<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 14, 1995
REGISTRATION NO. 33-62433
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- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
AMENDMENT NO. 4
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
GREEN TREE FLOORPLAN RECEIVABLES MASTER TRUST
(ISSUER WITH RESPECT TO OFFERED CERTIFICATES)
GREEN TREE FLOORPLAN FUNDING CORP.
(ORIGINATOR OF THE TRUST DESCRIBED HEREIN)
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
--------------
DELAWARE 6189 41-1823871
(STATE OR OTHER
JURISDICTION OF
INCORPORATION OR
ORGANIZATION)
(PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER)
(I.R.S. EMPLOYER
IDENTIFICATION NO.)
500 LANDMARK TOWERS
345 ST. PETER STREET, SAINT PAUL, MINNESOTA 55102-1639
(612) 293-3400
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
--------------
JOEL H. GOTTESMAN, ESQ.
1100 LANDMARK TOWERS
345 ST. PETER STREET, SAINT PAUL, MINNESOTA 55102-1639
(612) 293-3400
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
--------------
COPIES TO:
CHARLES F. SAWYER RENWICK D. MARTIN
DORSEY & WHITNEY P.L.L.P. BROWN & WOOD
220 SOUTH SIXTH STREET, MINNEAPOLIS, ONE WORLD TRADE CENTER, NEW YORK, NEW
MINNESOTA 55402 YORK 10048
--------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF SECURITIES TO THE
PUBLIC: As soon as practicable after the effective date of this Registration
Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
--------------
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE FEE
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Floorplan Receivable Trust
Certificates, Series 1995-
1, Class A................. $409,400,000 100% $409,400,000 $141,172.41
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Floorplan Receivable Trust
Certificates, Series 1995-
1, Class B................. $ 18,400,000 100% $ 18,400,000 $ 6,344.83
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Total................... $427,800,000 100% $427,800,000 $147,517.24(2)
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</TABLE>
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(1) Estimated solely for the purpose of calculating the registration fee on
the basis of the proposed maximum aggregate offering price, pursuant to
Rule 457(c).
(2) Of this amount, $144,310.34 has previously been paid, and $3,206.90 is
being paid herewith.
--------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THE REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.
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<PAGE>
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
ITEM AND CAPTION IN FORM S-1 CAPTION IN PROSPECTUS
---------------------------- ---------------------
<C> <S> <C>
1. Forepart of the Registration
Statement and Outside Front Forepart of Registration Statement; Outside
Cover Page of Prospectus... Front Cover Page of Prospectus
2. Inside Front and Outside
Back Cover Pages of Pro- Inside Front Cover Page; Outside Back Cover
spectus.................... Page of Prospectus
3. Summary Information, Risk
Factors and Ratio of Earn-
ings to Fixed Charges...... Prospectus Summary; Risk Factors
4. Use of Proceeds............. Use of Proceeds
5. Determination of Offering
Price...................... *
6. Dilution.................... *
7. Selling Security Holders.... *
8. Plan of Distribution........ Underwriting
9. Description of Securities to The Trust; The Transferor; The Receivables;
be Registered.............. Description of the Offered Certificates
10. Interests of Named Experts
and Counsel................ Legal Matters
11. Information with Respect to
the Registrant............. The Trust; The Transferor
12. Disclosure of Commission Po-
sition on Indemnification
for Securities Act Liabili-
ties....................... See Part II
</TABLE>
- --------
*Not applicable
<PAGE>
PROSPECTUS
LOGO
GREEN TREE FLOORPLAN RECEIVABLES MASTER TRUST
$409,400,000 FLOATING RATE FLOORPLAN RECEIVABLE TRUST CERTIFICATES, SERIES
1995-1, CLASS A
$18,400,000 FLOATING RATE FLOORPLAN RECEIVABLE TRUST CERTIFICATES, SERIES
1995-1, CLASS B
GREEN TREE FLOORPLAN FUNDING CORP. GREEN TREE FINANCIAL CORPORATION
TRANSFEROR SERVICER
---------------
Each of the Floating Rate Floorplan Receivable Trust Certificates, Series
1995-1, Class A (the "Class A Certificates") and each of the Floating Rate
Floorplan Receivable Trust Certificates, Series 1995-1, Class B (the "Class B
Certificates," and, together with the Class A Certificates, the "Offered
Certificates") will represent an undivided interest in the Green Tree
Floorplan Receivables Master Trust (the "Trust"), created pursuant to a
Pooling and Servicing Agreement among Green Tree Floorplan Funding Corp., as
transferor (the "Transferor"), Green Tree Financial Corporation, as servicer
("Green Tree" or the "Servicer") and Norwest Bank Minnesota, National
Association, as trustee (the "Trustee"). The fractional undivided interests in
the Trust represented by the Class B Certificates will be subordinated to fund
certain payments with respect to the Class A Certificates as described in
"Description of the Offered Certificates--Application of Collections," "--
Reallocated Principal Collections," and "--Investor Charge-Offs." The assets
of the Trust will include the amounts owed from time to time ("Receivables")
by retail dealers, manufacturers and distributors ("Dealers") pursuant to
revolving financing arrangements (each such arrangement, an "Account") between
such Dealers and Green Tree to finance (i) in the case of retail dealers,
their inventory of consumer and commercial products and (ii) in the case of
manufacturers and distributors, their inventory of finished goods, parts and
other items and the accounts receivable arising from the sale thereof. Any
increase in the Receivables referred to in clause (ii) to an amount in excess
of 20% of total Receivables will be subject to the limitations described under
"Description of the Offered Certificates--The Overconcentration Amounts."
Concurrently with the issuance of the Offered Certificates, the Trust will
issue the Floorplan Receivable Trust Certificates, Series 1995-1, Class C (the
"Class C Certificates"), which initially will be issued to the Transferor but
may in the future be privately placed, and the Floorplan Receivable Trust
Certificates, Series 1995-1, Class D (the "Class D Certificates," and,
together with the Class C Certificates and the Offered Certificates, the
"Certificates") to the Transferor. The Offered Certificates, the Class C
Certificates and the Class D Certificates constitute "Series 1995-1." The
fractional undivided interests in the Trust represented by the Class C
Certificates will be subordinated to fund certain payments with respect to the
Offered Certificates and the Class D Certificates will be subordinated to fund
certain payments with respect to the Class C Certificates and the Offered
Certificates as described in "Description of the Offered Certificates--
Application of Collections," "--Reallocated Principal Collections," and "--
Investor Charge-Offs." The Transferor will own the remaining undivided
interest in the Trust not represented by the Certificates and any other
investor certificates issued by the Trust, which retained interest will be
represented by the Exchangeable Transferor Certificate. The Exchangeable
Transferor Certificate will be held initially by the Transferor and will be
transferable only as provided in the Pooling and Servicing Agreement. The
Transferor from time to time may offer to the public or other investors under
a prospectus or other disclosure document in transactions either registered
under the Securities Act of 1933, as amended, or exempt from registration
thereunder, other series of certificates that evidence undivided interests in
certain assets of the Trust by exchanging a portion of its interest in the
Trust therefor. Only the Offered Certificates are being offered pursuant to
this Prospectus.
Interest on the outstanding principal balance of the Class A Certificates
will accrue at a rate per annum equal to the lesser of (i) the applicable one-
month LIBOR (calculated and determined as described under "Description of the
Offered Certificates--Interest Payments") plus .16% per annum or (ii) the Net
Receivables Rate (as defined under "Description of the Offered Certificates--
Interest Payments") (the "Class A Certificate Rate"). Interest on the
outstanding principal balance of the Class B Certificates will accrue at a
rate per annum equal to the lesser of (i) the applicable one-month LIBOR plus
.32% per annum or (ii) the Net Receivables Rate (as defined under "Description
of the Offered Certificates--Interest Payments") (the "Class B Certificate
Rate"). Interest with respect to the Certificates will be distributed on
January 16, 1996 and on the 13th day of each month thereafter (or, if such
13th day is not a business day, the next succeeding business day) (each, a
"Distribution Date"). Principal on the Class A Certificates is scheduled to be
distributed on the Distribution Date in December 1998 but may be paid earlier
under certain limited circumstances described herein. Principal on the Class B
Certificates is scheduled to be paid on the Distribution Date in January 1999
but may be paid earlier under certain limited circumstances described herein.
Application will be made to list the Offered Certificates on the Luxembourg
Stock Exchange.
There currently is no secondary market for the Offered Certificates, and
there is no assurance that one will develop or, if one does develop, that it
will continue until the Offered Certificates are paid in full.
---------------
POTENTIAL INVESTORS SHOULD CONSIDER, AMONG OTHER THINGS, THE INFORMATION SET
FORTH IN "RISK FACTORS" ON PAGES 24 THROUGH 29 HEREIN.
---------------
THE OFFERED CERTIFICATES REPRESENT INTERESTS IN THE TRUST ONLY AND DO NOT
REPRESENT INTERESTS IN OR RECOURSE OBLIGATIONS OF THE TRANSFEROR,
GREEN TREE FINANCIAL CORPORATION OR ANY AFFILIATE THEREOF.
NEITHER THE OFFERED CERTIFICATES NOR THE RECEIVABLES ARE
INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMIS-
SION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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<TABLE>
<CAPTION>
PROCEEDS TO
PRICE TO UNDERWRITING THE
PUBLIC(1) DISCOUNT TRANSFEROR(1)(2)
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<S> <C> <C> <C>
Per Class A Certificate.............. 100% .325% 99.675%
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Per Class B Certificate.............. 100% .9% 99.1%
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Total................................ $427,800,000 $1,496,150 $426,303,850
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</TABLE>
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(1) Plus accrued interest, if any, from December 20, 1995.
(2) Before deduction of expenses estimated to be $580,000.
---------------
The Offered Certificates are offered by the Underwriters as described in
"Underwriting," subject to prior sale, when, as and if issued to and accepted
by the Underwriters and subject to approval of certain legal matters by
counsel for the Underwriters. The Underwriters reserve the right to reject
orders in whole or in part. It is expected that the Offered Certificates will
be delivered in book-entry form on or about December 20, 1995 through the
facilities of The Depository Trust Company, Cedel Bank, societe anonyme and
the Euroclear System.
---------------
MERRILL LYNCH & CO. BEAR, STEARNS & CO. INC.
---------------
The date of this Prospectus is December 14, 1995.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE OFFERED
CERTIFICATES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
REPORTS TO CERTIFICATEHOLDERS
Unless and until Definitive Certificates (as defined herein) are issued,
monthly and annual reports, containing information concerning the Trust and
prepared by the Servicer, will be sent on behalf of the Trust to Cede & Co., as
nominee of The Depository Trust Company ("DTC") and registered holder of the
Offered Certificates, pursuant to the Pooling and Servicing Agreement (as
defined herein). All references herein to "holders" or "Certificateholders" of
the Class A or Class B Certificates reflect the rights of the owners of the
beneficial interests in the Offered Certificates ("Certificate Owners") as they
may indirectly exercise such rights through DTC and its participants, except as
otherwise specified herein. Neither Green Tree Financial Corporation nor any
successor servicer intends to send any of such monthly and annual reports to
Certificate Owners. See "Description of the Offered Certificates--Book-Entry
Registration," "--Reports to Certificateholders" and "--Evidence as to
Compliance." Certificate Owners may receive such reports upon written request,
together with (i) a certification that they are Certificate Owners and (ii)
payment of reproduction and postage expenses associated with the distribution
of such reports, from the Trustee at Norwest Bank Minnesota, National
Association, Norwest Center, Sixth Street and Marquette Avenue, Minneapolis,
Minnesota 55479-0069, Attention: Corporate Trust Department. Such reports will
not constitute financial statements prepared in accordance with generally
accepted accounting principles. The Servicer will file with the Securities and
Exchange Commission (the "Commission") such periodic reports with respect to
the Trust as are required under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the rules and regulations of the Commission
thereunder.
AVAILABLE INFORMATION
Green Tree Floorplan Funding Corp., as originator of the Trust, has filed a
Registration Statement under the Securities Act of 1933, as amended (the
"Securities Act"), with the Commission on behalf of the Trust with respect to
the Certificates offered pursuant to this Prospectus. For further information,
reference is made to the Registration Statement and amendments thereof and
exhibits thereto, which are available for inspection without charge at the
public references facilities maintained by the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549; 7 World Trade Center, Suite 1300, New York, New
York 10048, and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of the Registration Statement and amendments thereof and
exhibits thereto may be obtained from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. Periodic reports with respect to the Trust that have been filed under
the Exchange Act and the rules and regulations of the Commission thereunder and
other information filed by the Servicer can be inspected and copied at the
public reference facilities maintained by the Commission referred to above.
OTHER INFORMATION
Upon receipt of a request by an investor who has received an electronic
Prospectus from an Underwriter or a request by such investor's representative
within the period during which there is an obligation to deliver a Prospectus,
the Transferor or such Underwriter will promptly deliver, or cause to be
delivered, without charge, a paper copy of the Prospectus.
2
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by reference to the
detailed information appearing elsewhere in this Prospectus. Certain
capitalized terms used herein are defined in the "Glossary of Terms" or
elsewhere in this Prospectus. Unless the context requires otherwise, certain
capitalized terms, when used in this Prospectus, relate only to the Series
1995-1 Certificates and not to other certificates which may exist from time to
time.
Offered Certificates.........
$409,400,000 aggregate principal amount of Class
A Certificates and $18,400,000 aggregate prin-
cipal amount of Class B Certificates are being
offered hereby. The Offered Certificates will
be available for purchase in minimum denomina-
tions of $1,000 and in integral multiples of
$1,000 in excess thereof.
The Offered Certificates represent obligations
of the Trust only and do not represent inter-
ests in or recourse obligations of Green Tree,
the Transferor, or any affiliate of either of
them.
The Class B Certificates will be subordinated to
fund certain payments with respect to the Class
A Certificates as described herein. See "De-
scription of the Offered Certificates--Subordi-
nation of the Class B Certificates."
Other Series 1995-1
Certificates................ $6,900,000 aggregate principal amount of Class C
Certificates, which initially will be issued to
the Transferor but may in the future be pri-
vately placed, and $25,300,000 aggregate prin-
cipal amount (exclusive of the Class D Incre-
mental Invested Amount) of Class D Certifi-
cates, which are being issued concurrently to
the Transferor. The Class D Invested Amount
will be adjusted from time to time as described
under "Description of the Offered Certifi-
cates--The Overconcentration Amounts." Only the
Offered Certificates are being offered pursuant
to this Prospectus.
Transferor................... Green Tree Floorplan Funding Corp., a wholly
owned subsidiary of Green Tree, is the Trans-
feror. The principal executive offices of the
Transferor are located at 500 Landmark Towers,
345 St. Peter Street, St. Paul, Minnesota
55102-1639, telephone number (612) 293-3400.
See "The Transferor."
Servicer..................... Green Tree Financial Corporation (in such capac-
ity, "Green Tree" or the "Servicer"). The prin-
cipal executive offices of the Servicer are lo-
cated at 1100 Landmark Towers, 345 St. Peter
Street, St. Paul, Minnesota 55102-1639, tele-
phone number (612) 293-3400. A substitute
Servicer may be appointed in certain circum-
stances. See "Green Tree Financial Corporation
and its Commercial Finance Division" and "De-
scription of the Offered Certificates--Certain
Matters Regarding the Transferor and the
Servicer."
Trustee ..................... Norwest Bank Minnesota, National Association, is
the Trustee. Under certain circumstances speci-
fied herein, the beneficial owners of investor
certificates representing more than 50% of the
aggregate invested amount of all Series will
have the right to remove the Trustee. See "De-
scription of the Offered Certificates--The
Trustee."
3
<PAGE>
Trust........................ The Trust will be formed pursuant to the Pooling
and Servicing Agreement, which will be supple-
mented by the Series 1995-1 Supplement relating
to the Series 1995-1 Certificates, and by Sup-
plements applicable to other Series that may be
issued in the future. See "The Trust."
Trust Assets................. The Trust assets will include (i) all Receiv-
ables existing as of the Cut-off Date and
thereafter arising under the Accounts from time
to time satisfying certain criteria described
herein (see "The Receivables--Eligible Receiv-
ables and Eligible Accounts"), (ii) all funds
to be collected in respect of the Receivables,
(iii) all the rights of the Transferor under
the Receivables Purchase Agreement between the
Transferor and Green Tree (the "Purchase Agree-
ment"), (iv) all funds on deposit in certain
accounts of the Trust, (v) any amounts received
by the Servicer with respect to Receivables
that were previously charged off as uncollecti-
ble in accordance with the Servicer's customary
and usual servicing procedures ("Recoveries"),
(vi) an assignment of a security interest in
the consumer and commercial products or other
assets securing each Receivable (collectively,
the "Collateral Security"), (vii) the Transfer-
or's rights under all Floorplan Agreements with
Manufacturers relating to the Collateral Secu-
rity, and (viii) all proceeds of the foregoing.
The Offered Certificates will not have the ben-
efit of any credit enhancement other than the
subordination of the Class B Certificates,
Class C Certificates and Class D Certificates
for the benefit of each Class of Series 1995-1
Certificates with an earlier alphabetical des-
ignation as described above.
Pursuant to the Purchase Agreement, the Trans-
feror will purchase from Green Tree all of the
Receivables arising from time to time under the
Accounts, whether such Receivables are existing
as of the Cut-off Date or thereafter created.
See "Description of the Purchase Agreement--
Transfer of Receivables."
Pursuant to the Pooling and Servicing Agreement,
the Transferor will automatically transfer to
the Trust all of its right, title, and interest
in and to the Receivables. See "Risk Factors--
Transfer of the Receivables; Insolvency Risk
Considerations" for a discussion of certain le-
gal considerations relating to such transfer.
The Accounts................. The Accounts pursuant to which the Receivables
will be generated are revolving credit agree-
ments entered into with Green Tree or one of
its subsidiaries by dealers, manufacturers and
distributors located throughout the United
States ("Dealers") to finance their production
and inventory of consumer and commercial prod-
ucts. The Receivables constitute payment obli-
gations arising from time to time under the Ac-
counts. "Floorplan Receivables" represent ex-
tensions of credit to finance product inventory
for dealers, and are secured by the related
dealer's product inventory. The products for
which
4
<PAGE>
Green Tree currently provides floorplan financ-
ing to dealers include manufactured housing,
recreational vehicles and marine products. "As-
set-Based Receivables" represent extensions of
credit generally to manufacturers and distribu-
tors to finance their production and inventory,
and are secured by finished goods inventory,
accounts receivable, certain work-in-process,
raw materials and component parts, as well as
other assets of the borrower. In general, Green
Tree's credit approval process focuses on the
creation of the Account with the Dealer, with
credit limits and other appropriate restric-
tions established upon creation of the Account.
The amount of Receivables arising under an Ac-
count at any time will be determined primarily
by the financing needs of the Dealer.
Green Tree expects that it will provide financ-
ing to Dealers in other products in the future,
and that the relative proportions of the Re-
ceivables representing financing for each type
of product will change over time as the Receiv-
ables balance of each Dealer fluctuates over
time. The Accounts will be selected from all
such credit agreements of Green Tree that meet
the credit and eligibility criteria specified
in the Pooling and Servicing Agreement and the
related Series Supplement (the "Eligible Ac-
counts"). Under certain circumstances Accounts
may be added to, or removed from, the Trust,
and the Transferor expects to add additional
Accounts to the Trust from time to time. See
"Description of the Offered Certificates--Rep-
resentations and Warranties," "--Addition of
Accounts" and "--Removal of Accounts."
Receivables.................. The Receivables represent the amounts payable
from time to time pursuant to the Accounts. The
Receivables will bear interest at an adjustable
rate described herein. Certain Receivables do
not bear interest for a specified period fol-
lowing their origination. Generally, the prin-
cipal amount of a Receivable is due (i) in the
case of Floorplan Receivables, in scheduled in-
stallments with payment in full due upon the
retail sale of the related product, or (ii) in
the case of Asset-Based Receivables, upon the
reduction of eligible collateral or as the bor-
rower's needs decline, and in full upon the
termination of the facility. Accordingly, the
amount of Receivables will fluctuate from day
to day as new Receivables are generated and as
existing Receivables are collected, written off
as uncollectible, or otherwise adjusted. See
"Green Tree Financial Corporation and its Com-
mercial Finance Division."
Overconcentration Amounts.... In order to reduce the Trust's exposure to any
single Dealer or any single industry, certain
diversification thresholds ("Overconcentration
Amounts") will be tested at the end of each
Monthly Period. Initially, except as provided
below, no more than 20% (or, prior to the first
anniversary of the Closing Date, a lesser per-
centage) of the Receivables may be Asset-
5
<PAGE>
Based Receivables; no more than 2% (or 3% for
certain designated Dealers) of the Receivables
may have arisen under an Account with a single
Dealer; no more than 15% of the Receivables may
be Floorplan Receivables financing products
from a single manufacturer; no more than 5% of
the Receivables may be Floorplan Receivables
financing marine products; no more than 5% of
the Receivables may be Floorplan Receivables
financing recreational vehicles, and no more
than 5% of the Receivables may be Floorplan Re-
ceivables financing products other than manu-
factured housing, marine products or recre-
ational vehicles. Green Tree expects that the
Receivables will from time to time exceed one
or more of these thresholds. To the extent that
any such threshold is exceeded at the end of a
Monthly Period, the Class D Invested Amount
will be increased by an equivalent amount.
These threshold percentages may, however, be
increased in the future without the consent of
any Certificateholder, to a level acceptable to
each Rating Agency without any reduction or
withdrawal of its rating of the Class A or
Class B Certificates. See "Description of the
Offered Certificates--The Overconcentration
Amounts."
Collections.................. The Servicer will deposit all collections of Re-
ceivables (other than collections allocable to
the Exchangeable Transferor Certificate, sub-
ject to certain exceptions specified herein) in
the Collection Account on each business day.
The aggregate of (A) all collections on the Re-
ceivables with respect to interest or other
fees, (B) investment earnings on amounts on de-
posit in the Interest Funding Account, the
Principal Account, the Distribution Account,
the Collection Account, the Excess Funding Ac-
count and the Class D Subaccount of the Excess
Funding Account (collectively, the "Trust Ac-
counts") on such business day and (C) Recov-
eries will be treated as "Finance Charge Col-
lections." In addition, in order to provide ad-
ditional yield to the Trust to offset the ef-
fect of any increase in Receivables that do not
bear interest for a specified period, any in-
crease in the length of such a period or any
decrease in the level of interest rates borne
by the Receivables, the Transferor may elect at
any time to instruct the Servicer to allocate a
specified percentage (the "Discount Factor") of
Principal Collections to be treated as interest
collections ("Imputed Yield Collections"). The
Discount Factor, if any, may vary from time to
time (subject to the limitations set forth in
the Series 1995-1 Supplement), and initially
will be zero. Finance Charge Collections and
Imputed Yield Collections, if any, are collec-
tively referred to as "Interest Collections."
The remainder of the collections on the Receiv-
ables received on any business day will be
treated as "Principal Collections." Principal
Collections and Interest Collections are col-
lectively sometimes referred to herein as "Col-
lections." See "Description of the Offered Cer-
tificates--Interest Collections; Principal
Collec-
6
<PAGE>
tions." All such amounts will then be allocated
in accordance with the respective interests of
the Certificateholders, the certificateholders
of any other Series, and the holder of the Ex-
changeable Transferor Certificate in the Prin-
cipal Receivables and in the Interest Receiv-
ables in the Trust. During the Revolving Peri-
od, upon the retail sale of a product securing
a Receivable where Green Tree is providing the
customer financing for such retail sale, Green
Tree will not, except under certain limited
circumstances, be obligated to deposit cash in
the Collection Account in respect of the prin-
cipal amount of such Receivable but may instead
replace such Receivable with other Receivables.
See "Description of the Offered Certificates--
Allocation Percentages."
The Series 1995-1
Certificates
A. Class A Certificates.... The Class A Certificates will evidence undivided
interests in the assets of the Trust allocated
to the Class A Certificateholders' Interest and
will represent the right to receive from such
assets funds up to (but not in excess of) the
amounts required to make payments of interest
on the Class A Certificates at the Class A Cer-
tificate Rate and the payment of principal to
the extent of the Class A Invested Amount
(which may be less than the aggregate unpaid
principal amount of the Class A Certificates,
in certain circumstances, if the Investor De-
fault Amount exceeds funds allocable thereto
and the Class B Invested Amount, the Class C
Invested Amount and the Class D Invested Amount
are reduced to zero). See "Description of the
Offered Certificates--Subordination of the
Class B Certificates," "--Allocation Percent-
ages" and "--Investor Charge-Offs."
B. Class B Certificates.... The Class B Certificates will evidence undivided
interests in the assets of the Trust allocated
to the Class B Certificateholders' Interest and
will represent the right to receive from such
assets funds up to (but not in excess of) the
amounts required to make payments of interest
on the Class B Certificates at the Class B Cer-
tificate Rate and the payment of principal to
the extent of the Class B Invested Amount
(which may be less than the aggregate unpaid
principal amount of the Class B Certificates,
in certain circumstances, if the Investor De-
fault Amount exceeds funds allocable thereto
and the Class C Invested Amount and the Class D
Invested Amount are reduced to zero). See "De-
scription of the Offered Certificates--Subordi-
nation of the Class B Certificates," "--Alloca-
tion Percentages" and "--Investor Charge-Offs."
C. Class C Certificates.... The Class C Certificates will evidence undivided
interests in the assets of the Trust allocated
to the Class C Certificateholders' Interest and
will represent the right to receive from such
assets funds up to (but not in excess of) the
amounts required to make payments of principal
to the extent of the Class C Invested Amount
(which may be less than the aggregate unpaid
7
<PAGE>
principal amount of the Class C Certificates,
in certain circumstances, if the Investor De-
fault Amount exceeds funds allocable thereto
and the Class D Invested Amount is reduced to
zero). See "Description of the Offered Certifi-
cates--Allocation Percentages" and "--Investor
Charge-Offs." The Class C Certificates are not
being offered hereby.
D. Class D Certificates....
The Class D Certificates will evidence undivided
interests in the assets of the Trust allocated
to the Class D Certificateholders' Interest and
will represent the right to receive from such
assets funds up to (but not in excess of) the
amounts required to make payments of principal
to the extent of the Class D Invested Amount.
The Class D Invested Amount will initially
equal $41,535,874 (which includes $16,235,874
of Class D Incremental Invested Amount), and
will be adjusted from time to time as described
under "Description of the Offered Cer-
tificates--The Overconcentration Amounts." The
Class D Certificates are not being offered
hereby.
Transferor Interest.......... The Pooling and Servicing Agreement provides
that the Trustee will issue two types of cer-
tificates: (i) investor certificates in one or
more Series, each of which may have multiple
classes and of which one or more such classes
may be transferable, and (ii) the Exchangeable
Transferor Certificate. The Exchangeable Trans-
feror Certificate will evidence the Transferor
Interest, will be held by the Transferor, and
will be transferable only as provided in the
Pooling and Servicing Agreement. The Transferor
Interest will represent the right to the assets
of the Trust not allocated to the Series 1995-1
Certificateholders' Interest or the interest of
the holders of certificates of any future Se-
ries pursuant to the Pooling and Servicing
Agreement and applicable Supplements.
Issuance of New Series....... The Pooling and Servicing Agreement provides
that, pursuant to any one or more supplements
thereto (each, a "Supplement"), the Transferor
may cause the Trustee to issue one or more new
Series of certificates (a "New Issuance"). The
Transferor may create a New Issuance pursuant
to an Exchange (described below). The Trans-
feror may offer any Series for sale in transac-
tions either registered under the Securities
Act or exempt from registration thereunder, di-
rectly or through one or more underwriters or
placement agents, in fixed-price offerings, in
negotiated transactions or otherwise. The
Transferor currently intends to offer, from
time to time, additional Series issued by the
Trust.
Exchanges.................... The Pooling and Servicing Agreement provides
that, pursuant to any one or more Supplements
to the Pooling and Servicing Agreement, the
Transferor may tender the Exchangeable Trans-
feror Certificate or, if provided in the rele-
vant Supplement, certificates comprising any
Series and the Exchangeable Transferor Certifi-
cate, to the Trustee in exchange for certifi-
cates comprising one or more new Series and a
reissued Exchangeable Transferor Certificate
(an "Exchange"). Any
8
<PAGE>
Exchange will be subject to certain conditions
specified in the Pooling and Servicing Agree-
ment. See "Description of the Offered Certifi-
cates--Exchanges."
Interest..................... Interest on the respective outstanding balance
of each Class of Offered Certificates will ac-
crue at the applicable Certificate Rate (as de-
fined below) and will be payable on the 13th
day of each month, or if such day is not a
business day, on the next succeeding business
day (each a "Distribution Date"), beginning
January 16, 1996. Interest will accrue from and
including the preceding Distribution Date (or,
in the case of the first Distribution Date,
from and including the Closing Date) to but ex-
cluding such Distribution Date (each an "Inter-
est Accrual Period") and will be calculated on
the basis of the actual number of days in the
related Interest Accrual Period divided by 360.
Interest on the outstanding principal balance of
the Class A Certificates will accrue for each
Interest Accrual Period at a rate per annum
equal to the lesser of (i) one-month LIBOR
(calculated as described under "Description of
the Offered Certificates--Interest Payments")
determined as of the second LIBOR business day
prior to such Interest Accrual Period plus .16%
per annum or (ii) the Net Receivables Rate (as
described under "Description of the Offered
Certificates--Interest") (the "Class A Certifi-
cate Rate"). Interest on the outstanding prin-
cipal balance of the Class B Certificates will
accrue for each Interest Accrual Period at a
rate per annum equal to the lesser of (i) one-
month LIBOR determined as of the second LIBOR
business day prior to such Interest Accrual Pe-
riod plus .32% per annum or (ii) the Net Re-
ceivables Rate (the "Class B Certificate Rate"
and together with the Class A Certificate Rate,
the "Certificate Rates").
Interest payments on the Offered Certificates
will be made from Series Available Interest
Collections, as described under "Description of
the Offered Certificates--Application of Col-
lections--Payment of Fees, Interest and Other
Items," and from certain other funds allocated
for such purpose under the Pooling and Servic-
ing Agreement. See "Description of the Offered
Certificates--Reallocated Principal Collec-
tions."
Revolving Period............. The "Revolving Period" with respect to Series
1995-1 means the period from and including the
Closing Date to, but not including, the earlier
of (a) the Initial Principal Payment Date (de-
scribed below), (b) the commencement of the
Controlled Accumulation Period (described be-
low) and (c) the commencement of the Early Am-
ortization Period. During the Revolving Period,
Principal Collections otherwise allocable to
the Certificateholders (other than any Reallo-
cated Principal Collections applied to make in-
terest distributions) will, subject to certain
limitations, be paid from the Trust to the
holder of the
9
<PAGE>
Exchangeable Transferor Certificate or applied
as Shared Principal Collections and paid to
holders of certificates of other series, as de-
scribed below under "Shared Principal Collec-
tions."
The aggregate principal amount of the Series
1995-1 Certificates, except as otherwise pro-
vided herein, will remain fixed during the Re-
volving Period.
Principal Payments
A. Initial Principal
Payment Date............
Unless a Pay Out Event has occurred, principal
with respect to the Class A Certificates is ex-
pected to be paid on the Distribution Date in
December 1998 (the "Class A Scheduled Payment
Date"), and principal with respect to the Class
B Certificates is expected to be paid on the
Distribution Date in January 1999 (the "Class B
Scheduled Payment Date"). However, if the
Servicer elects not to extend the Initial Prin-
cipal Payment Date, the Revolving Period or the
Controlled Accumulation Period, as applicable,
will end and principal will be paid to the
Class A Certificateholders on the Initial Prin-
cipal Payment Date and, if necessary, on each
Distribution Date thereafter until the earlier
of the date on which the Class A Invested
Amount has been paid in full or the Series
1995-1 Termination Date, and after the Class A
Invested Amount has been paid in full, princi-
pal will be paid to the Class B
Certificateholders on each Distribution Date
until the earlier of the date on which the
Class B Invested Amount has been paid in full
or the Series 1995-1 Termination Date. The
"Initial Principal Payment Date" will initially
be the December 1997 Distribution Date, but
will successively and automatically be extended
to the next Distribution Date after the then-
current Initial Principal Payment Date unless
the Servicer elects not to so extend; provided
that the Initial Principal Payment Date may not
be later than the Class A Scheduled Payment
Date. See "Description of the Offered Certifi-
cates--Extension of Initial Principal Payment
Date" herein.
B. Controlled Accumulation
Period..................
On July 13, 1998, the Servicer will determine
the Accumulation Period Length. The "Accumula-
tion Period Length" will be one, two, three or
four month(s) and will be calculated as the
product, rounded upwards to the nearest inte-
ger, of (a) four and (b) a fraction, the numer-
ator of which is the Invested Amount as of July
13, 1998 (after giving effect to all changes
therein on such date) and the denominator of
which is the sum of such Invested Amount and
the invested amounts as of July 13, 1998 (after
giving effect to all changes therein on such
date) of all other outstanding Series whose re-
spective revolving periods are not scheduled to
end before the last day of the November 1998
Monthly Period. Depending on whether the Accu-
mulation Period Length is one month, two
10
<PAGE>
months, three months or four months, the "Accu-
mulation Period Commencement Date" will be the
first day of the November 1998 Monthly Period,
the October 1998 Monthly Period, the September
1998 Monthly Period or the August 1998 Monthly
Period, respectively. Notwithstanding the fore-
going, the Accumulation Period Commencement
Date will be August 1, 1998 if, prior to such
date, any other outstanding Series has entered
into an early amortization period. In addition,
if the Accumulation Period Length has been de-
termined to be less than four months and,
thereafter, any outstanding Series enters into
an early amortization period, the Accumulation
Period Commencement Date will be the earlier of
(i) the date that such outstanding Series en-
tered into its early amortization period and
(ii) the Accumulation Period Commencement Date
as previously determined.
The Controlled Accumulation Period will end on
the earliest of (i) the commencement of the
Early Amortization Period, (ii) the Initial
Principal Payment Date, (iii) payment of the
Invested Amount in full and (iv) the Series
1995-1 Termination Date.
On each business day during the Controlled Accu-
mulation Period, prior to the payment of the
Class A Invested Amount in full, the Servicer
will deposit into an account established for
the Certificateholders (the "Principal Ac-
count") an amount equal to the lesser of (a)
Principal Collections allocable to the Class A,
Class B and Class C Certificateholders' Inter-
ests plus Shared Principal Collections, if any,
from other Series allocable to the Class A,
Class B and Class C Certificates, plus certain
other amounts comprising Class A, Class B and
Class C Principal, and (b) the amount, if any,
by which (i) the sum of the Controlled Accumu-
lation Amount for such Monthly Period plus the
Accumulation Shortfall (described below), if
any (such sum being referred to as the "Con-
trolled Deposit Amount" for the related Monthly
Period) exceeds (ii) the amount in the Princi-
pal Account for the account of the Class A
Certificateholders.
On each business day during the Controlled Accu-
mulation Period, following the payment (or de-
posit in the Principal Account) of the Class A
Invested Amount in full but prior to the pay-
ment (or deposit in the Principal Account) of
the Class B Invested Amount in full, an amount
equal to the lesser of (a) Principal Collec-
tions allocable to the Class B and Class C
Certificateholders' Interests (on the basis of
the ABC Fixed/Floating Allocation Percentage)
plus Shared Principal Collections, if any, from
other Series allocable to the Class B and Class
C Certificates, plus certain other amounts com-
prising Class B and Class C Principal, and (b)
the amount, if any, by which (i) the Controlled
Deposit Amount for the related
11
<PAGE>
Monthly Period exceeds (ii) the amount in the
Principal Account for the account of the Class
B Certificateholders, will be deposited daily
in the Principal Account.
On any business day when the amount on deposit
in the Principal Account equals or exceeds the
Controlled Deposit Amount for the related Dis-
tribution Date, the balance of all such funds
remaining on deposit in the Collection Account
will be treated as Shared Principal Collections
and may be used to make payments to other Se-
ries which are in an accumulation or amortiza-
tion period.
If, for any Monthly Period, the amount deposited
in the Principal Account is less than the Con-
trolled Deposit Amount, the amount of such de-
ficiency will be the "Accumulation Shortfall"
for the succeeding Monthly Period.
All funds on deposit in the Principal Account
will be invested at the direction of the
Servicer by the Trustee in certain Cash Equiva-
lents. Investment earnings (net of investment
losses and expenses) on funds on deposit in the
Principal Account (the "Principal Investment
Proceeds") during the Controlled Accumulation
Period will be treated as Available Series In-
terest Collections. Amounts, if any, in the
Principal Account may be expected to earn in-
terest at a rate that is less than the weighted
average of the Class A Certificate Rate and the
Class B Certificate Rate plus 2% per annum (the
"Base Rate"). The difference between the amount
of interest actually earned on investments in
the Principal Account on any day and the amount
of interest that would have been earned on such
investments at the Base Rate is the "Principal
Funding Investment Shortfall" for such day. On
each business day, the Servicer will apply an
amount equal to the lesser of (i) the Series
Allocation Percentage of the Interest Collec-
tions allocable to the Transferor Interest
("Transferor Interest Collections") on such
business day and (ii) the Principal Funding In-
vestment Shortfall plus the Negative Carry
Amount (described below under "Excess Funding
Account"), if any, for such business day, in
the manner specified for application of Avail-
able Series Interest Collections.
Funds on deposit in the Principal Account will
be available to pay the Class A
Certificateholders the Class A Invested Amount
on the Class A Scheduled Payment Date. If the
aggregate principal amount of deposits made to
the Principal Account is insufficient to pay
the Class A Invested Amount on the Class A
Scheduled Payment Date, the Early Amortization
Period will commence as described below. Al-
though it is anticipated that during the Con-
trolled Accumulation Period prior to the pay-
ment of the Class A Invested Amount in full,
funds will be deposited in the Principal Ac-
count in an amount equal to the applicable Con-
trolled Deposit Amount for each
12
<PAGE>
Monthly Period and that scheduled principal
will be available for distribution to the Class
A Certificateholders on the Class A Scheduled
Payment Date, no assurance can be given in that
regard. See "Risk Factors--Certificate Rating"
and "Maturity Considerations."
On the Class B Scheduled Payment Date, provided
that the Class A Invested Amount is paid in
full on the Class A Scheduled Payment Date and
the Early Amortization Period has not com-
menced, Principal Collections will be paid to
the Class B Certificateholders in respect of
the Class B Invested Amount as described here-
in. If the Principal Collections are insuffi-
cient to pay the Class B Invested Amount in
full on the Class B Scheduled Payment Date, the
Early Amortization Period will commence as de-
scribed below. Although it is anticipated that
scheduled principal will be available for dis-
tribution to the Class B Certificateholders on
the Class B Scheduled Payment Date, no assur-
ance can be given in that regard. See "Risk
Factors--Certificate Rating" and "Maturity Con-
siderations."
If a Pay Out Event occurs during the Controlled
Accumulation Period, the Early Amortization Pe-
riod will commence and any amounts on deposit
in the Principal Account will be applied as de-
scribed under "C. Early Amortization Period"
below.
Other Series issued by the Trust may have either
an accumulation period or an amortization peri-
od. Such periods may have different lengths and
begin on different dates than the Controlled
Accumulation Period described herein. Thus,
certain Series may be in their revolving peri-
ods while others are in their amortization or
accumulation periods. In addition, other Series
may allocate Principal Collections based upon
different investor percentages. No Supplement
with respect to any such Series, however, may
change the terms of the Series 1995-1 Certifi-
cates or the terms of the Pooling and Servicing
Agreement as it relates to the Offered Certifi-
cates. See "Description of the Offered Certifi-
cates--Exchanges" for a discussion of the po-
tential terms of other Series.
C. Early Amortization If a Pay Out Event occurs, either during the Re-
Period...................... volving Period or the Controlled Accumulation
Period, the Early Amortization Period will be-
gin. During the Early Amortization Period,
Principal Collections allocable to the Class A,
Class B and Class C Certificateholders' Inter-
est and certain other amounts (including Shared
Principal Collections from any other Series and
funds on deposit in the Excess Funding Account
(other than funds in the Class D Subaccount),
if any) will no longer be reinvested in the
Trust or otherwise used to maintain the
Certificateholders' Interest, but instead will
be distributed as principal payments monthly on
each Distribution Date beginning with the first
Distribution Date following the Monthly
13
<PAGE>
Period in which a Pay Out Event occurs or is
deemed to have occurred. Principal payments
will be made first to the Class A
Certificateholders until the Class A Invested
Amount has been paid in full, and then to the
Class B Certificateholders until the Class B
Invested Amount has been paid in full, and then
to the Class C Certificateholders until the
Class C Invested Amount has been paid in full,
and then to the Class D Certificateholders un-
til the Class D Invested Amount has been paid
in full. See "Description of the Offered Cer-
tificates--Pay Out Events."
Allocation of Trust Assets... The Trust's assets will be allocated among the
Class A Certificateholders' Interest, the Class
B Certificateholders' Interest, the Class C
Certificateholders' Interest, the Class D
Certificateholders' Interest, the interest of
the certificateholders of any other Series is-
sued pursuant to the Pooling and Servicing
Agreement and applicable Supplements, and the
Transferor Interest. The interest of the
certificateholders of any class of any Series
in the assets of the Trust will be limited to
the certificateholders' interest for such class
and Series, and such certificateholders will
not have any recourse against any assets of the
Trust other than those allocated to such
certificateholders' interest pursuant to the
Pooling and Servicing Agreement and any appli-
cable Supplement. The principal amount of the
Transferor Interest will fluctuate as the
amount of Receivables in the Trust, the in-
vested amount of each Series, and the amounts,
if any, on deposit in the Excess Funding Ac-
count change from time to time. See "Descrip-
tion of the Offered Certificates--General" and
"--Excess Funding Account."
The Class A Certificateholders' Interest, the
Class B Certificateholders' Interest, the Class
C Certificateholders' Interest, and the Class D
Certificateholders' Interest will each include
the right to receive (but only to the extent
needed to make required payments under the
Pooling and Servicing Agreement) varying per-
centages of Interest Collections and Principal
Collections during each Monthly Period. Inter-
est Collections and the amount of Defaulted Re-
ceivables will be allocated on each business
day, and Principal Collections will be allo-
cated on each business day during the Revolving
Period, to the Class A Certificateholders' In-
terest, the Class B Certificateholders' Inter-
est, the Class C Certificateholders' Interest,
and the Class D Certificateholders' Interest
based on the Class A Floating Allocation Per-
centage, the Class B Floating Allocation Per-
centage, the Class C Floating Allocation Per-
centage, and the Class D Floating Allocation
Percentage, respectively. During the Revolving
Period for each Series, all Principal Collec-
tions that would otherwise be allocated to the
Certificateholders will be allocated on each
business day and paid to the Transferor (except
for Shared Principal Collections used to make
pay-
14
<PAGE>
ments to other Series and Reallocated Principal
Collections). During the Controlled Accumula-
tion Period, until the Class A Scheduled Pay-
ment Date, Principal Collections will generally
be allocated on each business day to the Class
A Certificateholders' Interest based on the ABC
Fixed/Floating Allocation Percentage. On and
after the Class A Scheduled Payment Date, Prin-
cipal Collections will generally be allocated
on each business day to the Class B
Certificateholders' Interest based on the ABC
Fixed/Floating Allocation Percentage. On and
after the Class B Scheduled Payment Date, all
Principal Collections will generally be allo-
cated on each business day to the Class C
Certificateholders' Interest based on the ABC
Fixed/Floating Allocation Percentage. See "De-
scription of the Offered Certificates--Alloca-
tion Percentages."
Shared Principal To the extent that Principal Collections and
Collections................. other amounts that are allocated to the
certificateholders' interest of any class of
any series (other than any Transferor Retained
Class) are not needed to make payments to the
certificateholders of such class or required to
be deposited in the Principal Account, they may
be applied to cover principal payments due to
or for the benefit of certificateholders of an-
other Series. Any such reallocation will not
result in a reduction in the certificate-
holders' interest of the Series to which such
Principal Collections were initially allocated.
As a result, Principal Collections and certain
other amounts otherwise allocable to other Se-
ries, to the extent such collections are not
needed to make payments to the
certificateholders of such other Series, may be
applied to cover principal payments due to or
for the benefit of the holders of the Series
1995-1 Certificates, and Principal Collections
and certain other amounts otherwise allocable
to the Series 1995-1 Certificates, to the ex-
tent such collections are not needed to make
payments to the holders of the Series 1995-1
Certificates, may be applied to cover principal
payments due to or for the benefit of the hold-
ers of certificates of other Series. See "De-
scription of the Offered Certificates--Applica-
tion of Collections."
Excess Funding Account....... At any time during which the Transferor Interest
is less than the Minimum Transferor Interest,
funds (to the extent available therefor as de-
scribed herein) otherwise payable to the Trans-
feror will be deposited in the Excess Funding
Account on each business day until the Trans-
feror Interest is equal to the Minimum Trans-
feror Interest. If for any reason the Trans-
feror Interest (plus any funds on deposit in
the Excess Funding Account) is less than the
Minimum Transferor Interest, or if the amount
of funds in the Excess Funding Account exceeds
certain threshholds for a specified period of
time, a Pay Out Event would occur and the Early
Amortization Period would begin. Funds on de-
posit in the Excess Funding Account will be
withdrawn and paid to the Transferor to the ex-
tent that on
15
<PAGE>
any day the Transferor Interest exceeds the
Minimum Transferor Interest. No funds will be
deposited in the Excess Funding Account, howev-
er, if any Series is in an amortization or ac-
cumulation period (including any early amorti-
zation period), unless the principal account
for such Series has been fully funded for such
Monthly Period.
Any funds on deposit in the Excess Funding Ac-
count at the beginning of the Controlled Accu-
mulation Period will be deposited in the Prin-
cipal Account. See "Description of the Offered
Certificates--Excess Funding Account."
Amounts, if any, in the Excess Funding Account
may be expected to earn interest at a rate that
is less than the Base Rate (described above un-
der "Principal Payments--B. Controlled Accumu-
lation Period"). The difference between the
amount of interest actually earned on invest-
ments in the Excess Funding Account on any day
and the amount of interest that would have been
earned on such investments at the Base Rate is
the "Negative Carry Amount" for such day. On
each business day, the Servicer will apply an
amount equal to the lesser of (i) the Trans-
feror Interest Collections on such business day
and (ii) the Principal Funding Investment
Shortfall plus the Negative Carry Amount, if
any, for such business day, in the manner spec-
ified for application of Available Series In-
terest Collections.
Distribution of Available
Series Interest Collections
Allocable to
Certificateholders..........
Available Series Interest Collections will be
applied on each business day in a Monthly Pe-
riod in the following order of priority:
(i) an amount equal to the amount of Class A
Monthly Interest and any overdue Class A
Monthly Interest not previously deposited in
the Interest Funding Account for such
Monthly Period and interest on any overdue
interest amounts will be deposited in the
Interest Funding Account;
(ii) an amount equal to the amount of Class
B Monthly Interest and any overdue Class B
Monthly Interest not previously deposited in
the Interest Funding Account for such
Monthly Period and interest on any overdue
interest amounts will be deposited in the
Interest Funding Account;
(iii) if Green Tree or an affiliate of Green
Tree is not the Servicer, an amount equal to
the Monthly Servicing Fee plus any unpaid
Monthly Servicing Fee for any prior Monthly
Period, to the extent such amount has not
been paid on prior business days in such
Monthly Period, will be paid to the
Servicer;
16
<PAGE>
(iv) an amount equal to the ABC Investor
Default Amount on such business day and, to
the extent not previously paid, the ABC
Investor Default Amount for each prior
business day in such Monthly Period will be
(a) during the Revolving Period, treated as
Shared Principal Collections, (b) during the
Controlled Accumulation Period, deposited in
the Principal Account (up to the Controlled
Deposit Amount) or (c) during any Early
Amortization Period, deposited in the
Principal Account;
(v) an amount equal to the Class D Investor
Default Amount on such business day and, to
the extent not previously paid, the Class D
Investor Default Amount for each prior
business day in such Monthly Period will be
(a) during the Revolving Period and the
Controlled Accumulation Period prior to the
payment in full of the Class C Invested
Amount, paid to the Transferor in order to
maintain the Class D Invested Amount, (b)
during the Controlled Accumulation Period
following the payment in full of the Class C
Invested Amount, paid to the Class D
Certificateholders up to the Class D
Invested Amount, and (c) during the Early
Amortization Period prior to the payment of
the Class C Invested Amount in full,
deposited in the Class D Subaccount of the
Excess Funding Account, to be held until the
Class C Invested Amount has been paid in
full, and to be available to be applied as
Reallocated Class D Principal Collections;
(vi) an amount equal to unreimbursed Class A
Investor Charge-Offs on such business day
will be (a) during the Revolving Period,
treated as Shared Principal Collections, (b)
during the Controlled Accumulation Period,
on or prior to the Class A Scheduled Payment
Date, deposited in the Principal Account (up
to the Controlled Deposit Amount), or (c)
during any Early Amortization Period,
deposited in the Principal Account;
(vii) an amount equal to the accrued and un-
paid interest on the outstanding aggregate
principal amount of the Class B Certificates
not previously deposited in the Interest
Funding Account for such Monthly Period will
be deposited in the Interest Funding Account;
(viii) an amount equal to unreimbursed Class
B Investor Charge-Offs on such business day
will be (a) during the Revolving Period,
treated as Shared Principal Collections, (b)
during the Controlled Accumulation Period, on
or prior to the Class A Scheduled Payment
Date, deposited in the Principal Account (up
to the Controlled Deposit Amount) for the
Class A Certificateholders, (c) during the
Controlled Accumulation Period, on and after
the Class A Scheduled Pay
17
<PAGE>
ment Date, deposited in the Principal Account
up to the Class B Invested Amount for the
Class B Certificateholders, or (d) during any
Early Amortization Period, deposited in the
Principal Account;
(ix) an amount equal to unreimbursed Class C
Investor Charge-Offs on such business day
will be (a) during the Revolving Period,
treated as Shared Principal Collections, (b)
during the Controlled Accumulation Period, on
or prior to the Class A Scheduled Payment
Date, deposited in the Principal Account (up
to the Controlled Deposit Amount) for the
Class A Certificateholders, (c) during the
Controlled Accumulation Period, prior to the
Class C Principal Commencement Date, depos-
ited in the Principal Account up to the Class
B Invested Amount for the Class B
Certificateholders, or (d) during any Early
Amortization Period, deposited in the Princi-
pal Account;
(x) an amount equal to unreimbursed Class D
Investor Charge-Offs on such business day
will be (a) during the Revolving Period and
during the Controlled Accumulation Period
prior to the payment in full of the Class C
Invested Amount, paid to the Transferor in
order to maintain the Class D Invested
Amount, (b) during the Controlled Accumula-
tion Period following the payment in full of
the Class C Invested Amount, paid to the
Class D Certificateholders, and (c) during
the Early Amortization Period prior to the
payment of the Class C Invested Amount in
full, deposited in the Class D Subaccount of
the Excess Funding Account, to be held until
the Class C Invested Amount has been paid in
full, and to be available to be applied as
Reallocated Class D Principal Collections;
(xi) if Green Tree or an affiliate of Green
Tree is the Servicer, an amount equal to the
Monthly Servicing Fee plus any unpaid Monthly
Servicing Fee for any prior Monthly Period,
to the extent such amount has not been paid
on prior business days in such Monthly Peri-
od, will be paid to the Servicer; and
(xii) the remainder will be treated as Excess
Interest Collections.
See "Description of the Offered Certifi-
cates--Application of Collections."
Sharing of Excess Interest Interest Collections on any business day in ex-
Collections................. cess of the amounts necessary to make required
payments in respect of the Series 1995-1 Cer-
tificates on such business day will be applied
to cover any shortfalls with respect to amounts
payable from Interest Collections allocable to
any other Series then outstanding, pro rata
based upon the amount of the shortfall, if
18
<PAGE>
any, with respect to such other Series. Any Ex-
cess Interest Collections remaining after cov-
ering shortfalls with respect to all outstand-
ing Series will be paid to the Transferor.
Investor Default Amount;
Investor Charge-Offs........
A portion of all Defaulted Receivables (the "In-
vestor Default Amount") will be allocated to
the Certificateholders in an amount equal to
the product of the Floating Allocation Percent-
age applicable during the related Monthly Pe-
riod and the principal amount of Defaulted Re-
ceivables for such Monthly Period. Available
Series Interest Collections will be applied to
the payment thereof as described in clauses
(iv) and (v) of "Distribution of Available Se-
ries Interest Collections Allocable to
Certificateholders" above. If such application
is not sufficient to cover the entire Investor
Default Amount, then the amount of Excess In-
terest Collections, to the extent applied to
the payment thereof as described in "Sharing of
Excess Interest Collections" above and any Re-
allocated Principal Collections applied with
respect thereto, as described under "Descrip-
tion of the Offered Certificates--Reallocated
Principal Collections," will be applied to
cover any remaining Investor Default Amount. If
such amounts are not sufficient to cover such
remaining Investor Default Amount, then the
Class D Invested Amount will be reduced by the
remaining aggregate Investor Default Amount (a
"Class D Investor Charge-Off") for such Monthly
Period to avoid a charge-off with respect to
the Class A Certificates, the Class B Certifi-
cates or the Class C Certificates.
The Class D Invested Amount will thereafter be
increased (but by no more than the amount of
previously unreimbursed Class D Investor
Charge-Offs and Reallocated Class D Principal
Collections) on any business day by the amount
of Available Series Interest Collections allo-
cated and available for such purpose as de-
scribed in clause (x) of "Distribution of
Available Series Interest Collections Allocable
to Certificateholders." If the Class D Invested
Amount is reduced to zero, a portion of the
Class C Invested Amount equal to the amount by
which such insufficiency would have caused the
Class D Invested Amount to be reduced below
zero (but not in excess of the remaining aggre-
gate Investor Default Amount for such Monthly
Period) will be deducted from the Class C In-
vested Amount (a "Class C Investor Charge-Off")
to avoid a charge-off with respect to the Class
A Certificates or the Class B Certificates. If
and for so long as the Class D Invested Amount
is reduced to zero, the Class C
Certificateholders will bear directly the
credit and other risks associated with their
undivided interest in the Trust.
The Class C Invested Amount will thereafter be
increased (but not in excess of the unpaid
principal balance of the Class C Certificates)
on any business day by the amount of Available
19
<PAGE>
Series Interest Collections allocated and
available for that pur- pose as described in
clause (ix) of "Distribution of Available Se-
ries Interest Collections Allocable to
Certificateholders." If the Class C Invested
Amount is reduced to zero, a portion of the
Class B Invested Amount equal to the amount by
which such insufficiency would have caused the
Class C Invested Amount to be reduced below
zero (but not in excess of the remaining aggre-
gate Investor Default Amount for such Monthly
Period) will be deducted from the Class B In-
vested Amount (a "Class B Investor Charge-Off")
to avoid a charge-off with respect to the Class
A Certificates. If and for so long as the Class
C Invested Amount is reduced to zero, the Class
B Certificateholders will bear directly the
credit and other risks associated with their
undivided interest in the Trust.
The Class B Invested Amount will thereafter be
increased (but not in excess of the unpaid
principal balance of the Class B Certificates)
on any business day by the amount of Available
Series Interest Collections allocated and
available for that purpose as described in
clause (viii) of "Distribution of Available Se-
ries Interest Collections Allocable to
Certificateholders." If the Class B Invested
Amount is reduced to zero, a portion of the
Class A Invested Amount equal to the amount by
which such insufficiency would have caused the
Class B Invested Amount to be reduced below
zero (but not in excess of the remaining aggre-
gate Investor Default Amount for such Monthly
Period) will be deducted from the Class A In-
vested Amount (a "Class A Investor Charge-
Off"). If and for so long as the Class B In-
vested Amount and the Class C Invested Amount
are reduced to zero, the Class A
Certificateholders will bear directly the
credit and other risks associated with their
undivided interest in the Trust.
The Class A Invested Amount will thereafter be
increased (but not in excess of the unpaid
principal balance of the Class A Certificates)
on any business day by the amount of Available
Series Interest Collections allocated and
available for that purpose as described in
clause (vi) of "Distribution of Available Se-
ries Interest Collections Allocable to
Certificateholders." See "Description of the
Offered Certificates--Investor Charge-Offs."
Subordination of the Class B
Certificates, the Class C
Certificates and the Class
D Certificates..............
The Class B Certificates will be subordinated to
fund payments of principal and interest on the
Class A Certificates. The Class C Certificates
will be subordinated to fund payments of prin-
cipal and interest on the Class A Certificates
and the Class B Certificates. The Class D Cer-
tificates will be subordinated to fund payments
of principal and interest on the Class A Cer-
tificates, the Class B Certificates and the
Class C Certificates. See "Description of the
Offered Certificates--Subordination of the
20
<PAGE>
Class B Certificates," "--Reallocation of Cash
Flows" and "--Reallocated Principal Collec-
tions" herein. The Class B Invested Amount, the
Class C Invested Amount and the Class D In-
vested Amount will be subordinated as described
herein to the extent necessary to fund certain
payments with respect to each Class of Certifi-
cates with an earlier alphabetical designation
as described herein. If at the end of any
Monthly Period there is a positive Class A Re-
quired Amount, Class B Required Amount or Class
C Required Amount, then, commencing on the
first business day of the following Monthly Pe-
riod, certain Principal Collections for such
business day will be used to fund first the
Class A Required Amount, second the Class B Re-
quired Amount and third the Class C Required
Amount, as more fully described herein in "De-
scription of the Offered Certificates--Reallo-
cated Principal Collections." To the extent the
Class B Invested Amount, the Class C Invested
Amount or the Class D Invested Amount is re-
duced, the percentage of Interest Collections
allocated to the Class B Certificateholders,
the Class C Certificateholders, or the Class D
Certificateholders, as applicable, will be re-
duced. Moreover, to the extent the amount of
such reduction in the Class B Invested Amount,
the Class C Invested Amount, or the Class D In-
vested Amount is not reimbursed, the amount of
principal distributable to the Class B
Certificateholders, the Class C
Certificateholders, or the Class D
Certificateholders, as applicable, from the
Collection Account will be reduced. Principal
payments with respect to the Class B Certifi-
cates will not be made until the final payment
of the Class A Invested Amount has been made to
the Class A Certificateholders. Principal pay-
ments with respect to the Class C Certificates
will not be made until the final payment of the
Class A Invested Amount has been made to the
Class A Certificateholders and the final pay-
ment of the Class B Invested Amount has been
made to the Class B Certificateholders. Princi-
pal payments with respect to the Class D Cer-
tificates will not be made until the final pay-
ment of the Class A Invested Amount has been
made to the Class A Certificateholders, the fi-
nal payment of the Class B Invested Amount has
been made to the Class B Certificateholders and
the final payment of the Class C Invested
Amount has been made to the Class C Certifi-
cateholders. See "Description of the Offered
Certificates--Subordination of the Class B Cer-
tificates," "--Reallocation of Cash Flows" and
"--Reallocated Principal Collections."
Servicing Compensation....... The Servicer will receive a monthly servicing
fee as described herein as servicing compensa-
tion from the Trust. See "Description of the
Certificates--Servicing Compensation and Pay-
ment of Expenses." In certain circumstances,
the Servicer will be permitted to use for its
own benefit and not segregate collections on
the Receivables received by it during each
Monthly Period until no later than the business
day prior to
21
<PAGE>
the related Distribution Date. See "Description
of the Offered Certificates--Application of
Collections."
Companion Series............. On or prior to the commencement of the Con-
trolled Accumulation Period or the Early Amor-
tization Period, the Series 1995-1 Certificates
may be paired with one or more other Series
(each a "Companion Series"). Each Companion Se-
ries either will be prefunded with an initial
deposit to a prefunding account in an amount up
to the initial principal balance of such Com-
panion Series, funded primarily from the pro-
ceeds for the sale of such Companion Series, or
will have a variable principal amount. Any such
prefunding account will be held for the benefit
of such Companion Series and not for the bene-
fit of Series 1995-1 Certificateholders. As
principal is paid with respect to the Series
1995-1 Certificates, either (i) in the case of
a prefunded Companion Series, an equal amount
of funds on deposit in any prefunding account
for such prefunded Companion Series will be re-
leased (which funds will be distributed to the
Transferor) or (ii) in the case of a Companion
Series having a variable principal amount, an
interest in such variable Companion Series in
an equal or lesser amount may be sold by the
Trust (and the proceeds thereof will be dis-
tributed to the Transferor) and, in either
case, the invested amount in the Trust of such
Companion Series will increase by up to the
corresponding amount. See "Description of the
Offered Certificates--Companion Series."
Optional Repurchase..........
The Class A Certificates, the Class B Certifi-
cates and the Class C Certificates will be sub-
ject to optional repurchase by the Transferor
on any Distribution Date after the Invested
Amount of the Class A Certificates, the Class B
Certificates and the Class C Certificates is
reduced to an amount less than or equal to 10%
of the initial Invested Amount of the Class A
Certificates, the Class B Certificates and the
Class C Certificates, respectively, if certain
conditions set forth in the Pooling and Servic-
ing Agreement are met. The repurchase price
will be equal to the Invested Amount plus ac-
crued and unpaid interest on the Class A Cer-
tificates and the Class B Certificates through
the day preceding the Distribution Date on
which the repurchase occurs. See "Description
of the Offered Certificates--Final Payment of
Principal; Termination."
Tax Status................... In the opinion of counsel to Green Tree and the
Transferor, the Class A Certificates and the
Class B Certificates will be characterized as
debt and the Trust will not be characterized as
an association, publicly traded partnership or
taxable mortgage pool taxable as a corporation
for federal income tax purposes under existing
law. Under the Pooling and Servicing Agreement,
the Transferor, the Servicer, the Class A
Certificate-
22
<PAGE>
holders and the Class B Certificateholders will
agree to treat the Class A Certificates and the
Class B Certificates as debt for federal, state
and other tax purposes. See "Certain Federal
Income Tax Consequences" for additional infor-
mation concerning the application of federal
income tax laws.
ERISA Considerations......... Under regulations issued by the U.S. Department
of Labor, the Trust's assets would not be
deemed "plan assets" of an employee benefit
plan holding an interest in the Certificates if
certain conditions are met, including that in-
terests in each Class of the Certificates be
held by at least 100 persons independent of the
Transferor and each other upon completion of
the public offering being made hereby. The Un-
derwriters expect, although no assurance can be
given, that the Class A Certificates will be
held by at least 100 such persons, and the
Transferor anticipates that the other condi-
tions of the "publicly offered security" excep-
tion contained in the regulations will be met
with respect to the Class A Certificates. No
monitoring or other measures will be taken to
ensure that any such conditions will be met
with respect to the Class A Certificates. The
Underwriter of the Class B Certificates expects
that the Class B Certificates will not be held
by at least 100 persons. Consequently, the pub-
licly offered security exception contained in
the regulations will not be met with respect to
the Class B Certificates. If the Trust's assets
were deemed to be "plan assets" of such a plan,
there is uncertainty as to whether existing ex-
emptions from the "prohibited transaction"
rules of the Employee Retirement Income Secu-
rity Act of 1974, as amended ("ERISA"), and the
Internal Revenue Code of 1986, as amended (the
"Code") would apply to all transactions involv-
ing the Trust's assets. Accordingly, employee
benefit plans contemplating purchasing the Of-
fered Certificates should consult their counsel
before making a purchase. See "Employee Benefit
Plan Considerations."
Offered Certificate Ratings.. It is a condition to the issuance of the Class A
Certificates that they be rated "AAA" by Stan-
dard & Poor's Ratings Services, a Division of
The McGraw-Hill Companies, Inc. ("Standard &
Poor's"), and "Aaa" by Moody's Investors Serv-
ice, Inc. ("Moody's"). Standard & Poor's and
Moody's are sometimes collectively referred to
herein as the "Rating Agencies".
It is a condition to the issuance of the Class B
Certificates that they be rated at least "A" by
Standard & Poor's and "A3" by Moody's.
A rating is not a recommendation to buy, sell or
hold securities and may be subject to revision
or withdrawal at any time by the assigning Rat-
ing Agency. Each rating should be evaluated in-
dependently of any other rating. See "Risk Fac-
tors--Certificate Rating."
Listing...................... Application will be made to list the Offered
Certificates on the Luxembourg Stock Exchange.
23
<PAGE>
RISK FACTORS
Prospective investors in the Offered Certificates should consider, among
other things, the following factors in connection with the purchase of the
Offered Certificates:
LIMITED EXPERIENCE
Green Tree began originating and servicing revolving credit arrangements in
February 1994, and thus has limited underwriting and servicing experience, and
very limited delinquency, default and loss experience, with respect to such
accounts. Green Tree's substantial experience in underwriting and servicing
retail installment sales contracts is not necessarily indicative that
satisfactory results will be experienced on Accounts and the Receivables
generated in Accounts. See "Green Tree Financial Corporation and its Commercial
Finance Division."
Green Tree's historical loss experience with respect to its portfolio of
revolving credit agreements is presented under "The Accounts--Loss Experience."
However, because Green Tree's portfolio has grown rapidly in the past year, and
Green Tree expects to create a substantial number of Additional Accounts that
will be transferred to the Trust in the future, the actual loss experience with
respect to the Accounts owned by the Trust may be different. Since a
substantial number of receivables from which the Receivables will be selected
were only recently originated, it may be expected that such receivables have
not yet exhibited a loss experience that is representative of the losses that
may be experienced over a longer period of time. There can be no assurance that
the loss experience for the Receivables in the future will be similar to Green
Tree's historical experience. In addition, Green Tree's historical experience
includes the effect of the financial obligations of Manufacturers in respect of
repossessed products as described under "Green Tree Financial Corporation and
its Commercial Finance Division--Floorplan Agreements with Manufacturers." If
Manufacturers are not able to perform such obligations in the future, the loss
experience in respect of the Receivables may be adversely affected.
ADDITION OF TRUST ASSETS; ADDITIONAL PRODUCT TYPES
The Transferor expects, and in some cases will be obligated, to designate
Additional Accounts, the Receivables in which will be conveyed to the Trust.
Such Additional Accounts may include accounts with dealers originated by Green
Tree under criteria different from those which were applied to the Dealers on
the Accounts designated on the Cut-off Date or to the dealers on previously
designated Additional Accounts, because such accounts were originated at a
different date. Such Accounts may also provide financing for products of types
different from those included in the Trust on the Closing Date. Consequently,
there can be no assurance that Additional Accounts designated in the future
will relate to the same types of products or will be of the same credit quality
as previously designated Accounts or that new product types that may secure the
Receivables in new Accounts will provide security that is as favorable as that
provided by manufactured homes or other additional product types. The
designation of Additional Accounts will be subject to the satisfaction of
certain conditions described herein under "Description of the Offered
Certificates--Addition of Accounts."
MASTER TRUST CONSIDERATIONS; POSSIBLE EFFECTS OF NEW SERIES ON PREVIOUSLY
ISSUED SERIES
In addition to the Certificates, the Trust, as a master trust, is expected to
issue additional Series from time to time. While the Principal Terms of any
Series will be specified in a Supplement to the Pooling and Servicing
Agreement, the provision of a Supplement and, therefore, the terms of any
additional Series, will not be subject to the prior review or consent of
holders of the certificates of any previously issued Series. Such Principal
Terms may include methods for determining applicable investor percentages and
allotting collections, provisions creating security or credit enhancement,
different classes of certificates (including subordinated classes of
certificates), provisions subordinating such Series to another Series (if the
Supplement relating to such Series so permits) or another Series to such Series
(if the Supplement for such other Series so
24
<PAGE>
permits), and any other amendment or supplement to the Pooling and Servicing
Agreement which is made applicable only to such Series. See "Description of the
Offered Certificates--Exchanges." In addition, the provisions of any Supplement
may give the holders of the certificates issued pursuant thereto consent,
approval, or other rights that could result in such holders having the power to
cause the Transferor, the Servicer, or the Trustee to take or refrain from
taking certain actions, including, without limitation, actions with respect to
the exercise of certain rights and remedies under the Pooling and Servicing
Agreement, without regard to the position or interest of the Certificateholders
of the 1995-1 Series or the certificateholders of any other Series. Similar
rights may also be given to the provider of any credit enhancement for any
Series. It is a condition precedent to issuance of any additional Series that
each rating agency that has rated any outstanding Series deliver written
confirmation to the Trustee that the Exchange will not result in such rating
agency reducing or withdrawing its rating on any outstanding Series. There can
be no assurance, however, that the Principal Terms of any other Series,
including any Series issued from time to time hereafter, might not have an
adverse impact on the timing and amount of payments received by a
Certificateholder or the value of Certificates even if there is no change in
the rating of any outstanding Series. See "Description of the Offered
Certificates--Exchanges."
TRANSFER OF THE RECEIVABLES; INSOLVENCY RISK CONSIDERATIONS
Green Tree will warrant to the Transferor in the Purchase Agreement relating
to any Series that the sale of the related Receivables by it to the Transferor
is a valid sale of such Receivables to the Transferor. Green Tree will take all
actions that are required under Minnesota law to perfect the Transferor's
ownership interest in such Receivables. See "Certain Legal Aspects of the
Receivables--Transfer of Receivables." Notwithstanding the foregoing, if Green
Tree were to become a debtor in a bankruptcy case and a creditor or trustee-in-
bankruptcy of Green Tree, or Green Tree itself as debtor-in-possession, were to
take the position that any sale of Receivables to the Transferor should be
recharacterized as a pledge of such Receivables to secure a borrowing of Green
Tree, then delays in payments to the Transferor (and therefore to the Trust and
the Certificateholders) of collections on the Receivables could occur or
(should the court rule that such transfers were borrowings rather than sales)
reductions in the amount of such payments could result. If a transfer of
Receivables to the Transferor were recharacterized as a pledge, a tax or
government lien on the property of Green Tree arising before any Receivables
come into existence may have priority over the Transferor's (and therefore the
Trust's) interest in such Receivables. See "Certain Legal Aspects of the
Receivables--Certain Matters Relating to Bankruptcy." If the transfer of
Receivables to the Transferor were respected as a sale, the Receivables would
not be part of Green Tree's bankruptcy estate and would not be available to
Green Tree's creditors.
In addition, if Green Tree were to become a debtor in a bankruptcy case and a
creditor or trustee-in-bankruptcy of Green Tree, or Green Tree itself as
debtor-in-possession, were to request a bankruptcy court to order that the
Transferor be substantively consolidated with Green Tree, delays in and
reductions in the amount of distributions on the Certificates could occur.
Although the Pooling and Servicing Agreement will provide that the Transferor
is transferring all of its right, title, and interest in and to the Receivables
to the Trust, a court could treat such transactions as an assignment of
collateral as security for the benefit of holders of certificates issued by the
Trust. It is possible that the risk of such treatment may be increased by the
retention by the Transferor of the Exchangeable Transferor Certificate, the
Class C Certificates and the Class D Certificates. The Transferor will
represent and warrant in the Pooling and Servicing Agreement that the transfer
of the Receivables to the Trust is either a valid transfer and assignment of
the Receivables to the Trust or the grant to the Trust of a security interest
in the Receivables. The Transferor has taken and will take certain actions
required to perfect the Trust's interest in the Receivables and will warrant
that if the transfer to the Trust is deemed to be a grant to the Trust of a
security interest in the Receivables, the Trustee will have a first priority
perfected security interest therein, subject only to Permitted Liens (as
defined in the Pooling and Servicing Agreement). If the transfer of the
Receivables to the Trust is deemed to create a security interest therein under
the Uniform Commercial Code (the "UCC"), a tax or government lien on property
of the Transferor arising before Receivables come into existence may have
priority over the Trust's interest in such Receivables. In the event of the
insolvency
25
<PAGE>
of the Transferor, certain administrative expenses may also have priority over
the Trust's interest in such Receivables. See "Certain Legal Aspects of the
Receivables--Transfer of Receivables."
In a recent decision, Octagon Gas Systems, Inc. v. Rimmer, 995 F.2d 948 (10th
Cir. 1993), the United States Court of Appeals for the 10th Circuit suggested
that even where a transfer of accounts or chattel paper from a seller to a
buyer constitutes a "true sale," the accounts or chattel paper would
nevertheless constitute property of the seller's estate in a bankruptcy of the
seller. If Green Tree or the Transferor were to become subject to a bankruptcy
proceeding and a court were to follow the Octagon court's reasoning,
Certificateholders might experience delays in payment or possibly losses in
their investment in the Certificates. Counsel to the Transferor has advised the
Transferor that the reasoning of the Octagon case appears to be inconsistent
with established precedent and the UCC. See "Certain Legal Aspects of the
Receivables--Certain Matters Relating to Bankruptcy."
To the extent that the Transferor is deemed to have granted a security
interest in the Receivables to the Trust and such security interest was validly
perfected before any insolvency of the Transferor and was not granted or taken
in contemplation of insolvency or with the intent to hinder, delay, or defraud
the Transferor or its creditors, such security interest should not be subject
to avoidance in the event of insolvency or receivership of the Transferor, and
payments to the Trust with respect to the Receivables should not be subject to
recovery by a bankruptcy trustee or receiver of the Transferor. If, however,
such a bankruptcy trustee or receiver were to assert a contrary position,
delays in payments on the Offered Certificates and possible reductions in the
amount of those payments could occur. If a bankruptcy trustee or receiver were
appointed for the Servicer, and no Servicer Default other than such bankruptcy
or receivership or insolvency of the Servicer exists, the bankruptcy trustee or
receiver may have the power to prevent either the Trustee or the majority of
the Certificateholders from effecting a transfer of servicing to a successor
Servicer. If a bankruptcy trustee or receiver were appointed for the
Transferor, causing a Pay Out Event to occur with respect to all Series then
outstanding, new Receivables would not be transferred to the Trust pursuant to
the Pooling and Servicing Agreement and the Trustee would sell the portion of
the Receivables allocable in accordance with the Pooling and Servicing
Agreement to each Series (unless holders of more than 50% of the principal
amount of each class of each Series, excluding any class or portion thereof
held by the Transferor, and the holders of any Supplemental Certificates or any
other interest in the Exchangeable Transferor Certificates other than the
Transferor instruct otherwise), thereby causing early termination of the Trust
and a loss to the Certificateholders if the net proceeds allocable to the
Certificateholders from such sale, if any, were insufficient to pay the
Certificateholders in full. The net proceeds of any such sale of the portion of
the Receivables allocated in accordance with the Pooling and Servicing
Agreement to each Series will first be used to pay amounts due to the Class A
Certificateholders, will thereafter be used to pay amounts due to the Class B
Certificateholders, will thereafter be used to pay amounts due to the Class C
Certificateholders, and will thereafter be used to pay amounts due to the Class
D Certificateholders. If the only Pay Out Event to occur is either the
insolvency of the Transferor or the appointment of a bankruptcy trustee or
receiver for the Transferor, the bankruptcy trustee or receiver may have the
power to continue to require the Transferor to transfer new Receivables to the
Trust and to prevent the early sale, liquidation, or disposition of the
Receivables and the commencement of the Early Amortization Period. In addition,
a bankruptcy trustee or receiver for the Transferor may have the power to cause
early payment of the Certificates. See "Certain Legal Aspects of the
Receivables--Certain Matters Relating to Bankruptcy."
BASIS RISK
The Receivables will bear interest at a variable rate above a designated
index rate. See "Green Tree Financial Corporation and its Commercial Finance
Division--Floorplan Payment Terms." The Offered Certificates bear interest at
the lesser of (i) a floating rate based on LIBOR and (ii) the Net Receivables
Rate. If there is a decline in such index rate, the amount of Interest
Collections on such Accounts may be reduced. It is possible that, with respect
to any Interest Accrual Period, LIBOR plus the margin used to compute the
applicable Certificate Rate will exceed the Net Receivables Rate for the
preceding Monthly Period. In such event, interest will accrue on the Offered
Certificates during such Interest Accrual Period at a rate equal to the Net
Receivables Rate. The Servicer has the right to change the Discount Factor to
offset any such reduced
26
<PAGE>
Interest Collections. The interest rates borne by the Receivables will be
limited by the applicable state usury laws.
SOCIAL, ECONOMIC AND OTHER FACTORS; COMPETITION
Green Tree's ability to generate new Receivables, and the Dealers' ability to
make payments on the Receivables owned by the Trust, will depend upon the
retail sales of manufactured housing and the other products securing such
Receivables. The level of retail sales of such products will be affected by a
variety of social and economic factors, including national and regional
unemployment levels and levels of economic activity in general, interest rates
and consumer perceptions of economic conditions. In addition, Green Tree
competes with various other financing sources, including independent finance
companies, manufacturer-affiliated finance companies and banks, who are in the
business of providing floorplan financing arrangements to dealers. If, for any
reason, Green Tree were unable to or ceased to generate new Receivables, a Pay
Out Event would occur. See "Payments and Maturity; Reinvestment Risk" below.
LIMITED LIQUIDITY
The Underwriters currently intend to make a market in the Offered
Certificates but are not obligated to do so. There can be no assurance that a
secondary market will develop for the Offered Certificates, or, if it does
develop, that it will provide the holders of any of the Offered Certificates
with liquidity of investment or that if such a secondary market develops that
it will continue to exist for the term of the Offered Certificates.
NON-RECOURSE TO TRANSFEROR, GREEN TREE OR AFFILIATES THEREOF
No Certificateholder will have recourse for payment of its Certificates to
any assets of any of the Transferor (other than the Exchangeable Transferor
Certificate and an interest represented by any class of investor certificates
which is retained by the Transferor (a "Transferor Retained Class"), in each
case to the extent described herein), Green Tree or any affiliates thereof.
Consequently, Certificateholders must rely solely upon payments on the
Receivables for the payment of principal of and interest on the Certificates.
Furthermore, under the Pooling and Servicing Agreement, the Certificateholders
have an interest in the Receivables and Collections only to the extent of the
Certificateholders' Interest and, to the limited extent described herein, the
Transferor Interest. Should the Offered Certificates not be paid in full on a
timely basis, Certificateholders may not look to any assets of any of the
Transferor (other than the Exchangeable Transferor Certificate and any
Transferor Retained Class, in each case to the extent described herein), Green
Tree or any affiliates thereof to satisfy their claims.
PAYMENTS AND MATURITY; REINVESTMENT RISK
The Receivables may be paid at any time and there is no assurance that there
will be additional Receivables created or that any particular pattern of
repayments will occur. A significant decline in the amount of Receivables
generated could result in the occurrence of a Pay Out Event and the
commencement of the Early Amortization Period if, as a result, the Transferor
Interest were reduced below the Minimum Transferor Interest or amounts in the
Excess Funding Account result in significant Negative Carry Amounts. See
"Maturity Considerations" and "Description of the Offered Certificates--Pay Out
Events" for a discussion of other Pay Out Events. If a Pay Out Event occurs,
the Early Amortization Period will commence and the average life and maturity
of the Offered Certificates may be significantly reduced. There can be no
assurance in that event that the holders of the Offered Certificates would be
able to reinvest any accelerated distributions on account of such Offered
Certificates in other suitable investments having a comparable yield.
Floorplan Receivables are generally payable upon the retail sale of the
related product. Asset-Based Receivables are payable as described under "Green
Tree Financial Corporation and its Commercial Finance Division--Asset-Based
Receivables." The payment of principal on the Certificates is dependent on the
receipt of Principal Collections during the Controlled Accumulation Period. No
assurance can be given that the Principal Collections allocable to Series 1995-
1 during the Controlled Accumulation Period, especially if another Series
enters into an early amortization period during such time, will be sufficient
to fully pay the Class A Invested Amount on the Class A Scheduled Payment Date
or the Class B Invested Amount on the Class B Scheduled Payment Date.
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EFFECT OF SUBORDINATION OF CLASS B CERTIFICATES; PRINCIPAL PAYMENTS
The Class B Certificates will be subordinated in right of payment of
principal to the Class A Certificates. Payments of principal in respect of the
Class B Certificates will not commence until after the Class A Invested Amount
has been paid in full. Moreover, the Class B Invested Amount is subject to
reduction on any Determination Date if collections of Principal Receivables
allocable to the Class B Certificates are reallocated to cover the Class A
Required Amount or if the aggregate Investor Default Amount, if any, for the
preceding Monthly Period exceeds the aggregate Available Series Interest
Collections applied to the payment thereof and is not funded from Excess
Interest Collections, Class C Reallocated Principal Collections or Class D
Reallocated Principal Collections and is not assessed against the Class C
Invested Amount or the Class D Invested Amount. If the Class B Invested Amount
suffers such a reduction, Interest Collections allocable to the Class B
Certificateholders' Interest in future Monthly Periods will be reduced.
Moreover, to the extent the amount of such reduction in the Class B Invested
Amount is not reimbursed, the amount of principal distributable to the Class B
Certificateholders will be reduced. See "Description of the Offered
Certificates-- Allocation Percentages," "--Reallocated Principal Collections,"
"--Investor Charge-Offs" and "--Subordination of the Class B Certificates."
NEGATIVE CARRY; DECREASE IN AVAILABLE SERIES INTEREST COLLECTIONS
If funds are deposited in the Excess Funding Account at any time, such funds
will be invested in Cash Equivalents and, as a result, would be expected to
earn a rate of return lower than the interest rates borne by a comparable
amount of Principal Receivables. Accordingly, any deposit of funds in the
Excess Funding Account may be expected to reduce the amount of Interest
Collections available to the Trust on each business day, until Green Tree is
able to generate sufficient Eligible Receivables to permit such funds to be
released from the Excess Funding Account. Transferor Interest Collections will,
however, be applied toward any such Negative Carry Amounts. See "Description of
the Offered Certificates--Coverage of Certain Interest Shortfalls."
ABILITY OF SERVICER TO CHANGE PAYMENT TERMS OF THE RECEIVABLES
The Servicer will have the right, on behalf of the Transferor, to change
payment terms (including without limitation the interest rate and repayment
terms) and various other terms with respect to the Receivables, subject to the
conditions described below. A decrease in the interest rate borne by the
Receivables or an increase in interest-free periods without an increase in the
Discount Factor would decrease the Portfolio Yield and could result in the
occurrence of a Pay Out Event. See "Payments and Maturity; Reinvestment Risk"
above. Green Tree will covenant that it will only change the terms relating to
the Receivables generally if in its reasonable judgment, no Pay Out Event will
occur as a result of the change and the interests of the certificateholders of
all outstanding Series will not be materially adversely affected. Except as
specified above, there are no restrictions on the ability of the Servicer to
change the terms of the Receivables. While the Servicer has no current
intention of taking actions which would change the payment or other terms of
the Receivables, other than in accordance with its customary and usual
procedures, there can be no assurance that changes in the marketplace or
prudent business practice might not result in a determination to do so.
Green Tree will have the right to generate new Receivables with payment terms
which are generally longer than the current payment terms on the Receivables.
Such a lengthening of the payment period could result in a reduction of the
monthly payment rate and consequently a reduction in the Portfolio Yield (if a
Discount Factor is in use), unless such Discount Factor is increased
accordingly for any Monthly Period.
CONTROL OF CERTAIN ACTIONS UNDER THE POOLING AND SERVICING AGREEMENT
Subject to certain exceptions, the consent or approval of the holders of a
specified percentage of the aggregate unpaid principal amount of all
outstanding investor certificates of each Series will be required to direct
certain actions to be taken, under the Pooling and Servicing Agreement or the
related Supplement. In determining whether the required percentage of
Certificateholders have given their approval or consent, except as otherwise
specified, the Class A Certificateholders, the Class B Certificateholders and
the Class C
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Certificateholders will be treated as a single Series. Accordingly, the Class A
Certificateholders will have the power to determine whether any such action is
taken without regard to the position or interests of the Class B
Certificateholders or the Class C Certificateholders relating to such action.
Neither the Class B Certificateholders nor the Class C Certificateholders will
have similar power. However, under certain circumstances the consent or
approval of a specified percentage of the aggregate invested amount of all
Series outstanding or of the invested amount of each class of each Series may
be required to direct certain actions, including requiring the appointment of a
successor Servicer following a Servicer Default, amending the Pooling and
Servicing Agreement in certain circumstances, directing the Servicer not to
sell the Receivables upon the occurrence of an Insolvency Event and directing a
repurchase of all outstanding Series upon the breach of certain representations
and warranties by the Transferor. In such instances, it may be difficult for
the Certificateholders to achieve the results that they desire.
CERTIFICATE RATING
It is a condition to issuance of the Class A Certificates that they have an
initial rating of "AAA" from Standard & Poor's and "Aaa" from Moody's. It is a
condition to issuance of the Class B Certificates that they have an initial
rating of "A" from Standard & Poor's and "A3" from Moody's. However, any such
rating will not address the likelihood that the principal of, or interest on,
the Class A Certificates will be paid by the Class A Scheduled Payment Date or
that the principal of, or interest on, the Class B Certificates will be paid by
the Class B Scheduled Payment Date. The Class C and Class D Certificates
initially will not be rated. The ratings will be based primarily on the value
of the Receivables and the funds on deposit in the Excess Funding Account, if
any (and the manner in which such funds are invested). The ratings are not a
recommendation to purchase, hold, or sell the Class A Certificates or the Class
B Certificates, inasmuch as such ratings do not comment as to the market price
or suitability for a particular investor. There can be no assurance that the
ratings will remain in effect for any given period of time or that any rating
will not be lowered or withdrawn by any Rating Agency if in its judgment
circumstances so warrant.
There can be no assurance as to whether any rating agency not requested to
rate the Offered Certificates will nonetheless issue a rating with respect to
any Class of the Offered Certificates, and, if so, what such rating would be. A
rating assigned to any Class of the Offered Certificates by a rating agency
that has not been requested by the Transferor to do so may be lower than the
ratings assigned by the Rating Agencies pursuant to the Transferor's request.
THE TRUST
The Trust will be formed, in accordance with the laws of the State of
Minnesota, pursuant to the Pooling and Servicing Agreement. The Trust will be
formed for the transactions described herein and similar transactions, as
contemplated by the Pooling and Servicing Agreement, and prior to formation
will have no assets or obligations. The Trust will not engage in any business
activity, other than as described herein, but rather will only acquire and hold
the Receivables (and related assets), issue (or cause to be issued) the
Certificates, the Exchangeable Transferor Certificate, and certificates
representing additional Series and engage in related activities (including,
with respect to any Series, entering into any credit enhancement and credit
enhancement agreement relating thereto) and make payments thereon. As a
consequence, the Trust is not expected to have any need for additional capital
resources.
THE TRANSFEROR
Green Tree Floorplan Funding Corp., a wholly owned subsidiary of Green Tree,
was incorporated in Delaware in September 1995. The Transferor was organized
for the limited purposes of purchasing receivables from Green Tree and
transferring such receivables to third parties, and any activities incidental
to and necessary or convenient for the accomplishment of such purposes. The
principal executive offices of the Transferor are located at 500 Landmark
Towers, 345 St. Peter Street, St. Paul, Minnesota 55102-1639 (telephone (612)
293-3400).
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The Transferor has taken, and will take in connection with the creation of
each Series of Certificates, steps intended to ensure that the voluntary or
involuntary application for relief by Green Tree under the United States
Bankruptcy Code or similar applicable state laws ("Insolvency Laws") will not
result in consolidation of the assets and liabilities of the Transferor with
those of Green Tree. These steps include the creation of the Transferor as a
separate, limited-purpose subsidiary pursuant to a Certificate of Incorporation
containing certain limitations (including restrictions on the nature of the
Transferor's business and a restriction on the Transferor's ability to commence
a voluntary case or proceeding under any Insolvency Laws without the unanimous
affirmative vote of all of its directors). The Transferor's Certificate of
Incorporation includes a provision that requires the Transferor to have two
directors who qualify under the Certificate of Incorporation as "Independent
Directors," meaning a person who is not now, and has never been, a director or
officer of, employed by, or the holder of any beneficial economic interest in
any Affiliate, and who may at no time hold any beneficial or economic interest
in the Transferor. "Affiliate" means any entity other than the Transferor (i)
which owns beneficially, directly or indirectly, 10% or more of the outstanding
shares of Common Stock of the Transferor, or (ii) of which 10% or more of the
outstanding shares of its Common Stock is owned beneficially, directly or
indirectly, by any entity described in clause (i) above, or (iii) which is
controlled by an entity described in clause (i) above, as the term "control" is
defined under the Rules and Regulations of the Commission. No assurance can be
given, however, that such a consolidation will not occur. See "Risk Factors--
Transfer of the Receivables; Insolvency Risk Considerations."
GREEN TREE FINANCIAL CORPORATION AND ITS COMMERCIAL FINANCE DIVISION
Green Tree is a Delaware corporation that, as of September 30, 1995, had
stockholders' equity of approximately $914,860,000. Through its various
divisions, Green Tree purchases, pools, sells and services retail installment
sales contracts for manufactured housing and retail installment sales contracts
for home improvements, a variety of consumer products and equipment finance,
and provides inventory financing to dealers, manufacturers and distributors of
various consumer and commercial products. Green Tree is currently the largest
servicer of manufactured housing government insured or guaranteed contracts,
and is one of the largest servicers of conventional manufactured housing
contracts, in the United States. Green Tree conducts its business throughout
the United States through 52 manufactured housing offices, 80 home improvement
locations and 3 regional wholesale lending centers, as well as centralized
operations in St. Paul, Minnesota and Rapid City, South Dakota. Its principal
executive offices are located at 1100 Landmark Towers, 345 St. Peter Street,
St. Paul, Minnesota 55102-1639 (telephone (612) 293-3400). Green Tree's Annual
Report on Form 10-K for the year ended December 31, 1994, most recent Proxy
Statement, and, when available, subsequent quarterly or annual reports are
available from Green Tree upon written request. The Certificates do not
represent an interest in or obligation of Green Tree, the Transferor or any of
their affiliates, and no Certificateholder will have recourse for payment of
its Certificates to any assets of any of Green Tree, the Transferor (other than
the Exchangeable Transferor Certificate and any Transferor Retained Class, to
the extent described herein) or any of their affiliates.
COMMERCIAL FINANCE DIVISION--GENERAL
The Receivables to be sold to the Transferor will be selected from extensions
of credit made by Green Tree's Commercial Finance Division ("CFD") under
revolving credit agreements with dealers, manufacturers and distributors of
various consumer and commercial products. The Green Tree party to such an
agreement may be a subsidiary of Green Tree. "Floorplan Receivables" represent
the financing of product inventory for retail dealers of a variety of consumer
products. "Asset-Based Receivables" represent the financing of production and
inventory by manufacturers, such revolving credit arrangements being secured by
finished goods inventory, accounts receivable arising from the sale of such
inventory, certain work-in-process, raw materials and component parts, as well
as other assets of the borrower. The dealers, manufacturers and distributors
obligated under the Receivables are collectively referred to as "Dealers." The
products securing the Floorplan Receivables currently include manufactured
housing, recreational vehicles and marine products. Green Tree expects to
provide financing to additional Dealers in the future, and Green Tree expects
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that the financing needs of Dealers will change over time, whether as a result
of seasonality or other changes in the Dealers' business. Accordingly, though
the types of credit arrangements are expected to remain the same, the products
securing those arrangements are expected to expand over time, and the relative
proportions of the various types of product collateral will change over time.
FLOORPLAN RECEIVABLES--GENERAL
The Floorplan Receivables are secured by the products being financed and the
Dealer's other inventory, together with personal guaranties in some instances.
The amount of the advance is generally equal to 100% of the invoice price of
the product. The Floorplan Receivables are generally full recourse obligations
of the related Dealer.
FLOORPLAN AGREEMENTS WITH MANUFACTURERS
Green Tree will provide financing for products for a particular Dealer, in
most instances, only if Green Tree has also entered into a floorplanning
agreement (the "Floorplan Agreement") with the manufacturer, distributor or
other vendor (each a "Manufacturer") of such product. Pursuant to the Floorplan
Agreement, the Manufacturer will agree, among other matters, to purchase from
Green Tree those products sold by such Manufacturer to a Dealer and financed by
Green Tree if Green Tree acquires possession of such products pursuant to
repossession, voluntary surrender, or other circumstances. The terms of such
repurchase obligations may vary, both by industry and by Manufacturer. In some
instances, the Manufacturer will be obligated to repurchase the product for a
price equal to the unpaid principal balance owed by the Dealer for the product
in question whenever Green Tree acquires possession thereof. On occasion,
different terms may be negotiated. Such terms may provide for a smaller
purchase price, or a purchase price which declines over time, or time periods
beyond which no obligation to purchase by the Manufacturer shall apply. Certain
Floorplan Agreements may also eliminate the repurchase obligation or reduce the
purchase price payable by the Manufacturer, depending upon the condition of the
inventory acquired by Green Tree.
FLOORPLAN CREDIT UNDERWRITING PROCESS
A Dealer requesting the establishment of a credit line with Green Tree is
required to submit an application and financial information, including audited
or unaudited financial statements and, in some cases, tax returns. CFD attempts
to talk to, or receive reference letters from, several of the applicant's
current creditors and may also obtain a credit agency report on the applicant's
credit history. In addition to such current financial information and
historical credit information, CFD will consider the following factors: the
reason for the request for the extension of credit; the need for the credit
line; the products to be financed and the financial status of the manufacturer
of such products, if any, that would enter into a related Floorplan Agreement;
and the experience of the Dealer's management. The determination of whether to
extend credit and the amount to be extended is based upon a weighing of the
above factors.
Extensions of credit lines in excess of $5,000,000 must be approved at the
corporate level of Green Tree. Extensions of credit up to $5,000,000 may be
approved by division level credit officers and up to $1,000,000 by a business
center vice president. CFD reviews individual Dealer credit limits (i) prior to
any increase in such credit limit, (ii) generally every 12 to 18 months and
(iii) upon becoming aware that the Dealer is experiencing financial
difficulties or is in default on its obligations under its agreement with Green
Tree.
CREATION OF FLOORPLAN RECEIVABLES
Green Tree's floorplan business is typically documented by an agreement
between Green Tree and the Dealer which provides for both the extension of
credit and a grant of a security interest. Such agreements are generally for an
unspecified period of time and create discretionary lines of credit, which
Green Tree may terminate at any time in its sole discretion, subject, however,
to prevailing standards of commercial reasonableness and good faith. Absent
default by the Dealer, the outstanding Floorplan Receivables owed by such
Dealer cannot be accelerated, even if the line of credit is terminated. After
the effective date of termination, Green Tree is under no obligation to
continue to provide additional financing, but the then current outstanding
balance will be repayable in accordance with the payment terms of such Dealer's
program with Green Tree, as described below.
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Advances made for the purchase of inventory are most commonly arranged in the
following manner: the Dealer will contact the manufacturer and place a purchase
order for a shipment of inventory. If the manufacturer has been advised that
Green Tree is the Dealer's inventory financing source, the manufacturer will
contact Green Tree to obtain an approval number with respect to such purchase
order. Upon such request, Green Tree will determine whether (i) the
manufacturer is in compliance with its Floorplan Agreement, (ii) the Dealer is
in compliance with its program with Green Tree and (iii) such purchase order is
within the Dealer's credit limit. If all of such requirements are met, Green
Tree will issue an approval number to the manufacturer. The manufacturer will
then ship the inventory and directly submit its invoice for such purchase order
to Green Tree for payment. Interest or finance charges normally begin to accrue
on the Dealer's accounts as of the invoice date. The proceeds of the loan being
made by Green Tree to the Dealer are paid directly to the manufacturer in
satisfaction of the invoice price and will normally be funded at that time. In
some cases, however, Green Tree will negotiate a delay in funding the advance
for a period which in most cases does not exceed 10 days after the date of the
invoice. Green Tree and the manufacturer may also agree that Green Tree may
discount the invoice price of the inventory ordered by the Dealer. Under this
arrangement, the manufacturer will deem itself paid in full upon receipt of
such discounted amount. Typically, in exchange for the increased yield created
by the discount, Green Tree will agree to provide the manufacturer's Dealers
with reduced interest, or perhaps no interest, for some period of time. Thus,
the Dealer's financing program may provide for so-called "interest free" or
"free flooring" periods during which no interest or finance charges will accrue
on their accounts. The price paid by the Trust for such a Receivable will be
the full amount payable by the Dealer.
FLOORPLAN PAYMENT TERMS
The Dealer is obligated to pay interest or finance charges monthly, but
principal repayment with respect to any particular item of inventory financed
by Green Tree is due and payable only upon the sale of such item by the Dealer,
subject in some cases to an ultimate maturity date. In addition, Green Tree
requires Dealers to begin repaying principal in installments if the unit has
not been sold within a specified period of time. These payments are referred to
as "curtailments." Even if a unit is subject to curtailment payments, the
outstanding balance with respect to such unit will remain fully payable upon
the sale of the unit.
Floorplan receivables generally accrue interest (subject to any "interest
free" or "free flooring" periods as described above) at a floating rate based
on a generally published prime rate or other index. Green Tree also charges the
Dealer a documentation, handling and inspection fee for each unit financed
("DHI Fees"). These fees will be included in the Finance Charge Collections
owned by the Trust. Interest and DHI Fees are due and payable on a monthly
basis.
FLOORPLAN BILLING PROCEDURES
At the beginning of each month Green Tree sends to each Dealer a billing
statement for the interest, DHI Fees, curtailments, if any, and any other non-
principal charges accrued or arising in the prior month. Payment is due in the
same month.
FLOORPLAN DEALER MONITORING
Inventory inspections are performed to physically verify the collateral used
to secure a Dealer's loan, check the condition of the inventory, account for
any missing inventory and collect any funds due. The inventory inspection is
one of the key tools utilized by CFD for monitoring inventory financed by Green
Tree, and is performed generally on a monthly basis with respect to each Dealer
account (and each location within a Dealer account to the extent that a dealer
conducts its business in more than one location). If an inspection reveals that
the Dealer has sold any inventory without immediate repayment to Green Tree,
the inventory is considered "sold and unpaid" ("SAU") and Green Tree demands
immediate repayment from the Dealer or initiates other appropriate steps to
resolve the SAU. Inspection dates within each month must vary, and unscheduled
inspections are performed whenever CFD deems it appropriate. CFD also requires
regular rotation of the individuals conducting a Dealer's inspections.
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In addition, Region Managers, within their respective portfolio of Dealers,
monitor each Dealer as to such Dealer's performance and adherence to Green
Tree's requirements. This includes a regular review of annual and interim
financial statements for trends, payments for sold inventory between
inspections, monitoring of Green Tree's on-going perfected security interests
in the inventory, existence of proper insurance coverage with respect to such
inventory at all times, timely payment of interest, DHI fees and curtailments,
proper recording of invoices, the maintenance of the Manufacturer Statements of
Origin which are on file with respect to each manufactured home financed, and
the requirement that all inventory stays within the repurchase period in effect
with respect to each Manufacturer.
ASSET-BASED RECEIVABLES
Asset-Based Receivables that may be sold to the Transferor arise from asset-
based revolving credit facilities provided to certain manufacturers and
distributors. These facilities typically involve a revolving line of credit,
for a contractually committed period of time, pursuant to which the borrower
may draw the lesser of the maximum amount of such line of credit or a
specifically negotiated loan availability amount, subject to the availability
of adequate collateral. Interest is typically payable monthly, while principal
payments and draws are generally settled weekly or, if earlier, when and to the
extent principal outstandings exceed eligible collateral at negotiated advance
rates (i.e., the maximum percentage of the borrowing base, or portion thereof,
that the borrowed amount can represent). The loan availability amount is
determined by multiplying an agreed upon advance rate against the value of
certain types of assets. In these facilities, Green Tree will most typically
lend against finished inventory and eligible accounts receivable arising from
the sale of such inventory which are free and clear of other liens and
otherwise in compliance with specified standards. Green Tree's asset-based
revolving credit facilities are usually secured by the assets which constitute
the borrowing base against which the loan availability amount is calculated
and, occasionally, by other personal property, mortgages or other assets of the
borrower. Asset-Based Receivables are generally not supported by any Floorplan
Agreement with a Manufacturer, and for that reason generally have significantly
lower advance rates than a borrowing agreement supported by a Floorplan
Agreement with a Manufacturer.
Green Tree's underwriting of Asset-Based Receivables gives consideration to a
variety of factors, including, among others, the financial condition of the
borrowing entity, its credit history and relationship with current and previous
lenders and its historical performance and trends. Upon satisfaction of certain
credit criteria, terms and conditions, an account is approved for a revolving
line of credit, the size of which is based on a variety of factors including
the needs of the borrower.
Upon approval of the credit, an evaluation of the borrowing base is performed
and advance rates are established based on the type of collateral. For purposes
of evaluating items such as finished goods inventory, work-in-process, raw
materials and component parts, an independent appraisal is generally obtained
and used in connection with establishing advance rates. With respect to
accounts receivable, eligibility criteria, typically excluding items past due
in excess of 60 days or aged over 120 days from invoice date, are established,
and concentration limits are set with respect to the individual items within
the receivables base. Next, an advance rate on eligible receivables is
determined based on a review of historical and projected data, giving
consideration to factors such as credit loss experience, dilution, contingent
sales and aged items. The intended result of the above analyses is to set
eligibility criteria and advance rates such that, under a collateral
liquidation scenario, Green Tree would fully recover any principal dollars
advanced on the revolving line of credit.
The credit facilities giving rise to the Asset-Based Receivables typically
provide for control of all cash receipts of the borrower through a bank lockbox
facility. The adequacy of the borrowing base is monitored weekly and audited
monthly. In addition, the financial condition of the borrower is monitored
monthly in connection with financial covenants set forth in the loan
agreements, and is subject to audit by Green Tree at any time.
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REALIZATION ON THE RECEIVABLES
Upon any default by a Dealer of its obligations to Green Tree under the
related financing agreement and expiration of any and all applicable notice and
cure periods that may have been agreed to between Green Tree and such Dealer,
Green Tree may declare such Dealer's obligations immediately due and payable
and enforce all of its legal rights and remedies, including commencement of
proceedings to realize upon any collateral, subject to prevailing standards of
commercial reasonableness and good faith. Upon learning of such a default
relating to Floorplan Receivables, Green Tree makes contact with the Dealer to
determine whether it can develop a workout arrangement with the Dealer to cure
all defaults. If disputes with the Dealer exist, such disputes may be submitted
to arbitration. If Green Tree determines that such an arrangement to cure a
default cannot be successfully implemented, the Dealer's payment obligations
are accelerated. Green Tree then attempts to obtain possession of the
collateral. If a Manufacturer is obligated to repurchase the collateral under a
Floorplan Agreement as described above under "Floorplan Agreements with
Manufacturers," the collateral is turned over to the related Manufacturer.
Green Tree repossesses, stores and then attempts to sell all other salable
collateral in a commercially reasonable manner. See "The Accounts--Loss
Experience."
Upon default by a Dealer under an Asset-Based Receivable revolving credit
arrangement, which, among other conditions, may arise as a result of the
borrower's failure to comply with certain specified debt covenants or failure
to maintain an adequate borrowing base to support outstanding balances, Green
Tree will continue its ongoing assessment of the borrower's financial condition
and determine its best course of action for purposes of obtaining repayment,
including the possibility of immediate liquidation of all collateral.
THE RECEIVABLES
The Receivables conveyed to the Trust will represent the amounts owed from
time to time under the Accounts. The Accounts will be selected from Green
Tree's portfolio of accounts on the basis of criteria set forth in the Pooling
and Servicing Agreement and the Series 1995-1 Series Supplement as applied on
the Cut-off Date and, with respect to Additional Accounts, as of the related
date of their designation (the "Trust Portfolio"). Many of the Accounts were
originated by subsidiaries of Green Tree. The Transferor will have the right
(subject to certain limitations and conditions set forth therein), and in some
circumstances will be obligated, to designate from time to time Additional
Accounts and to transfer to the Trust all Receivables arising from such
Additional Accounts, whether such Receivables are then existing or thereafter
created. Green Tree expects to transfer Receivables in Additional Accounts to
the Transferor, who will transfer such Receivables to the Trust, as Green
Tree's commercial finance business continues to grow. Any Additional Accounts
must be Eligible Accounts as of the date the Transferor designates such
accounts as Additional Accounts. Furthermore, pursuant to the Pooling and
Servicing Agreement, the Transferor has the right (subject to certain
limitations and conditions) to designate certain Accounts as Removed Accounts
and to require the Trustee to reconvey all Receivables in such Removed Accounts
to the Transferor, whether such Receivables are then existing or thereafter
created. Throughout the term of the Series, the Accounts from which the
Receivables arise will be the Accounts designated by the Transferor on the Cut-
off Date plus any Additional Accounts minus any Removed Accounts. Pursuant to
the Agreement and the Series 1995-1 Series Supplement, the Transferor will
represent and warrant to the Trust that, as of the Closing Date and the date
Receivables are conveyed to the Trust, such Receivables meet certain
eligibility requirements. See "Description of the Offered Certificates--
Representations and Warranties."
ELIGIBLE RECEIVABLES AND ELIGIBLE ACCOUNTS
The Receivables must arise under an Eligible Account. An "Eligible Account"
is defined to mean, as of the relevant Cut-off Date (or, with respect to
Additional Accounts, as of their date of designation for inclusion in the
Trust), an arrangement to provide a revolving extension of credit by Green Tree
or one of its subsidiaries to a Dealer (i) in order to finance the purchase by
a Dealer of consumer and commercial product
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inventory or (ii) as a line of credit secured by unencumbered assets of such
Dealer, which extension of credit, as of the date of determination thereof, (a)
is in existence and maintained with Green Tree or such subsidiary, (b) is
payable in United States dollars, (c) is with a Dealer whose most recent
billing address is in the United States or its territories or possessions, (d)
has been originated by Green Tree or such subsidiary in the ordinary course of
its business or acquired by Green Tree through the acquisition of an Eligible
Account from another lender upon satisfying Green Tree's customary underwriting
standards, (e) in respect of which no amounts have been charged off by Green
Tree or such subsidiary as uncollectible in its customary and usual manner as
of the Cut-off Date (or, with respect to Additional Accounts, as of their date
of designation for inclusion in the Trust), and (f) is with a Dealer that is
not involved in insolvency proceedings. The definition of Eligible Account may
be changed by amendment to the Pooling and Servicing Agreement without the
consent of the Certificateholders if (i) the Transferor delivers to the Trustee
a certificate of an authorized officer to the effect that, in the reasonable
belief of the Transferor, such amendment will not as of the date of such
amendment adversely affect in any material respect the interest of the
Certificateholders, and (ii) such amendment will not result in a withdrawal or
reduction of the rating of any outstanding Series issued by the Trust.
An "Eligible Receivable" is defined as a Receivable (a) that was originated
by Green Tree or one of its subsidiaries in the ordinary course of business or
acquired by Green Tree through the acquisition of an Eligible Account from
another lender upon satisfying Green Tree's customary underwriting standards,
(b) that has arisen under an Eligible Account, (c) that was created in
compliance with all requirements of law applicable thereto and pursuant to a
floorplan or asset-based financing agreement that complies with all
requirements of law applicable thereto, (d) with respect to which all consents,
licenses or authorizations of, or registrations with, any governmental
authority required to be obtained or given by Green Tree or the Transferor in
connection with the creation of such Receivable, or the transfer thereof to the
Trust or the execution, delivery, creation and performance by Green Tree or
such subsidiary of the related floorplan or asset-based financing agreement
have been duly obtained or given and are in full force and effect as of the
date of the creation of such Receivable, (e) as to which, at the time of its
creation, the Transferor had good and marketable title free and clear of all
liens and security interests (other than certain liens permitted pursuant to
the Pooling and Servicing Agreement), and at all times following the transfer
of such Receivables to the Trust, the Trust will have good and marketable title
free and clear of all liens and security interests (other than certain liens
permitted pursuant to the Pooling and Servicing Agreement) or the grant of a
first priority security interest therein, (f) that is the legal, valid, binding
and assignable payment obligation of the related Dealer, legally enforceable
against such Dealer in accordance with its terms (with certain bankruptcy
related exceptions), (g) that constitutes "chattel paper," an "account" or a
"general intangible" under Article 9 of the UCC as then in effect in the State
of Minnesota, (h) if such Receivable has the benefit of a Floorplan Agreement
with a Manufacturer, such Floorplan Agreement provides, subject to the specific
terms thereof and any limitations therein (which may vary among Floorplan
Agreements), that the Manufacturer is obligated to repurchase the products
securing the Receivables upon the Servicer's repossession thereof upon the
related Dealer's default, (i) which has been the subject of a valid transfer
and assignment from the Transferor to the Trust of all the Transferor's
interest therein and in the related Collateral Security (including any proceeds
thereof), (j) which at the time of transfer to the Trust is not subject to any
right of rescission, setoff, or any other defense (including defenses arising
out of violations of usury laws) of the Dealer, (k) as to which, at the time of
transfer of such Receivable to the Trust, Green Tree (or such subsidiary) and
the Transferor have satisfied all their respective obligations with respect to
such Receivable required to be satisfied at such time, (l) as to which, at the
time of transfer of such Receivable to the Trust, neither Green Tree (or such
subsidiary) nor the Transferor has taken or failed to take any action which
would impair the rights of the Trust or the certificateholders therein and (m)
which represents the obligation of a Dealer to repay an advance made to or on
behalf of such Dealer to finance products or the accounts receivable arising
from the sale of such products.
The products financed by the Receivables as of November 10, 1995 are shown
below under "The Accounts--Description of the Portfolio." Currently,
substantially all the Receivables are Floorplan Receivables owed by
manufactured housing dealers. These Receivables enable manufactured housing
dealers to finance their inventory of manufactured housing units pending resale
to consumers. A small percentage of the Receivables as of November 10, 1995 are
Floorplan Receivables relating to marine products (primarily
35
<PAGE>
boats, outboard motors and boat trailers) or relating to recreational vehicles,
which enable the related Dealers to finance their inventory of such products
pending resale to consumers. Green Tree expects that it will establish Accounts
for other Dealers in the future, whose related Receivables will finance other
types of products. A small percentage of the Receivables as of November 10,
1995 are Asset-Based Receivables, arising under revolving credit facilities for
manufacturers and distributors of various products. Green Tree expects that the
composition of the Receivables will change over time.
In order to reduce the Trust's exposure to any single Dealer or any single
industry, certain diversification thresholds ("Overconcentration Amounts") will
be tested at the end of each Monthly Period. Initially, except as provided
below, no more than 20% (or, prior to the first anniversary of the Closing
Date, a lesser percentage) of the Receivables may be Asset-Based Receivables;
no more than 2% (or, with respect to certain designated Dealers, 3%) of the
Receivables may have arisen under an Account with a single Dealer; no more than
15% of the Receivables may be Floorplan Receivables financing products from a
single manufacturer; no more than 5% of the Receivables may be Floorplan
Receivables financing marine products; no more than 5% of the Receivables may
be Floorplan Receivables financing recreational vehicles, and no more than 5%
of the Receivables may be Floorplan Receivables financing products other than
manufactured housing, marine products or recreational vehicles. Green Tree
expects that the Receivables will from time to time exceed one or more of these
thresholds. To the extent that any such threshold is exceeded at the end of a
Monthly Period, the Class D Invested Amount will be increased by an equivalent
amount. These threshold percentages may, however, be increased in the future
without the consent of any Certificateholder, to a level acceptable to each
Rating Agency without any reduction or withdrawal of its rating of the Class A
or Class B Certificates. See "Description of the Offered Certificates--The
Overconcentration Amounts."
THE ACCOUNTS
GENERAL
The Receivables have arisen or will arise in the Accounts. The Accounts have
been selected from all the accounts that were Eligible Accounts (the "Eligible
Portfolio") at the Cut-off Date. In order to be included in the Eligible
Portfolio, each Account must be an account established by Green Tree in the
ordinary course of business and meet certain other criteria provided in the
Pooling and Servicing Agreement. See "The Receivables--Eligible Receivables and
Eligible Accounts" and "Description of the Offered Certificates--
Representations and Warranties."
Pursuant to the Pooling and Servicing Agreement, the Transferor, and pursuant
to the Purchase Agreement, Green Tree, have the right (subject to certain
limitations and conditions), and in some circumstances are obligated, to
designate from time to time additional Eligible Accounts to be included as
Accounts ("Additional Accounts") and convey to the Trust the Receivables of
such Additional Accounts, including Receivables thereafter created. These
accounts must meet the eligibility criteria set forth above as of the date such
accounts are designated as Additional Accounts. Green Tree will convey the
Receivables then existing, with certain exceptions, or thereafter created under
such Additional Accounts to the Transferor, which will in turn convey them to
the Trust. See "Description of the Offered Certificates--Addition of Accounts."
DESCRIPTION OF THE PORTFOLIO
The following tables set forth the composition of the Receivables to be owned
by the Trust, as of November 10, 1995, by business line and other criteria. As
of November 30, 1995, the aggregate amount of Principal Receivables to be owned
by the Trust was $495,956,603. Because Green Tree expects to designate
Additional Accounts from time to time and to transfer the Receivables arising
therein to the Transferor and thence to the Trust, the business lines and the
actual composition of the Receivables by business line are expected to change
over time. In addition, due to the variability and uncertainty with respect to
the rates at which Receivables in the Trust Portfolio are created, paid or
otherwise reduced, the characteristics set forth below may vary significantly
as of any other date of determination.
In general, Green Tree considers any number of revolving financing
arrangements established with a group of affiliated Dealers to be a single
account, because the affiliated Dealers represent a consolidated credit risk.
However, Green Tree also measures its exposure to Dealers in various
industries, and for this purpose it
36
<PAGE>
would, for example, consider revolving financing arrangements with a group of
affiliated dealers engaged in sales of manufactured housing and recreational
vehicles to be separate accounts, one relating to a group of manufactured
housing dealers and one relating to a group of recreational vehicle dealers.
Accordingly, the total number of Accounts in the tables below may vary.
COMPOSITION OF RECEIVABLES IN THE TRUST BY BUSINESS LINE
NOVEMBER 10, 1995
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PERCENTAGE PERCENTAGE
OF NUMBER OF NUMBER
RECEIVABLES RECEIVABLES OF OF
BUSINESS LINE BALANCE BALANCE ACCOUNTS ACCOUNTS
------------- ----------- ----------- -------- ----------
<S> <C> <C> <C> <C>
Manufactured Housing Floorplan
Receivables.................... $450,138 92.2% 1,992 99.3%
Marine Floorplan Receivables.... 3,742 .8 9 .5
Recreational Vehicle Floorplan
Receivables.................... 74 -- 1 .1
Asset-Based Receivables......... 34,293 7.0 2 .1
-------- ----- ----- -----
Total......................... $488,247 100.0% 2,004 100.0%
======== ===== ===== =====
</TABLE>
COMPOSITION OF RECEIVABLES IN THE TRUST BY ACCOUNT BALANCE
AS OF NOVEMBER 10, 1995
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PERCENTAGE PERCENTAGE
OF NUMBER OF NUMBER
RECEIVABLES RECEIVABLES OF OF
ACCOUNT BALANCE RANGE BALANCE BALANCE ACCOUNTS ACCOUNTS
--------------------- ----------- ----------- -------- ----------
<S> <C> <C> <C> <C>
$0 to $500,000................... $198,017 40.6% 1,745 87.1%
$500,000.01 to $1,000,000........ 127,395 26.1 187 9.3
$1,000,000.01 to $5,000,000...... 107,265 22.0 67 3.3
$5,000,000.01 to $10,000,000..... 5,495 1.1 1 .1
Over $10,000,000.01.............. 50,075 10.2 3 .2
-------- ----- ----- -----
Total.......................... $488,247 100.0% 2,003 100.0%
======== ===== ===== =====
</TABLE>
GEOGRAPHIC DISTRIBUTION OF RECEIVABLES IN THE TRUST
AS OF NOVEMBER 10, 1995
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PERCENTAGE OF PERCENTAGE OF
RECEIVABLES RECEIVABLES NUMBER OF NUMBER OF
DEALER LOCATION(1) BALANCE BALANCE ACCOUNTS ACCOUNTS
------------------ ----------- ------------- --------- -------------
<S> <C> <C> <C> <C>
Georgia.................... $ 43,697 8.95% 112 5.33%
North Carolina............. 43,671 8.95 187 8.91
Texas...................... 41,370 8.47 142 6.77
Alabama.................... 30,669 6.28 114 5.43
Florida.................... 30,525 6.25 112 5.33
New Mexico................. 23,943 4.90 44 2.10
Michigan................... 23,103 4.73 101 4.81
Pennsylvania............... 18,346 3.76 53 2.53
Colorado................... 16,640 3.41 63 3.00
Other States(2)............ 216,283 44.30 1,171 55.79
-------- ------ ----- ------
Total.................... $488,247 100.00% 2,099 100.00%
======== ====== ===== ======
</TABLE>
- --------
(1) For purposes of this table, the accounts of affiliated Dealers have not
been aggregated. For purposes of this table, the Dealer's location is based
on the actual location of the Dealer's place of business rather than, for
example, the headquarters address.
(2) The percentage of the Receivables balance represented by Receivables in
each state not specifically listed is less than 3% of the Receivables
balance.
37
<PAGE>
YIELD INFORMATION
The Receivables bear interest in their accrual periods at rates generally
equal to an index rate selected in the related financing agreement, which as of
the date hereof is generally a prime rate, plus a margin. Certain Receivables
do not bear interest for a specified period after their origination. During the
first ten months of 1995, the receivables in Green Tree's portfolio had a yield
of 10.2% per annum. The Trust's yield on its Receivables will be affected by
the interest rates borne by Receivables, the Discount Factor, if any, and the
rate at which the Receivables balances are paid.
MAJOR CUSTOMERS; MAJOR MANUFACTURERS
At November 10, 1995 no one Floorplan Dealer accounted for more than 3.3% of
the aggregate balance of the Receivables to be transferred to the Trust. At
November 10, 1995, except as discussed below, no one Manufacturer was obligated
under Floorplan Agreements relating to Receivables aggregating more than 7.1%
of the aggregate Receivables balance. At October 31, 1995, Fleetwood
Enterprises, Inc. was obligated under its Floorplan Agreement with Green Tree
with respect to receivables aggregating 14.74% of Green Tree's entire
portfolio. Fleetwood Enterprises, Inc. is a large manufacturer of both
manufactured housing and recreational vehicles, with production facilities
located throughout the United States and in Germany, and is not affiliated with
Green Tree. No prediction can be made as to what percentage of the Receivables
in the future may be obligations of a single Dealer or be related to a single
Manufacturer under its Floorplan Agreement, but such percentages are subject to
the effect of Overconcentration Amounts. See "Description of the Offered
Certificates--The Overconcentration Amounts."
DELINQUENCY EXPERIENCE
The following table sets forth the delinquency experience as of the dates
indicated for Green Tree's entire portfolio. Because Green Tree's portfolio has
grown rapidly in the past year, and Green Tree expects to create a substantial
number of Additional Accounts that will be transferred to the Trust in the
future, the actual delinquency experience with respect to the Eligible Accounts
may be different. There can be no assurance that the delinquency experience for
the Receivables in the future will be similar to the experience shown below.
DELINQUENCY EXPERIENCE FOR TOTAL PORTFOLIO
RECEIVABLES BALANCE
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31, JUNE 30, SEPTEMBER 30,
1994 1994 1995 1995
-------- ------------ -------- -------------
<S> <C> <C> <C> <C>
Aggregate Principal Balance...... $22,284 $166,507 $421,464 $469,562
30 days + Delinquencies
Curtailments................... $0 $24 $46 $479
Finance Charges................ $0 $23 $322 $415
------- -------- -------- --------
Total........................ $0 $47 $368 $894
======= ======== ======== ========
Total Delinquencies as a
Percentage of Aggregate
Principal Balance............... 0.000% 0.028% 0.087% 0.190%
SAU/NSF(1)....................... (2) (2) (2) $188
SAU/NSF as a Percentage of
Aggregate Principal Balance..... (2) (2) (2) 0.040%
</TABLE>
- --------
(1) A "SAU/NSF" ("sold and unpaid" or "not sufficient funds") Account is one
that is deemed delinquent when (i) there is an unpaid receivable balance as
to which the related product has been sold and such receivable balance has
not been paid by the related Dealer or (ii) a payoff check from the related
Dealer has been returned because of insufficient funds.
(2) Data for these periods are not available.
38
<PAGE>
LOSS EXPERIENCE
The following table sets forth Green Tree's average principal receivables
balance and loss experience for each of the periods shown with respect to its
portfolio. Because Green Tree's portfolio has grown rapidly in the past year,
and Green Tree expects to create a substantial number of Additional Accounts
that will be transferred to the Trust in the future, actual loss experience
with respect to the Eligible Accounts may be different. Since a substantial
number of receivables from which the Receivables will be taken were only
recently originated, it may be expected that such receivables have not yet
exhibited a loss experience that is representative of the losses that may be
experienced over a longer period of time. There can be no assurance that the
loss experience for the Receivables in the future will be similar to the
historical experience set forth below with respect to the portfolio. The
historical experience set forth below includes the effect of the financial
obligations of Manufacturers in respect of repossessed products as described
above under "Green Tree Financial Corporation and its Commercial Finance
Division--Floorplan Agreements with Manufacturers." If Manufacturers are not
able to perform such obligations in the future, the loss experience in respect
of the portfolio and the Receivables may be adversely affected.
LOSS EXPERIENCE FOR THE PORTFOLIO
<TABLE>
<CAPTION>
ELEVEN MONTHS TEN MONTHS
ENDED ENDED
DECEMBER 31, OCTOBER 31,
1994 1995
------------- ------------
<S> <C> <C>
Average Principal Receivables Balance(1)........... $36,221,024 $359,301,440
Gross Losses....................................... 0 24,095
Net Losses(2)...................................... 0 24,095
Net Losses as a percentage of Average Principal
Receivables Balance............................... 0% .007%
</TABLE>
- --------
(1) Average Principal Receivables Balance is the average daily principal
balances for the eleven months ended December 31, 1994 and the ten months
ended October 31, 1995, respectively.
(2) Net losses in any period are gross losses less recoveries for such period.
Recoveries include recoveries from collateral security in addition to
recoveries from the products.
AGING EXPERIENCE
The following table provides the age distribution of inventory for all
dealers in the portfolio, as a percentage of total principal outstanding at the
date indicated. Because the Eligible Accounts will only be a portion of the
entire portfolio, actual age distribution with respect to the Eligible Accounts
may be different.
AGE DISTRIBUTION FOR THE PORTFOLIO(1)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PERCENTAGE OF
RECEIVABLES RECEIVABLES
BALANCE BALANCE
NOVEMBER 10, NOVEMBER 10,
1995 1995
------------ -------------
<S> <C> <C>
Days
1-30............................................... $115,717 25.5%
31-60.............................................. 70,485 15.5
61-90.............................................. 53,397 11.8
91-120............................................. 43,200 9.5
121-180............................................ 57,868 12.8
181-270............................................ 71,016 15.6
Over 270........................................... 42,272 9.3
-------- -----
Total............................................ $453,955 100.0%
======== =====
</TABLE>
- --------
(1) Excludes Asset-Based Receivables.
39
<PAGE>
MATURITY CONSIDERATIONS
The Pooling and Servicing Agreement provides that Class A Certificateholders
will not receive payments of principal until the Class A Scheduled Payment
Date, or earlier in the event of a Pay Out Event that results in the
commencement of the Early Amortization Period. The Pooling and Servicing
Agreement also provides that Class B Certificateholders will not receive
payments of principal until the Class B Scheduled Payment Date, or earlier in
the event of a Pay Out Event that results in the commencement of the Early
Amortization Period (in either case, only after the Class A Invested Amount has
been paid in full). The Class B Certificateholders will not receive any
payments of principal until the final principal payment on the Class A
Certificates has been made.
Controlled Accumulation Period. On each business day during the Controlled
Accumulation Period, prior to the payment (or deposit in the Principal Account)
of the Class A Invested Amount in full, an amount equal to the lesser of (a)
Principal Collections allocable to the Class A, Class B and Class C
Certificateholders' Interest plus Shared Principal Collections, if any, from
other Series allocable to the Class A, Class B and Class C Certificates, plus
certain other amounts comprising Class A, Class B and Class C Principal, and
(b) the amount, if any, by which (i) the sum of the Controlled Accumulation
Amount for such Monthly Period plus the Accumulated Shortfall, if any (such sum
being referred to as the "Controlled Deposit Amount" for the related Monthly
Period) exceeds (ii) the amount in the Principal Account for the account of the
Class A, Class B and Class C Certificate Owners, will be deposited daily in the
Principal Account.
On each business day during the Controlled Accumulation Period, following the
payment (or deposit in the Principal Account) of the Class A Invested Amount in
full but prior to the payment (or deposit in the Principal Account) of the
Class B Invested Amount in full, an amount equal to the lesser of (a) Principal
Collections allocable to the Class A, Class B and Class C Certificateholders'
Interest plus Shared Principal Collections, if any, from other Series allocable
to the Class A, Class B and Class C Certificates, plus certain other amounts
comprising Class A, Class B and Class C Principal, and (b) the amount, if any,
by which (i) the Controlled Deposit Amount for the related Monthly Period
exceeds (ii) the amount in the Principal Account for the account of the Class B
Certificate Owners, will be deposited daily in the Principal Account.
Although it is anticipated that during the Controlled Accumulation Period
prior to the payment of the Class A Invested Amount in full, funds will be
deposited in the Principal Account in an amount equal to the applicable
Controlled Deposit Amount for each Monthly Period and that the Class A Invested
Amount will be available for distribution to the Class A Certificate Owners on
the Class A Scheduled Payment Date, and that the Class B Invested Amount will
be available for distribution to the Class B Certificate Owners on the Class B
Scheduled Payment Date, respectively, no assurance can be given in that regard.
Pay Out Event. If a Pay Out Event occurs, the Early Amortization Period will
commence and any amounts on deposit in the Principal Account will be paid to
the Class A Certificate Owners on the Distribution Date in the month following
the commencement of the Early Amortization Period. In addition, to the extent
that the Class A Invested Amount has not been paid in full on the Class A
Scheduled Payment Date, the Class A Certificate Owners will be entitled to
monthly payments of principal equal to the Principal Collections allocable to
the Class A, Class B and Class C Certificateholders' Interest plus Shared
Principal Collections, if any, from other Series allocable to the Class A,
Class B and Class C Certificates, plus certain other amounts comprising Class
A, Class B and Class C Principal, until the earlier of the date on which the
Class A Invested Amount has been paid in full and the Series 1995-1 Termination
Date. After the Class A Invested Amount has been paid in full and if the Series
1995-1 Termination Date has not occurred, Principal Collections allocable to
the Class B and Class C Certificateholders' Interest plus Shared Principal
Collections, if any, from other Series allocable to the Class A, Class B and
Class C Certificates, plus certain other amounts comprising Class B and Class C
Principal, will be paid to the Class B Certificate Owners on each Distribution
Date until the earlier of the date on which the Class B Invested Amount has
been paid in full and the Series 1995-1 Termination Date. Thereafter, on and
after the Class C Principal Commencement Date, the Class C Certificate Owners
will be entitled to receive monthly payments of principal, until the Class C
Invested Amount is paid in full or until the Series 1995-1 Termination Date.
40
<PAGE>
A "Pay Out Event" occurs, either automatically or after specified notice,
upon
(i) failure by the Transferor to convey Receivables in Additional
Accounts to the Trust within five Business Days after the day on which it
is required to convey such Receivables pursuant to the Pooling and
Servicing Agreement;
(ii) failure on the part of the Transferor, the Servicer or Green Tree,
as applicable, to make certain payments or transfers of funds for the
benefit of the Certificate Owners or to observe or perform in any material
respect certain other covenants within the time periods specified in the
Pooling and Servicing Agreement;
(iii) material breaches of certain representations, warranties or
covenants of Green Tree or the Transferor which remain uncured after the
grace periods specified in the Pooling and Servicing Agreement;
(iv) the occurrence of certain events of bankruptcy, insolvency or
receivership relating to Green Tree or the Transferor;
(v) the Trust or the Transferor becomes an investment company within the
meaning of the Investment Company Act of 1940, as amended;
(vi) any Servicer Default occurs;
(vii) on any Determination Date, the average of the Monthly Payment Rates
for the three preceding Monthly Periods, where the Monthly Payment Rate for
a Monthly Period is the percentage obtained by dividing the aggregate of
the Receivables balances (without deducting therefrom any discount portion)
collected during such Monthly Period by the average daily aggregate
Receivables balance (without deducting therefrom any discount portion) for
such Monthly Period, is less than 20%;
(viii) the failure to pay the outstanding principal amount of the Class A
or Class B Certificates by the Class A Scheduled Payment Date or the Class
B Scheduled Payment Date, as applicable;
(ix) the ratio (expressed as a percentage) of (i) the average for each
month of the net losses on the Receivables (exclusive of the Ineligible
Receivables) owned by the Trust (i.e., gross losses less recoveries on any
such Receivables (including, without limitation, recoveries from collateral
security in addition to recoveries from the products, recoveries from
Manufacturers and insurance proceeds)) during any three consecutive
calendar months to (ii) the average of the month-end aggregate balances of
such Receivables (without deducting therefrom the discount portion) for
such three-month period, exceeds 5% on an annualized basis;
(x) the sum of all Cash Equivalents and amounts on deposit in the Excess
Funding Account represents more than 50% of the sum of the aggregate amount
of Principal Receivables (without deducting therefrom any discount portion)
on each of six or more consecutive Determination Dates, after giving effect
to all payments made or to be made on the Distribution Date next succeeding
each such respective Determination Date; or
(xi) if Principal Collections allocable to the Class D
Certificateholder's Interest have been reallocated in any Monthly Period to
cover any Required Amounts and have not been reimbursed as of the
Determination Date in such Monthly Period.
41
<PAGE>
The amount of new Receivables generated in any month and payment rates on the
Receivables may vary because of seasonal variations in product sales and
inventory levels, retail incentive programs provided by product manufacturers
and various economic factors affecting product sales generally. The following
table sets forth the monthly payment rates ("MPR") for the receivables
originated by Green Tree from Dealers for each month since February 1994 and
the average monthly payment rates for such receivables for all months during
the periods shown, in each case calculated by dividing the total collections
during a given month by total opening monthly balances of such receivables
during the periods shown and expressing such amounts as a percentage. Payment
rates shown in the table are based on amounts which would be deemed payments of
Principal Receivables with respect to such receivables.
MONTHLY PAYMENT RATES FOR THE PORTFOLIO
<TABLE>
<CAPTION>
PORTFOLIO
COMPOSITION (1)
--------------------
PAYMENT ASSET-
MONTH/YEAR RATE PRESOLD STOCK BASED
- ---------- ------- ------- ----- ------
<S> <C> <C> <C> <C>
February 1994...................................... 95% 97% 3% 0%
March 1994......................................... 115 100 0 0
April 1994......................................... 118 100 0 0
May 1994........................................... 135 100 0 0
June 1994.......................................... 124 100 0 0
July 1994.......................................... 108 99 1 0
August 1994........................................ 113 99 1 0
September 1994..................................... 115 99 1 0
October 1994....................................... 100 83 17 0
November 1994...................................... 51 35 65 0
December 1994...................................... 20 10 90 0
--- --- --- ---
1994 Average....................................... 56% 42% 58% 0%
--- --- --- ---
January 1995....................................... 22 11 89 0
February 1995...................................... 19 9 91 0
March 1995......................................... 24 8 92 0
April 1995......................................... 25 9 91 0
May 1995........................................... 28 9 91 0
June 1995.......................................... 29 10 90 0
July 1995.......................................... 29 10 90 0
August 1995........................................ 33 10 90 0
September 1995..................................... 28 10 90 0
October 1995....................................... 30 9 87 4
--- --- --- ---
1995 Average (2)................................... 28% 10% 89% 1%
--- --- --- ---
Life Average....................................... 30% 12% 88% 0%
=== === === ===
</TABLE>
- --------
(1) Green Tree began financing manufactured housing floorplan receivables on a
"Presold" basis in February 1994. Under the Presold program, floorplan
financing is provided to a dealer on units for which Green Tree has already
approved a retail contract for sale to a customer. In October 1994 Green
Tree began financing manufactured housing floorplan receivables on a dealer
"Stock" basis (where the dealer does not have a purchase order for the
product from a retail customer), and later began financing other products
through the Stock program as well.
(2) Through October 1995.
The amount of collections on Receivables may vary from month to month due to
seasonal fluctuations in sales of the products securing the Receivables and
other factors. There can be no assurance that Principal Collections with
respect to the Trust, and thus the rate at which funds are deposited in the
Principal
42
<PAGE>
Account during the Controlled Accumulation Period, will be similar to the
historical experience set forth above. If a Pay Out Event occurs, the average
life and maturity of the Offered Certificates could be significantly reduced.
Certificate Owners will bear the risk of being able to reinvest principal
received on the Certificates at a yield at least equal to their yield on the
Certificates. If an investor acquires a Certificate at a discount, the
repayment of principal on the Certificate later than on the related Scheduled
Payment Date will likely result in a lower than anticipated yield. In addition,
if an investor acquires a Certificate at a premium, repayment of principal
earlier than the related Scheduled Payment Date will result in a yield to that
investor that is lower than anticipated by that investor.
USE OF PROCEEDS
The Trustee, on behalf of the Trust, will receive the Receivables from the
Transferor and, in exchange therefor, will issue the Exchangeable Transferor
Certificate, the Class A Certificates, the Class B Certificates, the Class C
Certificates and the Class D Certificates to or upon the order of the
Transferor. The Transferor will apply the entire net proceeds received from the
sale of the Offered Certificates, which is expected to be approximately
$426,303,850, to be applied toward the purchase price of the Receivables.
DESCRIPTION OF THE OFFERED CERTIFICATES
The Offered Certificates will be issued pursuant to the Pooling and Servicing
Agreement and the Series 1995-1 Supplement. Pursuant to the Pooling and
Servicing Agreement, the Transferor and the Trustee may execute additional
Supplements in order to issue additional Series.
GENERAL
The Offered Certificates will represent undivided interests in certain assets
of the Trust, including the right to the investor allocation percentage of all
Obligor payments on the Receivables in the Trust. Each Class A Certificate and
Class B Certificate represents the right to receive payments of interest at the
Class A Certificate Rate or the Class B Certificate Rate, as the case may be,
funded from Available Series Interest Collections and the right to receive
payments of principal on or after the Class A Scheduled Payment Date or the
Class B Scheduled Payment Date, as applicable, in each case funded from
Principal Collections allocated to the Class A, Class B and Class C
Certificateholders' Interests.
The Transferor will own the Exchangeable Transferor Certificate, the Class C
Certificates and the Class D Certificates, but may in the future privately
place the Class C Certificates. The Exchangeable Transferor Certificate will
represent an undivided interest in the Trust, including the right to a
percentage (the "Transferor Percentage") of all Obligor payments on the
Receivables in the Trust equal to 100% minus the sum of the applicable investor
allocation percentages (which shall not exceed 100%) for all Series of
certificates then outstanding. See "--Certain Matters Regarding the Transferor
and the Servicer."
During the Revolving Period, the amount of the Invested Amount in the Trust
will remain constant except under certain limited circumstances. See "--
Defaulted Receivables" and "--The Overconcentration Amounts." The amount of
Principal Receivables in the Trust, however, will vary each day as new
Receivables arise in the Accounts and other Receivables are paid. The amount of
the Transferor Interest (or the amount in the Excess Funding Account, if
necessary) will fluctuate each day, therefore, to reflect the changes in the
amount of the Principal Receivables in the Trust. During the Controlled
Accumulation Period, the Invested Amount will decline as dealer payments of
Principal Receivables are collected and held for distribution or distributed to
the Certificate Owners. As a result, the Transferor Interest will generally
increase each month during the Controlled Accumulation Period to reflect the
reductions in the Invested Amount of such Series and will also change to
reflect the variations in the amount of the Principal Receivables in the Trust.
The Transferor Interest may be reduced as the result of an Exchange. See "--
Exchanges."
Each Class of Offered Certificates initially will be represented by
certificates registered in the name of the nominee of DTC (together with any
successor depository selected by the Transferor, the "Depository"),
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except as set forth below. Beneficial interests in each Class of Offered
Certificates will be available for purchase in minimum denominations of $1,000
and integral multiples of $1,000 in excess thereof in book-entry form only. The
Transferor has been informed by DTC that DTC's nominee will be Cede & Co.
Accordingly, Cede & Co. is expected to be the holder of record of the Offered
Certificates. Unless and until Definitive Certificates are issued under the
limited circumstances described herein, no Certificate Owner acquiring an
interest in any Class of Offered Certificates will be entitled to receive a
certificate representing such Certificate Owner's interest in such
Certificates. Until such time, all references herein to actions by
Certificateholders of any Class of Offered Certificates will refer to actions
taken by the Depository upon instructions from its participating organizations
("DTC Participants" or "Participants") and all references herein to
distributions, notices, reports, and statements to Certificateholders of any
Class of Offered Certificates will refer to distributions, notices, reports,
and statements to the Depository or its nominee, as the registered holder of
the Offered Certificates of such Class, for distribution to Certificate Owners
of such Class in accordance with the Depository's procedures. See "--Book-Entry
Registration" and "--Definitive Certificates."
BOOK-ENTRY REGISTRATION
With respect to each Class of Offered Certificates in book-entry form,
Certificateholders may hold their Certificates through DTC (in the United
States) or Cedel or Euroclear (in Europe), if they are participants of such
systems, or indirectly through organizations that are participants in such
systems.
Cede, as nominee for DTC, will hold the global certificates. Cedel and
Euroclear will hold omnibus positions on behalf of the Cedel Participants and
the Euroclear Participants, respectively, through customers' securities
accounts in Cedel's and Euroclear's names on the books of their respective
depositaries (collectively, the "Depositaries") which in turn will hold such
positions in customers' securities accounts in the Depositaries' names on the
books of DTC.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities for its Participants and facilitates the clearance and
settlement among Participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic book-entry changes in
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Participants include securities brokers and dealers,
banks, trust companies, clearing corporations, and certain other organizations.
Indirect access to the DTC system is also available to others such as
securities brokers and dealers, banks, and trust companies that clear through
or maintain a custodial relationship with a Participant, either directly or
indirectly ("Indirect Participants"). The rules applicable to DTC and its
Participants are on file with the Securities and Exchange Commission.
Transfers between DTC Participants will occur in accordance with DTC rules.
Transfers between Cedel Participants and Euroclear Participants will occur in
the ordinary way in accordance with their applicable rules and operating
procedures.
Cross-market transfers between persons holding directly or indirectly through
DTC in the United States, on the one hand, and directly or indirectly through
Cedel Participants or Euroclear Participants on the other, will be effected in
DTC in accordance with DTC rules on behalf of the relevant European
international clearing system by its Depositary; however, such cross-market
transactions will require delivery of instructions to the relevant European
international clearing system by the counterparty in such system in accordance
with its rules and procedures and within its established deadlines (European
time). The relevant European international clearing system will, if the
transaction meets its settlement requirements, deliver instructions to its
Depositary to take action to effect final settlement on its behalf by
delivering or receiving securities in DTC, and making or receiving payment in
accordance with normal procedures for same-day funds settlement applicable to
DTC. Cedel Participants and Euroclear Participants may not deliver instructions
directly to the Depositaries.
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Because of time-zone differences, credits of securities in Cedel or Euroclear
as a result of a transaction with a DTC Participant will be made during the
subsequent securities settlement processing, dated the business day following
the DTC settlement date, and such credits or any transactions in such
securities settled during such processing will be reported to the relevant
Cedel Participant or Euroclear Participant on such business day. Cash received
in Cedel or Euroclear as a result of sales of securities by or through a Cedel
Participant or a Euroclear Participant to a DTC Participant will be received
with value on the DTC settlement date but will be available in the relevant
Cedel or Euroclear cash account only as of the business day following
settlement in DTC.
Purchases of Offered Certificates under the DTC system must be made by or
through Participants, which will receive a credit for the Offered Certificates
on DTC's records. The ownership interest of each actual Certificate Owner is in
turn to be recorded on the Participants' and Indirect Participants' records.
Certificate Owners will not receive written confirmation from DTC of their
purchase, but Certificate Owners are expected to receive written confirmations
providing details of the transaction, as well as periodic statements of their
holdings, from the Participant or Indirect Participant through which the
Certificate Owner entered into the transaction. Transfers of ownership
interests in the Offered Certificates are to be accomplished by entries made on
the books of Participants acting on behalf of Certificate Owners. Certificate
Owners will not receive certificates representing their ownership interest in
Offered Certificates, except in the event that use of the book-entry system for
the Offered Certificates is discontinued.
To facilitate subsequent transfers, all Offered Certificates deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Offered Certificates with DTC and their registration
in the name of Cede & Co. effects no change in beneficial ownership. DTC has no
knowledge of the actual Certificate Owners; DTC's records reflect only the
identity of the Participants to whose accounts such Offered Certificates are
credited, which may or may not be the Certificate Owners. The Participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by DTC to Participants, by
Participants to Indirect Participants, and by Participants and Indirect
Participants to Certificate Owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in effect from
time to time.
Neither DTC nor Cede & Co. will consent or vote with respect to the Offered
Certificates. Under its usual procedures, DTC mails an omnibus proxy to the
issuer as soon as possible after the record date, which assigns Cede & Co.'s
consenting or voting rights to those Participants to whose accounts the Offered
Certificates are credited on the record date (identified in a listing attached
thereto).
Principal and interest payments on the Offered Certificates will be made to
DTC. DTC's practice is to credit Participants' accounts on the Distribution
Date in accordance with their respective holdings shown on DTC's records unless
DTC has reason to believe that it will not receive payment on the Distribution
Date. Payments by Participants to Certificate Owners will be governed by
standing instructions and customary practices, as is the case with securities
held for the accounts of customers in bearer form or registered in "street
name," and will be the responsibility of such Participant and not of DTC, the
Trustee or the Transferor, subject to any statutory or regulatory requirements
as may be in effect from time to time. Payment of principal and interest to DTC
is the responsibility of the Trustee, disbursement of such payments to
Participants shall be the responsibility of DTC, and disbursement of such
payments to the Certificate Owners shall be the responsibility of Participants
and Indirect Participants.
DTC may discontinue providing its services as securities depository with
respect to the Offered Certificates at any time by giving reasonable notice to
the Transferor or the Trustee. Under such circumstances, in the event that a
successor securities depository is not obtained, Definitive Certificates are
required to be printed and delivered. The Transferor may decide to discontinue
use of the system of book-entry transfers through DTC (or a successor
securities depository). In that event, Definitive Certificates will be printed
and delivered.
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Cedel Bank, societe anonyme ("Cedel") is incorporated under the laws of
Luxembourg as a professional depository. Cedel holds securities for its
participating organizations ("Cedel Participants") and facilitates the
clearance and settlement of securities transactions between Cedel Participants
through electronic book-entry changes in accounts of Cedel Participants,
thereby eliminating the need for physical movement of certificates.
Transactions may be settled by Cedel in any of 28 currencies, including United
States dollars. Cedel provides to its Cedel Participants, among other things,
services for safekeeping, administration, clearance and settlement of
internationally traded securities and securities lending and borrowing. Cedel
interfaces with domestic markets in several countries. As a professional
depository, Cedel is subject to regulations by the Luxembourg Monetary
Institute. Cedel Participants are recognized financial institutions around the
world, including underwriters, securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations and may
include the underwriters of any Series of Certificates. Indirect access to
Cedel is also available to others, such as banks, brokers, dealers and trust
companies that dear through or maintain a custodial relationship with a Cedel
Participant, either directly or indirectly.
The Euroclear System (the "Euroclear System") was created in 1968 to hold
securities for participants of the Euroclear System ("Euroclear Participants")
and to clear and settle transactions between Euroclear Participants through
simultaneous electronic book-entry delivery against payment, thereby
eliminating the need for physical movement of certificates and any risk from
lack of simultaneous transfers of securities and cash. Transactions may now be
settled in any of 32 currencies, including United States dollars. The Euroclear
System includes various other services, including securities lending and
borrowing and interfaces with domestic markets in several countries generally
similar to the arrangements for cross-market transfers with DTC described
above. The Euroclear System is operated by Morgan Guaranty Trust Company of New
York, Brussels, Belgium office (the "Euroclear Operator" or "Euroclear"), under
contract with Euroclear Clearance System, S.C., a Belgian cooperative
corporation (the "Cooperative"). All operations are conducted by the Euroclear
Operator, and all Euroclear securities clearance accounts and Euroclear cash
accounts are accounts with the Euroclear Operator, not the Cooperative. The
Cooperative establishes policy for the Euroclear system on behalf of Euroclear
Participants. Euroclear Participants include banks (including central banks),
securities brokers and dealers and other professional financial intermediaries
and may include the underwriters of any Series of Certificates. Indirect access
to the Euroclear System is also available to other firms that clear through or
maintain a custodial relationship with a Euroclear Participant, either directly
or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such, it
is regulated and examined by the Board of Governors of the Federal Reserve
System and the New York State Banking Department, as well as the Belgian
Banking Commission.
Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System and applicable Belgian law
(collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within the Euroclear System, withdrawal of
securities and cash from the Euroclear System, and receipts of payments with
respect to securities in the Euroclear System. All securities in the Euroclear
System are held on a fungible basis without attribution of specific
certificates to specific securities clearance accounts. The Euroclear Operator
acts under the Terms and Conditions only on behalf of Euroclear Participants
and has no record of or relationship with persons holding through Euroclear
Participants.
Distributions with respect to Offered Certificates held through Cedel or
Euroclear will be credited to the cash accounts of Cedel Participants or
Euroclear Participants in accordance with the relevant system's rules and
procedures, to the extent received by its Depositary. Such distributions will
be subject to tax reporting in accordance with relevant United States tax laws
and regulations. Cedel or the Euroclear Operator, as the case may be, will take
any other action permitted to be taken by a Certificateholder under the related
Pooling
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and Servicing Agreement on behalf of a Cedel Participant or a Euroclear
Participant only in accordance with its relevant rules and procedures and
subject to its Depositary's ability to effect such actions on its behalf
through DTC.
Although DTC, Cedel and Euroclear have agreed to the foregoing procedures in
order to facilitate transfers of Offered Certificates among participants of
DTC, Cedel and Euroclear, they are under no obligation to perform or continue
to perform such procedures and such procedures may be discontinued at any time.
DEFINITIVE CERTIFICATES
Each Class of Offered Certificates will be issued in such registered,
certificated form to the Certificate Owners of such Class or their nominees
("Definitive Certificates"), rather than to the Depository or its nominee, only
if (i) the Transferor advises the Trustee in writing that the Depository is no
longer willing or able to discharge properly its responsibilities as Depository
with respect to the Offered Certificates of such Class, and the Trustee or the
Transferor is unable to locate a qualified successor, (ii) the Transferor, at
its option, advises the Trustee in writing that it elects to terminate the
book-entry system through the Depository, or (iii) after the occurrence of a
Servicer Default, Certificate Owners representing not less than 50% of the
Invested Amount of such Class advise the Trustee and the Depository through
Participants in writing that the continuation of a book-entry system through
the Depository is no longer in the best interest of the Certificate Owners of
such Class.
Upon the occurrence of any of the events described in the immediately
preceding paragraph, the Depository is required to notify all Participants of
the availability through the Depository of Definitive Certificates. Upon
surrender by the Depository of the definitive certificate representing the
Offered Certificates of the affected Class and instructions for registration,
the Trustee will issue the Offered Certificates of such Class as Definitive
Certificates, and thereafter the Trustee will recognize the holders of such
Definitive Certificates as Certificateholders under the Pooling and Servicing
Agreement.
Distribution of principal and interest on the Offered Certificates will be
made by the Trustee directly to Certificateholders in accordance with the
procedures set forth herein and in the Pooling and Servicing Agreement.
Interest payments and any principal payments on each Distribution Date will be
made to Certificateholders in whose names the Definitive Certificates were
registered at the close of business on the related Record Date. Distributions
will be made by check mailed to the address of such Certificateholder as it
appears on the register maintained by the Trustee. The final payment on any
Offered Certificate, however, will be made only upon presentation and surrender
of such Certificate at the office or agency specified in the notice of final
distribution to Certificateholders. The Trustee will provide such notice to
registered Certificateholders mailed not later than the fifth day of the month
of such final distributions.
Definitive Certificates will be transferable and exchangeable at the offices
of the transfer agent and registrar, which initially will be the Trustee (in
such capacity, the "Transfer Agent and Registrar"). No service charge will be
imposed for any registration of transfer or exchange, but the Transfer Agent
and Registrar may require payment of a sum sufficient to cover any tax or other
governmental charge imposed in connection therewith. The Transfer Agent and
Registrar will not be required to register the transfer or exchange of
Definitive Certificates for the period from the Record Date preceding the due
date for any payment to the Distribution Date with respect to such Definitive
Certificates.
INTEREST PAYMENTS
Interest on the respective outstanding balance of each Class of Offered
Certificates will accrue at the applicable Certificate Rate and will be payable
on the 13th day of each month, or if such day is not a business day, on the
next succeeding business day (each a "Distribution Date"), beginning January
16, 1996. Interest
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will accrue from and including the preceding Distribution Date (or, in the case
of the first Distribution Date, from and including the Closing Date) to but
excluding such Distribution Date and will be calculated on the basis of the
actual number of days in the related Interest Accrual Period divided by 360
days.
Interest on the outstanding principal balance of the Class A Certificates
will accrue for each Interest Accrual Period at the Class A Certificate Rate,
which shall equal the lesser of (i) LIBOR (calculated as described below)
determined as of the second LIBOR business day prior to such Interest Accrual
Period plus .16% per annum or (ii) the Net Receivables Rate (described below).
Interest on the outstanding principal balance of the Class B Certificates will
accrue for each Interest Accrual Period at the Class B Certificate Rate, which
shall equal the lesser of (i) LIBOR determined as of the second LIBOR business
day prior to such Interest Accrual Period plus .32% per annum or (ii) the Net
Receivables Rate (described below). The Class C Certificates and the Class D
Certificates will not bear interest.
The Trustee will determine LIBOR on December 18, 1995 for the period from
December 20, 1995 through January 15, 1996 and will determine LIBOR for each
Interest Accrual Period following the initial Interest Accrual Period on the
second business day prior to the Distribution Date on which such Interest
Accrual Period commences (each, a "LIBOR Determination Date"). For purposes of
calculating LIBOR, a business day is any day on which banks in London and New
York are open for the transaction of international business. The Trustee will
determine LIBOR in accordance with the following provisions:
(i) On each LIBOR Determination Date, the Trustee will determine LIBOR on
the basis of quotations of the offered rates for one-month United States
dollar deposits following the LIBOR Determination Date provided by four
major banks in the London interbank market selected by the Servicer (the
"Reference Banks") as of 11:00 a.m. (London time) as such quotations appear
on the Telerate Page 3875 of the Dow Jones Telerate Service (or such other
page as may replace Telerate Page 3875 on that service for the purpose of
displaying London interbank offered rates of major banks). LIBOR as
determined by the Trustee is the arithmetic mean of such quotations
(rounded, if necessary, to the nearest multiple of 0.0625% per annum).
(ii) If, on any LIBOR Determination Date, at least two but fewer than all
of the Reference Banks provide quotations, LIBOR will be determined in
accordance with clause (i) above on the basis of the offered quotations of
those Reference Banks providing such quotations.
(iii) If, on the LIBOR Determination Date, only one or none of the
Reference Banks provides such offered quotations, LIBOR will be:
(a) the rate per annum (rounded as aforesaid) that the Trustee
determines to be either (x) the arithmetic mean of the offered
quotations that leading banks in The City of New York selected by the
Servicer are quoting on the relevant LIBOR Determination Date for one-
month United States dollar deposits to the principal London office of
each of the Reference Banks or those of them (being at least two in
number) to which such offered quotations are, in the opinion of the
Servicer, being so made or (y) in the event the Trustee can determine
no such arithmetic mean, the arithmetic mean of the offered quotations
that leading banks in The City of New York selected by the Servicer are
quoting on such LIBOR Determination Date to leading European banks for
one-month United States dollar deposits; or
(b) if the banks selected as aforesaid by the Servicer are not
quoting as described in clause (a) above, LIBOR for such Interest
Accrual Period will be LIBOR as determined on the previous LIBOR
Determination Date.
The "Net Receivables Rate" for a Distribution Date is (i) the weighted
average of the interest rates borne by the Receivables during the second
preceding Monthly Period (because interest payments on the
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Receivables at such rates will be due and payable in the Monthly Period
preceding such Distribution Date), plus (ii) the product of (x) the Monthly
Payment Rate for the Monthly Period preceding such Distribution Date, (y) the
Discount Factor, if any, for such Distribution Date and (z) twelve, less 2% per
annum, unless the Servicing Fee has been waived for such Monthly Period. The
"Monthly Payment Rate" for a Monthly Period is the percentage equivalent of a
fraction, the numerator of which is the aggregate of the Receivables balance
(without deducting therefrom the discount portion, if any) collected during
such Monthly Period and the denominator of which is the average daily aggregate
Receivables balance (without deducting therefrom the discount portion, if any)
for such Monthly Period.
The Class A Certificate Rate and the Class B Certificate Rate applicable to
the then current and immediately preceding Interest Accrual Period may be
obtained by telephoning the Trustee at its Corporate Trust Office at (612) 667-
4959. Following the listing of the Offered Certificates on the Luxembourg Stock
Exchange, the Trustee will cause the Class A Certificate Rate and the Class B
Certificate Rate applicable to an Interest Accrual Period to be provided to the
Luxembourg Stock Exchange as soon as possible after its determination but in no
event later than the first day of such Interest Accrual Period.
PRINCIPAL PAYMENTS
During the Revolving Period (which begins on the Closing Date and ends on the
day before the earliest of (i) the Initial Principal Payment Date, (ii) the
commencement of the Controlled Accumulation Period or (iii) the commencement of
the Early Amortization Period), no principal payments will be made to the
Certificateholders. During the Controlled Accumulation Period, principal will
be deposited in the Principal Account on each business day and such amounts
will be distributed to the Class A Certificateholders on the Class A Scheduled
Payment Date, then to the Class B Certificateholders on the Class B Scheduled
Payment Date, then to the Class C Certificateholders until the Class C Invested
Amount is paid in full, and finally to the Class D Certificateholders until the
Class D Invested Amount is paid in full. The amount of principal deposited in
the Principal Account during each Monthly Period during the Controlled
Accumulation Period will not exceed the Controlled Deposit Amount. See "--Pay
Out Events" for a discussion of events which might lead to the commencement of
the Early Amortization Period prior to the first day of the Controlled
Accumulation Period. See "--Application of Collections" for a discussion of the
method by which Principal Collections are allocated during the Controlled
Accumulation Period.
Principal Collections for any Monthly Period during the Controlled
Accumulation Period allocated to the Class A, Class B and Class C
Certificateholders' Interests will first be used to cover, with respect to such
Monthly Period, required deposits into the Principal Account for the benefit of
the Class A Certificateholders. On and after the Class B Principal Payment
Commencement Date, Principal Collections for any Monthly Period allocated to
the Class A, Class B and Class C Certificateholders' Interests will first be
used to cover required deposits into the Principal Account for the benefit of
the Class B Certificateholders. On and after the Class C Principal Commencement
Date, Principal Collections for any Monthly Period allocated to the Class A,
Class B and Class C Certificateholders' Interests will first be used to cover
required deposits into the Principal Account for the benefit of the Class C
Certificateholders. The Servicer will determine the amount of Principal
Collections for any business day allocated to the Class A, Class B and Class C
Certificateholders' Interests that remain after covering required deposits or
payments of principal to the Certificateholders and any similar amount
remaining with respect to certificates of any other Series (other than amounts
allocated to Transferor Retained Classes) (collectively, "Shared Principal
Collections"). The Servicer will allocate the Shared Principal Collections to
cover any scheduled or permitted principal distributions to certificateholders
and deposits to principal funding accounts, if any, for any Series that have
not been covered out of the Principal Collections allocable to such Series and
certain other amounts ("Principal Shortfalls"). Shared Principal Collections
will not be used to cover investor charge-offs for any Series. If Principal
Shortfalls exceed Shared Principal Collections on any business day, Shared
Principal Collections will be allocated pro rata among the applicable Series
based on the relative amounts of Principal Shortfalls. To the extent that
Shared Principal Collections exceed Principal Shortfalls, the balance will,
subject to certain limitations, be paid to the holder of the Exchangeable
Transferor Certificate.
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EXTENSION OF INITIAL PRINCIPAL PAYMENT DATE
Unless a Pay Out Event has occurred, principal with respect to the Class A
Certificates is expected to be paid on the Class A Scheduled Payment Date and
principal with respect to the Class B Certificates is expected to be paid on
the Class B Scheduled Payment Date, provided that the Certificateholders will
receive payments of principal earlier than such dates if the Servicer elects
not to extend the Initial Principal Payment Date. The Initial Principal Payment
Date will initially be the December 1997 Distribution Date, but will
successively and automatically be extended to the next Distribution Date after
the then-current Initial Principal Payment Date unless the Servicer elects not
to so extend; provided that the Initial Principal Payment Date may not be later
than the Class A Scheduled Payment Date. In the event that the Servicer elects
not to extend the Initial Principal Payment Date, the Revolving Period or the
Controlled Accumulation Period, as applicable, will end, and amounts then on
deposit in the Principal Account and Principal Collections with respect to each
Distribution Date commencing on the Initial Principal Payment Date will be paid
first to the Class A Certificateholders until the earlier of the date on which
the Class A Invested Amount is paid in full or the Series 1995-1 Termination
Date, and then all Principal Collections will be paid to the Class B
Certificateholders until the earlier of the date on which the Class B Invested
Amount is paid in full or the Series 1995-1 Termination Date and then all
Principal Collections will be paid to the Class C Certificateholders until the
earlier of the date on which the Class C Invested Amount is paid in full or the
Series 1995-1 Termination Date.
The Servicer will cause the Trustee to provide written notice to each
Certificateholder, the Transferor, the Rating Agency and the Luxembourg Stock
Exchange of any election by the Servicer not to extend the Initial Principal
Payment Date. The Servicer will cause the Trustee to mail such notice not more
than 60 nor less than 30 days prior to the then-current Initial Principal
Payment Date.
POSTPONEMENT OF CONTROLLED ACCUMULATION PERIOD
The Controlled Accumulation Period is currently expected to commence at the
close of business on July 31, 1998; however, the date on which the Controlled
Accumulation Period actually commences may be delayed if the Controlled
Accumulation Period Length (determined as described below) is less than the
number of months remaining between the Period Length Determination Date
(defined below) and the Class A Scheduled Payment Date. On July 13, 1998, the
Servicer will determine the "Accumulation Period Length." The "Accumulation
Period Length" will be one, two, three or four months and will be calculated as
the product, rounded upwards to the nearest integer, of (a) four and (b) a
fraction, the numerator of which is the Invested Amount as of July 13, 1998
(after giving effect to all changes therein on such date) and the denominator
of which is the sum of such Invested Amount and the invested amounts as of July
13, 1998 (after giving effect to all changes therein on such date) of all other
outstanding Series whose respective revolving periods are not scheduled to end
before the last day of the November 1998 Monthly Period. Depending on whether
the Accumulation Period Length is one month, two months, three months or four
months, the "Accumulation Period Commencement Date" will be the first day of
the November 1998 Monthly Period, the October 1998 Monthly Period, the
September 1998 Monthly Period or the August 1998 Monthly Period, respectively.
Notwithstanding the foregoing, the Accumulation Period Commencement Date will
be August 1, 1998 if, prior to such date, any other outstanding Series has
entered into an early amortization period. The effect of the foregoing
calculation is to reduce the Controlled Accumulation Period Length based on the
invested amounts of other Series that are scheduled to be in their revolving
periods and thus scheduled to create Shared Principal Collections during the
Controlled Accumulation Period.
INTEREST COLLECTIONS; PRINCIPAL COLLECTIONS
The Servicer will allocate the aggregate amount of Collections available in
the Collection Account (or shall instruct the Trustee to so allocate from
amounts on deposit in the Collection Account if all Collections are being
deposited therein as described below under "--Application of Collections;
Allocations") on each
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business day to Interest Collections and Principal Collections. "Interest
Collections" are calculated as the sum of (A) all collections of interest and
other fees on the Receivables, (B) all Imputed Yield Collections (if a Discount
Factor is then in effect), (C) investment earnings on amounts on deposit in the
Trust Accounts on such business day and (D) Recoveries on such business day.
"Principal Collections" are such Collections other than Interest Collections.
SUBORDINATION OF THE CLASS B CERTIFICATES
The Class B Certificates will be subordinated to the extent necessary to fund
certain payments with respect to the Class A Certificates. To the extent the
Class B Invested Amount is reduced, the percentage of Interest Collections
allocated to the Class B Certificateholders will be reduced. Moreover, to the
extent the amount of such reduction in the Class B Invested Amount is not
reimbursed, the amount of principal distributable to the Class B
Certificateholders will be reduced.
The Class C Certificates will be subordinated to the extent necessary to fund
certain payments with respect to the Class A Certificates and the Class B
Certificates. To the extent the Class C Invested Amount is reduced, the
percentage of Interest Collections allocated to the Class C Certificateholders
will be reduced. Moreover, to the extent the amount of such reduction in the
Class C Invested Amount is not reimbursed, the amount of principal
distributable to the Class C Certificateholders will be reduced.
If, on any Determination Date, the aggregate Investor Default Amount, if any,
for each business day in the preceding Monthly Period exceeds (a) the aggregate
amount of Available Series Interest Collections applied to the payment thereof
as described in clauses (iv) and (v) of "--Application of Collections--Payment
of Fees, Interest, and Other Items," (b) the amount of Excess Interest
Collections allocated thereto as described in "--Reallocation of Cash Flows,"
and (c) the amount of Reallocated Principal Collections allocated with respect
thereto as described in "--Reallocated Principal Collections," the Class D
Invested Amount will be reduced by the amount by which such aggregate Investor
Default Amount exceeds the amount applied with respect thereto during the
preceding Monthly Period. Such reductions of the Class D Invested Amount will
thereafter be reimbursed and the Class D Invested Amount increased on each
business day by the amount, if any, of Available Series Interest Collections
and Excess Interest Collections allocated and available for that purpose. The
Class D Invested Amount will initially be $41,535,874 and may be adjusted under
the circumstances described under "--The Overconcentration Amounts" below.
In the event that any such reduction of the Class D Invested Amount would
cause the Class D Invested Amount to be a negative number, the Class D Invested
Amount will be reduced to zero and the Class C Invested Amount will be reduced
by the amount by which the Class D Invested Amount would have been reduced
below zero, but not more than the remaining aggregate Investor Default Amount
for such preceding Monthly Period. Such reductions of the Class C Invested
Amount will thereafter be reimbursed and the Class C Invested Amount increased
during such Monthly Period by the amount, if any, of such Available Series
Interest Collections and Excess Interest Collections for such business day
allocated and available for that purpose.
In the event that any such reduction of the Class C Invested Amount would
cause the Class C Invested Amount to be a negative number, the Class C Invested
Amount will be reduced to zero and the Class B Invested Amount will be reduced
by the amount by which the Class C Invested Amount would have been reduced
below zero, but not more than the remaining aggregate Investor Default Amount
for such Monthly Period. Such reductions of the Class B Invested Amount will
thereafter be reimbursed and the Class B Invested Amount increased on each
business day by the amount, if any, of Available Series Interest Collections
and Excess Interest Collections for such business day allocated and available
for that purpose. If the Class B Invested Amount is reduced to zero, the Class
A Invested Amount will be reduced by the amount
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by which the Class B Invested Amount would have been reduced below zero, but
not more than the remaining aggregate Investor Default Amount for such Monthly
Period. Such reductions of the Class A Invested Amount will thereafter be
reimbursed and the Class A Invested Amount increased on each business day by
the amount, if any, of Available Series Interest Collections and Excess
Interest Collections allocated and available for that purpose. See "--
Reallocation of Cash Flows," "--Reallocated Principal Collections" and "--
Investor Charge-Offs."
TRANSFER AND ASSIGNMENT OF RECEIVABLES AND COLLATERAL SECURITY
On the Closing Date, the Transferor will transfer and assign to the Trust all
of its right, title, and interest in and to the Receivables and the related
Collateral Security outstanding as of the Closing Date, all of the Receivables
thereafter arising in the Accounts and its interest in the related Collateral
Security and the proceeds of all of the foregoing. Prior to such transfer and
assignment and pursuant to the Purchase Agreement, Green Tree will contribute
and sell to the Transferor all its right, title and interest in and to the
Receivables and the related Collateral Security existing as of the Cut-off Date
and all the Receivables and the related Collateral Security arising in the
Accounts from time to time thereafter. On the Closing Date, and concurrently
with the transfer and assignment of the Receivables and related Collateral
Security to the Trust, the Trustee will authenticate the Certificates and
deliver the Certificates to the Transferor which will in turn deliver the
Offered Certificates to the Underwriters against payment of the net proceeds of
the sale of the Offered Certificates. The Trustee will also authenticate and
deliver the Exchangeable Transferor Certificate to the Transferor.
Green Tree, for itself and as Servicer, will identify in its computer files
that the Receivables have been assigned to the Trust. Green Tree, as Servicer,
will retain and will not deliver to the Trustee any other records or agreements
relating to the Receivables. The records and agreements relating to the
Receivables will not be segregated from those relating to other accounts and
receivables of Green Tree and the physical documentation relating to the
Receivables will not be stamped or marked to reflect the transfer of the
Receivables to the Trust. The Trustee will have reasonable access to such
records and agreements as required by applicable law or to enforce the rights
of the Certificateholders. Green Tree will file one or more UCC-1 financing
statements in accordance with the UCC to perfect the Transferor's interest in
the Receivables and the proceeds thereof, as applicable. The Transferor, in
turn, will file one or more UCC-1 financing statements in accordance with
applicable state law to perfect the Trust's interest in the Receivables and the
proceeds thereof. The UCC-1 financing statements that perfect Green Tree's (or
the relevant subsidiary's) security interest in the Collateral Security will
not be amended to reflect such transfers. See "Risk Factors"--"Transfer of the
Receivables; Insolvency Risk Considerations" and "Certain Legal Aspects of the
Receivables."
EXCHANGES
The Pooling and Servicing Agreement provides for the Trustee to issue two
types of certificates: (i) one or more Series of certificates, each of which
may have one or more classes, and (ii) the Exchangeable Transferor Certificate.
The Exchangeable Transferor Certificate will evidence the Transferor Interest,
will initially be held by the Transferor, and will be transferable only as
provided in the Pooling and Servicing Agreement. The Pooling and Servicing
Agreement also provides that, pursuant to any one or more Supplements to the
Pooling and Servicing Agreement, the holder of the Exchangeable Transferor
Certificate may tender the Exchangeable Transferor Certificate and the
certificates evidencing any Series of certificates, to the Trustee in exchange
for one or more new Series and a reissued Exchangeable Transferor Certificate.
Under the Pooling and Servicing Agreement, the holder of the Exchangeable
Transferor Certificate may define, with respect to any newly issued Series,
certain terms including: (i) its name or designation; (ii) its initial invested
amount (or method for calculating such amount); (iii) its certificate rate (or
the method of allocating interest payments or other cash flows to such Series);
(iv) the closing date; (v) the rating agency or agencies, if any, rating the
Series; (vi) the interest payment date or dates and the date or dates from
which interest shall accrue; (vii) the name of the clearing agency, if any;
(viii) the method for allocating collections to certificateholders of such
Series with respect to Principal Collections, Interest Collections, and
Defaulted Receivables and the method by which the principal amount of such
Series will amortize or accrue; (ix) the
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names of any accounts to be used by such Series and the terms governing the
operation of any such accounts; (x) the percentage used to calculate monthly
servicing fees; (xi) the Minimum Transferor Interest; (xii) the credit
enhancement provider, if applicable, and the terms of any credit enhancement
with respect to such Series; (xiii) the base rate applicable to such Series;
(xiv) the terms on which the certificates of such Series may be repurchased or
remarketed to other investors; (xv) the termination date of such Series; (xvi)
any deposit into any account provided for such Series; (xvii) the number of
classes of such Series and, if more than one class, the rights and priorities
of each such class; (xviii) the fees, if any, to be included in funds available
to certificateholders in such Series; (xix) the subordination, if any, of such
new Series with respect to any other Series; (xx) the rights, if any, of the
holder of the Exchangeable Transferor Certificate that have been transferred to
the holders of such Series; (xxi) the pool factor (consisting of a seven-digit
decimal expressing the ratio of the invested amount to the initial invested
amount); (xxii) whether such Series will be part of a group or subject to being
paired with any other prefunded Series; (xxiii) whether such Series will be
prefunded; and (xxiv) any other relevant terms, including whether or not such
Series will be pledged as collateral for an issuance of any other securities,
including commercial paper (all such terms, the "Principal Terms" of such
Series). None of the Transferor, the Servicer, the Trustee, or the Trust is
required or intends to obtain the consent of any Certificateholder to issue any
additional Series or in connection with the determination of the Principal
Terms thereof. However, as a condition of an Exchange, the holder of the
Exchangeable Transferor Certificate will deliver to the Trustee written
confirmation that the Exchange will not result in any Rating Agency reducing or
withdrawing its rating of any outstanding Series, including the Offered
Certificates. The Transferor may offer any Series to the public or other
investors in transactions either registered under the Securities Act or exempt
from registration thereunder, directly, through one or more underwriters or
placement agents, in fixed-price offerings, in negotiated transactions, or
otherwise. Any such Series may be issued in fully registered or book-entry form
in minimum denominations determined by the Transferor. The Certificates
represent the Series initially issued by the Trust. The Transferor currently
intends to offer, from time to time, additional Series.
The Pooling and Servicing Agreement provides that the holder of the
Exchangeable Transferor Certificate may perform Exchanges and define the
Principal Terms of each Series, including the period during which amortization
of the principal amount thereof is intended to occur, which period may have a
different length and begin on a different date than such period for any other
Series. Accordingly, one or more Series may be in their amortization periods
while other Series are not. Moreover, any Series may have the benefit of a
credit enhancement that is available only to such Series. Under the Pooling and
Servicing Agreement, the Trustee will hold any such form of credit enhancement
only on behalf of the Series with respect to which it relates. Likewise, with
respect to each such form of credit enhancement, the holder of the Exchangeable
Transferor Certificate may deliver a different form of credit enhancement
agreement. The Pooling and Servicing Agreement also provides that the holder of
the Exchangeable Transferor Certificate may specify different coupon rates and
monthly servicing fees with respect to each Series (or a particular class
within such Series). Collections allocated to Interest Receivables not used to
pay interest on the certificates, the monthly servicing fee, the investor
default amount, or investor charge-offs with respect to any Series will be
allocated as provided in such credit enhancement agreement, if applicable. The
holder of the Exchangeable Transferor Certificate also has the option under the
Pooling and Servicing Agreement to vary between Series the terms upon which a
Series (or a particular class within such Series) may be repurchased by the
Transferor or remarketed to other investors. Additionally, certain Series may
be subordinated to other Series, and classes within a Series may have different
priorities. The Series 1995-1 Supplement does not permit the subordination of
the Certificates to any other Series that may be issued by the Trust (except to
the limited extent described herein with respect to Shared Principal
Collections and Excess Interest Collections). There is no limit to the number
of Exchanges that may be performed under the Pooling and Servicing Agreement.
The Trust will terminate only as provided in the Pooling and Servicing
Agreement.
An Exchange may occur only upon the satisfaction of certain conditions
provided in the Pooling and Servicing Agreement. The holder of the Exchangeable
Transferor Certificate may perform an Exchange by notifying the Trustee at
least five business days in advance of the date upon which the Exchange is to
occur. The notice will state the designation of any Series to be issued on the
date of the Exchange and, with respect
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to each such Series: (i) its initial principal amount (or method for
calculating such amount), (ii) its certificate rate (or the method of
allocating interest payments or other cash flows to such Series), and (iii) the
provider of the credit enhancement, if any, which is expected to provide credit
support with respect to it. The Pooling and Servicing Agreement provides that
on the date of the Exchange the Trustee will authenticate any such Series only
upon delivery to the Trustee of the following: (i) a Supplement to the Pooling
and Servicing Agreement specifying the Principal Terms of such Series, (ii) an
opinion of counsel to the effect that the certificates of such Series will be
characterized as indebtedness or as partnership interests under existing law
for federal and applicable state income tax purposes and that the issuance of
such Series will not materially adversely affect the federal income tax
characterization of any outstanding Series, including Series 1995-1, or result
in the trust being subject to tax at the entity level for federal or applicable
state tax purposes, (iii) if required by such Supplement, the form of credit
enhancement and an appropriate credit enhancement agreement with respect
thereto executed by the Transferor and the issuer of the credit enhancement,
(iv) written confirmation from each Rating Agency that the Exchange will not
result in such Rating Agency's reducing or withdrawing its rating on any then-
outstanding Series rated by it, including Series 1995-1, (v) the existing
Exchangeable Transferor Certificate and, if applicable, the certificates
representing the Series to be exchanged, and (vi) an officer's certificate of
the Transferor stating that, after giving effect to such Exchange, (a) the
Transferor Interest would be at least equal to the Minimum Transferor Interest,
and (b) taking into account the certificates of the newly issued Series, more
than 20% (by Invested Amount and by value) of the outstanding certificates
issued by the Trust with respect to which no opinion of counsel was issued that
the applicable class would be treated as debt for federal income tax purposes
(including the Exchangeable Transferor Certificate and each Transferor Retained
Class) shall, by their terms, be prohibited from being transferred.
Under the Pooling and Servicing Agreement, the Transferor may also exchange
the Exchangeable Transferor Certificate for a newly issued Exchangeable
Transferor Certificate and a second certificate (a "Supplemental Certificate")
the terms of which will be defined in a supplement upon the satisfaction of
certain conditions provided in the Pooling and Servicing Agreement.
REPRESENTATIONS AND WARRANTIES
The Transferor will make representations and warranties to the Trust relating
to the Accounts, the Receivables and the Collateral Security to the effect,
among other things, that (a) as of the Cut-off Date, the Series 1995-1 Closing
Date and the date of issuance of any other Series (a "Series Issuance Date")
(or, in the case of an Additional Account, as of the date of its designation
for inclusion in the Trust and the date the related Receivables are transferred
to the Trust (an "Addition Date")), each Account or Additional Account was or
is an Eligible Account or, if it was or is an Ineligible Account on such date,
such Account is being removed from the Trust in accordance with the
requirements of the Pooling and Servicing Agreement, (b) as of the Cut-off Date
(or as of the Additional Cut-off Date, in the case of any Additional Accounts)
or as of the date any future Receivable is generated (a "Transfer Date"), each
Receivable is an Eligible Receivable, (c) each Receivable and all Collateral
Security conveyed to the Trust on the Series 1995-1 Closing Date and on each
Transfer Date or, in the case of Additional Accounts, on the Addition Date, and
all of the Transferor's right, title and interest in the Purchase Agreement,
have been conveyed to the Trust free and clear of any liens, and (d) all
appropriate consents and governmental authorizations required to be obtained by
the Transferor in connection with the conveyance of each such Receivable have
been duly obtained. If the Transferor breaches any representation and warranty
described in this paragraph, such breach remains uncured for 30 days (or such
longer period as may be agreed to by the Trustee) after the earlier to occur of
the discovery of such breach by the Transferor or the Servicer or receipt of
written notice of such breach by the Transferor or the Servicer, and such
breach has a materially adverse effect on the Certificateholders' Interest or
the interests of the holders of other outstanding Series in any Receivable or
Account, the Certificateholders' Interest and such other certificateholders'
interests in such Receivable or, in the case of a breach relating to an
Account, all Receivables in the related Account ("Ineligible Receivables") will
be reassigned to the Transferor on the terms and conditions set forth below and
such Account shall no longer be included as an Account.
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Each Ineligible Receivable will be reassigned to the Transferor on or before
the end of the Monthly Period in which such reassignment obligation arises by
the Transferor directing the Servicer to deduct the balance of such Receivable
(discounted by the Discount Factor, if any, for the Monthly Period preceding
such Determination Date) from the Pool Balance. In the event that such
deduction would cause the Transferor Interest to be less than the Minimum
Transferor Interest on the preceding Determination Date (after giving effect to
the allocations, distributions, withdrawals and deposits to be made on such
Distribution Date), on the date on which such reassignment is to occur the
Transferor will be obligated to make a deposit into the Collection Account in
immediately available funds in an amount equal to the amount by which the
Transferor Interest would be less than the Minimum Transferor Interest (the
amount of any such deposit being referred to herein as a "Transfer Deposit
Amount"), provided that if the Transfer Deposit Amount is not so deposited, the
principal balance of the related Receivables will be deducted from the Pool
Balance only to the extent the Transferor Interest is not reduced below the
Minimum Transferor Interest and any principal balance not so deducted will not
be reassigned and will remain part of the Trust. The reassignment of any such
Receivable to the Transferor and the payment of any related Transfer Deposit
Amount will be the sole remedy respecting any breach of the representations and
warranties described in the preceding paragraph with respect to such Receivable
available to Certificateholders or the Trustee on behalf of Certificateholders.
The Transferor will make in the Pooling and Servicing Agreement and related
Series Supplement representations and warranties to the Trust to the effect,
among other things, that as of the Closing Date of such Series (a) the
Transferor is duly organized, validly existing, and in good standing under the
laws of the State of Delaware and has the corporate power and authority to
execute, deliver and perform its obligations under the Pooling and Servicing
Agreement, the Series 1995-1 Supplement, and the Purchase Agreement, (b) the
Transferor is duly qualified to do business and in good standing (or is exempt
from such requirement) in any state required in order to conduct its business
and has obtained all necessary licenses and approvals required under federal,
Minnesota and Delaware law, (c) the execution and delivery of the Pooling and
Servicing Agreement, the Series 1995-1 Supplement, and the Purchase Agreement,
and the consummation of the transactions provided for therein, have been duly
authorized by the Transferor by all necessary corporate action on its part, (d)
the Pooling and Servicing Agreement will constitute a legal, valid and binding
obligation of the Transferor and (e) the transfer of Receivables and the
Collateral Security by it to the Trust under the Pooling and Servicing
Agreement will constitute either a valid transfer and assignment to the Trust
of all right, title and interest of the Transferor in and to the Receivables
and the Collateral Security (other than Receivables in Additional Accounts),
whether then existing or thereafter created and the proceeds thereof (including
amounts in any of the accounts established for the benefit of
Certificateholders) or the grant of a first priority perfected security
interest in such Receivables (except for certain liens permitted pursuant to
the Pooling and Servicing Agreement) and the proceeds thereof (including
amounts in any of the accounts established for the benefit of
Certificateholders), which is effective as to each such Receivable upon the
creation thereof. In the event of a breach of any of the representations and
warranties described in this paragraph, either the Trustee or the Holders of
Certificates evidencing undivided interests in the Trust aggregating more than
50% of the aggregate investor interest of the related Series outstanding may
direct the Transferor to accept reassignment of an amount of Principal
Receivables equal to the invested amount to be reassigned (as described below)
within 60 days of such notice, or within such longer period specified in such
notice. The Transferor will thereupon be obligated to accept reassignment of
such Receivables on a Distribution Date occurring within such applicable
period. Such reassignment will not be required to be made, however, if at any
time during such applicable period, or such longer period, the representations
and warranties shall then be true and correct in all material respects. The
amount to be deposited by the Transferor for distribution to certificateholders
in connection with such reassignment will be equal to the invested amount for
all Series of certificates required to be reassigned on the last day of the
Monthly Period preceding the Distribution Date on which the reassignment is
scheduled to be made, less the amount, if any, previously allocated for payment
of principal to such certificateholders on such Distribution Date, plus an
amount equal to all interest accrued but unpaid on such certificates at the
applicable certificate rate through the last day of the related Interest
Accrual Period, less the amount transferred to the Distribution Account
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from the Interest Funding Account in respect of interest on such certificates
for the month ending on such last day of the Monthly Period. The payment of the
reassignment deposit amount and the transfer of all other amounts deposited for
the preceding month in the Distribution Account will be considered a payment in
full of the investor interest for all Series of certificates required to be
repurchased and will be distributed upon presentation and surrender of the
certificates for each such Series. If the Trustee or certificateholders give a
notice as provided above, the obligation of the Transferor to make any such
deposit will constitute the sole remedy available to the Trustee and the
certificateholders with respect to any breach of the Transferor's
representations and warranties.
An "Eligible Account" will be defined to mean, as of the relevant Cut-off
Date (or, with respect to Additional Accounts, as of their date of designation
for inclusion in the Trust), an arrangement to provide a revolving extension of
credit by Green Tree or one of its subsidiaries to a Dealer (i) in order to
finance the purchase by a Dealer of consumer and commercial product inventory
or (ii) as a line of credit secured by unencumbered assets of such Dealer,
which extension of credit, as of the date of determination thereof, (a) is in
existence and maintained with Green Tree or such subsidiary, (b) is payable in
United States dollars, (c) is with a Dealer whose most recent billing address
is in the United States or its territories or possessions, (d) has been
originated by Green Tree or such subsidiary in the ordinary course of business
or acquired by Green Tree through the acquisition of an Eligible Account from
another lender upon satisfying Green Tree's customary underwriting standards,
(e) in respect of which no amounts have been charged off by Green Tree or such
subsidiary as uncollectible in its customary and usual manner as of the Cut-off
Date (or, with respect to Additional Accounts, as of their date of designation
for inclusion in the Trust), and (f) is with a Dealer that is not involved in
insolvency proceedings. The definition of Eligible Account may be changed by
amendment to the Pooling and Servicing Agreement without the consent of the
Certificateholders if (i) the Transferor delivers to the Trustee a certificate
of an authorized officer to the effect that, in the reasonable belief of the
Transferor, such amendment will not as of the date of such amendment adversely
affect in any material respect the interest of the Certificateholders, and (ii)
such amendment will not result in a withdrawal or reduction of the rating of
any outstanding Series under the Trust.
An "Eligible Receivable" will be defined to mean each Receivable (a) that was
originated or acquired by Green Tree or one of its subsidiaries in the ordinary
course of business or acquired by Green Tree through the acquisition of an
Eligible Account from another lender upon satisfying Green Tree's customary
underwriting standards, (b) that has arisen under an Eligible Account, (c) that
was created in compliance with all requirements of law applicable thereto and
pursuant to a floorplan or asset-based financing agreement that complies with
all requirements of law applicable thereto, (d) with respect to which all
consents, licenses or authorizations of, or registrations with, any
governmental authority required to be obtained or given by Green Tree or the
Transferor in connection with the creation of such Receivable or the transfer
thereof to the Trust or the execution, delivery, creation and performance by
Green Tree or such subsidiary of the related floorplan or asset-based financing
agreement have been duly obtained or given and are in full force and effect as
of the date of the creation of such Receivable, (e) as to which, at the time of
its creation, the Transferor had good and marketable title free and clear of
all liens and security interests (other than certain liens permitted pursuant
to the Pooling and Servicing Agreement), and at all times following the
transfer of such Receivables to the Trust, the Trust will have good and
marketable title free and clear of all liens and security interests (other than
certain liens permitted pursuant to the Pooling and Servicing Agreement) or the
grant of a first priority security interest therein, (f) that is the legal,
valid, binding and assignable payment obligation of the related Dealer, legally
enforceable against such Dealer, in accordance with its terms (with certain
bankruptcy related exceptions), (g) that constitutes "chattel paper," an
"account" or a "general intangible" under Article 9 of the Uniform Commercial
Code as then in effect in the State of Minnesota, (h) if such Receivable has
the benefit of a Floorplan Agreement with a Manufacturer, such Floorplan
Agreement provides, subject to the specific terms thereof and any limitations
therein (which may vary among Floorplan Agreements), that the Manufacturer is
obligated to repurchase the products securing the Receivables upon the
Servicer's repossession thereof upon the related Dealer's default, (i) which
has been the subject of a valid transfer and assignment from the Transferor to
the Trust of all the Transferor's interest therein and in the related
Collateral Security (including any proceeds thereof), (j) which at the time of
transfer to the Trust is not subject to any right of rescission, setoff, or any
other defense (including defenses arising out of violations
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of usury laws) of the Dealer, (k) as to which, at the time of transfer of such
Receivable to the Trust, Green Tree (or such subsidiary) and the Transferor
have satisfied all their respective obligations with respect to such Receivable
required to be satisfied at such time, (l) as to which, at the time of transfer
of such Receivable to the Trust, neither Green Tree or such subsidiary nor the
Transferor has taken or failed to take any action which would impair the rights
of the Trust or the certificateholders therein and (m) which represents the
obligation of a Dealer to repay an advance made to or on behalf of such Dealer
to finance products or the accounts receivable arising from the sale of such
products.
It will not be required or anticipated that the Trustee will make any initial
or periodic general examination of the Receivables or any records relating to
the Receivables for the purpose of establishing the presence or absence of
defects, compliance with the Transferor's representations and warranties or for
any other purpose. The Servicer, however, will deliver to the Trustee on or
before March 31 of each year, beginning in 1997, an opinion of counsel with
respect to the validity of the security interest of the Trust in and to the
Receivables and certain other components of the Trust Portfolio.
ADDITION OF ACCOUNTS
Subject to the conditions described below, the Transferor will have the right
to designate, from time to time, Additional Accounts to be included as Accounts
with respect to the Trust. In addition, the Transferor will be required to
designate Additional Accounts if the Transferor Interest on the last day of any
Monthly Period is less than the Minimum Transferor Interest. The Transferor
will convey to the Trust its interest in all Receivables in such Additional
Accounts, whether such Receivables are then existing or thereafter created.
Each Additional Account must be an Eligible Account at the time of its
designation. However, Additional Accounts may not be of the same credit quality
as the initial Accounts, and may have been originated by Green Tree using
credit criteria different from those which were applied by Green Tree to the
initial Accounts.
A conveyance by the Transferor to the Trust of Receivables in Additional
Accounts is subject to the following conditions, among others: (i) each such
Additional Account must be an Eligible Account; (ii) the Transferor shall
represent and warrant that the addition of such Additional Accounts shall not,
in the reasonable belief of the Transferor, cause a Pay Out Event to occur;
(iii) the Transferor shall not select such Additional Accounts in a manner that
it believes is adverse to the interests of the certificateholders or any
Enhancement Provider; (iv) the Transferor shall deliver a Tax Opinion, other
than in the case of a required addition, and certain other opinions of counsel
with respect to the addition of such Additional Accounts to the Trustee, each
Rating Agency and any credit enhancement provider and (v) if the Automatic
Addition Condition (as described below) is not satisfied, the applicable Rating
Agencies shall have provided written confirmation that such addition will not
result in a reduction or withdrawal of the rating of the Certificates or any
other rated outstanding Series or class of certificates. If the Automatic
Addition Condition is satisfied and the Account being added will contain
Receivables secured by a security interest in a type of product not previously
financed by Green Tree, then such addition is subject to each Rating Agency
confirming that the addition of such Account would not result in the reduction
or the withdrawal of the rating of the Certificates.
The "Automatic Addition Condition" means, with respect to the addition of
Accounts that (i) during the calendar quarter in which such addition occurs,
the number of new Accounts for Dealers that are financing products of the type
already being financed by Green Tree does not exceed 5% of the number of all
Accounts at the end of the preceding calendar quarter, (ii) during the twelve
months ending at the beginning of such calendar quarter, the number of such new
Accounts does not exceed 20% of the number of all Accounts at the beginning of
such twelve month period, (iii) the average for the three months preceding the
month of such addition of the aggregate balance of Receivables that have been
delinquent for more than 30 days does not exceed 1.25% of the Pool Balance at
the end of the month preceding the month of such addition, and (iv) the
annualized average for such three month period of the net losses incurred in
respect of the Receivables does not exceed 1.75% of the Pool Balance at the end
of the month preceding the month of such addition.
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In addition to the periodic reports otherwise required to be filed by the
Servicer with the Commission pursuant to the Exchange Act, the Servicer intends
to file, on behalf of the Trust, a Report on Form 8-K with respect to any
addition to the Trust of Receivables in Additional Accounts that would have a
material effect on the composition of the assets of the Trust.
REMOVAL OF ACCOUNTS
The Transferor shall have the right at any time to require the removal from
the Trust of Eligible Accounts, including all amounts then held by the Trust or
thereafter received by the Trust in respect of the Eligible Accounts to be
removed. To remove any Eligible Account and such amounts, the Transferor (or
the Servicer on its behalf) shall, among other things, (a) on or before the
fifth business day prior to the Determination Date on which such removal will
occur (the "Removal Date"), furnish to the Trustee, any credit enhancement
provider and each Rating Agency a written notice (the "Removal Notice")
specifying the Removal Date; (b) on or before the fifth business day after the
Removal Date, the Transferor shall have furnished to the Trustee a computer
file, microfiche list or other list of the Accounts (the "Removed Accounts")
that were removed on the Removal Date, specifying for each Removed Account as
of the date of the Removal Notice its number, the aggregate amount outstanding
in such Removed Account and the aggregate amount of Receivables therein; (c)
represent and warrant that the removal of any such Eligible Account on the
Removal Date will not, in the reasonable belief of the Transferor, cause a Pay
Out Event to occur or cause the Transferor Interest to be less than the Minimum
Transferor Interest amount as of such date; (d) represent and warrant that no
selection procedures believed by the Transferor to be adverse to the interest
of the certificateholders were utilized in selecting the Removed Accounts; (e)
obtain a statement from each Rating Agency that such removal will not result in
a reduction or withdrawal of the rating of the Class A or Class B Certificates
or any other outstanding Series or class of certificates; and (f) on or before
the related Removal Date, deliver to the Trustee and any credit enhancement
provider an Officer's certificate confirming the items set forth in clauses
(c), (d) and (e) above and a Tax Opinion with respect to such removal.
All Receivables existing in the Removed Accounts will be reassigned to the
Transferor as of the Removal Date. On any date on which an Account becomes an
Ineligible Account (which date will be deemed the Removal Date for such
Account), the Transferor will commence the removal of such Account from the
Trust. However, all Receivables existing in any such Account (other than an
Account that was an Ineligible Account at the time it was originally designated
as an Account) as of the Removal Date will continue to be a Trust asset.
Accounts that are terminated by their Dealers after they have paid the
related Receivables in full will be deemed to be removed from the Trust without
having to follow the procedures described above.
TRUST ACCOUNTS
The Trustee will establish and maintain with a Qualified Institution in the
name of the Trust, for the benefit of the Certificateholders, two separate
accounts, each in a segregated trust account (which need not be a deposit
account), consisting of an "Interest Funding Account" and a "Principal
Account." The Trustee will also establish a "Distribution Account" for the
benefit of the certificateholders of each Series which will be a non-interest
bearing segregated demand deposit account established with a Qualified
Institution. The Servicer will establish and maintain, in the name of the
Trust, for the benefit of certificateholders of all Series, a "Collection
Account," which will be a segregated account established by and maintained by
the Servicer with a Qualified Institution. A "Qualified Institution" is a
depository institution or trust company, which may include the Trustee,
organized under the laws of the United States or any one of the states thereof,
which at all times has a certificate of deposit rating of P-1 by Moody's and of
A-1+ by Standard & Poor's or long-term unsecured debt obligation (other than
such obligation the rating of which is based on collateral or on the credit of
a person other than such institution or trust company) rating of Aaa by Moody's
and of AAA by Standard & Poor's and deposit insurance provided by the FDIC, or
a depository institution, which may include the Trustee, which is acceptable to
the Rating Agencies; provided, however, that no such rating shall be required
of an institution which shall have corporate trust powers and which maintains
the Collection Account, any principal account, any interest funding account or
any other account maintained for the benefit
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of Certificateholders as a fully segregated trust account with the trust
department of such institution which is rated at least Baa3 by Moody's. Funds
in the Principal Account and the Interest Funding Account will be invested, at
the direction of the Transferor, in (i) obligations fully guaranteed by the
United States of America, (ii) time deposits, promissory notes, or certificates
of deposit of depository institutions or trust companies, the certificates of
deposit of which are rated P-1 by Moody's and A-1+ by Standard & Poor's, (iii)
commercial paper having, at the time of the Trust' investment, a rating of P-1
by Moody's and of A-1+ by Standard & Poor's, (iv) bankers' acceptances issued
by any depository institution or trust company described in clause (ii) above,
(v) money market funds which have the highest rating from, or have otherwise
been approved in writing by, Moody's and Standard & Poor's, (vi) certain open
end diversified investment companies, (vii) Eurodollar time deposits that have
been rated P-1 by Moody's and A-1+ by Standard & Poor's, and (viii) any other
investment that each Rating Agency confirms in writing will not adversely
affect its then current rating of any outstanding Certificates (such
investments, "Cash Equivalents"). Any earnings (net of losses and investment
expenses) on funds in the Interest Funding Account and the Principal Account
will be deposited in the Collection Account as part of Available Series
Interest Collections. The Servicer has the revocable power to withdraw funds
from the Collection Account, and to instruct the Trustee to make withdrawals
and payments from the Interest Funding Account and the Principal Account, for
the purpose of carrying out the Servicer' duties under the Pooling and
Servicing Agreement. The agent making payments to the Certificateholders (the
"Paying Agent") has the revocable power to withdraw funds from the Distribution
Account for the purpose of making distributions to Certificateholders. The
Paying Agent initially will be the Trustee.
EXCESS FUNDING ACCOUNT
The Trustee will establish and maintain in the name of the Trust, for the
benefit of the certificateholders of all Series, an "Excess Funding Account"
which will be a segregated account established by and maintained by the
Servicer with a Qualified Institution. At any time during which the Transferor
Interest does not exceed the Minimum Transferor Interest, funds (to the extent
available therefor as described herein) otherwise payable to the Transferor
will be deposited in the Excess Funding Account on any business day until the
Transferor Interest is at least equal to the Minimum Transferor Interest. Funds
on deposit in the Excess Funding Account will be withdrawn and paid to the
Transferor to the extent that on any day the Transferor Interest exceeds the
Minimum Transferor Interest as a result of the addition of new Receivables to
the Trust. Such deposits in and withdrawals from the Excess Funding Account may
be made on a daily basis. No funds will be deposited in the Excess Funding
Account, however, if any Series is in an amortization or accumulation period
(including any early amortization period), unless the principal account for
such Series has been fully funded for such Monthly Period.
Any funds on deposit in the Excess Funding Account at the beginning of the
Controlled Accumulation Period will be deposited in the Principal Account as
part of Class A Principal, Class B Principal, or Class C Principal, as
applicable, for any Distribution Date. In the event that more than one Series
begins its amortization or accumulation period at the same time, amounts on
deposit in the Excess Funding Account (other than any amounts in the Class D
Subaccount) will be paid out to each such Series pro rata based on the
aggregate invested amount of each such Series. A Pay Out Event will occur if
the sum of all Cash Equivalents and other amounts on deposit in the Excess
Funding Account as a percentage of the sum of the aggregate amount of Principal
Receivables (without deducting therefrom any discount portion) plus the amount
on deposit in the Excess Funding Account shall equal or exceed 50% on the last
day of six consecutive Monthly Periods.
Funds on deposit in the Excess Funding Account will be invested by the
Trustee at the direction of the Transferor in Cash Equivalents. On each
Distribution Date, all net investment income earned on amounts in the Excess
Funding Account since the preceding Distribution Date will be withdrawn from
the Excess Funding Account and treated as Interest Collections. Amounts, if
any, in the Excess Funding Account may be expected to earn interest at a rate
that is less than the Base Rate. The difference between the amount of interest
actually earned on investments in the Excess Funding Account on any day and the
amount of interest that would have been earned on such investments at the Base
Rate is the "Negative Carry Amount" for such day. See "--Coverage of Certain
Interest Shortfalls" below.
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ALLOCATION PERCENTAGES
Pursuant to the Pooling and Servicing Agreement, during each Monthly Period,
the Servicer will allocate among the Class A Certificateholders' Interest, the
Class B Certificateholders' Interest, the Class C Certificateholders' Interest,
the Class D Certificateholders' Interest, the Transferor Interest, and the
holders of any other Series issued and outstanding from time to time pursuant
to the Pooling and Servicing Agreement and applicable Supplements all Interest
Collections and all Principal Collections and the amount of all Defaulted
Receivables. Interest Collections and the amount of Defaulted Receivables will
be allocated at all times, and Principal Collections will be allocated during
the Revolving Period, to the Class A Certificateholders' Interest, the Class B
Certificateholders' Interest, the Class C Certificateholders' Interest and the
Class D Certificateholders' Interest, based on the percentage equivalent of a
fraction, the numerator of which is the Class A Invested Amount, the Class B
Invested Amount, the Class C Invested Amount, or the Class D Invested Amount,
respectively, at the end of the preceding business day and the denominator of
which is the greater of (a) the Pool Balance (plus amounts, if any, on deposit
in the Excess Funding Account) as of the end of the preceding business day and
(b) with respect to Principal Collections only, the sum of the numerator for
all classes of all Series then outstanding used to calculate the applicable
allocation percentage (the "Class A Floating Allocation Percentage," the "Class
B Floating Allocation Percentage," the "Class C Floating Allocation
Percentage," and the "Class D Floating Allocation Percentage," respectively;
the sum of all such percentages, the "Floating Allocation Percentage"). During
the Revolving Period, all Principal Collections allocable to the Certificates
will be allocated and paid to the Transferor (except for collections applied as
Reallocated Principal Collections and Shared Principal Collections paid to the
holders of certificates of other Series, if any, and except for any funds
deposited in the Excess Funding Account). On any business day on or after the
Controlled Accumulation Period Commencement Date or during the Early
Amortization Period, Principal Collections will be allocated to the
Certificateholders' Interest based on the percentage equivalent of a fraction,
the numerator of which is the Class A Invested Amount, the Class B Invested
Amount, the Class C Invested Amount or the Class D Invested Amount,
respectively, at the end of the last day of the Revolving Period and the
denominator of which is the greater of (a) the Pool Balance (plus amounts, if
any, on deposit in the Excess Funding Account) at the end of the preceding
business day and (b) the sum of the numerators used to calculate the allocation
percentages with respect to Principal Collections for all Series (the "Class A
Fixed/Floating Allocation Percentage," the "Class B Fixed/Floating Allocation
Percentage," the "Class C Fixed/Floating Allocation Percentage," and the "Class
D Fixed/Floating Allocation Percentage," respectively; the sum of all such
percentages the "Fixed/Floating Allocation Percentage"). On any business day
when Principal Collections are being allocated for payment to the Class A,
Class B or Class C Certificates, Principal Collections will be allocated to the
Class A, Class B or Class C Certificateholders' Interest based on the
percentage equivalent of a fraction, the numerator of which is the sum of the
Class A Invested Amount, the Class B Invested Amount and the Class C Invested
Amount at the end of the last day of the Revolving Period and the denominator
of which is the greater of (a) the sum of the Pool Balance and the amount on
deposit in the Excess Funding Account at the end of the preceding business day
and (b) the sum of the numerators used to calculate the allocation percentages
with respect to Principal Collections for all Series (the "ABC Fixed/Floating
Allocation Percentage").
"Pool Balance" means, as of the time of determination thereof, the product of
(i) the total amount of Principal Receivables at such time multiplied by (ii)
one minus the Discount Factor, if any.
"Class A Invested Amount" means an amount equal to (a) the initial principal
balance of the Class A Certificates, minus (b) the aggregate amount of
principal payments made to Class A Certificateholders prior to such date, minus
(c) the aggregate amount of Class A Investor Charge-Offs for all prior
Determination Dates, equal to the amount by which the Class A Invested Amount
has been reduced to fund the Investor Default Amount on all prior Distribution
Dates as described under "--Investor Charge-Offs," and plus
(d) the aggregate amount of Available Series Interest Collections, Excess
Interest Collections and Reallocated Principal Collections applied on all prior
Distribution Dates for the purpose of reimbursing amounts deducted pursuant to
the foregoing clause (c).
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"Class B Invested Amount" for any date means an amount equal to (a) the
initial principal balance of the Class B Certificates, minus (b) the aggregate
amount of principal payments made to Class B Certificateholders prior to such
date, minus (c) the aggregate amount of Class B Investor Charge-Offs for all
prior Determination Dates, equal to the amount by which the Class B Invested
Amount has been reduced to fund the Investor Default Amount on all prior
Distribution Dates as described under "--Investor Charge-Offs," minus (d) the
aggregate amount of Reallocated Class B Principal Collections for which neither
the Class D Invested Amount nor the Class C Invested Amount has been reduced
for all prior Distribution Dates, and plus (e) the aggregate amount of
Available Series Interest Collections, Excess Interest Collections and
Reallocated Class C Principal Collections and Reallocated Class D Principal
Collections applied on all prior Distribution Dates for the purpose of
reimbursing amounts deducted pursuant to the foregoing clauses (c) and (d).
"Class C Invested Amount" for any date means an amount equal to (a) the
initial principal balance of the Class C Certificates, minus (b) the aggregate
amount of principal payments made to Class C Certificateholders prior to such
date, minus (c) the aggregate amount of Class C Investor Charge-Offs for all
prior Determination Dates, equal to the amount by which the Class C Invested
Amount has been reduced to fund the Investor Default Amount on all prior
Distribution Dates as described under "--Investor Charge-Offs," minus (d) the
aggregate amount of Reallocated Class C Principal Collections for which the
Class D Invested Amount has not been reduced for all prior Distribution Dates,
and plus (e) the aggregate amount of Available Series Interest Collections,
Excess Interest Collections, Reallocated Class D Principal Collections and
certain other amounts as may be available applied on all prior Distribution
Dates for the purpose of reimbursing amounts deducted pursuant to the foregoing
clauses (c) and (d).
"Class D Invested Amount" means an amount equal to (a) the initial principal
balance of the Class D Certificates, plus (b) the Class D Incremental Invested
Amount (described below under "--The Overconcentration Amounts") for the
related Monthly Period, plus (c) any Additional Class D Invested Amount, minus
(d) the aggregate amount of principal payments made to Class D
Certificateholders prior to such date, minus (e) the aggregate amount of Class
D Investor Charge-Offs for all prior Determination Dates, equal to the amount
by which the Class D Invested Amount has been reduced to fund the Investor
Default Amount on all prior Distribution Dates as described under "--Investor
Charge-Offs," minus (f) the aggregate amount of Reallocated Class D Principal
Collections for all prior Distribution Dates, plus (g) the aggregate amount of
Available Series Interest Collections and Excess Interest Collections applied
on all prior Distribution Dates for the purpose of reimbursing amounts deducted
pursuant to the foregoing clauses (e) and (f).
"Invested Amount" means the sum of the Class A Invested Amount, the Class B
Invested Amount, the Class C Invested Amount and the Class D Invested Amount.
"Transferor's Percentage" means (a) when used with respect to Principal
Collections during the Revolving Period and Interest Collections and the amount
of Defaulted Receivables at all times, 100% minus the sum of the Floating
Allocation Percentage and the floating allocation percentages for all other
Series and (b) when used with respect to Principal Collections during the
Controlled Accumulation Period or Early Amortization Period, 100% minus the sum
of the Fixed/Floating Allocation Percentage and the allocation percentages used
with respect to Principal Collections for all other Series.
As a result of the Floating Allocation Percentage, Interest Collections and
the portion of Defaulted Receivables allocated to the Certificateholders will
change each business day based on the relationship of the Class A Invested
Amount, the Class B Invested Amount, the Class C Invested Amount, and Class D
Invested Amount to the Pool Balance and amounts on deposit in the Excess
Funding Account on the preceding business day.
THE OVERCONCENTRATION AMOUNTS
The Class D Invested Amount will be adjusted to reflect, on each Distribution
Date, the aggregate principal amount of Receivables in the Trust on such
Distribution Date which are Asset-Based Receivable Overconcentrations, Dealer
Overconcentrations, Manufacturer Overconcentrations and Product Line
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Overconcentrations (the "Overconcentration Amount") allocable to the
Certificateholders' Interest. The Overconcentration Amount is intended to
provide additional protection to Class A, Class B and Class C
Certificateholders against the risk of a decrease in credit diversification of
the Receivables caused by such Overconcentrations. There can be no assurance,
however, that the adjustment to the Class D Invested Amount (as described
below) will provide sufficient protection against losses on the Receivables.
Moreover, if Green Tree is unable to continue to generate new Receivables that
satisfy these diversification requirements, the resulting increase in the Class
D Invested Amount (as described below) due to the Overconcentration Amount,
resulting in a corresponding decrease in the Transferor Interest, could cause a
Pay Out Event to occur.
"Asset-Based Receivable Overconcentration" on any Distribution Date means
the excess of (a) the aggregate of all amounts of Principal Receivables in
Accounts for Asset-Based Receivables on the last day of the Monthly Period
immediately preceding such Distribution Date over (b) the Asset-Based
Percentage of the Principal Receivables on the last day of such immediately
preceding Monthly Period. Subject to adjustment as described below, the
"Asset-Based Percentage" will be 10% until the date six months after the
Closing Date; thereafter, once certain performance tests are met, 15% until
the date one year after the Closing Date; and thereafter, once certain
performance tests are met, 20%.
"Dealer Overconcentration" on any Distribution Date means, with respect
to any Account with a Dealer, the excess of (a) the aggregate amount of
Principal Receivables in such Account on the last day of the Monthly Period
immediately preceding such Distribution Date over (b) 2% of the Principal
Receivables on the last day of such immediately preceding Monthly Period.
Certain designated Dealers may be subject to a higher percentage limit with
Rating Agency approval, but in no case higher than 3%.
"Manufacturer Overconcentration" on any Distribution Date means the
excess of (a) the aggregate of all amounts of Principal Receivables in
Accounts created pursuant to Floorplan Agreements with a single
Manufacturer on the last day of the Monthly Period immediately preceding
such Distribution Date over (b) 15% of the Principal Receivables on the
last day of such immediately preceding Monthly Period.
"Product Line Overconcentration" on any Distribution Date means the
excess of (a) the aggregate of all amounts of Principal Receivables in the
Accounts that represent financing for a single product line (other than
Asset-Based Receivables and Receivables that represent financing for
manufactured housing) on the last day of the Monthly Period immediately
preceding such Distribution Date over (b) 5% for marine products, 5% for
recreational vehicles, and 5% for any other products in total, of the
Principal Receivables on the last day of such immediately preceding Monthly
Period. If Receivables are transferred to the Trust in the future and such
Receivables are secured by products in a product line that is new to the
Trust, the Rating Agencies may create a separate category of product line
overconcentration with its own overconcentration limits, and such new
product line overconcentration will become part of the Overconcentration.
The Class D Invested Amount will be adjusted to reflect changes in the Class
D Incremental Invested Amount, as described under "Allocation Percentages"
above. The "Class D Incremental Invested Amount" for any Monthly Period will
equal the product of (a) a fraction, the numerator of which is the sum of the
Invested Amount (exclusive of the Class D Incremental Invested Amount) on the
last day of the immediately preceding Monthly Period, and the denominator of
which is the Pool Balance on such last day, times (b) the Overconcentration
Amount for the Distribution Date in such Monthly Period.
Notwithstanding the above, in the case of each such Overconcentration, the
percentage in clause (b) for such Overconcentration may be increased by the
Transferor, without the consent of any Certificateholder, to a level acceptable
to each Rating Agency without any reduction or withdrawal of its rating of the
Class A or Class B Certificates. Any such increase in such a percentage may
involve an adjustment, upward or downward, of the Class D Invested Amount (if
upward, an "Additional Class D Invested Amount").
REALLOCATION OF CASH FLOWS
On the first business day following the end of each Monthly Period, the
Servicer will determine the Required Amount, if any. Commencing on such first
business day, the Servicer will apply all or a portion of the Excess Interest
Collections of other Series with respect to such business day allocable to the
Series 1995-1
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Certificates in an amount equal to the remaining Required Amount. Excess
Interest Collections from other Series allocable to the Series 1995-1
Certificates for any business day will be equal to the product of (x) Excess
Interest Collections available from all other Series for such business day and
(y) a fraction, the numerator of which is the Required Amount for such business
day and the denominator of which is the aggregate amount of shortfalls in
required amounts or other amounts to be paid from available Interest
Collections for all Series for such business day.
REALLOCATED PRINCIPAL COLLECTIONS
On the first business day following the end of each Monthly Period, the
Servicer will apply or cause the Trustee to apply an amount, not to exceed the
Class D Invested Amount, equal to the product of (a)(i) during the Revolving
Period, the Class D Floating Allocation Percentage or (ii) during the
Controlled Accumulation Period or Early Amortization Period, the Class D
Fixed/Floating Allocation Percentage and (b) the amount of Principal
Collections with respect to such business day to the following amounts in the
following priority (such collections applied in accordance with clause (a)
below are called "Reallocated Class D Principal Collections"):
(a) an amount equal to the sum of (i) the remaining Class A Required
Amount, if any, with respect to the prior Monthly Period, (ii) the
remaining Class B Required Amount, if any, with respect to the prior
Monthly Period and (iii) the remaining Class C Required Amount, if any,
with respect to the prior Monthly Period will be applied first to the
components of the Class A Required Amount, then to the components of the
Class B Required Amount and then to the components of the Class C Required
Amount in the same priority in which Available Series Interest Collections
are applied to such components as described in "--Application of
Collections--Payment of Fees, Interest and Other Items"; and
(b) any such collections not applied in the foregoing manner (and
therefore not constituting Reallocated Class D Principal Collections) (i)
on business days with respect to the Revolving Period and the Controlled
Accumulation Period or Early Amortization Period prior to the payment in
full of the Class C Invested Amount will be paid to the Transferor in order
to maintain the Class D Invested Amount, (ii) on business days during the
Controlled Accumulation Period following payment in full of the Class C
Invested Amount will be included in the funds available to make principal
payments to the Class D Certificateholders until the Class D Invested
Amount is paid in full and (iii) on business days during an Early
Amortization Period will be deposited in the Class D Subaccount of the
Excess Funding Account to be held until the Class C Invested Amount is paid
in full and to be available to be applied as Reallocated Class D Principal
Collections.
On each business day, the Servicer will apply or cause the Trustee to apply
an amount, not to exceed the Class C Invested Amount, equal to the product of
(a)(i) during the Revolving Period, the Class C Floating Allocation Percentage
or (ii) during the Controlled Accumulation Period or Early Amortization Period,
the Class C Fixed/Floating Allocation Percentage and (b) the amount of
Principal Collections with respect to such business day to the following
amounts in the following priority (such collections applied in accordance with
clause (a) below are called "Reallocated Class C Principal Collections"):
(a) an amount equal to the sum of (i) the remaining Class A Required
Amount, if any, with respect to the prior Monthly Period over the amount of
Reallocated Class D Principal Collections applied with respect thereto for
such Monthly Period and (ii) the remaining Class B Required Amount, if any,
with respect to the prior Monthly Period over the amount of Reallocated
Class D Principal Collections applied with respect thereto for such Monthly
Period, will be applied first to the remaining components of the Class A
Required Amount and then to the remaining components of the Class B
Required Amount in the same priority in which Available Series Interest
Collections are applied to such components as described in "--Application
of Collections--Payment of Fees, Interest and Other Items"; and
(b) any such collections not applied in the foregoing manner (and
therefore not constituting Reallocated Class C Principal Collections) will,
on business days with respect to the Revolving Period, be applied as Shared
Principal Collections and on business days with respect to the Controlled
Accumulation Period or Early Amortization Period will be included in the
funds available to make principal payments to the Class A
Certificateholders until the Class A Invested Amount is paid in full
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and then to the Class B Certificateholders until the Class B Invested
Amount is paid in full and then to the Class C Certificateholders until the
Class C Invested Amount is paid in full.
On each business day, the Servicer will apply or cause the Trustee to apply
an amount, not to exceed the Class B Invested Amount, equal to the product of
(a)(i) during the Revolving Period, the Class B Floating Allocation Percentage
or (ii) during the Controlled Accumulation Period or Early Amortization Period,
the Class B Fixed/Floating Allocation Percentage and (b) the amount of
Principal Collections with respect to such business day to the following
amounts in the following priority (such collections applied in accordance with
clause (a) below are called "Reallocated Class B Principal Collections" and the
sum of Reallocated Class D Principal Collections, Reallocated Class C Principal
Collections and Reallocated Class B Collections is called "Reallocated
Principal Collections"):
(a) an amount equal to the excess, if any, of the remaining Class A
Required Amount, if any, with respect to the prior Monthly Period over the
sum of the amount of Reallocated Class D Principal Collections and
Reallocated Class C Principal Collections applied with respect thereto for
the prior Monthly Period will be applied to the remaining components of the
Class A Required Amount in the same priority in which Available Series
Interest Collections are applied to such components as described in "--
Application of Collections--Payment of Fees, Interest and Other Items"; and
(b) any such collections not applied in the foregoing manner (and
therefore not constituting Reallocated Class B Principal Collections) will,
on business days with respect to the Revolving Period, be applied as Shared
Principal Collections and on business days with respect to the Controlled
Accumulation Period or Early Amortization Period will be included in the
funds available to make principal payments to the Class A
Certificateholders until the Class A Invested Amount is paid in full and
then to the Class B Certificateholders until the Class B Invested Amount is
paid in full.
On each Determination Date, the Class D Invested Amount will be reduced by
the amount of unreimbursed Reallocated Principal Collections for the related
Monthly Period. In the event that such reduction would cause the Class D
Invested Amount to be a negative number, the Class D Invested Amount will be
reduced to zero and the Class C Invested Amount will be reduced by the amount
by which the Class D Invested Amount would have been reduced below zero. In the
event that the amount of Reallocated Principal Collections for such
Distribution Date would cause the Class C Invested Amount to be a negative
number, the Class C Invested Amount will be reduced to zero and the Class B
Invested Amount will be reduced by the amount by which the Class C Invested
Amount would have been reduced below zero. In the event that the amount of
Reallocated Principal Collections for such Distribution Date would cause the
Class B Invested Amount to be a negative number on any Distribution Date, the
amount of Class B Reallocated Principal Collections on such Distribution Date
will be an amount not to exceed the amount which would cause the Class B
Invested Amount to be reduced to zero.
APPLICATION OF COLLECTIONS
Allocations. Payments on the Receivables will be made to the Servicer, who
will deposit all such payments (other than collections allocable to the
Exchangeable Transferor Certificate, subject to certain exceptions specified
herein), in the Collection Account no later than the second business day
following the date of processing. On the day on which any deposit to the
Collection Account is available, the Servicer will make the deposits and
payments to the accounts and parties as indicated below; provided, however,
that for as long as Green Tree or any affiliate of Green Tree remains the
Servicer under the Pooling and Servicing Agreement, then the Servicer may make
such deposits and payments on the business day immediately prior to the
Distribution Date (the "Transfer Date") in an aggregate amount equal to the net
amount of such deposits and payments which would have been made had the
conditions of this proviso not applied if (a)(i) the Servicer provides to the
Trustee a letter of credit or other form of credit enhancement rated in the
highest rating category by the Rating Agency covering the risk of collection of
the Servicer and (ii) the Transferor shall not have received a notice from the
Rating Agency that making payments monthly rather than daily would result in
the lowering of such Rating Agency's then-existing rating of any Series of
certificates then outstanding or (b) the Servicer has and maintains a short-
term credit rating of P-1 by Moody's and A-1 by Standard & Poor's. During the
Revolving Period, upon the retail sale of a product securing a Receivable where
Green Tree is providing the customer financing for such retail sale, Green Tree
will not, except under
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certain limited circumstances, be obligated to deposit cash in the Collection
Account in respect of the principal amount of such Receivable but may instead
replace such Receivable with other Receivables.
If clause (a) or clause (b) set forth in the proviso to the immediately
preceding paragraph is satisfied, payments on the Receivables collected by the
Servicer will not be segregated from the assets of the Servicer. Until such
payments on the Receivables collected by the Servicer are deposited into the
Collection Account, such funds may be used by the Servicer for its own benefit,
and the proceeds of any short-term investment of such funds will accrue to the
Servicer. During such times as the Servicer holds funds representing payments
on the Receivables collected by the Servicer and is permitted to use such funds
for its own benefit, the Certificateholders are subject to risk of loss,
including risk resulting from the bankruptcy or insolvency of the Servicer. The
Servicer will pay no fee to the Trust or any Certificateholder for any use by
the Servicer of funds representing collections on the Receivables.
Notwithstanding the foregoing, whether the Servicer is required to make daily
or monthly deposits to the Collection Account, the Servicer is only required to
deposit Collections from the Collection Account into any Trust Account or any
account for any other Series up to the required amount to be deposited therein
and is permitted to withdraw from the Collection Account any funds not required
to be so deposited.
The Servicer will withdraw the following amounts from the Collection Account
for application on each business day as indicated:
(i) an amount equal to the Transferor Percentage plus, prior to the Class
D Principal Payment Commencement Date, the Class D Floating Allocation
Percentage or the Class D Fixed/Floating Allocation Percentage, as
applicable, of the aggregate amount of Principal Collections (less the
amount thereof which may be applied as Reallocated Class D Principal
Collections) and any amounts to be paid in respect of the Class D Investor
Default Amount will be paid to the Transferor to maintain the Class D
Invested Amount;
(ii) an amount equal to the Transferor Percentage of the aggregate amount
of Interest Collections will be paid to the holder of the Exchangeable
Transferor Certificate to the extent such funds are not applied to cover
Negative Carry Amounts or Principal Funding Investment Shortfalls, or
allocated to any Series as set forth in the applicable Supplement;
(iii) an amount equal to the sum of (a) the Floating Allocation
Percentage of the aggregate amount of Interest Collections and (b) Excess
Interest Collections of other Series allocable to such Series, will be
allocated and paid as described below in "--Payment of Fees, Interest, and
Other Items;"
(iv) during the Revolving Period, an amount equal to the sum of the Class
A Floating Allocation Percentage, the Class B Floating Allocation
Percentage and the Class C Floating Allocation Percentage of Principal
Collections (less the amount thereof which may be applied as Reallocated
Class B Principal Collections and Reallocated Class C Principal
Collections) will be applied as Shared Principal Collections;
(v) during the Controlled Accumulation Period or Early Amortization
Period and prior to the Class B Principal Commencement Date, an amount
equal to the ABC Fixed/Floating Allocation Percentage of Principal
Collections (less the amount thereof which may be applied as Reallocated
Class B Principal Collections or Reallocated Class C Principal
Collections), any amount on deposit in the Excess Funding Account
(exclusive of any amount in the Class D Subaccount), any amounts to be paid
in respect of the ABC Investor Default Amount, Class A Investor Charge-
Offs, Class B Investor Charge-Offs and Class C Investor Charge-Offs and any
amount of Shared Principal Collections allocated to the Certificates on
such business day up to (a) during the Controlled Accumulation Period, the
Controlled Deposit Amount or (b) during the Early Amortization Period, the
Class A Invested Amount, will be deposited in the Principal Account;
(vi) during the Controlled Accumulation Period or Early Amortization
Period and on or after the Class B Principal Commencement Date, an amount
equal to the ABC Fixed/Floating Allocation Percentage of such Principal
Collections (less the amount thereof which may be applied as Reallocated
Class B Principal Collections or Reallocated Class C Principal
Collections), any remaining amount on deposit in the Excess Funding Account
(exclusive of any amount in the Class D Subaccount), any amounts to be paid
in respect of the ABC Investor Default Amount, Class B Investor Charge-Offs
and
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Class C Investor Charge-Offs and any amount of Shared Principal Collections
allocated to the Certificates on such business day, up to (a) during the
Controlled Accumulation Period, the Controlled Deposit Amount or (b) during
the Early Amortization Period, the Class B Invested Amount, will be
deposited in the Principal Account;
(vii) during the Controlled Accumulation Period or Early Amortization
Period and on or after the Class C Principal Commencement Date, an amount
equal to the ABC Fixed/Floating Allocation Percentage of such Principal
Collections (less the amount thereof which may be applied as Reallocated
Class C Principal Collections), any remaining amount on deposit in the
Excess Funding Account (exclusive of any amount in the Class D Subaccount),
any amounts to be paid in respect of the ABC Investor Default Amount, and
Class C Investor Charge-Offs and any amount of Shared Principal Collections
allocated to the Certificates on such business day, up to the Class C
Invested Amount, will be deposited into the Principal Account;
(viii) Shared Principal Collections will be allocated to each outstanding
Series pro rata based on any Principal Shortfalls with respect to any
Series which is in its amortization period. The Servicer will pay any
remaining Shared Principal Collections on such business day to the holder
of the Exchangeable Transferor Certificate; and
(ix) Excess Interest Collections will be allocated as set forth below in
paragraph (xii) to "--Payment of Fees, Interest, and Other Items."
Any Shared Principal Collections and other amounts described above as being
payable to the Transferor will not be paid to the Transferor if the Transferor
Interest on any date, after giving effect to the inclusion in the Trust of all
Receivables on or prior to such date and the application of all prior payments
to the Transferor, does not exceed the Minimum Transferor Interest. Any such
amounts otherwise payable to the Transferor will be deposited into and held in
the Excess Funding Account, and on the commencement of the accumulation period
or amortization period with respect to any Series, such amounts will be
deposited in the principal account of such Series to the extent specified in
the related Supplement until the applicable principal account of such Series
has been funded in full or the holders of certificates of such Series have been
paid in full. See "--Excess Funding Account."
Payment of Fees, Interest and Other Items. On each business day during a
Monthly Period, the Servicer will determine the Floating Allocation Percentage
of Interest Collections (the "Available Series Interest Collections") and will
distribute from the Collection Account the following amounts in the following
priority (in each case, subject to the limit of the Available Series Interest
Collections less all amounts distributed pursuant to a higher priority):
(i) an amount equal to the excess of
(A) the sum of (1) the Class A Monthly Interest, (2) the amount of
any Class A Monthly Interest previously due but not deposited in the
Interest Funding Account in prior Monthly Periods, and (3) any
additional interest (to the extent permitted by applicable law) at
the Class A Certificate Rate with respect to interest amounts that
were due but not paid in a prior Monthly Period over
(B) the amount which has already been deposited in the Interest
Funding Account with respect thereto in the current Monthly Period,
will be deposited in the Interest Funding Account for distribution on the
next succeeding Distribution Date to the Class A Certificateholders;
(ii) an amount equal to the excess of
(A) the sum of (1) the Class B Monthly Interest, (2) the amount of
any Class B Monthly Interest previously due but not deposited in the
Interest Funding Account in prior Monthly Periods, and (3) any
additional interest (to the extent permitted by applicable law) at
the Class B Certificate Rate with respect to Class B Monthly
Interest amounts that were due but not paid in a prior Monthly
Period over
(B) the amount which has already been deposited in the Interest
Funding Account with respect thereto in the current Monthly Period,
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will be deposited in the Interest Funding Account for distribution on the
next succeeding Distribution Date to the Class B Certificateholders;
(iii) if Green Tree or an affiliate of Green Tree is not the Servicer, an
amount equal to the portion of the Monthly Servicing Fee for the current
month that has not been previously paid to the Servicer plus any prior
Monthly Servicing Fee that was due but not previously paid to the Servicer,
will be distributed to the Servicer;
(iv) an amount equal to the sum of (1) the aggregate ABC Investor Default
Amount for such business day and (2) the unpaid ABC Investor Default Amount
for any prior business day during the then-current Monthly Period, will (w)
during the Revolving Period, be treated as Shared Principal Collections,
(x) during the Controlled Accumulation Period or Early Amortization Period
on and prior to the Class B Principal Commencement Date, be deposited in
the Principal Account for payment to the Class A Certificateholders, (y) on
and after the Class B Principal Commencement Date, be deposited in the
Principal Account for payment to the Class B Certificateholders and (z) on
and after the Class C Principal Commencement Date, be deposited in the
Principal Account for payment to the Class C Certificateholders;
(v) an amount equal to the sum of (1) the aggregate Class D Investor
Default Amount for such business day and (2) the unpaid Class D Investor
Default Amount for any prior business day during the then-current Monthly
Period, will (x) during the Revolving Period and the Controlled
Accumulation Period prior to the payment in full of the Class C Invested
Amount, be paid to the Transferor in order to maintain the Class D Invested
Amount, (y) during the Controlled Accumulation Period or Early Amortization
Period following the payment in full of the Class C Invested Amount, be
deposited in the Principal Account for payment to the Class D
Certificateholders, and (z) during the Early Amortization Period prior to
the payment of the Class C Invested Amount in full, deposited in the Class
D Subaccount of the Excess Funding Account, to be held until the Class C
Invested Amount has been paid in full, and to be available to be applied as
Reallocated Class D Principal Collections;
(vi) an amount equal to unreimbursed Class A Investor Charge-Offs, if
any, will be applied to reimburse Class A Investor Charge-Offs and (w)
during the Revolving Period, be treated as Shared Principal Collections,
(x) during the Controlled Accumulation Period or Early Amortization Period
but on and prior to the Class B Principal Commencement Date, be deposited
in the Principal Account for payment to the Class A Certificateholders, (y)
on and after the Class B Principal Commencement Date, be deposited in the
Principal Account for payment to the Class B Certificateholders and (z) on
and after the Class C Principal Commencement Date, be deposited in the
Principal Account for payment to the Class C Certificateholders;
(vii) an amount equal to the sum of (1) the amount of interest which has
accrued with respect to the outstanding aggregate principal amount of the
Class B Certificates at the Class B Certificate Rate but has not been
deposited in the Interest Funding Account with respect to the Class B
Certificateholders either on such business day or on a prior business day,
and (2) any additional interest (to the extent permitted by applicable law)
at the Class B Certificate Rate with respect to such interest amounts that
were due but not paid to Class B Certificateholders in any previous Monthly
Period, will be deposited in the Interest Funding Account for distribution
on the next succeeding Distribution Date to the Class B Certificateholders;
(viii) an amount equal to unreimbursed Class B Investor Charge-Offs, if
any, will be applied to reimburse Class B Investor Charge-Offs and (w)
during the Revolving Period, be treated as Shared Principal Collections,
(x) during the Controlled Accumulation Period or Early Amortization Period
but prior to the Class B Principal Commencement Date, be deposited in the
Principal Account for payment to the Class A Certificateholders, (y) on and
after the Class B Principal Commencement Date but prior to the Class C
Principal Commencement Date, be deposited in the Principal Account for
payment to the Class B Certificateholders and (z) on and after the Class C
Principal Commencement Date, be deposited in the Principal Account for
payment to the Class C Certificateholders;
(ix) an amount equal to unreimbursed Class C Investor Charge-Offs, if
any, will be applied to reimburse Class C Investor Charge-Offs and (w)
during the Revolving Period, be treated as Shared
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Principal Collections, (x) during the Controlled Accumulation Period or
Early Amortization Period but prior to the Class B Principal Commencement
Date, be deposited in the Principal Account for payment to the Class A
Certificateholders, (y) on and after the Class B Principal Commencement
Date but prior to the Class C Principal Commencement Date, be deposited in
the Principal Account for payment to the Class B Certificateholders and (z)
on and after the Class C Principal Commencement Date, be deposited in the
Principal Account for payment to the Class C Certificateholders;
(x) an amount equal to unreimbursed Class D Investor Charge-Offs, if any,
will (x) during the Revolving Period and during the Controlled Accumulation
Period prior to the payment in full of the Class C Invested Amount, be paid
to the Transferor, (y) during the Early Amortization Period, be deposited
in the Class D Subaccount of the Excess Funding Account, to be held until
the Class C Invested Amount has been paid in full and to be available to be
applied as Reallocated Class D Principal Collections, and (z) during the
Controlled Accumulation Period following payment in full of the Class C
Invested Amount, be deposited in the Principal Account for payment to the
Class D Certificateholders;
(xi) if Green Tree or an affiliate of Green Tree is the Servicer, an
amount equal to the portion of the Monthly Servicing Fee for the current
month that has not been previously paid to the Servicer plus any prior
Monthly Servicing Fee that was due but not previously paid to the Servicer
will be distributed to the Servicer; and
(xii) any Available Series Interest Collections remaining after making
the above described distributions will be treated as Excess Interest
Collections which will be available to cover shortfalls, if any, in amounts
payable from Interest Collections to certificateholders of other Series and
then to pay any unpaid commercially reasonable costs and expenses of a
successor Servicer, if any. Excess Interest Collections which are not so
used will be paid to the Transferor.
"Class A Monthly Interest" with respect to any Distribution Date will equal
the product of (i) the Class A Certificate Rate for the related Interest
Accrual Period, (ii) the actual number of days in such Interest Accrual Period
divided by 360 and (iii) the outstanding principal balance of the Class A
Certificates on the related Record Date or, with respect to the first
Distribution Date, the initial outstanding principal balance of the Class A
Certificates.
"Class B Monthly Interest" with respect to any Distribution Date will equal
the product of (i) the Class B Certificate Rate for the related Interest
Accrual Period, (ii) the actual number of days in such Interest Accrual Period
divided by 360 and (iii) the Class B Invested Amount on the related Record Date
or, with respect to the first Distribution Date, the initial outstanding
principal balance of the Class B Certificates.
"Required Amount" means on the first business day following a Monthly Period
the amount, if any, by which the full amount to be paid pursuant to clauses
(i)-(xi) above in "--Payments of Fees, Interest, and Other Items" for such
prior Monthly Period exceeds the portion of the Available Series Interest
Collections applied to the payment of the amounts described in such clauses for
such prior Monthly Period.
Payment of Principal. On each business day during the Revolving Period, the
Trustee, acting in accordance with instructions from the Servicer, will treat
the amount described in clause (iv) of "--Allocations" as Shared Principal
Collections which will be applied as described in clause (viii) of "--
Allocations." On the Transfer Date preceding the Class A Scheduled Payment
Date, the Trustee, acting in accordance with instructions from the Servicer,
will withdraw the amount on deposit in the Principal Account and deposit such
amount in the Distribution Account for distribution to the Class A
Certificateholders on the Class A Scheduled Payment Date. If the amount so
distributed on the Class A Scheduled Payment Date is less than the Class A
Invested Amount, the Class A Certificateholders will be entitled on each
subsequent Distribution Date to receive principal payments to the extent of
Class A Principal until the Class A Invested Amount is paid in full. The Class
B Certificateholders will be entitled to receive payment of the Class B
Invested Amount on the Class B Scheduled Payment Date, but only after the Class
A Invested Amount has been paid in full. The Class C Certificateholders will be
entitled to receive principal payments to the extent of Class C Principal until
the Class C Invested Amount is paid in full only after the Class A Invested
Amount and the Class B Invested Amount have been paid in full. The Class D
Certificateholders will be entitled to receive principal payments only after
the Class A Invested Amount, the Class B Invested Amount, and the Class C
Invested Amount have been paid in full.
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"Class A Principal" with respect to any Distribution Date during the
Controlled Accumulation Period or Early Amortization Period will equal the sum
of (i) an amount equal to the ABC Fixed/Floating Allocation Percentage of all
Principal Collections (less the amount of Reallocated Class B Principal
Collections and Reallocated Class C Principal Collections) received during the
Monthly Period immediately preceding such Distribution Date, (ii) any amount on
deposit in the Excess Funding Account allocated to the Class A Certificates
with respect to the preceding Monthly Period, (iii) the aggregate ABC Investor
Default Amount paid from Available Series Interest Collections, Excess Interest
Collections or Reallocated Principal Collections with respect to the preceding
Monthly Period and any reimbursements from Available Series Interest
Collections, Excess Interest Collections or Reallocated Principal Collections
of unreimbursed Class A Investor Charge-Offs, Class B Investor Charge-Offs and
Class C Investor Charge-Offs and (iv) Shared Principal Collections allocated to
the Class A Certificates; provided, however, that with respect to any
Distribution Date during the Controlled Accumulation Period, Class A Principal
will not exceed the lesser of (i) the Controlled Deposit Amount and (ii) the
Class A Invested Amount; provided, further that with respect to the Series
1995-1 Termination Date, Class A Principal will be an amount equal to the Class
A Invested Amount.
"Class B Principal" with respect to any Distribution Date on or after the
Class A Scheduled Payment Date will equal the sum of (i) an amount equal to the
ABC Fixed/Floating Allocation Percentage of all Principal Collections (less the
amount of Reallocated Class B Principal Collections and Reallocated Class C
Principal Collections) received during the Monthly Period immediately preceding
such Distribution Date (or, in the case of the first Distribution Date
following the date on which an amount equal to the Class A Invested Amount is
deposited in the Principal Account to be applied to the payment of Class A
Principal, the ABC Fixed/Floating Allocation Percentage of Principal
Collections from the date on which such deposit is made), (ii) any amount on
deposit in the Excess Funding Account allocated to the Class B Certificates
with respect to the preceding Monthly Period, and (iii) the aggregate ABC
Investor Default Amount paid from Available Series Interest Collections, Excess
Interest Collections or Reallocated Principal Collections with respect to the
preceding Monthly Period and any reimbursements from Available Series Interest
Collections, Excess Interest Collections or Reallocated Principal Collections
of unreimbursed Class B Investor Charge-Offs and Class C Investor Charge-Offs
and (iv) Shared Principal Collections allocated to the Class B Certificates;
provided, however, that with respect to any Distribution Date during the
Controlled Accumulation Period, Class B Principal will not exceed the lesser of
(i) the Controlled Deposit Amount and (ii) the Class B Invested Amount;
provided, further, that with respect to the Series 1995-1 Termination Date,
Class B Principal will be an amount equal to the Class B Invested Amount.
"Class C Principal" with respect to any Distribution Date on or after the
Class C Principal Commencement Date will equal the sum of (i) an amount equal
to the ABC Fixed/Floating Allocation Percentage of all Principal Collections
(less the amount of Reallocated Class C Principal Collections) received during
the Monthly Period immediately preceding such Distribution Date (or, in the
case of the first Distribution Date following the date on which an amount equal
to the Class B Invested Amount is deposited in the Principal Account to be
applied to the payment of Class B Principal, the ABC Fixed/Floating Allocation
Percentage of Principal Collections from the date on which such deposit is
made), (ii) any amount on deposit in the Excess Funding Account allocated to
the Class C Certificates with respect to the preceding Monthly Period, (iii)
the aggregate ABC Investor Default Amount paid from Available Series Interest
Collections, Excess Interest Collections or Reallocated Principal Collections
with respect to the preceding Monthly Period and any reimbursements from
Available Series Interest Collections, Excess Interest Collections or
Reallocated Principal Collections of unreimbursed Class C Investor Charge-Offs
and (iv) Shared Principal Collections allocated to the Class C Certificates;
provided, that with respect to the Series 1995-1 Termination Date, Class C
Principal will be an amount equal to the Class C Invested Amount.
On the Transfer Date preceding the Class D Principal Commencement Date, and
on each Transfer Date thereafter until the Trust is terminated or until the
Class D Invested Amount is paid in full, the Trustee, acting in accordance with
instructions from the Servicer, will withdraw amounts deposited into the
Principal Account in respect of Principal Collections processed during the
related Monthly Period and, to the extent
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of the Class D Invested Amount, deposit such amounts in the Distribution
Account for distribution to the Class D Certificateholders on the next
succeeding Distribution Date (the "Class D Principal"). The Class D
Certificateholders will be entitled to receive principal payments to the extent
of Class D Principal until the Class D Invested Amount is paid in full.
COVERAGE OF CERTAIN INTEREST SHORTFALLS
To the extent of any shortfall in the amount of Available Series Interest
Collections due to the accumulation of principal in the Excess Funding Account
or the Principal Account, the Transferor Interest Collections will be made
available to cover such Negative Carry Amount and such Principal Funding
Investment Shortfall.
Interest Collections allocable to any Series in excess of the amounts
necessary to make required payments with respect to such Series ("Excess
Interest Collections") will be applied to cover any shortfalls with respect to
amounts payable from Interest Collections allocable to any other Series, pro
rata based upon the amounts of the shortfalls, if any, with respect to such
other Series. Any Excess Interest Collections remaining after covering
shortfalls with respect to all outstanding Series during a Monthly Period will
be paid to the successor Servicer, if any, to cover certain costs and expenses
and then to the holder of the Exchangeable Transferor Certificate.
DEFAULTED RECEIVABLES
Receivables will be charged off as uncollectible in accordance with the
Servicer's customary and usual policies (a "Defaulted Receivable"). See "The
Accounts--Loss Experience." On each business day, the Servicer will allocate to
the Certificateholders a portion of all Defaulted Receivables in an amount (the
"Investor Default Amount") equal to the product of (a) the Floating Allocation
Percentage applicable on such business day and (b) the aggregate principal
amount of Defaulted Receivables identified since the prior reporting date. On
each business day, the Servicer will allocate to the Class A, Class B and Class
C Certificateholders a portion of all Defaulted Receivables in an amount (the
"ABC Investor Default Amount") equal to the product of (a) the sum of the Class
A Floating Allocation Percentage, the Class B Floating Allocation Percentage
and the Class C Floating Allocation Percentage applicable on such business day
and (b) the aggregate principal amount of Defaulted Receivables identified
since the prior reporting date. On each business day, the Servicer will
allocate to the Class D Certificateholders a portion of all Defaulted
Receivables in an amount (the "Class D Investor Default Amount") equal to the
product of (a) the Class D Floating Allocation Percentage and (b) the aggregate
principal amount of Defaulted Receivables identified since the prior reporting
date.
INVESTOR CHARGE-OFFS
If on the second business day preceding each Distribution Date (the
"Determination Date"), the aggregate Investor Default Amount, if any, for all
business days in the preceding Monthly Period exceeded the aggregate amount of
the Available Series Interest Collections, Excess Interest Collections and
Reallocated Principal Collections allocated with respect thereto during such
Monthly Period, then the Class D Invested Amount will be reduced by the
aggregate amount of such excess, but not more than the remaining aggregate
Investor Default Amount for such Monthly Period (a "Class D Investor Charge-
Off"). The Class D Invested Amount thereafter will be increased (but not in
excess of the aggregate of such reductions in the Class D Invested Amount
previously made that have not been previously reimbursed as described in this
sentence) on any business day by the amounts allocated and available for that
purpose as described under clause (x) of "--Application of Collections--Payment
of Fees, Interest, and Other Items."
In the event that any such reduction of the Class D Invested Amount would
cause the Class D Invested Amount to be a negative number, the Class D Invested
Amount will be maintained at or reduced to zero, and the Class C Invested
Amount will be reduced by the aggregate amount of such excess, but not more
than the remaining aggregate Investor Default Amount for such Monthly Period (a
"Class C Investor Charge-Off"), which will have the effect of slowing or
reducing the return of principal to the Class C Certificateholders. The Class C
Invested Amount will thereafter be increased (but not in excess of the unpaid
principal balance of the Class C Certificates) on any Monthly Period by the
amounts allocated and available
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for that purpose as described under clause (ix) of "--Application of
Collections--Payment of Fees, Interest, and Other Items."
In the event that any such reduction of the Class C Invested Amount would
cause the Class C Invested Amount to be a negative number, the Class C Invested
Amount will be reduced to zero, and the Class B Invested Amount will be reduced
by the aggregate amount of such excess, but not more than the remaining
aggregate Investor Default Amount for such Monthly Period (a "Class B Investor
Charge-Off"), which will have the effect of slowing or reducing the return of
principal to the Class B Certificateholders. The Class B Invested Amount will
thereafter be increased (but not in excess of the unpaid principal balance of
the Class B Certificates) on any Monthly Period by the amounts allocated and
available for that purpose as described under clause (viii) of "--Application
of Collections--Payment of Fees, Interest, and Other Items."
In the event that any such reduction of the Class B Invested Amount would
cause the Class B Invested Amount to be a negative number, the Class B Invested
Amount will be reduced to zero, and the Class A Invested Amount will be reduced
by the amount by which the Class B Invested Amount would have been reduced
below zero, but not more than the remaining aggregate Investor Default Amount
for such Monthly Period (a "Class A Investor Charge-Off"). The Class A Invested
Amount will thereafter be increased (but not in excess of the unpaid principal
balance of the Class A Certificates) on any Monthly Period by the amounts
allocated and available for that purpose as described under clause (vi) of "--
Application of Collections--Payment of Fees, Interest, and Other Items."
COMPANION SERIES
The Series 1995-1 Certificates may be paired with one or more other Series
(each a "Companion Series"). Each Companion Series either will be prefunded
with an initial deposit to a prefunding account in an amount up to the initial
principal balance of such Companion Series, funded primarily from the proceeds
for the sale of such Companion Series, or will have a variable principal
amount. Any such prefunding account will be held for the benefit of such
Companion Series and not for the benefit of Series 1995-1 Certificateholders.
As principal is paid with respect to the Series 1995-1 Certificates, either (i)
in the case of a prefunded Companion Series, an equal amount of funds on
deposit in any prefunding account for such prefunded Companion Series will be
released (which funds will be distributed to the Transferor) or (ii) in the
case of a Companion Series having a variable principal amount, an interest in
such variable Companion Series in an equal or lesser amount may be sold by the
Trust (and the proceeds thereof will be distributed to the Transferor) and, in
either case, the invested amount in the Trust of such Companion Series will
increase by up to the corresponding amount. Upon payment in full of the Series
1995-1 Certificates, assuming that there have been no unreimbursed charge-offs
with respect to any related Companion Series, the aggregate invested amount of
such related Companion Series will have been increased by an amount up to an
aggregate amount equal to the Series 1995-1 Investor Interest paid to the
Series 1995-1 Certificateholders since the issuance of such Companion Series.
The issuance of a Companion Series will be subject to the conditions described
under "Description of the Certificates--Exchanges." Green Tree does not expect
that the terms of any Companion Series would have an impact on the timing or
amount of payments received by a Series 1995-1 Certificateholder.
FINAL PAYMENT OF PRINCIPAL; TERMINATION
The Class A Certificates, the Class B Certificates, and the Class C
Certificates will each be subject to optional repurchase by the Transferor on
any Distribution Date after the sum of the Class A Invested Amount, the Class B
Invested Amount and the Class C Invested Amount is reduced to an amount less
than or equal to $43,470,000 (10% of the initial outstanding principal amount
of the Class A Certificates, the Class B Certificates and the Class C
Certificates), if certain conditions set forth in the Pooling and Servicing
Agreement are satisfied. The repurchase price will be equal to (i) the unpaid
Class A Invested Amount plus accrued and unpaid interest on the Class A
Certificates, (ii) the unpaid Class B Invested Amount plus accrued and unpaid
interest on the Class B Certificates, (iii) the unpaid Class C Invested Amount
plus accrued and unpaid interest on the Class C Certificates and (iv) the
unpaid Class D Invested Amount. In each case interest will accrue through the
day preceding the Distribution Date on which the repurchase occurs.
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The Certificates will be retired on the day following the Distribution Date
on which the final payment of principal is scheduled to be made to the
Certificateholders, whether as a result of optional reassignment to the
Transferor or otherwise. Subject to prior termination as provided above, the
Pooling and Servicing Agreement provides that the final distribution of
principal and interest on the Certificates will be made on the earlier of (i)
the Distribution Date on which the Invested Amount is paid in full and (ii) the
December 2000 Distribution Date (the "Series 1995-1 Termination Date"), except
to the extent provided below. In the event that the Invested Amount is greater
than zero, exclusive of any Class held by the Transferor, on the Series 1995-1
Termination Date, the Trustee will sell or cause to be sold (and apply the
proceeds first to the Class A Certificates until paid in full, then to the
Class B Certificates until paid in full, then to the Class C Certificates until
paid in full, and finally to the Class D Certificates to the extent necessary
to pay such remaining amounts to all Certificateholders pro rata within each
Class as final payment of the Certificates) interests in the Receivables or
certain Receivables, as specified in the Pooling and Servicing Agreement and
the Series 1995-1 Supplement, in an amount up to 110% of the Invested Amount at
the close of business on such date (but not more than the total amount of
Receivables allocable to the Certificates in accordance with the Pooling and
Servicing Agreement). If the sale contemplated by the preceding sentence has
not occurred by the Series 1995-1 Termination Date, the affected
Certificateholders shall remain entitled to receive proceeds of such sale when
it occurs. The net proceeds of such sale and any collections on the
Receivables, up to an amount equal to the Invested Amount plus accrued interest
due on the Certificates, will be paid on the Series 1995-1 Termination Date
first to Class A Certificateholders until the Class A Invested Amount is paid
in full, then to the Class B Certificateholders until the Class B Invested
Amount is paid in full, then to the Class C Certificateholders until the Class
C Invested Amount is paid in full, and then to the Class D Certificateholders
until the Class D Invested Amount is paid in full.
Unless the Servicer and the holder of the Exchangeable Transferor Certificate
instruct the Trustee otherwise, the Trust will terminate on the earlier of (a)
the day after the Distribution Date following the date on which funds shall
have been deposited in the Distribution Account for the payment to
certificateholders outstanding sufficient to pay in full the aggregate investor
interest of all Series outstanding plus interest thereon at the applicable
certificate rates to the next Distribution Date and (b) a date which shall not
be later than December 20, 2025, or (c) if the Receivables are sold, disposed
of or liquidated following the occurrence of an Insolvency Event, immediately
following such sale, disposition or liquidation (such date, the "Trust
Termination Date"). Upon the termination of the Trust and the surrender of the
Exchangeable Transferor Certificate, the Trustee will convey to the holder of
the Exchangeable Transferor Certificate all right, title, and interest of the
Trust in and to the Receivables and other funds of the Trust (other than funds
on deposit in the Distribution Account and other similar bank accounts of the
Trust with respect to any Series).
PAY OUT EVENTS
As described above, the Revolving Period is expected to continue through the
end of the Monthly Period, unless a Pay Out Event occurs prior to
such date or the Initial Principal Payment Date is not extended by the
Servicer. A "Pay Out Event" refers to any of the following events:
(i) failure by the Transferor to convey Receivables in Additional
Accounts to the Trust within five business days after the day on which it
is required to convey such Receivables pursuant to the Pooling and
Servicing Agreement;
(ii) failure on the part of the Transferor, the Servicer or Green Tree,
as applicable, (a) to make any payment or deposit required by the Pooling
and Servicing Agreement or the Purchase Agreement, on or before the date
such payment or deposit is required to be made therein, which failure is
not cured within five business days after written notice from the Trustee
of such failure; or (b) to deliver a Distribution Date Statement on the
date required under the Pooling and Servicing Agreement (or within ten
business days after written notice from the Trustee of such failure); or
(c) to comply with its covenant not to create any lien on a Receivable
which failure has a material adverse effect on the holders of the
Certificates and which continues unremedied for a period of 60 days after
written notice to it; provided, however, that any Pay Out Event shall not
be deemed to have occurred if the Transferor shall have repurchased the
related Receivables or, if applicable, all the Receivables during such
period in
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accordance with the provisions of the Pooling and Servicing Agreement; or
(d) to observe or perform in any material respect any other covenants or
agreements set forth in the Pooling and Servicing Agreement or the Purchase
Agreement, which failure has a materially adverse effect on the
Certificateholders and which continues unremedied for a period of 45 days
after written notice of such failure;
(iii) any representation or warranty made by Green Tree in the Purchase
Agreement or by the Transferor in the Pooling and Servicing Agreement or
any information required to be given by the Transferor to the Trustee to
identify the Accounts proves to have been incorrect in any material respect
when made and continues to be incorrect in any material respect for a
period of 60 days after written notice and as a result the interests of the
Certificateholders are materially and adversely affected (excluding,
however, any representation or warranty made by the Transferor that the
Pooling and Servicing Agreement constitutes, or the transfer of the
Receivables to the Trust is, a valid sale, transfer and assignment to the
Trust or all right, title and interest of the Transferor in the Receivables
and the Collateral Security if the Pooling and Servicing Agreement
constitutes the grant of a security interest in the Receivables and
Collateral Security); provided, however, that any Pay Out Event shall not
be deemed to occur thereunder if the Transferor has repurchased the related
Receivables or all such Receivables, if applicable, during such period in
accordance with the provisions of the Pooling and Servicing Agreement;
(iv) the occurrence of certain events of bankruptcy, insolvency or
receivership relating to Green Tree or the Transferor;
(v) the Trust or the Transferor becomes an investment company within the
meaning of the Investment Company Act of 1940, as amended;
(vi) any Servicer Default occurs;
(vii) on any Determination Date, the average of the Monthly Payment Rates
for the three preceding Monthly Periods, where the Monthly Payment Rate for
a Monthly Period is the percentage obtained by dividing the aggregate of
the Receivables balance (without deducting therefrom any discount portion)
collected during such Monthly Period by the average daily aggregate
Receivables balance (without deducting therefrom any discount portion) for
such Monthly Period, is less than 20%;
(viii) the failure to pay the outstanding principal amount of the Class A
or Class B Certificates by the Class A Scheduled Payment Date or the Class
B Scheduled Payment Date, as applicable;
(ix) the ratio (expressed as a percentage) of (a) the average for each
month of the net losses on the Receivables (exclusive of the Ineligible
Receivables) owned by the Trust (i.e., gross losses less recoveries on any
such Receivables (including, without limitation, recoveries from collateral
security in addition to recoveries from the products, recoveries from
Manufacturers and insurance proceeds)) during any three consecutive
calendar months to (b) the average of the month-end aggregate balances of
such Receivables (without deducting therefrom the discount portion) for
such three-month period, exceeds 5% on an annualized basis;
(x) the sum of all Cash Equivalents and other amounts on deposit in the
Excess Funding Account represents more than 50% of the sum of the aggregate
amount of Principal Receivables (without deducting therefrom any discount
portion) on each of six or more consecutive Determination Dates, after
giving effect to all payments made or to be made on the Distribution Date
next succeeding each such respective Determination Date; or
(xi) if Principal Collections allocable to the Class D
Certificateholder's Interest have been reallocated in any Monthly Period to
cover any Required Amounts and have not been reimbursed as of the
Determination Date in such Monthly Period.
In the case of any event described in clause (i), (ii), (iii) or (vi) above,
a Pay Out Event will be deemed to have occurred with respect to the
Certificates only if, after any applicable grace period, the Certificateholders
evidencing undivided interests aggregating more than 50% of the Invested
Amount, by written notice to the
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Transferor and the Servicer, declare that a Pay Out Event has occurred with
respect to the Certificates as of the date of such notice. In the case of any
event described in clause (iv) or (v) above, a Pay Out Event with respect to
all Series then outstanding, and in the case of any event described in clause
(vii), (viii), (ix), (x) or (xi) above, a Pay Out Event with respect only to
the Certificates, will be deemed to have occurred without any notice or other
action on the part of the Trustee or the Certificateholders or all
certificateholders, as appropriate, immediately upon the occurrence of such
event. On the date on which a Pay Out Event is deemed to have occurred, the
Early Amortization Period will commence. In such event, distributions of
principal to the Certificateholders will begin on the first Distribution Date
following the month in which such Pay Out Event occurred. If, because of the
occurrence of a Pay Out Event, the Early Amortization Period begins,
Certificateholders will begin receiving distributions of principal earlier than
they otherwise would have, which may shorten the average life of the
Certificates.
In addition to the consequences of a Pay Out Event discussed above, if,
pursuant to certain provisions of federal law, the Transferor voluntarily
enters liquidation or a trustee in bankruptcy is appointed for the Transferor
(an "Insolvency Event"), the Transferor will immediately cease to transfer
Receivables to the Trust and promptly give notice to the Trustee of such event.
Within 15 days, the Trustee will publish a notice of the liquidation or the
appointment stating that the Trustee intends to sell, dispose of, or otherwise
liquidate the Receivables in a commercially reasonable manner. With respect to
each Series outstanding at such time (or, if any such Series has more than one
class, of each class of such Series excluding any class or portion thereof held
by the Transferor), unless otherwise instructed within a specified period by
certificateholders representing undivided interests aggregating more than 50%
of the invested amount of such Series (or class excluding any class or portion
thereof held by the Transferor) and the holders (other than the Transferor) of
any Supplemental Certificates or any other interest in the Exchangeable
Transferor Certificate, the Trustee will sell, dispose of, or otherwise
liquidate the portion of the Receivables allocable to the Series that did not
vote to continue the Trust in accordance with the Pooling and Servicing
Agreement in a commercially reasonable manner and on commercially reasonable
terms. The proceeds from the sale, disposition, or liquidation of the
Receivables will be treated as collections of the Receivables allocable to such
Certificateholders and will be distributed to the applicable Certificateholders
as provided above in "--Application of Collections."
If the only Pay Out Event to occur is either the bankruptcy or insolvency of
the Transferor or the appointment of a bankruptcy trustee or receiver for the
Transferor, the bankruptcy trustee or receiver may have the power to prevent
the early sale, liquidation, or disposition of the Receivables and the
commencement of the Early Amortization Period. In addition, a bankruptcy
trustee or receiver may have the power to cause the early sale of the
Receivables and the early retirement of the Certificates.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
The Servicer's compensation for its servicing activities and reimbursement
for its expenses will take the form of the payment to it of a servicing fee in
an amount for any Monthly Period equal to the sum of (i) with respect to each
Series, one-twelfth of the product of (x) the applicable servicing fee
percentage with respect to such Series and (y) the Invested Amount of such
Series on the first day of such Monthly Period and (z) one-twelfth of the
product of the weighted average servicing fee percentage for all Series and the
average Transferor Interest for such Monthly Period. The monthly servicing fee
will be allocated between the Transferor Interest, the Certificateholders'
Interest, and the investor interest for all other Series. The portion of the
servicing fee allocable to the Certificateholders' Interest during each Monthly
Period (the "Monthly Servicing Fee") will be equal to one-twelfth of the
product of (x) the Servicing Fee Rate per annum and
(y) the Invested Amount on the preceding Record Date or, in the case of the
first Distribution Date, the initial principal amount of the Certificates. The
Monthly Servicing Fee will be funded from Interest Collections allocated to the
Certificateholders' Interest, and will be paid each month from the amount so
allocated and on deposit in the Collection Account. See "--Application of
Collections--Payment of Fees, Interest, and Other Items" above. The remainder
of the servicing fee will be allocable to the Transferor
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Interest and the investor interests of other Series. Neither the Trust nor the
Certificateholders will have any obligation to pay such portion of the
servicing fee.
The Servicer will be permitted to waive its right to receive the Servicing
Fee on any Distribution Date, so long as it believes that sufficient Interest
Collections will be available on a future Distribution Date to pay the Monthly
Servicing Fee relating to such waived Servicing Fee, in which case the
Servicing Fee and the Monthly Servicing Fee for such Distribution Date shall be
deemed to be zero.
The Servicer will pay from its servicing compensation certain expenses
incurred in connection with servicing the Receivables, including, without
limitation, payment of the fees and disbursements of the Trustee and
independent certified public accountants and other fees which are not expressly
stated in the Pooling and Servicing Agreement to be payable by the Trust or the
Certificateholders other than federal, state, and local income and franchise
taxes, if any, of the Trust.
CERTAIN MATTERS REGARDING THE TRANSFEROR AND THE SERVICER
The Servicer may not resign from its obligations and duties under the Pooling
and Servicing Agreement, except upon determination that performance of its
duties is no longer permissible under applicable law. No such resignation will
become effective until the Trustee or a successor to the Servicer has assumed
the Servicer's responsibilities and obligations under the Pooling and Servicing
Agreement. The Servicer may delegate some or all of its servicing duties;
provided, however, such delegation will not relieve the Servicer of its
obligation to perform such duties in accordance with the Pooling and Servicing
Agreement. In addition, any affiliate of Green Tree may be substituted in all
respects for Green Tree as Servicer, provided that Green Tree will remain
jointly and severally liable with such affiliate.
The Pooling and Servicing Agreement provides that the Servicer will indemnify
the Trust and the Trustee from and against any reasonable loss, liability,
expense, damage, or injury suffered or sustained by reason of any acts or
omissions or alleged acts or omissions of the Servicer with respect to the
activities of the Trust or the Trustee; provided, however, that the Servicer
will not indemnify (a) the Trustee for liabilities imposed by reason of fraud,
negligence, or willful misconduct by the Trustee in the performance of its
duties under the Pooling and Servicing Agreement, (b) the Trust, the
Certificateholders, or the Certificate Owners for liabilities arising from
actions taken by the Trustee at the request of Certificateholders, (c) the
Trust, the Certificateholders, or the Certificate Owners for any losses,
claims, damages, or liabilities incurred by any of them in their capacities as
investors, including without limitation, losses incurred as a result of
Defaulted Receivables, or (d) the Trust, the Certificateholders, or the
Certificate Owners for any liabilities, costs, or expenses of the Trust, the
Certificateholders, or the Certificate Owners arising under any tax law,
including without limitation, any federal, state, or local income or franchise
tax or any other tax imposed on or measured by income (or any interest or
penalties with respect thereto or arising from a failure to comply therewith)
required to be paid by the Trust, the Certificateholders, or the Certificate
Owners in connection with the Pooling and Servicing Agreement to any taxing
authority.
In addition, the Pooling and Servicing Agreement provides that, subject to
certain exceptions, the Transferor will indemnify the Trust and the Trustee
from and against any reasonable loss, liability, expense, damage, or injury
(other than to the extent that any of the foregoing relate to any tax law or
any failure to comply therewith) suffered or sustained by reason of any acts or
omissions or alleged acts or omissions arising out of or based upon the
arrangement created by the Pooling and Servicing Agreement as though the
Pooling and Servicing Agreement created a partnership under the Minnesota
Uniform Partnership Act in which the Transferor is a general partner.
The Pooling and Servicing Agreement provides that, except for the foregoing
indemnities, neither the Transferor nor the Servicer nor any of their
respective directors, officers, employees, or agents will be under any
liability to the Trust, the Trustee, the Certificateholders, or any other
person for any action taken, or for refraining from taking any action pursuant
to the Pooling and Servicing Agreement. Neither the Transferor
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nor the Servicer nor any of their respective directors, officers, employees, or
agents will be protected against any liability which would otherwise be imposed
by reason of willful misfeasance, bad faith, or gross negligence of the
Transferor, the Servicer, or any such person in the performance of its duties
thereunder or by reason of reckless disregard of obligations and duties
thereunder. In addition, the Pooling and Servicing Agreement provides that the
Servicer is not under any obligation to appear in, prosecute, or defend any
legal action that is not incidental to its servicing responsibilities under the
Pooling and Servicing Agreement and which in its opinion may expose it to any
expense or liability.
Under the Pooling and Servicing Agreement, the Transferor will be liable
directly to an injured party for the entire amount of any losses, claims,
damages or liabilities (other than those incurred by a Certificateholder in the
capacity of an investor in the Certificates) arising out of or based on the
arrangement created by the Pooling and Servicing Agreement or the actions of
the Servicer taken pursuant to the Pooling and Servicing Agreement as though
the Pooling and Servicing Agreement created a partnership under the Minnesota
Uniform Partnership Act in which the Transferor is a general partner. The
Transferor will also pay, indemnify and hold harmless each Certificateholder
for any such losses, claims, damages or liabilities (other than those incurred
by a Certificateholder in the capacity of an investor in the Certificates)
except to the extent that they lapse from any action by any Certificateholder.
In the event of a Service Transfer, the successor Servicer will indemnify the
Transferor for any losses, claims, damages and liabilities of the Transferor as
described in this paragraph arising from the actions or omissions of such
successor.
SERVICER DEFAULT
In the event of any Servicer Default (as defined below), either the Trustee
or certificateholders representing undivided interests aggregating more than
50% of the aggregate investor interests for all outstanding Series, by written
notice to the Servicer (and to the Trustee if given by the certificateholders),
may terminate all of the rights and obligations of the Servicer as servicer
under the Pooling and Servicing Agreement and in and to the Receivables and the
proceeds thereof and the Trustee may appoint a new Servicer (a "Service
Transfer"). The rights and interest of the Transferor under the Pooling and
Servicing Agreement and in the Transferor Interest will not be affected by such
termination. Upon such termination, the Trustee will as promptly as possible
appoint a successor Servicer. If no such Servicer has been appointed and has
accepted such appointment by the time the Servicer ceases to act as Servicer,
all authority, power, and obligations of the Servicer under the Pooling and
Servicing Agreement will pass to and be vested in the Trustee. If the Trustee
is unable to obtain any bids from eligible servicers and the Servicer delivers
an Officer's certificate to the effect that it cannot in good faith cure the
applicable Servicer Default, and if the Trustee is legally unable to act as a
successor Servicer, then the Trustee will give the Transferor the right to
accept reassignment of all of the Receivables on terms equivalent to the best
purchase offer as determined by the Trustee.
A "Servicer Default" refers to any of the following events:
(i) failure by the Servicer to make any payment, transfer, or deposit, or
to give instructions to the Trustee to make certain payments, transfers, or
deposits within five business days after the date the Servicer is required
to do so under the Pooling and Servicing Agreement or any Supplement;
provided, however, that any such failure caused by a nonwillful act of the
Servicer shall not constitute a Servicer Default if the Servicer promptly
remedies such failure within five business days after receiving notice of
such failure or otherwise becoming aware of such failure;
(ii) failure on the part of the Servicer duly to observe or perform in
any respect any other covenants or agreements of the Servicer which has a
material adverse effect on the certificateholders of any Series then
outstanding and which continues unremedied for a period of 60 days after
written notice of such failure, requiring the same to be remedied, shall
have been given to the Servicer by the Trustee, or to the Servicer and the
Trustee by holders of Certificates evidencing undivided interests
aggregating not less than 50% of the Invested Amount of any Series
materially adversely affected thereby and continues to have a material
adverse effect on the certificateholders of any Series then outstanding for
such period; or
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the delegation by the Servicer of its duties under the Pooling and
Servicing Agreement, except as specifically permitted thereunder;
(iii) any representation, warranty, or certification made by the Servicer
in the Pooling and Servicing Agreement, or in any certificate delivered
pursuant to the Pooling and Servicing Agreement, proves to have been
incorrect when made which has a material adverse effect on the
certificateholders of any Series then outstanding, and which continues to
be incorrect in any material respect for a period of 60 days after written
notice of such failure, requiring the same to be remedied, shall have been
given to the Servicer by the Trustee, or to the Servicer and Trustee by the
holders of Certificates evidencing undivided interests aggregating not less
than 50% of the Invested Amount of any Series materially adversely affected
thereby and continues to have a material adverse effect on such
certificateholders for such period; or
(iv) the occurrence of certain events of bankruptcy, insolvency, or
receivership of the Servicer.
Notwithstanding the foregoing, a delay in or failure of performance referred
to in clause (i) above for a period of five business days, or referred to under
clause (ii) or (iii) for a period of 60 business days, will not constitute a
Servicer Default if such delay or failure could not be prevented by the
exercise of reasonable diligence by the Servicer and such delay or failure was
caused by an act of God or other similar occurrence. Upon the occurrence of any
such event, the Servicer will not be relieved from using its best efforts to
perform its obligations in a timely manner in accordance with the terms of the
Pooling and Servicing Agreement, and the Servicer will provide the Trustee, any
provider of credit enhancement, the Transferor, and the holders of certificates
of all Series outstanding prompt notice of such failure or delay by it,
together with a description of the cause of such failure or delay and its
efforts to perform its obligations.
In the event of a Servicer Default, due to the bankruptcy of the Servicer, if
no Servicer Default other than such bankruptcy or the insolvency of the
Servicer exists, the bankruptcy trustee or the Servicer itself as debtor-in-
possession may have the power to prevent either the Trustee or the majority of
the certificateholders from effecting a Service Transfer.
REPORTS TO CERTIFICATEHOLDERS
On each Distribution Date, the Paying Agent will forward to each
Certificateholder of record (which is expected to be Cede & Co., as nominee for
DTC, unless Definitive Certificates are issued) a statement prepared by the
Servicer setting forth, among other things, with respect to such Series: (a)
the total amount distributed, (b) the amount of the distribution allocable to
principal on the Class A Certificates, the Class B Certificates, the Class C
Certificates and the Class D Certificates, (c) the amount of such distribution
allocable to interest on the Class A Certificates and the Class B Certificates,
(d) the amount of Principal Collections processed during the related Monthly
Period and allocated in respect of the Class A Certificates, the Class B
Certificates, the Class C Certificates and the Class D Certificates,
respectively, (e) the amount of Interest Collections processed during the
preceding Monthly Period and allocated in respect of the Class A Certificates,
the Class B Certificates, the Class C Certificates and the Class D
Certificates, respectively, (f) the aggregate amount of Principal Receivables,
the Invested Amount, the Class A Invested Amount, the Class B Invested Amount,
the Class C Invested Amount, the Class D Invested Amount, the Floating
Allocation Percentage, and during the Controlled Accumulation Period or Early
Amortization Period, the ABC Fixed/Floating Allocation Percentage with respect
to the Principal Receivables in the Trust as of the close of business on the
Record Date, (g) the aggregate outstanding balance of Receivables which are
current, 30-59, 60-89 and 90 or more days delinquent as of the end of the day
on the Record Date, (h) the Aggregate Investor Default Amount for the related
Monthly Period, (i) the aggregate amount of Class A Investor Charge-Offs, Class
B Investor Charge-Offs, Class C Investor Charge-Offs and Class D Investor
Charge-Offs for the preceding Monthly Period, (j) the amount of the Monthly
Servicing Fee for the preceding Monthly Period, and (k) the aggregate amount of
funds in the Excess Funding Account as of the last day of the Monthly Period
immediately preceding the Distribution Date. Unless and until Definitive
Certificates are issued, such reports with respect to the 1995-1 Series will be
sent to Cede & Co., as registered holder of the Certificates and the nominee of
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DTC. Certificate Owners may receive copies of such reports upon written
request, together with a certification that they are Certificate Owners and
payment of reproduction and postage expenses associated with the distribution
of such reports, from the Trustee. See "Reports to Certificateholders."
The Paying Agent will furnish to each person who at any time during the
preceding calendar year was a Certificateholder of record (which is expected to
be Cede & Co., as nominee for DTC, unless Definitive Certificates are issued) a
statement prepared by the Servicer containing the information required to be
contained in the regular monthly report to Certificateholders, as set forth in
clauses (a), (b), and (c) above aggregated for such calendar year or the
applicable portion thereof during which such person was a Certificateholder,
together with, on or before March 31 of each year, beginning in 1997, such
customary information (consistent with the treatment of the Certificates as
debt) as the Servicer or Trustee deems necessary or desirable for tax reporting
purposes. Moreover, as long as the Certificateholder of record is Cede & Co.,
as nominee for DTC, Certificate Owners will receive tax and other information
from Participants and Indirect Participant rather than from the Trustee.
REPORTS; NOTICES
Following the listing of the Offered Certificates on the Luxembourg Stock
Exchange, the Trustee will publish or will cause to be published following each
Distribution Date in a daily newspaper in Luxembourg (expected to be the
Luxemburger Wort) a notice to the effect that the information set forth in the
foregoing paragraph will be available for review at the main office of the
Listing Agent of the Trust in Luxembourg, Luxembourg.
Following the listing of the Offered Certificates on the Luxembourg Stock
Exchange, notices to Certificateholders will be given by publication in a daily
newspaper in Luxembourg, which is expected to be the Luxemburger Wort. In the
event that Definitive Certificates are issued, notices to Certificateholders
will also be given by mail to the addresses of such holders as they appear in
the certificate register.
EVIDENCE AS TO COMPLIANCE
The Pooling and Servicing Agreement will provide that on or before March 31
of each calendar year (beginning in 1997), the Servicer will cause a firm of
independent public accountants which is a member of the American Institute of
Certified Public Accountants to furnish a report to the effect that such
accounting firm has examined selected documents and records relating to the
servicing of the Accounts in accordance with certain procedures agreed upon
with the Servicer, and that, on the basis of such agreed upon procedures, such
firm states that such servicing was conducted in compliance with the Pooling
and Servicing Agreement during the period covered by such report except for
such significant exceptions or errors in records that, in the opinion of such
firm, generally accepted auditing standards requires it to report.
AMENDMENTS
The Pooling and Servicing Agreement and any Supplement may be amended by the
Transferor, the Servicer, and the Trustee, without the consent of
Certificateholders, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of such Pooling and Servicing
Agreement and Supplements or of modifying in any manner the rights of such
Certificateholders; provided that (i) the Transferor delivers an opinion of
counsel acceptable to the trustee to the effect that such amendment will not
adversely affect in any material respect the interest of the
Certificateholders, and (ii) such amendment will not result in a withdrawal or
reduction of the rating of any outstanding series.
The Pooling and Servicing Agreement and the Supplement may be amended by the
Transferor, the Servicer, and the Trustee with the consent of the holders of
certificates evidencing undivided interests aggregating not less than 66 2/3%
of the investor interests of each and every Series adversely affected (and
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with respect to Series 1995-1, the holders of not less than 66 2/3% of the
Invested Amount of each Class of Certificates adversely affected), for the
purpose of adding any provisions to, changing in any manner or eliminating any
of the provisions of the Pooling and Servicing Agreement, or any Supplement or
of modifying in any manner the rights of certificateholders of any then
outstanding Series. No such amendment, however, may (a) reduce in any manner
the amount of, or delay the timing of, distributions required to be made on any
such Series, (b) change the definition of or the manner of calculating the
interest of any certificateholder of such Series, or (c) reduce the aforesaid
percentage of investor interests the holders of which are required to consent
to any such amendment, in each case without the consent of all
certificateholders of all Series adversely affected. Promptly following the
execution of any amendment to the Pooling and Servicing Agreement, the Trustee
will furnish written notice of the substance of such amendment to each
Certificateholder. Any Supplement and any amendments regarding the addition or
removal of Receivables from the Trust will not be considered an amendment
requiring certificateholder consent under the provisions of the Pooling and
Servicing Agreement and any Supplement.
LIST OF CERTIFICATEHOLDERS
Upon written request of Certificateholders representing undivided interests
in the Trust aggregating not less than 10% of the Invested Amount, the Trustee
after having been adequately indemnified by such Certificateholders for its
costs and expenses, and having given the Servicer notice that such request has
been made, will afford such Certificateholders access during business hours to
the current list of Certificateholders of the Trust for purposes of
communicating with other Certificateholders with respect to their rights under
the Pooling and Servicing Agreement. See "--Book-Entry Registration" and "--
Definitive Certificates."
THE TRUSTEE
The Transferor, the Servicer, and their respective affiliates may from time
to time enter into normal banking, lending and trustee relationships with the
Trustee and its affiliates. The Trustee, the Transferor, the Servicer, and any
of their respective affiliates may hold Certificates in their own names. In
addition, for purposes of meeting the legal requirements of certain local
jurisdictions, the Trustee will have the power to appoint a co-trustee or
separate trustees of all or any part of the Trust. In the event of such
appointment, all rights, powers, duties, and obligations conferred or imposed
upon the Trustee by the Pooling and Servicing Agreement will be conferred or
imposed upon the Trustee and such separate trustee or co-trustee jointly, or,
in any jurisdiction in which the Trustee shall be incompetent or unqualified to
perform certain acts, singly upon such separate trustee or co-trustee who will
exercise and perform such rights, powers, duties, and obligations solely at the
direction of the Trustee.
The Trustee may resign at any time, in which event the Transferor will be
obligated to appoint a successor Trustee. The Transferor may also remove the
Trustee if the Trustee ceases to be eligible to continue as such under the
Pooling and Servicing Agreement or if the Trustee becomes insolvent. In such
circumstances, the Transferor will be obligated to appoint a successor Trustee.
Any resignation or removal of the Trustee and appointment of a successor
Trustee does not become effective until acceptance of the appointment by the
successor Trustee.
If the Trustee fails to perform any of its obligations under the Pooling and
Servicing Agreement, and a certificateholder delivers written notice of such
failure to the Trustee, and the Trustee shall not have corrected such failure
for 60 days thereafter, then the holders of investor certificates representing
more than 50% of the aggregate invested amount of all Series (including related
commitments) shall have the right to remove the Trustee and (with the consent
of the Transferor, which shall not be unreasonably withheld) promptly appoint a
successor trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to the
successor trustee.
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DESCRIPTION OF THE PURCHASE AGREEMENT
The following summary describes certain terms of the Receivables Purchase
Agreement (the "Purchase Agreement") and is qualified in its entirety by
reference to the Purchase Agreement.
TRANSFER OF RECEIVABLES
Pursuant to the Purchase Agreement, Green Tree will sell and transfer to the
Transferor all of its right, title and interest in and to all of the
Receivables and the Collateral Security as of the Cut-off Date and all of the
Receivables thereafter created. As described herein, pursuant to the Pooling
and Servicing Agreement and the related Series Supplement, the Transferor will
transfer to the Trust all of its right, title and interest in and to the
Purchase Agreement.
In connection with each such sale or transfer of Receivables to the
Transferor, Green Tree will indicate in its computer files that such
Receivables have been sold or transferred to the Transferor, and that such
Receivables have been transferred by the Transferor to the Trust. In addition,
Green Tree will provide to the Transferor a computer file or microfiche or
written list containing a true and complete list of all such Receivables,
identifying the balances of the Receivables as of the Cut-off Date. The records
and agreements relating to such Accounts and Receivables will not be segregated
by Green Tree from other documents and agreements relating to other accounts
and receivables and will not be stamped or marked to reflect the sale or
transfer of such Receivables to the Transferor, but the computer records of
Green Tree will be marked to evidence such sale or transfer. Green Tree will
file UCC financing statements with respect to the Receivables meeting the
requirements of Minnesota state law. See "Risk Factors--Transfer of the
Receivables; Insolvency Risk Considerations" and "Certain Legal Aspects of the
Receivables--Transfer of Receivables."
REPRESENTATIONS AND WARRANTIES
Pursuant to the Purchase Agreement, Green Tree will make certain
representations and warranties to the Transferor that, among other things, (a)
it has been duly incorporated and is in good standing and that it has the
authority to consummate the transactions contemplated by the Purchase Agreement
and (b) as of the Cut-off Date (or, in the case of an Additional Account, as of
the Additional Cut-off Date and Addition Date), each Account or Additional
Account was an Eligible Account.
Pursuant to the Purchase Agreement, Green Tree will make certain
representations and warranties to the Transferor relating to the Receivables
that, among other things, (a) as of the Cut-off Date and each Closing Date,
each of the Accounts was an Eligible Account or, if it was or is an Ineligible
Account on such date, such Account is being removed from the Trust in
accordance with the requirements of the Pooling and Servicing Agreement, and
(b) as of the date any new Receivable is created, such Receivable is an
Eligible Receivable. In the event of a breach of any representation and
warranty set forth in this paragraph which results in an Ineligible Receivable
and the requirement that the Transferor accept retransfer of such Ineligible
Receivable pursuant to the Pooling and Servicing Agreement, then Green Tree
will be obligated to repurchase such Ineligible Receivable from the Transferor
on the date of such retransfer. The purchase price for such Ineligible
Receivable will be the face amount thereof plus any accrued and unpaid interest
thereon, of which at least the amount of any cash deposit required to be made
by the Transferor under the Pooling and Servicing Agreement in respect of the
retransfer of such Ineligible Receivable must be paid in cash.
Pursuant to the Purchase Agreement, Green Tree will also make representations
and warranties to the Transferor that, among other things, as of the Closing
Date, (a) the Purchase Agreement constitutes a legal, valid and binding
obligation of Green Tree and (b) the Purchase Agreement constitutes a valid
sale or transfer
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to the Transferor of all right, title and interest of Green Tree in and to the
Receivables, whether then existing or thereafter created in the Accounts, the
Collateral Security, all related security interests and other related rights
and the proceeds thereof, which is effective as to each Receivable upon the
creation thereof. If the breach of any of the representations and warranties
described in this paragraph results in the obligation of the Transferor under
the Pooling and Servicing Agreement to accept retransfer of the Receivables,
Green Tree will be obligated to repurchase the Receivables retransferred to
Green Tree for an amount of cash equal to the amount of cash the Transferor is
required to deposit under the Pooling and Servicing Agreement in connection
with such retransfer.
Green Tree will agree to indemnify the Transferor and to hold the Transferor
harmless from and against any and all losses, damages and expenses (including
reasonable attorneys' fees) suffered or incurred by the Transferor if the
foregoing representations and warranties are materially false.
CERTAIN COVENANTS
Pursuant to the Purchase Agreement, Green Tree covenants that it will perform
its obligations under the agreements relating to the Receivables and the
Accounts in conformity with its then-current policies and procedures relating
to the Receivables and Accounts.
Green Tree further covenants that, except for the sale and conveyance under
the Purchase Agreement and the interests created under the Pooling and
Servicing Agreement and the Series Supplement, Green Tree will not sell,
pledge, assign or transfer any interest in the Receivables to any other person.
Green Tree also covenants to defend and indemnify the Transferor for any loss,
liability or expense incurred by the Transferor in connection with a breach by
Green Tree of any of its representations, warranties or covenants contained in
the Purchase Agreement.
In addition, Green Tree expressly acknowledges and consents to the
Transferor's assignment of its rights relating to the Receivables under the
Purchase Agreement to the Trustee.
TERMINATION
The Purchase Agreement will terminate immediately after the Trust terminates.
In addition, if Green Tree becomes party to any bankruptcy or similar
proceeding (other than as a claimant) and, if such proceeding is not voluntary
and is not dismissed within 60 days of its institution, Green Tree will
immediately cease to sell or transfer Receivables to the Transferor and will
promptly give notice of such event to the Transferor and to the Trustee.
CERTAIN LEGAL ASPECTS OF THE RECEIVABLES
TRANSFER OF RECEIVABLES
On the Closing Date, Green Tree will sell and assign the Receivables to the
Transferor pursuant to the Purchase Agreement, and the Transferor will
immediately sell and assign the Receivables to the Trust pursuant to the Series
1995-1 Supplement. The Transferor represents and warrants on the Closing Date
that such sale to the Trust constitutes a valid transfer and assignment to the
Trust of all right, title and interest of the Transferor in and to the
Receivables, except for the interest of any investor certificate of any Series
then held by it, or the grant to the Trust of a security interest in the
Receivables. The Transferor has also represented and warranted in the Pooling
and Servicing Agreement that, in the event the transfer of the Receivables by
the Transferor to the Trust is deemed to create a security interest under the
UCC, there will exist a valid, subsisting, and enforceable first priority
perfected security interest in such Receivables created thereafter in favor of
the Trust on and after their creation, subject to certain tax liens. For a
discussion of the Trust's rights arising from these representations and
warranties not being satisfied, see "Description of the Offered Certificates--
Representations and Warranties."
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Each of Green Tree and the Transferor has represented that the Receivables
are "general intangibles," "chattel paper" or "accounts" for purposes of the
UCC as in effect in Minnesota. If the Receivables are deemed to be general
intangibles and the transfer thereof by either Green Tree to the Transferor or
by the Transferor to the Trust is deemed to be a sale, Minnesota common law
applies and neither possession nor a financing statement is required. If the
Receivables are deemed to be general intangibles and the transfer thereof by
either Green Tree to the Transferor or by the Transferor to the Trust is deemed
to create a security interest, the UCC as in effect in Minnesota applies and
the transferee must file an appropriate financing statement or statements in
order to perfect its interest therein. If the Receivables are deemed to be
chattel paper and the transfer thereof by either Green Tree to the Transferor
or by the Transferor to the Trust is deemed either to be a sale or to create a
security interest, the UCC as in effect in Minnesota applies and the transferee
must either take possession of the chattel paper or file an appropriate
financing statement or statements in order to perfect its interest therein. If
the Receivables are treated as accounts and the transfer thereof by either by
Green Tree to the Transferor or the Transferor to the Trust is deemed either to
be a sale or create a security interest, the transferee must file an
appropriate financing statement or statements in order to perfect its interest
therein under the UCC as in effect in Minnesota. Financing statements covering
the Receivables will be filed under the UCC as in effect in Minnesota by both
the Transferor and the Trust to perfect their respective interests in the
Receivables and continuation statements will be filed as required to continue
the perfection of such interests. The Receivables will not be stamped to
indicate the interest of the Transferor or the Trustee.
There are certain limited circumstances under the UCC and other applicable
law in which prior or subsequent transferees of Receivables could have an
interest in such Receivables with priority over the Trust's interest. A
purchaser of the Receivables that are chattel paper who gives new value and
takes possession of the instruments that evidence the Receivables (i.e., the
chattel paper) in the ordinary course of such purchaser's business may, under
certain circumstances, have priority over the interest of the Trust in such
Receivable. Under the Purchase Agreement, Green Tree warrants to the
Transferor, and under the Agreement and Series 1995-1 Supplement the Transferor
warrants to the Trust, that the Receivables have been transferred free and
clear of the lien of any third party. Each of Green Tree and the Transferor
will also covenant that it will not sell, pledge, assign, transfer or grant any
lien on any Receivable or, except as described under "Description of the
Offered Certificates--Exchanges," the Exchangeable Transferor's Certificate (or
any interest therein) other than to the Trust. A tax or other government lien
on property of Green Tree or the Transferor arising prior to the time a
Receivable comes into existence may also have priority over the interest of the
Trust in such Receivable. In addition, while Green Tree is the Servicer, cash
collections on the Receivables may, under certain circumstances, be commingled
with the funds of Green Tree prior to each Distribution Date and, in the event
of bankruptcy of Green Tree, the Trust may not have a perfected interest in
such collections.
CERTAIN MATTERS RELATING TO BANKRUPTCY
Green Tree warrants to the Transferor in the Purchase Agreement that the sale
of the Receivables by it to the Transferor is a valid sale of the Receivables
to the Transferor. In addition, pursuant to the Purchase Agreement, Green Tree
and the Transferor will agree to treat the transactions described herein as a
sale of such Receivables to the Transferor, and Green Tree will take all
actions that are required under Minnesota law to perfect the Transferor's
ownership interest in the Receivables. Notwithstanding the foregoing, if Green
Tree were to become a debtor in a bankruptcy case and a creditor or trustee-in-
bankruptcy of Green Tree or Green Tree itself as debtor-in-possession were to
take the position that the sale of Receivables from Green Tree to the
Transferor should be recharacterized as a pledge of such Receivables to secure
a borrowing from Green Tree, then delays in payments of collections of
Receivables to the Transferor could occur or (should the court rule in favor of
any such trustee, debtor-in-possession or creditor) reductions in the amount of
such payments could result.
In addition, if Green Tree were to become a debtor in a bankruptcy case and a
creditor or trustee-in-bankruptcy of such debtor or Green Tree itself were to
request a court to order that Green Tree should be substantively consolidated
with the Transferor, delays in payments on the Certificates could result.
Should
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the bankruptcy court rule in favor of any such creditor, trustee-in-bankruptcy
or Green Tree, reductions in such payments could result.
The Transferor will warrant to the Trust that the transfer of the Receivables
to the Trust is a sale of the Receivables to the Trust or the grant of a
security interest in the Receivables to the Trust. The Transferor is required
to take all actions that are required under Minnesota law to perfect the
Trust's ownership interest or security interest in the Receivables and the
Transferor will warrant to the Trust that the Trust will at all times have a
first priority perfected ownership interest or security interest therein and,
with certain exceptions, the proceeds thereof. Nevertheless, a tax or
government lien on property of Green Tree or the Transferor arising prior to
the time a Receivable is conveyed to the Trust may have priority over the
interest of the Trust in such Receivable. The Transferor's certificate of
incorporation provides that, under certain circumstances, the Transferor is
required to have two independent directors (as defined therein) in which event
it shall not file a voluntary application for relief under Title 11 of the
United States Code (the "Bankruptcy Code") without the affirmative vote of its
two independent directors. Pursuant to the Pooling and Servicing Agreement, the
Trustee, all certificateholders and any credit enhancement provider with
respect to any other series will covenant that they will not at any time
institute against the Transferor any bankruptcy, reorganization or other
proceedings under any federal or state bankruptcy or similar law.
Notwithstanding such steps, if the Transferor were to become a debtor in a
bankruptcy case, and a bankruptcy trustee for the Transferor or the Transferor
as debtor in possession or a creditor of the Transferor were to take the
position that the transfer of the Receivables from the Transferor to the Trust
should be recharacterized as a pledge of such Receivables, then delays in
payments on the Certificates or (should the court rule in favor of any such
trustee, debtor in possession or creditor) reductions in the amount of such
payments could result.
The Transferor does not intend to file, and Green Tree will agree that it
will not cause the Transferor to file, a voluntary application for relief under
the Bankruptcy Code or any similar applicable state law with respect to the
Transferor so long as the Transferor is solvent and does not foresee becoming
insolvent.
If Green Tree or the Transferor were to become a debtor in a bankruptcy case
causing a Pay Out Event to occur, then, pursuant to the Purchase Agreement, new
Receivables would no longer be transferred to the Transferor and, pursuant to
the Pooling and Servicing Agreement, only collections on Receivables
theretofore sold to the Transferor and transferred to the related Trust would
be available to be applied to pay interest accruing on the Certificates and to
pay the principal amount of the Certificates. Under such circumstances, the
Servicer is obligated to allocate all Principal Collections to the oldest
principal balance first. If such allocation method were to be altered by the
bankruptcy court, the rate of payment on the Certificates might be adversely
affected. In addition, distributions of principal on each Certificate would not
be subject to the applicable Controlled Accumulation Amount. If the only Pay
Out Event to occur is either the insolvency of the Transferor or the
appointment of a bankruptcy trustee or receiver for the Transferor, the
receiver or bankruptcy trustee for the Transferor may have the power to
continue to require the Transferor to transfer new Principal Receivables to the
Trust and to prevent the early sale, liquidation, or disposition of the
Receivables and the commencement of the Early Amortization Period. See
"Description of the Offered Certificates--Pay Out Events."
The occurrence of certain events of bankruptcy, insolvency or receivership
with respect to the Servicer will result in a Servicer Default, which Servicer
Default, in turn, will result in a Pay Out Event. If no other Servicer Default
other than the commencement of such bankruptcy or similar event exists, a
trustee-in-bankruptcy of the Servicer may have the power to prevent either the
Trustee or the Certificateholders from appointing a successor Servicer.
Payments made in respect of repurchases of Receivables by Green Tree or the
Transferor pursuant to the Pooling and Servicing Agreement and the Series 1995-
1 Supplement may be recoverable by Green Tree or the Transferor, as debtor in
possession, or by a creditor or a trustee-in-bankruptcy of Green Tree or the
Transferor as a preferential transfer from Green Tree or the Transferor if such
payments are made within one year prior to the filing of a bankruptcy case in
respect of Green Tree or the Transferor.
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In a recent decision, Octagon Gas Systems, Inc. v. Rimmer, 995 F.2d 948 (10th
Cir. 1993), the United States Court of Appeals for the 10th Circuit suggested
that even where a transfer of accounts from a seller to a buyer constitutes a
"true sale," the accounts would nevertheless constitute property of the
seller's bankruptcy estate in a bankruptcy of the seller. If Green Tree or the
Transferor were to become subject to a bankruptcy proceeding and a court were
to follow the Octagon court's reasoning, Certificateholders might experience
delays in payment or possibly losses in their investment in the Certificates.
Counsel has advised the seller that the reasoning of the Octagon case appears
to be inconsistent with established precedent and the UCC. In addition, because
Green Tree, the Transferor, the Trust and the transaction governed by the
Pooling and Servicing Agreement do not have any particular link to the 10th
Circuit, it is unlikely that Green Tree or the Transferor would be subject to a
receivership proceeding in the 10th Circuit. Accordingly, the Octagon case
should not be binding precedent on a court in a receivership proceeding.
SECURITY INTERESTS IN THE RELATED PRODUCTS
The Transferor will represent and warrant in the Pooling and Servicing
Agreement that each Receivable is at the time of creation secured by a first
priority security interest in the related product or accounts receivable.
Generally, under applicable state laws, a security interest in goods or
accounts receivable which secure wholesale financing obligations may be
perfected by the filing of UCC financing statements. Green Tree endeavors to
take all actions necessary under applicable state laws to perfect Green Tree's
(or a subsidiary's) security interest in such goods and accounts receivable.
However, at the time a product is sold or an account receivable is paid, Green
Tree's (or a subsidiary's) security interest therein will terminate. Therefore,
if a Dealer fails to remit to Green Tree amounts owed with respect to a product
that has been sold or an account receivable that has been paid, the related
Receivables will no longer be secured by such goods or accounts receivable.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
Set forth below is a discussion of the material federal income tax
consequences to Certificate Owners. This discussion is based upon present
provisions of the Internal Revenue Code of 1986, as amended (the "Code"), the
regulations promulgated thereunder, and judicial or ruling authority, all of
which are subject to change (which may be retroactive). Dorsey & Whitney,
P.L.L.P., counsel to Green Tree and the Transferor ("Counsel"), is delivering
its opinion regarding certain federal income tax matters discussed below. The
opinion of Counsel specifically addresses only those issues specifically
identified below as being covered by such opinion; however, the opinion of
Counsel also states that the additional discussion set forth below accurately
sets forth Counsel's advice with respect to material tax issues. No ruling on
any of the issues discussed below will be sought from the Internal Revenue
Service (the "IRS"). This discussion does not deal with all aspects of federal
income taxation that may be relevant to Offered Certificate Owners in light of
their personal investment circumstances, nor to certain types of owners subject
to special treatment under the federal income tax laws (e.g., banks, life
insurance companies and tax-exempt organizations). Prospective investors are
encouraged to consult their own tax advisors with regard to the federal income
tax consequences of owning and disposing of the Certificates, as well as the
tax consequences arising under the laws of any applicable state, foreign
country or other jurisdiction.
Treatment of the Certificates as Indebtedness of the Transferor. The
Transferor and the holders of Certificates will express in the Pooling and
Servicing Agreement the intent that, for federal, state and local income and
franchise tax purposes, the Offered Certificates will be indebtedness secured
by the Receivables and any other Trust assets allocable to the Offered
Certificates. The Transferor, by entering into the Pooling and Servicing
Agreement, and each Offered Certificate Owner, by the acceptance of an interest
in an Offered Certificate, will agree to treat the Offered Certificates as
indebtedness for federal, state and local income and franchise tax purposes.
The Pooling and Servicing Agreement generally will refer to the transfer of the
related
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Receivables as a "sale," however, and since different criteria are used in
determining the nontax accounting treatment of the transaction, the Transferor
will treat the Pooling and Servicing Agreement, for certain nontax purposes, as
effecting a transfer of an ownership interest in the Receivables and not as
creating a debt obligation.
A basic premise of federal income tax law is that the economic substance of a
transaction generally determines the tax consequences. The form of a
transaction, while a relevant factor, is not conclusive evidence of its
economic substance. In appropriate circumstances, the courts have allowed
taxpayers, as well as the IRS, to treat a transaction in accordance with its
economic substance, as determined under federal income tax law, even though the
participants in the transaction have characterized it differently for nontax
purposes.
The determination of whether the economic substance of a property transfer is
a sale or a loan secured by the transferred property has been made by the IRS
and the courts on the basis of numerous factors designed to determine whether
the transferor has relinquished (and the transferee has obtained) substantial
incidents of ownership in the property. Among those factors, the primary
factors examined are whether the transferee has the opportunity to gain if the
property increases in value and bears the risk of loss if the property
decreases in value. Based upon an analysis of such factors, Counsel's opinion
provides that for federal income tax purposes the Offered Certificates will be
characterized as indebtedness secured by the Receivables and any other Trust
assets, and the Trust will not be characterized as an "association," "publicly
traded partnership" or "taxable mortgage pool" taxable as a corporation.
Interest Income to Certificate Owners. Assuming the Offered Certificates are
debt obligations for federal income tax purposes, interest on the Offered
Certificates will be taxable as ordinary interest income when received by
Certificate Owners utilizing the cash-basis method of accounting and when
accrued by Certificate Owners utilizing the accrual method of accounting. Under
the applicable regulations, the Offered Certificates would be considered issued
with original issue discount ("OID") if the "stated redemption price at
maturity" of an Offered Certificate (generally equal to its principal amount as
of the date of issuance plus all interest other than "qualified stated
interest" payable prior to or at maturity) exceeds the original issue price (in
this case, the initial offering price at which a substantial amount of the
Offered Certificates are sold to the public). Any OID would be considered de
minimis under the regulation if it does not exceed 1/4% of the stated
redemption price at maturity of an Offered Certificate multiplied by the number
of full years until its maturity date. It is anticipated that the Offered
Certificates will not be considered issued with more than de minimis OID. Under
the OID regulations, an owner of an Offered Certificate issued with a de
minimis amount of OID must include such OID in income, on a pro rata basis, as
principal payments are made on the Offered Certificate.
While it is not anticipated that the Offered Certificates will be issued with
more than de minimis OID, it is possible that they will be so issued or will be
deemed to be issued with OID. This deemed OID could arise, for example, if
interest payments on the Offered Certificates are not deemed to be "qualified
stated interest" because the Offered Certificates do not provide for default
remedies ordinarily available to holders of debt instruments or because no
penalties are imposed as a result of any failure to make interest payments on
the Offered Certificates. In addition, under the OID regulations, certain
variable interest rates, including rates based upon the weighted average
interest rate of the Receivables, may not be treated as qualified stated
interest. Based upon existing authority, however, the Transferor and the
Trustee will treat interest payments on the Offered Certificates as qualified
stated interest under the OID regulations. If the Offered Certificates are
issued or are deemed to be issued with OID, all or a portion of the taxable
income to be recognized with respect to the Offered Certificates would be
includible in the income of Certificate Owners as OID. Any amount treated as
OID would not, however, be includible again when the amount is actually
received. If the yield on a class of Offered Certificates were not materially
different from its coupon, this treatment would have no significant effect on
Certificate Owners using the accrual method of accounting. However, cash method
Certificate Owners may be required to report income with respect to the Offered
Certificates in advance of the receipt of cash attributable to such income.
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A Certificate Owner must include OID in income as interest over the term of
the Offered Certificate under a constant yield method. In general, OID must be
included in income in advance of the receipt of cash representing that income.
Each Certificate Owner should consult its own tax advisor regarding the impact
of the OID rules if the Offered Certificates are issued with OID.
A Certificate Owner who purchases an Offered Certificate at a discount may be
subject to the "market discount" rules of the Code. These rules provide, in
part, for the treatment of gain attributable to accrued market discount as
ordinary income upon the receipt of partial principal payments or on the sale
or other disposition of the Offered Certificate, and for the deferral of
interest deductions with respect to debt incurred to acquire or carry the
market discount Offered Certificate. A Certificate Owner who purchases an
Offered Certificate at a premium may elect to amortize and deduct this premium
over the remaining term of the Offered Certificate in accordance with rules set
forth in Section 171 of the Code.
As an alternative to the above treatments, accrual method Certificate Owners
may elect to include in gross income all interest with respect to an Offered
Certificate, including stated interest, acquisition discount, OID, de minimis
OID, market discount, de minimis market discount, and unstated interest, as
adjusted by any amortizable bond premium or acquisition premium, using the
constant yield method.
Disposition of Offered Certificates. Generally, gain or loss will be
recognized on a sale or other taxable disposition of Offered Certificates in an
amount equal to the difference between the amount realized and the seller's tax
basis in the Offered Certificates. A Certificate Owner's tax basis in an
Offered Certificate will generally equal the cost thereof increased by any OID,
market discount and gain previously included by such Certificate Owner in
income with respect to the Offered Certificate and decreased by any bond
premium previously amortized and any principal payments previously received by
such Certificate Owner with respect to the Offered Certificate. Any such gain
or loss will be capital gain or loss if the Offered Certificate was held as a
capital asset, except for gain representing accrued interest and accrued market
discount not previously included in income. Capital gain or loss will be long-
term if the Offered Certificate was held by the holder for more than one year
and otherwise will be short-term. Any capital losses realized generally may be
used by a corporate taxpayer only to offset capital gains, and by an individual
taxpayer only to the extent of capital gains plus $3,000 of other income.
Information Reporting and Backup Withholding. The Trustee will be required to
report annually to the IRS, and to each Offered Certificateholder of record,
the amount of interest paid on the Offered Certificates (and the amount of
interest withheld for federal income taxes, if any) for each calendar year,
except as to exempt holders (generally, holders that are corporations, tax-
exempt organizations, qualified pension and profit-sharing trusts, individual
retirement accounts, or nonresident aliens who provide certification of their
status as nonresidents). As long as the only "Certificateholder" of record is
Cede, as nominee for DTC, Certificate Owners and the IRS will receive tax and
other information only from Participants and Indirect Participants rather than
from the Trustee. Each nonexempt Offered Certificate Owner will be required to
provide, under penalties of perjury, a certificate on IRS Form W-9 containing
the Owner's name, address, federal taxpayer identification number and a
statement that such Owner is not subject to backup withholding. Should a
nonexempt Offered Certificate Owner fail to provide the required certification,
the Trustee (or the Participants or Indirect Participants) will be required to
withhold (or cause to be withheld) 31% of the interest (and principal)
otherwise payable to the Owner, and remit the withheld amounts to the IRS as a
credit against the Owner's federal income tax liability.
Possible Classification of the Trust as a Partnership or Association. As
described above, it is the opinion of Counsel that for federal income tax
purposes the Offered Certificates will be characterized as debt and the Trust
will not be characterized as an association, publicly traded partnership or
taxable mortgage pool taxable as a corporation. However, this opinion is not
binding on the IRS and no assurance can be given that this characterization
will be sustained.
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If the IRS were to contend successfully that any class of Certificates is not
debt for federal income tax purposes, the Trust might be classified for federal
income tax purposes as a partnership, an association taxable as a corporation,
or a publicly traded partnership taxable as a corporation. In the opinion of
Counsel, if the Class C Certificates were sold to investors and the IRS were to
contend successfully that the Class C Certificates were not debt for federal
income tax purposes (assuming that neither the Class A or Class B Certificates,
nor certificates of any other outstanding series, were also recharacterized)
the arrangement among the Transferor and the Class C Certificateholders would
be classified as a partnership for federal income tax purposes and would not be
treated as a publicly traded partnership because of an exception for (i) an
entity whose income is interest income that is not derived in the conduct of a
financial business or (ii) partnership interests that are privately placed. In
such case, the partnership would not be subject to federal income tax. If the
Class A or Class B Certificates are treated as equity interests in a
partnership, the partnership would in all likelihood be treated as a publicly
traded partnership. A publicly traded partnership is, in general, taxable as a
corporation. If the partnership were nevertheless not taxable as a corporation
because of an exception for an entity whose income is interest income that is
not derived in the conduct of a financial business, it would not be subject to
federal income tax. Rather, each item of income, gain, loss, deduction and
credit generated through the ownership of the Receivables by the partnership
would be passed through to the partners in the partnership (including the
Certificate Owners) according to their respective interests therein.
The income reportable by the Offered Certificate Owners as partners in such a
partnership could differ from the income reportable by them as holders of debt.
However, except as provided below, it is not expected that such differences
would be material. If the Offered Certificate Owners were treated as partners,
a cash-basis Certificate Owner might be required to report income when it
accrues to the partnership rather than when it is received by the Certificate
Owner. Moreover, if the Offered Certificates are interests in a partnership, an
individual Certificate Owner's share of expenses of the partnership would be
miscellaneous itemized deductions that might not be deductible in whole or in
part, causing the Certificate Owner to be taxable on a greater amount of income
than the stated interest on the Offered Certificates. Finally, if any class of
Certificates is treated as equity in a partnership in which other Certificates
are debt, all or part of a tax-exempt Certificate Owner's share of income from
Certificates treated as equity would be treated as unrelated debt-financed
income taxable to the Certificate Owner.
Alternatively, if the Trust were treated as either an association taxable as
a corporation, a publicly traded partnership or taxable mortgage pool taxable
as a corporation, the resulting entity would be subject to federal income taxes
at corporate tax rates on its taxable income generated by ownership of the
Receivables. Distributions by the entity (other than interest distributions on
classes of Certificates properly characterized as debt) would probably not be
deductible in computing the entity's taxable income. Such an entity-level tax
could result in reduced distributions to Offered Certificate Owners, and the
Offered Certificate Owners could be liable for a share of such a tax. Moreover,
all or part of the distributions on Certificates treated as equity would
probably be treated as dividend income to the recipients, although such
dividends might, under certain circumstances, be eligible for the dividends
received deduction under the Code.
Since the Transferor will treat the Offered Certificates as indebtedness for
federal income tax purposes, the Trustee (and Participants and Indirect
Participants) will not comply with the tax reporting requirements that would
apply under these alternative characterizations of the Offered Certificates.
Foreign Investors. If, in accordance with the opinion of Counsel, the Offered
Certificates are classified as debt for federal income tax purposes, the
following information describes the federal income tax treatment of investors
that are not U.S. persons (each a "Foreign Person"). The term "Foreign Person"
means any person other than (i) a citizen or resident of the United States,
(ii) a corporation, partnership or other entity organized in or under the laws
of the United States or any political subdivision thereof or (iii) an estate or
trust the income of which is includible in gross income for U.S. federal income
tax purposes, regardless of its source.
(a) Interest paid or accrued to a Foreign Person would be exempt from
U.S. withholding taxes (including backup withholding taxes); provided that
the Foreign Person complies with applicable
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identification requirements (and does not actually or constructively own
10% or more of the voting stock of Green Tree and is not a controlled
foreign corporation with respect to Green Tree). Applicable identification
requirements will be satisfied if there is delivered to a securities
clearing organization (or bank or other financial institution that holds
the Offered Certificates on behalf of the customer in the ordinary course
of its trade or business) (i) IRS Form W-8 signed under penalties of
perjury by the beneficial owner of the Offered Certificates stating that
the owner is not a U.S. person and providing the owner's name and address,
(ii) IRS Form 1001 signed by the beneficial owner of the Offered
Certificates or the owner's agent claiming exemption from withholding under
an applicable tax treaty, or (iii) IRS Form 4224 signed by the beneficial
owner of the Offered Certificates or the owner's agent claiming exemption
from withholding of tax on income connected with the conduct of a trade or
business in the United States; provided that in any such case (x) the
applicable form is delivered pursuant to applicable procedures and is
properly transmitted to the United States entity otherwise required to
withhold tax and (y) none of the entities receiving the form has actual
knowledge that the owner is a U.S. person or that any certification on the
form is false.
(b) An owner of an Offered Certificate who is a Foreign Person will not
be subject to United States federal income tax on gain realized on the
sale, exchange or redemption of the Offered Certificate, provided that (i)
the gain is not effectively connected to a trade or business carried on by
the owner in the United States, (ii) in the case of an owner who is an
individual, the owner is not present in the United States for 183 days or
more during the taxable year in which the sale, exchange or redemption
occurs, (iii) in the case of gain representing accrued interest, the
conditions described in clause (a) are satisfied, and (iv) the Offered
Certificate was held as a capital asset.
(c) If the interest, gain or income on an Offered Certificate held by a
Foreign Person is effectively connected with the conduct of a trade or
business in the United States by the Foreign Person, the holder (although
exempt from the withholding tax previously discussed if an appropriate
statement is furnished) generally will be subject to United States federal
income tax on the interest, gain or income at regular federal income tax
rates. In addition, if the Foreign Person is a foreign corporation, it may
be subject to a branch profits tax equal to 30 percent of its "effectively
connected earnings and profits" within the meaning of the Code for the
taxable year, as adjusted for certain items, unless it qualifies for a
lower rate under an applicable tax treaty.
(d) An Offered Certificate owned by an individual who at the time of
death is a nonresident alien will not be subject to United States federal
estate tax as a result of the owner's death if, immediately before his
death, (i) the decedent did not actually or constructively own 10% or more
of the voting stock of Green Tree Financial Corporation and (ii) the
ownership of the Offered Certificate was not effectively connected with the
conduct by the decedent of a trade or business in the United States.
If the IRS were to contend successfully that the Offered Certificates are
equity interests in a partnership (not taxable as a corporation), an Offered
Certificate Owner that is a Foreign Person might be required to file a U.S.
income tax return and pay tax on its share of partnership income at regular
U.S. rates, including, in the case of a corporation, the branch profits tax
(and would be subject to withholding tax on its share of partnership income).
If the Offered Certificates are recharacterized as equity interests in an
association taxable as a corporation or a publicly traded partnership taxable
as a corporation, an owner who is a Foreign Person would generally be taxed
(and be subject to withholding) on the gross amount of the distributions on the
Offered Certificates, to the extent they are treated as dividends, at the rate
of 30% (unless the rate is reduced by applicable treaty).
STATE AND LOCAL TAX CONSEQUENCES
The activities to be undertaken by the Servicer in servicing and collecting
the Receivables will take place in Minnesota. The State of Minnesota imposes an
income tax on individuals, trusts and estates and a franchise tax measured by
net income on corporations. This discussion of Minnesota taxation is based upon
current
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statutory provisions and the regulations promulgated thereunder, and applicable
judicial or ruling authority, all of which are subject to change (which may be
retroactive). No ruling on any of the issues discussed below will be sought
from the Minnesota Department of Revenue.
If the Offered Certificates are treated as debt for federal income tax
purposes, in the opinion of Counsel this treatment will also apply for
Minnesota tax purposes, and the Trust will not be characterized as an
association, publicly traded partnership or taxable mortgage pool taxable as a
corporation for Minnesota tax purposes. Certificate Owners not otherwise
subject to Minnesota income or franchise taxation would not become subject to
such a tax solely because of their ownership of the Offered Certificates.
Certificate Owners already subject to income or franchise taxation in Minnesota
could, however, be required to pay such a tax on all or a portion of the income
generated from ownership of the Offered Certificates.
If the Trust is treated as a partnership (not taxable as a corporation) for
federal income tax purposes, in the opinion of Counsel the Trust would also be
treated as such a partnership for Minnesota income tax purposes. The
partnership therefore would not be subject to Minnesota taxation. Certificate
Owners that are not otherwise subject to Minnesota income or franchise taxation
would not become subject to such a tax solely because of their interests in the
constructive partnership. Certificate Owners already subject to income or
franchise taxation in Minnesota could, however, be required to pay such a tax
on all or a portion of the income from the constructive partnership.
If the Offered Certificates are treated as ownership interests in an
association or publicly traded partnership taxable as a corporation, in the
opinion of Counsel this treatment would also apply for Minnesota income and
franchise tax purposes. Pursuant to this treatment, the Trust would be subject
to the Minnesota franchise tax measured by net income (which could result in
reduced distributions to Certificate Owners). Certificate Owners that are not
otherwise subject to Minnesota income or franchise taxation would not become
subject to such a tax solely because of their interests in the constructive
corporation. Certificate Owners already subject to income or franchise taxation
in Minnesota could, however, be required to pay such a tax on all or a portion
of the income from the constructive corporation.
Because state tax laws vary, it is not possible to describe the tax
consequences to the Certificate Owners in all of the states. Certificate Owners
are therefore urged to consult their own tax advisors with respect to the state
tax treatment of the Offered Certificates and income derived therefrom.
EMPLOYEE BENEFIT PLAN CONSIDERATIONS
Section 406 of ERISA and Section 4975 of the Code prohibit a pension, profit
sharing or other employee benefit plan that is subject to such provisions from
engaging in certain transactions involving "plan assets" with persons that are
"parties in interest" under ERISA or "disqualified persons" under the Code with
respect to the plan. ERISA also imposes certain duties on persons who are
fiduciaries of plans subject to ERISA and prohibits certain transactions
between a plan and parties in interest with respect to such plans. Under ERISA,
any person who exercises any authority or control respecting the management or
disposition of the assets of a plan is considered to be a fiduciary of such
plan (subject to certain exceptions not here relevant). A violation of these
"prohibited transaction" rules may generate excise tax and other liabilities
under ERISA and the Code for such persons.
Plan fiduciaries must determine whether the acquisition and holding of the
Offered Certificates and the operations of the Trust would result in direct or
indirect prohibited transactions under ERISA and the Code. The operations of
the Trust could result in prohibited transactions if Benefit Plans that
purchase the Offered Certificates are deemed to own an interest in the
underlying assets of the Trust. There may also be an improper delegation of the
responsibility to manage Benefit Plan assets if Benefit Plans that purchase the
Offered Certificates are deemed to own an interest in the underlying assets of
the Trust.
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Pursuant to a final regulation (the "Final Regulation") issued by the
Department of Labor (the "DOL") concerning the definition of what constitutes
the "plan assets" of an employee benefit plan subject to Title I of ERISA or
Section 4975 of the Code, or an individual retirement account ("IRA")
(collectively referred to as "Benefit Plans"), the assets and properties of
certain entities in which a Benefit Plan makes an equity investment could be
deemed to be assets of the Benefit Plan in certain circumstances. Accordingly,
if Benefit Plans purchase Offered Certificates, the Trust could be deemed to
hold plan assets unless one of the exceptions under the Final Regulation is
applicable to the Trust.
The Final Regulation applies to the purchase by a Benefit Plan of an "equity
interest" in an entity. Assuming that interests in Offered Certificates are
equity interests, the Final Regulation contains an exception that provides that
if a Benefit Plan acquires a "publicly offered security," the issuer of the
security is not deemed to hold plan assets. A publicly offered security is a
security that is (i) freely transferable, (ii) part of a class of securities
that is owned by 100 or more investors independent of the issuer and of one
another and (iii) either is (A) part of a class of securities registered under
Section 12(b) or 12(g) of the Exchange Act or (B) sold to the plan as part of
an offering of securities to the public pursuant to an effective registration
statement under the Securities Act and the class of securities of which such
security is a part is registered under the Exchange Act within 120 days (or
such later time as may be allowed by the Commission) after the end of the
fiscal year of the issuer during which the offering of such securities to the
public occurred. In addition, the Final Regulation provides that if at all
times less that 25% of the value of all classes of equity interests in
Certificates are held by benefit plan investors (which is defined as including
plans subject to ERISA, government plans and IRA's), the investing plan's
assets will not include any of the underlying assets of the Trust.
It is anticipated that interests in the Class A Certificates will meet the
criteria of publicly offered securities as set forth above. The Underwriters
expect, although no assurances can be given, that interests in the Class A
Certificates will be held by at least 100 independent investors at the
conclusion of the offering; there are no restrictions imposed on the transfer
of interests in the Class A Certificates; and interests in the Class A
Certificates will be sold as part of an offering pursuant to an effective
registration statement under the Securities Act and thereafter will be timely
registered under the Exchange Act.
The Underwriter of the Class B Certificates expects that the Class B
Certificates will not be held by at least 100 persons. Consequently, the
publicly offered security exception contained in the regulations will not be
met with respect to the Class B Certificates. Consequently, no transfer of a
Class B Certificate will be permitted to be made to a Benefit Plan unless such
Benefit Plan, at its expense, delivers to the Trustee and the Transferor an
opinion of counsel satisfactory to them to the effect that the purchase or
holding of a Class B Certificate by such Benefit Plan will not result in the
assets of the Trust being deemed to be "assets of the Benefit Plan" or subject
to the prohibited transaction provisions of ERISA and the Code and will not
subject the Trustee, the Transferor or the Servicer to any obligation in
addition to those undertaken in the Pooling and Servicing Agreement. Unless
such opinion is delivered, each person acquiring a Class B Certificate or the
beneficial ownership of a Class B Certificate will be deemed to represent to
the Trustee, the Transferor and the Servicer that such person is not a Benefit
Plan subject to ERISA or Section 4975 of the Code.
If interests in a Class of the Offered Certificates fail to meet the criteria
of publicly offered securities, the Trust's assets may be deemed to include
assets of Benefit Plans that are holders of the Certificates of such Class, and
transactions involving the Trust and "parties in interest" or "disqualified
persons" with respect to such Benefit Plans might be prohibited under Section
406 of ERISA and Section 4975 of the Code unless an exemption is applicable. In
addition, the Transferor or any of the Underwriters may be considered to be a
party in interest, disqualified person or fiduciary with respect to an
investing Benefit Plan. Accordingly, an investment by a Benefit Plan in Offered
Certificates may be a prohibited transaction under ERISA and the Code unless
such investment is subject to a statutory or administrative exemption. Thus,
for example, if a participant in any Benefit Plan is an Obligor, under DOL
interpretations the purchase of interests in Offered Certificates by such plan
could constitute a prohibited transaction. Three class exemptions issued by the
DOL
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that could apply in such event are DOL Prohibited Transaction Exemption 84-14
(Class Exemption for Plan Asset Transactions Determined by Independent
Qualified Professional Asset Managers), 91-38 (Class Exemption for Certain
Transactions Involving Bank Collective Investment Funds) and 90-1 (Class
Exemption for Certain Transactions Involving Insurance Company Pooled Separate
Accounts). There is no assurance that these exemptions even if all of the
conditions specified therein are satisfied, or any other exemption will apply
to all transactions involving the Trust's assets.
In light of the foregoing, fiduciaries of a Benefit Plan considering the
purchase of interests in Offered Certificates should consult their own counsel
as to whether the assets of the Trust which are represented by such interests
would be considered plan assets, and whether, under the general fiduciary
standards of investment prudence and diversification, an investment in Offered
Certificates is appropriate for the Benefit Plan taking into account the
overall investment policy of the Benefit Plan and the composition of the
Benefit Plan's investment portfolio. In addition, fiduciaries should consider
the consequences that would apply if the Trust's assets were considered plan
assets, the applicability of exemptive relief from the prohibited transaction
rules, and, whether all conditions for such exemptive relief would be
satisfied. In this regard, purchasers that are insurance companies should
consult with their counsel with respect to the recent United States Supreme
Court case interpreting the fiduciary responsibility rules of ERISA, John
Hancock Mutual Life Insurance Co. v. Harris Trust and Savings Bank, 144 S.Ct.
517 (1993). In John Hancock, the Supreme Court ruled that assets held in an
insurance company's general account may be deemed to be "plan assets" for ERISA
purposes under certain circumstances. Prospective purchasers should determine
whether the decision affects their ability to make purchases of the Offered
Certificates.
UNDERWRITING
Subject to the terms and conditions set forth in an Underwriting Agreement
dated December 14, 1995 (the "Underwriting Agreement"), among the Transferor,
Green Tree and the underwriters named below (the "Underwriters"), the
Transferor has agreed to sell to each of the Underwriters, and each of the
Underwriters has severally agreed to purchase from the Transferor, the
principal amount of the Offered Certificates set forth opposite its name below.
<TABLE>
<CAPTION>
AMOUNT OF AMOUNT OF
CLASS A CLASS B
UNDERWRITER CERTIFICATES CERTIFICATES
----------- ------------ ------------
<S> <C> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.......................... $204,700,000 $18,400,000
Bear, Stearns & Co. Inc........................ 204,700,000 --
------------ -----------
Total...................................... $409,400,000 $18,400,000
============ ===========
</TABLE>
In the Underwriting Agreement, the Underwriters have agreed, subject to the
terms and conditions set forth therein, to purchase all the Offered
Certificates offered hereby if any Offered Certificates are purchased. In the
event of a default by any Underwriter, the Underwriting Agreement provides
that, in certain circumstances, the purchase commitments of the nondefaulting
Underwriter may be increased or the Underwriting Agreement may be terminated.
The Transferor has been advised by the Underwriters that the Underwriters
propose initially to offer the Class A Certificates to the public at the public
offering price set forth on the cover page of this Prospectus, and to certain
dealers at such price less a concession not in excess of .275% of the principal
amount of the Class A Certificates. The Underwriters may allow, and such
dealers may reallow, a discount with respect to the Class A Certificates not in
excess of .175% of such principal amount to certain other dealers. The
Transferor has been advised by Merrill Lynch, Pierce, Fenner & Smith
Incorporated, the Underwriter of the Class B Certificates, that the Underwriter
of the Class B Certificates proposes initially to offer the Class B
Certificates to the public at the public offering price set forth on the cover
page of this Prospectus, and to certain dealers at such price less a concession
not in excess of .5% of the principal amount of the Class B
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Certificates. The Underwriter of the Class B Certificates may allow, and such
dealers may reallow, a discount with respect to the Class B Certificates not in
excess of .3% of such principal amount to certain other dealers. After the
initial public offering, the public offering price, concession and discount may
be changed.
The Underwriting Agreement provides that the Transferor and Green Tree will
indemnify the Underwriters against certain liabilities, including liabilities
under applicable securities laws, or contribute to payments the Underwriters
may be required to make in respect thereof.
Each Underwriter has represented and agreed that (i) it has not offered or
sold and, prior to the expiration of the period of six months from the Closing
Date, will not offer or sell any Class A or Class B Certificates to persons in
the United Kingdom, except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or
agent) for the purposes of their businesses or otherwise in circumstances which
have not resulted and will not result in an offer to the public in the United
Kingdom within the meaning of the Public Offers of Securities Regulation 1995;
(ii) it has complied and will comply with all applicable provisions of the
Financial Services Act 1986 with respect to anything done by it in relation to
the Class A or Class B Certificates in, from or otherwise involving the United
Kingdom; and (iii) it has only issued or passed on and will only issue or pass
on in the United Kingdom any document received by it in connection with the
issue of the Class A or Class B Certificates to a person who is of a kind
described in Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1995, or is a person to whom such document
may otherwise lawfully be issued or passed on.
LISTING AND GENERAL INFORMATION
Application has been made to list the Offered Certificates on the Luxembourg
Stock Exchange. In connection with the listing application, the Certificate of
Incorporation and Bylaws of the Transferor, as well as legal notice relating to
the issuance of the Offered Certificates will be deposited prior to listing
with the Chief Registrar of the District Court of Luxembourg, where copies
thereof may be obtained upon request. Once the Certificates have been so
listed, trading of the Offered Certificates may be effected on the Luxembourg
Stock Exchange. The Class A Certificates and the Class B Certificates have been
accepted for clearance through the facilities of DTC, Cedel and Euroclear (ISIN
number for the Class A Certificates US393510AA00 and for the Class B
Certificates, US393510AB82).
The transactions contemplated in this Prospectus were authorized by
resolutions adopted by the Transferor on September 13, 1995.
Copies of the Pooling and Servicing Agreement, the Series 1995-1 Supplement,
the annual report of independent public accountants described in "Description
of the Offered Certificates--Evidence as to Compliance" in the Prospectus, the
documents listed under "Available Information" and the reports to
Certificateholders referred to under "Reports to Certificateholders" and
"Description of the Offered Certificates--Reports to Certificateholders" in the
Prospectus will be available at the office of the Listing Agent of the Trust in
Luxembourg, whose address is 80, place de la Gare 1616, Luxembourg. Financial
information regarding the Transferor will be included in the consolidated
financial statements of Green Tree Financial Corporation in its Annual Report
on Form 10-K for the fiscal year ended December 31, 1995, which will be
available at the office of the Listing Agent in Luxembourg.
The Certificates, the Pooling and Servicing Agreement and the Series 1995-1
Supplement are governed by the laws of the State of Minnesota.
LEGAL MATTERS
The legality of the Offered Certificates will be passed upon for the
Transferor and Green Tree by Dorsey & Whitney P.L.L.P., Minneapolis, Minnesota.
The material federal income tax consequences of the Certificates will be passed
upon for the Transferor by Dorsey & Whitney P.L.L.P. Certain legal matters
relating to the Offered Certificates will be passed upon for the Underwriters
by Brown & Wood.
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GLOSSARY OF TERMS
There follows abbreviated definitions of certain capitalized terms used in
the Prospectus. The Pooling and Servicing Agreement and the 1995-1 Series
Supplement may contain a more complete definition of certain of the terms
defined herein and reference should be made to the Pooling and Servicing
Agreement and the 1995-1 Series Supplement for a more complete definition of
all such terms.
"ABC Fixed/Floating Allocation Percentage" means, for any business day, the
percentage equivalent of a fraction, the numerator of which is the sum of the
Class A Invested Amount, the Class B Invested Amount and the Class C Invested
Amount at the end of the last day of the Revolving Period and the denominator
of which is the greater of (a) the sum of the aggregate amount of the Pool
Balance and the amount on deposit in the Excess Funding Account at the end of
the preceding business day and (b) the sum of the numerators used to calculate
the allocation percentages with respect to Principal Receivables for all
Series.
"ABC Investor Default Amount" means an amount equal to the product of (a)
the sum of the Class A Floating Allocation Percentage, the Class B Floating
Allocation Percentage and the Class C Floating Allocation Percentage
applicable on such business day and (b) the aggregate principal amount of
Defaulted Receivables identified since the prior reporting date.
"Accounts" mean the revolving credit agreements entered into with Green Tree
or one of its subsidiaries by dealers, manufacturers and distributors located
throughout the United States to finance their production and inventory of
consumer and commercial products.
"Accumulation Period Commencement Date" means the first day of the August
1998 Monthly Period, provided, however, if the Accumulation Period Length has
been determined to be less than four months and, after such determination, any
outstanding Series enters into an early amortization period, the Accumulation
Period Commencement Date shall be the earlier of (i) the date that such
outstanding Series entered into its early amortization period and (ii) the
Accumulation Period Commencement Date, as previously determined.
"Accumulation Period Length" means the one, two, three or four month(s)
period, determined on July 13,
1998, and shall be calculated as the product, rounded upwards to the nearest
integer, of (a) four and (b) a fraction, the numerator of which is the
Invested Amount as of July 13, 1998 (after giving effect to all changes
therein on such date) and the denominator of which is the sum of such Invested
Amount and the invested amounts as of July 13, 1998 (after giving effect to
all changes therein on such date) of all other outstanding Series whose
respective revolving periods are not scheduled to end before the last day of
the November 1998 Monthly Period.
"Accumulation Shortfall" means, for the succeeding Monthly Period, the
amount by which the Controlled Deposit Amount exceeds the amount deposited in
the Principal Account for any Monthly Period.
"Addition Date" means in the case of an Additional Account, the date of its
designation for inclusion in the Trust and the date the related Receivables
are transferred to the Trust.
"Additional Accounts" means the additional Eligible Accounts which the
Transferor and Green Tree have the right (subject to certain limitations and
conditions), and in some circumstances are obligated, to designate from time
to time to be included as Accounts and to convey to the Trust the Receivables
of such Additional Accounts.
"Additional Cut-off Date" means with respect to Additional Accounts, the
date specified in the Addition Notice delivered with respect to such
Additional Accounts pursuant to Section 2.6(c) of the Pooling and Servicing
Agreement.
"Additional Class D Invested Amount" means any increase in the Class D
Invested Amount agreed to in connection with an increase by the Transferor in
any of the percentages used to calculate the Overconcentration Amounts.
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"Affiliate" means, with respect to a particular Person, any Person that,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person.
"Asset-Based Receivable Overconcentration" on any Distribution Date means the
excess of (a) the aggregate of all amounts of Principal Receivables in Accounts
for Asset-Based Receivables on the last day of the Monthly Period immediately
preceding such Distribution Date over (b) the Asset-Based Percentage of the
Principal Receivables on the last day of such immediately preceding Monthly
Period. Subject to adjustment as described below, the "Asset-Based Percentage"
will be 10% until the date six months after the Closing Date; thereafter, once
certain performance tests are met, 15% until the date one year after the
Closing Date; and thereafter, once certain performance tests are met, 20%.
Notwithstanding the above, in the case of such Overconcentration, the
percentage in clause (b) may be increased by the Transferor, without the
consent of any Certificateholder, to a level acceptable to each Rating Agency
without any reduction or withdrawal of its rating of the Class A or Class B
Certificates (but which may involve an adjustment, upward or downward, of the
Class D Invested Amount).
"Asset-Based Receivables" represent extensions of credit generally to
manufacturers and distributors to finance their production and inventory, and
are secured by finished goods inventory, accounts receivable, certain work-in-
process, raw materials and component parts, as well as other assets of the
borrower.
"Automatic Addition Condition" means, with respect to the addition of
Accounts, that (i) during the calendar quarter in which such addition occurs,
the number of new Accounts for Dealers that are financing products of the type
already being financed by Green Tree does not exceed 5% of the number of all
Accounts at the end of the preceding calendar quarter, (ii) during the twelve
months ending at the beginning of such calendar quarter, the number of such new
Accounts does not exceed 20% of the number of all Accounts at the beginning of
such twelve month period, (iii) the average for the three months preceding the
month of such addition of the aggregate balance of Receivables that have been
delinquent for more than 30 days does not exceed 1.25% of the Pool Balance at
the end of the month preceding the month of such addition, and (iv) the
annualized average for such three month period of the net losses incurred in
respect of the Receivables does not exceed 1.75% of the Pool Balance at the end
of the month preceding the month of such addition.
"Available Series Interest Collections" means, for any business day, the
Floating Allocation Percentage of Interest Collections for such business day.
"Bankruptcy Code" means Title 11 of the United States Code.
"Base Rate" means the sum of (i) the weighted average of the Class A
Certificate Rate and the Class B Certificate Rate plus (ii) 2% per annum.
"Benefit Plans" means an employee benefit plan subject to Title I of ERISA or
Section 4975 of the Code, or an individual retirement account (an "IRA").
"Cash Equivalents" mean, unless otherwise provided in the Supplement with
respect to any Series, (a) negotiable instruments or securities represented by
instruments in bearer or registered form which evidence (i) obligations of or
fully guaranteed by the United States of America; (ii) time deposits,
promissory notes, or certificates of deposit of any depositary institution or
trust company; provided, however, that at the time of the Trust's investment or
contractual commitment to invest therein, the certificates of deposit or short-
term deposits of such depositary institution or trust company shall have a
credit rating from Standard & Poor's of A-1+ and from Moody's of P-1; (iii)
commercial paper having, at the time of the Trust's investment or contractual
commitment to invest therein, a rating from Standard & Poor's of A-1+ and from
Moody's of P-1; (iv) banker's acceptances issued by any depositary institution
or trust company described in clause (a)(ii) above; and (v) investments in
money market funds rated AAA-m or AAA-mg by Standard & Poor's and Aaa by
Moody's or otherwise approved in writing by Moody's and Standard & Poor's; (b)
time deposits and demand deposits in the name of the Trust or the Trustee in
any depositary institution or trust company referred to in clause (a)(ii)
above; (c) securities not represented by an instrument that are registered in
the
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name of the Trustee or its nominee (which may not be Green Tree or an
Affiliate) upon books maintained for that purpose by or on behalf of the issuer
thereof and identified on books maintained for that purpose by the Trustee as
held for the benefit of the Trust or the Certificateholders, and consisting of
(x) shares of an open end diversified investment company which is registered
under the Investment Company Act which (i) invests its assets exclusively in
obligations of or guaranteed by the United States of America or any
instrumentality or agency thereof having in each instance a final maturity date
of less than one year from their date of purchase or other Cash Equivalents,
(ii) guarantees to maintain a constant net asset value per share, (iii) has
aggregate net assets of not less than $100,000,000 on the date of purchase of
such shares and (iv) which each Rating Agency designates in writing will not
result in a withdrawal or downgrading of its then current rating of any Series
rated by it or (y) Eurodollar time deposits of a depository institution or
trust company that are rated A-1+ by Standard & Poor's and P-1 by Moody's;
provided, however, that at the time of the Trust's investment or contractual
commitment to invest therein, the Eurodollar deposits of such depositary
institution or trust company shall have a credit rating from Standard & Poor's
of A-1+ and P-1 by Moody's; and (d) any other investment if each Rating Agency
confirms in writing that such investment will not adversely affect its then
current rating of the Investor Certificates.
"Cede & Co." means DTC's nominee. Cede & Co. is expected to be the holder of
record of the Offered Certificates.
"Cedel" means Cedel Bank, societe anonyme, the professional depository,
incorporated under the laws of Luxembourg, which holds securities for its
participating organizations and facilitates the clearance and settlement of
securities transactions between Cedel Participants through electronic book-
entry changes in the accounts of such Cedel Participants.
"Cedel Participants" means the participating organizations for which Cedel
holds securities.
"Certificate Owners" means the owners of the beneficial interests in the
Offered Certificates.
"Certificateholders" means the holders of record of the Class A, Class B,
Class C and Class D Certificates.
"Certificateholders' Interest" means the interest in the assets of the Trust
allocated to the Certificateholders.
"Certificate Rates" means the Class A Certificate Rate and the Class B
Certificate Rate.
"Certificates" means each of the Offered Certificates, the Floorplan
Receivable Trust Certificates, Series 1995-1, Class C and the Floorplan
Receivable Trust Certificates, Series 1995-1, Class D.
"CFD" means Green Tree's Commercial Finance Division.
"Class" means, with respect to any Series, any one of the classes of
Certificates of that Series as specified in the related Series Supplement.
"Class A Certificate Rate" means the rate at which interest on the
outstanding principal balance of the Class A Certificates will accrue, which
will be at a rate per annum equal to the lesser of (i) the applicable one-month
LIBOR plus .16% per annum or (ii) the Net Receivables Rate.
"Class A Certificateholder" means the Person in whose name a Class A
Certificate is registered in the Certificate Register.
"Class A Certificates" means each of the Floating Rate Floorplan Receivable
Trust Certificates, Series 1995-1, Class A.
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"Class A Certificateholders' Interest" means the portion of the
Certificateholders' Interest evidenced by the Class A Certificates.
"Class A Fixed/Floating Allocation Percentage" means, with respect to any
business day, the percentage equivalent of a fraction, the numerator of which
is the Class A Invested Amount at the end of the last day of the Revolving
Period and the denominator of which is the greater of (a) the sum of the Pool
Balance and the amount on deposit in the Excess Funding Account at the end of
the preceding business day and (b) the sum of the numerators used to calculate
the allocation percentages with respect to Principal Collections for all
Series.
"Class A Floating Allocation Percentage" means, with respect to any business
day, the percentage equivalent of a fraction, the numerator of which is the
Class A Invested Amount as of the end of the preceding business day and the
denominator of which is the greater of (a) the Pool Balance and the amount on
deposit in the Excess Funding Account as of the end of the preceding business
day and (b) when used with respect to Principal Collections only, the sum of
the numerators with respect to all Classes of all Series then outstanding used
to calculate the applicable allocation percentage.
"Class A Invested Amount" means an amount equal to (a) the initial principal
balance of the Class A Certificates minus (b) the aggregate amount of principal
payments made to Class A Certificateholders prior to such date, minus (c) the
aggregate amount of Class A Investor Charge-Offs for all prior Distribution
Dates, equal to the amount by which the Class A Invested Amount has been
reduced to fund the Investor Default Amount on all prior Distribution Dates,
and plus (d) the aggregate amount of Available Series Interest Collections,
Excess Interest Collections and Reallocated Principal Collections applied on
all prior Distribution Dates for the purpose of reimbursing amounts deducted
pursuant to the foregoing clause (c).
"Class A Investor Charge-Off" means, if the Class B Invested Amount is
reduced to zero, the portion of the Class A Invested Amount equal to the amount
by which such insufficiency would have caused the Class B Invested Amount to be
reduced below zero (but not in excess of the remaining aggregate Investor
Default Amount for such Monthly Period) that will be deducted from the Class A
Invested Amount.
"Class A Monthly Interest" with respect to any Distribution Date will equal
the product of (i) the Class A Certificate Rate for the related Interest
Accrual Period, (ii) the actual number of days in such Interest Accrual Period
divided by 360 and (iii) the outstanding principal balance of the Class A
Certificates on the related Record Date or, with respect to the first
Distribution Date, the initial outstanding principal balance of the Class A
Certificates.
"Class A Principal" with respect to any Distribution Date during the
Controlled Accumulation Period or Early Amortization Period will equal the sum
of (i) an amount equal to the ABC Fixed/Floating Allocation Percentage of all
Principal Collections (less the amount of Reallocated Class B Principal
Collections and Reallocated Class C Principal Collections) received during the
Monthly Period immediately preceding such Distribution Date, (ii) any amount on
deposit in the Excess Funding Account (other than any amount in the Class D
Subaccount) allocated to the Class A Certificates with respect to the preceding
Monthly Period, (iii) the aggregate ABC Investor Default Amount paid from
Available Series Interest Collections, Excess Interest Collections or
Reallocated Principal Collections with respect to the preceding Monthly Period
and any reimbursements from Available Series Interest Collections, Excess
Interest Collections or Reallocated Principal Collections of unreimbursed Class
A Investor Charge-Offs, Class B Investor Charge-Offs and Class C Investor
Charge-Offs and (iv) Shared Principal Collections allocated to the Class A
Certificates; provided, however, that with respect to any Distribution Date
during the Controlled Accumulation Period, Class A Principal will not exceed
the lesser of (i) the Controlled Deposit Amount and (ii) the Class A Invested
Amount; provided, further, that with respect to the Series 1995-1 Termination
Date, Class A Principal will be an amount equal to the Class A Invested Amount.
"Class A Required Amount" means the amount determined by the Servicer on each
business day equal to the excess, if any, of (x) the sum of (i) Class A
Interest for the prior Monthly Period, (ii) any Class A
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Interest due but not paid on any previous Distribution Date plus any Class A
Additional Interest previously due but not paid to the Class A
Certificateholders on a prior Distribution Date, (iii) if Green Tree or an
Affiliate of Green Tree is no longer the Servicer, the Class A Floating
Allocation Percentage of the Servicing Fee for the prior Monthly Period and
(iv) the Class A Floating Allocation Percentage of the Default Amount, to the
extent not previously paid, for any business day in the prior Monthly Period
over (y) the Available Series 1995-1 Interest Collections plus any Excess
Interest Collections from other Series allocated with respect to the amounts
described in clauses (x)(i) through (iv).
"Class A Scheduled Payment Date" means the Distribution Date in December
1998.
"Class B Certificate Rate" means the rate at which interest on the
outstanding principal balance of the Class B Certificates will accrue which
shall be at a rate per annum equal to the lesser of (i) the applicable one-
month LIBOR plus .32% per annum or (ii) the Net Receivables Rate.
"Class B Certificateholder" means the Person in whose name a Class B
Certificate is registered in the Certificate Register.
"Class B Certificates" means each of the Floating Rate Floorplan Receivable
Trust Certificates, Series 1995-1, Class B.
"Class B Certificateholders' Interest" means the portion of the
Certificateholders' Interest evidenced by the Class B Certificates.
"Class B Fixed/Floating Allocation Percentage" means, with respect to any
business day, the percentage equivalent of a fraction, the numerator of which
is the Class B Invested Amount at the end of the last day of the Revolving
Period and the denominator of which is the greater of (a) the sum of the Pool
Balance and the amount on deposit in the Excess Funding Account at the end of
the preceding business day and (b) the sum of the numerators used to calculate
the allocation percentages with respect to Principal Collections for all
Series.
"Class B Floating Allocation Percentage" means, with respect to any business
day, the percentage equivalent of a fraction, the numerator of which is the
Class B Invested Amount as of the end of the preceding business day and the
denominator of which is the greater of (a) the sum of the Pool Balance and the
amount on deposit in the Excess Funding Account as of the end of the preceding
business day and (b) when used with respect to Principal Collections only, the
sum of the numerators with respect to all Classes of all Series then
outstanding used to calculate the applicable allocation percentage.
"Class B Invested Amount" for any date means an amount equal to (a) the
initial principal balance of the Class B Certificates minus (b) the aggregate
amount of principal payments made to Class B Certificateholders prior to such
date, minus (c) the aggregate amount of Class B Investor Charge-Offs for all
prior Distribution Dates, minus (d) the aggregate amount of Reallocated Class B
Principal Collections for which neither the Class D Invested Amount nor the
Class C Invested Amount has been reduced for all prior Distribution Dates, and
plus (e) the aggregate amount of Available Series Interest Collections, Excess
Interest Collections and Reallocated Class C Principal Collections and
Reallocated Class D Principal Collections applied on all prior Distribution
Dates for the purpose of reimbursing amounts deducted pursuant to the foregoing
clauses (c) and (d).
"Class B Investor Charge-Off" means, if the Class C Invested Amount is
reduced to zero, the portion of the Class B Invested Amount equal to the amount
by which such insufficiency would have caused the Class C Invested Amount to be
reduced below zero (but not in excess of the remaining aggregate Investor
Default Amount for such Monthly Period) that will be deducted from the Class B
Invested Amount.
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"Class B Monthly Interest" with respect to any Distribution Date will equal
the product of (i) the Class B Certificate Rate for the related Interest
Accrual Period, (ii) the actual number of days in such Interest Accrual Period
divided by 360 and (iii) the Class B Invested Amount on the related Record Date
or, with respect to the first Distribution Date, the initial outstanding
principal balance of the Class B Certificates.
"Class B Principal" with respect to any Distribution Date on or after the
Class A Scheduled Payment Date will equal the sum of (i) an amount equal to the
ABC Fixed/Floating Allocation Percentage of all Principal Collections (less the
amount of Reallocated Class B Principal Collections and Reallocated Class C
Principal Collections) received during the Monthly Period immediately preceding
such Distribution Date (or, in the case of the first Distribution Date
following the date on which an amount equal to the Class A Invested
Amount is deposited in the Principal Amount to be applied to the payment of
Class A Principal, the ABC Fixed/Floating Allocation Percentage of Principal
Collections from the date on which such deposit is made), (ii) any amount on
deposit in the Excess Funding Account (other than the Class D Subaccount)
allocated to the Class B Certificates with respect to the preceding Monthly
Period, and (iii) the aggregate ABC Investor Default Amount paid from Available
Series Interest Collections, Excess Interest Collections or Reallocated
Principal Collections with respect to the preceding Monthly Period and any
reimbursements from Available Series Interest Collections, Excess Interest
Collections or Reallocated Principal Collections of unreimbursed Class B
Investor Charge-Offs and Class C Investor Charge-Offs and (iv) Shared Principal
Collections allocated to the Class B Certificates; provided, however, that with
respect to any Distribution Date during the Controlled Accumulation Period,
Class B Principal will not exceed the lesser of (i) the Controlled Deposit
Amount and (ii) the Class B Invested Amount; provided, further that with
respect to the Series 1995-1 Termination Date, Class B Principal will be an
amount equal to the Class B Invested Amount.
"Class B Principal Commencement Date" means the earliest of (a) the Class B
Scheduled Payment Date, (b) the Distribution Date during the Early Amortization
Period or following the Initial Principal Payment Date on which the Class A
Invested Amount is paid in full or, if there are no Principal Collections
allocable to the Series 1995-1 Investor Certificates remaining after payments
have been made to the Class A Certificates on such Distribution Date, the
Distribution Date following the Distribution Date on which the Class A Invested
Amount is paid in full and (c) the Distribution Date following a sale or
repurchase of the Receivables as set forth in the Pooling and Servicing
Agreement and the 1995-1 Series Supplement.
"Class B Required Amount" means the amount determined by the Servicer on each
business day equal to the excess, if any, of (x) the sum of (i) Class B
Interest for the prior Monthly Period, (ii) any Class B Interest due but not
paid on any previous Distribution Date plus any Class B Additional Interest
previously due but not paid to the Class B Certificateholders on a prior
Distribution Date, (iii) if Green Tree or an Affiliate of Green Tree is no
longer the Servicer, the Class B Floating Allocation Percentage of the
Servicing Fee for the prior Monthly Period and (iv) the Class B Floating
Allocation Percentage of the Default Amount, to the extent not previously paid,
for any business day in the prior Monthly Period over (y) the Available Series
1995-1 Interest Collections plus any Excess Interest Collections from other
Series allocated with respect to the amounts described in clauses (x)(i)
through (iv).
"Class B Scheduled Payment Date" means the Distribution Date in January 1999.
"Class C Certificates" means each of the Floorplan Receivable Trust
Certificates, Series 1995-1, Class C.
"Class C Certificateholder" means the Person in whose name a Class C
Certificate is registered in the Certificate Register.
"Class C Certificateholders' Interest" means the portion of the
Certificateholders' Interest evidenced by the Class B Certificates.
"Class C Fixed/Floating Allocation Percentage" means, with respect to any
business day, the percentage equivalent of a fraction, the numerator of which
is the Class C Invested Amount at the end of the last day of the Revolving
Period and the denominator of which is the greater of (a) the sum of the Pool
Balance and the amount on deposit in the Excess Funding Account at the end of
the preceding business day and (b) the sum of the numerators used to calculate
the allocation percentages with respect to Principal Collections for all
Series.
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"Class C Floating Allocation Percentage" means, with respect to any business
day, the percentage equivalent of a fraction, the numerator of which is the
Class C Invested Amount as of the end of the preceding business day and the
denominator of which is the greater of (a) the sum of the Pool Balance and the
amount on deposit in the Excess Funding Account as of the end of the preceding
business day and (b) when used with respect to Principal Collections only, the
sum of the numerators with respect to all Classes of all Series then
outstanding used to calculate the applicable allocation percentage.
"Class C Invested Amount" for any date means an amount equal to (a) the
initial principal balance of the Class C Certificates minus (b) the aggregate
amount of principal payments made to Class C Certificateholders prior to such
date, minus (c) the aggregate amount of Class C Investor Charge-Offs for all
prior Distribution Dates, equal to the amount by which the Class C Invested
Amount has been reduced to fund the Investor Default Amount on all prior
Distribution Dates minus (d) the aggregate amount of Reallocated Class C
Principal Collections for which the Class D Invested Amount has not been
reduced for all prior Distribution Dates, and plus (e) the aggregate amount of
Available Series Interest Collections, Excess Interest Collections, Reallocated
Class D Principal Collections and certain other amounts as may be available
applied on all prior Distribution Dates for the purpose of reimbursing amounts
deducted pursuant to the foregoing clauses (c) and (d).
"Class C Investor Charge-Off" means, if the Class D Invested Amount is
reduced to zero, the portion of the Class C Invested Amount equal to the amount
by which such insufficiency would have caused the Class D Invested Amount to be
reduced below zero (but not in excess of the remaining aggregate Investor
Default Amount for such Monthly Period) that will be deducted from the Class C
Invested Amount.
"Class C Principal" with respect to any Distribution Date on or after the
Class C Principal Commencement Date will equal the sum of (i) an amount equal
to the ABC Fixed/Floating Allocation Percentage of all Principal Collections
(less the amount of Reallocated Class C Principal Collections) received during
the Monthly Period immediately preceding such Distribution Date (or, in the
case of the first Distribution Date following the date on which an amount equal
to the Class B Invested Amount is deposited in the Principal Account to be
applied to the payment of Class B Principal, the ABC Fixed/Floating Allocation
Percentage of Principal Collections from the date on which such deposit is
made), (ii) any amount on deposit in the Excess Funding Account allocated to
the Class C Certificates with respect to the preceding Monthly Period, (iii)
the aggregate ABC Investor Default Amount paid from Available Series Interest
Collections, Excess Interest Collections or Reallocated Principal Collections
with respect to the preceding Monthly Period and any reimbursements from
Available Series Interest Collections, Excess Interest Collections or
Reallocated Principal Collections of unreimbursed Class C Investor Charge-Offs
and (iv) Shared Principal Collections allocated to the Class C Certificates;
provided, that with respect to the Series 1995-1 Termination Date, Class C
Principal will be an amount equal to the Class C Invested Amount.
"Class C Principal Commencement Date" means the earlier of (a) the
Distribution Date on which the Class B Invested Amount is paid in full or, if
there are no Principal Collections allocable to the Series 1995-1 Investor
Certificates remaining after payments have been made to the Class B
Certificates on such Distribution Date, the Distribution Date following the
Distribution Date on which the Class B Invested Amount is paid in full and (b)
the Distribution Date following a sale or repurchase of the Receivables as set
forth in the Pooling and Servicing Agreement and the 1995-1 Series Supplement.
"Class C Required Amount" means the amount determined by the Servicer on each
business day equal to the excess, if any, of (x) the sum of (i) if Green Tree
or an Affiliate of Green Tree is no longer the Servicer, the Class C Floating
Allocation Percentage of the Servicing Fee for the prior Monthly Period and
(ii) the Class C Floating Allocation Percentage of the Default Amount, to the
extent not previously paid, for any business day in the prior Monthly Period
over (y) the Available Series 1995-1 Interest Collections plus any Excess
Interest Collections from other Series allocated with respect to the amounts
described in clauses (x)(i) and (ii).
"Class D Certificateholder" means the person in whose name a Class D
Certificate is registered in the Certificate Register.
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"Class D Certificates" means each of the Floorplan Receivable Trust
Certificates, Series 1995-1, Class D.
"Class D Certificateholders' Interest" means the portion of the
Certificateholders' Interest evidenced by the Class D Certificates.
"Class D Fixed/Floating Allocation Percentage" means, with respect to any
business day, the percentage equivalent of a fraction, the numerator of which
is the Class D Invested Amount at the end of the last day of the Revolving
Period and the denominator of which is the greater of (a) the sum of the Pool
Balance and the amount on deposit in the Excess Funding Account as of the end
of the preceding business day and (b) the sum of the numerators used to
calculate the allocation percentages with respect to Principal Collections for
all Series.
"Class D Floating Allocation Percentage" means, with respect to any business
day, the percentage equivalent of a fraction, the numerator of which is the
Class D Invested Amount as of the end of the preceding business day and the
denominator of which is the greater of (a) the total amount of Principal
Receivables and the amount on deposit in the Excess Funding Account at the end
of the preceding business day and (b) when used with respect to Principal
Collections only, the sum of the numerators with respect to all Classes of all
Series then outstanding used to calculate the applicable allocation percentage.
"Class D Incremental Invested Amount" means for any Monthly Period the
product of (a) a fraction, the numerator of which is the sum of the Invested
Amount (exclusive of the Class D Incremental Invested Amount) on the last day
of the immediately preceding Monthly Period and the denominator of which is the
Pool Balance on such last day times (b) the Overconcentration Amount for such
Monthly Period.
"Class D Invested Amount" means an amount equal to (a) the initial principal
balance of the Class D Certificates, plus (b) the Class D Incremental Invested
Amount for the related Monthly Period, plus (c) any Additional Class D Invested
Amount, minus (d) the aggregate amount of principal payments made to Class D
Certificateholders prior to such date, minus (e) the aggregate amount of Class
D Investor Charge-Offs for all prior Distribution Dates, equal to the amount by
which the Class D Invested Amount has been reduced to fund the Investor Default
Amount on all prior Distribution Dates minus (f) the aggregate amount of
Reallocated Class D Principal Collections for all prior Distribution Dates,
plus (g) the aggregate amount of Interest Collections and Excess Interest
Collections applied on all prior Distribution Dates for the purpose of
reimbursing amounts deducted pursuant to the foregoing clauses (e) and plus
(f).
"Class D Investor Charge-Off" means the amount by which the Class D Invested
Amount will be reduced by the remaining aggregate Investor Default Amount if
the Available Series Interest Collections amount is not sufficient to cover the
entire Investor Default Amount.
"Class D Investor Default Amount" means the portion of all Defaulted
Receivables in an amount equal to the product of (a) the Class D Floating
Allocation Percentage and (b) the aggregate principal amount of Defaulted
Receivables identified since the prior reporting date.
"Class D Principal" means, beginning on the Transfer Date preceding the Class
D Principal Commencement Date, the amounts that the Trustee, acting in
accordance with instructions from the Servicer, will withdraw from amounts
deposited into the Principal Account in respect of Principal Collections
processed during the related Monthly Period and, to the extent of the Class D
Invested Amount, shall deposit in the Distribution Account for distribution to
the Class D Certificateholders on the next succeeding Distribution Date.
"Class D Principal Payment Commencement Date" means the earlier of (a) the
Distribution Date on which the Class C Invested Amount is paid in full or, if
there are no Principal Collections allocable to the Series 1995-1 Investor
Certificates remaining after payments have been made to the Class C
Certificates on
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such Distribution Date, the Distribution Date following the Distribution Date
on which the Class C Invested Amount is paid in full and (b) the Distribution
Date following a sale or repurchase of the Receivables as set forth in the
Pooling and Servicing Agreement and the 1995-1 Series Supplement.
"Class D Subaccount" means a subaccount of the Excess Funding Account, into
which Principal Collections allocable to Class D Certificates will be deposited
during any Early Amortization Period.
"Closing Date" means December 20, 1995.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral Security" means an assignment of a security interest in the
consumer and commercial products or other assets securing each Receivable.
"Collection Account" means a segregated account established by and maintained
by the Servicer with a Qualified Institution in the name of the Trust, for the
benefit of certificateholders of all Series.
"Collections" means the Principal Collections and Interest Collections.
"Commission" means the Securities and Exchange Commission.
"Companion Series" means one or more other Series with which the Series 1995-
1 Certificates may be paired.
"Controlled Accumulation Amount" means an amount sufficient to amortize the
Class A Invested Amount given the Controlled Accumulation Period Length.
"Controlled Accumulation Period" means unless, a Pay Out Event has occurred,
the period commencing on the Accumulation Period Commencement Date and ending
upon the earliest to occur of (i) the commencement of the Early Amortization
Period, (ii) the Initial Principal Payment Date, (iii) payment to the Investor
Certificateholders of the full Invested Amount, and (iv) the Series 1995-1
Termination Date.
"Controlled Deposit Amount" means, for any Monthly Period, the sum of the (i)
Controlled Accumulation Amount for such Monthly Period plus (ii) the
Accumulation Shortfall for the related Monthly Period.
"Cooperative" means the Euroclear Clearance System, S.C., a Belgian
cooperative corporation.
"Counsel" means Dorsey & Whitney P.L.L.P.
"Cut-off Date" means November 10, 1995.
"DHI Fees" means, with respect to the Floorplan Receivables, the
documentation, handling and inspection fee charged to each Dealer by Green Tree
for each unit financed.
"DOL" means the United States Department of Labor.
"DTC" means The Depository Trust Company.
"DTC Participants" means the participating organizations of DTC.
"Dealer Overconcentration" means, on any Distribution Date with respect to
any Account with a Dealer, the excess of (a) the aggregate amount of Principal
Receivables in such Account on the last day of Monthly Period immediately
preceding such Distribution Date over (b) 2% of the Principal Receivables on
the last day of such immediately preceding Monthly Period. Certain Dealers may
be subject to a higher
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percentage limit with Rating Agency approval, but in no case higher than 3%.
Notwithstanding the above, in the case of such Overconcentration, the
percentage in clause (b) may be increased by the Transferor, without the
consent of any Certificateholder, to a level acceptable to each Rating Agency
without any reduction or withdrawal of its rating of the Class A or Class B
Certificates (but which may involve an adjustment, upward or downward, of the
Class D Invested Amount).
"Dealers" means those dealers, manufacturers and distributors who are
obligated under the Receivables.
"Defaulted Receivables" means the Receivables that will be charged off as
uncollectible in accordance with the Servicer's customary and usual policies.
"Definitive Certificates" means definitive, fully registered Certificates
issued to Certificate Owners pursuant to the Pooling and Servicing Agreement.
"Depositaries" means Cede, Cedel and Euroclear.
"Depository" means the nominee of DTC (together with any successor depository
selected by the Transferor).
"Determination Date" means the second business day preceding each
Distribution Date.
"Discount Factor" means a specified percentage of Principal Collections to be
treated as interest collections. The Discount Factor, if any, may vary from
time to time and initially will be zero.
"Distribution Account" means a non-interest bearing segregated demand deposit
account established by the Trustee with a Qualified Institution for the benefit
of the certificateholders of each Series.
"Distribution Date" means the 13th day of each month, or if such day is not a
business day, the next succeeding business day, beginning January 16, 1996.
"Early Amortization Period" means the period beginning on the date that a Pay
Out Event occurs and ending on the earlier of (i) the date on which the Class A
Invested Amount, the Class B Invested Amount, the Class C Invested Amount and
the Class D Invested Amount have been paid in full and (ii) the Series 1995-1
Termination Date.
"Eligible Account" means as of the relevant Cut-off Date (or, with respect to
Additional Accounts, as of their date of designation for inclusion in the
Trust), an arrangement to provide a revolving extension of credit by Green Tree
or one of its subsidiaries to a Dealer (i) in order to finance the purchase by
a Dealer of consumer and commercial product inventory or (ii) as a line of
credit secured by unencumbered assets of such Dealer, which extension of
credit, as of the date of determination thereof, (a) is in existence and
maintained with Green Tree or such subsidiary, (b) is payable in United States
dollars, (c) is with a Dealer whose most recent billing address is in the
United States or its territories or possessions, (d) has been originated by
Green Tree or such subsidiary in the ordinary course of its business or
acquired by Green Tree through the acquisition of an Eligible Account from
another lender upon satisfying Green Tree's customary underwriting standards
(e) in respect of which no amounts have been charged off by Green Tree or such
subsidiary as uncollectible in its customary and usual manner as of the Cut-off
Date (or, with respect to Additional Accounts, as of their date of designation
for inclusion in the Trust), and (f) is with a Dealer that is not involved in
insolvency proceedings.
"Eligible Portfolio" means all the accounts that were Eligible Accounts at
the Cut-off Date.
"Eligible Receivable" means a Receivable (a) that was originated by Green
Tree or one of its subsidiaries in the ordinary course of business or acquired
by Green Tree through the acquisition of an Eligible Account from another
lender upon satisfying Green Tree's customary underwriting standards, (b) that
has arisen
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under an Eligible Account, (c) that was created in compliance with all
requirements of law applicable thereto and pursuant to a floorplan or asset-
based financing agreement that complies with all requirements of law applicable
thereto, (d) with respect to which all consents, licenses or authorizations of,
or registrations with, any governmental authority required to be obtained or
given by Green Tree or the Transferor in connection with the creation of such
Receivable, or the transfer thereof to the Trust or the execution, delivery,
creation and performance by Green Tree or such subsidiary of the related
floorplan or asset-based financing agreement have been duly obtained or given
and are in full force and effect as of the date of the creation of such
Receivable, (e) as to which, at the time of its creation, the Transferor had
good and marketable title free and clear of all liens and security interests
(other than certain liens permitted pursuant to the Pooling and Servicing
Agreement), and at all times following the transfer of such Receivables to the
Trust, the Trust will have good and marketable title free and clear of all
liens and security interests (other than certain liens permitted pursuant to
the Pooling and Servicing Agreement) or the grant of a first priority security
interest therein, (f) that is the legal, valid, binding and assignable payment
obligation of the related Dealer, legally enforceable against such Dealer in
accordance with its terms (with certain bankruptcy related exceptions), (g)
that constitutes "chattel paper," an "account" or a "general intangible" under
Article 9 of the UCC as then in effect in the State of Minnesota, (h) if such
Receivable has the benefit of a Floorplan Agreement with a Manufacturer, such
Floorplan Agreement provides, subject to the specific terms thereof and any
limitations therein (which may vary among Floorplan Agreements), that the
Manufacturer is obligated to repurchase the products securing the Receivables
upon the Servicer's repossession thereof upon the related Dealer's default, (i)
which has been the subject of a valid transfer and assignment from the
Transferor to the Trust of all the Transferor's interest therein and in the
related Collateral Security (including any proceeds thereof), (j) which at the
time of transfer to the Trust is not subject to any right of rescission,
setoff, or any other defense (including defenses arising out of violations of
usury laws) of the Dealer, (k) as to which, at the time of transfer of such
Receivable to the Trust, Green Tree (or such subsidiary) and the Transferor
have satisfied all their respective obligations with respect to such Receivable
required to be satisfied at such time, (l) as to which, at the time of transfer
of such Receivable to the Trust, neither Green Tree (or such subsidiary) nor
the Transferor has taken or failed to take any action which would impair the
rights of the Trust or the certificateholders therein and (m) which represents
the obligation of a Dealer to repay an advance made to or on behalf of such
Dealer to finance products or the accounts receivable arising from the sale of
such products.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Euroclear" or "Euroclear Operator" means Morgan Guaranty Trust Company of
New York, Brussels, Belgium office as operator of the Euroclear System.
"Euroclear Participants" means participants of the Euroclear System.
Euroclear Participants include banks (including central banks), securities
brokers and dealers and other professional financial intermediaries and may
include the underwriters of any Series of Certificates.
"Euroclear System" means the system created in 1968 to hold securities for
Euroclear Participants and to clear and settle transactions between Euroclear
Participants through simultaneous electronic book-entry delivery against
payment.
"Excess Funding Account" means the segregated account established by and
maintained by the Servicer in the name of the Trust with a Qualified
Institution for the benefit of the certificateholders of all Series.
"Excess Interest Collections" means Interest Collections allocable to any
Series in excess of the amounts necessary to make required payments with
respect to such Series.
"Exchange" means a transaction whereby the Transferor may tender the
Exchangeable Transferor Certificate or, if provided in the relevant Supplement,
certificates comprising any Series and the Exchangeable Transferor Certificate,
to the Trustee in exchange for certificates comprising one or more new Series
and a reissued Exchangeable Transferor Certificate.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchangeable Transferor Certificate" means a certificate representing the
Transferor's interest in the Trust, which shall be the remaining undivided
interest in the Trust not represented by the Certificates and any other
investor certificates issued by the Trust.
"FDIC" means the United States Federal Deposit Insurance Corporation.
"Final Regulation" means the final regulation issued by the DOL concerning
the definition of what constitutes the "plan assets" of an employee benefit
plan subject to Title I of ERISA or Section 4975 of the Code, or an IRA.
"Finance Charge Collections" means, for any business day, the aggregate of
(a) all collections on the Receivables with respect to interest or other fees,
(b) investment earnings on amounts on deposit in all Trust Accounts on such
business day and (c) Recoveries.
"Fixed/Floating Allocation Percentage" means for a Series the percentage
equivalent of a fraction, the numerator of which is the Class A Invested
Amount, the Class B Invested Amount, the Class C Invested Amount or the Class D
Invested Amount, respectively, at the end of the last day of the Revolving
Period and the denominator of which is the greater of (a) the Pool Balance
(plus amounts, if any, on deposit in the Excess Funding Account) at the end of
the preceding business day and (b) the sum of the numerators used to calculate
the allocation percentages with respect to Principal Collections for all
Series.
"Floating Allocation Percentage" means for a Series on any business day, the
percentage equivalent of a fraction, the numerator of which is the Class A
Invested Amount, the Class B Invested Amount, the Class C Invested Amount, or
the Class D Invested Amount, respectively, at the end of the preceding business
day and the denominator of which is the greater of (a) the Pool Balance (plus
amounts, if any, on deposit in the Excess Funding Account) as of the end of the
preceding business day and (b) with respect to Principal Collections only, the
sum of the numerator for all classes of all Series then outstanding used to
calculate the applicable allocation percentage.
"Floorplan Agreement" means the agreement Green Tree enters into with a
Manufacturer providing financing for products for Dealers.
"Floorplan Receivables" represent extensions of credit to finance product
inventory for dealers, and are secured by the related dealer's product
inventory.
"Foreign Person" means any person other than (i) a citizen or resident of the
United States, (ii) a corporation, partnership or other entity organized in or
under the laws of the United States or any political subdivision thereof or
(iii) an estate or trust the income of which is includible in gross income for
U.S. federal income tax purposes, regardless of its source.
"Global Securities" means the globally offered Floorplan Receivable Trust
Certificates, Series 1995-1.
"Green Tree" means Green Tree Financial Corporation.
"Holders" means the holders of record of the Class A, Class B, Class C and
Class D Certificates.
"Free Flooring Period" means a period during which no interest or finance
charges accrue on a Dealer's account.
"Imputed Yield Collections" means the specified percentage of Principal
Collections which the Transferor elects to be treated as interest collections.
"Independent Director" means a person who is not now, and has never been, a
director or officer of, employed by, or the holder of any beneficial economic
interest in any Affiliate of the Transferor, and who may at no time hold any
beneficial or economic interest in the Transferor.
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"Indirect Participants" means securities brokers and dealers, banks, and
trust companies that have an indirect access to the DTC system and that clear
through or maintain a custodial relationship with a Participant, either
directly or indirectly.
"Ineligible Receivable" means any Receivable that does not satisfy the
definition of Eligible Receivable.
"Initial Invested Amount" means, with respect to any Series of Certificates,
the amount stated in the related Supplement.
"Initial Principal Payment Date" means initially the December 1997
Distribution Date, but will successively and automatically be extended to the
next Distribution Date after the then-current Initial Principal Payment Date
unless the Servicer elects not to so extend; provided that the Initial
Principal Payment Date may not be later than the Class A Scheduled Payment
Date.
"Insolvency Event" means the event whereby, pursuant to certain provisions of
federal law, the Transferor voluntarily enters liquidation or a trustee in
bankruptcy is appointed for the Transferor.
"Insolvency Laws" means the United States Bankruptcy Code or similar
applicable state laws.
"Interest Accrual Period" means, with respect to a Distribution Date, the
period during which interest will accrue from and including the preceding
Distribution Date (or, in the case of the first Distribution Date, from and
including the Closing Date) to but excluding such Distribution Date.
"Interest Collections" for any business day means the sum of (A) all Finance
Charge Collections and (B) all Imputed Yield Collections (if a Discount Factor
is then in effect) for such business day.
"Interest Free Period" means a period during which no interest or finance
charges accrue on a Dealer's account.
"Interest Funding Account" means a segregated trust account (which need not
be a deposit account) established and maintained by the Trustee with a
Qualified Institution in the name of the Trust, for the benefit of the
Certificateholders.
"Interest Receivables" means, with respect to any Account, all amounts billed
to the related Dealer in respect of interest and all other non-principal
charges, plus any Imputed Yield Receivables.
"Invested Amount" means the sum of the Class A Invested Amount, the Class B
Invested Amount, the Class C Invested Amount and the Class D Invested Amount.
"Investment Company Act" means the Investment Company Act of 1940, as amended
from time to time.
"Investor Default Amount" means a portion of all Defaulted Receivables which
will be allocated to the Certificateholders in an amount equal to the product
of the Floating Allocation Percentage applicable during the related Monthly
Period and the Principal Amount of Defaulted Receivables for such Monthly
Period.
"IRA" means an individual retirement account.
"IRS" means the Internal Revenue Service.
"LIBOR" for any Interest Accrual Period is described under "Description of
the Offered Certificates-- Interest Payments."
"LIBOR Determination Date" means, for any Interest Accrual Period following
the initial Interest Accrual Period, the second business day prior to the
commencement of the second and each subsequent Interest Accrual Period. With
respect to the initial Interest Accrual Period, the Trustee will determine
LIBOR on December 18, 1995 for the period from December 20, 1995 through
January 15, 1996.
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"Manufacturer" means the manufacturer, distributor or vendor of products for
sale or lease to Dealers in the ordinary course of business.
"Manufacturer Overconcentration" means, on any Distribution Date, the excess
of (a) the aggregate of all amounts of Principal Receivables in Accounts
created pursuant to Floorplan Agreements with a single Manufacturer on the last
day of the Monthly Period immediately preceding such Distribution Date over (b)
15% of the Principal Receivables on the last day of such immediately preceding
Monthly Period. Notwithstanding the above, in the case of each such
Overconcentration, the percentage in clause (b) for such Overconcentration may
be increased by the Transferor, without the consent of any Certificateholder,
to a level acceptable to each Rating Agency without any reduction or withdrawal
of its rating of the Class A or Class B Certificates (but which may involve an
adjustment, upward or downward, of the Class D Invested Amount).
"Minimum Transferor Interest" means, as of any date of determination, the sum
of the product for each Series of (i) the Minimum Transferor Percentage for
such Series, times (ii) the Invested Amount for such Series.
"Minimum Transferor Percentage" is 4% with respect to the Series 1995-1
Certificates.
"Monthly Payment Rate" means, for any Monthly Period, the percentage
equivalent of a fraction, the numerator of which is the aggregate of the
Receivables balances (without deducting therefrom the discount portion, if any)
collected during such Monthly Period and the denominator of which is the
average daily aggregate Receivables balance (without deducting therefrom the
discount portion, if any) for such Monthly Period.
"Monthly Period" means the period from and including the first day of each
calendar month to and including the last day of such calendar month.
"Monthly Servicing Fee" means the portion of the servicing fee allocable to
the Certificateholders' Interest during each Monthly Period, which will be
equal to one-twelfth of the product of (x) the Servicing Fee Rate per annum and
(y) the Invested Amount on the preceding Record Date or, in the case of the
first Distribution Date, the initial principal amount of the Certificates.
"Moody's" means Moody's Investors Service, Inc., or any successor thereto.
"Negative Carry Amount" means the difference between the amount of interest
actually earned on investments in the Excess Funding Account on any day and the
amount of interest that would have been earned on such investments at the Base
Rate on such day.
"Net Receivables Rate" means for a Distribution Date (i) the weighted average
of the interest rates borne by the Receivables during the second preceding
Monthly Period (because interest payments on the Receivables at such rates will
be due and payable in the Monthly Period preceding such Distribution Date),
plus (ii) the product of (x) the Monthly Payment Rate for the Monthly Period
preceding such Distribution Date, the (y) Discount Factor, if any, for such
Distribution Date and (z) twelve, less 2% per annum, unless the Servicing Fee
has been waived for such Monthly Period.
"New Issuance" means one or more new Series of Certificates that the
Transferor may cause the Trustee to issue pursuant to any one or more
Supplements to the Pooling and Servicing Agreement.
"Offered Certificates" means the Class A Certificates and the Class B
Certificates.
"OID" means original issue discount.
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"Overconcentration Amount" means on each Distribution Date, the aggregate
principal amount of Receivables in the Trust on such Distribution Date which
are Asset-Based Receivable Overconcentrations, Dealer Overconcentrations,
Manufacturer Overconcentrations and Product Line Overconcentrations.
"Participants" means the participating organizations of DTC.
"Pay Out Event" is described under "Description of the Offered Certificates--
Pay Out Event."
"Paying Agent" means the agent making payments to the Certificateholders.
"Permitted Lien" means, with respect to the Receivables, (i) liens in favor
of the Transferor created pursuant to the Purchase Agreement assigned to the
Trustee pursuant to the Pooling and Servicing Agreement; (ii) liens in favor of
the Trustee pursuant to Pooling and Servicing Agreement; and (iii) liens which
secure the payment of taxes, assessments and governmental charges or levies, if
such taxes are either (a) not delinquent or (b) being contested in good faith
by appropriate legal or administrative proceedings and as to which adequate
reserves in accordance with generally accepted accounting principles shall have
been established.
"Pool Balance" means the product of (i) the total amount of Principal
Receivables and (ii) one minus the Discount Factor.
"Pooling and Servicing Agreement" means the Pooling and Servicing Agreement,
dated as of
December 1, 1995, among the Transferor, the Servicer, and the Trustee, as
supplemented or amended in accordance with its terms. Unless the context
requires otherwise, the term "Pooling and Servicing Agreement" refers to the
Pooling and Servicing Agreement as supplemented by the 1995-1 Series
Supplement.
"Portfolio Yield" means, with respect to any Monthly Period, the annualized
percentage equivalent of a fraction, the numerator of which is the sum of the
aggregate amount of Available Series Interest Collections for such Monthly
Period, calculated on a cash basis, minus the aggregate Investor Default Amount
for such Monthly Period, and the denominator of which is the average daily
Invested Amount during the preceding Monthly Period.
"Presold" means the financing program offered by Green Tree to dealers
through which floorplan financing is provided to a dealer on units for which
Green Tree has already approved a retail financing contract for sale to a
customer.
"Principal Account" means a segregated trust account (which need not be a
deposit account) established and maintained by the Trustee with a Qualified
Institution in the name of the Trust, for the benefit of the
Certificateholders.
"Principal Collections" means all Collections other than Interest
Collections.
"Principal Funding Investment Shortfall" means, for any day, the difference
between the amount of interest actually earned on investments in the Principal
Account on any day and the amount of interest that would have been earned on
such investments at the Base Rate for such day.
"Principal Investment Proceeds" means investment earnings (net of investment
losses and expenses) on funds on deposit in the Principal Account during the
Controlled Accumulation Period.
"Principal Receivables" means, with respect to an Account, amounts shown on
the Servicer's records as Receivables (other than such amounts that represent
Interest Receivables, Defaulted Receivables or interest payable by the related
Dealer).
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"Principal Shortfalls" means the amounts representing scheduled or permitted
principal distributions to certificateholders and deposits to principal funding
accounts, if any, for any Series that have not been covered out of the
Principal Collections allocable to such Series and certain other amounts.
"Principal Terms" means certain terms, with respect to any newly issued
Series, including: (i) its name or designation; (ii) its initial invested
amount (or method for calculating such amount); (iii) its certificate rate (or
the method of allocating interest payments or other cash flows to such Series);
(iv) the closing date; (v) the rating agency or agencies, if any, rating the
Series; (vi) the interest payment date or dates and the date or dates from
which interest shall accrue; (vii) the name of the clearing agency, if any;
(viii) the method for allocating collections to certificateholders of such
Series with respect to Principal Collections, Interest Collections, and
Defaulted Receivables and the method by which the principal amount of such
Series will amortize or accrue; (ix) the names of any accounts to be used by
such Series and the terms governing the operation of any such accounts; (x) the
percentage used to calculate monthly servicing fees; (xi) the Minimum
Transferor Interest; (xii) the credit enhancement provider, if applicable, and
the terms of any credit enhancement with respect to such Series; (xiii) the
base rate applicable to such Series; (xiv) the terms on which the certificates
of such Series may be repurchased or remarketed to other investors; (xv) the
termination date of such Series; (xvi) any deposit into any account provided
for such Series; (xvii) the number of classes of such Series and, if more than
one class, the rights and priorities of each such class; (xviii) the fees, if
any, to be included in funds available to certificateholders in such Series;
(xix) the subordination, if any, of such new Series with respect to any other
Series; (xx) the rights, if any, of the holder of the Exchangeable Transferor
Certificate that have been transferred to the holders of such Series; (xxi)
whether such Series will be part of a group or subject to being paired with any
other prefunded Series; (xxii) whether such Series will be prefunded; and
(xxiii) any other relevant terms, including whether or not such Series will be
pledged as collateral for an issuance of any other securities, including
commercial paper.
"Product Line Overconcentration" on any Distribution Date means the excess of
(a) the aggregate of all amounts of Principal Receivables in the Accounts that
represent financing for a single product line (other than Asset-Based
Receivables and Receivables that represent financing for manufactured housing)
on the last day of the Monthly Period immediately preceding such Distribution
Date over (b) 5% for marine products, 5% for recreational vehicles, and 5% for
any other products in total, of the Principal Receivables on the last day of
such immediately preceding Monthly Period. Notwithstanding the above, in the
case of each such Overconcentration, the percentage in clause (b) for such
Overconcentration may be increased by the Transferor, without the consent of
any Certificateholder, to a level acceptable to each Rating Agency without any
reduction or withdrawal of its rating of the Class A or Class B Certificates
(but which may involve an adjustment, upward or downward, of the Class D
Invested Amount).
"Purchase Agreement" means the Receivables Purchase Agreement dated as of
December 1, 1995, between the Transferor and Green Tree Financial Corporation.
"Qualified Institution" means a depository institution or trust company,
which may include the Trustee, organized under the laws of the United States or
any one of the states thereof, which at all times has a certificate of deposit
rating of P-1 by Moody's and of A-1+ by Standard & Poor's or long-term
unsecured debt obligation (other than such obligation the rating of which is
based on collateral or on the credit of a person other than such institution or
trust company) rating of Aaa by Moody's and of AAA by Standard & Poor's and
deposit insurance provided by the FDIC, or a depository institution, which may
include the Trustee, which is acceptable to the Rating Agencies; provided,
however, that no such rating shall be required of an institution which shall
have corporate trust powers and which maintains the Collection Account, any
principal account, any interest funding account or any other account maintained
for the benefit of Certificateholders as a fully segregated trust account with
the trust department of such institution which is rated at least Baa3 by
Moody's.
"Rating Agency" means each of Standard & Poor's and Moody's.
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"Reallocated Class B Principal Collections" is described in "--Description of
the Certificates--Reallocated Principal Collections."
"Reallocated Class C Principal Collections" is described in "--Description of
the Certificates--Reallocated Principal Collections."
"Reallocated Class D Principal Collections" is described in "--Description of
the Certificates--Reallocated Principal Collections."
"Reallocated Principal Collections" means the sum of Reallocated Class D
Principal Collections, Reallocated Class C Principal Collections and
Reallocated Class B Collections.
"Receivables" means, with respect to an Account, all amounts payable
(including interest, finance charges and other charges), and the obligation to
pay such amounts, by the related Dealer from time to time in respect of
advances made by Green Tree to or on behalf of such Dealer in connection with
the Floorplan Business or the Asset Based Lending Business, as the case may be,
together with the group of writings evidencing such amounts and the security
interest created in connection therewith and all of the rights, remedies,
powers and privileges thereunder (including under the related Financing
Agreement). Receivables which become Defaulted Receivables will cease to be
included as Receivables on the day on which they become Defaulted Receivables.
Receivables which Green Tree is unable to transfer to the Transferor pursuant
to the Purchase Agreement or which the Transferor is unable to transfer to the
Trust as provided in the Pooling and Servicing Agreement and Receivables which
arise in Designated Accounts from and after the related Removal Commencement
Date shall not be included in calculating the amount of Receivables.
"Record Date" means, with respect to any Distribution Date, the third
business day preceding such Distribution Date, except that, with respect to any
Definitive Certificates, Record Date shall mean the fifth day of the then
current Monthly Period.
"Recoveries" means any amounts received by the Servicer with respect to
Receivables that were previously charged off as uncollectible in accordance
with the Servicer's customary and usual servicing procedures.
"Reference Banks" means four major banks in the London interbank market
selected by the Servicer to determine and provide LIBOR on the basis of
quotations of the offered rates for one-month United States dollar deposits
following the LIBOR Determination Date.
"Removal Date" means, with respect to the Transferor's removal from the Trust
of Eligible Accounts, the Determination Date on which such removal will occur.
"Removal Notice" means, with respect to the Transferor's removal from the
Trust of Eligible Accounts, the written notice furnished to the Trustee, any
credit enhancement provider and each Rating Agency specifying the Removal Date
of such Removed Accounts.
"Removed Accounts" means the Accounts that were removed from the Trust, as
identified on a computer file, microfiche list or other list furnished by the
Transferor to the Trustee.
"Required Amount" means on the first business day following a Monthly Period,
the amount, if any, by which the full amount to be paid pursuant to clauses
(i)-(xi) in "Description of the Offered Certificates--Payments of Fees,
Interest, and Other Items" for such prior Monthly Period exceeds the portion of
the Available Series Interest Collections applied to the payment of the amounts
described in such clauses for such prior Monthly Period.
"Revolving Period" with respect to Series 1995-1 means the period from and
including the Closing Date to, but not including, the earlier of (a) the
Initial Principal Payment Date, (b) the commencement of the Controlled
Accumulation Period and (c) the commencement of the Early Amortization Period.
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"SAU" means "sold and unpaid" and refers to inventory that the Dealer has
sold without immediate repayment to Green Tree.
"SAU/NSF" means an account that is deemed delinquent when (i) there is an
unpaid receivable balance as to which the related product has been sold and
such receivable balance has not been paid by the related Dealer or (ii) a
payoff check from the related Dealer has been returned because of insufficient
funds.
"Securities Act" means the Securities Act of 1933, as amended.
"Series" means any series of certificates issued by the Trust pursuant to a
Supplement, including the 1995-1 Series Supplement.
"Series Allocation Percentage" means, on any date of determination, the
percentage equivalent of a fraction the numerator of which is the Invested
Amount of such Series and the denominator of which is the sum of the Invested
Amounts of all Series then outstanding.
"Series Available Interest Collections" means the amount of the Floating
Allocation Percentage of Interest Collections available in the Collection
Account.
"Series Issuance Date" means the date of issuance of any other Series.
"Series 1995-1" means the Offered Certificates, the Class C Certificates and
the Class D Certificates.
"Series 1995-1 Supplement" means the Supplement, dated as of December 1,
1995, among the Transferor, the Servicer and the Trustee, relating to the
Series 1995-1 Certificates.
"Series 1995-1 Closing Date" means December 20, 1995.
"Series 1995-1 Termination Date" means the earlier of (i) the date in which
the final distribution of principal and interest on the Certificates is made
and (ii) the December 2000 Distribution Date.
"Service Transfer" means, in the event of a Servicer Default, the termination
of all rights and obligations of the Servicer as servicer under the Pooling and
Servicing Agreement and in and to the Receivables and the proceeds thereof and
the appointment by the Trustee of a new Servicer.
"Servicer" means Green Tree Financial Corporation or an Affiliate or
successor of Green Tree Financial Corporation, and any replacement Servicer as
provided in the Pooling and Servicing Agreement.
"Servicer Default" means any of the following events: (i) failure by the
Servicer to make any payment, transfer, or deposit, or to give instructions to
the Trustee to make certain payments, transfers, or deposits
within five business days after the date the Servicer is required to do so
under the Pooling and Servicing Agreement or any Supplement; provided, however,
that any such failure caused by a nonwillful act of the Servicer shall not
constitute a Servicer Default if the Servicer promptly remedies such failure
within five business days after receiving notice of such failure or otherwise
becoming aware of such failure; (ii) failure on the part of the Servicer duly
to observe or perform in any respect any other covenants or agreements of the
Servicer which has a material adverse effect on the certificateholders of any
Series then outstanding and which continues unremedied for a period of 60 days
after written notice of such failure, requiring the same to be remedied, shall
have been given to the Servicer by the Trustee, or to the Servicer and the
Trustee by holders of Certificates evidencing undivided interests aggregating
not less than 50% of the Invested Amount of any Series materially adversely
affected thereby and continues to have a material adverse effect on the
certificateholders of any Series then outstanding for such period; or the
delegation by the Servicer of its duties under the Pooling and Servicing
Agreement, except as specifically permitted thereunder; (iii) any
representation, warranty, or certification made by the Servicer in the Pooling
and Servicing Agreement, or in any certificate delivered pursuant to the
Pooling and Servicing Agreement, proves to have been incorrect
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when made which has a material adverse effect on the certificateholders of any
Series then outstanding, and which continues to be incorrect in any material
respect for a period of 60 days after written notice of such failure, requiring
the same to be remedied, shall have been given to the Servicer by the Trustee,
or to the Servicer and Trustee by the holders of Certificates evidencing
undivided interests aggregating not less than 50% of the Invested Amount of any
Series materially adversely affected thereby and continues to have a material
adverse effect on such certificateholders for such period; or (iv) the
occurrence of certain events of bankruptcy, insolvency, or receivership of the
Servicer.
"Servicing Fee Rate" means 2.00% per annum.
"Servicing Compensation" means the Monthly Servicing Fee and certain other
amounts (as specified in the Pooling and Servicing Agreement and the Series
Supplement) which the Servicer will receive from the Trust.
"Shared Principal Collections" means the amount of Principal Collections for
any business day allocated by the Servicer to the Class A, Class B and Class C
Certificateholders' Interest (other than amounts allocated to the Transferor
Retained Class) remaining after covering required deposits or payments to the
Certificateholders and any similar amount remaining for any other Series.
"Standard & Poor's" means Standard & Poor's Rating Services, a Division of
The McGraw-Hill Companies, Inc., or any successor thereto.
"Supplement" means any supplement to the Pooling and Servicing Agreement.
"Supplemental Certificate" means a second certificate issued in addition to a
newly issued Exchangeable Transferor Certificate which was exchanged for an
Exchangeable Transferor Certificate.
"Terms and Conditions" means the Terms and Conditions Governing Use of
Euroclear and the related Operating Procedures of the Euroclear System and
applicable Belgian law which govern securities clearance accounts and cash
accounts within the Euroclear System.
"Transfer Agent and Registrar" means the transfer agent and registrar, which
initially will be the Trustee.
"Transfer Date" means, with respect to any Series, the business day
immediately prior to the Distribution Date on which the Servicer may make
deposits and payments.
"Transfer Deposit Amount" means, on any date on which a reassignment of an
Ineligible Receivable is to occur, the amount of the deposit by the Transferor
into the Collection Account in immediately available funds, equal to the amount
by which the Transferor Interest is less than the Minimum Transferor Interest.
"Transferor" means Green Tree Floorplan Funding Corp.
"Transferor Interest" means the Transferor's right to the assets of the Trust
not allocated to the Series 1995-1 Certificateholders' interest or the interest
of the holders of certificates of any future Series pursuant to the Pooling and
Servicing Agreement and applicable Supplements.
"Transferor Interest Collections" means, on any business day, the Series
Allocation Percentage of the Interest Collections allocable to the Transferor
Interest for such business day.
"Transferor Percentage" (a) when used with respect to Principal Collections
during the Revolving Period and Interest Collections and the amount of
Defaulted Receivables at all times, 100% minus the sum of the Floating
Allocation Percentage and the floating allocation percentages for all other
Series and (b) when used with respect to Principal Collections during the
Controlled Accumulation Period or Early Amortization Period, 100% minus the sum
of the Fixed/Floating Allocation Percentage and the allocation percentages used
with respect to Principal Collections for all other Series.
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"Transferor Retained Class" means any class of investor certificates of any
Series that the Transferor is initially required to retain pursuant to the
terms of any Supplement.
"Trust" means the Green Tree Floorplan Receivables Master Trust.
"Trust Accounts" means the Interest Funding Account, the Principal Account,
the Distribution Account, the Collection Account, the Excess Funding Account
and the Class D Subaccount of the Excess Funding Account.
"Trust Portfolio" means the Receivables conveyed to the Trust that arise in
Accounts selected from Green Tree's portfolio of accounts on the basis of
criteria set forth in the Pooling and Servicing Agreement and the 1995-1 Series
Supplement as applied on the Cut-off Date and, with respect to Additional
Accounts, as of the related date of their designation.
"Trust Termination Date" means the date in which the Trust will terminate on
the earlier of (a) the day after the Distribution Date following the date on
which funds shall have been deposited in the Distribution Account for the
payment to certificateholders outstanding sufficient to pay in full the
aggregate investor interest of all Series outstanding plus interest thereon at
the applicable certificate rates to the next Distribution Date and (b) a date
which shall not be later than December 20, 2025, or (c) if the Receivables are
sold, disposed of or liquidated following the occurrence of an Insolvency
Event, immediately following such sale, disposition or liquidation, unless the
Servicer and the holder of the Exchangeable Transferor Certificate instruct the
Trustee otherwise.
"Trustee" means Norwest Bank Minnesota, National Association.
"UCC" means the Uniform Commercial Code, as amended from time to time, as in
effect in the applicable jurisdiction.
"U.S. Person" means (i) a citizen or resident of the United States, (ii) a
corporation or partnership organized in or under the laws of the United States
or any political subdivision thereof or (iii) an estate or trust the income of
which is includible in gross income for United States tax purposes, regardless
of its source.
"Underwriters" means Merrill Lynch, Pierce, Fenner & Smith Incorporated and
Bear, Stearns & Co. Inc.
"Underwriting Agreement" means the underwriting agreement dated December 14,
1995, among the Transferor, Green Tree and the Underwriters.
112
<PAGE>
ANNEX
GLOBAL CLEARANCE SETTLEMENT AND TAX DOCUMENTATION PROCEDURES
Except in certain limited circumstances, the globally offered Floating Rate
Floorplan Receivable Trust Certificates, Series 1995-1 (the "Global
Securities") will be available only in book-entry form. Investors in the Global
Securities may hold such Global Securities through any of The Depository Trust
Company ("DTC"), Cedel or Euroclear. The Global Securities will be tradeable as
home market instruments in both the European and U.S. domestic markets. Initial
settlement and all secondary trades will settle in same-day funds.
Secondary market trading between investors holding Global Securities through
Cedel and Euroclear will be conducted in the ordinary way in accordance with
their normal rules and operating procedures and in accordance with conventional
eurobond practice (i.e., seven calendar day settlement).
Secondary market trading between investors holding Global Securities through
DTC will be conducted according to the rules and procedures applicable to U.S.
corporate debt obligations.
Secondary cross-market trading between Cedel or Euroclear and DTC
Participants holding Certificates will be effected on a delivery-against-
payment basis through the respective Depositaries of Cedel and Euroclear (in
such capacity) and as DTC Participants.
Non-U.S. holders (as described below) of Global Securities will be subject to
U.S. withholding taxes unless such holders meet certain requirements and
deliver appropriate U.S. tax documents to the securities clearing organizations
or their participants.
INITIAL SETTLEMENT
All Global Securities will be held in book-entry form by DTC in the name of
Cede & Co. as nominee of DTC. Investors' interests in the Global Securities
will be represented through financial institutions acting on their behalf as
direct and indirect Participants in DTC. As a result, Cedel and Euroclear will
hold positions on behalf of their participants through their respective
Depositaries, which in turn will hold such positions in accounts as DTC
Participants.
Investors electing to hold their Global Securities through DTC will follow
the settlement practices applicable to conventional credit card certificate
issues. Investor securities custody accounts will be credited with their
holdings against payment in same-day funds on the settlement date.
Investors electing to hold their Global Securities through Cedel or Euroclear
accounts will follow the settlement procedures applicable to conventional
eurobonds, except that there will be no temporary global security and no "lock-
up" or restricted period. Global Securities will be credited to the securities
custody accounts on the settlement date against payment in the same-day funds.
SECONDARY MARKET TRADING
Since the purchaser determines the place of delivery, it is important to
establish at the time of the trade where both the purchaser's and Transferor's
accounts are located to ensure that settlement can be made on the desired value
date.
Trading between DTC Participants. Secondary market trading between DTC
Participants will be settled using the procedures applicable to conventional
credit card certificate issues in same-day funds.
A-1
<PAGE>
Trading between Cedel and/or Euroclear Participants. Secondary market trading
between Cedel Participants or Euroclear Participants will be settled using the
procedures applicable to conventional eurobonds in same-day funds.
Trading between DTC Transferor and Cedel or Euroclear purchaser. When Global
Securities are to be transferred from the account of a DTC Participant to the
accounts of a Cedel Participant or a Euroclear Participant, the purchaser will
send instructions to Cedel or Euroclear through a Cedel Participant or
Euroclear Participant at least one business day prior to settlement. Cedel or
Euroclear will instruct the respective Depositary, as the case may be, to
receive the Global Securities against payment. Payment will include interest
accrued on the Global Securities from and including the last coupon payment
date to and excluding the settlement date, on the basis of actual days elapsed
and a 360 day year. Payment will then be made by the respective Depositary to
the DTC Participant's account against delivery of the Global Securities. After
settlement has been completed, the Global Securities will be credited to the
respective clearing system and by the clearing system, in accordance with its
usual procedures, to the Cedel Participant's or Euroclear Participant's
account. The Global Securities credit will appear the next day (European time)
and the cash debit will be bad-valued to, and the interest on the Global
Securities will accrue from, the value date (which would be the preceding day
when settlement occurred in New York). If settlement is not completed on the
intended value date (i.e., the trade fails), the Cedel or Euroclear cash debit
will be valued instead as of the actual settlement date.
Cedel Participants and Euroclear Participants will need to make available to
the respective clearing systems the funds necessary to process De-day funds
settlement. The most direct means of doing so is to pre-position funds for
settlement, either from cash on hand or existing lines of credit, as they would
for any settlement occurring within Cedel or Euroclear. Under this approach,
they may take on credit exposure to Cedel or Euroclear until the Global
Securities are credited to their accounts one day later.
As an alternative, if Cedel or Euroclear has extended a line of credit to
them, Cedel Participants or Euroclear Participants can elect not to preposition
funds and allow that credit line to be drawn upon the finance settlement. Under
this procedure, Cedel Participants or Euroclear Participants purchasing Global
Securities would incur overdraft charges for one day, assuming they cleared the
overdraft when the Global Securities were credited to their accounts. However,
interest on the Global Securities would accrue form the value date. Therefore,
in many cases the investment income on the Global Securities earned during that
one-day period may substantially reduce or offset the amount of such overdraft
charges, although this result will depend on each Cedel Participant's or
Euroclear Participant's particular cost of funds.
Since the settlement is taking place during New York business hours, DTC
Participants can employ their usual procedures for sending Global Securities to
the respective Depositary for the benefit of Cedel Participants or Euroclear
Participants. The sale proceeds will be available to the DTC Transferor on the
settlement date. Thus, to the DTC Participants a cross-market transaction will
settle no differently than a trade between two DTC Participants.
Trading between Cedel or Euroclear Transferor and DTC purchaser. Due to time
zone differences in their favor, Cedel Participants and Euroclear Participants
may employ their customary procedures for transactions in which Global
Securities are to be transferred by the respective clearing system, through the
respective Depositary, to a DTC Participant. The Transferor will send
instructions to Cedel or Euroclear through a Cedel Participant or Euroclear
Participant at least one business day prior to settlement. In these cases,
Cedel or Euroclear will instruct the respective Depositary, as appropriate, to
deliver the bonds to the DTC Participant's account against payment. Payment
will include interest accrued on the Global Securities from and including the
last coupon payment date to and excluding the settlement date on the basis of
actual days elapsed and a 360 day year. The payment will then be reflected in
the account of the Cedel Participant or Euroclear Participant the following
day, and receipt of the cash proceeds in the Cedel Participant's or Euroclear
Participant's account would be back-valued to the value date (which would be
the
A-2
<PAGE>
preceding day, when settlement occurred in New York). Should the Cedel
Participant or Euroclear Participant have a line of credit with its respective
clearing system and elect to be in debt in anticipation of receipt of the sale
proceeds in its account, the back-valuation will extinguish any overdraft
charges incurred over that one-day period. If settlement is not completed on
the intended value date (i.e., the trade fails), receipt of the cash proceeds
in the Cedel Participant's or Euroclear Participant's account would instead be
valued as of the actual settlement date.
Finally, day traders that use Cedel or Euroclear and that purchase Global
Securities from DTC Participants for delivery to Cedel Participants or
Euroclear Participants should note that these trades would automatically fail
on the sale side unless affirmative action were taken. At least three
techniques should be readily available to eliminate this potential problem:
(a) borrowing through Cedel or Euroclear for one day (until the purchase
side of the day trade is reflected in their Cedel or Euroclear accounts) in
accordance with the clearing system's customary procedures;
(b) borrowing the Global Securities in the U.S. from a DTC Participant no
later than one day prior to settlement, which would give the Global
Securities sufficient time to be reflected in their Cedel or Euroclear
account in order to settle the sale side of the trade; or
(c) staggering the value dates for the buy and sell sides of the trade so
that the value date for the purchase form the DTC Participant is at least
one day prior to the value date for the sale to the Cedel Participant or
Euroclear Participant.
CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS
A beneficial owner of Global Securities holding securities through Cedel or
Euroclear (or through DTC if the holder has an address outside the U.S.) will
be subject to the 30% U.S. withholding tax that generally applies to payments
of interest (including original issue discount) on registered debt issued by
U.S. Persons, unless (i) each clearing system, bank or other financial
institution that holds customers' securities in the ordinary course of its
trade or business in the chain of intermediaries between such beneficial owner
and the U.S. entity required to withhold tax complies with applicable
certification requirements and (ii) such beneficial owner takes one of the
following steps to obtain an exemption or reduced tax rate:
Exemption for non-U.S. Persons (Form W-8). Beneficial owners of Certificates
that are non-U.S. Persons can obtain a complete exemption from the withholding
tax by filing a signed Form W-8 (Certificate of Foreign Status) and a
certificate under penalties of perjury (the "Tax Certificate") that such
beneficial owner is (i) not a controlled foreign corporation (within the
meaning of Section 957(a) of the Code) that is related (within the meaning of
Section 864(d)(4) of the Code) to the Trust or the Transferor and (ii) not a 10
percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of
the Trust or the Transferor. If the information shown on Form W-8 or the Tax
Certificate changes, a new Form W-8 or Tax Certificate, as the case may be,
must be filed within 30 days of such change.
Exemption for non-U.S. Persons with effectively connected income (Form 4224).
A non-U.S. Person, including a non-U.S. corporation or bank with a U.S. branch,
for which the interest income is effectively connected with its conduct of a
trade or business in the United States, can obtain an exemption from the
withholding tax by filing Form 4224 (Exemption from Withholding of Tax on
Income Effectively Connected with the Conduct of a Trade or Business in the
United States).
Exemption or reduced rate for non-U.S. persons resident in treaty countries
(Form 1001). Non-U.S. Persons that are Certificate Owners residing in a country
that has a tax treaty with the United States can obtain an exemption or reduced
tax rate (depending on the treaty terms) by filing Form 1001 (Ownership,
Exemption or Reduced Rate Certificate). If the treaty provides only for a
reduced rate, withholding tax will be imposed at that rate unless the filer
alternatively files Form W-8. Form 1001 may be filed by the Certificate Owner
or his agent.
A-3
<PAGE>
Exemption for U.S. Persons (Form W-9). U.S. Persons can obtain a complete
exemption from the withholding tax by filing Form W-9 (Payer's Request for
Taxpayer Identification Number and Certification).
U.S. Federal Income Tax Reporting Procedure. The Certificate Owner of a
Global Security or, in the case of a Form 1001 or a Form 4224 filer, his agent,
files by submitting the appropriate form to the person through whom it holds
(the clearing agency, in the case of persons holding directly on the books of
the clearing agency). Form W-8 and Form 1001 are effective for three calendar
years and Form 4224 is effective for one calendar year.
The term "U.S. Person" means (i) a citizen or resident of the United States,
(ii) a corporation or partnership organized in or under the laws of the United
States or any political subdivision thereof or (iii) an estate or trust the
income of which is includible in gross income for United States tax purposes,
regardless of its source. This summary does not deal with all aspects of U.S.
Federal income tax withholding that may be relevant to foreign holders of the
Global Securities. Investors are advised to consult their own tax advisors for
specific tax advice concerning their holding and disposing of the Global
Securities.
A-4
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE INFORMATION
OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PRO-
SPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE TRANSFEROR OR THE UNDERWRITERS.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UN-
DER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF GREEN TREE FINANCIAL CORPORATION, GREEN TREE FLOORPLAN FUNDING
CORP. OR THE RECEIVABLES SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT CON-
STITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY STATE IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SO-
LICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Reports to Certificateholders.............................................. 2
Available Information...................................................... 2
Other Information.......................................................... 2
Prospectus Summary......................................................... 3
Risk Factors............................................................... 24
The Trust.................................................................. 29
The Transferor............................................................. 29
Green Tree Financial Corporation and its Commercial Finance Division....... 30
The Receivables............................................................ 34
The Accounts............................................................... 36
Maturity Considerations.................................................... 40
Use of Proceeds............................................................ 43
Description of the Offered Certificates.................................... 43
Description of the Purchase Agreement...................................... 80
Certain Legal Aspects of the Receivables................................... 81
Certain Federal Income Tax
Consequences.............................................................. 84
Employee Benefit Plan Considerations....................................... 89
Underwriting............................................................... 91
Listing and General Information............................................ 92
Legal Matters.............................................................. 92
Glossary of Terms.......................................................... 93
Annex...................................................................... A-1
</TABLE>
---------------
UNTIL 90 DAYS AFTER THE DATE OF THIS PROSPECTUS, ALL DEALERS EFFECTING TRANS-
ACTIONS IN THE OFFERED CERTIFICATES, WHETHER OR NOT PARTICIPATING IN THIS DIS-
TRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE
OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND
WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
LOGO
GREEN TREE FLOORPLAN RECEIVABLES MASTER TRUST
$409,400,000 FLOATING RATE
FLOORPLAN RECEIVABLE TRUST CERTIFICATES,
SERIES 1995-1, CLASS A
$18,400,000 FLOATING RATE
FLOORPLAN RECEIVABLE TRUST CERTIFICATES,
SERIES 1995-1, CLASS B
GREEN TREE FLOORPLAN FUNDING CORP.
TRANSFEROR
GREEN TREE FINANCIAL CORPORATION
SERVICER
----------------------
PROSPECTUS
DECEMBER 14, 1995
----------------------
MERRILL LYNCH & CO.
BEAR, STEARNS & CO. INC.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
SEC registration fee............................................ $147,517.24
Blue Sky fees and expenses...................................... 10,000.00
Accountant's fees and expenses.................................. 30,000.00
Attorney's fees and expenses.................................... 75,000.00*
Trustee's fees and expenses..................................... 15,000.00*
Printing and engraving expenses................................. 150,000.00
Rating Agency fees.............................................. 150,000.00*
Miscellaneous................................................... 2,482.76
-----------
Total......................................................... $580,000.00
===========
</TABLE>
- --------
* Estimated
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits:
<TABLE>
<C> <S>
*1.1 Proposed form of Underwriting Agreement
3.1 Certificate of Incorporation of Green Tree Floorplan Funding Corp.
3.2 Bylaws of Green Tree Floorplan Funding Corp.
*4.1 Form of Pooling and Servicing Agreement
*4.2 Form of Series 1995-1 Supplement to the Pooling and Servicing Agreement
*4.3 Form of Receivables Purchase Agreement
5.1 Opinion and consent of Dorsey & Whitney P.L.L.P. as to legality
*8.1 Opinion and consent of Dorsey & Whitney P.L.L.P. as to tax matters
23.1 Consent of Dorsey & Whitney P.L.L.P. (included as part of Exhibit 5.1)
23.2 Consent of Dorsey & Whitney P.L.L.P. (included as part of Exhibit 8.1)
24.1 Power of attorney from officers and directors of the Registrants signed
by an attorney-in-fact
</TABLE>
--------
*Filed herewith.
(b) Financial Statements:
Not Applicable
II-1
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS DULY CAUSED THIS AMENDMENT NO. 4 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 DECEMBER 12, 1995.
Green Tree Floorplan Funding Corp.
/s/ John W. Brink
By: _________________________________
JOHN W. BRINK
VICE PRESIDENT AND TREASURER
POWER OF ATTORNEY
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THIS AMENDMENT NO. 4 TO
THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATE INDICATED.
SIGNATURE TITLE DATE
/s/ Lawrence M. Coss Chairman of the
- ------------------------------------- Board and President December 12,
LAWRENCE M. COSS (Principal 1995
Executive Officer)
/s/ John W. Brink Vice President and
- ------------------------------------- Treasurer December 12,
JOHN W. BRINK (Principal 1995
Financial Officer
and Principal
Accounting Officer)
and Director
/s/ Richard G. Evans Director
- ------------------------------------- December 12,
RICHARD G. EVANS 1995
II-2
<PAGE>
INDEX TO EXHIBITS
Exhibit Form of
Number Description* Filing
- ------ ----------- ------
*1.1 Proposed form of Underwriting Agreement Electronically Filed
3.1 Certificate of Incorporation of Green
Tree Floorplan Funding Corp.
3.2 Bylaws of Green Tree Floorplan Funding
Corp.
*4.1 Form of Pooling and Servicing Agreement Electronically Filed
*4.2 Form of Series 1995-1 Supplement to the
Pooling and Servicing Agreement Electronically Filed
*4.3 Form of Receivables Purchase Agreement Electronically Filed
5.1 Opinion and consent of Dorsey & Whitney
P.L.L.P. as to legality
*8.1 Opinion of Dorsey & Whitney P.L.L.P. as
to tax matters Electronically Filed
23.1 Consent of Dorsey & Whitney P.L.L.P.
(included as part of Exhibit 5.1)
23.2 Consent of Dorsey & Whitney P.L.L.P.
(included as part of Exhibit 8.1)
24.1 Power of attorney from officers and directors
of the Registrant signed by an attorney-in-fact
- ----------
* Filed herewith.
<PAGE>
draft 12/8/95
$_______________
(Floating Rate) Floorplan Receivable Trust Certificates,
Series 1995-1, Class A
and
$_______________
(Floating Rate) Floorplan Receivable Trust Certificates,
Series 1995-1, Class B
GREEN TREE FLOORPLAN RECEIVABLES MASTER TRUST
UNDERWRITING AGREEMENT
----------------------
December __, 1995
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
World Financial Center
North Tower
New York, New York 10281
BEAR, STEARNS & CO. INC.
245 Park Avenue
New York, New York 10167
Dear Sirs:
Green Tree Floorplan Funding Corp. ("GTFFC") is a Delaware corporation with
its principal place of business in Saint Paul, Minnesota. GTFFC has filed a
Registration Statement on Form S-1 (hereinafter referred to as the "Registration
Statement") relating to $___________ (Floating Rate) Floorplan Receivable Trust
Certificates, Series 1995-1, Class A and $___________ (Floating Rate) Floorplan
Receivable Trust Certificates, Series 1995-1, Class B (the "Offered
Certificates") evidencing interests in Green Tree Floorplan Receivables Master
Trust (the "Trust"). The Offered Certificates will be issued pursuant to a
pooling and servicing agreement (the "Pooling and Servicing Agreement") dated as
of December 1, 1995 among GTFFC, as transferor, Green Tree Financial
Corporation, as servicer ("Green Tree" or the "Servicer"), and Norwest Bank
Minnesota, National Association, as trustee (the "Trustee") and pursuant to a
1995-1 Series
<PAGE>
Supplement to the Pooling and Servicing Agreement (the "Series Supplement"),
dated as of December 1, 1995 among GTFFC, as transferor, Green Tree, as
Servicer, and the Trustee, as trustee. The Pooling and Servicing Agreement, as
supplemented by the Series Supplement, is hereinafter referred to as the
"Pooling and Servicing Agreement." $________ principal amount of Class C
Certificates (the "Class C Certificates"), $________ principal amount of Class D
Certificates (the "Class D Certificates") and the Exchangeable Transferor's
Certificate (together with the Offered Certificates, the Class C Certificates
and the Class D Certificates, the "Certificates") will also be issued pursuant
to the Pooling and Servicing Agreement. The assets of the Trust will consist of
(i) all wholesale receivables (the "Receivables") generated from time to time in
a portfolio of revolving financing arrangements between Green Tree and certain
dealers in consumer and commercial products (the "Accounts") satisfying certain
criteria described in the Prospectus, (ii) all funds collected from Obligors in
respect of the Receivables, (iii) all right, title, and interest of GTFFC in,
to, and under a receivables purchase agreement (the "Purchase Agreement"), dated
as of December 1, 1995 between GTFFC and Green Tree, (iv) all funds on deposit
in the Trust Accounts, (v) Recoveries, (vi) an assignment of a security interest
in the Collateral Security, (vii) GTFFC's rights under all Floorplan Agreements,
and (viii) proceeds of the foregoing. The Receivables will be purchased from
Green Tree by GTFFC pursuant to the Purchase Agreement and thereafter
transferred to the Trust. The forms of the Pooling and Servicing Agreement and
the Series Supplement have been filed as exhibits to the Registration Statement.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Pooling and Servicing Agreement, the Series Supplement and the
Purchase Agreement (together, the "Designated Agreements"). GTFFC and Green
Tree will be referred to collectively herein as the "Green Tree Parties."
The Certificates are more fully described in a Registration Statement that
GTFFC has furnished to you. The terms "you" or "Underwriters" as used herein,
unless the context otherwise requires, shall mean you, acting severally and not
jointly under this Agreement. The term "Representative" refers to Merrill
Lynch, Pierce, Fenner & Smith Incorporated acting as Representative of the
Underwriters.
The offering of the Offered Certificates will be made through you. GTFFC
and Green Tree will also enter into an agreement (the "Terms Agreement")
providing for the sale of such Offered Certificates to, and the purchase thereof
by, you, severally and not jointly. The Terms Agreement shall specify, among
other things, the price or prices at which the Offered Certificates are to be
purchased by the Underwriters from the Trust and the initial public offering
price or prices or the method by which the price or prices at which the Offered
2
<PAGE>
Certificates are to be sold will be determined. The Terms Agreement, which
shall be substantially in the form of Exhibit A hereto, may take the form of an
exchange of any standard form of written telecommunication between you and
GTFFC. The offering of the Offered Certificates will be governed by this
Agreement, as supplemented by the Terms Agreement.
GTFFC has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 33-62433) and a related
preliminary prospectus for the registration of the Offered Certificates under
the Securities Act of 1933 (the "1933 Act"), and has filed, and proposes to
file, such amendments thereto as may have been required to the date hereof
pursuant to the 1933 Act and the rules of the Commission thereunder (the
"Regulations"). The registration statement (including the prospectus
constituting a part thereof and the information, if any, deemed to be part
thereof pursuant to Rule 430A(b) of the Regulations) in the form in which it
became effective under the Act on December ___, 1995 (the "Effective Date"),
including the exhibits thereto, is referred to herein as the "Registration
Statement", and the prospectus dated December ___, 1995 in the form in which it
was most recently filed with the Commission (including the information, if any,
deemed to be part thereof pursuant to Rule 430A(b) of the 1933 Act Regulations)
is referred to herein as the "Prospectus", except that if any revised prospectus
shall be provided to you by GTFFC for use in connection with the offering of the
Offered Certificates which differs from the Prospectus on file at the Commission
at the time the Registration Statement becomes effective (whether or not such
revised prospectus is required to be filed by GTFFC pursuant to Rule 424(b) of
the 1933 Act Regulations), the term "Prospectus" shall refer to such revised
prospectus from and after the time it is first provided to you for such use.
GTFFC understands that you propose to make a public offering of the Offered
Certificates as soon as you deem advisable after this Agreement and the Terms
Agreement have been executed and delivered.
SECTION 1. Representations and Warranties. Each of GTFFC and Green Tree
represents and warrants to you as of the date hereof, as of the date of the
Terms Agreement (the "Representation Date") and as of the Closing Time (as
defined below) as follows:
(a) The Registration Statement and the Prospectus, on the Effective
Date and on the date hereof, and as of the Representation Date will, comply
in all material respects with the requirements of the 1933 Act and the
Regulations. The Registration Statement, on the Effective Date and on the
date hereof, did not and does not, and as of the
3
<PAGE>
Representation Date and the Closing Time will not, contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading. The Prospectus, as amended or supplemented on the Effective
Date and on the date hereof, did not and does not, and as amended or
supplemented as of the Representation Date and the Closing Time will not,
contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this subsection shall
not apply to statements in, or omissions from, the Registration Statement
or Prospectus made in reliance upon and in conformity with information
furnished to GTFFC in writing by any Underwriter through the Representative
expressly for use in the Registration Statement or Prospectus. There are
no contracts or documents of GTFFC which are required to be filed as
exhibits to the Registration Statement pursuant to the 1933 Act or the
Regulations which have not been so filed or incorporated by reference.
(b) Each of GTFFC and Green Tree has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
state of Delaware, with corporate power and authority to own, lease and
operate its properties and conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement, the Designated Agreements and the Terms Agreement as such Green
Tree Party may be a party to; and each of the Green Tree Parties is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which the ownership or lease of its
properties or the conduct of its business under the Designated Agreements
requires such qualification.
(c) Neither GTFFC nor Green Tree is in violation of its certificate
of incorporation or by-laws or in default in the performance or observance
of any material obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which it is a party or by which it or its properties may be
bound, which default might result in any material adverse change in its
financial condition, earnings, affairs or business or which might
materially and adversely affect the properties or assets thereof.
(d) The execution and delivery of this Agreement, the Terms Agreement
and the Designated Agreements by GTFFC and Green Tree are within the
corporate power of GTFFC and Green Tree, respectively, and have been duly
authorized by all
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necessary corporate action on the part of GTFFC and Green Tree; and neither
the issuance and sale of the Offered Certificates to the Underwriters, nor
the execution and delivery of this Agreement, the Terms Agreement or the
Designated Agreements by GTFFC or Green Tree, nor the consummation by GTFFC
or Green Tree of any of the transactions therein contemplated, nor
compliance by GTFFC or Green Tree with the provisions hereof or thereof,
will materially conflict with or result in a material breach of, or
constitute a material default under, any of the provisions of any law,
governmental rule, regulation, judgment, decree or order binding on GTFFC
or Green Tree or their respective properties or the certificate of
incorporation or by-laws of GTFFC or Green Tree, or any of the provisions
of any indenture, mortgage, contract or other instrument to which GTFFC or
Green Tree is a party or by which it is bound or result in the creation or
imposition of any lien, charge or encumbrance upon any of their respective
properties pursuant to the terms of any such indenture, mortgage, contract
or other instrument.
(e) This Agreement has been, and the Terms Agreement when executed
and delivered as contemplated hereby and thereby will have been, duly
authorized, executed and delivered by GTFFC and Green Tree, and each
constitutes, or will constitute when so executed and delivered, a legal,
valid and binding instrument enforceable against GTFFC and Green Tree in
accordance with its terms, subject (i) to applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws affecting
creditors rights generally, (ii) as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law) and (iii) as to enforceability with respect
to rights of indemnity thereunder, to limitations of public policy under
securities laws.
(f) The Designated Agreements, when executed and delivered as
contemplated hereby and thereby, will have been duly authorized, executed
and delivered by GTFFC and Green Tree, and will constitute, when so
executed and delivered, a legal, valid and binding agreements, enforceable
against GTFFC and Green Tree in accordance with their respective terms,
subject (i) to applicable bankruptcy, reorganization, insolvency,
moratorium or other similar laws affecting creditors' rights generally and
(ii) as to enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law).
(g) As of the Closing Time, the Certificates will have been duly and
validly authorized, and, when executed and authenticated as specified in
the Pooling and Servicing Agreement, will be validly issued and outstanding
and will
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be entitled to the benefits of the Pooling and Servicing Agreement, and
will be binding obligations of the Trust to the extent provided in the
Pooling and Servicing Agreement.
(h) No filing or registration with, notice to or consent, approval,
authorization or order of any court or governmental authority or agency is
required for the consummation by GTFFC or Green Tree of the transactions
contemplated by this Agreement, any of the Designated Agreements or the
Terms Agreement, except such as may be required under the 1933 Act, the
Regulations, or state securities or Blue Sky laws.
(i) There are no proceedings or investigations pending or, to the best
knowledge of GTFFC or Green Tree, threatened against GTFFC or Green Tree
before any governmental authority (i) asserting the invalidity of any
Designated Agreement or of this Agreement, (ii) seeking to prevent the
consummation of any of the transactions contemplated thereby, (iii) seeking
any determination or ruling that would materially and adversely affect the
performance by GTFFC or Green Tree of its obligations thereunder or the
ability of Green Tree to originate Receivables, (iv) seeking any
determination or ruling that would materially and adversely affect the
validity or enforceability thereof or (v) seeking to affect adversely the
tax attributes of the Trust.
(j) Each of GTFFC and Green Tree possesses all material licenses,
certificates, authorities or permits issued by the appropriate state,
federal or foreign regulatory agencies or bodies necessary to conduct the
business now operated by it or as described in the Prospectus and has not
received any notice of proceedings relating to the revocation or
modification of any such license, certificate, authority or permit which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would materially and adversely affect the conduct of the
business, operations, financial condition or income of GTFFC or Green Tree,
respectively.
(k) Neither GTFFC, Green Tree nor the Trust will be subject to
registration as an "investment company" under the Investment Company Act of
1940, as amended (the "1940 Act").
(l) The Certificates and the Designated Agreements conform in all
material respects to the descriptions thereof contained in the Prospectus.
(m) At the Closing Time, the Offered Certificates shall have received
the certificate ratings specified in the Terms Agreement.
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(n) At the Closing Time, each of the representations and warranties
of GTFFC and Green Tree set forth in any of the Designated Agreements will
be true and correct.
SECTION 2. Purchase and Sale. The commitment of the Underwriters to
purchase the Offered Certificates pursuant to the Terms Agreement shall be
deemed to have been made on the basis of the representations and warranties
herein contained and shall be subject to the terms and conditions herein set
forth.
Payment of the purchase price for, and delivery of, the Offered
Certificates to be purchased by you shall be made at the office of Brown & Wood,
One World Trade Center, New York, New York 10048, or at such other place as
shall be agreed upon by you and GTFFC, at such time or date as shall be agreed
upon by you and GTFFC and Green Tree in the Terms Agreement (such time and date
being referred to as the "Closing Time"). Payment shall be made to or at the
direction of GTFFC, in immediately available Federal funds wired to such bank as
may be designated by GTFFC. The Offered Certificates shall be in such
denominations specified by the Representative and registered in the name of Cede
& Co., unless the Representative shall otherwise specify in writing at least two
business days prior to the Closing Time. The Offered Certificates, which may be
in temporary form, will be made available for examination and packaging by you
no later than 12:00 noon on the first business day prior to the Closing Time.
SECTION 3. Covenants of GTFFC and Green Tree. GTFFC and Green Tree
covenant with you as follows:
(a) Immediately following the execution of this Agreement and the
Terms Agreement, GTFFC will prepare the Prospectus setting forth the
principal amount of the Offered Certificates, the price at which the
Offered Certificates are to be purchased by you, either the initial public
offering price or the method by which the price by which the Offered
Certificates are to be sold will be determined, the selling concession(s)
and reallowance(s), if any, and such other information as you and GTFFC
deem appropriate in connection with the offering of the Offered
Certificates. GTFFC will, to the extent required by the Regulations,
promptly transmit copies of the Prospectus to the Commission for filing
pursuant to Rule 424 under the 1933 Act and will furnish to you as many
copies of the Prospectus as you shall reasonably request.
(b) If at any time when the Prospectus is required by the 1933 Act to
be delivered in connection with sales of the Offered Certificates by you,
any event shall occur or condition exist as a result of which it is
necessary, in the opinion of your counsel, counsel for GTFFC, or otherwise,
to further amend or supplement the Prospectus in order that the
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Prospectus will not include an untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein, in the
light of circumstances existing at the time it is delivered to a purchaser,
not misleading or if it shall be necessary, in the opinion of any such
counsel or otherwise, at any such time to amend or supplement the
Registration Statement or the Prospectus in order to comply with the
requirements of the 1933 Act or the Regulations thereunder, GTFFC will
promptly prepare and will (1) file with the Commission such amendment or
supplement as may be necessary to correct such untrue statement or omission
or to make the Registration Statement comply with such requirements and (2)
within two business days will furnish to you as many copies of the
Prospectus, as so amended or supplemented, as you shall reasonably request.
(c) GTFFC will give you reasonable notice of any intention to file
any amendment to the Registration Statement or any amendment or supplement
to the Prospectus, whether pursuant to the 1933 Act or otherwise (other
than reports to be filed pursuant to the Securities Exchange Act of 1934,
as amended (the "1934 Act")), and GTFFC will furnish you with copies of any
such amendment or supplement or other documents proposed to be filed a
reasonable time in advance of filing, and will not file any such amendment
or supplement or other documents in a form to which you or your counsel
shall object.
(d) GTFFC will notify you immediately, and confirm the notice in
writing, (i) of the effectiveness of any amendment to the Registration
Statement, (ii) of the mailing or the delivery to the Commission for filing
of any supplement to the Prospectus or any document, other than reports to
be filed pursuant to the 1934 Act, (iii) of the receipt of any comments
from the Commission with respect to the Registration Statement or the
Prospectus, (iv) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or
for additional information, and (v) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or suspension of the qualification of the Certificates or the initiation of
any proceedings for that purpose. GTFFC will make every reasonable effort
to prevent the issuance of any such stop order and, if any such stop order
is issued, to obtain the lifting thereof at the earliest possible moment.
(e) GTFFC will deliver to you as many signed and as many conformed
copies of the Registration Statement (as originally filed) and of each
amendment thereto (including
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exhibits filed therewith or incorporated by reference therein) as you may
reasonably request.
(f) GTFFC will endeavor, in cooperation with you, to qualify the
Certificates for offering and sale under the applicable securities laws of
such states and other jurisdictions of the United States as you may
designate, and will maintain or cause to be maintained such qualifications
in effect for as long as may be required for the distribution of the
Certificates. GTFFC will file or cause the filing of such statements and
reports as may be required by the laws of each jurisdiction in which the
Certificates have been qualified as above provided.
SECTION 4. Conditions of Underwriter's Obligations. The obligations of
the Underwriters to purchase the Offered Certificates pursuant to the Terms
Agreement are subject to the accuracy of the representations and warranties on
the part of GTFFC and Green Tree herein contained, to the accuracy of the
statements of officers of GTFFC and Green Tree made pursuant hereto, to the
performance by each of GTFFC and Green Tree of all of its obligations hereunder
and to the following further conditions:
(a) The Registration Statement shall have become effective not later than
4:00 p.m., New York time, on the day following the date of this Agreement or
such later date as shall have been consented to by the Representative; and at
the Closing Time (i) no stop order suspending the effectiveness of the
Registration Statement shall have been issued or proceedings therefor initiated
or threatened by the Commission, (ii) the Offered Certificates shall have
received the ratings specified in the Terms Agreement, and (iii) there shall not
have come to your attention any facts that would cause you to believe that the
Prospectus, at the time it was required to be delivered to a purchaser of the
Offered Certificates, contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in light of the circumstances existing at such time, not misleading.
If GTFFC has elected to rely upon Rule 430A of the Regulations, the price of the
Offered Certificates and any price-related information previously omitted from
the effective Registration Statement pursuant to such Rule 430A shall have been
transmitted to the Commission for filing pursuant to Rule 424(b) of the 1933 Act
Regulations within the prescribed time period, and prior to Closing Time GTFFC
shall have provided evidence satisfactory to the Representative of such timely
filing, or a post-effective amendment providing such information shall have been
promptly filed and declared effective in accordance with the requirements of
Rule 430A of the Regulations.
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(b) At or prior to the Closing Time you shall have received:
(1) The favorable opinion (the "Underwriter Opinion"), dated as of the
Closing Time, of Dorsey & Whitney P.L.L.P., special counsel for GTFFC and Green
Tree, in form and substance satisfactory to you and your counsel, to the effect
that:
(i) Each of GTFFC and Green Tree has been duly organized and
is validly existing as a corporation in good standing under the laws
of the State of Delaware.
(ii) The execution and delivery by each of GTFFC and Green
Tree of this Agreement, the Terms Agreement, the Purchase Agreement
and the Pooling and Servicing Agreement and the signing of the
Registration Statement by GTFFC are within the corporate power of
GTFFC and Green Tree, respectively, and each has been duly authorized
by all necessary corporate action on the part of each of GTFFC and
Green Tree.
(iii) This Agreement and the applicable Terms Agreement
have been duly authorized, executed and delivered by each of GTFFC and
Green Tree, and each is a valid and binding obligation of each of
GTFFC and Green Tree enforceable against GTFFC and Green Tree in
accordance with its terms, except that (A) such enforcement may be
subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating
to creditors' or secured parties' rights generally, (B) such
enforcement may be limited by general principles of equity, including
(without limitation) concepts of materiality, reasonableness, good
faith and fair dealing, and other similar doctrines affecting the
enforceability of agreements generally (regardless of whether
enforcement is sought in a proceeding in equity or at law), and (C)
the enforceability as to rights to indemnity thereunder is subject to
the effect of federal and state securities laws and public policy
relating thereto.
(iv) The Designated Agreements have been duly authorized,
executed and delivered by GTFFC and Green Tree, and are the valid and
binding obligations of GTFFC and Green Tree enforceable against GTFFC
and Green Tree in accordance with their respective terms, except that
(A) such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and (B) such
enforcement may be limited by general principles of equity
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(regardless of whether enforcement is sought in a proceeding in equity
or at law).
(v) None of the transfer of the Receivables to the Trust,
the issue and sale of the Certificates or the consummation of the
transactions contemplated herein nor the fulfillment of the terms
hereof or of the Designated Agreements will, to the best of such
counsel's knowledge, conflict with or constitute a breach of, or
default under, any contract, indenture, mortgage, loan agreement,
note, lease or other instrument to which GTFFC or Green Tree is a
party or by which either of them may be bound or to which the property
or assets of either of them are subject (which contracts, indentures,
mortgages, loan agreements, notes, leases and other such instruments
have been identified by GTFFC and Green Tree to such counsel), nor
will such action result in any violation of the provisions of the
certificate of incorporation or by-laws of GTFFC or Green Tree or, to
the best of such counsel's knowledge, any order or regulation known to
such counsel to be applicable to GTFFC or Green Tree of any state or
federal court, regulatory body, administrative agency, governmental
body or arbitrator having jurisdiction over GTFFC or Green Tree.
(vi) The Certificates have been duly authorized and, when
executed and authenticated as specified in the Pooling and Servicing
Agreement and delivered and, in the case of the Offered Certificates,
paid for pursuant to this Agreement and the Terms Agreement, will be
duly issued and entitled to the benefits of the Pooling and Servicing
Agreement.
(vii) The Receivables are either "chattel paper",
"accounts" or "general intangibles" under the UCC. The Purchase
Agreement creates, in favor of GTFFC, a valid security interest (as
such term is defined in Section 1-201 of the UCC) in the Receivables
now existing and hereafter created that are either chattel paper or
accounts, which security interest, if characterized as a transfer for
security, will secure the "Secured Obligations" (as defined in the
Pooling and Servicing Agreement) and, in the case of Receivables that
are general intangibles, is effective to transfer Green Tree's
ownership interest in such Receivables to GTFFC. The Pooling and
Servicing Agreement creates, in favor of the Trustee for the benefit
of the Certificateholders, a valid security interest (as such term is
defined in Section 1-201 of the UCC) in the Receivables now existing
and hereafter created, which security interest, if characterized as a
transfer for
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security, will secure the "Secured Obligations" (as defined in the
Pooling and Servicing Agreement), and, in the case of Receivables that
are general intangibles, is effective to transfer GTFFC's ownership
interest in such Receivables to the Trustee. The perfection and the
effect of perfection or nonperfection of the ownership or security
interests in the Receivables created pursuant to the Purchase
Agreement or the Pooling and Servicing Agreement will be governed by
the laws of the State of Minnesota. The UCC-1 financing statements
are in appropriate form for filing with the Secretary of State of
Minnesota. Upon the filing of the UCC-1 financing statements in the
office of the Secretary of State of Minnesota, GTFFC will have a
perfected ownership interest in the Receivables, which ownership
interest shall have priority over any other security interest in the
Receivables, and the Trustee will have a perfected ownership or
security interest in the Receivables, which ownership or security
interest shall have priority over any other security interest in the
Receivables. In rendering such opinion, such counsel may take
customary exceptions acceptable to you.
(viii) To the best of such counsel's knowledge, no filing
or registration with or notice to or consent, approval, authorization
or order of any Minnesota or federal court or governmental authority
or agency is required to be obtained by GTFFC or Green Tree for the
consummation by GTFFC or Green Tree of the transactions contemplated
by this Agreement, the Terms Agreement or the Designated Agreements,
except such as may be required under the 1933 Act or the Regulations,
or state securities or Blue Sky laws.
(ix) The Registration Statement is effective under the 1933
Act and, to the best of such counsel's knowledge and information, no
stop order suspending the effectiveness of the Registration Statement
has been issued under the 1933 Act or proceedings therefor initiated
or threatened by the Commission.
(x) The Pooling and Servicing Agreement is not required to
be qualified under the Trust Indenture Act of 1939, as amended.
(xi) To the best of such counsel's knowledge, there are no
contracts or documents which are required to be filed as exhibits to
the Registration Statement pursuant to the 1933 Act or the Regulations
thereunder which have not been so filed or incorporated by reference.
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(xii) The statements in the Prospectus under the heading
"Certain Federal Income Tax Consequences," to the extent that they
constitute statements of law or legal conclusions as to the likely
outcome of material issues under the federal income tax laws, have
been prepared or reviewed by such counsel and are correct in all
material respects.
(xiii) The Trust created by the Pooling and Servicing
Agreement is not, and will not as a result of the offer and sale of
the Offered Certificates as contemplated in the Prospectus and in this
Agreement become, an "investment company" as such term is defined in
the 1940 Act.
(xiv) The statements in the Prospectus under the caption
"Description of the Certificates," insofar as such statements purport
to summarize certain terms of the Certificates and the Pooling and
Servicing Agreement, constitute a fair and accurate summary of such
documents.
(xv) The statements in the Prospectus under the headings
"Risk Factors--Transfer of the Receivables; Insolvency Risk
Considerations", "Certain Legal Aspects of the Receivables--Certain
Matters Relating to Bankruptcy" and "Employee Benefit Plan
Considerations", to the extent that they constitute statements of law
or legal conclusions with respect thereto, have been reviewed by such
counsel and are correct in all material respects.
(xvi) The Certificates, the Pooling and Servicing
Agreement and the Underwriting Agreement conform in all material
respects to the descriptions thereof contained in the Prospectus.
(xvii) The Registration Statement and the Prospectus (other
than the financial statements and other financial, statistical and
numerical information included therein, as to which no opinion need be
rendered) as of their respective effective or issue dates, complied as
to form in all material respects with the requirements of the 1933 Act
and the Regulations thereunder.
(xviii) The execution, delivery and performance by GTFFC or
Green Tree of the Designated Agreements do not require the consent or
approval of, the giving of notice to, the registration with, or the
taking of any other action in respect of any federal, state or other
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governmental agency or authority which has not previously been
effected.
(xix) To such counsel's knowledge, there are no pending or
overtly threatened lawsuits or claims against GTFFC or Green Tree or
relating to the transactions contemplated by this Agreement or the
Designated Agreements which, if adversely determined, would have a
materially adverse effect on the transactions contemplated by this
Agreement and the Designated Agreements.
Such counsel shall deliver to you such additional opinions addressing the
transfer by Green Tree to GTFFC and the transfer by GTFFC to the Trust of each
of its right, title and interest in and to the Receivables and other property
included in the Trust on the Closing Time as may be reasonably required by the
Rating Agencies rating the Offered Certificates.
Such counsel shall state that it has participated in conferences with
officers and other representatives of GTFFC and Green Tree, your counsel,
representatives of the independent accountants for GTFFC and Green Tree and you
at which the contents of the Registration Statement and the Prospectus were
discussed and, although such counsel is not passing upon and does not assume
responsibility for, the factual accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus (except as
stated in paragraphs (xii), (xiv), (xv) and (xvi) above) and has made no
independent check or verification thereof for the purpose of rendering this
opinion, on the basis of the foregoing (relying as to materiality to a large
extent upon the certificates of officers and other representatives of GTFFC and
Green Tree), nothing has come to their attention that leads such counsel to
believe that the Registration Statement, when it became effective, contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
or that the Registration Statement and the Prospectus on the date of this
Agreement and the Terms Agreement contained, and the Prospectus at Closing Time
contains, any untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except that such
counsel need express no view with respect to the financial statements, schedules
and other financial, statistical and numerical data included in or incorporated
by reference into the Registration Statement or the Prospectus.
Such counsel may state that they are admitted to practice only in the State
of Minnesota, that they are not admitted to the Bar in any other State and are
not experts in the law of any
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other State and to the extent that the foregoing opinions concern the laws of
any other State such counsel may rely upon the opinion of counsel satisfactory
to you and admitted to practice in such jurisdiction. Any opinions relied upon
by such counsel as aforesaid shall be addressed to you and shall be delivered
together with the opinion of such counsel, which shall state that such counsel
believes that their reliance thereon is justified.
(2) The favorable opinion, dated as of the applicable Closing Time,
of Joel H. Gottesman, Senior Vice President and General Counsel to Green
Tree, as Servicer of the Receivables, in form and substance satisfactory to
you and your counsel, to the effect that:
(i) There are no pending or, to his knowledge, threatened
litigation or administrative proceeding of or before any court,
tribunal or governmental agency, authority or body or any arbitrator
which, if adversely determined, would have a material adverse effect
on the financial condition of GTFFC or Green Tree.
(ii) Each of GTFFC and Green Tree is qualified to do
business, and is in good standing, as a foreign corporation in each
U.S. jurisdiction in which the character of the business owned or
leased by it makes such qualification necessary, except where the
failure to be so qualified would not have a material adverse effect on
the financial condition of Green Tree.
(iii) Each of GTFFC and Green Tree possesses all material
licenses, certificates, authorities or permits issued by the
appropriate state or federal regulatory agencies or bodies necessary
to conduct the business now conducted by it and as described in the
Prospectus, except to the extent that the failure to have such
licenses, certificates, authorities or permits does not have a
material adverse effect on the Receivables or the Certificates or the
financial condition of GTFFC or Green Tree, and neither GTFFC nor
Green Tree has received any notice of proceedings relating to the
revocation or modification of any such license, certificate, authority
or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would materially and
adversely affect the conduct of its business, operations or financial
condition.
(iv) At the time of the transfer of the Receivables to
GTFFC, Green Tree owned the Receivables free and clear of any lien,
security interest, charge or other interests of others, except such
liens as are permitted under the Pooling and Servicing Agreement.
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With respect to each Receivable, such Receivable is secured by a
validly perfected first priority security interest in favor of Green
Tree as a secured party. Each Receivable and the related Collateral
Security has been duly and validly assigned to GTFFC by Green Tree.
(3) The favorable opinion of counsel to the Trustee, dated as of the
Closing Time, addressed to you and in form and scope satisfactory to your
counsel, to the effect that:
(i) The Pooling and Servicing Agreement has been duly
authorized, executed and delivered by the Trustee and is enforceable
against the Trustee in accordance with its terms, subject to customary
and usual exceptions.
(ii) The Trustee has full power and authority to execute and
deliver the Pooling and Servicing Agreement and to perform its
obligations thereunder.
(iii) To the best of such counsel's knowledge, there are no
actions, proceedings or investigations pending or threatened against
or affecting the Trustee before or by any court, arbitrator,
administrative agency or other governmental authority which, if
adversely decided, would materially and adversely affect the ability
of the Trustee to carry out the transactions contemplated in the
Pooling and Servicing Agreement.
(iv) No consent, approval or authorization of, or
registration, declaration or filing with, any court or governmental
agency or body of the jurisdiction of incorporation of the Trustee is
required for the execution, delivery or performance by the Trustee of
the Pooling and Servicing Agreement.
In rendering such opinion, such counsel may rely, as to
matters of fact, to the extent deemed proper and stated therein, on certificates
of responsible officers of the Trustee or public officials.
(4) The favorable opinion or opinions, dated as of the Closing Time,
of counsel for the Underwriters with respect to the issue and sale of the
Certificates, the Registration Statement, this Agreement, the Prospectus
and other related matters as you may require.
(c) You shall have received from Dorsey & Whitney P.L.L.P., special
counsel for GTFFC, an opinion, dated as of the Closing Time and satisfactory in
form and substance to the Representative and to counsel to the Underwriters, to
the effect that the
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Offered Certificates will be characterized for Minnesota income and franchise
tax purposes as indebtedness secured by the Receivables and Certificateholders
not otherwise subject to taxation in Minnesota will not be subject to tax in
respect of the Offered Certificates.
(d) At the Closing Time you shall have received a certificate of the
President or a Vice President of each of GTFFC and Green Tree, dated as of such
Closing Time, to the effect that (i) the representations and warranties of each
of GTFFC and Green Tree contained in Section 1 are true and correct with the
same force and effect as though such Closing Time were the Representation Date;
(ii) GTFFC or Green Tree, as applicable, has complied in all material respects
with all the agreements and satisfied all the conditions on its part to be
performed or satisfied under this Agreement at or prior to the Closing Time;
(iii) no stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been initiated or, to
GTFFC's or Green Tree's knowledge, threatened by the Commission as of the
Closing Time; and (iv) nothing has come to such person's attention that would
lead such person to believe that the Prospectus contains an untrue statement of
a material fact or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(e) You shall have received from KPMG Peat Marwick LLP, or other
independent certified public accountants acceptable to you, a letter, dated as
of the Closing Time, delivered at such times, in the form heretofore agreed to.
(f) At the Closing Time you shall have received, addressed to you, any
additional opinions delivered by counsel pursuant to the request of the Rating
Agencies rating the Offered Certificates.
(g) The Representative shall have received facsimile confirmation from a
filing service that (i) a copy of the UCC-1 financing statement on Form UCC-1
has been filed with the Secretary of State of the State of Minnesota with
respect to the transfer of the Receivables by Green Tree to GTFFC pursuant to
the Purchase Agreement, identifying the Receivables as collateral and naming
Green Tree as debtor and GTFFC as the secured party, and (ii) a copy of the UCC-
1 financing statement on Form UCC-1 has been filed with the Secretary of State
of the State of Minnesota with respect to the transfer of the Receivables by
GTFFC to the Trustee pursuant to the Pooling and Servicing Agreement,
identifying the Receivables as collateral and naming GTFFC as debtor and the
Trustee as the secured party.
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(h) At the Closing Time, counsel for the Underwriters shall have been
furnished with such documents and opinions as they reasonably may require for
the purpose of enabling them to pass upon the issuance and sale of the Offered
Certificates as herein contemplated and related proceedings or in order to
evidence the accuracy and completeness of any of the representations and
warranties, or the fulfillment of any of the conditions, herein contained; and
all proceedings taken by GTFFC and Green Tree in connection with the issuance
and sale of the Certificates as herein contemplated shall be satisfactory in
form and substance to you and counsel for the Underwriters.
(i) As of the Closing Time, each of the Designated Agreements will have
been duly authorized, executed and delivered by, and will constitute a legal,
valid and binding obligation of, and will be enforceable against each of GTFFC
and Green Tree, in accordance with its terms, subject to applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws affecting
creditors' rights generally and as to enforceability, to general principles of
equity (regardless whether enforcement is sought in a proceeding in equity or at
law).
(j) At the Closing Time, Standard & Poor's Ratings Services, A Division of
The McGraw-Hill Companies, Inc. shall have delivered a letter to GTFFC stating
that the Class A Certificates are rated "AAA" and the Class B Certificates are
rated "A" and Moody's Investor Service, Inc. shall have delivered a letter to
GTFFC stating that the Class A Certificates are rated "Aaa" and the Class B
Certificates are rated "A3".
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Agreement and the Terms Agreement may
be terminated by you by notice to GTFFC at any time at or prior to the Closing
Time, and such termination shall be without liability of any party to any other
party except as provided in Section 5.
SECTION 5. Payment of Expenses. Green Tree will pay all expenses incident
to the performance of the obligations of GTFFC or Green Tree under this
Agreement, including without limitation those related to (i) the filing of the
Registration Statement and all amendments thereto, (ii) the printing and
delivery to the Underwriters, in such quantities as you may reasonably request,
of copies of this Agreement, the Terms Agreement, any agreements among
underwriters and selling agreements and the Underwriters' questionnaires and
powers of attorney, (iii) the preparation, issuance and delivery of the Offered
Certificates to the Underwriters, (iv) the fees and disbursements of GTFFC's and
Green Tree's counsel and accountants, (v) the qualification of the Offered
Certificates under securities and Blue Sky laws and the determination of the
eligibility of the Offered Certificates for investment in accordance with the
provisions of Section 3(g),
18
<PAGE>
including filing fees, and the fees and disbursements of your counsel in
connection therewith and in connection with the preparation of any Blue Sky
Survey and Legal Investment Survey, (vi) the printing and delivery to the
Underwriters, in such quantities as you may reasonably request, hereinafter
stated, of copies of the Registration Statement and Prospectus and all
amendments and supplements thereto, and of any Blue Sky Survey and Legal
Investment Survey, (vii) the printing and delivery to the Underwriters, in such
quantities as you may reasonably request, of copies of the Pooling and Servicing
Agreement, (viii) the fees charged by the Rating Agencies for rating the Offered
Certificates, (ix) the fees and expenses incurred in connection with the listing
of the Offered Certificates on any securities exchange, (x) the fees and
expenses, if any, incurred with respect to the National Association of
Securities Dealers, Inc., including the fees and disbursements of counsel for
you in connection therewith and (xi) the fees and expenses of the Trustee and
its counsel.
If this Agreement and the Terms Agreement is terminated by you in
accordance with the provisions of Section 4 or Section 9(i) hereof, Green Tree
shall reimburse you for all reasonable out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the Underwriters.
SECTION 6. Indemnification. (a) GTFFC and Green Tree, jointly and
severally, agree to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any
amendment thereto), or the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the statements therein
not misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in the Prospectus (or any amendment or
supplement thereto) or the omission or alleged omission therefrom of a material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, unless such untrue
statement or omission or alleged untrue statement or omission was made in
reliance upon and in conformity with written information furnished to GTFFC by
any Underwriter through the Representative expressly for use in the Registration
Statement (or any amendment thereto) or the Prospectus (or any amendment or
supplement thereto);
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or
19
<PAGE>
investigation or proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue statement or
omission, (A) if such settlement is effected with the written consent of GTFFC
or (B) if such settlement is effected without the written consent of GTFFC more
than 30 days after receipt by GTFFC of a notice from the Underwriters,
substantially reflecting the proposed terms of such settlement, to which GTFFC
has not responded prior to the date such settlement is effected; and
(iii) against any and all expense whatsoever (including the fees and
disbursements of counsel chosen by you), reasonably incurred in investigating,
preparing to defend or defending against any litigation, or investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or omission, to the extent
that any such expense is not paid under (i) or (ii) above, which expenses shall
be reimbursed as they are incurred.
This indemnity agreement will be in addition to any liability which either
GTFFC or Green Tree may otherwise have. Insofar as this indemnity may permit
indemnification for liabilities under the 1933 Act of any person who is a
partner of any Underwriter entitled to indemnity hereby or who controls any
Underwriter within the meaning of Section 15 of the 1933 Act and who, at the
date of this Agreement is a director, officer or controlling person of either
GTFFC or Green Tree, such indemnity agreement is subject to the undertaking of
GTFFC in the Registration Statement.
(b) Each Underwriter severally agrees to indemnify and hold harmless each
of GTFFC and Green Tree, each director of GTFFC or Green Tree, each of GTFFC's
officers who signed the Registration Statement, and each person, if any, who
controls either GTFFC or Green Tree within the meaning of Section 15 of the 1933
Act against any and all loss, liability, claim, damage and expense described in
the indemnity contained in subsection (a) of this Section, but only with respect
to untrue statements or omissions or alleged untrue statements or omissions,
made in the Registration Statement (or any amendment thereto) or the Prospectus
(or any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to GTFFC by any Underwriter through the
Representative expressly for use in the Registration Statement (or any amendment
thereto) or the Prospectus (or any amendment or supplement thereto). This
indemnity agreement will be in addition to any liability that such Underwriter
may otherwise have.
(c) Each indemnified party shall give prompt notice to each indemnifying
party of any action commenced against it with respect to which indemnity may be
sought hereunder but failure to
20
<PAGE>
so notify an indemnifying party shall not relieve it from any liability that it
may have otherwise than on account of this indemnity agreement. An indemnifying
party may participate at its own expense in the defense of such action. In no
event shall the indemnifying parties be liable for the fees and expenses of more
than one counsel (in addition to local counsel) for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
SECTION 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, GTFFC and Green Tree
on the one hand, and the Underwriters, on the other, shall contribute to the
aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by said indemnity agreement incurred by GTFFC and Green Tree and
one or more of the Underwriters (i) in such proportion as shall be appropriate
to reflect the relative benefit received by the Underwriters, as represented by
the percentage that the Underwriting discount or discounts on the cover of the
Prospectus bears to the initial public offering price or prices as set forth
thereon, and GTFFC and Green Tree, as applicable, shall be responsible for the
balance; or (ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
benefit referred to in clause (i) above but also the relative fault of GTFFC and
Green Tree, as applicable, on the one hand and the Underwriters on the other
with respect to statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other relevant
equitable considerations; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation and, provided further, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price of the
Offered Certificates purchased by such Underwriter pursuant to the Terms
Agreement exceeds the amount of any damages which such Underwriter has otherwise
paid or become liable to pay by reason of any untrue or alleged untrue statement
or omission or alleged omission. For purposes of this Section, each person, if
any, who controls any Underwriter within the meaning of Section 15 of the 1933
Act shall have the same rights to contribution as the Underwriters and each
director of GTFFC or Green Tree, each officer of GTFFC who signed the
Registration Statement, and each person, if any, who controls GTFFC or Green
Tree within the meaning of Section 15 of the 1933 Act shall have the same rights
to contribution as GTFFC and Green Tree.
21
<PAGE>
SECTION 8. Representations, Warranties and Agreements to survive Delivery.
All representations, warranties and agreements contained in this Agreement, or
contained in certificates of Officers of GTFFC or Green Tree submitted pursuant
hereto, shall remain operative and in full force and effect, regardless of any
termination of this Agreement, or any investigation made by or on behalf of the
Underwriters or controlling person thereof, or by or on behalf of GTFFC or Green
Tree and shall survive delivery of any Offered Certificates to the Underwriters.
SECTION 9. Termination of Agreement. The Representative may terminate
this Agreement and the Terms Agreement, immediately upon notice to GTFFC, at any
time at or prior to the Closing Time (i) if there has been, since the date of
the Terms Agreement or since the respective dates as of which information is
given in the Registration Statement or the Prospectus any change, or any
development involving a prospective change in, or affecting, the condition,
financial or otherwise, earnings, affairs or business of GTFFC or Green Tree
whether or not arising in the ordinary course of business, which in your
judgment would materially impair the market for, or the investment quality of,
the Offered Certificates, or (ii) if there has occurred any outbreak of
hostilities or other calamity or crisis the effect of which on the financial
markets of the United States is such as to make it, in the judgment of the
Representative, impracticable to market the Offered Certificates or enforce
contracts for the sale of the Offered Certificates, or (iii) if trading
generally on either the New York Stock Exchange or the American Stock Exchange
has been suspended, or minimum or maximum prices for securities have been
required, by either of said exchanges or by order of the Commission or any other
governmental authority, or if a banking moratorium has been declared by either
Federal, Minnesota or New York authorities. In the event of any such
termination, (A) the covenants set forth in Section 3 with respect to the
offering of the Offered Certificates shall remain in effect so long as the
Underwriters own any Offered Certificates purchased pursuant to the Terms
Agreement and (B) the covenant set forth in Section 3(c), the provisions of
Section 5, the indemnity agreement set forth in Section 6, and the contribution
provisions set forth in Section 7, and the provisions of Sections 8 and 13 shall
remain in effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of
the Underwriters participating in the offering of the Offered Certificates shall
fail at the Closing Time to purchase the Offered Certificates which it or they
are obligated to purchase hereunder and under the Terms Agreement (the
"Defaulted Certificates"), then the Representative shall have the right, within
24 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Certificates in such amounts as may be agreed upon and upon the
22
<PAGE>
terms herein set forth. If, however, you have not completed such arrangements
within such 24-hour period, then:
(1) if the aggregate principal amount of Defaulted Certificates does
not exceed 10% of the aggregate principal amount of the Offered
Certificates to be purchased pursuant to such Terms Agreement, the non-
defaulting Underwriters shall be obligated to purchase the full amount
thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all such non-defaulting
Underwriters, or
(2) if the aggregate principal amount of Defaulted Certificates
exceeds 10% of the aggregate principal amount of the Certificates to be
purchased pursuant to such Terms Agreement, the Terms Agreement shall
terminate, without any liability on the part of any non-defaulting
Underwriters.
No action taken pursuant to this Section shall relieve any defaulting
Underwriters from liability with respect to any default of such Underwriters
under this Agreement and the Terms Agreement.
In the event of a default by any Underwriters as set forth in this Section,
either the Representative or GTFFC shall have the right to postpone the Closing
Time for a period of time not exceeding seven days in order that any required
changes in the Registration Statement or Prospectus or in any other documents or
arrangements may be effected.
SECTION 11. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to you at the respective addresses set forth on
the first page hereof, attention of the Syndicate Department. Notices to GTFFC
shall be directed to Green Tree Floorplan Funding Corp., 500 Landmark Towers,
345 St. Peter Street, Saint Paul, Minnesota, 55102-1639, Attention of the
Secretary, with a copy to the Treasurer. Notices to Green Tree shall be
directed to Green Tree Financial Corporation, 1100 Landmark Towers, 345 St.
Peter Street, Saint Paul, Minnesota 55102-1639, attention of the Secretary, with
a copy to the Treasurer.
SECTION 12. Parties. This Agreement and the Terms Agreement shall inure
to the benefit of and be binding upon you, GTFFC, Green Tree and any Underwriter
who becomes a party to this Agreement and the Terms Agreement, and their
respective successors. Nothing expressed or mentioned in this Agreement or the
Terms Agreement is intended or shall be construed to give any person, firm or
corporation, other than the parties hereto or thereto and their respective
successors and the controlling
23
<PAGE>
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives any legal or equitable right, remedy or claim
under or with respect to this Agreement or the Terms Agreement or any provision
herein or therein contained. This Agreement and the Terms Agreement and all
conditions and provisions hereof or thereof are intended to be for the sole and
exclusive benefit of the parties and their respective successors and said
controlling persons and officers and directors and their heirs and legal
representatives (to the extent of their rights as specified herein and therein)
and for the benefit of no other person, firm or corporation. No purchaser of
Offered Certificates from any Underwriter shall be deemed to be a successor by
reason merely of such purchase.
SECTION 13. Governing Law and Time. This Agreement and the Terms
Agreement shall be governed by the laws of the State of New York. Specified
times of day refer to New York City time.
SECTION 14. Counterparts. This Agreement and the Terms Agreement may be
executed in counterparts, each of which shall constitute an original of any
party whose signature appears on it, and all of which shall together constitute
a single instrument.
24
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us a counterpart hereof, whereupon this instrument
along with all counterparts will become a binding agreement between you, GTFFC
and Green Tree in accordance with its terms.
Very truly yours,
GREEN TREE FLOORPLAN FUNDING CORP.
By______________________________
Name:
Title:
GREEN TREE FINANCIAL CORPORATION
By______________________________
Name:
Title:
CONFIRMED AND ACCEPTED, as of
the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By___________________________
Name:
Title:
BEAR, STEARNS & CO. INC.
By___________________________
Name:
Title:
25
<PAGE>
$_______________
(Floating Rate) Floorplan Receivable Trust Certificates,
Series 1995-1, Class A
and
$_______________
(Floating Rate) Floorplan Receivable Trust Certificates,
Series 1995-1, Class B
EXHIBIT A
GREEN TREE FLOORPLAN RECEIVABLES MASTER TRUST
FORM OF TERMS AGREEMENT
-----------------------
Dated: December___, 1995
To: Green Tree Financial Corporation, ("GreenTree"),
Green Tree Floorplan Funding Corp. ("GTFFC")
Re: Underwriting Agreement dated December ___, 1995
Terms of the Certificates:
- -------------------------
Original
Principal Certificate Interest
Amount Rate
--------- --------------------
Class A
Class B
A-1
<PAGE>
Servicer:
- --------
Green Tree Financial Corporation (in such capacity, the "Servicer")
Purchase Price:
- --------------
The purchase price payable by the Underwriters for the Class A
Certificates is ____% of the principal amount of the Class A Certificates plus
accrued interest, if any, at the Certificate Interest Rate (____%) from _______
__, 1995.
The purchase price payable by the Underwriters for the Class B
Certificates is ____% of the principal amount of the Class B Certificates plus
accrued interest, if any, at the Certificate Interest Rate (____%) from _______
__, 1995.
Underwriting Commission:
- -----------------------
Notwithstanding anything to the contrary in the Underwriting Agreement, no
additional underwriting commission shall be payable by GTFFC to the
Underwriters in connection with the purchase of the Offered Certificates.
Public Offering price at which the Underwriters will initially sell the
Offered Certificates:
Class A __________%
Class B __________%
Closing Date and Location:
- -------------------------
On or about December ___, 1995, offices of Brown & Wood, One World Trade
Center, New York, New York.
A-2
<PAGE>
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:__________________________________
Name:
Title:
BEAR, STEARNS & CO. INC.
By:__________________________________
Name:
Title:
ACCEPTED:
GREEN TREE FINANCIAL CORPORATION
By:_______________________________
Name:
Title:
GREEN TREE FLOORPLAN FUNDING CORP.
By:_______________________________
Name:
Title:
A-3
<PAGE>
Exhibit 4.1
================================================================================
GREEN TREE FLOORPLAN FUNDING CORP.
Transferor
GREEN TREE FINANCIAL CORPORATION
Servicer
and
Norwest Bank Minnesota, National Association
Trustee
Green Tree Floorplan Receivables Master Trust
________________________________________
POOLING AND SERVICING AGREEMENT
Dated as of December 1, 1995
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.1 Definitions................................................ 1-1
Section 1.2 Other Definitional Provisions.............................. 1-23
Section 1.3 Provisions Relating to Rating Agencies..................... 1-24
ARTICLE II
CONVEYANCE OF RECEIVABLES;
ISSUANCE OF CERTIFICATES
Section 2.1 Conveyance of Receivables.................................. 2-1
Section 2.2 Acceptance by Trustee...................................... 2-3
Section 2.3 Representations and Warranties of the Transferor........... 2-3
Section 2.4 Representations and Warranties of the Transferor
Relating to the Agreement and the Receivables.............. 2-5
Section 2.5 Covenants of the Transferor................................ 2-10
Section 2.6 Addition of Accounts....................................... 2-12
Section 2.7 Removal of Eligible Accounts............................... 2-15
Section 2.8 Removal of Ineligible Accounts............................. 2-16
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES
Section 3.1 Acceptance of Appointment and Other Matters
Relating to the Servicer................................... 3-1
Section 3.2 Servicing Compensation..................................... 3-2
Section 3.3 Representations and Warranties of the Servicer............. 3-3
Section 3.4 Reports and Records for the Trustee........................ 3-5
Section 3.5 Annual Servicer's Certificate.............................. 3-7
Section 3.6 Annual Independent Accountants' Servicing Report........... 3-7
Section 3.7 Tax Treatment.............................................. 3-8
Section 3.8 Notices to Green Tree...................................... 3-9
-i-
<PAGE>
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION
AND APPLICATION OF COLLECTIONS
Section 4.1 Rights of Certificateholders............................... 4-1
Section 4.2 Establishment of Accounts.................................. 4-1
Section 4.3 Collections and Allocations................................ 4-4
ARTICLE V
[ARTICLE V IS RESERVED AND SHALL BE SPECIFIED
IN ANY SUPPLEMENT WITH RESPECT TO ANY SERIES]
ARTICLE VI
THE CERTIFICATES
Section 6.1 The Certificates........................................... 6-1
Section 6.2 Authentication of Certificates............................. 6-1
Section 6.3 Registration of Transfer and Exchange of Certificates...... 6-2
Section 6.4 Mutilated, Destroyed, Lost or Stolen Certificates.......... 6-5
Section 6.5 Persons Deemed Owners...................................... 6-6
Section 6.6 Appointment of Paying Agent................................ 6-6
Section 6.7 Access to List of Certificateholders' Names and Addresses.. 6-7
Section 6.8 Authenticating Agent....................................... 6-8
Section 6.9 Tender of Exchangeable Transferor Certificate.............. 6-9
Section 6.10 Book-Entry Certificates.................................... 6-12
Section 6.11 Notices to Clearing Agency................................. 6-13
Section 6.12 Definitive Certificates.................................... 6-13
Section 6.13 Global Certificate; Euro-Certificate Exchange Date......... 6-14
Section 6.14 Meetings of Certificateholders............................. 6-14
ARTICLE VII
OTHER MATTERS RELATING TO THE TRANSFEROR
Section 7.1 Liability of the Transferor................................ 7-1
Section 7.2 Merger or Consolidation of, or Assumption
of the Obligations of, the Transferor...................... 7-1
Section 7.3 Limitation on Liability.................................... 7-2
Section 7.4 Liabilities................................................ 7-2
-ii-
<PAGE>
ARTICLE VIII
OTHER MATTERS RELATING TO THE SERVICER
Section 8.1 Liability of the Servicer.................................. 8-1
Section 8.2 Merger or Consolidation of, or Assumption
of the Obligations of, the Servicer........................ 8-1
Section 8.3 Limitation on Liability of the Servicer and Others......... 8-1
Section 8.4 Servicer Indemnification of the Transferor,
the Trust and the Trustee.................................. 8-2
Section 8.5 The Servicer Not to Resign................................. 8-3
Section 8.6 Access to Certain Documentation and
Information Regarding the Receivables...................... 8-3
Section 8.7 Delegation of Duties....................................... 8-4
Section 8.8 Waiver of Servicing Fee.................................... 8-4
ARTICLE IX
PAY OUT EVENTS
Section 9.1 Pay Out Events.............................................. 9-1
Section 9.2 Additional Rights Upon the Occurrence of Certain Events..... 9-3
ARTICLE X
SERVICER DEFAULTS
Section 10.1 Servicer Defaults.......................................... 10-1
Section 10.2 Trustee to Act; Appointment of Successor................... 10-3
Section 10.3 Notification to Certificateholders......................... 10-5
Section 10.4 Waiver of Past Defaults.................................... 10-5
ARTICLE XI
THE TRUSTEE
Section 11.1 Duties of Trustee.......................................... 11-1
Section 11.2 Certain Matters Affecting the Trustee...................... 11-3
Section 11.3 Trustee Not Liable for Recitals in Certificates............ 11-4
Section 11.4 Trustee May Own Certificates............................... 11-5
Section 11.5 The Servicer to Pay Trustee's Fees and Expenses............ 11-5
Section 11.6 Eligibility Requirements for Trustee....................... 11-5
Section 11.7 Resignation or Removal of Trustee.......................... 11-6
-iii-
<PAGE>
Section 11.8 Successor Trustee.......................................... 11-6
Section 11.9 Merger or Consolidation of Trustee......................... 11-7
Section 11.10 Appointment of Co-Trustee or Separate Trustee.............. 11-7
Section 11.11 Tax Returns................................................ 11-8
Section 11.12 Trustee May Enforce Claims Without
Possession of Certificates................................. 11-9
Section 11.13 Suits for Enforcement...................................... 11-9
Section 11.14 Rights of Certificateholders to Direct Trustee............. 11-9
Section 11.15 Representations and Warranties of Trustee.................. 11-10
Section 11.16 Maintenance of Office or Agency............................ 11-10
ARTICLE XII
TERMINATION
Section 12.1 Termination of Trust....................................... 12-1
Section 12.2 Optional Termination....................................... 12-2
Section 12.3 Final Payment with Respect to any Series................... 12-3
Section 12.4 Termination Rights of Holder of
Exchangeable Transferor Certificate........................ 12-4
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.1 Amendment.................................................. 13-1
Section 13.2 Protection of Right, Title and Interest to Trust........... 13-2
Section 13.3 Limitation on Rights of Certificateholders................. 13-3
Section 13.4 Governing Law.............................................. 13-4
Section 13.5 Notices.................................................... 13-4
Section 13.6 Severability of Provisions................................. 13-5
Section 13.7 Assignment................................................. 13-5
Section 13.8 Certificates Non-Assessable and Fully Paid................. 13-5
Section 13.9 Further Assurances......................................... 13-5
Section 13.10 No Waiver; Cumulative Remedies............................. 13-6
Section 13.11 Counterparts............................................... 13-6
Section 13.12 Third-Party Beneficiaries.................................. 13-6
Section 13.13 Actions by Certificateholders.............................. 13-6
Section 13.14 Rule 144A Information...................................... 13-7
Section 13.15 Merger and Integration..................................... 13-7
Section 13.16 Headings................................................... 13-7
-iv-
<PAGE>
EXHIBITS
- --------
Exhibit A Form of Exchangeable Transferor Certificate
Exhibit B Form of Daily Report
Exhibit C Form of Settlement Statement
Exhibit D Form of Annual Servicer's Certificate
Exhibit E Forms of Opinion of Counsel
Exhibit F Form of Assignment of Receivables in Additional Accounts
Exhibit G Form of Reassignment of Receivables in Removed Accounts
Exhibit H Form of Agreed-Upon Procedures
Exhibit I Form of Reconveyance of Receivables by Trustee
SCHEDULES
- ---------
Schedule 1 List of Accounts
Schedule 2 Designation of Collection Account
-v-
<PAGE>
POOLING AND SERVICING AGREEMENT, dated as of December 1, 1995 by and among
GREEN TREE FLOORPLAN FUNDING CORP., a corporation organized and existing under
the laws of the State of Delaware, as Transferor, GREEN TREE FINANCIAL
CORPORATION, a corporation organized and existing under the laws of the State of
Delaware, as Servicer, and Norwest Bank Minnesota, a national banking
association, as Trustee.
In consideration of the mutual agreements herein contained, each party
agrees as follows for the benefit of the other parties and the
Certificateholders:
<PAGE>
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Whenever used in this Agreement, the following
words and phrases shall have the following meanings:
"Account" shall mean each Initial Account and, from and after the related
Addition Date, each Additional Account. The term "Account" shall not apply to
any Removed Accounts reassigned or assigned to the Transferor or the Servicer in
accordance with the terms of this Agreement.
"Addition Date" shall have the meaning specified in Section 2.6(c).
"Addition Notice" shall have the meaning specified in Section 2.6(c).
"Additional Accounts" shall mean each individual revolving credit agreement
entered into with Green Tree or one of its subsidiaries by a Dealer to finance
such Dealer's inventory of consumer and commercial products, which account is
designated pursuant to Section 2.6(a) or (b) to be included as an Account and is
identified in the computer file or microfiche or written list delivered to the
Trustee by the Transferor pursuant to Sections 2.1 and 2.6(d).
"Additional Cut-off Date" shall mean, with respect to Additional Accounts,
the date specified in the Addition Notice delivered with respect to such
Additional Accounts pursuant to Section 2.6(c).
"Affiliate" means, with respect to a particular Person, any Person that,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person.
"Agent" shall mean, with respect to any Series, the Person so designated in
the related Supplement.
"Aggregate Invested Amount" shall mean, as of any date of determination,
the sum of the Invested Amounts of all Series of Certificates issued and
outstanding on such date of determination.
"Aggregate Investor Percentage" with respect to Principal Collections,
Interest Collections and Defaulted Receivables, as the case may be, shall mean,
as of any date of determination, the sum of such Investor Percentages of all
Series of Certificates issued and outstanding on such date of determination,
provided, however, that the Aggregate Investor Percentage shall not exceed 100%.
"Aggregate Principal Receivables" shall mean, for any day, the aggregate
amount of Principal Receivables at the end of such day.
1-1
<PAGE>
"Agreement" shall mean this Pooling and Servicing Agreement and all
amendments hereof and supplements hereto, including any Supplement.
"Applicants" shall have the meaning specified in Section 6.7.
"Appointment Day" shall have the meaning specified in subsection 9.2(a).
"Asset-Based Financing Agreement" shall mean an asset based lending
agreement entered into by Green Tree and a Dealer in connection with the Asset-
Based Business with such Dealer, as amended or modified from time to time.
"Asset-Based Lending Business" shall mean the asset-based revolving credit
facilities made by Green Tree generally to Dealers in order to finance their
production and inventory, and are secured by finished goods inventory, accounts
receivable, certain works in process, raw materials and component parts, as well
as other assets of the borrower.
"Asset-Based Receivable Overconcentration" on any Distribution Date shall
mean the excess of (a) the aggregate of all amounts of Principal Receivables in
Accounts for Asset-Based Receivables on the last day of the Monthly Period
immediately preceding such Distribution Date over (b) the Asset-Based Percentage
of the Principal Receivables on the last day of such immediately preceding
Monthly Period. Subject to adjustment as described below, the "Asset-Based
Percentage" will be 10% until the date six months after the Closing Date;
thereafter, once certain performance tests are met, 15% until the date one year
after the Closing Date; and thereafter, once certain performance tests are met,
20%. Notwithstanding the above, in the case of such Overconcentration, the
percentage in clause (b) may be increased by the Transferor, without the consent
of any Certificateholder, to a level acceptable to each Rating Agency without
any reduction or withdrawal of its rating of the Class A, Class B or Class C
Certificates (but which may involve an adjustment, upward or downward, of the
Class D Invested Amount).
"Asset-Based Receivables" shall mean extensions of credit generally to
manufacturers and distributors to finance their production and inventory, and
are secured by finished goods inventory, accounts receivable, certain work-in-
process, raw materials and component parts, as well as other assets of the
borrower.
"Assignment" shall have the meaning specified in Section 2.6(d).
"Authentication Agent" shall have the meaning specified in Section 6.8.
"Authorized Newspaper" shall mean a newspaper of general circulation in the
Borough of Manhattan, The City of New York printed in the English language and
customarily published on each Business Day, whether or not published on
Saturdays, Sundays and holidays.
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"Automatic Addition Condition" shall mean, with respect to the addition of
Accounts pursuant to Section 2.6(c), that, (i) during the calendar quarter in
which such addition occurs, the number of new Accounts for Dealers that are
financing products of the type already being financed by Green Tree does not
exceed 5% of the number of all Accounts at the end of the preceding calendar
quarter, (ii) during the twelve months ending at the beginning of such calendar
quarter, the number of such new Accounts does not exceed 20% of the number of
all Accounts at the beginning of such twelve month period, (iii) the average for
the three months preceding the month of such addition of the aggregate balance
of Receivables that have been delinquent for more than 30 days does not exceed
1.25% of the Pool Balance at the end of the month preceding the month of such
addition, and (iv) the annualized average for such three month period of the net
losses incurred in respect of the Receivables does not exceed 1.75% of the Pool
Balance at the end of the month preceding the month of such addition.
"Bearer Certificates" shall have the meaning specified in Section 6.1.
"Bearer Rules" shall mean the provisions of the Internal Revenue Code, in
effect from time to time, governing the treatment of bearer obligations,
including sections 163(f), 871, 881, 1441, 1442 and 4701, and any regulations
thereunder including, to the extent applicable to any Series, proposed or
temporary regulations of the Internal Revenue Service.
"Beneficiary" shall mean any of the Holders of the Investor Certificates
and any Enhancement Provider.
"Book-Entry Certificates" shall mean certificates evidencing a beneficial
interest in the Investor Certificates, ownership and transfers of which shall be
made through book entries by a Clearing Agency as described in Section 6.10;
provided, that after the occurrence of a condition whereupon book-entry
registration and transfer are no longer authorized and Definitive Certificates
are to be issued to the Certificate Owners, such certificates shall no longer be
"Book-Entry Certificates."
"Business Day" shall mean any day other than a Saturday, a Sunday or a day
on which banking institutions in New York, New York or Delaware (or, with
respect to any Series, any additional city specified in the related Supplement)
are authorized or obligated by law or executive order to be closed, and such
other days in each year designated by the Servicer in writing to the Trustee by
the first day of December in the preceding year.
"Cash Equivalents" shall mean, unless otherwise provided in the Supplement
with respect to any Series, (a) negotiable instruments or securities represented
by instruments in bearer or registered form which evidence (i) obligations of or
fully guaranteed by the United States of America; (ii) time deposits, promissory
notes, or certificates of deposit of any depositary institution or
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trust company; provided, however, that at the time of the Trust's investment or
contractual commitment to invest therein, the certificates of deposit or short-
term deposits of such depositary institution or trust company shall have a
credit rating from Standard & Poor's of A-1+ and from Moody's of P-1; (iii)
commercial paper having, at the time of the Trust's investment or contractual
commitment to invest therein, a rating from Standard & Poor's of A-1+ and from
Moody's of P-1; (iv) banker's acceptances issued by any depositary institution
or trust company described in clause (a)(ii) above; and (v) investments in money
market funds rated AAA-m or AAA-mg by Standard & Poor's and Aaa by Moody's or
otherwise approved in writing by Moody's and Standard & Poor's; (b) time
deposits and demand deposits in the name of the Trust or the Trustee in any
depositary institution or trust company referred to in clause (a)(ii) above; (c)
securities not represented by an instrument that are registered in the name of
the Trustee or its nominee (which may not be Green Tree or an Affiliate) upon
books maintained for that purpose by or on behalf of the issuer thereof and
identified on books maintained for that purpose by the Trustee as held for the
benefit of the Trust or the Certificateholders, and consisting of (x) shares of
an open end diversified investment company which is registered under the
Investment Company Act which (i) invests its assets exclusively in obligations
of or guaranteed by the United States of America or any instrumentality or
agency thereof having in each instance a final maturity date of less than one
year from their date of purchase or other Cash Equivalents, (ii) seeks to
maintain a constant net asset value per share, (iii) has aggregate net assets of
not less than $100,000,000 on the date of purchase of such shares and (iv) which
each Rating Agency designates in writing will not result in a withdrawal or
downgrading of its then current rating of any Series rated by it or (y)
Eurodollar time deposits of a depository institution or trust company that are
rated A-1+ by Standard & Poor's and P-1 by Moody's; provided, however, that at
the time of the Trust's investment or contractual commitment to invest therein,
the Eurodollar deposits of such depositary institution or trust company shall
have a credit rating from Standard & Poor's of A-1+ and P-1 by Moody's; and (d)
any other investment if each Rating Agency confirms in writing that such
investment will not adversely affect its then current rating of the Investor
Certificates.
"CEDEL" shall mean Cedel Bank, societe anonyme, the professional
depository, incorporated under the laws of Luxembourg, which holds securities
for its participating organizations and facilitates the clearance and settlement
of securities transactions between Cedel Participants through electronic book-
entry changes in the accounts of such Cedel Participants.
"Certificate" shall mean any one of the Investor Certificates of any Series
or the Exchangeable Transferor Certificate.
"Certificate Interest" shall mean interest payable in respect of the
Investor Certificates of any Series pursuant to Article IV of the Agreement as
supplemented by the Supplement for such Series.
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"Certificate Owner" shall mean, with respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Book-Entry Certificate, as may be
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly or as an indirect
participant, in accordance with the rules of such Clearing Agency).
"Certificate Principal" shall mean principal payable in respect of the
Investor Certificates of any Series pursuant to Article IV of this Agreement.
"Certificate Rate" shall mean, with respect to any Series of Certificates
(or, for any Series with more than one Class, for each Class of such Series),
the percentage (or formula on the basis of which such rate shall be determined)
stated in the related Supplement.
"Certificate Register" shall mean the register maintained pursuant to
Section 6.3, providing for the registration of the Certificates and transfers
and exchanges thereof.
"Certificateholder" or "Holder" shall mean the Person in whose name a
Certificate is registered in the Certificate Register and, if applicable, the
holder of any Bearer Certificate or Coupon, as the case may be.
"Class" shall mean, with respect to any Series, any one of the classes of
Certificates of that Series as specified in the related Supplement.
"Clearing Agency" shall mean an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended.
"Clearing Agency Participant" shall mean a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency or Foreign Clearing Agency effects book-entry transfers and pledges of
securities deposited with the Clearing Agency or Foreign Clearing Agency.
"Closing Date" shall mean, with respect to any Series, the date of issuance
of such Series of Certificates, as specified in the related Supplement.
"Collateral Security" shall mean, with respect to any Receivable, (i) the
security interest, if any, granted by or on behalf of the related Dealer with
respect thereto, including, a first priority perfected security interest in the
related Products or assets, (ii) all other security interests or liens and
property subject thereto from time to time purporting to secure payment of such
Receivable, whether pursuant to the agreement giving rise to such Receivable or
otherwise, together with all financing statements signed by a Dealer describing
any collateral securing such Receivable, (iii) all guarantees, insurance and
other agreements (including Floorplan Agreements and subordination agreements
with other lenders) or arrangements of whatever character from time to time
supporting or securing
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payment of such Receivable whether pursuant to the agreement giving rise to such
Receivable or otherwise, and (iv) all Records in respect of such Receivable.
"Collection Account" shall have the meaning specified in subsection 4.2(a).
"Collections" shall mean, without duplication, all payments by or on behalf
of Dealers received by the Servicer in respect of the Receivables (including
proceeds from the realization upon any Collateral Security), in the form of
cash, checks, wire transfers or any other form of payment. Collections shall
include both the Principal Collections and Interest Collections.
"Corporate Trust Office" shall mean the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered,
which office at the date of the execution of this Agreement is located at
Norwest Center, Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479-
0069, Attention: Corporate Trust Department.
"Coupon" shall have the meaning specified in Section 6.1.
"Daily Report" shall mean a report in the form specified in subsection
1.2(e) as may be supplemented pursuant to any Supplement.
"Date of Processing" shall mean, with respect to any transaction, the date
on which such transaction is first recorded on the Servicer's computer file of
accounts (without regard to the effective date of such recordation).
"Dealer" shall mean each of the dealers, manufacturers and distributors who
are obligated under the Receivables.
"Dealer Overconcentration" on any Distribution Date shall mean, with
respect to any Account with a Dealer, the excess of (a) the aggregate of
Principal Receivables in such Account on the last day of the Monthly Period
immediately preceding such Distribution Date over (b) 2% of the Principal
Receivables on the last day of such immediately preceding Monthly Period.
Certain Dealers may be subject to a higher percentage limit with Rating Agency
approval, but in no case higher than 3%. Notwithstanding the above, in the case
of such Overconcentration, the percentage in clause (b) may be increased by the
Transferor, without the consent of any Certificateholder, to a level acceptable
to each Rating Agency without any reduction or withdrawal of its rating of the
Class A, Class B or Class C Certificates (but which may involve an adjustment,
upward or downward, of the Class D Invested Amount).
"Defaulted Receivable" shall mean each Eligible Receivable which, in
accordance with the Servicer's customary and usual servicing procedures, the
Servicer has charged off as uncollectible; a Receivable shall become a Defaulted
Receivable on the day on which such Receivable is recorded as charged off as
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uncollectible on the Servicer's computer file. Notwithstanding any other
provision hereof, any Defaulted Receivables that are Ineligible Receivables
shall be treated as Ineligible Receivables rather than Defaulted Receivables.
"Defeasance Account" shall have the meaning specified in the applicable
Supplement.
"Definitive Certificate" shall have the meaning specified in Section 6.10.
"Demand Note" shall mean the Demand Note, dated December ___, 1995, issued
by Green Tree to the Transferor, and any Demand Notes issued in replacement
thereof.
"Depositary" shall have the meaning specified in Section 6.10.
"Depositary Agreement" shall mean, with respect to each Series, the
agreement among the Transferor, the Trustee and the Clearing Agency, or as
otherwise provided in the related Supplement.
"Designated Account" shall have the meaning specified in Section 2.8(b).
"Designated Balance" shall have the meaning specified in Section 2.8(b).
"Determination Date" with respect to any Distribution Date shall mean the
second Business Day prior to each Distribution Date.
"Discount Factor" shall initially be 0%; provided, however, that such
percentage may be changed from time to time by the Transferor if such change
will not cause a Pay Out Event to occur and the Rating Agency has confirmed that
the change will not result in the Rating Agency reducing or withdrawing its
original rating on any then outstanding Series rated by it.
"Disposition" shall have the meaning specified in Section 9.2(a).
"Distribution Account" shall have the meaning specified in subsection
4.2(c).
"Distribution Date" shall mean, unless otherwise specified in any
Supplement for the related Series, the thirteenth day of each month or, if such
day is not a Business Day, the next succeeding Business Day.
"Dollars," "$" or "U.S. $" shall mean United States dollars.
"Eligible Account" shall mean as of the relevant Cut-off Date (or, with
respect to Additional Accounts, as of their date of designation for inclusion in
the Trust), an arrangement to provide a revolving extension of credit by Green
Tree or one of its subsidiaries to a Dealer (i) in order to finance the purchase
by a Dealer of consumer
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and commercial product inventory or (ii) as a line of credit secured by
unencumbered assets of such Dealer, which extension of credit, as of the date of
determination thereof, (a) is in existence and maintained with Green Tree or
such subsidiary, (b) is payable in United States dollars, (c) is with a Dealer
whose most recent billing address is in the United States or its territories or
possessions, (d) has been originated by Green Tree or such subsidiary in the
ordinary course of its business or acquired by Green Tree through the
acquisition of an Eligible Account from another lender upon satisfying Green
Tree's customary underwriting standards, (e) in respect of which no amounts have
been charged off by Green Tree or such subsidiary as uncollectible in its
customary and usual manner as of the Cut-off Date (or, with respect to
Additional Accounts, as of their date of designation for inclusion in the
Trust), and (f) is with a Dealer that is not involved in insolvency proceedings.
"Eligible Portfolio" shall mean all the Accounts that were Eligible
Accounts at the Cut-off Date.
"Eligible Receivable" shall mean a Receivable:
(a) that was originated by Green Tree or one of its subsidiaries in
the ordinary course of business or acquired by Green Tree through the
acquisition of an Eligible Account from another lender upon satisfying
Green Tree's customary underwriting standards;
(b) that has arisen under an Eligible Account;
(c) that was created in compliance in all respects with all
requirements of law applicable thereto and pursuant to a floorplan or
asset-based financing agreement that complies with all requirements of law
applicable thereto;
(d) with respect to which all consents, licenses or authorizations of,
or registrations with, any governmental authority required to be obtained,
effected or given by Green Tree or the Transferor in connection with the
creation of such Receivable or the transfer thereof to the Trust or the
execution, delivery, creation and performance by Green Tree or such
subsidiary of the related floorplan or asset-based financing agreement have
been duly obtained or given and are in full force and effect as of the date
of the creation of such Receivable;
(e) as to which at the time of its creation, the Transferor had good
and marketable title free and clear of all liens and security interests
(other than certain liens permitted pursuant to the Pooling and Servicing
Agreement), and at all times following the transfer of such Receivables to
the Trust, the Trust will have good and marketable title free and clear of
all liens and security interests (other than certain liens permitted
pursuant to the
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Pooling and Servicing Agreement) or the grant of a first priority security
interest therein;
(f) that is the legal, valid, binding and assignable payment
obligation of the related Dealer, legally enforceable against such Dealer
in accordance with its terms (with certain bankruptcy related exceptions);
(g) that constitutes "chattel paper," an "account" or a "general
intangible" under Article 9 of the UCC as then in effect in the State of
Minnesota;
(h) if such Receivable has the benefit of a Floorplan Agreement with a
Manufacturer, such Floorplan Agreement provides, subject to the specific
terms thereof and any limitations therein (which may vary among Floorplan
Agreements), that the Manufacturer is obligated to repurchase the products
securing the Receivables upon the Servicer's repossession thereof upon the
related Dealer's default;
(i) which has been the subject of a valid transfer and assignment from
the Transferor to the Trust of all the Transferor's interest therein and in
the related Collateral Security (including any proceeds thereof);
(j) which at the time of transfer to the Trust is not subject to any
right of rescission, setoff, or any other defense (including defenses
arising out of violations of usury laws) of the Dealer;
(k) as to which, at the time of transfer of such Receivable to the
Trust, Green Tree (or such subsidiary) and the Transferor have satisfied
all their respective obligations with respect to such Receivable required
to be satisfied at such time;
(l) as to which, at the time of transfer of such Receivable to the
Trust, neither Green Tree (or such subsidiary) nor the Transferor has taken
or failed to take any action which would impair the rights of the Trust or
the certificateholders therein; and
(m) which represents the obligation of a Dealer to repay an advance
made to or on behalf of such Dealer to finance products or the accounts
receivable arising from the sale of such products.
"Enhancement" shall mean, with respect to any Series, any cash collateral
account, cash collateral guaranty, collateral invested amount, letter of credit,
guaranteed rate agreement, maturity guaranty facility, tax protection agreement,
interest rate cap, interest rate swap, subordination of the rights of one class
to another, or any other contract, agreement or arrangement for the benefit of
the
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Certificateholders of such Series (or Certificateholders of a Class within
such Series) as designated in the applicable Supplement.
"Enhancement Provider" shall mean, with respect to any Series, the Person,
if any, designated as such in the related Supplement.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"Euroclear" or "Euroclear Operator" shall mean Morgan Guaranty Trust
Company of New York, Brussels, Belgium office, as operator of the Euroclear
System.
"Excess Funding Account" shall have the meaning specified in subsection
4.2(d).
"Exchange" shall mean either of the procedures described in Section 6.9(b).
"Exchangeable Transferor Certificate" shall mean the certificate executed
by the Transferor and authenticated by the Trustee, substantially in the form of
Exhibit A and exchangeable as provided in Section 6.9; provided, that at any
time there shall be only one Exchangeable Transferor Certificate.
"Exchange Date" shall have the meaning, with respect to any Series issued
pursuant to an Exchange, specified in subsection 6.9(b).
"Exchange Notice" shall have the meaning, with respect to any Series issued
pursuant to an Exchange, specified in subsection 6.9(b).
"Existing Manufacturer" shall mean (i) each Manufacturer with which Green
Tree or a subsidiary of Green Tree has entered into a business arrangement,
either through a Floorplan Agreement or any other arrangement, on or prior to
the Closing Date for Series 1995-1 and (ii) each Manufacturer with which Green
Tree or a subsidiary of Green Tree enters into such a business arrangement after
the Closing Date for Series 1995-1 and as to which the Rating Agency Condition
is satisfied.
"Extended Trust Termination Date" shall have the meaning specified in
subsection 12.1(a).
"FDIC" shall mean the Federal Deposit Insurance Corporation, or any
successor thereto.
"Finance Charge Collections" shall mean for any Business Day, the aggregate
of (i) all collections on the Receivables with respect to interest or other
fees, (ii) investment earnings on amounts on deposit in all Trust Accounts on
such Business Day, and (iii) Recoveries for such Business Day.
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"Financing Agreement" shall mean any Wholesale Financing Agreement or
Asset-Based Financing Agreement.
"Financing Guidelines" shall mean Green Tree's written policies and
procedures, as such policies and procedures may be amended from time to time,
(a) relating to the operation of its Floorplan Business and Asset-Based Lending
Business, including the written policies and procedures for determining the
interest rate, if any, charged to Dealers, the other terms and conditions
relating to Green Tree's wholesale financing accounts, the creditworthiness of
Dealers and the extension of credit to Dealers, and (b) relating to the
maintenance of accounts and collection of receivables.
"Fixed/Floating Allocation Percentage" shall mean for a Series, for any
Business Day or Distribution Date, as applicable, the percentage equivalent of a
fraction, the numerator of which is the Invested Amount of such Series at the
end of the last day of Revolving Period of such Series and the denominator of
which is the greater of (a) the Pool Balance (plus amounts, if any, on deposit
in the Excess Funding Account) at the end of the preceding Business Day and (b)
the sum of the numerators used to calculate the allocation percentages with
respect to Principal Collections for all Series.
"Floating Allocation Percentage" shall mean for a Series on any Business
Day the percentage equivalents of fractions, the numerator of each of which is
the Invested Amount at the end of the preceding business day and the denominator
of which is the greater of (a) the Pool Balance (plus amounts, if any, on
deposit in the Excess Funding Account) as of the end of the preceding Business
Day and (b) with respect to Principal Collections only, the sum of the
numerators for all classes of all Series then outstanding used to calculate the
applicable allocation percentage.
"Floorplan Agreement" shall mean the agreement Green Tree enters into with
a Manufacturer providing financing for products for Dealers.
"Floorplan Business" shall mean the extensions of credit made by Green Tree
to Dealers in order to finance Products purchased by Dealers from Manufacturers.
"Floorplan Receivables" represent extensions of credit to finance product
inventory for dealers, and are secured by the related dealer's product
inventory.
"Foreign Clearing Agency" shall mean CEDEL and the Euroclear Operator.
"Global Certificate" shall have the meaning specified in Section 6.13.
"Governmental Authority" shall mean the United States of America, any state
or other political subdivision thereof and any entity exercising executive,
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legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Green Tree" shall mean Green Tree Financial Corporation, a corporation
organized and existing under the laws of the State of Delaware, and its
successors in interest.
"GTFFC" shall mean Green Tree Floorplan Funding Corp., a corporation
organized and existing under the laws of the State of Delaware, and its
successors in interest.
"Holder" or "Certificateholder" shall mean the Person in whose name a
Certificate is registered in the Certificate Register, and if applicable, the
holder of any Bearer Certificate or Coupon, as the case may be.
"Imputed Yield Collections" shall mean the specified percentage of
Principal Collections which the Transferor elects to be treated as interest
collections.
"Imputed Yield Receivables" shall mean the product of the aggregate unpaid
balance of the Eligible Receivables and the Discount Factor.
"Ineligible Account" shall mean an Account that at the time of
determination is not an Eligible Account.
"Ineligible Amount" on any Determination Date shall mean the amount of the
Ineligible Receivables included in the Trust on such Determination Date.
"Ineligible Receivable" means any Receivable that does not satisfy the
definition of Eligible Receivable.
"Initial Account" shall mean each individual revolving credit agreement
entered into with Green Tree or one of its subsidiaries by Dealers to finance
their production and inventory of consumer commercial products and which is
identified in the computer file or microfiche or written list delivered to the
Trustee on the first Closing Date by the Transferor pursuant to Section 2.1.
"Initial Closing Date" shall mean December 20, 1995.
"Initial Cut-off Date" shall mean November 10, 1995.
"Initial Invested Amount" shall mean, with respect to any Series of
Certificates, the amount stated in the related Supplement.
"Insolvency Event" shall have the meaning specified in subsection 9.2(a).
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"Insurance Proceeds" with respect to an Account shall mean any amounts
received by the Servicer pursuant to any policy of insurance which is required
to be paid to Green Tree pursuant to a Wholesale Financing Agreement or an
Asset-Based Financing Agreement.
"Interest Collections" for any business day means the sum of (a) all
Finance Charge Collections and (b) all Imputed Yield Collections (if a Discount
Factor is then in effect) for such business day.
"Interest Funding Account" shall have the meaning specified in subsection
4.2(b).
"Interest Receivables" shall mean, with respect to any Account, all amounts
billed to the related Dealer in respect of interest and all other non-principal
charges, plus any Imputed Yield Receivables.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Invested Amount" shall have, with respect to any Series of Certificates,
the meaning stated in the related Supplement.
"Investment Company Act" shall mean the Investment Company Act of 1940, as
amended from time to time.
"Investor Account" shall mean each of the Interest Funding Account, any
Principal Account, the Excess Funding Account, any Distribution Account and any
Series Account.
"Investor Certificate" shall mean any one of the certificates (including,
without limitation, the Bearer Certificates or the Registered Certificates)
executed by the Transferor and authenticated by the Trustee substantially in the
form (or forms in the case of a Series with multiple classes) of the investor
certificate or variable funding certificate attached to the related Supplement.
"Investor Certificateholder" shall mean the Holder of an Investor
Certificate.
"Investor Charge Off" shall have, with respect to each Series, the meaning
specified in the applicable Supplement.
"Investor Default Amount" shall have, with respect to any Series of
Certificates, the meaning stated in the related Supplement.
"Investor Exchange" shall have the meaning specified in subsection 6.9(b).
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"Investor Percentage" shall mean, with respect to Principal Collections,
Imputed Yield Collections and Defaulted Receivables, and any Series of
Certificates, the Floating Allocation Percentage or the Fixed/Floating
Allocation Percentage, as applicable.
"Lien" shall mean any security interest, mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), preference, participation interest, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever, including any
conditional sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing and the filing of
any financing statement under the UCC or comparable law of any jurisdiction to
evidence any of the foregoing; provided, however, that (i) any assignment
permitted by Section 7.2, (ii) any Lien created by this Agreement or any
Supplement, (iii) any security interests in the Products that are subordinate to
the security interests securing the related Receivables and (iv) any inchoate
lien that arises by operation of laws is not delinquent or due and affects
collateral securing a Receivable (but does not encumber any Receivable) shall
not be deemed to constitute a Lien.
"Manufacturer" shall mean the manufacturer, distributor or vendor of
products for sale or lease to Dealers in the ordinary course of business.
"Manufacturer Overconcentration" on any Distribution Date shall mean, the
excess of (a) the aggregate of all amounts of Principal Receivables in Accounts
created pursuant to Floorplan Agreements with a single Manufacturer on the last
day of the Monthly Period immediately preceding such Distribution Date that are
covered by a Floorplan Agreement with such Manufacturer over (b) 15% of the
Principal Receivable on the last day of such immediately preceding Monthly
Period. Notwithstanding the above, in the case of each such Overconcentration,
the percentage in clause (b) for such Overconcentration may be increased by the
Transferor, without the consent of any Certificateholder, to a level acceptable
to each Rating Agency without any reduction or withdrawal of its rating of the
Class A, Class B or Class C Certificates (but which may involve an adjustment,
upward or downward, of the Class D Invested Amount).
"Minimum Aggregate Principal Receivables" shall mean, as of any date of
determination, an amount equal to the Initial Invested Amounts for all
outstanding Series on such date.
"Minimum Net Worth" shall mean, at any time of determination, $________.
"Minimum Retained Interest" shall mean the product of the weighted average
Minimum Retained Percentages for all Series and the sum of the outstanding
principal amounts of all classes of all Series.
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"Minimum Retained Percentage" shall mean the highest Minimum Retained
Percentage specified in any Supplement.
"Minimum Transferor Interest" shall mean, as of any date of determination,
the product of (i) the Invested Amount and (ii) the Minimum Transferor
Percentage.
"Minimum Transferor Percentage" shall mean the highest Minimum Transferor
Percentage specified in any Supplement for an outstanding Series.
"Monthly Investor Servicing Fee" shall mean the Servicing Fee payable to
the Servicer with respect to a Monthly Period.
"Monthly Payment Rate" shall mean, for any Monthly Period, the percentage
equivalent of a fraction, the numerator of which is the aggregate of the
Receivables balances (without deducting therefrom the discount portion, if any)
collected during such Monthly Period, and the denominator of which is the
average daily aggregate Receivables balance (without deducting therefrom the
discount portion, if any) for such Monthly Period.
"Monthly Period" shall mean, unless otherwise defined with respect to a
Series in the related Supplement, the period from and including the first day of
each calendar month to and including the last day of such calendar month.
"Moody's" shall mean Moody's Investors Service, Inc. or any successor
thereto.
"Net Receivables Rate" shall mean, for any Distribution Date (i) the
weighted average of the interest rates borne by the Receivables during the
second preceding Monthly Period (because interest payments on the Receivables at
such rates will be due and payable in the Monthly Period preceding such
Distribution Date), plus (ii) the product of (x) the Monthly Payment Rate for
the Monthly Period preceding such Distribution Date, (y) the Discount Factor, if
any, for such Distribution Date, and (z) twelve, less 2% per annum, unless the
Servicing Fee has been waived for such Monthly Period pursuant to Section 8.8.
"NSF" shall mean, with respect to a Receivable, that a check in payment of
such Receivable has been returned because of insufficient funds and has not
thereafter been paid.
"Obligor" shall mean a Person obligated to make payments with respect to a
Receivable pursuant to a Financing Agreement.
"Officer's Certificate" shall mean a certificate signed by any Vice
President, Treasurer, Assistant Treasurer or more senior officer of the
Transferor or Servicer and delivered to the Trustee.
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"Opinion of Counsel" shall mean a written opinion of counsel, who may be
counsel for or an employee of Green Tree or the Transferor, and who shall be
reasonably acceptable to the Trustee.
"Outstanding Balance" shall mean, with respect to a Receivable on any day,
the aggregate amount owed by the Dealer thereunder as of the close of business
on the prior Business Day (net of returns and adjustments).
"Overconcentration Amount" on each Distribution Date shall mean, the
aggregate principal amount of Receivables in the Trust on such Distribution Date
which are Asset-Based Receivable Overconcentrations, Dealer Overconcentrations,
Manufacturer Overconcentrations and Product Line Overconcentrations.
"Paying Agent" shall mean any paying agent appointed pursuant to Section
6.6 and shall initially be the Trustee.
"Pay Out Commencement Date" shall mean, with respect to each Series, the
date on which (a) a Trust Pay Out Event is deemed to occur pursuant to Section
9.1 or (b) a Series Pay Out Event is deemed to occur pursuant to the Supplement
for such Series.
"Pay Out Event" shall mean, with respect to each Series, a Trust Pay Out
Event or a Series Pay Out Event.
"Permitted Lien" shall mean with respect to the Receivables: (i) Liens in
favor of the Transferor created pursuant to the Purchase Agreement assigned to
the Trustee pursuant to this Agreement; (ii) Liens in favor of the Trustee
pursuant to this Agreement; and (iii) Liens which secure the payment of taxes,
assessments and governmental charges or levies, if such taxes are either (a) not
delinquent or (b) being contested in good faith by appropriate legal or
administrative proceedings and as to which adequate reserves in accordance with
generally accepted accounting principles shall have been established.
"Person" shall mean any legal person, including any individual,
corporation, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, governmental entity or other entity of
similar nature.
"Pool Balance" shall mean the product of (i) the total amount of Principal
Receivables and (ii) one minus the Discount Factor.
"Principal Account" shall have the meaning specified in subsection 4.2(b).
"Principal Collections" shall mean, with respect to any Business Day, all
Collections, other than Interest Collections.
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"Principal Funding Investment Shortfall" shall mean an amount equal to the
difference between (i) the amount of interest actually earned on investments in
the Principal Account on any day and (ii) the amount of interest that would have
been earned on such investments at the Base Rate for such day.
"Principal Investment Proceeds" shall mean the investment earnings (net of
investment losses and expenses) of funds on deposit in the Principal Account
during the Controlled Accumulation Period.
"Principal Receivables" with respect to an Account shall mean amounts shown
on the Servicer's records as Receivables(other than such amounts that represent
Imputed Yield Receivables, Defaulted Receivables or interest payable by the
related Dealer).
"Principal Shortfalls" shall mean, with respect to any Business Day and any
outstanding Series, the amount which the related Supplement specifies as the
"Principal Shortfall" for such Business Day.
"Principal Terms" shall have the meaning, with respect to any Series issued
pursuant to an Exchange, specified in subsection 6.9(c).
"Product Line Overconcentration" on any Distribution Date means, the excess
of (a) the aggregate of all amounts of Principal Receivables in the Accounts
that represent financing for a single product line (other than Asset-Based
Receivables and Receivables that represent financing for manufactured housing)
on the last day of the Monthly Period immediately preceding such Distribution
Date over (b) 5% for marine products, 5% for recreational vehicles, and 5% for
any other products in total, of the Principal Receivables on the last day of
such immediately preceding Monthly Period. Notwithstanding the above, in the
case of each such Overconcentration, the percentage in clause (b) for such
Overconcentration may be increased by the Transferor, without the consent of any
Certificateholder, to a level acceptable to each Rating Agency without any
reduction or withdrawal of its rating of the Class A or Class B Certificates
(but which may involve an adjustment, upward or downward, of the Class D
Invested Amount).
"Products" shall mean the commercial and consumer goods financed by Green
Tree for Dealers pursuant to a Wholesale Financing Agreement.
"Prospective Pay Out Event" shall have the meaning specified in subsection
2.3(n).
"Publication Date" shall have the meaning specified in subsection 9.2(a).
"Purchase Agreement" shall mean the Receivables Purchase Agreement dated as
of December 1, 1995 between the Transferor, as purchaser of such Receivables,
and Green Tree, as seller of such Receivables, governing the terms and
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conditions upon which the Transferor is acquiring the initial Receivables
transferred to the Trust on the Closing Date and all Receivables acquired
thereafter, as the same may from time to time be amended, modified or otherwise
supplemented.
"Qualified Institution" shall have the meaning specified in subsection
4.2(a).
"Rating Agency" shall mean, with respect to each Series, the rating agency
or agencies, if any, specified in the related Supplement.
"Rating Agency Condition" shall mean, with respect to any action, that each
Rating Agency shall have notified the Transferor, the Servicer and the Trustee
in writing that such action will not result in a reduction or withdrawal of the
rating of any outstanding Series or Class with respect to which it is a Rating
Agency.
"Reassignment Date" shall have the meaning specified in subsection 2.4(d).
"Receivables" shall mean, with respect to an Account, all amounts payable
(including interest, finance charges and other charges), and the obligation to
pay such amounts, by the related Dealer from time to time in respect of advances
made by Green Tree to or on behalf of such Dealer in connection with the
Floorplan Business or the Asset-Based Lending Business, as the case may be,
together with the group of writings evidencing such amounts and the security
interest created in connection therewith and all of the rights, remedies, powers
and privileges thereunder (including under the related Financing Agreement).
Receivables which become Defaulted Receivables will cease to be included as
Receivables on the day on which they become Defaulted Receivables, but
Recoveries in respect thereof, shall be part of the Trust. Receivables which
Green Tree is unable to transfer to the Transferor pursuant to the Purchase
Agreement or which the Transferor is unable to transfer to the Trust as provided
in Section 2.6(d) and Receivables which arise in Designated Accounts from and
after the related Removal Commencement Date shall not be included in calculating
the amount of Receivables.
"Record Date" shall mean, with respect to any Distribution Date, unless
otherwise specified in the applicable Supplement, the Business Day preceding
such Distribution Date, except that, with respect to any Definitive
Certificates, Record Date shall mean the fifth day of the then current Monthly
Period.
"Records" shall mean, with respect to any Receivable, all documents, books,
records and other information (including, without limitation, computer programs,
tapes, discs, punch cards, data processing software and related property and
rights) relating to such Receivable and the related Dealer.
"Recoveries" shall mean any amounts received by the Servicer with respect
to Receivables that were previously charged off as uncollectible in accordance
with the Servicer's customary and usual servicing procedures.
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"Registered Certificates" shall have the meaning specified in Section 6.1.
"Related Person" shall mean a Person that is an Affiliate of Green Tree,
any Investor Certificateholder, any Enhancement Provider, or any Person whose
status would violate the conditions for a trustee contained in Section (4)(i) of
Rule 3a-7 under the Investment Company Act of 1940, as amended.
"Relevant UCC State" shall mean each jurisdictions in which the filing of a
UCC financing statement is necessary to perfect the ownership interest and
security interest of the Transferor pursuant to the Purchase Agreement or the
ownership or security interest of the Trustee established under this Agreement.
"Removal Date" shall have the meaning specified in Section 2.7(b).
"Removal Notice" shall have the meaning specified in Section 2.7(b).
"Removed Account" shall have the meaning specified in Section 2.7(b).
"Requirements of Law" for any Person shall mean the certificate of
incorporation or articles of association and bylaws or other organizational or
governing documents of such Person, and any material law, treaty, rule or
regulation, or determination of an arbitrator or Governmental Authority, in each
case applicable to or binding upon such Person or to which such Person is
subject, whether Federal, state or local (including usury laws and the Federal
Truth in Lending Act).
"Responsible Officer" shall mean any officer within the Corporate Trust
Office (or any successor group of the Trustee), including the President, any
Vice President or any other officer of the Trustee customarily performing
functions similar to those performed by any person who at the time shall be an
above-designated officer and who shall have direct responsibility for the
administration of this Agreement.
"Retained Interest" shall mean, on any date of determination, the sum of
the Transferor Interest and the Invested Amount represented by any Transferor
Retained Certificate.
"Retained Percentage" shall mean, on any date of determination, the
percentage equivalent of a fraction the numerator of which is the Retained
Interest and the denominator of which is the aggregate amount of Principal
Receivables at the end of the day immediately prior to such date of
determination plus all amounts on deposit in the Excess Funding Account (but not
including investment earnings on such amounts).
"Revolving Period" shall have, with respect to each Series, the meaning
specified in the related Supplement.
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"SAU" shall mean "sold and unpaid" and refers to inventory that the Dealer
has sold without immediate repayment to Green Tree.
"Secured Obligations" shall have the meaning specified in Section 2.1.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Series" shall mean any series of Investor Certificates, issued by the
Trust pursuant to a Supplement, including the 1995-1 Series Supplement
"Series Account" shall mean any account or accounts established pursuant to
a Supplement for the benefit of the related Series.
"Series Allocation Percentage" shall mean with respect to any Series, or
any date of determination, the percentage equivalent of a fraction the numerator
of which is the Invested Amount of such Series and the denominator of which is
the sum of the Invested Amounts of all Series then outstanding.
"Series Cut-off Date" shall mean, with respect to any Series, the date
specified as such in the related Supplement.
"Series 1995-1" shall mean the series of Investor Certificates to be issued
and to be designated as "Series 1995-1."
"Series Pay Out Event" shall have, with respect to any Series, the meaning
specified in the related Supplement.
"Series Servicing Fee Percentage" shall mean, with respect to any Series,
the amount specified as such in the related Supplement.
"Servicer Default" shall have the meaning specified in Section 10.1.
"Servicing Fee" shall have the meaning specified in the related
Supplements.
"Servicing Officer" shall mean any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Receivables whose name
appears on a list of servicing officers furnished to the Trustee by the Servicer
as such list may from time to time be amended.
"Settlement Statement" shall mean a report in the form specified in
subsection 1.2(e) as may be supplemented pursuant to any Supplement.
"Shared Principal Collections" shall mean, with respect to any Business
Day, for all outstanding Series the aggregate amount of Principal Collections
which the
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related Supplements specify are to be treated as "Shared Principal Collections"
available to be allocated to other Series for such Business Day.
"Standard & Poor's" shall mean Standard & Poor's Ratings Services, a
Division of The McGraw-Hill Companies, Inc., or any successor thereto.
"Successor Servicer" shall have the meaning specified in subsection
10.2(a).
"Supplement" shall mean, with respect to any Series, a supplement to this
Agreement complying with the terms of Section 6.9 of this Agreement, executed in
conjunction with any issuance of Certificates of such Series (or, in the case of
the issuance of Certificates on the Initial Closing Date, the supplements
executed in connection with the issuance of such Certificates).
"Tax Opinion" shall mean, with respect to any action, an Opinion of Counsel
to the effect that, for Federal income and Minnesota state income and franchise
tax purposes, (a) such action will not adversely affect the characterization of
the Investor Certificates of any outstanding Series or Class as debt, (b) such
action will not cause or constitute a taxable event with respect to any Investor
Certificateholders or the Trust, (c) such action will not cause the Trust to be
characterized as an association, publicly traded partnership or taxable mortgage
pool taxable as a corporation, and (d) in the case of Section 6.3(b), the
Investor Certificates of the new Series will be characterized as debt.
"Termination Notice" shall have, with respect to any Series, the meaning
specified in Section 10.1.
"Transfer" shall mean transfer, sell, exchange, pledge, hypothecate,
participate, or otherwise assign, in whole or in part.
"Transfer Agent and Registrar" shall have the meaning specified in Section
6.3 and shall initially be the Trustee.
"Transfer Date" shall mean, with respect to any Series, the Business Day
immediately prior to the Distribution Date on which the Servicer may make
deposits and payments.
"Transfer Deposit Amount" shall mean, with respect to any Receivable
reassigned or assigned to the Transferor or the Servicer, as applicable,
pursuant to Section 2.4(c) or Section 3.3, the amounts specified in such
Sections.
"Transferor" shall mean Green Tree Floorplan Funding Corp., a corporation
organized and existing under the laws of the State of Delaware, and any
successor thereto.
"Transferor Exchange" shall have the meaning specified in subsection
6.9(b).
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"Transferor Interest" shall mean the Transferor's right to the assets of
the Trust not allocated to the Series 1995-1 Certificateholders' Interest or the
interest of the holders of certificates of any future Series pursuant to the
Pooling and Servicing Agreement and applicable Supplements.
"Transferor Interest Collections" shall mean, on any Business Day, the
Series Allocation Percentage of the Interest Collections allocable to the
Transferor Interest for such Business Day.
"Transferor Percentage" shall mean (a) when used with respect to Principal
Collections during the Revolving Period and Interest Collections and the amount
of Defaulted Receivables at all times, 100% minus the sum of the Floating
Allocation Percentage and the floating allocation percentages for all other
Series and (b) when used with respect to Principal Collections during the
Controlled Accumulation Period or Early Amortization Period, 100% minus the sum
of the Fixed/Floating Allocation Percentage and the allocation percentages used
with respect to Principal Collections for all other Series.
"Transferor Retained Certificates" shall mean Investor Certificates of any
Series which the Transferor is required to retain pursuant to the terms of any
Supplement.
"Transferor Retained Class" shall mean any Class of Investor Certificates
of any Series that the Transferor is initially required to retain pursuant to
the terms of any Supplement.
"Trigger Event" shall have the meaning specified in subsection 9.2(a).
"Trust" shall mean the Green Tree Floorplan Receivables Master Trust
created by this Agreement, the corpus of which shall consist of the Trust
Property.
"Trust Extension" shall have the meaning specified in subsection 12.1(a).
"Trust Pay Out Event" shall have, with respect to each Series, the meaning
specified in Section 9.1.
"Trust Property" shall have the meaning assigned in Section 2.1.
"Trust Termination Date" shall mean the earliest to occur of (i) unless a
Trust Extension shall have occurred, the day after the Distribution Date with
respect to any Series following the date on which funds shall have been
deposited in the Distribution Account or the applicable Series Account for the
payment of Investor Certificateholders of each Series then issued and
outstanding sufficient to pay in full the Aggregate Invested Amount plus
interest accrued at the applicable Certificate Rate through the end of the day
prior to the Distribution Date with respect to each
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such Series and certain other amounts as may be specified in any Series
Supplement, (ii) if a Trust Extension shall have occurred, the Extended Trust
Termination Date, and (iii) the date specified in Section 12.1.
"Trustee" shall mean Norwest Bank Minnesota, National Association, a
national banking association, and its successors and any Person resulting from
or surviving any consolidation or merger to which it or its successors may be a
party and any successor trustee appointed as herein provided.
"UCC" shall mean the Uniform Commercial Code, as amended from time to time,
as in effect in the applicable jurisdiction.
"Undivided Interest" shall mean the undivided interest in the Trust
evidenced by an Investor Certificate.
"Wholesale Financing Agreement" shall mean a wholesale financing agreement
entered into by Green Tree and a Dealer in order to finance Products purchased
by such Dealer from a Manufacturer, as amended or modified from time to time.
Section 1.2 Other Definitional Provisions.
(a) All terms defined in any Supplement or this Agreement shall have the
defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.
(b) As used herein and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in Section
1.1, and accounting terms partially defined in Section 1.1 to the extent not
defined, shall have the respective meanings given to them under generally
accepted accounting principles. To the extent that the definitions of
accounting terms herein are inconsistent with the meanings of such terms under
generally accepted accounting principles, the definitions contained herein shall
control.
(c) The agreements, representations and warranties of Green Tree in this
Agreement and in any Supplement in its capacity as Servicer and of GTFFC in its
capacity as Transferor shall be deemed to be the agreements, representations and
warranties of Green Tree and GTFFC solely in each such capacity for so long as
either of them acts in each such capacity under this Agreement.
(d) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to any Supplement or this
Agreement as a whole and not to any particular provision of this Agreement or
any Supplement; and Section, subsection, Schedule and Exhibit references
contained in this Agreement or any Supplement are references to Sections,
subsections,
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Schedules and Exhibits in or to this Agreement or any Supplement unless
otherwise specified.
(e) The Daily Report and Settlement Statement shall be in substantially the
forms of Exhibits B and C, with such changes as the Servicer may determine to be
necessary or desirable; provided, however, that no such change shall serve to
exclude information required by this Agreement or any Supplement and each such
change shall be reasonably acceptable to the Trustee. The Servicer shall, upon
making such determination and receiving the consent of the Trustee to such
change, deliver to the Trustee and each Rating Agency an Officer's Certificate
to which shall be annexed the form of the related Exhibit, as so changed. Upon
the delivery of such Officer's Certificate to the Trustee, the related Exhibit,
as so changed, shall for all purposes of this Agreement constitute such Exhibit.
The Trustee may conclusively rely upon such Officer's Certificate in determining
whether the related Exhibit, as changed, conforms to the requirements of this
Agreement.
Section 1.3 Provisions Relating to Rating Agencies. Provisions in this
Agreement relating to Standard & Poor's or Moody's or a Rating Agency shall be
effective only so long as there is a Series of Investor Certificates outstanding
that has been rated by such Rating Agency at the request of the Transferor. By
way of illustration and not limitation of the foregoing, if no Series of
Investor Certificates then outstanding has been rated at the request of the
Transferor by Standard & Poor's, a notice required hereunder to be given to a
Rating Agency need not be given to Standard & Poor's and an Eligible Institution
need not have its debt or certificates of deposit rated by Standard & Poor's.
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ARTICLE II
CONVEYANCE OF RECEIVABLES;
ISSUANCE OF CERTIFICATES
Section 2.1 Conveyance of Receivables. The Transferor does hereby sell,
transfer, assign, set-over, and otherwise convey (i) to the Trust for the
benefit of the Certificateholders and the other Beneficiaries on the Initial
Closing Date, in the case of the Initial Accounts, and on the applicable
Addition Date, in the case of Additional Accounts (except as expressly provided
herein), (i) all of its right, title and interest in, to and under the
Receivables in each Account and all Collateral Security with respect thereto
owned by the Transferor at the close of business on the Initial Cut-off Date, in
the case of Initial Accounts, and on the applicable Additional Cut-off Date, in
the case of Additional Accounts, and all monies due or to become due and all
amounts received with respect thereto and all proceeds (including proceeds as
defined in Section 9-306 of the UCC as in effect in the State of Minnesota and
Recoveries) thereof, (ii) all of the Transferor's rights, remedies, powers and
privileges with respect to such Receivables, and the Receivables conveyed to the
Trust in the next sentence, under the related Floorplan Agreements, if any, and
(iii) all of the Transferor's rights, remedies, powers and privileges with
respect to such Receivables under the Purchase Agreement, and (iv) all proceeds
of the foregoing. As of each Business Day prior to the earlier of (i) the
occurrence of a Pay Out Event specified in Section 9.1(b), (c), (d) or (e) and
(ii) the Trust Termination Date, on which Receivables are created in the
Accounts (a "Receivables Transfer Date"), the Transferor does hereby sell,
transfer, assign, set over and otherwise convey, without recourse (except as
expressly provided herein), to the Trust for the benefit of the
Certificateholders and the other Beneficiaries, all of its right, title and
interest in, to and under the Receivables in each Account (other than any
Receivables created in any Designated Account from and after the applicable
Removal Date) and all Collateral Security with respect thereto owned by the
Transferor at the close of business on such Transfer Date and not theretofore
conveyed to the Trust, all monies due or to become due and all amounts received
with respect thereto and all proceeds (including "proceeds" as defined in
Section 9-306 of the UCC as in effect in the State of Minnesota and Recoveries)
thereof. The foregoing sale, transfer, assignment, set-over and conveyance and
any subsequent sales, transfers, assignments, set-overs and conveyances do not
constitute, and are not intended to result in, the creation or an assumption by
the Trust, the Trustee, any Agent or any Beneficiary of any obligation of the
Servicer, Green Tree, the Transferor, or any other Person in connection with the
Accounts, the Receivables or under any agreement or instrument relating thereto,
including any obligation to any Dealers or Manufacturers and Green Tree (and not
any of the other foregoing Persons) shall continue to perform and be responsible
for their respective obligations under the Financing Agreements, Floorplan
Agreements and any related agreements and arrangements. The foregoing transfer,
assignment, setover and conveyance to the Trust, and any subsequent transfer,
assignment, setover and conveyance to the Trust, shall be made to the Trustee,
on behalf of the Trust, and
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each reference in this Agreement or any Supplement
to any such transfer, assignment, setover and conveyance shall be construed
accordingly.
In connection with such sales, the Transferor agrees to record and file, at
its own expense, a financing statement on form UCC-1 (and Transferor's or Green
Tree's continuation statements when applicable) with respect to the Receivables
now existing and hereafter created for the sale of chattel paper, accounts and
general intangibles (as defined in Section 9-105 of the UCC as in effect in any
state where the Transferor's or Green Tree's chief executive offices or books
and records relating to the Receivables are located) meeting the requirements of
applicable state law in such manner and in such jurisdictions as are necessary
to perfect the sale and assignment of the Receivables and the other assets
conveyed hereby to the Trust, and to deliver a file-stamped copy of such
financing statements or other evidence of such filing to the Trustee on or prior
to the first Closing Date, in the case of the Initial Accounts, and (if any
additional filing is so necessary) the applicable Addition Date, in the case of
Additional Accounts. The Trustee shall be under no obligation whatsoever to
file such financing statement, or a continuation statement to such financing
statement, or to make any other filing under the UCC in connection with such
sales.
In connection with such sales, the Transferor further agrees, at its own
expense, on or prior to the Initial Closing Date, in the case of the Initial
Accounts, the applicable Addition Date, in the case of Additional Accounts, and
the applicable Removal Commencement Date, in the case of Removed Accounts, (a)
to cause Green Tree to indicate in its books and records, which may include
computer files, as required by the Purchase Agreement, that the Receivables
created in connection with the Accounts (other than Removed Accounts) have been
sold, and the Collateral Security assigned, to the Transferor in accordance with
the Purchase Agreement and sold to the Trust pursuant to this Agreement for the
benefit of the Certificateholders and the other Beneficiaries and (b) to deliver
to the Trustee (or cause Green Tree to do so) a computer file or microfiche or
written list containing a true and complete list of all such Accounts (other
than Removed Accounts) specifying for each such Account, as of the Initial Cut-
off Date, in the case of the Initial Accounts, and the applicable Additional
Cut-off Date, in the case of Additional Accounts, (i) its account number and
(ii) the aggregate amount of Principal Receivables in such Account. Such file
or list, as supplemented from time to time to reflect Additional Accounts and
Removed Accounts, shall be marked as Schedule 1 to this Agreement and is hereby
incorporated into and made a part of this Agreement. The Trustee shall be under
no obligation whatsoever to verify the accuracy or completeness of the
information contained in Schedule 1 from time to time.
In the event that such sale and assignment is deemed to constitute a pledge
of security for a loan or loans (the "Secured Obligations"), it is the intent of
this Agreement that the Transferor shall be deemed to have granted to the
Trustee a first priority perfected security interest in all of the Transferor's
right, title and interest to and under the Receivables and the Collateral
Security and all proceeds thereof, the
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Floorplan Agreements and the Purchase Agreement, and that this Agreement shall
constitute a security agreement under applicable law in order to secure the
Secured Obligation. Such property, together with all monies as are from time to
time deposited in the Collection Account, any Interest Funding Account, any
Principal Account, any Distribution Account, any Series Account and the Excess
Funding Account and all amounts on deposit in or credited to such accounts and
any other account and all monies as are from time to time available under any
Enhancement for any Series for payment to Certificateholders shall constitute
the property of the Trust (the "Trust Property").
Section 2.2 Acceptance by Trustee.
(a) The Trustee hereby acknowledges its acceptance, on behalf of the Trust,
of all right, title and interest previously held by the Transferor in, to and
under the Trust Property and declares that it shall maintain such right, title
and interest, upon the Trust herein set forth, for the benefit of all
Certificateholders and the other Beneficiaries.
(b) The Trustee shall have no power to create, assume or incur indebtedness
or other liabilities in the name of the Trust other than as contemplated in this
Agreement.
Section 2.3 Representations and Warranties of the Transferor. The
Transferor hereby represents and warrants to the Trustee, on behalf of the
Trust, as of the Initial Closing Date and, with respect to any Series of
Certificates, as of the date of the related Supplement and the related Closing
Date for such Series:
(a) Organization and Good Standing. The Transferor is a corporation duly
organized and validly existing in good standing under the laws of the State of
Delaware and has the corporate power and authority and legal right to own its
properties and conduct its business as such properties are presently owned and
such business is presently conducted, and to execute, deliver and perform its
obligations under this Agreement and the Purchase Agreement and to execute and
deliver to the Trustee the Certificates pursuant hereto.
(b) Due Qualification. The Transferor is duly qualified to do business and
is in good standing (or is exempt from such requirements) as a foreign
corporation in any state required in order to conduct business, and has obtained
all necessary licenses and approvals with respect to the Transferor required
under federal, Minnesota and Delaware law.
(c) Due Authorization. The execution and delivery of this Agreement and
the Purchase Agreement and the consummation of the transactions provided for
herein and therein, have been duly authorized by the Transferor by all necessary
corporate action on its part.
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(d) Binding Obligation. Each of this Agreement and the Purchase Agreement,
and the consummation of the transactions provided for herein and therein,
constitutes a legal, valid, and binding obligation of the Transferor,
enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereinafter in effect, affecting the enforcement of
creditors' rights in general and as such enforceability may be limited by
general principles of equity (whether considered in a proceeding at law or in
equity).
(e) No Conflicts. The execution and delivery of this Agreement and the
Purchase Agreement and the performance of the transactions contemplated hereby
and thereby, do not (i) contravene the Transferor's certificate of incorporation
or bylaws, (ii) violate any material provision of law applicable to it or
require any filing (except for the filings under the UCC), registration, consent
or approval under, any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award presently in effect having applicability to the
Transferor, except for such filings, registrations, consents or approvals as
have already been obtained and are in full force and effect.
(f) No Violation. The execution and delivery of this Agreement and the
Purchase Agreement and the execution and delivery to the Trustee of the
Certificates, the performance of the transactions contemplated by this Agreement
and the Purchase Agreement and the fulfillment of the terms hereof and thereof
will not violate any Requirements of Law applicable to the Transferor, will not
violate, result in any breach of any of the material terms and provisions of, or
constitute (with or without notice or lapse of time or both) a default under,
any Requirement of Law applicable to the Transferor or any material indenture,
contract, agreement, mortgage, deed of trust or other material instrument to
which the Transferor is a party or by which it or its properties are bound.
(g) No Proceedings. There are no proceedings or investigations pending or,
to the best knowledge of the Transferor, threatened against the Transferor,
before any Governmental Authority (i) asserting the invalidity of this Agreement
and the Purchase Agreement, (ii) seeking to prevent the consummation of any of
the transactions contemplated hereby or thereby, (iii) seeking any determination
or ruling that would materially and adversely affect the performance by the
Transferor of its obligations thereunder, (iv) seeking any determination or
ruling that would materially and adversely affect the validity or enforceability
thereof or (v) seeking to affect adversely the tax attributes of the Trust.
(h) All Consents Required. All approvals, authorizations, consents, orders
or other actions of any Governmental Authority required in connection with the
execution and delivery of this Agreement, the Purchase Agreement and the
Certificates, the performance of the transactions contemplated by this Agreement
and the Purchase Agreement and the fulfillment of the terms hereof and thereof,
have been obtained.
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(i) Record of Accounts. As of the Initial Closing Date, in the case of the
Initial Accounts, as of the applicable Addition Date, in the case of the
Additional Accounts, and, as of the applicable Removal Date, in the case of
Removed Accounts, Schedule 1 to this Agreement is an accurate and complete
listing in all material respects of all the Accounts as of the Cut-off Date, the
applicable Additional Cut-off Date or the applicable Removal Date, as the case
may be, and the information contained therein with respect to the identity of
such Accounts and the Receivables existing thereunder is true and correct in all
material respects as of the Cut-off Date, such applicable Additional Cut-off
Date or such Removal Date, as the case may be.
(j) Place of Business. The principal executive offices of the Transferor
are in Minnesota, and the offices where the Transferor keeps its records
concerning the Receivables and related Contracts are in Minnesota.
(k) Pay Out Event. As of the Initial Closing Date, no Pay Out Event and no
condition that with the giving of notice and/or the passage of time would
constitute a Pay Out Event (a "Prospective Pay Out Event"), has occurred and is
continuing.
(l) Not an Investment Company. The Transferor is not an "investment
company" within the meaning of the Investment Company Act, or is exempt from all
provisions of such Act.
For the purposes of the representations and warranties contained in this
Section 2.3 and made by the Transferor on the Initial Closing Date,
"Certificates" shall mean the Certificates issued on the Initial Closing Date.
The representations and warranties set forth in this Section 2.3 shall survive
the transfer and assignment of the respective Receivables to the Trust, and
termination of the rights and obligations of the Servicer pursuant to Section
10.1. The Transferor hereby represents and warrants to the Trust, with respect
to any Series of Certificates, as of its Closing Date, unless otherwise stated
in the related Supplement, that the representations and warranties of the
Transferor set forth in Section 2.3 are true and correct as of such date (and
for the purposes of such representations and warranties, "Certificates" shall
mean the Certificates issued on the related Closing Date) and that each
representation and warranty set forth in this Section 2.3 and in Section
2.4(a)(i) with respect to the Agreement shall be made at such time with respect
to the applicable Supplement. Upon discovery by the Transferor, the Servicer or
a Responsible Officer of the Trustee of a breach of any of the foregoing
representations and warranties, the party discovering such breach shall give
prompt written notice to the others.
Section 2.4 Representations and Warranties of the Transferor Relating to
the Agreement and the Receivables.
(a) Binding Obligation; Valid Transfer and Assignment. The Transferor
hereby represents and warrants to the Trustee, on behalf of the Trust, that, as
of the
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Initial Closing Date and with respect to any Series of Certificates, as
of the date of its related Supplement and Closing Date:
(i) The Purchase Agreement and this Agreement each constitutes the
legal, valid and binding obligation of the Transferor, enforceable against
the Transferor in accordance with its terms, except (A) as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect, affecting the enforcement of creditors' rights in general, and (B)
as such enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity).
(ii) The transfer of Receivables by the Transferor to the Trust under
this Agreement constitutes either (A) a valid transfer, assignment, setover
and conveyance to the Trust of all right, title and interest of the
Transferor in and to the Trust Property, and such Trust Property will be
held by the Trust free and clear of any Lien of any Person claiming through
or under the Transferor or any of its Affiliates except for (x) Permitted
Liens, (y) the interest of the Transferor as Holder of the Exchangeable
Transferor Certificate and any other Class of Certificates held by the
Transferor from time to time and (z) the Transferor's right, if any, to
interest accruing on, and investment earnings, if any, in respect of any
Interest Funding Account, any Principal Account, the Excess Funding
Account, or any Series Account, as provided in this Agreement or the
related Supplement, or (B) a grant of a first priority security interest
(as defined in the UCC as in effect in the Relevant UCC State) in, to and
under the Trust Property, which grant is enforceable with respect to the
existing Receivables and the proceeds thereof upon execution and delivery
of this Agreement, and which will be enforceable with respect to such
Receivables hereafter created and the proceeds thereof, upon such creation.
If this Agreement constitutes the grant of a security interest to the Trust
in such property, upon the filing of the financing statement described in
Section 2.1 and in the case of the Receivables hereafter created and
proceeds thereof, upon such creation, the Trust shall have a first priority
perfected security interest in such property, except for Permitted Liens.
Except as contemplated in this Agreement or any Supplement, neither the
Transferor nor any Person claiming through or under the Transferor shall
have any claim to or interest in the Collection Account, any Principal
Account, any Interest Funding Account, the Distribution Account, the Excess
Funding Account, any principal funding account for any Series or any other
Series Account, except for the Transferor's rights to receive interest
accruing on, and investment earnings in respect of, any such account as
provided in this Agreement (or, if applicable, any Series Account as
provided in any Supplement) and, if this Agreement constitutes the grant of
a security interest in such property, except for the interest of the
Transferor in such property as a debtor for purposes of the UCC as in
effect in the Relevant UCC State. The Purchase Agreement constitutes a
valid transfer, assignment, set-over and conveyance to the
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Transferor of all right, title and interest of Green Tree in and to the
Receivables and the Collateral Security purported to be sold thereunder,
whether then existing or thereafter created in the applicable Accounts, and
the proceeds thereof.
(iii) The Transferor is not insolvent and will not be rendered
insolvent upon the transfer of the Receivables to the Trust.
(iv) All consents, licenses, approvals or authorizations of or
registrations or declarations with any Governmental Authority required in
connection with the transfer of Trust Property to the Trust have been
obtained.
(v) Each Receivable and all other Trust Property existing on the first
Closing Date or, in the case of Additional Accounts, on the applicable
Addition Date, and on each Receivables Transfer Date, has been conveyed to
the Trust free and clear of any Lien and in compliance with all applicable
Requirements of Law in all material respects.
(vi) With respect to each Receivable and all other Trust Property
existing on the Initial Closing Date or, in the case of Additional
Accounts, on the applicable Addition Date, and on each Transfer Date, all
consents, licenses, approvals or authorizations of or registrations or
declarations with any Governmental Authority required to be obtained,
effected or given by the Transferor in connection with the conveyance of
such Receivable or other Trust Property to the Trust have been duly
obtained, effected or given and are in full force and effect.
(vii) On the Cut-off Date and each Closing Date, each Initial Account
is an Eligible Account or, if such Account is not an Eligible Account, such
Account is being removed from the Trust in accordance with Section 2.8 and,
in the case of Additional Accounts, on the applicable Additional Cut-off
Date and each subsequent Closing Date, each such Additional Account is an
Eligible Account or its being removed pursuant to Section 2.8.
(viii) On the Initial Closing Date, in the case of the Initial
Accounts, and, in the case of the Additional Accounts, on the applicable
Additional Cut-off Date, and on each Receivables Transfer Date, each
Receivable conveyed to the Trust on such date is an Eligible Receivable or,
if such Receivable is not an Eligible Receivable, such Receivable is
conveyed to the Trust in accordance with Section 2.9.
(b) Notice of Breach. The representations and warranties set forth in this
Section 2.4 shall survive the transfer and assignment of the respective
Receivables to the Trust. Upon discovery by the Transferor, the Servicer or a
Responsible Officer of the Trustee of a breach of any of the representations and
warranties set forth in
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this Section 2.4, the party discovering such breach
shall give prompt written notice to the other parties mentioned above. The
Transferor agrees to cooperate with the Servicer and the Trustee in attempting
to cure any such breach.
(c) Designation of Ineligible Receivables. In the event any representation
or warranty set forth in Section 2.4(a)(iii) through (viii) is not true and
correct as of the date specified therein with respect to any Receivable or
Account and such breach has a materially adverse effect on the
Certificateholders' Interest in such Receivable or Account, then, within 30 days
(or such longer period as may be agreed to by the Trustee) of the earlier to
occur of the discovery of any such event by the Transferor or the Servicer, or
receipt by the Transferor or the Servicer of written notice of any such event by
the Transferor or the Servicer, or receipt by the Transferor shall accept a
reassignment of such Receivable or, in the case of such an untrue representation
or warranty with respect to an Account, all Receivables in such Account, on the
Determination Date immediately succeeding the day of such discovery or notice on
the terms and conditions set forth in the next succeeding paragraph; provided,
however, that no such reassignment shall be required to be made with respect to
such Receivable if, by the end of such 30-day period (or such longer period as
may be agreed to by the Trustee), the breached representation or warranty shall
then be true and correct in all material respects and any material adverse
effect caused thereby shall have been cured.
The Transferor shall accept a reassignment of each such Receivable by
directing the Servicer to deduct, subject to the next sentence, the principal
amount of such Receivables (exclusive of their Discount Portions) from the Pool
Balance on or prior to the end of the Collection Period in which such
reassignment obligation arises. If, following such deduction, the Transferor
Interest would be less than the Minimum Transferor Interest on the immediately
preceding Determination Date (after giving effect to the allocations,
distributions, withdrawals and deposits to be made on the Distribution Date
following such Determination Date), then not later than 12:00 noon New York City
time on the day on which such reassignment occurs, the Transferor shall deposit
in the Collection Account in immediately available funds the amount (the
"Transfer Deposit Amount") by which the Transferor Interest would be less than
such Minimum Transferor Interest (up to the principal amount of such Receivables
exclusive of the Discount Portions thereof); provided that if the Transfer
Deposit Amount is not deposited as required by this sentence, then the amounts
to be deducted in respect of such Receivables shall only be deducted from the
Pool Balance to the extent that the Transferor Interest is not reduced below the
Minimum Transferor Interest and the Receivables, the amounts to be deducted in
respect of which have not been so deducted, shall not be reassigned to the
Transferor and shall remain part of the Trust. Upon reassignment of any such
Receivable, but only after payment by the Transferor of the Transfer Deposit
Amount, if any, the Trust shall automatically and without further action be
deemed to sell, transfer, assign, set over and otherwise convey to the
Transferor, without recourse, representation or warranty, all the right, title
and interest of the Trust in and to such Receivable, all Collateral Security and
all moneys due or to become due
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with respect thereto and all proceeds thereof. The Trustee shall execute such
documents and instruments of transfer or assignment as shall be furnished by the
Transferor and shall take such other actions as shall reasonably be requested by
the Transferor, to effect the conveyance of such Receivables pursuant to this
Section. The obligation of the Transferor to accept a reassignment of any such
Receivable and to pay any related Transfer Deposit Amount shall constitute the
sole remedy respecting the event giving rise to such obligation available to
Certificateholders (or the Trustee on behalf of Certificateholders).
(d) Reassignment of Trust Portfolio. In the event any representation and
warranty under subsections 2.3(a), (b) or (c) or 2.4(a)(i) or (ii) is not true
and correct as of the date specified therein with respect to any Receivable or
Account either the Trustee or the Holders of Investor Certificates evidencing
Undivided Interests aggregating more than 50% of the Invested Amount of such
Series, by notice then given in writing to the Transferor (and to the Trustee
and the Servicer, if given by the Investor Certificateholders of such Series),
may direct the Transferor to accept reassignment of an amount of Principal
Receivables equal to the face amount of the Invested Amount to be repurchased
(as specified below) within 60 days of such notice (or within such longer period
as may be specified in such notice), and the Transferor shall be obligated to
accept reassignment of such Receivables on a Distribution Date specified by the
Transferor (such Distribution Date, the "Reassignment Date") occurring within
such applicable period on the terms and conditions set forth below; provided,
however, that no such reassignment shall be required to be made, and no notice
of such reassignment may be given, if, at any time during such applicable
period, the representations and warranties contained in subsections 2.3(a), (b)
and (c) and subsections 2.4(a)(i) and (ii) shall then be true and correct in all
material respects. The Transferor shall, on the Transfer Date (in next day
funds) preceding the Reassignment Date, deposit an amount equal to the
reassignment deposit amount for such Series in the related Distribution Account
or Series Account, as provided in the related Supplement, for distribution to
the Investor Certificateholders pursuant to Article XII. The reassignment
deposit amount with respect to any Series, unless otherwise stated in the
related Supplement, shall be equal to (i) the Invested Amount of such Series at
the end of the day on the last day of the Monthly Period preceding the
Reassignment Date plus (ii) an amount equal to all interest accrued but unpaid
on the Investor Certificates of such Series at the applicable Certificate Rate
through the last day of the related interest accrual period, less the amount, if
any, previously allocated for payment of interest to the Certificateholders of
such Series on the related Distribution Date in the Monthly Period in which the
Reassignment Date occurs plus any other amounts accrued and owing as specified
in the applicable Supplement. Payment of the reassignment deposit amount with
respect to any Series, and all other amounts in the Distribution Account or the
applicable Series Account in respect of the preceding Monthly Period, shall be
considered a prepayment in full of the Receivables represented by the Investor
Certificates of such Series. On the Distribution Date following the Transfer
Date on which such amount has been deposited in full into the Distribution
Account or the applicable Series Account, the Receivables and all
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monies due or to become due with respect thereto and all proceeds of the
Receivables shall be released to the Transferor after payment of all amounts
otherwise due hereunder on or prior to such dates and the Trustee shall execute
and deliver such instruments of transfer or assignment, in each ease without
recourse, representation or warranty, as shall be prepared by and as are
reasonably requested by the Transferor to vest in the Transferor, or its
designee or assignee, all right, title and interest of the Trust in and to such
Receivables, all monies due or to become due with respect thereto and all
proceeds of such Receivables allocated to such Receivables pursuant to the
related Supplement. If the Trustee or the Investor Certificateholders of any
Series give notice directing the Transferor to accept reassignment as provided
above, the obligation of the Transferor to accept reassignment of the applicable
Receivables and pay the reassignment deposit amount pursuant to this subsection
2.4(d) shall constitute the sole remedy respecting a breach of the
representations and warranties contained in subsections 2.3(a), (b) and (c) and
2.4(a)(i) and (ii) available to the Investor Certificateholders of such Series
or the Trustee on behalf of the Investor Certificateholders of such Series. The
Trustee shall have no duty to conduct any affirmative investigation as to the
occurrence of any condition requiring the repurchase of any Receivable by the
Transferor pursuant to this Agreement or any Supplement or the eligibility of
any Receivable for purposes of this Agreement or any Supplement.
Section 2.5 Covenants of the Transferor. The Transferor hereby covenants
that:
(a) No Liens. Except for the conveyances hereunder or as provided in
Section 6.9, the Transferor will not sell, pledge, assign or transfer to any
other Person, or grant, create, incur, assume or suffer to exist any Lien on,
any Receivable or any other Trust Asset, whether now existing or hereafter
created, or any interest therein, or the Transferor's Interest or the
Exchangeable Transferor Certificate and the Transferor shall defend the right,
title and interest of the Trust in, to and under the Receivables and the other
Trust Assets, whether now existing or hereafter created, and such rights,
remedies, powers and privileges, against all claims of third parties claiming
through or under the Transferor.
(b) Receivables to be Chattel Paper, General Intangibles or Accounts. The
Transferor will take no action to cause any Receivable to be evidenced by any
instrument (as defined in the UCC as in effect in the Relevant UCC State),
except in connection with the enforcement or collection of a Receivable. Except
in such circumstances, the Transferor will take no action to cause any
Receivable to be anything other than "chattel paper," a "general intangible" or
an "account" (as defined in the UCC as in effect in the Relevant UCC State).
(c) Security Interests. Except for the conveyances hereunder, the
Transferor will not sell, pledge, assign or transfer to any other Person, or
grant, create, incur, assume or suffer to exist any Lien, on any Receivable,
whether now existing or hereafter created, or any interest therein; the
Transferor will immediately
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notify the Trustee of the existence of any Lien on any Receivable; and the
Transferor shall defend the right, title and interest of the Trust in, to and
under the Receivables, whether now existing or hereafter created, against all
claims of third parties claiming through or under the Transferor; provided,
however, that nothing in this subsection 2.5(c) shall prevent or be deemed to
prohibit the Transferor from suffering to exist upon any of the Receivables any
Permitted Lien.
(d) Account Allocations. In the event that the Transferor is unable for
any reason to transfer Receivables to the Trust, then the Transferor agrees that
it shall allocate, after the occurrence of such event, payments on each Account
with respect to the principal balance of such Account first to the oldest
principal balance of such Account and to have such payments applied as
Collections in accordance with the terms of this Agreement. The parties hereto
agree that Interest Receivables, whenever created, accrued in respect of
Principal Receivables which have been conveyed to the Trust shall continue to be
a part of the Trust notwithstanding any cessation of the transfer of additional
Principal Receivables to the Trust and Collections with respect thereto shall
continue to be allocated and paid in accordance with the terms of this
Agreement.
(e) Delivery of Collections. In the event that the Transferor, Green Tree,
or any Affiliate thereof, receives Collections, the Transferor and Green Tree
agrees to deposit such Collections into the Collection Account as soon as
practicable after the receipt thereof, but in no event later than two Business
Days following the Date of Processing thereof.
(f) Conveyance of Receivables. The Transferor covenants and agrees that it
will not permit Green Tree to convey, assign, exchange or otherwise transfer any
Receivable, to any Person other than the Transferor prior to the termination of
this Agreement pursuant to Article XII; provided, however, that the Transferor
shall not be prohibited hereby from permitting Green Tree to convey, assign,
exchange or otherwise transfer a Receivable in connection with a transaction in
which Green Tree and its successor agree to comply with provisions substantially
similar to those of Section 7.2.
(g) Notice of Liens. The Transferor shall notify the Trustee promptly
after becoming aware of any Lien on any Receivable other than Permitted Liens
and Participation Interests.
(h) Enforcement of Purchase Agreement. The Transferor agrees to take all
action necessary and appropriate to enforce its rights and claims under the
Purchase Agreement.
(i) Separate Business. The Transferor will not permit its assets to be
commingled with those of Green Tree and the Transferor shall maintain separate
corporate records, books of accounts and bank accounts from those of Green Tree.
The Transferor will not conduct its business in the name of Green Tree and will
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cause Green Tree to conduct its business solely in its own name so as not to
mislead others as to the identity of the entity with which those others are
concerned. The Transferor will provide for its own operating expenses and
liabilities from its own funds, except that the organizational expenses of the
Transferor may be paid by Green Tree. The Transferor will not hold itself out,
or permit itself to be held out, as having agreed to pay, or as generally being
liable for, the debts of Green Tree. The Transferor shall cause Green Tree not
to hold itself out, or permit itself to be held out, as having agreed to pay, or
as generally being liable for, the debts of the Transferor except that the
organizational expenses of the Transferor may be paid by Green Tree and that
Green Tree will contribute to the Transferor on the Closing Date a demand note.
The Transferor will maintain an arm's length relationship with Green Tree with
respect to any transactions between the Transferor, on the one hand, and Green
Tree, on the other.
(j) Purchase Agreement Notices. The Transferor (i) shall promptly give the
Trustee copies of any notices, reports or certificates given or delivered to the
Transferor under the Purchase Agreement, (ii) shall not without the consents,
approvals and opinions, if any, required by Section 13.1, as if Section 13.1
related to the Purchase Agreement rather than this Agreement, enter into any
amendment, supplement or other modification to, or waiver of any provision of,
the Purchase Agreement and (iii) shall not permit the addition or removal of a
Receivable to or from the operation of the Purchase Agreement unless there is a
corresponding right or obligation of the Transferor to add or remove such
Receivable to or from the Trust.
(k) Minimum Net Worth. The Transferor shall not (i) assign, sell, convey,
pledge, transfer, reconvey, cancel, forgive, compromise or otherwise dispose of
any Demand Note held by it, in whole or in part, (ii) make any distribution
unless the net worth of the Transferor following such distribution shall be at
least equal to the Minimum Net Worth (for the purpose of the determination of
net worth: (A) any Demand Note held by the Transferor shall be valued at par,
(B) any interest in the Trust held by the Transferor, including the Exchangeable
Transferor Certificate and any Transferor Retained Certificates, shall be valued
at zero, and (C) investments shall be valued at their respective purchase prices
plus accrued interest), or (iii) except as specifically permitted by this
Agreement, sell, transfer, assign, give or encumber by operation of law or
otherwise any of its assets.
Section 2.6 Addition of Accounts.
(a) If, as of the close of business on the last day of any Collection
Period, the Transferor Interest is less than the Minimum Transferor Interest,
then the Transferor shall, within 10 Business Days following the end of such
Collection Period, designate and transfer to the Trust the Receivables (and the
related Collateral Security) of additional Eligible Accounts of the Transferor
to be included as Accounts in a sufficient amount such that after giving effect
to such addition the Transferor Interest exceeds the Minimum Transferor
Interest.
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(b) The Transferor may from time to time, at its sole discretion, subject
to the conditions specified in paragraph (d) below, voluntarily designate
additional Eligible Accounts to be included as Accounts and transfer to the
Trust the Receivables (and the related Collateral Security) of such Additional
Accounts.
(c) Receivables and Collateral Security from such Additional Accounts
shall be sold to the Trust effective on a date (each an "Addition Date")
specified in a written notice provided by the Transferor (or the Servicer on its
behalf) to the Trustee, the Rating Agencies, any Agent and any Enhancement
Providers specifying the Additional Cut-off Date and the Addition Date for such
Additional Accounts (each an "Addition Notice") on or before the fifth Business
Day but not more than the 30th day prior to the related Addition Date or, if the
Automatic Addition Condition is satisfied, on the Determination Date following
the Monthly Period in which such Addition Dates occur (the "Notice Date"). An
Addition Notice may relate to one or more Accounts added on one or more Addition
Dates.
(d) The Transferor shall be permitted to convey to the Trust the
Receivables and all Collateral Security related thereto in any Additional
Accounts designated by the Transferor as such pursuant to Section 2.6(a) or (b)
only upon satisfaction of each of the following conditions on or prior to the
related Notice Date (except for the condition in clause (vii), if applicable,
which shall be satisfied on or before the tenth Business Day after such Notice
Date):
(i) the Transferor shall have provided the Trustee, any Agent, the
Rating Agencies and any Enhancement Providers with a timely Addition
Notice;
(ii) such Additional Accounts shall all be Eligible Accounts;
(iii) the Transferor shall have delivered to the Trustee a duly
executed written assignment (including an acceptance by the Trustee) in
substantially the form of Exhibit F (the "Assignment") covering the
Receivables in the Accounts specified in the Addition Notice and the
computer file or microfiche or written list required to be delivered
pursuant to Section 2.1;
(iv) the Transferor shall, to the extent required by Section 4.3,
have deposited in the Collection Account all Collections with respect to
such Additional Accounts since the Additional Cut-off Date;
(v) (A) no selection procedures reasonably believed by the Transferor
to be adverse to the interests of the Beneficiaries shall have been used in
selecting such Additional Accounts; (B) the list of Additional Accounts
delivered pursuant to clause (iii) above shall be true and correct in all
material respects as of the Additional Cut-off Date and (C) as of each of
the
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Notice Date and the Addition Date, neither Green Tree nor the Transferor
shall have been insolvent nor shall any of them have been made insolvent by
such transfer nor shall any of them be aware of any pending insolvency;
(vi) if the Automatic Addition Condition is not satisfied with
respect to such addition, the Rating Agency Condition shall have been
satisfied with respect to such addition;
(vii) If (A) one or more of the Additional Accounts specified in such
Addition Notice will contain Receivables secured by a security interest in
a type of Product that has not been previously financed in the Floorplan
Business or (B) one or more of the Additional Accounts is supported by a
Floorplan Agreement with a Manufacturer that, as of the related Addition
Date, is not an Existing Manufacturer, then, whether or not the Automatic
Condition is satisfied, the Rating Agency Condition shall have been
satisfied in respect of the addition of each Additional Account specified
in clauses (A) and (B) on or prior to the related Addition Date;
(viii) the addition of the Receivables arising in such Additional
Accounts shall not result in the occurrence of a Pay Out Event;
(ix) the Transferor shall have delivered to the Trustee and any
Enhancement Providers a certificate of a Vice President or more senior
officer confirming (A) the items set forth in paragraphs (ii) through
(viii) above and (B) that the Transferor reasonably believes that the
addition of the Receivables arising in such Additional Accounts will not
result in the occurrence of a Pay Out Event; and
(x) on or before each Notice Date, the Transferor shall have
delivered to the Trustee and any Enhancement Providers (A) an Opinion of
Counsel with respect to the Receivables in the Additional Accounts added
since the last delivery of such opinion substantially in the form of
Exhibit E-3 and (B) except in the case of an addition required by Section
2.6(a), a Tax Opinion with respect to such addition; provided, however,
that such Opinion of Counsel and Tax Opinion will be required to be
delivered no more frequently than annually; provided further that, unless
the Rating Agency Condition is satisfied, such Opinion of Counsel and Tax
Opinion shall be from outside counsel if the rating of the unsecured long-
term debt of Green Tree is below investment grade.
(e) The Transferor hereby represents and warrants as of the applicable
Addition Date as to the matters set forth in Section 2.6(d)(v). Upon discovery
by the Transferor, the Servicer, any Agent, a Responsible Officer of the Trustee
or any Enhancement Providers of a breach of the foregoing representations and
warranties, the party discovering the breach shall give prompt written notice to
the other parties, to any Agent and to any Enhancement Providers.
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Section 2.7. Removal of Eligible Accounts.
(a) On each Determination Date, the Transferor shall have the right to
remove Accounts, including all amounts then held by the Trust or thereafter
received by the Trust in respect of the Accounts being removed, from the Trust
in the manner prescribed in Section 2.7(b). The termination of an Account by a
Dealer upon such Dealer's payment in full of the related Account shall not be a
removal of such Account under this Section 2.7.
(b) To remove Accounts, including all amounts then held by the Trust or
thereafter received by the Trust in respect of the Accounts being removed, the
Transferor (or the Servicer on its behalf) shall take the following actions and
make the following determinations:
(i) not less than five Business Days prior to the Removal Date,
furnish to the Trustee, any Agent, any Enhancement Providers and the Rating
Agencies a written notice (the "Removal Notice") specifying the
Determination Date (which may be the Determination Date on which such
notice is given) on which removal of the Receivables of one or more
Accounts (the "Removed Accounts") will occur (a "Removal Date");
(ii) from and after such Removal Date, cease to transfer to the Trust
any and all Receivables arising in such Removed Accounts;
(iii) represent and warrant that the removal of any such Eligible
Account on any Removal Date shall not, in the reasonable belief of the
Transferor, (w) cause a Pay Out Event to occur, (x) cause the Transfere
Interest, calculated as a percentage of the aggregate amount of Principal
Receivables, to be less than the Minimum Transferor Interest on such
removal Date, (y) cause the aggregate amount of Principal Receivables to be
less than the Minimum Aggregate Principal Receivables or (z) result in the
failure to make any payment specified in a Supplement for any Series;
(iv) represent and warrant that no selection procedures reasonably
believed by the Transferor to be adverse to the interests of the
Certificateholders or the Beneficiaries were utilized in selecting the
Accounts to be removed;
(v) satisfy the Rating Agency Condition with respect to such removal;
(vi) deliver to the Trustee, each Rating Agency, any Agent and any
Enhancement Providers a Tax Opinion, dated the Removal Date, with respect
to such removal;
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(vii) on or before the related Removal Date, deliver to the Trustee,
any Agent and any Enhancement Providers an Officer's Certificate confirming
the items set forth in clauses (iii) through (v) above and confirming that
the Transferor reasonably believes that the removal of the Removed Accounts
will not result in the occurrence of a Pay Out Event; the Trustee may
conclusively rely on such Officer's Certificate and shall have no duty to
make inquiries with regard to the matters set forth therein and shall incur
no liability in so relying; and
(viii) on or before the fifth Business Day after the Removal Date,
furnish to the Trustee a computer file, microfiche list or other list of
the Removed Accounts that were removed on the Removal Date, specifying for
each Removed Account as of the date of the Removal Notice its number, the
aggregate amount outstanding in such Removed Account and the aggregate
amount of Principal Receivables therein and represent that such computer
file, microfiche list or other list of the Removed Accounts is true and
complete in all material respects.
No Accounts shall be so removed if such removal will result in a reduction or
withdrawal of the rating of any outstanding Series or Class by the applicable
Rating Agency.
(c) Subject to Section 2.7(b), on the Removal Date with respect to any
such Removed Account, such Removed Account shall be deemed removed from the
Trust for all purposes. After the Removal Date and upon the written request of
the Servicer, the Trustee shall deliver to the Transferor a reassignment in
substantially the form of Exhibit F (the "Reassignment").
Section 2.8. Removal of Ineligible Accounts.
(a) On or prior to the tenth Business Day following the date on which an
Account becomes an Ineligible Account (which date shall be deemed to be the
"Removal Commencement Date"), the Transferor shall commence removal of the
Receivable of such Ineligible Account in the manner prescribed in Section
2.8(b).
(b) With respect to each Account that becomes an Ineligible Account, the
Transferor (or the Servicer on its behalf) shall take the following actions and
make the following determinations:
(i) furnish to the Trustee, any Agent and any Enhancement Providers a
Removal Notice specifying the Removal Commencement Date and the Ineligible
Accounts to be removed (the "Designated Accounts");
(ii) determine on the Removal Commencement Date with respect to such
Designated Accounts the aggregate balance of Principal Receivables in
respect of each Designated Account (the "Designated Balance") and amend
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Schedule 1 by delivering to the Trustee a computer file or microfiche or
written list containing a true and complete list of the Removed Accounts
specifying for each such Account, as of the Removal Commencement Date, its
account number, the aggregate amount of Receivables outstanding in such
Account and the Designated Balance;
(iii) from and after such Removal Commencement Date, cease to
transfer to the Trust any and all Receivables arising in such Designated
Accounts;
(iv) from and after such Removal Commencement Date, allocate
Collections of Principal Receivables in respect of each Designated Account,
first to the oldest outstanding principal balance of such Designated
Account, until the Removal Date with respect thereto; and
(v) on each Business Day from and after such Removal Commencement
Date to and until the related Removal Date, allocate (A) to the Trust (to
be further allocated pursuant to the terms of this Agreement), Defaulted
Receivables and Collections of Interest Receivables in respect of each
Designated Account, based on the ratio of the aggregate amount of Principal
Receivables in all Designated Accounts owned by the Trust on such Business
Day to the total aggregate amount of Principal Receivables in all such
Designated Accounts on such Business Day and (B) to the Transferor, the
remainder of the Defaulted Receivables and Collections of Interest
Receivables in all such Designated Accounts on such Business Day.
(c) On the Removal Date with respect to any such Account to be removed,
the Transferor shall cease to allocate any Collections therefrom in accordance
herewith and such Account shall be deemed a Removed Account. After the Removal
Date and upon the written request of the Servicer, the Trustee shall deliver to
the Transferor a Reassignment.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF RECEIVABLES
Section 3.1 Acceptance of Appointment and Other Matters Relating to the
Servicer.
(a) Green Tree agrees to act as the Servicer under this Agreement. The
Investor Certificateholders of each Series by their acceptance of the related
Certificates consent to Green Tree acting as Servicer. Notwithstanding the
foregoing or any other provisions of this Agreement or any Supplement, the
Investor Certificateholders consent to an Affiliate of Green Tree acting as
Servicer hereunder; provided, that Green Tree will remain jointly and severally
liable with such Affiliate for the obligations of the Servicer hereunder.
(b) The Servicer shall service and administer the Receivables and shall
collect payments due under the Receivables in accordance with its customary and
usual servicing procedures and the Financing Guidelines and shall have full
power and authority, acting alone or through any party properly designated by it
hereunder, to do any and all things in connection with such servicing and
administration that it may deem necessary or desirable. Without limiting the
generality of the foregoing and subject to Section 10.1, the Servicer is hereby
authorized and empowered (i) to make withdrawals from the Collection Account as
set forth in this Agreement, (ii) unless such power and authority is revoked by
the Trustee on account of the occurrence of a Servicer Default pursuant to
Section 10.1, to instruct the Trustee in writing to make withdrawals and
payments, from any Interest Funding Account, the Excess Funding Account, any
Principal Account and any Series Account, in accordance with such instructions
as set forth in this Agreement, (iii) unless such power and authority is revoked
by the Trustee on account of the occurrence of a Servicer Default pursuant to
Section 10.1, to instruct the Trustee in writing to take any action permitted or
required under any Enhancement at such time as set forth in this Agreement and
any Supplement, (iv) to execute and deliver, on behalf of the Trust for the
benefit of the Certificateholders, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Receivables and, after the
delinquency of any Receivable and to the extent permitted under and in
compliance with applicable law and regulations, to commence enforcement
proceedings with respect to such Receivables, (v) to make any filings, reports,
notices, applications, registrations with, and to seek any consents or
authorizations from, the Securities and Exchange Commission and any state
securities authority on behalf of the Trust as may be necessary or advisable to
comply with any federal or state securities or reporting requirements and (vi)
to delegate certain of its service, collection, enforcement and administrative
duties hereunder with respect to the Receivables to any Person who agrees to
conduct such duties in accordance with the Servicer's customary and usual
servicing procedures;
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provided, that the Servicer shall remain jointly and severally liable for such
duties with such Person and shall give notice to the Trustee of any such
delegation. The Trustee agrees that it shall promptly follow the instructions of
the Servicer to withdraw funds from the Collection Account, any Principal
Account, any Interest Funding Account, the Excess Funding Account, or any Series
Account and to take any action required under any Enhancement at such time as
required under this Agreement. The Trustee shall execute at the Servicer's
written request such documents prepared by the Transferor and acceptable to the
Trustee as the Servicer certifies are necessary or appropriate to enable the
Servicer to carry out its servicing and administrative duties hereunder.
(c) The Servicer shall not be obligated to use separate servicing
procedures, offices or employees for servicing the Receivables from the
procedures, offices and employees used by the Servicer in connection with
servicing other receivables.
(d) The Servicer shall comply with and perform its servicing obligations
with respect to the Financing Agreements relating to the Accounts and the Finan
cing Guidelines, except insofar as any failure to so comply or perform would not
materially and adversely affect the rights of the Trust or any of the
Beneficiaries. Subject to compliance with all Requirements of Law and subject to
the requirements of Section 3.1(b), the Servicer may change the terms and
provisions of the Wholesale Financing Agreements, the Floorplan Agreements, the
Asset-Based Financing Agreements or the Financing Guidelines in any respect
(including the calculation of the amount or the timing of charge-offs and the
rate of the finance charge assessed thereon), only if as a result of such
change, in this reasonable judgment of the Servicer, no Pay Out Event will
occur.
Section 3.2 Servicing Compensation. As compensation for its servicing
activities hereunder and reimbursement for its expenses as set forth in the
immediately following paragraph, the Servicer shall be entitled to receive a
servicing fee in respect of each day prior to the termination of the Trust
pursuant to Section 12.1 (the "Servicing Fees"), payable in arrears on each date
and in the manner specified in the applicable Supplement, equal to the product
of (i) a fraction, the numerator of which is the actual number of days in the
measuring period specified in the applicable Supplement and the denominator of
which is the actual number of days in the year, (ii) the weighted average Series
Servicing Fee Percentage for all Outstanding Series (based upon the Series
Servicing Fee Percentage for each Series and the Invested Amount of such Series)
and (iii) the daily average aggregate Outstanding Balance of all Principal
Receivables over the term of such measuring period. The share of the Servicing
Fee allocable to each Series with respect to any date of payment shall be equal
to the product of (i) a fraction, the numerator of which is the actual number of
days in the measuring period specified in the applicable Supplement and the
denominator of which is the actual number of days in the year, (ii) the
applicable Series Servicing Fee Percentage for such Series and (iii) the
Invested Amount of such Series, as appropriate, as of the date of determination
for such payment as specified in the applicable Supplement. The remainder of the
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Servicing Fee shall be paid by the Transferor, or retained by the Servicer as
provided in Article IV, and in no event shall the Trust, the Trustee, any
Enhancement Provider, or the Investor Certificateholders be liable for the share
of the Servicing Fee to be paid by the Transferor.
The Servicer shall be responsible for its own expenses, which shall include
the amounts due to the Trustee pursuant to Section 11.5 and the reasonable fees
and disbursements of independent public accountants and all other expenses
incurred by the Servicer in connection with its activities hereunder; provided,
that the Servicer shall not be liable for any liabilities, costs or expenses of
the Trust, the Investor Certificateholders or the Certificate Owners arising
under any tax law, including without limitation any federal, state or local
income or franchise taxes or any other tax imposed on or measured by income (or
any interest, penalties or additions with respect thereto or arising from a
failure to comply therewith). In the event that the Servicer fails to pay any
amounts due to the Trustee pursuant to Section 11.5, the Trustee shall be
entitled to deduct and receive such amounts from the Servicing Fee prior to the
payment thereof to the Servicer and the obligations of the Trust to pay any such
amounts shall thereby be fully satisfied. The Servicer shall be required to pay
such expenses for its own account and shall not be entitled to any payment
therefor other than the Servicing Fee.
Section 3.3 Representations and Warranties of the Servicer. Green Tree,
as initial Servicer, hereby makes, and any Successor Servicer by its appointment
hereunder shall make, the following representations and warranties on which the
Trustee has relied in accepting the Receivables in trust and in authenticating
the Certificates issued on the Initial Closing Date:
(a) Organization and Good Standing. The Servicer is a corporation duly
organized, validly existing and in good standing under the laws of its state of
incorporation and has the corporate power, authority and legal right to own its
properties and conduct its business as such properties are presently owned and
such business is presently conducted, and to execute, deliver and perform its
obligations under this Agreement.
(b) Due Qualification. The Servicer is duly qualified to do business and
is in good standing (or is exempt from such requirements) as a foreign
corporation in any state where such qualification is necessary in order to
service the Receivables as required by this Agreement and has obtained all
necessary licenses and approvals as required under Federal and state law in
order to service the Receivables as required by this Agreement, and if the
Servicer shall be required by any Requirement of Law to so qualify or register
or obtain such license or approval, then it shall do so except where the failure
to obtain such license or approval does not materially affect the Servicer's
ability to perform its obligations hereunder or the enforceability of the
Receivables.
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(c) Due Authorization. The execution and delivery of this Agreement and
the consummation of the transactions provided for herein, have been duly
authorized by the Servicer by all necessary corporate action on the part of the
Servicer.
(d) Binding Obligation. This Agreement and the consummation of the
transactions provided for herein, constitutes a legal, valid and binding
obligation of the Servicer, enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereinafter in effect,
affecting the enforcement of creditors' rights in general and as such
enforceability may be limited by general principles of equity (whether
considered in a proceeding at law or in equity).
(e) No Violation. The execution and delivery of this Agreement by the
Servicer, and the performance of the transactions contemplated by this Agreement
and the fulfillment of the terms hereof applicable to the Servicer, will not
violate, result in any breach of any of the material terms and provisions of, or
constitute (with or without notice or lapse of time or both) a default under,
any Requirement of Law applicable to the Servicer or any material indenture,
contract, agreement, mortgage, deed of trust or other material instrument to
which the Servicer is a party or by which it is bound.
(f) No Proceedings. There are no proceedings or investigations pending
or, to the best knowledge of the Servicer, threatened against the Servicer
before any Governmental Authority (i) asserting the invalidity of this
Agreement, (ii) seeking to prevent the issuance of the Certificates or the
consummation of any of the transactions contemplated by this Agreement, (iii)
seeking any determination or ruling that would materially and adversely affect
the performance by the Servicer of its obligations under this Agreement, (iv)
seeking any determination or ruling that would materially and adversely affect
the validity or enforceability of this Agreement or (v) seeking to affect
adversely the tax attributes of the Trust.
(g) Compliance with Requirements of Law. The Servicer shall duly satisfy
all obligations on its part to be fulfilled under or in connection with each
Receivable, will maintain in effect all qualifications required under
Requirements of Law in order to service properly each Receivable and will comply
in all material respects with all other Requirements of Law in connection with
servicing each Receivable the failure to comply with which would have a material
adverse effect on the Certificateholders or any Enhancement Provider.
(h) Protection of Certificateholders' Rights. The Servicer shall take no
action which, nor omit to take any action the omission of which, would impair
the rights of Certificateholders in any Receivable or the rights of any
Enhancement Provider, nor shall it reschedule, revise or defer payments due on
any Receivable except in accordance with Green Tree's usual and customary
collection procedures.
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(i) All Consents Required. All approvals, authorizations, consents,
orders or other actions of any Governmental Authority required in connection
with the execution and delivery of this Agreement and the performance of the
transactions contemplated by this Agreement and the fulfillment of the terms
hereof, have been obtained; provided, however, that the Servicer makes no
representation or warranty regarding State securities or "Blue Sky" laws in
connection with the distribution of the Certificates.
(j) Rescission or Cancellation. The Servicer shall not permit any
rescission or cancellation of any Receivable except as ordered by a court of
competent jurisdiction or other Governmental Authority or in accordance with
Green Tree's usual and customary collection policies or the normal operating
procedures of the Servicer.
(k) Negative Pledge. Except for the conveyance hereunder to the Trustee,
the Servicer will not sell, pledge, assign or transfer to any other Person, or
grant, create, incur, assume or suffer to exist any Lien on, any Receivable sold
and assigned to the Trust, whether now existing or hereafter created, or any
interest therein, and the Servicer shall defend the rights, title and interest
of the Trust in, to and under any Receivable sold and assigned to the Trust,
whether now existing or hereafter created, against all claims of third parties
claiming through or under the Seller or the Servicer.
(l) Principal Place of Business. The Servicer shall at all times maintain
its principal executive offices within the United States.
Section 3.4 Reports and Records for the Trustee.
(a) Daily Records. Upon reasonable prior notice by the Trustee, the
Servicer shall make available at an office of the Servicer (or other location
designated by the Servicer if such records are not accessible by the Servicer
at an office of the Servicer) selected by the Servicer for inspection by the
Trustee or its agent (reasonably acceptable to the Servicer) on a Business Day
during the Servicer's normal business hours a record setting forth (i) the
Collections on the Receivables and (ii) the amount of Receivables for the
Business Day preceding the date of the inspection. The Servicer shall, at all
times, maintain its computer files with respect to the Receivables in such a
manner so that the Receivables may be specifically identified and, upon
reasonable prior request of the Trustee, shall make available to the Trustee, at
an office of the Servicer (or other location designated by the Servicer if such
computer files are not located at an office of the Servicer) selected by the
Servicer, on any Business Day of the Servicer during the Servicer's normal
business hours any computer programs necessary to make such identification.
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(b) Daily Report.
(i) On each Business Day the Servicer shall prepare a completed Daily
Report.
(ii) The Servicer shall deliver to the Trustee and the Paying Agent
the Daily Report by 3:00 p.m. (New York City time) on each Business Day
with respect to activity in the Receivables for the prior Business Day (or,
in the case of a Daily Report delivered on the second Business Day
following a Saturday, Sunday or other non-Business Day, the aggregate
activity for the preceding Business Day and such preceding non-Business
Days).
(iii) Upon discovery of any error or receipt of notice of any error in
any Daily Report, the Servicer, the Transferor and the Trustee shall
arrange to confer and shall agree upon any adjustments necessary to correct
any such errors. If any such error is material, the Servicer or the
Trustee, as the case may be, shall retain all Collections which would
otherwise be paid from the Trust (or such lesser amount as the Trustee and
the Servicer shall agree to be necessary to cover any such error) in the
Collection Account until such material error is corrected. Unless the
Trustee has received written notice of any error or discrepancy, the
Trustee may rely on each Daily Report delivered to it for all purposes
hereunder.
(c) Settlement Statement. On the second Business Day prior to each
Distribution Date, the Servicer shall, prior to 3:00 p.m. (New York City time)
on such day, deliver to the Trustee and the Paying Agent the Settlement
Statement for the related Monthly Period substantially in the form of Exhibit C
hereto, including the following information (which, in the case of clauses
(iii), (iv) and (v) below, will be stated on the basis of an original principal
amount of $1,000 per Certificate): (i) the aggregate amount of Collections
received in the Collection Account for the Monthly Period preceding such
Determination Date and the aggregate amount of Interest Collections and the
aggregate amount of Principal Collections processed during such Monthly Period;
(ii) with respect to the preceding Monthly Period for each Series of
Certificates, the aggregate amount of the applicable Investor Percentage of
Principal Collections, and the aggregate amount of the applicable Investor
Percentage of Interest Collections; (iii) for each Series and for each Class
within any such Series, the total amount to be distributed to Investor
Certificateholders on the next succeeding Distribution Date; (iv) for each
Series and for each Class within any such Series, the amount of such
distribution to Certificateholders allocable to principal; (v) for each Series
and for each Class within any such Series, the amount of such distribution to
Certificateholders allocable to interest; (vi) for each Series and each Class
within a Series, the Investor Default Amount for the immediately preceding
Monthly Period; (vii) for each Series and each Class within a Series, the amount
of the Investor Charge-Offs and the amount of the reimbursements of Investor
Charge-Offs for such Distribution Date; (viii) for each Series, the Servicing
Fee for such Distribution Date; (ix) for each Series, the existing deficit
controlled
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amortization amount, if applicable; (x) the Aggregate Principal Receivables in
the Trust at the close of business on the last day of the Monthly Period
preceding such Distribution Date; (xi) for each Series, the Invested Amount at
the close of business on the last day of the Monthly Period immediately
preceding such Distribution Date; (xii) the available amount of any Enhancement
for each Class of each Series, if any; (xiii) for each Series and each Class
within a Series, the Pool Factor as of the end of the related Monthly Period;
(xiv) whether a Pay Out Event or a Prospective Pay Out Event with respect to any
Series shall have occurred during or with respect to the related Monthly Period;
(xv) the amount of any Adjustment Payments for the Related Monthly Period; and
(xvi) such other calculations as may be required by any Supplement. The Trustee
shall be under no duty to recalculate, verify or recompute the information
supplied to it under this Section 3.4 or such other matters as are set forth in
any Settlement Statement. The Servicer shall also provide a copy of the
Settlement Statement in a prompt manner to each Rating Agency.
Section 3.5 Annual Servicer's Certificate. The Servicer will deliver, in
accordance with Section 13.5, to the Trustee, any Enhancement Provider and each
Rating Agency, on or before March 31 of each year, beginning in 1997, an
Officer's Certificate substantially in the form of Exhibit D stating that (a) a
review of the activities of the Servicer during the preceding fiscal year and of
its performance under this Agreement was made under the supervision of the
officer signing such certificate and (b) to such officer's knowledge, based on
such review, the Servicer has fully performed all its obligations under this
Agreement throughout such period, or, if there has been a default in the
performance of any such obligation, specifying each such default known to such
officer and the nature and status thereof. A copy of such certificate may be
obtained by any Investor Certificateholder by a request in writing to the
Trustee addressed to the Corporate Trust Office.
Section 3.6 Annual Independent Accountants' Servicing Report.
(a) On or before March 31 of each year, commencing March 31, 1997, the
Servicer shall cause a firm of nationally recognized independent public
accountants (who may also render other services to the Servicer or the
Transferor) to furnish a report with respect to the prior fiscal year to the
Trustee, any Enhancement Provider and each Rating Agency, to the effect that
such firm has applied certain procedures, agreed upon with the Servicer and the
Trustee and substantially as set forth in Exhibit I which would re-perform
certain accounting procedures performed by the Servicer pursuant to certain
documents and records relating to the servicing of the Receivables under this
Agreement. In addition, each report shall set forth the agreed upon procedures
performed and the results of such procedures.
(b) On or before March 31 of each year, commencing March 31, 1997, the
Servicer shall cause a firm of nationally recognized independent certified
public accountants (who may also render other services to the Servicer or the
Transferor) to furnish a report to the Trustee, any Enhancement Provider and
each Rating Agency to the effect that they have compared the mathematical
calculations set forth
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in each of the monthly certificates forwarded by the Servicer pursuant to
subsection 3.4(c) during the period covered by such report with the computer
reports which were the source of such amounts and that on the basis of such
comparison, such amounts are in agreement, except for such exceptions as they
believe to be immaterial and such other exceptions as shall be set forth in such
report.
(c) A copy of each report provided pursuant to Section 3.5 or 3.6 may be
obtained by any Investor Certificateholder by a request to the Trustee addressed
to the Corporate Trust Office.
Section 3.7 Tax Treatment. The Transferor has structured this Agreement and
the Investor Certificates with the intention that the Investor Certificates will
qualify under applicable federal, state, local and foreign tax law as
indebtedness. Except to the extent expressly specified to the contrary in any
Supplement, the Transferor, the Servicer, the Holder of the Exchangeable
Transferor Certificate, each Investor Certificateholder, and each Certificate
Owner agree to treat and to take no action inconsistent with the treatment of
the Investor Certificates (or beneficial interest therein) as indebtedness for
purposes of federal, state, local and foreign income or franchise taxes and any
other tax imposed on or measured by income. Each Investor Certificateholder, and
the Holder of the Exchangeable Transferor Certificate, by acceptance of its
Certificate and each Certificate Owner, by acquisition of a beneficial interest
in a Certificate, agree to be bound by the provisions of this Section 3.7. Each
Certificateholder agrees that it will cause any Certificate Owner acquiring an
interest in a Certificate through it to comply with this Agreement as to
treatment as indebtedness under applicable tax law, as described in this Section
3.7. Furthermore, subject to Section 11.11, the Trustee shall treat the Trust as
a security device only, and shall not file tax returns or obtain an employer
identification number on behalf of the Trust.
In the event that any class of Investor Certificates (other than a class of
Investor Certificates which is and at all times has been wholly owned by the
Transferor) is deemed for federal income tax purposes to represent an equity
interest in the Trust, the Trust shall be treated for federal income tax
purposes as a partnership among the Holders of such Investor Certificates and
the Transferor. In the event such a partnership is deemed to exist, the net
income of the Trust for any month as determined for federal income tax purposes
(and each item of income, gain, loss, deduction and credit, if any, entering
into the computation thereof) shall be allocated among the Holders of such
Investor Certificates as of the first Record Date following the end of such
month in proportion to their ownership of the principal amount of such Investor
Certificates on such date, in an amount of such income up to the sum of the
interest accrued on such Certificates for such month, and the balance thereof
shall be allocated to the Transferor. If the net income of the Trust for any
month is insufficient for the full amount of such allocations to such
Certificateholders, net income in succeeding months shall be allocated to such
Certificateholders to make up for such shortfall before being allocated to the
Transferor as provided above for such succeeding months. Net losses of the
Trust, if
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any, for any month as determined for federal income tax purposes (and each item
of income, gain, loss, deduction and credit, if any, entering into the
computation thereof) shall be allocated to the Transferor to the extent that the
Transferor is reasonably expected to bear the economic burden of such net loss,
then net losses shall be allocated among such Certificateholders as of the first
Record Date following the end of such month in proportion to their ownership of
the principal amount of such Investor Certificates on such Record Date.
Notwithstanding anything in this Agreement to the contrary, the Transferor shall
be allocated at least 1% of each item of income, profit, gain or loss of the
Trust. The Transferor is authorized to modify the allocations in this paragraph
if necessary or appropriate, in its sole discretion, for the allocations to
fairly reflect the economic income, gain or loss to the Transferor or the
Certificateholders, or to comply with the provisions of the Code and the
accompanying Treasury Regulations.
Section 3.8 Notices to Green Tree. In the event that Green Tree or any
Affiliate thereof is no longer acting as Servicer, any Successor Servicer
appointed pursuant to Section 10.2 shall deliver or make available to Green Tree
each certificate and report required to be prepared, forwarded or delivered
thereafter pursuant to Sections 3.4, 3.5 and 3.6.
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ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION
AND APPLICATION OF COLLECTIONS
Section 4.1 Rights of Certificateholders. Each Series of Investor
Certificates shall represent Undivided Interests in the Trust, including the
benefits of any Enhancement issued with respect to such Series and the right to
receive the Collections and other amounts at the times and in the amounts
specified in this Article IV to be deposited in the Investor Accounts or to be
paid to the Investor Certificateholders of such Series (the "Certificateholders'
Interest"); provided, however, that the aggregate interest represented by such
Certificates at any time in the Principal Receivables shall not exceed an amount
equal to the Invested Amount of such Certificates. The Exchangeable Transferor
Certificate shall represent the remaining undivided interest in the Trust,
including the right to receive the Collections and other amounts at the times
and in the amounts specified in this Article IV to be paid to the Holder of the
Exchangeable Transferor Certificate; provided, however, that the aggregate
interest represented by such Exchangeable Transferor Certificate at any time in
the Principal Receivables shall not exceed the Transferor Interest at such time
and such Certificate shall not represent any interest in the Investor Accounts,
except as provided in this Agreement, or the benefits of any Enhancement issued
with respect to any Series.
Section 4.2 Establishment of Accounts.
(a) The Collection Account. The Servicer, for the benefit of the
Certificateholders, shall establish in the name of the Trustee, on behalf of
the Trust, a non-interest bearing segregated account (the "Collection Account")
bearing a designation clearly indicating that the funds deposited therein are
held in trust for the benefit of the Certificateholders, and shall cause such
Collection Account to be established and maintained, (i) in a segregated trust
account with the corporate trust department of a depositary institution or trust
company (which may include the Trustee) organized under the laws of the United
States of America or any one of the states thereof or the District of Columbia
which has a long-term unsecured debt rating of at least Baa3 by Moody's and
whose deposits are insured to the limits provided by law by the FDIC having
corporate trust powers and acting as trustee for funds deposited therein
(provided, however, that such account need not be maintained as a segregated
trust account with the corporate trust department of such institution if at all
times the certificates of deposit short-term deposits or commercial paper or the
long-term unsecured debt obligations (other than such obligation whose rating is
based on collateral or on the credit of a Person other than such institution or
trust company) of such depositary institution or trust company shall have a
credit rating from Standard & Poor's of at least A-1+ and P-1 from Moody's of at
least P-1 in the case of the certificates of deposit, short-term deposits or
commercial paper, or a rating from Standard & Poor's of AAA and from Moody's of
Aaa in the case of the long-term unsecured debt obligations, or (ii) with a
depositary institution, which may include
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the Trustee, which is acceptable to the Rating Agency (in the case of (i) and
(ii), a "Qualified Institution"). If, at any time, the institution holding the
Collection Account ceases to be a Qualified Institution, the Transferor shall
direct the Servicer to establish within ten Business Days a new Collection
Account with a Qualified Institution, transfer any cash and/or any investments
to such new Collection Account and from the date such new Collection Account is
established, it shall be the "Collection Account." The Servicer shall give
written notice to the Trustee of the location and account number of the
Collection Account and shall notify the Trustee in writing prior to any
subsequent change thereof. Pursuant to authority granted to it pursuant to
subsection 3.1(b), the Servicer shall have the power revocable by the Trustee to
withdraw funds from the Collection Account for the purposes of carrying out its
duties hereunder.
The Collection Account shall be under the sole dominion and control of the
Trustee and the Trustee shall possess all right, title and interest in all funds
from time to time on deposit in such account.
(b) The Interest Funding and Principal Accounts. The Trustee, for the
benefit of the Investor Certificateholders, shall establish and maintain with a
Qualified Institution in the name of the Trust two segregated trust accounts for
each Series (an "Interest Funding Account" and a "Principal Account,"
respectively), each bearing a designation clearly indicating that the funds
therein are held for the benefit of the Investor Certificateholders of such
Series. Except as provided in subsection 4.2(e), each Interest Funding Account
and each Principal Account shall be under the sole dominion and control of the
Trustee for the benefit of the Investor Certificateholders. Pursuant to
authority granted to it hereunder, the Servicer shall have the revocable power
to instruct the Trustee to withdraw funds from the Interest Funding Account and
any Principal Account for any purpose of carrying out the Servicer's or the
Trustee's duties hereunder. The Trustee at all times shall maintain accurate
records reflecting each transaction in each Principal Account and each Interest
Funding Account and that funds held therein shall at all times be held in trust
for the benefit of the Investor Certificateholders of such Series. If, at any
time, the institution holding the Interest Funding Account ceases to be a
Qualified Institution, the Servicer shall direct the Trustee to establish within
ten Business Days a new Interest Funding Account meeting the conditions
specified above with a Qualified Institution, transfer any cash and/or any
investments to such new Interest Funding Account and from the date such new
Interest Funding Account is established, it shall be the "Interest Funding
Account." Similarly, if, at any time, the institution holding any Principal
Account ceases to be a Qualified Institution, the Servicer shall direct the
Trustee to establish within ten Business Days a new Principal Account meeting
the conditions specified above with a Qualified Institution, transfer any cash
and/or any investments to such new Principal Account and from the date such new
Principal Account is established, it shall be a "Principal Account."
(c) Distribution Accounts. The Trustee, for the benefit of the Investor
Certificateholders of each Series, shall cause to be established and maintained
in the
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name of the Trust, with an office or branch of a Qualified Institution a
non-interest-bearing segregated demand deposit account for each Series (a
"Distribution Account") bearing a designation clearly indicating that the funds
deposited therein are held in trust for the benefit of the Investor
Certificateholders of such Series. Each Distribution Account shall be under the
sole dominion and control of the Trustee for the benefit of the Investor
Certificateholders of the related Series. Pursuant to the authority granted to
the Paying Agent herein, the Paying Agent shall have the power, revocable by the
Trustee, to make withdrawals and payments from the Distribution Account for the
purpose of carrying out the Paying Agent's duties hereunder. If, at any time,
the institution holding a Distribution Account ceases to be a Qualified
Institution, the Servicer shall direct the Trustee to establish within ten
Business Days a new Distribution Account meeting the conditions specified above
with a Qualified Institution, transfer any cash and/or any investments to such
new Distribution Account and from the date such new Distribution Account is
established, it shall be a "Distribution Account."
(d) The Excess Funding Account. The Trustee, for the benefit of the
Certificateholders, shall cause to be established in the name of the Trustee, on
behalf of the Certificateholders, with a Qualified Institution, a segregated
trust account (the "Excess Funding Account") bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Certificateholders. Except as provided in subsection 4.3(f), the Excess
Funding Account shall, except as otherwise provided herein, be under the sole
dominion and control of the Trustee for the benefit of the Certificateholders.
Pursuant to the authority granted to the Servicer herein, the Servicer shall
have the power, revocable by the Trustee, to make withdrawals and payments from
the Excess Funding Account for the purpose of carrying out the Servicer's or
Trustee's duties hereunder. If, at any time, the institution holding the Excess
Funding Account ceases to be a Qualified Institution, the Servicer shall direct
the Trustee to establish within ten Business Days a new Excess Funding Account
meeting the conditions specified above with a Qualified Institution, transfer
any cash and/or any investments to such new Excess Funding Account and from the
date such new Excess Funding Account is established, it shall be the "Excess
Funding Account."
(e) Administration of the Principal Accounts and the Interest Funding
Accounts. Funds on deposit in each Principal Account and each Interest Funding
Account shall at all times be invested by the Servicer (or, at the written
direction of the Transferor, by the Trustee) on behalf of the Transferor in Cash
Equivalents. Any such investment shall mature and such funds shall be available
for withdrawal on the Transfer Date following the Monthly Period in which such
funds were processed for collection. No such investments shall be liquidated
prior to maturity. At the end of each month, all interest and earnings (net of
losses and investment expenses) on funds on deposit in each Principal Account
and each Interest Funding Account (unless otherwise specified in the applicable
Supplement) shall be part of Finance Charge Collections. Subject to the
restrictions set forth above, the Servicer, or a Person designated in writing by
the Servicer, of which the Trustee shall have
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received written notification, shall have the authority to instruct the Trustee
with respect to the investment of funds on deposit in any Principal Account and
any Interest Funding Account. Any investment instructions to the Trustee shall
be in writing, shall be given no later than 10:00 a.m. New York City time on a
Business Day that such investment is proposed to be made and shall include a
certification that the proposed investment is a Cash Equivalent that matures at
or prior to the time required by this Agreement. For purposes of determining
the availability of funds or the balances in any Interest Funding Account and
any Principal Account for any reason under this Agreement all investment
earnings on such funds shall be deemed not to be available or on deposit.
Section 4.3 Collections and Allocations.
(a) Collections. Dealers shall make payments on the Receivables to the
Servicer who shall deposit all such payments in the Collection Account no later
than the second Business Day following the Date of Processing thereof.
The Servicer shall allocate such amounts to each Series of Investor
Certificates and to the Holder of the Exchangeable Transferor Certificate in
accordance with this Article IV and shall cause the Trustee to withdraw the
required amounts from the Collection Account or pay such amounts to the Holder
of the Exchangeable Transferor Certificate in accordance with this Article IV.
The Servicer shall make such deposits or payments on the date indicated herein
by wire transfer or as otherwise provided in the Supplement for any Series of
Certificates with respect to such Series.
Notwithstanding anything in this Agreement to the contrary, but subject to
the terms of any Supplement, for so long as, and only so long as, Green Tree (or
any successors to Green Tree pursuant to Section 8.2) or an Affiliate of Green
Tree shall remain the Servicer hereunder, and (a)(i) Green Tree (or any
successors to Green Tree pursuant to Section 8.2) or an Affiliate of Green Tree
provides to the Trustee a letter of credit or other form of Enhancement rated at
least A-1 by Standard & Poor's and P-1 by Moody's (as certified to the Trustee
by the Servicer), and (ii) after notifying each Rating Agency of the proposed
use of such letter of credit or other form of Enhancement the Transferor shall
have received a notice from each Rating Agency that making payments monthly
rather than daily would not result in a down-grading or withdrawal of any of
such Rating Agency's then existing ratings of the Investor Certificates, or (b)
Green Tree (or any successors to Green Tree pursuant to Section 8.2) shall have
and maintain a short-term credit rating of at least A-1 by Standard & Poor's and
P-1 by Moody's (as certified to the Trustee by the Servicer), the Servicer need
not deposit Collections from the Collection Account into the Principal Account
or the Interest Funding Account or any Series Account, or make payments to the
Holder of the Exchangeable Transferor Certificate, prior to the close of
business on the day any Collections are deposited in the Collection Account as
otherwise provided in this Article IV, but may instead make such deposits,
payments and withdrawals on each Transfer Date in an amount equal to the net
amount of such
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deposits, payments and withdrawals which would have been made but
for the provisions of this paragraph.
Notwithstanding anything else in this Agreement to the contrary, with
respect to any Monthly Period, whether the Servicer is required to make monthly
or daily deposits from the Collection Account into the Interest Funding Account,
the Principal Account or any Series Account, as provided in any Supplement, (i)
the Servicer will only be required to deposit Collections from the Collection
Account into the Interest Funding Account, the Principal Account or any Series
Account up to the required amount to be deposited into any such deposit account
or, without duplication, distributed on or prior to the related Distribution
Date to investor Certificateholders or to any Enhancement Provider pursuant to
the terms of any Supplement or agreement relating to such Enhancement and (ii)
if at any time prior to such Distribution Date the amount of Collections
deposited in the Collection Account exceeds the amount required to be deposited
pursuant to clause (i) above, the Servicer will be permitted to withdraw the
excess from the Collection Account.
(b) Allocations for the Exchangeable Transfer or Certificate. Throughout
the existence of the Trust, unless otherwise stated in any Supplement, on each
Business Day the Servicer shall allocate to the Holder of the Exchangeable
Transferor Certificate an amount equal to the product of (A) the Transferor
Percentage as of the end of the preceding Business Day and (B) the aggregate
amount of Principal Collections and Interest Collections available in the
Collection Account. The Servicer shall pay such amount to the Holder of the
Exchangeable Transferor Certificate on each Business Day; provided, however,
that amounts payable to the Holder of the Exchangeable Transferor Certificate
pursuant to this clause (b) shall instead be deposited in the Excess Funding
Account to the extent necessary to prevent the Transferor Interest from being
less than the Minimum Transferor Interest.
(c) [Reserved]
(d) Allocation for Series. On each Business Day, (i) the amount of
Interest Collections available in the Collection Account allocable to each
Series shall be determined by multiplying the aggregate amount of such Interest
Collections by the Floating Allocation Percentage for such Series, (ii) the
amount of Principal Collections available in the Collection Account allocable to
each Series shall be determined by multiplying the aggregate amount of such
Principal Collections by (x) during the Revolving Period for a Series, the
Floating Allocation Percentage for such Series and (y) during any Amortization
Period for a Series, the Fixed/Floating Allocation Percentage for such Series,
and (iii) the Defaulted Receivables allocable to each Series shall be determined
by multiplying the aggregate amount of such Defaulted Receivables by the
Floating Allocation Percentage for such Series. The Servicer shall, prior to
the close of business on the day any Collections are deposited in the Collection
Account, cause the Trustee to withdraw the required amounts from the Collection
Account and cause the Trustee to deposit such amounts into the applicable
Principal Account, the applicable Interest Funding Account, the Excess
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<PAGE>
Funding Account, or any Series Account or pay such amounts to the Holder of the
Exchangeable Transferor Certificate in accordance with the provisions of this
Article IV.
(e) Unallocated Principal Collections; Excess Funding Account. On each
Business Day, Shared Principal Collections shall be allocated to each
outstanding Series pro rata based on the Principal Shortfall, if any, for each
such Series. The Servicer shall pay any remaining Shared Principal Collections
on such Business Day to the Transferor; provided, that if the Transferor
Interest as determined on such Business Day does not exceed the Minimum
Transferor Interest, then such remaining Shared Principal Collections shall be
deposited in the Excess Funding Account to the extent necessary to increase the
Transferor Interest above the Minimum Transferor Interest; provided, further,
that if an Early Amortization Period has commenced and is continuing with
respect to more than one outstanding Series, such remaining Shared Principal
Collections shall be allocated to such Series pro rata based on the Investor
Percentage for Principal Receivables applicable for such Series.
(f) Amounts in Excess Funding Account. Amounts on deposit in the Excess
Funding Account on any Business Day will be invested by the Servicer (or, at the
direction of the Transferor, by the Trustee) on behalf of the Transferor in Cash
Equivalents which shall mature and be available on or before the next Business
Day on which amounts may be released from the Excess Funding Account. Earnings
from such investments received shall be deposited in the Collection Account and
treated as Interest Collections. Any investment instructions to the Trustee
shall be in writing and shall include a certification that the proposed
investment is a Cash Equivalent that matures at or prior to the date required by
this Agreement. If on any Business Day other than a Business Day on which a
Prospective Pay Out Event has occurred and is continuing, the Transferor
Interest is greater than the Minimum Transferor Interest, amounts on deposit in
the Excess Funding Account may, at the option of the Transferor, be released to
the Holder of the Exchangeable Transferor Certificate. On the first Business
Day of the Amortization Period for any Series, funds on deposit in the Excess
Funding Account will be deposited in the Principal Account for such Series to
the extent of the lesser of (x) the Invested Amount of such Series and (y) the
amount then on deposit in the Excess Funding Account.
[THE REMAINDER OF ARTICLE IV IS RESERVED
AND SHALL BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO ANY SERIES]
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<PAGE>
ARTICLE V
[ARTICLE V IS RESERVED AND SHALL BE
SPECIFIED IN ANY SUPPLEMENT WITH RESPECT
TO ANY SERIES]
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<PAGE>
ARTICLE VI
THE CERTIFICATES
Section 6.1 The Certificates. Subject to Sections 6.10 and 6.13, the
Investor Certificates of each Series and any Class thereof may be issued in
bearer form (the "Bearer Certificates") with attached interest coupons and, if
applicable, a special coupon (collectively, the "Coupons") or in fully
registered form (the "Registered Certificates"), and shall be substantially in
the form of the exhibits with respect thereto attached to the related
Supplement. The Exchangeable Transferor Certificate shall be substantially in
the form of Exhibit A. The Investor Certificates and the Exchangeable
Transferor Certificate shall, upon issue pursuant hereto or to Section 6.9 or
Section 6.10, be executed and delivered by the Transferor to the Trustee for
authentication and redelivery as provided in Sections 2.1 and 6.2. Any Investor
Certificate shall be issuable in a minimum denomination of $1,000 Undivided
Interest and integral multiples thereof, unless otherwise specified in any
Supplement, and shall be issued upon original issuance in an original aggregate
principal amount equal to the Initial Invested Amount. The Exchangeable
Transferor Certificate shall be issued as a single certificate. Each
Certificate shall be executed by manual or facsimile signature on behalf of the
Transferor by its President or any Vice President. Certificates bearing the
manual or facsimile signature of the individual who was, at the time when such
signature was affixed, authorized to sign on behalf of the Transferor or the
Trustee shall not be rendered invalid, notwithstanding that such individual has
ceased to be so authorized prior to the authentication and delivery of such
Certificates or does not hold such office at the date of such Certificates. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form provided for herein, executed by or on
behalf of the Trustee by the manual signature of a duly authorized signatory,
and such certificate upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been validly issued and duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication except Bearer Certificates which shall be dated the
applicable Issuance Date as provided in the related Supplement.
Section 6.2 Authentication of Certificates. Contemporaneously with the
initial assignment and transfer of the Receivables, whether now existing or
hereafter created and the other components to the Trust, the Trustee shall
authenticate and deliver the initial Series of Investor Certificates, upon the
written order of the Transferor. Upon the issuance of such Investor
Certificates, such Investor Certificates shall be validly issued, fully paid and
nonassessable. The Trustee shall authenticate and deliver the Exchangeable
Transferor Certificate to the Transferor simultaneously with its delivery of the
initial Series of Investor Certificates. Upon an Exchange as provided in
Section 6.9 and the satisfaction of certain other conditions specified therein,
the Trustee shall authenticate and deliver the Investor Certificates of
additional Series (with the designation provided in the related
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Supplement), upon the written order of the Transferor. Upon the written order of
the Transferor, the Certificates of any Series shall be duly authenticated by or
on behalf of the Trustee, in authorized denominations equal to (in the
aggregate) the Initial Invested Amount of such Series of Investor Certificates.
If specified in the related Supplement for any Series, the Trustee shall
authenticate and deliver outside the United States the Global Certificate that
is issued upon original issuance thereof, upon the written order of the
Transferor, to the Depositary. If specified in the related Supplement for any
Series, the Trustee shall authenticate Book-Entry Certificates that are issued
upon original issuance thereof, upon the written order of the Transferor, to a
Clearing Agency or its nominee as provided in Section 6.10.
Section 6.3 Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall cause to be kept at the office or agency to be
maintained by a transfer agent and registrar (the "Transfer Agent and
Registrar") in accordance with the provisions of Section 11.16, a register (the
"Certificate Register") in which, subject to such reasonable regulations as it
may prescribe, the Transfer Agent and Registrar shall provide for the
registration of the Investor Certificates of each Series (unless otherwise
provided in the related Supplement) and of transfers and exchanges of the
Investor Certificates as herein provided. Whenever reference is made in this
Agreement to the transfer or exchange of the Certificates by the Trustee, such
reference shall be deemed to include the transfer or exchange on behalf of the
Trustee by a Transfer Agent and Registrar. Norwest Bank Minnesota, National
Association is hereby initially appointed Transfer Agent and Registrar for the
purposes of registering the Investor Certificates and transfers and exchanges of
the Investor Certificates as herein provided. If any form of Investor
Certificate is issued as a Global Certificate, Norwest Bank Minnesota, National
Association may, or if and so long as any Series of Investor Certificates are
listed on a stock exchange and such exchange shall so require, Norwest Bank
Minnesota, National Association shall appoint a co-transfer agent and co-
registrar, which will also be a co-paying agent, in such city as the Transferor
may specify. Any reference in this Agreement to the Transfer Agent and Registrar
shall include any co-transfer agent and co-registrar unless the context
otherwise requires. Norwest Bank Minnesota, National Association shall be
permitted to resign as Transfer Agent and Registrar upon 30 days' written notice
to the Servicer. In the event that Norwest Bank Minnesota, National Association
shall no longer be the Transfer Agent and Registrar, the Transferor shall
appoint a successor Transfer Agent and Registrar. If any Series with respect to
which Book Entry Certificates were originally issued is no longer issued as
Book-Entry Certificates, then the Servicer may appoint a successor Transfer
Agent and Registrar.
Upon surrender for registration of transfer of any Certificate at any
office or agency of the Transfer Agent and Registrar maintained for such
purpose, the Transferor shall execute, subject to the provisions of subsection
6.3(c), and the Trustee shall (unless the Transfer Agent and Registrar is
different than the Trustee, in which case the Transfer Agent and Registrar
shall) authenticate and deliver, in
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the name of the designated transferee or transferees, one or more new
Certificates in authorized denominations of like aggregate Undivided Interests;
provided, that the provisions of this paragraph shall not apply to Bearer
Certificates.
At the option of any Holder of Registered Certificates, Registered
Certificates may be exchanged for other Registered Certificates of the same
Series in authorized denominations of like aggregate Undivided Interests in the
Trust, upon surrender of the Registered Certificates to be exchanged at any
office or agency of the Transfer Agent and Registrar maintained for such
purpose. At the option of a Bearer Certificateholder, subject to applicable
laws and regulations (including without limitation, the Bearer Rules), Bearer
Certificates may be exchanged for other Bearer Certificates or Registered
Certificates of the same Series in authorized denominations of like aggregate
Undivided Interests in the Trust, in the manner specified in the Supplement for
such Series, upon surrender of the Bearer Certificates to be exchanged at an
office or agency of the Transfer Agent and Registrar located outside the United
States. Each Bearer Certificate surrendered pursuant to this Section 6.3 shall
have attached thereto (or be accompanied by) all unmatured Coupons, provided
that any Bearer Certificate so surrendered after the close of business on the
Record Date preceding the relevant Distribution Date after the related Series
Termination Date need not have attached the Coupons relating to such
Distribution Date.
Whenever any Investor Certificates of any Series are so surrendered for
exchange, the Transferor shall execute, and the Trustee shall (unless the
Transfer Agent and Registrar is different than the Trustee, in which case the
Transfer Agent and Registrar shall) authenticate and deliver, the Investor
Certificates of such Series which the Certificateholder making the exchange is
entitled to receive. Every Investor Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in a form satisfactory to the Trustee and the Transfer
Agent and Registrar duly executed by the Certificateholder thereof or his
attorney-in-fact duly authorized in writing.
The preceding provisions of this Section 6.3 notwithstanding, the Trustee
or the Transfer Agent and Registrar, as the case may be, shall not be required
to register the transfer of or exchange any Investor Certificate of any Series
for the period from the Record Date preceding the due date for any payment to
the Distribution Date with respect to the Investor Certificates of such Series.
Unless otherwise provided in the related Supplement, no service charge
shall be made for any registration of transfer or exchange of Certificates, but
the Transfer Agent and Registrar may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.
All Investor Certificates (together with any Coupons attached to Bearer
Certificates) surrendered for registration of transfer or exchange shall be
canceled
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<PAGE>
by the Transfer Agent and Registrar and disposed of in a manner satisfactory to
the Trustee. The Trustee shall cancel and dispose of any Global Certificate upon
its exchange in full for Definitive Certificates, but shall not be required to
destroy such Global Certificates. Such certificate shall also state that a
certificate or certificates of each Foreign Clearing Agency to the effect
referred to in Section 6.13 was received with respect to each portion of the
Global Certificate exchanged for Definitive Certificates.
The Transferor shall execute and deliver to the Trustee or the Transfer
Agent and Registrar, as applicable, Bearer Certificates and Registered
Certificates in such amounts and at such times as are necessary to enable the
Trustee to fulfill its responsibilities under this Agreement and the
Certificates.
(b) Except as provided in Section 6.9 or 7.2 or in any Supplement, in no
event shall the Exchangeable Transferor Certificate or any interest therein be
transferred, sold, exchanged, pledged, participated or otherwise assigned
hereunder, in whole or in part, unless the Transferor shall have consented in
writing to such transfer and unless the Trustee shall have received (1)
confirmation in writing from each Rating Agency that such transfer will not
result in a lowering or withdrawal of its then-existing rating of any Series of
Investor Certificates and (2) an Opinion of Counsel that such transfer does not
(i) adversely affect the conclusions reached in any of the federal income tax
opinions issued in connection with the original issuance of any Series of
Investor Certificates or (ii) result in a taxable event to the holders of any
such Series.
(c) Unless otherwise provided in the related Supplement, registration of
transfer of Registered Certificates containing a legend relating to the
restrictions on transfer of such Registered Certificates (which legend shall be
set forth in the Supplement relating to such Investor Certificates) shall be
effected only if the conditions set forth in such related Supplement are
satisfied.
Whenever a Registered Certificate containing the legend set forth in the
related Supplement is presented to the Transfer Agent and Registrar for
registration of transfer, the Transfer Agent and Registrar shall promptly seek
instructions from the Servicer regarding such transfer. The Transfer Agent and
Registrar and the Trustee shall be entitled to receive written instructions
signed by an officer of the Trustee prior to registering any such transfer or
authenticating new Registered Certificates, as the case may be. The Servicer
hereby agrees to indemnify the Transfer Agent and Registrar and the Trustee and
to hold each of them harmless against any loss, liability or expense incurred
without negligence or bad faith on their part arising out of or in connection
with actions taken or omitted by them in reliance on any such written
instructions furnished pursuant to this subsection 6.3(c).
(d) The Transfer Agent and Registrar will maintain at its expense in the
Borough of Manhattan, The City of New York, an office or offices or an agency or
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<PAGE>
agencies where Investor Certificates of such Series may be surrendered for
registration of transfer or exchange.
(e) Prior to the Transfer of any portion of a Transferor Retained Class,
the Trustee shall have received (i) an Officer's Certificate of the Transferor
that on the date of the proposed Transfer, taking into account the certificates
whose Transfer is proposed, more than 20% (by Invested Amount and by value) of
the outstanding certificates issued by the Trust with respect to which no
Opinion of Counsel was issued that the applicable class would be treated as debt
for federal income tax purposes (including the Transferor Certificate and each
Transferor Retained Class) shall be owned by the Transferor and (ii) an Opinion
of Counsel to the effect that such proposed Transfer will not adversely affect
the Federal, Minnesota or Delaware income tax characterization of any
outstanding Series of Investor Certificates or the taxability (or tax
characterization) of the Trust under Federal, Minnesota or Delaware income tax
laws. The Transferor shall provide to Moody's notice of any such Transfer and a
copy of the Opinion of Counsel described in clause (ii) above.
(f) Notwithstanding anything in this Agreement to the contrary, if the
Trust issues any Class of Investor Certificates with respect to which an Opinion
of Counsel is not received stating that such Investor Certificates will be
treated as debt for federal income tax purposes, the following provisions shall
apply to such Certificates:
(i) Such Certificates shall be issued only in transactions which are
not required to be registered under the Securities Act of 1933; and
(ii) The Transferor may prevent any transfer, participation or other
disposition of any interest in any such Certificate if the Transferor, in
its sole and absolute discretion, determines that such transfer,
participation or other disposition, if effected, would cause the Trust to
be treated as a publicly traded partnership under Section 7704 of the
Internal Revenue Code of 1986, as amended, or the Treasury Regulations
issued thereunder.
Section 6.4 Mutilated, Destroyed, Lost or Stolen Certificates. If (a) any
mutilated Certificate (together, in the case of Bearer Certificates, with all
unmatured Coupons, if any, appertaining thereto) is surrendered to the Transfer
Agent and Registrar, or the Transfer Agent and Registrar receives evidence to
its satisfaction of the destruction, loss or theft of any Certificate and (b)
there is delivered to the Transfer Agent and Registrar and the Trustee such
security or indemnity as may be required by them to hold each of them and the
Trust harmless, then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
(unless the Transfer Agent and Registrar is different from the Trustee, in which
case the Transfer Agent and Registrar shall) authenticate and deliver (in
compliance with applicable law), in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and aggregate Undivided Interest. In connection with the issuance of any
new
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Certificate under this Section 6.4, the Trustee or the Transfer Agent and
Registrar may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee and the Transfer Agent
and Registrar) connected therewith. Any duplicate Certificate issued pursuant
to this Section 6.4 shall constitute complete and indefeasible evidence of
ownership in the Trust, as if originally issued, whether or not the lost, stolen
or destroyed Certificate shall be found at any time.
Section 6.5 Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Trustee, the Paying Agent, the
Transfer Agent and Registrar and any agent of any of them may treat the Person
in whose name any Certificate is registered as the owner of such Certificate for
the purpose of receiving distributions pursuant to Article V (as described in
any Supplement) and Article XI; and for all other purposes whatsoever, and
neither the Trustee, the Paying Agent, the Transfer Agent and Registrar nor any
agent of any of them shall be affected by any notice to the contrary; provided,
however, that in determining whether the holders of Investor Certificates
evidencing the requisite Undivided Interests have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Investor
Certificates owned by the Transferor, the Servicer or any Affiliate thereof
shall be disregarded and deemed not to be outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Investor Certificates which a Responsible Officer in the Corporate Trust Office
of the Trustee knows to be so owned shall be so disregarded. Investor
Certificates so owned that have been pledged in good faith shall not be
disregarded as outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Investor Certificates
and that the pledgee is not the Transferor, the Servicer or an Affiliate
thereof.
In the case of a Bearer Certificate, the Trustee, the Paying Agent, the
Transfer Agent and Registrar and any agent of any of them may treat the holder
of a Bearer Certificate or Coupon as the owner of such Bearer Certificate or
Coupon for the purpose of receiving distributions pursuant to Article V (as
described in any Supplement) and Article XII and for all other purposes
whatsoever, and neither the Trustee, the Paying Agent, the Transfer Agent and
Registrar nor any agent of any of them shall be affected by any notice to the
contrary. Certificates so owned that have been pledged in good faith shall not
be disregarded and may be regarded as outstanding, if the pledgee establishes
to the satisfaction of the Trustee the pledgee's right so to act with respect to
such Investor Certificates and that the pledgee is not the Transferor, the
Servicer or an Affiliate thereof.
Section 6.6 Appointment of Paying Agent.
(a) The Paying Agent shall make distributions to Investor
Certificateholders from the appropriate account or accounts maintained for the
benefit of
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Certificateholders as specified in this Agreement or the related Supplement for
any Series pursuant to Articles IV and V hereof. Any Paying Agent shall have
the revocable power to withdraw funds from such appropriate account or accounts
for the purpose of making distributions referred to above. The Trustee (or the
Servicer if the Trustee is the Paying Agent) may revoke such power and remove
the Paying Agent, if the Trustee (or the Servicer if the Trustee is the Paying
Agent) determines in its sole discretion that the Paying Agent shall have failed
to perform its obligations under this Agreement in any material respect or for
other good cause. The Paying Agent, unless the Supplement with respect to any
Series states otherwise, shall initially be Norwest Bank Minnesota, National
Association. Norwest Bank Minnesota, National Association shall be permitted to
resign as Paying Agent upon 30 days' written notice to the Servicer. Upon the
resignation of the Paying Agent, if the Paying Agent was not the Trustee, the
Trustee shall be the successor Paying Agent unless and until another successor
has been appointed as Paying Agent. In the event that the Trustee shall no
longer be the Paying Agent, the Transferor shall appoint a successor to act as
Paying Agent (which shall be a bank or trust company). Any reference in this
Agreement to the Paying Agent shall include any co-paying agent unless the
context requires otherwise.
If specified in the related Supplement for any Series, so long as the
Investor Certificates of such Series are outstanding and the Paying Agent is not
located in New York City, the Transferor shall maintain a co-paying agent in New
York City (for Registered Certificates only) or any other city designated in
such Supplement.
(b) The Trustee shall cause each Paying Agent (other than itself) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee that such Paying Agent will hold all sums, if any,
held by it for payment to the Certificateholders in trust for the benefit of the
Certificateholders entitled thereto and waive all rights of set off the Paying
Agent may have against any sums held by it until such sums shall be paid to such
Certificateholders and shall agree, and if the Trustee is the Paying Agent it
hereby agrees, that it shall comply with all requirements of the Internal
Revenue Code regarding the withholding by the Trustee of payments in respect of
federal income taxes due from Certificate Owners.
Section 6.7 Access to List of Certificateholders' Names and Addresses.
The Trustee will furnish or cause to be furnished by the Transfer Agent and
Registrar to the Servicer or the Paying Agent, within five Business Days after
receipt by the Trustee of a request therefor from the Servicer or the Paying
Agent, respectively, in writing, a list in such form as the Servicer or the
Paying Agent may reasonably require, of the names and addresses of the Investor
Certificateholders as of the most recent Record Date for payment of
distributions to Investor Certificateholders. Unless otherwise provided in the
related Supplement, holders of Investor Certificates evidencing Undivided
Interests aggregating not less than 25% of the Invested Amount of the Investor
Certificates of any Series (the "Applicants") may apply in writing to the
Trustee, and if such application states that the Applicants
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desire to communicate with other Investor Certificateholders of any Series with
respect to their rights under this Agreement or under the Investor Certificates
and is accompanied by a copy of the communication which such Applicants propose
to transmit, then the Trustee, after having been adequately indemnified by such
Applicants for its costs and expenses, shall afford or shall cause the Transfer
Agent and Registrar to afford such Applicants access during normal business
hours to the most recent list of Certificateholders held by the Trustee and
shall give the Servicer notice that such request has been made, within five
Business Days after the receipt of such application. Such list shall be as of a
date no more than 45 days prior to the date of receipt of such Applicants'
request. Every Certificateholder, by receiving and holding a Certificate, agrees
with the Trustee that neither the Trustee, the Transfer Agent and Registrar, nor
any of their respective agents shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the
Certificateholders hereunder, regardless of the source from which such
information was obtained.
Section 6.8 Authenticating Agent.
(a) The Trustee may appoint one or more authenticating agents (each, an
"Authenticating Agent") with respect to the Certificates which shall be
authorized to act on behalf of the Trustee in authenticating the Certificates in
connection with the issuance, delivery, registration of transfer, exchange or
repayment of the Certificates. The Trustee will appoint any Transfer Agent and
Registrar to be an Authentication Agent. Whenever reference is made in this
Agreement to the authentication of Certificates by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication on behalf of the Trustee by an Authenticating Agent and a
certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent must be acceptable to the
Transferor. The Trustee hereby initially appoints itself as its Authenticating
Agent.
(b) Any institution succeeding to the corporate agency business of an
Authenticating Agent shall continue to be an Authenticating Agent without the
execution or filing of any paper or any further act on the part of the Trustee
or such Authenticating Agent.
(c) An Authenticating Agent may at any time resign by giving written notice
of resignation to the Trustee and to the Transferor. The Trustee may at any
time terminate the agency of an Authenticating Agent by giving notice of
termination to such Authenticating Agent and to the Transferor. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
an Authenticating Agent shall cease to be acceptable to the Trustee or the
Transferor, the Trustee promptly may appoint a successor Authenticating Agent.
Any successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authen-
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ticating Agent shall be appointed unless acceptable to the Trustee and the
Transferor.
(d) The Servicer agrees to pay each Authenticating Agent from time to time
reasonable compensation for its services under this Section 6.8.
(e) The provisions of Sections 11.1, 11.2 and 11.3 shall be applicable to
any Authenticating Agent.
(f) Pursuant to an appointment made under this Section 6.8, the
Certificates may have endorsed thereon, in lieu of the Trustee's certificate of
authentication, an alternate certificate of authentication in substantially the
following form:
Trustee's Certificate of Authentication
This is one of the certificates described in the Pooling and Servicing
Agreement.
_________________________________________
as Authenticating Agent for the
Trustee,
By: _____________________________________
Authorized Signatory
Dated:
Section 6.9 Tender of Exchangeable Transferor Certificate.
(a) Upon any Exchange, the Transferor shall deliver to the Trustee for
authentication under Section 6.2, one or more new Series of Investor
Certificates. Any such Series of Investor Certificates shall be substantially
in the form specified in the related Supplement and shall bear, upon its face,
the designation for such Series to which it belongs, as selected by the
Transferor. Except as specified in any Supplement for a related Series, all
Investor Certificates of any Series shall rank pari passu and be equally and
ratably entitled as provided herein to the benefits hereof (except that the
Enhancement provided for any Series shall not be available for any other Series)
without preference, priority or distinction on account of the actual time or
times of authentication and delivery, all in accordance with the terms and
provisions of this Agreement and the related Supplement.
(b) The Holder of the Exchangeable Transferor Certificate may (i) tender
the Exchangeable Transferor Certificate to the Trustee in exchange for (A) one
or more newly issued Series of Investor Certificates, or (B) a reissued
Exchangeable Transferor Certificate, (ii) request the Trustee to issue to it one
or more Classes of
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any newly issued Series of Investor Certificates which upon payment by the pur-
chaser thereof of the Initial Invested Amount of such Certificates to a
Defeasance Account, will represent an interest in the Trust equal to such
Initial Invested Amount (an "Unfunded Certificate") or (iii) take a combination
of the actions specified in clauses (i) and (ii) provided that the sum of the
amount of Transferor Interest which is tendered under clause (i) and the amount
to be paid to the Defeasance Account under clause (ii) equals the Initial
Invested Amount of the Investor Certificates delivered to the Holder of the
Exchangeable Transferor Certificate (any such event under clauses (i), (ii) or
(iii), a "Transferor Exchange"). In addition, to the extent permitted for any
Series of Investor Certificates as specified in the related Supplement, the
Investor Certificateholders of such Series may tender their Investor
Certificates and the Holder of the Exchangeable Transferor Certificate may
tender the Exchangeable Transferor Certificate to the Trustee pursuant to the
terms and conditions set forth in such Supplement in exchange for (i) one or
more newly issued Series of Investor Certificates and (ii) a reissued
Exchangeable Transferor Certificate (an "Investor Exchange"). Notwithstanding
anything to the contrary herein, the Transferor shall not be permitted to
deposit money into any Defeasance Account. The Transferor Exchange and Investor
Exchange are referred to collectively herein as an "Exchange." The Holder of the
Exchangeable Transferor Certificate may perform an Exchange by notifying the
Trustee, in writing, at least five Business Days in advance (an "Exchange
Notice") of the date upon which the Exchange is to occur (an "Exchange Date").
Any Exchange Notice shall state the designation of any Series to be issued on
the Exchange Date and, with respect to each such Class or Series: (a) its
Initial Invested Amount (or the method for calculating such Initial Invested
Amount), which at any time may not be greater than the current principal amount
of the Exchangeable Transferor Certificate at such time (or in the case of an
Investor Exchange, the sum of the Invested Amount of any Class or Series of
Investor Certificates to be exchanged plus the current principal amount of the
Exchangeable Transferor Certificate) taking into account any Receivables trans-
ferred to the Trust simultaneous with such Exchange, (b) its Certificate Rate
(or the method for allocating interest payments or other cash flows to such
Series), if any, and (c) the Enhancement Provider, if any, with respect to such
Series. On the Exchange Date, the Trustee shall authenticate and deliver any
such Class or Classes of Series of Investor Certificates only upon delivery to
it of the following: (a) a Supplement satisfying the criteria set forth in
subsection 6.9(c) and in form reasonably satisfactory to the Trustee executed
by the Transferor and the Servicer and specifying the Principal Terms of such
Series, (b) the applicable Enhancement, if any, (c) the agreement, if any,
pursuant to which the Enhancement Provider agrees to provide the Enhancement, if
any, (d) an Opinion of Counsel to the effect that (i) any Class of the newly
issued Series of Investor Certificates sold to third parties will be
characterized as either indebtedness or partnership interests for Federal and
applicable state income tax purposes or (ii) that the issuance of the newly
issued Series of Investor Certificates will not adversely affect the Federal,
Minnesota or Delaware income tax characterization of any outstanding Series of
Investor Certificates or the taxability of the Trust under Federal, Minnesota or
Delaware income tax laws, (e) written confirmation from each Rating Agency that
the Exchange will not result
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in such Rating Agency's reducing or withdrawing its rating on any then
outstanding Series as to which it is a Rating Agency, (f) an Officer's
Certificate of the Transferor, that on the Exchange Date (i) after giving effect
to such Exchange, the Transferor Interest would be at least equal to the Minimum
Transferor Interest, (ii) the Retained Interest would be at least equal to the
Minimum Retained Interest, and (iii) taking into account the certificates of the
newly issued Series, more than 20% (by Invested Amount and by value) of the
outstanding certificates issued by the Trust with respect to which no Opinion of
Counsel was issued that the applicable class would be treated as debt for
federal income tax purposes (including the Transferor Certificate and each
Transferor Retained Class) shall, by their terms, be prohibited from being
Transferred, (g) the existing Exchangeable Transferor Certificate or applicable
Investor Certificates, as the case may be and (h) such other documents,
certificates and Opinions of Counsel as may be required by the applicable
Supplement. Upon satisfaction of such conditions, the Trustee shall cancel the
existing Exchangeable Transferor Certificate or applicable Investor
Certificates, as the case may be, and issue, as provided above, such Series of
Investor Certificates and a new Exchangeable Transferor Certificate, dated the
Exchange Date. There is no limit to the number of Exchanges that may be
performed under this Agreement.
(c) In conjunction with an Exchange, the parties hereto shall execute a
Supplement, which shall specify the relevant terms with respect to any newly
issued Series of Investor Certificates, which may include without limitation:
(i) its name or designation, (ii) the Initial Invested Amount or the method of
calculating the Initial Invested Amount, (iii) the Certificate Rate (or formula
for the determination thereof), (iv) the Closing Date, (v) the rating agency or
agencies rating such Series, (vi) the name of the Clearing Agency, if any, (vii)
the rights of the Holder of the Exchangeable Transferor Certificate that have
been transferred to the Holders of such Series pursuant to such Exchange
(including any rights to allocations of Collections of Imputed Yield Receivables
and Principal Receivables), (viii) the interest payment date or dates and the
date or dates from which interest shall accrue, (ix) the method of allocating
Principal Collections for such Series and the method by which the principal
amount of Investor Certificates of such Series shall amortize or accrete and the
method for allocating Imputed Yield Collections and Defaulted Receivables, (x)
the names of any accounts to be used by such Series and the terms governing the
operation of any such account, (xi) the Series Servicing Fee Percentage, (xii)
the Minimum Transferor Interest, (xiii) the Series Termination Date, (xiv) the
terms of any Enhancement with respect to such Series, (xv) the Enhancement
Provider, if applicable, (xvi) the base rate applicable to such Series, (xvii)
the terms on which the Certificates of such Series may be repurchased or
remarketed to other investors, (xviii) any deposit into any account provided for
such Series, (xix) the number of Classes of such Series and, if more than one
Class, the rights and priorities of each such Class, (xx) whether any fees will
be included in the funds available to be paid for such Series, (xxi) the
subordination of such Series to any other Series, (xxii) the Pool Factor,
(xxiii) the Minimum Aggregate Principal Receivables, (xxiv) whether such Series
will be a part of a group or subject to being paired with any other Series,
(xxv) whether such Series will be pre-funded, and
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(xxvi) any other relevant terms of such Series (including whether or not such
Series will be pledged as collateral for an issuance of any other securities,
including commercial paper) (all such terms, the "Principal Terms" of such
Series). The terms of such Supplement may modify or amend the terms of this
Agreement, solely as applied to such new Series. If on the date of the issuance
of such Series there is issued and outstanding one or more Series of Investor
Certificates and no Series of Investor Certificates is currently rated by a
Rating Agency, then as a condition to such Exchange a nationally recognized
investment banking firm or commercial bank shall also deliver to the Trustee an
officer's certificate stating, in substance, that the Exchange will not have an
adverse effect on the timing or distribution of payments to such other Series of
Investor Certificates then issued and outstanding.
(d) The Transferor may surrender the Exchangeable Transferor Certificate to
the Trustee in exchange for a newly issued Exchangeable Transferor Certificate
and a second certificate (a "Supplemental Certificate"), the terms of which
shall be defined in a supplement to this Agreement (which supplement shall be
subject to Section 13.01 hereof to the extent that it amends any of the terms of
this Agreement), to be delivered to or upon the order of the Transferor (or a
Person designated by the Transferor, in the case of the transfer or exchange
thereof, as provided below), upon satisfaction of the following conditions: (i)
following such exchange, the Transferor Interest (less any interest therein
represented by any Supplemental Certificates) in the Principal Receivables in
the Trust equals or exceeds the greater of the Minimum Transferor Interest and
the Minimum Retained Interest following such exchange, (ii) following such
exchange the sum of (a) the Transferor Interest (less any interest therein
represented by any Supplemental Certificates) in the Principal Receivables and
(b) the interest in Principal Receivables represented by the Transferor Retained
Certificates equals or exceeds, on the day following such exchange, 20% of the
sum of (x) the Transferor Interest (including any interest therein represented
by any Supplemental Certificate) and (y) the interest in Principal Receivables
represented by the Transferor Retained Certificates on such date, and (iii) the
Trustee received prior to such exchange (A) a letter from the Rating Agency
stating that the then current ratings on the Investor Certificates of each rated
class of each Series then outstanding will not be reduced or withdrawn because
of the issuance of such Supplemental Certificate and (B) an Opinion of Counsel
to the effect that (i) such Supplemental Certificate will be characterized as
either indebtedness or a partnership interest for Federal and applicable state
income tax purposes or (ii) that such Supplemental Certificate will not
adversely affect the Federal, Minnesota or Delaware income tax characterization
of any outstanding Series of Investor Certificates or the taxability of the
Trust under Federal, Minnesota or Delaware income tax laws, transferred or
exchanged only upon satisfaction of the conditions set forth in clause (iii)
above.
Section 6.10 Book-Entry Certificates. Unless otherwise provided in any
related Supplement, the Investor Certificates, upon original issuance, shall be
issued in the form of typewritten Certificates representing the Book-Entry
Certificates, to be delivered to the depositary specified in such Supplement
(the "Depositary") which
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shall be the Clearing Agency or Foreign Clearing Agency, by or on behalf of such
Series. The Investor Certificates of each Series shall, unless otherwise
provided in the related Supplement, initially be registered on the Certificate
Register in the name of the nominee of the Clearing Agency or Foreign Clearing
Agency. No Certificate Owner will receive a definitive certificate representing
such Certificate Owner's interest in the related Series of Investor
Certificates, except as provided in Section 6.12. Unless and until definitive,
fully registered Investor Certificates of any Series ("Definitive Certificates")
have been issued to Certificate Owners pursuant to Section 6.12:
(i) the provisions of this Section 6.10 shall be in full force and
effect with respect to each such Series;
(ii) the Transferor, the Servicer, the Paying Agent, the Transfer
Agent and Registrar and the Trustee may deal with the Clearing Agency and
the Clearing Agency Participants for all purposes (including the making of
distributions on the Investor Certificates of each such Series) as the
authorized representatives of the Certificate Owners;
(iii) to the extent that the provisions of this Section 6.10 conflict
with any other provisions of this Agreement, the provisions of this Section
6.10 shall control with respect to each such Series; and
(iv) the rights of Certificate Owners of Investor Certificates of each
such Series shall be exercised only through the Clearing Agency or Foreign
Clearing Agency and the applicable Clearing Agency Participants and shall
be limited to those established by law and agreements between such
Certificate Owners and the Clearing Agency or Foreign Clearing Agency
and/or the Clearing Agency Participants. Pursuant to the Depositary
Agreement applicable to a Series, unless and until Definitive Certificates
of such Series are issued pursuant to Section 6.12, the initial Clearing
Agency will make book-entry transfers among the Clearing Agency
Participants and receive and transmit distributions of principal and
interest on the Investor Certificates to such Clearing Agency Participants.
Section 6.11 Notices to Clearing Agency. Whenever notice or other
communication to the Certificateholders is required under this Agreement, unless
and until Definitive Certificates shall have been issued to Certificate Owners
pursuant to Section 6.12, the Trustee shall give all such notices and communica-
tions specified herein to be given to Holders of the Investor Certificates to
the Clearing Agency or Foreign Clearing Agency.
Section 6.12 Definitive Certificates. If (i) (A) the Transferor advises the
Trustee in writing that the Clearing Agency or Foreign Clearing Agency is no
longer willing or able to discharge properly its responsibilities under the
applicable Depositary Agreement, and (B) the Transferor is unable to locate a
qualified successor,
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(ii) the Transferor, at its option, advises the Trustee in writing that it
elects to terminate the book-entry system through the Clearing Agency or Foreign
Clearing Agency with respect to any Series of Certificates or (iii) after the
occurrence of a Servicer Default, Certificate Owners of a Series representing
beneficial interests aggregating not less than 50% of the Invested Amount of
such Series advise the Trustee and the applicable Clearing Agency or Foreign
Clearing Agency through the applicable Clearing Agency Participants in writing
that the continuation of a book-entry system through the applicable Clearing
Agency or Foreign Clearing Agency is no longer in the best interests of the
Certificate Owners, the Trustee shall notify all Certificate Owners of such
Series, through the applicable Clearing Agency Participants, of the occurrence
of any such event and of the availability of Definitive Certificates to
Certificate Owners of such Series requesting the same. Upon surrender to the
Trustee of the Investor Certificates of such Series by the applicable Clearing
Agency or Foreign Clearing Agency for registration, accompanied by registration
instructions from the applicable Clearing Agency or Foreign Clearing Agency, the
Trustee shall issue the Definitive Certificates of such Series. Neither the
Transferor nor the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Certificates of such Series,
all references herein to obligations imposed upon or to be performed by the
applicable Clearing Agency or Foreign Clearing Agency shall be deemed to be
imposed upon and performed by the Trustee, to the extent applicable with respect
to such Definitive Certificates, and the Trustee shall recognize the Holders of
the Definitive Certificates of such Series as Certificateholders of such Series
hereunder.
Section 6.13 Global Certificate; Euro-Certificate Exchange Date. If
specified in the related Supplement for any Series, the Investor Certificates
may be initially issued in the form of a single temporary Global Certificate
(the "Global Certificate") in bearer form, without interest coupons, in the
denomination of the Initial Invested Amount of such Series and substantially in
the form attached to the related Supplement. Unless otherwise specified in the
related Supplement, the provisions of this Section 6.13 shall apply to such
Global Certificate. The Global Certificate will be authenticated by the Trustee
upon the same conditions, in substantially the same manner and with the same
effect as the Definitive Certificates. The Global Certificate may be exchanged
in the manner described in the related Supplement for Registered Certificates or
Bearer Certificates in definitive form.
Section 6.14 Meetings of Certificateholders.
To the extent provided by the Supplement for any Series issued in whole or
in part in Bearer Certificates, the Servicer or the Trustee may at any time call
a meeting of the Certificateholders of such Series, to be held at such time and
at such place as the Servicer or the Trustee, as the case may be, shall
determine, for the purpose of approving a modification of or amendment to, or
obtaining a waiver of, any covenant or condition set forth in this Agreement
with respect to such Series or in the Certificates of such Series, subject to
Section 13.1 of this Agreement.
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ARTICLE VII
OTHER MATTERS RELATING TO THE TRANSFEROR
Section 7.1 Liability of the Transferor. The Transferor shall be liable in
accordance herewith solely to the extent of the obligations specifically
undertaken by the Transferor.
Section 7.2 Merger or Consolidation of or Assumption of the Obligations of
the Transferor.
(a) The Transferor shall not consolidate with or merge into any other
business entity or convey or transfer its properties and assets substantially as
an entirety to any Person, unless:
(i) the business entity formed by such consolidation or into which the
Transferor is merged or the Person which acquires by conveyance or transfer
the properties and assets of the Transferor substantially as an entirety
shall be, if the Transferor is not the surviving entity, organized and
existing under the laws of the United States of America or any State or the
District of Columbia and such Person shall assume, without the execution or
filing of any paper or any further act on the part of the parties hereto,
the performance of every covenant and obligation of the Transferor, as
applicable hereunder and shall benefit from all the rights granted to the
Transferor, as applicable hereunder. To the extent that any right, covenant
or obligation of the Transferor, as applicable hereunder, is inapplicable
to the successor entity, such successor entity shall be subject to such
covenant or obligation, or benefit from such right, as would apply, to the
extent practicable, to such successor entity. In furtherance hereof, in
applying this Section 7.2 to a successor entity, Section 9.2 hereof shall
be applied by reference to events of involuntary liquidation, receivership
or conservatorship applicable to such successor entity as shall be set
forth in the officer's certificate described in subsection 7.2(a)(ii);
(ii) the Transferor shall have delivered to the Trustee an Officer's
Certificate signed by a Vice President (or any more senior officer) of the
Transferor stating that such consolidation, merger, conveyance or transfer
and such supplemental agreement comply with this Section 7.2 and that all
conditions precedent herein provided for relating to such transaction have
been complied with and an Opinion of Counsel that such supplemental
agreement is legal, valid and binding and that the entity surviving such
consolidation, conveyance or transfer is organized and existing under the
laws of the United States of America or any State or the District of
Columbia and, subject to customary limitations and qualifications, such
entity will not be substantively consolidated with Green Tree or the
Servicer;
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(iii) the Transferor shall have delivered notice to the Rating Agency
of such consolidation, merger, conveyance or transfer and the Rating Agency
shall have provided written confirmation that such consolidation, merger,
conveyance or transfer will not result in the Rating Agency reducing or
withdrawing its rating on any then outstanding Series as to which it is a
Rating Agency;
(iv) the successor entity shall be a special purpose bankruptcy remote
entity; and
(v) if the Transferor is not the surviving entity, the surviving
entity shall file new UCC-1 financing statements with respect to the
interest of the Trust in the Receivables.
(b) The obligations of the Transferor hereunder shall not be assignable nor
shall any Person succeed to the obligations of the Transferor hereunder except
for mergers, consolidations, assumptions or transfers in accordance with the
provisions of the foregoing paragraph.
Section 7.3 Limitation on Liability. The directors, officers, employees or
agents of the Transferor shall not be under any liability to the Trust, the
Trustee, the Certificateholders, any Enhancement Provider or any other Person
hereunder or pursuant to any document delivered hereunder, it being expressly
understood that all such liability is expressly waived and released as a
condition of, and as consideration for, the execution of this Agreement and any
Supplement and the issuance of the Certificates; provided, however, that this
provision shall not protect the officers, directors, employees, or agents of the
Transferor against any liability which would otherwise be imposed upon them by
reason of willful misfeasance, bad faith or gross negligence in the performance
of duties or by reason of reckless disregard of their obligations and duties
hereunder. Except as provided in Sections 7.1 and 7.4 with respect to the Trust
and the Trustee and its officers, directors, employees and agents, the
Transferor shall not be under any liability to the Trust, the Trustee, its
officers, directors, employees and agents, the Certificateholders, any
Enhancement Provider or any other Person for any action taken or for refraining
from the taking of any action in its capacity as Transferor pursuant to this
Agreement or any Supplement whether arising from express or implied duties
under this Agreement or any Supplement or otherwise; provided, however, that
this provision shall not protect the Transferor against any liability which
would otherwise be imposed upon it by reason of willful misfeasance, bad faith
or gross negligence in the performance of duties or by reason of reckless
disregard of its obligations and duties hereunder. The Transferor and any
director, officer, employee or agent may rely in good faith on any document of
any kind prima facie properly executed and submitted by any Person respecting
any matters arising hereunder.
Section 7.4 Liabilities. Notwithstanding Section 7.3, by entering into this
Agreement, the Transferor agrees to be liable, directly to the injured party,
for the
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entire amount of any losses, claims, damages, penalties or liabilities (other
than those incurred by a Certificateholder in the capacity of an investor in the
Investor Certificates as a result of the performance of the Receivables, market
fluctuations, a shortfall or failure by the Enhancement Provider to make payment
under any Enhancement or other similar market or investment risks associated
with ownership of the Investor Certificates) arising out of or based on the
arrangement created by this Agreement and the actions of the Servicer taken
pursuant hereto as though this Agreement created a partnership under the
Minnesota Uniform Partnership Act, in which the Transferor is a general partner.
The Transferor agrees to pay, indemnify and hold harmless each Investor
Certificateholder against and from any and all such loses claims, damages and
liabilities (other than those incurred by a Certificateholder in the capacity of
an investor in the Investor Certificates as a result of the performance of the
Receivables, market fluctuations, a shortfall or failure by an Enhancement
Provider to make payment under an Enhancement or other similar market or
investment risks) except to the extent that they arise from any action by such
Investor Certificateholder. Subject to Sections 8.3 and 8.4, in the event of a
Service Transfer, the Successor Servicer will indemnify and hold harmless the
Transferor for any losses claims damages and liabilities of the Transferor as
described in this Section 7.4 arising from the actions or omissions of such
Successor Servicer.
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ARTICLE VIII
OTHER MATTERS RELATING
TO THE SERVICER
Section 8.1 Liability of the Servicer. The Servicer shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer in such capacity herein.
Section 8.2 Merger or Consolidation of or Assumption of the Obligations of
the Servicer. Subject to subsection 3.1(a), the Servicer shall not consolidate
with or merge into any other corporation or convey or transfer its properties
and assets substantially as an entirety to any Person, unless:
(i) the corporation formed by such consolidation or into which the
Servicer is merged or the Person which acquires by conveyance or transfer
the properties and assets of the Servicer substantially as an entirety
shall be a corporation organized and existing under the laws of the United
States of America or any State or the District of Columbia and, if the
Servicer is not the surviving entity, such Person shall assume, without the
execution or filing of any paper or any further act on the part of any of
the parties hereto, the performance of every covenant and obligation of the
Servicer hereunder (to the extent that any right, covenant or obligation of
the Servicer, as applicable hereunder, is inapplicable to the successor
entity, such successor entity shall be subject to such covenant or
obligation, or benefit from such right, as would apply, to the extent
practicable, to such successor entity); and
(ii) the Servicer shall have delivered to the Trustee an Officer's
Certificate that such consolidation, merger, conveyance or transfer and
such supplemental agreement comply with this Section 8.2 and that all
conditions precedent herein provided for relating to such transaction have
been complied with and an Opinion of Counsel that such supplemental
agreement is legal, valid and binding with respect to the Servicer and that
the entity surviving such consolidation, conveyance or transfer is
organized and existing under the laws of the United States of America or
any State or the District of Columbia; and
(iii) the Servicer shall have delivered notice to the Rating Agency of
such consolidation, merger, conveyance or transfer.
Section 8.3 Limitation on Liability of the Servicer and Others. The
directors, officers, employees or agents of the Servicer shall not be under any
liability to the Trust, the Trustee, the Certificateholders, any Enhancement
Provider or any other Person hereunder or pursuant to any document delivered
hereunder, it being expressly understood that all such liability is expressly
waived and released as a condition of, and as consideration for, the execution
of this Agreement and any
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Supplement and the issuance of the Certificates; provided, however, that this
provision shall not protect the directors, officers, employees and agents of the
Servicer against any liability which would otherwise be imposed upon them by
reason of willful misfeasance, bad faith or gross negligence in the performance
of duties or by reason of reckless disregard of their obligations and duties
hereunder. Except as provided in Sections 8.1 and 8.4 with respect to the
Trustee, its officers, directors, employees and agents, the Servicer shall not
be under any liability to the Trust, the Trustee, its officers, directors,
employees and agents, the Certificateholders, any Enhancement Provider or any
other Person for any action taken or for refraining from the taking of any
action in its capacity as Servicer pursuant to this Agreement or any Supplement;
provided, however, that this provision shall not protect the Servicer against
any liability which would otherwise be imposed upon it by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties or by
reason of its reckless disregard of its obligations and duties hereunder or
under any Supplement. The Servicer may rely in good faith on any document of any
kind prima facie properly executed and submitted by any Person respecting any
matters arising hereunder. The Servicer shall not be under any obligation to
appear in, prosecute or defend any legal action which is not incidental to its
duties to service the Receivables in accordance with this Agreement which in its
reasonable opinion may involve it in any expense or liability.
Section 8.4 Servicer Indemnification of the Transferor, the Trust and the
Trustee. Subject to the limitations on liability set forth in Section 8.3, the
Servicer shall indemnify and hold harmless the Transferor, the Trustee and the
Trust (each, an "Indemnified Party") from and against any loss, liability,
reasonable expense, damage or injury, including, but not limited to, any
judgment, award, settlement, reasonable attorneys' fees and other costs or
expenses incurred in connection with the defense of any actual or threatened
action, proceeding or claim, suffered or sustained by reason of any acts or
omissions or alleged acts or omissions of the Servicer with respect to
activities of the Trust or the Trustee for which the Servicer is responsible
pursuant to this Agreement; provided, however, that the Servicer shall not
indemnify or hold harmless an Indemnified Party if such acts, omissions or
alleged acts or omissions constitute or are caused by fraud, gross negligence,
or willful misconduct by such Indemnified Party (or any of such Indemnified
Party's officers, directors, employees or agents) or the Investor
Certificateholders; provided, further, that the Servicer shall not indemnify or
hold harmless the Trust, the Investor Certificateholders or the Certificate
Owners for any losses, liabilities, expenses, damages or injuries suffered or
sustained by any of them with respect to any action taken by the Trustee at the
request of the Investor Certificateholders; provided, further, that the Servicer
shall not indemnify or hold harmless the Trust, the Investor Certificateholders
or the Certificate Owners as to any losses, liabilities, expenses, damages or
injuries suffered or sustained by any of them in their capacities as investors,
including without limitation losses incurred as a result of Defaulted
Receivables; provided, further, that the Servicer shall not indemnify or hold
harmless the Transferor, the Trust, the Investor Certificateholders or the
Certificate Owners for any losses, liabilities, expenses, damages or injuries
suffered
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or sustained by the Trust, the Investor Certificateholders or the Certificate
Owners arising under any tax law, including without limitation, any federal,
state, local or foreign income or franchise taxes or any other tax imposed on or
measured by income (or any interest, penalties or additions with respect thereto
or arising from a failure to comply therewith) required to be paid by the Trust,
the Investor Certificateholders or the Certificate Owners in connection
herewith to any taxing authority; and, provided, further, that in no event will
the Servicer be liable, directly or indirectly, for or in respect of any
indebtedness or obligation evidenced or created by any Certificate, recourse as
to which shall be limited solely to the assets of the Trust allocated for the
payment thereof as provided on this Agreement and any applicable Supplement. Any
such indemnification shall not be payable from the assets of the Trust, but the
Servicer shall be subrogated to the rights of the Trust with respect to the
foregoing matters if and to the extent that the Servicer shall have indemnified
the Trust with respect thereto. The Servicer shall indemnify and hold harmless
the Trustee and its officers, directors, employees or agents from and against
any loss, liability, reasonable expense, damage or injury suffered or sustained
by reason of the acceptance of this Trust by the Trustee, the issuance by the
Trust of the Certificates or any of the other matters contemplated herein or in
any Supplement; provided, however, that the Servicer shall not indemnify the
Trustee or its officers, directors, employees or agents for any loss, liability,
expense, damage or injury caused by the fraud, negligence or willful misconduct
of any of them. The provisions of this indemnity shall run directly to and be
enforceable by an injured party subject to the limitations hereof and shall
survive the resignation or removal of the Servicer, the resignation or removal
of the Trustee and/or the termination of the Trust and shall survive the
termination of the Agreement.
Section 8.5 The Servicer Not to Resign. Subject to subsection 3.1(a), the
Servicer shall not resign from the obligations and duties hereby imposed on it
except upon determination that (i) the performance of its duties hereunder is no
longer permissible under applicable law and (ii) there is no reasonable action
which the Servicer could take to make the performance of its duties hereunder
permissible under applicable law. Any such determination permitting the
resignation of the Servicer shall be evidenced as to clause (i) above by an
Opinion of Counsel to such effect delivered to the Trustee. No such resignation
shall become effective until the Trustee or a Successor Servicer shall have
assumed the responsibilities and obligations of the Servicer in accordance with
Section 10.2 hereof. If the Trustee is unable within 120 days of the date of
delivery to it of such Opinion of Counsel to appoint a Successor Servicer, the
Trustee shall serve as Successor Servicer hereunder (but shall have continued
authority to appoint another Person as Successor Servicer).
Section 8.6 Access to Certain Documentation and Information Regarding the
Receivables. The Servicer shall provide to the Trustee and its agents (who
shall be reasonably acceptable to the Servicer) access to the documentation
regarding the Receivables in such cases where the Trustee is required in
connection with the enforcement of the rights of the Investor
Certificateholders, or by applicable statutes or regulations, to review such
documentation, such access being afforded without
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charge but only (i) upon reasonable request, (ii) during normal business hours,
(iii) subject to the Servicer's normal security and confidentiality procedures
and (iv) at offices designated by the Servicer. Nothing in this Section 8.6
shall derogate from the obligation of the Transferor, the Trustee or the
Servicer to observe any applicable law prohibiting disclosure of information
regarding the Dealers, and the failure of the Servicer to provide access as
provided in this Section 8.6 as a result of such obligations shall not
constitute a breach of this Section 8.6.
Section 8.7 Delegation of Duties. In the ordinary course of business, the
Servicer may at any time delegate any duties hereunder to any Person who agrees
to conduct such duties in accordance with the Servicer's usual and customary
collection procedures. Any such delegations shall not relieve the Servicer of
its liability and responsibility with respect to such duties, and shall not
constitute a resignation within the meaning of Section 8.5 hereof and the
Servicer will remain jointly and severally liable with such Person for any
amounts which would otherwise be payable pursuant to this Article VIII as if
the Servicer had performed such duty; provided, however, that in the case of any
significant delegation to a Person other than an Affiliate of Green Tree (i)
written notice shall be given to the Trustee and to each Rating Agency of such
delegation, (ii) the Transferor should not have received written notice from
Moody's that such delegation would result in the lowering or withdrawal of its
then existing rating of any Series or Class of Investor Certificates and (iii)
the Transferor shall not have received written notice from Standard & Poor's
that such delegation would result in the lowering or withdrawal of its then
existing rating of any Series or Class of Investor Certificates.
Section 8.8 Waiver of Servicing Fee. The Servicer may in its discretion
elect to waive all Servicing Fees payable to it with respect to any Monthly
Period.
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ARTICLE IX
PAY OUT EVENTS
Section 9.1 Pay Out Events. If any one of the following events shall
occur:
(a) a failure by the Transferor to convey Receivables in Additional
Accounts to the Trust within five Business Days after the day on which it
is required to convey such Receivables pursuant to this Agreement;
(b) the Transferor or the Servicer (or Green Tree, if it is not the
Servicer) shall file a petition commencing a voluntary case under any
chapter of the Federal bankruptcy laws; or the Transferor or the Servicer
(or Green Tree, as aforesaid) shall file a petition or answer or consent
seeking reorganization, arrangement, adjustment, or composition under any
other similar applicable Federal law, or shall consent to the filing of any
such petition, answer, or consent; or the Transferor or the Servicer (or
Green Tree, as aforesaid), shall appoint, or consent to the appointment of,
a custodian, receiver, liquidator, trustee, assignee, sequestrator or other
similar official in bankruptcy or insolvency of it or of any substantial
part of its property; or the Transferor or the Servicer (or Green Tree, as
aforesaid), shall make an assignment for the benefit of creditors, or shall
admit in writing its inability to pay its debts generally as they become
due;
(c) any order for relief against the Transferor or the Servicer (or
Green Tree, if it is not the Servicer), shall have been entered by a court
having jurisdiction in the premises under any chapter of the Federal
bankruptcy laws, and such order shall have continued undischarged or
unstayed for a period of 60 days; or a decree or order by a court having
jurisdiction in the premises shall have been entered approving as properly
filed a petition seeking reorganization, arrangement, adjustment, or
composition of the Transferor or the Servicer (or Green Tree, as
aforesaid), under any other similar applicable Federal law, and such decree
or order shall have continued undischarged or unstayed for a period of 120
days; or a decree or order of a court having jurisdiction in the premises
for the appointment of a custodian, receiver, liquidator, trustee,
assignee, sequestrator, or other similar official in bankruptcy or
insolvency of the Transferor or the Servicer (or Green Tree, as aforesaid),
or of any substantial part of its property or for the winding up or
liquidation of its affairs, shall have been entered, and such decree or
order shall have remained in force undischarged or unstayed for a period of
120 days;
(d) failure on the part of the Transferor or the Servicer (or Green
Tree, as applicable), (i) to make any payment or deposit required by the
terms of this Agreement or the Purchase Agreement on or before the date
occurring five Business Days after the date such payment or deposit is
required to be
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made herein, or (ii) with respect to any Series, to deliver a Distribution
Date Statement within ten Business Days after notice from the Trustee of
such failure to deliver such Distribution Date Statement, or (iii) duly to
observe or perform in any material respect the covenant of the Transferor
set forth in Section 2.5(a) with respect to a Receivable, which failure, in
the case of this clause (iii), has a material adverse effect on the
interests of the Holders of the Investor Certificates and continues
unremedied for a period of 60 days after the date on which notice of such
failure, requiring the same to be remedied, shall have been given to the
Transferor by the Trustee or any Enhancement Provider; provided, however,
that a Pay Out Event shall not be deemed to have occurred if the Transferor
shall have repurchased the related Receivables or, if applicable, all of
the Receivables during such period in accordance with the provisions of
this Agreement; or (iv) duly to observe or perform in any material respect
any other covenants or agreements of the Transferor or the Servicer or
Green Tree, as the case may be, set forth in this Agreement or the Purchase
Agreement, which failure in the case of this clause (iv) has a material
adverse effect on the interests of the Holders of the Investor Certificates
and continues unremedied for a period of 45 days after the date on which
written notice of such failure, requiring the same to be remedied, shall
have been given to the Transferor by the Trustee or to the Transferor and
the Trustee by any Enhancement Provider;
(e) any representation or warranty made by Green Tree in the Purchase
Agreement or the Transferor in this Agreement or any information contained
in a computer file or microfiche or written list required to be delivered
by the Transferor pursuant to Section 2.1, 2.6, 2.7 or 2.8, (i) shall prove
to have been incorrect in any material respect when made or when delivered,
and shall continue to be incorrect in any material respect for a period of
60 days after the date on which written notice of such failure, requiring
the same to be remedied, shall have been given to the Transferor by the
Trustee and (ii) as a result of such incorrectness the interests of the
Holders of the Investor Certificates are materially and adversely affected
(excluding, however, the representation and warranty made by the Transferor
pursuant to Section 2.3(j) if the Agreement constitutes the grant of a
perfected security interest in the Receivables and the Collateral Security
and the proceeds thereof under the UCC as then in effect in the State of
Minnesota transferred to the Trust hereunder); provided, however, that a
Pay Out Event shall not be deemed to have occurred under this paragraph if
the Transferor has repurchased the related Receivable or all such
Receivables, if applicable, during such period in accordance with the
provisions of this Agreement; or
(f) the Trust or the Transferor shall become an "investment company"
within the meaning of the Investment Company Act;
then, subject to applicable law, and after the applicable grace period, if any,
an amortization event (a "Trust Pay Out Event") shall occur without any notice
or
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other action on the part of the Trustee, any Agent, the Certificateholders or
any other Beneficiary, immediately upon the occurrence of such event.
Section 9.2 Additional Rights Upon the Occurrence of Certain Events.
(a) If the Transferor shall consent to the appointment of a bankruptcy
trustee or receiver or liquidator for the winding-up or liquidation of its
affairs, or a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises for the appointment of a bankruptcy trustee
or receiver or liquidator for the winding-up or liquidation of its affairs shall
have been entered against the Transferor (an "Insolvency Event"), on the day of
such Insolvency Event (the "Appointment Day") the following actions shall be
taken and processes begun:
(i) If an Insolvency Event shall have occurred, the Transferor shall
immediately cease to transfer Receivables to the Trust and shall promptly give
written notice to the Trustee of such Insolvency Event. Notwithstanding any
cessation of the transfer to the Trust of additional Receivables, Receivables
transferred to the Trust prior to the occurrence of such Insolvency Event and
Receivables transferred to the Trust prior to the occurrence of such Involvency
Event and Collections with respect thereto shall continue to be a part of the
Trust and will be a part of the Trust and will be allocated and paid in
accordance with Article IV.
(ii) If an Insolvency Event shall have occurred, this Agreement and the
Trust shall be deemed to have terminated, subject to the liquidation, winding-up
and dissolution procedures described below; provided, however, that within 15
days of the date of written notice to the Trustee, the Trustee shall (i) publish
a notice in an Authorized Newspaper that an Insolvency Event has occurred, that
the Trust has terminated, and that the Trustee intends to sell, dispose of or
otherwise liquidate the Receivables pursuant to this Agreement in a commercially
reasonable manner and on commercially reasonable terms, which shall include the
solicitation of competitive bids (a "Disposition"), and (ii) send written notice
to the Investor Certificateholders describing the provisions of this Section 9.2
and requesting each Investor Certificateholder to advise the Trustee in writing
that it elects one of the following options: (A) the Investor Certificateholder
wishes the Trustee to instruct the Servicer not to effectuate a Disposition, or
(B) the Investor Certificateholder refuses to advise the Trustee as to the
specific action the Trustee shall instruct the Servicer to take, or (C) the
Investor Certificateholder wishes the Servicer to effect a Disposition. If
after 90 days from the day notice pursuant to clause (i) above is first
published (the "Publication Date"), the Trustee shall not have received the
written instruction described in clause (A) above from Holders of Investor
Certificates representing Undivided Interests aggregating in excess of 50% of
the related Invested Amount of each Series (or, in the case of a Series having
more than one Class, each Class of such Series) and the holders of any
Supplemental Certificates or any other interest in the Exchangeable Transferor
Certificate other than the Transferor as provided in Section 6.3(b) for each
Series, (a "Holders' Majority"), the Trustee shall
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instruct the Servicer to effectuate a Disposition, and the Servicer shall
proceed to consummate a Disposition. If, however, with respect to the portion of
the Receivables allocable to any outstanding Series, a Holders' Majority
instruct the Trustee not to effectuate a Disposition of the portion of the
Receivables allocable to such Series, the Trust shall be reconstituted and
continue with respect to such Series pursuant to the terms of this Agreement and
the applicable Supplement (as amended in connection with such reconstitution).
The portion of the Receivables allocable to any Series shall be equal to the sum
of (1) the product of (A) the Transferor Percentage, (B) the aggregate
outstanding Principal Receivables and (C) a fraction, the numerator of which is
the related Investor Percentage of Interest Collections and the denominator of
which is the sum of all Investor Percentages with respect to Interest
Collections for all Series outstanding and (2) the Invested Amount of such
Series. The Transferor or any of its Affiliates shall be permitted to bid for
the Receivables. In addition, the Transferor or any of its Affiliates shall have
the right to match any bid by a third person and be granted the right to
purchase the Receivables at such matched bid price. The Trustee may obtain a
prior determination from any such bankruptcy trustee, receiver or liquidator
that the terms and manner of any proposed Distribution are commercially
reasonable. The provisions of Sections 9.1 and 9.2 shall not be deemed to be
mutually exclusive.
(b) The proceeds from the Disposition pursuant to subsection (a) above
shall be treated as Collections on the Receivables and shall be allocated and
deposited in accordance with the provisions of Article IV; provided, however,
that the proceeds from a Disposition with respect to any Series shall be applied
solely to make payments to such Series; provided, further, that the Trustee
shall determine conclusively in its sole discretion the amount of such proceeds
that are allocable to Interest Collections and the amount of such proceeds that
are allocable to Collections of Principal Receivables. Unless the Trustee
receives written instructions from Investor Certificateholders of one or more
Series to continue the Trust with respect to such Series as provided in
subsection 9.2(a) above, on the day following the last Distribution Date in the
Monthly Period during which such proceeds are distributed to the Investor
Certificateholders of each Series, the Trust shall terminate.
(c) The Trustee may appoint an agent or agents to assist with its
responsibilities pursuant to this Article IX with respect to competitive bids.
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ARTICLE X
SERVICER DEFAULTS
Section 10.1 Servicer Defaults. If any one of the following events (a
"Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer to make any payment, transfer or
deposit or to give instructions or notice to the Trustee pursuant to
Article IV or to instruct the Trustee to make any required drawing,
withdrawal, or payment under any Enhancement on or before the date
occurring five Business Days after the date such payment, transfer,
deposit, withdrawal or drawing or such instruction or notice is required to
be made or given, as the case may be, under the terms of this Agreement;
provided, however, that any such failure caused by a non-willful act of the
Servicer shall not constitute a Servicer Default if the Servicer promptly
remedies such failure within five Business Days after receiving notice of
such failure or otherwise becoming aware of such failure;
(b) failure on the part of the Servicer duly to observe or perform in
any respect any other covenants or agreements of the Servicer set forth in
this Agreement, which has a material adverse effect on the Investor
Certificateholders of any Series and which continues unremedied for a
period of 60 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Servicer by
the Trustee, or to the Servicer and the Trustee by the Holders of Investor
Certificates evidencing Undivided Interests aggregating not less than 50%
of the Invested Amount of any Series materially adversely affected thereby
and continues to materially adversely affect such Investor
Certificateholders for such period;
(c) any representation, warranty or certification made by the
Servicer in this Agreement or in any certificate delivered pursuant to this
Agreement shall prove to have been incorrect when made, which has a
material adverse effect on the Investor Certificateholders of any Series
and which continues to be incorrect in any material respect for a period of
60 days after the date on which written notice of such failure, requiring
the same to be remedied, shall have been given to the Servicer by the
Trustee, or to the Servicer and the Trustee by the Holders of Investor
Certificates evidencing Undivided Interests aggregating not less than 50%
of the Invested Amount of any Series materially adversely affected thereby
and continues to materially adversely affect such Investor
Certificateholders for such period; or
(d) the Servicer shall consent to the appointment of a bankruptcy
trustee or receiver or liquidator in any bankruptcy proceeding or any other
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to the Servicer or of or relating to all
or
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substantially all of its property; or a decree or order of a court or
agency or supervisory authority having jurisdiction in the premises for the
appointment of a bankruptcy trustee or receiver or liquidator in any
bankruptcy proceeding or any other insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against
the Servicer, and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 days; or the Servicer shall
admit in writing its inability to pay its debts generally as they become
due, file a petition to take advantage of any applicable insolvency or
reorganization statute, make any assignment for the benefit of its
creditors or voluntarily suspend payment of its obligations;
then, so long as such Servicer Default shall not have been remedied, either the
Trustee, or the Holders of Investor Certificates evidencing Undivided Interests
aggregating more than 50% of the Aggregate Invested Amount, by notice then given
in writing to the Servicer (and to the Trustee if given by the Investor
Certificateholders) (a "Termination Notice"), may terminate all of the rights
and obligations of the Servicer as Servicer under this Agreement. After receipt
by the Servicer of such Termination Notice, and on the date that a Successor
Servicer shall have been appointed by the Trustee pursuant to Section 10.2, all
authority and power of the Servicer under this Agreement shall pass to and be
vested in a Successor Servicer; and, without limitation, the Trustee is hereby
authorized and empowered (upon the failure of the Servicer to cooperate) to
execute and deliver, on behalf of the Servicer, as attorney-in-fact or
otherwise, all documents and other instruments upon the failure of the Servicer
to execute or deliver such documents or instruments, and to do and accomplish
all other acts or things necessary or appropriate to effect the purposes of
such transfer of servicing rights and obligations. The Servicer agrees to
cooperate with the Trustee and such Successor Servicer in effecting the
termination of the responsibilities and rights of the Servicer to conduct
servicing hereunder including, without limitation, the transfer to such
Successor Servicer of all authority of the Servicer to service the Receivables
provided for under this Agreement, including, without limitation, all authority
over all Collections which shall on the date of transfer be held by the Servicer
for deposit, or which have been deposited by the Servicer, in the Collection
Account, the Excess Funding Account, the Interest Funding Account or the
Principal Account, and any Series Account, or which shall thereafter be received
with respect to the Receivables. The Servicer shall promptly transfer its
electronic records or electronic copies thereof relating to the Receivables to
the Successor Servicer in such electronic form as the Successor Servicer may
reasonably request and shall promptly transfer to the Successor Servicer all
other records, correspondence and documents necessary for the continued
servicing of the Receivables in the manner and at such times as the Successor
Servicer shall reasonably request. To the extent that compliance with this
Section 10.1 shall require the Servicer to disclose to the Successor Servicer
information of any kind which the Servicer deems to be confidential, the
Successor Servicer shall be required to enter into such customary licensing and
confidentiality
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agreements as the Servicer shall deem necessary to protect its interests. The
Servicer shall, on the date of any servicing transfer, transfer all of its
rights and obligations under the Enhancement with respect to any Series to the
Successor Servicer. In connection with any service transfer, all reasonable
costs and expenses (including attorneys' fees) incurred in connection with
transferring the records, correspondence and other documents with respect to the
Receivables and the other Trust Property to the Successor Servicer and amending
this Agreement to reflect such succession as Successor Servicer pursuant to this
Section 10.1 and Section 10.2 shall be paid by the Servicer (unless the Trustee
is acting as the Servicer on a temporary basis, in which case the original
Servicer shall be responsible therefor) upon presentation of reasonable
documentation of such costs and expenses.
Notwithstanding the foregoing, a delay in or failure of performance
referred to in subsection 10.1(a) for a period of five Business Days or under
subsection 10.l(b) or (c) for a period of 60 days, shall not constitute a
Servicer Default if such delay or failure could not be prevented by the exercise
of reasonable diligence by the Servicer and such delay or failure was caused by
an act of God or the public enemy, acts of declared or undeclared war, public
disorder, rebellion, riot or sabotage, epidemics, landslides, lightning, fire,
hurricanes, tornadoes, earthquakes, nuclear disasters or meltdowns, floods,
power outages, bank closings, communications outages, computer failure or
similar causes. The preceding sentence shall not relieve the Servicer from
using its best efforts to perform its obligations in a timely manner in
accordance dance with the terms of this Agreement and the Servicer shall provide
the Trustee, any Enhancement Provider, the Transferor and the Holders of
Investor Certificates with an Officer's Certificate giving prompt notice of such
failure or delay by it, together with a description of the cause of such failure
or delay and its efforts so to perform its obligations.
Section 10.2 Trustee to Act; Appointment of Successor.
(a) On and after the receipt by the Servicer of a Termination Notice
pursuant to Section 10.1, the Servicer shall continue to perform all servicing
functions under this Agreement until the date specified in the Termination
Notice or as otherwise specified by the Trustee in writing or, if no such date
is specified in such Termination Notice, or otherwise specified by the Trustee,
until a date mutually agreed upon by the Servicer and Trustee. The Trustee
shall notify each Rating Agency of such removal of the Servicer. The Trustee
shall, as promptly as possible after the giving of a Termination Notice, appoint
a successor servicer (the "Successor Servicer"), and such Successor Servicer
shall accept its appointment by a written assumption in a form acceptable to the
Trustee. If such Successor Servicer is unable to accept such appointment, the
Trustee may obtain bids from any potential successor servicer. If the Trustee
is unable to obtain any bids from any potential successor servicer and the
Servicer delivers an Officer's Certificate to the effect that it cannot in good
faith cure the Servicer Default which gave rise to a transfer of servicing, and
if the Trustee is legally unable to act as Successor Servicer, then the Trustee
shall offer the Transferor the right to accept reassignment of all of the
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Receivables for an amount equal to the Aggregate Invested Amount on the date of
such purchase plus all interest accrued but unpaid on all of the outstanding
Investor Certificates at the applicable Certificate Rate through the date of
such purchase; provided, however, that no such purchase by the Transferor shall
occur unless the Transferor shall deliver an Opinion of Counsel reasonably
acceptable to the Trustee that such purchase would not constitute a fraudulent
conveyance of the Transferor. The proceeds of such sale shall be deposited in
the Distribution Account or any Series Account, as provided in the related
Supplement, for distribution to the Investor Certificateholders of each
outstanding Series pursuant to Section 12.3 of the Agreement. In the event that
a Successor Servicer has not been appointed and has not accepted its appointment
at the time when the Servicer ceases to act as Servicer, the Trustee without
further action shall automatically be appointed the Successor Servicer (but
shall have continued authority to appoint another Person as Successor Servicer).
The Trustee may delegate any of its servicing obligations to an affiliate or
agent of the Trustee in accordance with Article III hereof. Any such delegations
shall not relieve the Trustee of its liability and responsibility with respect
to such duties. Notwithstanding the above, the Trustee shall, if it is legally
unable to act, petition a court of competent jurisdiction to appoint any
established financial institution having, in the case of an entity that is
subject to risk-based capital adequacy requirements, risk-based capital of at
least $50,000,000 or, in the case of an entity that is not subject to risk-based
capital requirements, having a net worth of not less than $50,000,000 and whose
regular business includes the servicing of receivables similar to the
Receivables as the Successor Servicer hereunder.
(b) Upon its appointment, the Successor Servicer shall be the successor in
all respects to the Servicer with respect to servicing functions under this
Agreement and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Servicer by the terms and provisions
hereof, and all references in this Agreement to the Servicer shall be deemed to
refer to the Successor Servicer. Any Successor Servicer, by its acceptance of
its appointment, will automatically agree to be bound by the terms and
provisions of each Enhancement.
(c) In connection with such appointment and assumption, the Trustee shall
be entitled to such compensation, or may make such arrangements for the
compensation of the Successor Servicer out of Collections, as it and such
Successor Servicer shall agree; provided, however, that no such compensation
shall be in excess of the Servicing Fee permitted to the Servicer pursuant to
Section 3.2. The Transferor agrees that if the Servicer is terminated
hereunder, it will agree to deposit a portion of the Collections in respect of
Imputed Yield Receivables that it is entitled to receive pursuant to Article IV
to pay its ratable share of the compensation of the Successor Servicer.
(d) All authority and power granted to the Successor Servicer under this
Agreement shall automatically cease and terminate upon termination of the Trust
pursuant to Section 12.1 and shall pass to and be vested in the Transferor and,
without limitation, the Transferor is hereby authorized and empowered to execute
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and deliver, on behalf of the Successor Servicer, as attorney-in-fact or
otherwise, all documents and other instruments, and to do and accomplish all
other acts or things necessary or appropriate to effect the purposes of such
transfer of servicing rights. The Successor Servicer agrees to cooperate with
the Transferor in effecting the termination of the responsibilities and rights
of the Successor Servicer to conduct servicing on the Receivables. The
Successor Servicer shall transfer its electronic records relating to the
Receivables to the Transferor in such electronic form as the Transferor may
reasonably request and shall transfer all other records, correspondence and
documents to the Transferor in the manner and at such times as the Transferor
shall reasonably request. To the extent that compliance with this Section 10.2
shall require the Successor Servicer to disclose to the Transferor information
of any kind which the Successor Servicer deems to be confidential, the
Transferor shall be required to enter into such customary licensing and
confidentiality agreements as the Successor Servicer shall deem necessary to
protect its interests.
Section 10.3 Notification to Certificateholders. Upon the Servicer
becoming aware of any Servicer Default, the Servicer shall give prompt written
notice thereof to the Trustee and any Enhancement Provider and, upon receipt of
such written notice, the Trustee shall give notice to the Investor
Certificateholders at their respective addresses appearing in the Certificate
Register. Upon any termination or appointment of a Successor Servicer pursuant
to this Article X, the Trustee shall give prompt written notice thereof to
Investor Certificateholders at their respective addresses appearing in the
Certificate Register.
Section 10.4 Waiver of Past Defaults. The Holders of Investor
Certificates evidencing Undivided Interests aggregating not less than 66-2/3% of
the Invested Amount of each Series materially adversely affected by any default
by the Servicer or Transferor may, on behalf of all Certificateholders of such
Series, waive any default by the Servicer or Transferor in the performance of
its obligations hereunder and its consequences, except a default in the failure
to make any required deposits or payments of interest or principal relating to
such Series pursuant to Article IV, which default does not result from the
failure of the Paying Agent to perform its obligations to make any required
deposits or payments of interest and principal in accordance with Article IV.
Upon any such waiver of a past default, such default shall cease to exist, and
any default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon except to the extent
expressly so waived.
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ARTICLE XI
THE TRUSTEE
Section 11.1 Duties of Trustee.
(a) The Trustee, prior to the occurrence of any Servicer Default of which a
Responsible Officer of the Trustee has actual knowledge and after the curing of
all Servicer Defaults which may have occurred, undertakes to perform such duties
and only such duties as are specifically set forth in this Agreement, and no
implied covenants or duties shall be read into this Agreement against the
Trustee. If a Responsible Officer has received written notice that a Servicer
Default has occurred (and such Servicer Default has not been cured or waived),
the Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs; provided, however, that if the Trustee shall assume
the duties of the Servicer pursuant to Section 8.5 or 10.2, the Trustee in
performing such duties shall use the degree of skill and attention customarily
exercised by a servicer with respect to comparable receivables that it services
for itself or others.
(b) The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee that are specifically required to be furnished pursuant to any provision
of this Agreement, shall examine them to determine whether they substantially
conform to the requirements of this Agreement. The Trustee shall retain all
such items for at least one year after receipt and shall make such items
available for inspection by any Investor Certificateholder at the Corporate
Trust Office, such inspection to be made during regular business hours and upon
reasonable prior notice to the Trustee.
(c) Subject to subsection 11.1(a), no provision of this Agreement shall be
construed to relieve the Trustee from liability for its own negligent action,
its own negligent failure to act or its own misconduct; provided, however, that:
(i) the Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;
(ii) the Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of the Holders of Investor Certificates
evidencing Undivided Interests aggregating more than 50% of the Invested
Amount of any Series relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee with respect to such
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Series, or exercising any trust or power conferred upon the Trustee with
respect to such Series, under this Agreement; and
(iii) the Trustee shall not be charged with knowledge of any
failure by the Servicer referred to in clauses (a) and (b) of Section 10.1
or of any breach by the Servicer contemplated by clause (c) of Section 10.1
or any Pay Out Event unless a Responsible Officer of the Trustee obtains
actual knowledge of such failure, breach or Pay Out Event or the Trustee
receives written notice of such failure, breach or Pay Out Event from the
Servicer or any Holders of Investor Certificates evidencing Undivided
Interests aggregating not less than 10% of the Invested Amount of any
Series adversely affected thereby.
(d) The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require
the Trustee to perform, or be responsible for the manner of performance if, any
of the obligations of the Servicer under this Agreement except during such time,
if any, as the Trustee shall be the successor to, and be vested with the rights,
duties, powers and privileges of, the Servicer in accordance with the terms of
this Agreement.
(e) Except for actions expressly authorized by this Agreement, the Trustee
shall take no action reasonably likely to impair the interests of the Trust in
any Receivable now existing or hereafter created or to impair the value of any
Receivable now existing or hereafter created.
(f) Except as provided in this Agreement, the Trustee shall have no power
to vary the corpus of the Trust.
(g) If a Responsible Officer of the Trustee has received written notice
that the Paying Agent or the Transfer Agent and Registrar shall fail to perform
any obligation, duty or agreement in the manner or on the day required to be
performed by the Paying Agent or the Transfer Agent and Registrar, as the case
may be, under this Agreement, the Trustee shall be obligated promptly upon its
obtaining knowledge thereof by a Responsible Officer of the Trustee to perform
such obligation, duty or agreement in the manner so required.
(h) If the Transferor has agreed to transfer any of its wholesale
receivables (other than the Receivables) to another Person, upon the written
request of the Transferor, the Trustee on behalf of the Trust will enter into
such intercreditor agreements with the transferee of such receivables as are
customary and necessary to identify separately the rights, if any, of the Trust
and such other Person in the Transferor's wholesale receivables; provided,
however, that the Trust shall not be required to enter into any intercreditor
agreement that could adversely affect the
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interests of the Certificateholders or the Trustee and, upon the request of the
Trustee, the Transferor will deliver an Opinion of Counsel on any matters
relating to such intercreditor agreement, reasonably requested by the Trustee.
Section 11.2 Certain Matters Affecting the Trustee. Except as otherwise
provided in Section 11.1:
(a) the Trustee may rely on and shall be protected in acting on, or in
refraining from acting in accordance with, the initial report, the Daily
Report, the Settlement Statement, the Annual Servicer's Certificate, the
monthly payment instructions and notification to the Trustee, the monthly
Certificateholder's statement, any resolution, Officer's Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other
paper or document believed by it to be genuine and to have been signed or
presented to it pursuant to this Agreement by the proper party or parties;
(b) the Trustee may consult with counsel, and the advice or any
Opinion of Counsel shall be full and complete authorization and protection
in respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such advice or Opinion of Counsel;
(c) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement or any Enhancement, or to
institute, conduct or defend any litigation hereunder or in relation
hereto, at the request, order or direction of any of the Certificateholders
or any Enhancement Provider, pursuant to the provisions of this Agreement,
unless such Certificateholders or Enhancement Provider shall have offered
to the Trustee reasonable security or indemnity against the costs, expenses
and liabilities which may be incurred therein or thereby; nothing contained
herein shall, however, relieve the Trustee of the obligations, upon the
occurrence of any Servicer Default (which has not been cured or waived) of
which a Responsible Officer of the Trustee has knowledge, to exercise such
of the rights and powers vested in it by this Agreement and any
Enhancement, and to use the same degree of care and skill in its exercise
as a prudent person would exercise or use under the circumstances in the
conduct of his own affairs;
(d) the Trustee shall not be personally liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized
or within the discretion or rights or powers conferred upon it by this
Agreement;
(e) the Trustee shall not be bound to make any investigation into the
facts of matters stated in the initial report, the Daily Report, the
Settlement Statement, the Annual Servicer's Certificate, the monthly
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payment instructions and notification to the Trustee, the monthly
Certificateholder's statement, any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing so to do by
Holders of Investor Certificates evidencing Undivided Interests aggregating
more than 50% of the Invested Amount of any Series which could be adversely
affected if the Trustee does not perform such acts;
(f) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian, and the Trustee shall not be responsible for any
misconduct or negligence on the part of any such agent, attorney or
custodian appointed with due care by it hereunder;
(g) except as may be required by subsection 11.1(a), the Trustee shall
not be required to make any initial or periodic examination of any
documents or records related to the Receivables for the purpose of
establishing the presence or absence of defects, the compliance by the
Transferor with its representations and warranties or for any other
purpose;
(h) whenever in the administration of this Agreement the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officer's Certificate; and
(i) the right of the Trustee to perform any discretionary act
enumerated in this Agreement or any Supplement shall not be construed as a
duty, and the Trustee shall not be answerable for performance of any such
act.
Section 11.3 Trustee Not Liable for Recitals in Certificates. The Trustee
assumes no responsibility for the correctness of the recitals contained herein
and in the Certificates (other than the certificate of authentication on the
Certificates). Except as set forth in Section 11.15, the Trustee makes no
representations as to the validity or sufficiency of this Agreement or of the
Certificates (other than the certificate of authentication on the Certificates)
or of any Receivable or related document. The Trustee shall not be accountable
for the use or application by the Transferor of any of the Certificates or of
the proceeds of such Certificates, or for the use or application of any funds
paid to the Transferor in respect of the Receivables or deposited in or
withdrawn from the Collection Account, the Excess Funding Account, the Principal
Account or the Interest Funding Account, or any Series Account or other accounts
now or hereafter established to effectuate the transactions contemplated herein
and in accordance with the terms hereof. The Trustee shall have no
responsibility for filing any financing or continuation statement in any public
office at any time or to otherwise perfect or maintain the perfection of any
security interest or Lien granted to it hereunder (unless the Trustee shall have
become the Successor
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Servicer) or to prepare or file any Securities and Exchange
Commission filing for the Trust or to record this Agreement or any Supplement.
Section 11.4 Trustee May Own Certificates. The Trustee in its individual
or any other capacity may become the owner or pledgee of Investor Certificates
and may deal with the Transferor, the Servicer or any Enhancement Provider with
the same rights as it would have if it were not the Trustee. The Trustee in its
capacity as Trustee shall exercise its duties and responsibilities hereunder
independent of and without reference to its investment, if any, in Investor
Certificates.
Section 11.5 The Servicer to Pay Trustee's Fees and Expenses. The
Servicer covenants and agrees to pay to the Trustee from time to time, and the
Trustee shall be entitled to receive, reasonable compensation (which shall not
be limited by any provision of law in regard to the compensation of a trustee of
an express trust) for all services rendered by the Trustee in the execution of
the trust hereby created and in the exercise and performance of any of the
powers and duties hereunder of the Trustee, and, subject to Section 8.4, the
Servicer will pay or reimburse the Trustee (without reimbursement from any
Investor Account, any Series Account or otherwise) upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Trustee
in accordance with any of the provisions of this Agreement (including the
reasonable fees and expenses of its agents and counsel) except any such expense,
disbursement or advance as may arise from its own negligence or bad faith and
except as provided in the following sentence. If the Trustee is appointed
Successor Servicer pursuant to Section 10.2, the provisions of this Section 11.5
shall not apply to expenses, disbursements and advances made or incurred by the
Trustee in its capacity as Successor Servicer (which shall be covered out of the
Servicing Fee).
The obligations of the Servicer under this Section 11.5 shall survive the
termination of the Trust and the resignation or removal of the Trustee.
Section 11.6 Eligibility Requirements for Trustee. The Trustee hereunder
shall at all times (a) be a corporation organized and doing business under the
laws of the United States of America or any state thereof authorized under such
laws to exercise corporate trust powers, having a long-term unsecured debt
rating of at least Baa3 by Moody's, having, in the case of an entity that is
subject to risk-based capital adequacy requirements, risk-based capital of at
least $50,000,000 or, in the case of an entity that is not subject to risk-based
capital adequacy requirements, having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by federal or state
authority and (b) not be a Related Person. If such corporation publishes
reports of condition at least annually, pursuant to law or to the requirements
of the aforesaid supervising or examining authority, then for the purpose of
this Section 11.6, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease
to be
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eligible in accordance with the provisions of this Section 11.6, the Trustee
shall resign immediately in the manner and with the effect specified in Section
11.7.
Section 11.7 Resignation or Removal of Trustee.
(a) The Trustee may at any time resign and be discharged from the Trust
hereby created by giving written notice thereof to the Servicer. Upon receiving
such notice of resignation, the Servicer shall promptly appoint a successor
trustee by written instrument, in duplicate, one copy of which instrument shall
be delivered to the resigning Trustee and one copy to the successor trustee. If
no successor trustee shall have been so appointed and have accepted such
appointment within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 11.6 hereof and shall fail to resign after
written request therefor by the Transferor, or if at any time the Trustee shall
be legally unable to act, or shall be adjudged bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Transferor may, but shall not be required to, remove the Trustee and promptly
appoint a successor trustee by written instrument, in duplicate, one copy of
which instrument shall be delivered to the Trustee so removed and one copy to
the successor trustee.
(c) If (i) the Trustee shall fail to perform any of its obligations
hereunder, (ii) a Certificateholder shall deliver written notice of such failure
to the Trustee, and (iii) the Trustee shall not have corrected such failure for
60 days thereafter, then the Holders of Investor Certificates representing more
than 50% of the Invested Amount shall have the right to remove the Trustee and
(with the consent of the Transferor, which shall not be unreasonably withheld)
promptly appoint a successor trustee by written instrument, in duplicate, one
copy of which instrument shall be delivered to the Trustee so removed and one
copy to the successor trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 11.7 shall
not become effective until acceptance of appointment by the successor trustee as
provided in Section 11.8 hereof and any liability of the Trustee arising
hereunder shall survive such appointment of a successor trustee. Notice of any
resignation or removal of the Trustee and appointment of a successor trustee
shall be provided to Moody's and Standard & Poor's by the Servicer in a prompt
manner.
Section 11.8 Successor Trustee.
(a) Any successor trustee appointed as provided in Section 11.7 hereof
shall execute, acknowledge and deliver to the Transferor and to its predecessor
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Trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor Trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with the like effect as if originally named as Trustee
herein. The predecessor Trustee shall deliver to the successor trustee all
documents and statements held by it hereunder, and the Transferor and the
predecessor Trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for fully and certainly vesting and
confirming in the successor trustee all such rights, powers, duties and
obligations.
(b) No successor trustee shall accept appointment as provided in this
Section 11.8 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 11.6 hereof.
(c) Upon acceptance of appointment by a successor trustee as provided in
this Section 11.8, such successor trustee shall mail notice of such succession
hereunder to all Certificateholders at their addresses as shown in the
Certificate Register.
Section 11.9 Merger or Consolidation of Trustee. Any Person into which
the Trustee may be merged or converted or with which it may be consolidated, or
any Person resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any Person succeeding to all or substantially all
of the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such corporation shall be eligible under the
provisions of Section 11.6 hereof, without the execution or filing of any paper
or any further act on the part of any of the parties hereto, anything herein to
the contrary notwithstanding.
Section 11.10 Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust may at the time be located, the Trustee shall have the
power and may execute and deliver all instruments to appoint one or more Persons
to act as a co-trustee or co-trustees, or separate trustee or separate trustees,
of all or any part of the Trust, and to vest in such Person or Persons, in such
capacity and for the benefit of the Certificateholders, such title to the trust,
or any part thereof, and, subject to the other provisions of this Section 11.10,
such powers, duties, obligations, rights and trusts as the Trustee may consider
necessary or desirable. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
11.6 and no notice to Certificateholders of the appointment of any co-trustee or
separate trustee shall be required under Section 11.8 hereof.
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(b) Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly
(it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any laws of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the Servicer hereunder), the Trustee shall be incompetent
or unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the Trust
or any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(ii) no trustee hereunder shall be personally liable by reason of any
act or omission of any other trustee hereunder; and
(iii) the Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article XI. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Servicer.
(d) Any separate trustee or co-trustee may at any time constitute the
Trustee as its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect to this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 11.11 Tax Returns. Consistent with Section 3.7, the Trustee shall
not file any Federal tax returns on behalf of the Trust; provided, however, that
if a class of Certificates is issued that will be characterized as a partnership
interest for federal income tax purposes, partnership information returns shall
be prepared and signed
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by the Transferor, and the Transferor shall be the "tax matters partner" of such
partnership pursuant to the Code. In the event the Trust shall be required to
file tax returns, the Servicer shall at its expense prepare or cause to be
prepared any tax returns required to be filed by the Trust and, to the extent
possible, shall remit such returns to the Trustee for signature at least five
days before such returns are due to be filed. The Trustee is hereby authorized
to sign any such return on behalf of the Trust. The Servicer shall prepare or
shall cause to be prepared all tax information required by law to be distributed
to Certificateholders and shall deliver such information to the Trustee at least
five days prior to the date it is required by law to be distributed to
Certificateholders. The Trustee, upon request, will furnish the Servicer with
all such information known to the Trustee as may be reasonably required in
connection with the preparation of all tax returns of the Trust and shall, upon
request, execute such return. In no event shall the Trustee be liable for any
liabilities, costs or expenses of the Trust, the Investor Certificateholders or
the Certificate Owners arising under any tax law, including without limitation
federal, state, local or foreign income or excise taxes or any other tax imposed
on or measured by income (or any interest or penalty or addition with respect
thereto or arising from a failure to comply therewith).
Section 11.12 Trustee May Enforce Claims Without Possession of
Certificates. All rights of action and claims under this Agreement or any
Series of Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee. Any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of any Series of Certificateholders in respect of which such
judgment has been obtained.
Section 11.13 Suits for Enforcement. If a Servicer Default of which a
Responsible Officer of the Trustee has knowledge shall occur and be continuing,
the Trustee, in its discretion may, subject to the provisions of Section 10.1,
proceed to protect and enforce its rights and the rights of any Series of
Certificateholders under this Agreement by a suit, action or proceeding in
equity or at law or otherwise, whether for the specific performance of any
covenant or agreement contained in this Agreement or in aid of the execution of
any power granted in this Agreement or for the enforcement of any other legal,
equitable or other remedy as the Trustee, being advised by counsel, shall deem
most effectual to protect and enforce any of the rights of the Trustee or any
Series of Certificateholders.
Section 11.14 Rights of Certificateholders to Direct Trustee. Holders of
Investor Certificates evidencing Undivided Interests aggregating more than 50%
of the Aggregate Invested Amount (or, with respect to any remedy, trust or power
that does not relate to all Series, 50% of the aggregate Invested Amount of the
Investor Certificates of all Series to which such remedy, trust or power
relates) shall have the right to direct the time, method, and place of
conducting any proceeding for any
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remedy available to the Trustee, or exercising any trust or power conferred on
the Trustee; provided, however, that Holders of Investor Certificates
aggregating more than 50% of the aggregate Invested Amount of any Class may
direct the Trustee to exercise its rights under Section 8.6; provided, further,
that, subject to Section 11.1, the Trustee shall have the right to decline to
follow any such direction if the Trustee being advised by counsel determines
that the action so directed may not lawfully be taken, or if the Trustee in good
faith shall, by a Responsible Officer or Responsible Officers of the Trustee,
determine that the proceedings so directed would be illegal or involve it in
personal liability or be unduly prejudicial to the rights of Certificateholders
not parties to such direction; and provided, further, that nothing in this
Agreement shall impair the right of the Trustee to take any action deemed proper
by the Trustee and which is not inconsistent with such direction of such Holders
of Investor Certificates.
Section 11.15 Representations and Warranties of Trustee. The Trustee
represents and warrants that:
(i) the Trustee is a corporation organized, existing and authorized to
engage in the business of banking under the laws of the State of its
incorporation;
(ii) the Trustee is an entity that satisfies the eligibility
requirements of Section 11.6;
(iii) the Trustee has full power, authority and right to execute,
deliver and perform this Agreement, and has taken all necessary action to
authorize the execution, delivery and performance by it of this Agreement;
and
(iv) this Agreement has been duly executed and delivered by the
Trustee.
Section 11.16 Maintenance of Office or Agency. The Trustee will maintain
at its expense an office or offices, or agency or agencies, where notices and
demands to or upon the Trustee in respect of the Certificates and this Agreement
may be served. The Trustee initially appoints its Corporate Trust Office as its
office for such purposes. The Trustee will give prompt written notice to the
Servicer and to Certificateholders (or in the case of Holders of Bearer
Certificates, in the manner provided for in the related Supplement) of any
change in the location of the Certificate Register or any such office or agency.
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ARTICLE XII
TERMINATION
Section 12.1 Termination of Trust.
(a) The respective obligations and responsibilities of the Transferor, the
Servicer and the Trustee created hereby (other than the obligation of the
Trustee to make payments to Certificateholders as hereafter set forth) shall
terminate, except with respect to the duties described in Section 8.4 and 11.5
and subsection 12.3(b), on the Trust Termination Date; provided, however, that
the Trust shall not terminate on the date specified in clause (i) of the
definition of "Trust Termination Date" if each of the Servicer and the Holder of
the Exchangeable Transferor Certificate notify the Trustee in writing, not later
than five Business Days preceding such date, that they desire that the Trust not
terminate on such date, which notice (such notice, a "Trust Extension") shall
specify the date on which the Trust shall terminate (such date, the "Extended
Trust Termination Date"); provided, however, that the Extended Trust Termination
Date shall be no later than [Closing Date], 2035. The Servicer and the Holder
of the Exchangeable Transferor Certificate may, on any date following the Trust
Extension, so long as no Series of Certificates is outstanding, deliver a notice
in writing to the Trustee changing the Extended Trust Termination Date.
(b) In the event that (i) the Trust has not terminated by the Distribution
Date occurring in the second month preceding the Trust Termination Date, and
(ii) the Invested Amount of any Series, exclusive of any Transferor Retained
Class (after giving effect to all transfers, withdrawals, deposits and drawings
to occur on such date and the payment of principal on any Series of Certificates
to be made on the related Distribution Date during such month pursuant to
Article IV), would be greater than zero, the Servicer shall sell within 30 days
after such Transfer Date an amount of Receivables up to the remaining Invested
Amount if it can do so in a commercially reasonable manner. The Servicer shall
notify each Enhancement Provider of the proposed sale of the Receivables and
shall provide each Enhancement Provider an opportunity to bid on the
Receivables. The Transferor shall have the right of first refusal to purchase
the Receivables on terms equivalent to the best purchase offer as determined by
the Trustee in its sole discretion. The proceeds of any such sale shall be
treated as Collections on the Receivables and shall be allocated and deposited
in accordance with Article IV; provided, however, that the Trustee shall
determine conclusively in its sole discretion the amount of such proceeds which
are allocable to Imputed Yield Collections and the amount of such proceeds which
are allocable to Principal Collections. During such thirty-day period, the
Servicer shall continue to collect payments on the Receivables and allocate and
deposit such payments in accordance with the provisions of Article IV.
(c) All principal or interest with respect to any Series of Investor
Certificates shall be due and payable no later than the Series Termination Date
with
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respect to such Series. Unless otherwise provided in a Supplement, in the
event that the Invested Amount of any Series of Certificates is greater than
zero, exclusive of any Class held by the Transferor, on its Series Termination
Date (the "Affected Series"), after giving effect to all transfers, withdrawals,
deposits and drawings to occur on such date and the payment of principal to be
made on such Series on such date, and the Trustee will sell or cause to be sold,
and the Trustee will pay the proceeds to all Certificateholders of such Series
pro rata in final payment of all principal of and accrued interest on such
Series of Certificates or, if any Class of such Series is subordinated, in order
of their respective seniorities, an amount of Principal Receivables and the
related Imputed Yield Receivables (or interests therein) up to 110% of the
Invested Amount of such Series at the close of business on such date (but the
amount of such Principal Receivables not to be more than an amount of
Receivables equal to the sum of (1) the product of (A) the Transferor
Percentage, (B) the aggregate outstanding Principal Receivables and (C) a
fraction the numerator of which is the Invested Amount of such Series on such
date and the denominator of which is the sum of the Invested Amounts of all
Series on such Date and (2) the Invested Amount of such Series). Receivables on
which the Dealer has not made the full monthly payment for the prior months
shall be deemed to be in default for purposes of this Section 12.1(c) to the
extent that the cash allocated to any Class of Transferor Retained Certificates
of such Series pursuant to a sale under Section 12.1(c) is less than the amount
that would have been allocated to the Exchangeable Transferor Certificate and
the Transferor Retained Certificates had the proceeds from such sale been
allocated pursuant to Section 4.3. The Servicer shall notify each Enhancement
Provider of the proposed sale of such Receivables and shall provide each
Enhancement Provider an opportunity to bid on such Receivables. The Transferor
shall be permitted to purchase such Receivables in such case and shall have a
right of first refusal with respect thereto to the extent of a bona fide offer
by an unrelated third party or to the extent the Receivables represent Defaulted
Receivables. Any proceeds of such sale in excess of such principal and interest
paid shall be paid to the Holder of the Exchangeable Transferor Certificate.
Upon such Series Termination Date with respect to the applicable Series of
Certificates, final payment of all amounts allocable to any Investor
Certificates of such Series shall be made in the manner provided in Section
12.3.
Section 12.2 Optional Termination. (a) If so provided in any Supplement,
the Transferor may, but shall not be obligated to, cause a final distribution to
be made in respect of the related Series of Certificates on a Distribution Date
specified in such Supplement by depositing into the Distribution Account or the
applicable Series Account, not later than the Transfer Date preceding such
Distribution Date, for application in accordance with Section 12.3, the amount
specified in such Supplement; [provided, however, that if the short-term
deposits or long-term unsecured debt obligations of the Transferor are not rated
at the time of such purchase of Receivables [at least P-3 or Baa3, respectively,
by Moody's], no such event shall occur unless the Transferor shall deliver to
the Trustee, with a copy to [Moody's], an Opinion of Counsel that such deposit
into the Distribution Account or any Series
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Account as provided in the related Supplement would not constitute a fraudulent
conveyance of the Transferor].
(b) The amount deposited pursuant to subsection 12.2(a) shall be paid to
the Investor Certificateholders of the related Series pursuant to Section 12.3
on the related Distribution Date following the date of such deposit. All
Certificates of a Series with respect to which a final distribution has been
made pursuant to subsection 12.2(a) shall be delivered by the Holder to, and be
canceled by the Transfer Agent and Registrar and be disposed of in a manner
satisfactory to the Trustee and the Transferor. The Invested Amount of each
Series with respect to which a final distribution has been made pursuant to
subsection 12.2(a) shall, for the purposes of the definition of "Transferor
Interest," be deemed to be equal to zero on the Distribution Date following the
making of the deposit, and the Transferor Interest shall thereupon be deemed to
have been increased by the Invested Amount of such Series.
Section 12.3 Final Payment with Respect to any Series.
(a) Written notice of any termination, specifying the Distribution Date
upon which the Investor Certificateholders of any Series may surrender their
Certificates for payment of the final distribution with respect to such Series
and cancellation, shall be given (subject to at least four Business Days' prior
notice from the Servicer to the Trustee) by the Trustee to Investor
Certificateholders of such Series mailed not later than the fifth day of the
month of such final distribution (or in the manner provided by the Supplement
relating to such Series) specifying (i) the Distribution Date (which shall be
the Distribution Date in the month (x) in which the deposit is made pursuant to
subsection 2.4(e), 9 2(a), 10.2(a), or 12.2(a) of the Agreement or such other
section as may be specified in the related Supplement, or (y) in which the
related Series Termination Date occurs) upon which final payment of such
Investor Certificates will be made upon presentation and surrender of such
Investor Certificates at the office or offices therein designated (which, in the
case of Bearer Certificates, shall be outside the United States), (ii) the
amount of any such final payment and (iii) that the Record Date otherwise
applicable to such Distribution Date is not applicable, payments being made
only upon presentation and surrender of the Investor Certificates at the office
or offices therein specified. The Servicer's notice to the Trustee in
accordance with the preceding sentence shall be accompanied by an Officer's
Certificate setting forth the information specified in Article V of this
Agreement covering the period during the then current calendar year through the
date of such notice and setting forth the date of such final distribution. The
Trustee shall give such notice to the Transfer Agent and Registrar and the
Paying Agent at the time such notice is given to such Investor
Certificateholders.
(b) Notwithstanding the termination of the Trust pursuant to subsection
12.1(a) or the occurrence of the Series Termination Date with respect to any
Series, all funds then on deposit in the Excess Funding Account, the Interest
Funding Account, the Principal Account, the Distribution Account or any Series
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Account applicable to the related series shall continue to be held in trust for
the benefit of the Certificateholders of the related Series and the Paying Agent
or the Trustee shall pay such funds to the Certificateholders of the related
Series upon surrender of their Certificates (which surrenders and payments, in
the case of Bearer Certificates, shall be made only outside the United States).
In the event that all of the Investor Certificateholders of any Series shall not
surrender their Certificates for cancellation within six months after the date
specified in the above-mentioned written notice, the Trustee shall give a second
written notice (or, in the case of Bearer Certificates, publication notice) to
the remaining Investor Certificateholders of such Series upon receipt of the
appropriate records from the Transfer Agent and Registrar to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within one and one half years after the second notice with respect
to a Series, all the Investor Certificates of such Series shall not have been
surrendered for cancellation, the Trustee may take appropriate steps or may
appoint an agent to take appropriate steps, to contact the remaining Investor
Certificateholders of such Series concerning surrender of their Certificates,
and the cost thereof shall be paid out of the funds in the Distribution Account
or any Series Account held for the benefit of such Investor Certificateholders.
The Trustee and the Paying Agent shall pay to the Transferor upon request any
monies held by them for the payment of principal or interest which remains
unclaimed for two years. After payment to the Transferor, Investor
Certificateholders entitled to the money must look to the Transferor for payment
as general creditors unless an applicable abandoned property law designates
another Person.
(c) All Certificates surrendered for payment of the final distribution with
respect to such Certificates and cancellation shall be canceled by the Transfer
Agent and Registrar and be disposed of in a manner satisfactory to the Trustee
and the Transferor.
Section 12.4 Termination Rights of Holder of Exchangeable Transferor
Certificate. Upon the termination of the Trust pursuant to Section 12.1, and
after payment of all amounts due hereunder on or prior to such termination and
the surrender of the Exchangeable Transferor Certificate, the Trustee shall
execute a written reconveyance substantially in the form of Exhibit J pursuant
to which it shall reconvey to the Holder of the Exchangeable Transferor
Certificate (without recourse, representation or warranty) all right, title and
interest of the Trust in the Receivables, whether then existing or thereafter
created, all moneys due or to become due with respect thereto (including all
amounts theretofore posted as Imputed Yield Receivables) allocable to the Trust
pursuant to any Supplement, except for amounts held by the Trustee pursuant to
subsection 12.3(b). The Trustee shall execute and deliver such instruments of
transfer and assignment, in each case prepared by the Transferor and without
recourse, representation or warranty (other than a warranty that such property
is conveyed free and clear of any Lien of any Person claiming by or through the
Trustee) as shall be reasonably requested by the Holder of the Exchangeable
Transferor Certificate to vest in such Holder all right, title and interest
which the Trust had in the Receivables and other Trust Property.
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ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.1 Amendment.
(a) This Agreement (including any Supplement) may be amended from time to
time by the Servicer, the Transferor and the Trustee, without the consent of any
of the Certificateholders, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement,
or of modifying in any manner the rights of the Holders of Certificates;
provided, however, that such action shall not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any of the
Investor Certificateholders; provided, further, that such amendment shall not
reduce in any manner the amount of, or delay the timing of, distributions which
are required to be made on any Investor Certificate of such Series without the
consent of the related Investor Certificateholder, change the definition of or
the manner of calculating the interest of any Investor Certificateholder of such
Series without the consent of the related Investor Certificateholder or reduce
the percentage pursuant to subsection 13.1(b) required to consent to any such
amendment, in each case without the consent of all such Investor
Certificateholders. Additionally, this Agreement may be amended from time to
time by the Servicer, the Transferor and the Trustee, without the consent of any
of the Certificateholders, to add to or change any of the provisions of this
Agreement to provide that Bearer Certificates may be registrable as to
principal, to change or eliminate any restrictions on the payment of principal
of (or premium, if any) or any interest on Bearer Certificates to comply with
the Bearer Rules, to permit Bearer Certificates to be issued in exchange for
Registered Certificates (if then permitted by the Bearer Rules), to permit
Bearer Certificates to be issued in exchange for Bearer Certificates of other
authorized denominations or to permit the issuance of Certificates in
uncertificated form.
This Agreement and any supplement may also be amended from time to time by
the Servicer, the Transferor and the Trustee, without the consent of any of the
Certificateholders, for the purpose of changing the definition of Eligible
Account if (i) the Transferor delivers to the Trustee a certificate of an
authorized officer to the effect that, in the reasonable belief of the
Transferor, such amendment will not as of the date of such amendment adversely
affect in any material respect the interest of any of the Investor
Certificateholders, and (ii) such amendment will not result in a withdrawal or
reduction of the rating of any outstanding Series issued by the Trust.
(b) This Agreement and any Supplement may also be amended from time to time
by the Servicer, the Transferor and the Trustee with the consent of the Holders
of Investor Certificates evidencing Undivided Interests aggregating not less
than 66-2/3% of the Invested Amount of each and every Series adversely affected,
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the
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rights of the Investor Certificateholders of any Series then issued and
outstanding; provided, however, that no such amendment under this subsection
shall (i) reduce in any manner the amount of, or delay the timing of,
distributions which are required to be made on any Investor Certificate of such
Series without the consent of all of the related Investor Certificateholders;
(ii) change the definition of or the manner of calculating the interest of any
Investor Certificateholder of such Series without the consent of the related
Investor Certificateholder or (iii) reduce the aforesaid percentage required to
consent to any such amendment, in each case without the consent of all such
Investor Certificateholders.
(c) Notwithstanding anything in this Section 13.1 to the contrary, the
Supplement with respect to any Series may be amended on the items and in
accordance with the procedures provided in such Supplement.
(d) Promptly after the execution of any such amendment (other than an
amendment pursuant to paragraph (a)), the Trustee shall furnish notification of
the substance of such amendment to each Investor Certificateholder of each
Series adversely affected and ten Business Days prior to the proposed effective
date for such amendment the Servicer shall furnish notification of the substance
of such amendment to each Rating Agency providing a rating for such Series.
(e) It shall not be necessary to obtain the consent of Investor
Certificateholders under this Section 13.1 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Investor Certificateholders shall
be subject to such reasonable requirements as the Trustee may prescribe.
(f) Any Supplement executed and delivered pursuant to Section 6.9, executed
in accordance with the provisions hereof, shall not be considered amendments to
this Agreement for the purpose of subsections 13.1(a) and (b).
(g) In connection with any amendment, the Trustee may request an Opinion of
Counsel from the Transferor or Servicer to the effect that the amendment
complies with all requirements of this Agreement. The Trustee may, but shall
not be obligated to, enter into any amendment which affects the Trustee's
rights, duties or immunities under this Agreement or otherwise.
Section 13.2 Protection of Right, Title and Interest to Trust.
(a) The Servicer shall cause this Agreement, all amendments hereto and/or
all financing statements and continuation statements and any other necessary
documents covering the Certificateholders and the Trustee's right, title and
interest to the Trust to be promptly recorded, registered and filed, and at all
times to be kept recorded, registered and filed, all in such manner and in such
places as may be required by law fully to preserve and protect the right, title
and interest of
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<PAGE>
the Certificateholders or the Trustee, as the case may be, hereunder to all
property comprising the Trust. The Servicer shall deliver to the Trustee file-
stamped copies of, or filing receipts for, any document recorded, registered or
filed as provided above, as soon as available following such recording,
registration or filing. The Transferor shall cooperate fully with the Servicer
in connection with the obligations set forth above and will execute any and all
documents reasonably required to fulfill the intent of this subsection 13.2(a).
(b) Within 30 days after the Transferor makes any change in its name,
identity or corporate structure which would make any financing statement or
continuation statement filed in accordance with paragraph (a) above materially
misleading within the meaning of Section 9-402(7) of the UCC as in effect in the
Relevant UCC State, the Transferor shall give the Trustee written notice of any
such change and shall file such financing statements or amendments as may be
necessary to continue the perfection of the Trust's security interest in the
Receivables and the proceeds thereof.
(c) Each of the Transferor and the Servicer will give the Trustee prompt
written notice of any relocation of any office from which it services
Receivables or keeps records concerning the Receivables or of its principal
executive office and whether, as a result of such relocation, the applicable
provisions of the UCC would require the filing of any amendment of any
previously filed financing or continuation statement or of any new financing
statement and shall file such financing statements or amendments as may be
necessary to continue the perfection of the Trust's security interest in the
Receivables and the proceeds thereof. Each of the Transferor and the Servicer
will at all times maintain each office from which it services Receivables and
its principal executive office within the United States of America.
(d) The Servicer will deliver to the Trustee on or before March 31 of each
year, beginning with March 31, 1997, an Opinion of Counsel, substantially in the
form of Exhibit E-1.
Section 13.3 Limitation on Rights of Certificateholders.
(a) The death or incapacity of any Investor Certificateholder shall not
operate to terminate this Agreement or the Trust, nor shall such death or
incapacity entitle such Certificateholder's legal representatives or heirs to
claim an accounting or to take any action or commence any proceeding in any
court for a partition or winding up of the Trust, nor otherwise affect the
rights, obligations and liabilities of the parties hereto or any of them.
(b) No Investor Certificateholder shall have any right to vote (except with
respect to the Investor Certificateholders as provided in Section 13.1 hereof)
or in any manner otherwise control the operation and management of the Trust, or
the obligations of the parties hereto, nor shall anything herein set forth, or
contained in
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<PAGE>
the terms of the Certificates, be construed so as to constitute the
Certificateholders from time to time as members of an association; nor shall any
Investor Certificateholder be under any liability to any third person by reason
of any action taken by the parties to this Agreement pursuant to any provision
hereof.
(c) No Certificateholder shall have any right by virtue of any provisions
of this Agreement to institute any suit, action or proceeding in equity or at
law upon or under or with respect to this Agreement, unless such
Certificateholder previously shall have given written notice to the Trustee, and
unless the Holders of Certificates evidencing Undivided Interests aggregating
more than 50% of the Invested Amount of any Series which may be adversely
affected but for the institution of such suit, action or proceeding, shall have
made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notices request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding; it being
understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Certificateholders shall have the right in any manner whatever by
virtue or by availing itself or themselves of any provisions of this Agreement
to affect, disturb or prejudice the rights of the Certificateholders of any
other of the Certificates, or to obtain or seek to obtain priority over or
preference to any other such Certificateholder, or to enforce any right under
this Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section 13.3, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
Section 13.4 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF MINNESOTA WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 13.5 Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at, sent by facsimile to, sent by courier at or mailed by registered
mail, return receipt requested, to (a) in the case of the Transferor to 500
Landmark Towers, 345 St. Peter Street, St. Paul, Minnesota 55102-1639,
Attention: Chief Financial Officer, with a copy to the Servicer as provided
below, (b) in the case of the Servicer, 1100 Landmark Towers, 345 St. Peter
Street, St. Paul, Minnesota 55102-1639, Attention: Chief Financial Officer,
(c) in the case of the Trustee, to the Corporate Trust Office, (d) in the case
of the Enhancement Provider for a particular Series, the address, if any,
specified in the Supplement relating to such Series and (e) in the case of the
Rating Agency for a particular Series, the address, if any, specified in the
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Supplement relating to such Series; or, as to each party, at such other address
as shall be designated by such party in a written notice to each other party.
Unless otherwise provided with respect to any Series in the related Supplement
any notice required or permitted to be mailed to a Certificateholder shall be
given by first class mail, postage prepaid, at the address of such
Certificateholder as shown in the Certificate Register, or with respect to any
notice required or permitted to be made to the Holders of Bearer Certificates,
by publication in the manner provided in the related Supplement. If and so long
as any Series or Class is listed on the Luxembourg Stock Exchange and such
Exchange shall so require, any Notice to Investor Certificateholders shall be
published in an authorized newspaper of general circulation in Luxembourg within
the time period prescribed in this Agreement. Any notice so mailed within the
time prescribed in this Agreement shall be conclusively presumed to have been
duly given, whether or not the Certificateholder receives such notice.
Section 13.6 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or rights of the Certificateholders thereof.
Section 13.7 Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Section 8.2, this Agreement may not be
assigned by the Servicer without the prior consent of Holders of Investor
Certificates evidencing Undivided Interests aggregating not less than 66-2/3% of
the Invested Amount of each Series on a Series by Series basis. Upon such
assignment, the Trustee shall provide notice to Moody's and Standard and Poor's
in a prompt manner.
Section 13.8 Certificates Non-Assessable and Fully Paid. Except to the
extent otherwise expressly provided in Section 7.4 with respect to the
Transferor, it in the intention of the parties to this Agreement that the
Investor Certificateholders shall not be personally liable for obligations of
the Trust, that the Undivided Interests represented by the Certificates shall be
nonassessable for any losses or expenses of the Trust or for any reason
whatsoever, and that Certificates upon authentication thereof by the Trustee
pursuant to Sections 2.1 and 6.2 are and shall be deemed fully paid.
Section 13.9 Further Assurances. The Transferor and the Servicer agree to
do and perform, from time to time, any and all acts and to execute any and all
further instruments required or reasonably requested by the Trustee more fully
to effect the purposes of this Agreement, including, without limitation, the
execution of any financing statements or continuation statements relating to the
Receivables and the
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other Trust Property for filing under the provisions of the UCC of any
applicable jurisdiction.
Section 13.10 No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Trustee, any Enhancement Provider or
the Investor Certificateholders, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exhaustive of any rights, remedies, powers and privileges
provided by law.
Section 13.11 Counterparts. This Agreement may be executed in two or more
counterparts (and by different parties on separate counterparts), each of which
shall be an original, but all of which together shall constitute one and the
same instrument.
Section 13.12 Third-Party Beneficiaries. This Agreement will inure to the
benefit of and be binding upon the parties hereto, the Certificateholders and,
to the extent provided in the related Supplement, to the Enhancement Provider
named therein, and their respective successors and permitted assigns. Except as
otherwise provided in this Article XIII, no other Person will have any right or
obligation hereunder.
Section 13.13 Actions by Certificateholders.
(a) Wherever in this Agreement a provision is made that an action may be
taken or a notice, demand or instruction given by Investor Certificateholders,
such action, notice or instruction may be taken or given by any Investor
Certificateholder, unless such provision requires a specific percentage of
Investor Certificateholders.
(b) Any request, demand, authorization, direction, notice, consent, waiver
or other act by a Certificateholder shall bind such Certificateholder and every
subsequent holder of such Certificate issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof in respect of anything done
or omitted to be done by the Trustee or the Servicer in reliance thereon,
whether or not notation of such action is made upon such Certificate.
(c) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement or any Supplement to be given or
taken by Certificateholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Certificateholders in
person or by agent duly appointed in writing; and except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, when required, to the Transferor
or the Servicer.
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Proof of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Agreement or any Supplement
and conclusive in favor of the Trustee, the Transferor and the Servicer, if made
in the manner provided in this Section.
(d) The fact and date of the execution by any Certificateholder of any such
instrument or writing may be proved in any reasonable manner which the Trustee
deems sufficient.
Section 13.14 Rule 144A Information. For so long as any of the Investor
Certificates of any Series or any Class are "restricted securities" within the
meaning of Rule 144(a)(3) under the Securities Act, each of the Transferor, the
Servicer, the Trustee and the Enhancement Provider for such Series agree to
cooperate with each other to provide to any Investor Certificateholders of such
Series or Class and to any prospective purchaser of Certificates designated by
such an Investor Certificateholder upon the request of such Investor
Certificateholder or prospective purchaser, any information required to be
provided to such holder or prospective purchaser to satisfy the condition set
forth in Rule 144A(d)(4) under the Securities Act.
Section 13.15 Merger and Integration. Except as specifically stated
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.
Section 13.16 Headings. The headings herein are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
13-7
<PAGE>
IN WITNESS WHEREOF, the Transferor, the Servicer and the Trustee have
caused this Agreement to be duly executed by their respective officers as of the
day and year first above written.
GREEN TREE FLOORPLAN
FUNDING CORP., Transferor
By:___________________________
Name:
Title:
GREEN TREE FINANCIAL
CORPORATION, Servicer
By:___________________________
Name:
Title:
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION, Trustee
By:___________________________
Name:
Title:
<PAGE>
EXHIBIT A
---------
FORM OF EXCHANGEABLE TRANSFEROR CERTIFICATE
-------------------------------------------
No. 1 One Unit
GREEN TREE FLOORPLAN RECEIVABLES MASTER TRUST
FLOORPLAN RECEIVABLE TRUST CERTIFICATE
THIS CERTIFICATE WAS ISSUED PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY BE SOLD ONLY PURSUANT TO
A REGISTRATION STATEMENT EFFECTIVE UNDER THE ACT OR AN EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE ACT. IN ADDITION, THE TRANSFER OF THIS
CERTIFICATE IS SUBJECT TO RESTRICTIONS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN. A COPY OF THE POOLING AND SERVICING AGREEMENT
WILL BE FURNISHED TO THE HOLDER OF THIS CERTIFICATE BY THE TRUSTEE UPON WRITTEN
REQUEST.
This Certificate represents an Undivided Interest in
----------------------------------------------------
the Green Tree Floorplan Receivables Master Trust
-------------------------------------------------
Evidencing an undivided interest in a trust, the corpus of which consists
primarily receivables generated from time to time in the ordinary course of
business from a portfolio of revolving financing arrangements (the "Accounts")
of Green Tree Financial Corporation ("Green Tree" or the "Servicer") and other
assets and interests constituting the Trust under the Pooling and Servicing
Agreement described below.
(Not an interest in or a recourse obligation of
Green Tree Financal Corporation, Green Tree Floorplan Funding Corp.
or any Affiliate of either of them.)
This certifies that __________________ ("_______", the "Holder" or the
"Transferor," as the context requires) is the registered owner of a fractional
undivided interest in the Green Tree Floorplan Receivables Master Trust (the
"Trust") issued pursuant to the Pooling and Servicing Agreement, dated as of
December 1, 1995 (the "Pooling and Servicing Agreement"); such term to include
any amendment or Supplement thereto) among Green Tree Floorplan Funding Corp.,
as Transferor, Green Tree, as Servicer, and Norwest Bank Minnesota, National
Association, as Trustee (the "Trustee"), as supplemented by each supplement
thereto existing from time to time (the "Agreement"). The corpus of the Trust
consists of all of the Transferor's right, title and interest in, to and under
the Trust Property (as defined in the Agreement).
A-1
<PAGE>
Although a summary of certain provisions of the Pooling and Servicing
Agreement is set forth below, this Certificate does not purport to summarize the
Pooling and Servicing Agreement and reference is made to the Pooling and
Servicing Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds and duties evidenced hereby and the rights,
duties and obligations of the Trustee. To the extent not defined herein, the
capitalized terms used herein have the meanings ascribed to them in the Pooling
and Servicing Agreement. This Certificate is issued under and is subject to the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement, as amended from time to time, the Holder
by virtue of the acceptance hereof assents and by which the Holder is bound.
This Certificate has not been registered or qualified under the Securities
Act of 1933, as amended, or any state securities law. No sale, transfer or
other disposition of this Certificate shall be permitted other than in
accordance with the provisions of Section 6.3, 6.9 or 7.2 of the Pooling and
Servicing Agreement.
This Certificate is the Exchangeable Transferor Certificate (the
"Certificate"), which represents an undivided interest in the Trust, including
the right to receive the Collections and other amounts at the times and in the
amounts specified in the Pooling and Servicing Agreement to be paid to the
Holder of the Exchangeable Transferor Certificate. The aggregate interest
represented by this Certificate at any time in the Principal Receivables in the
Trust shall not exceed the Transferor Interest at such time. In addition to
this Certificate, Series of Investor Certificates will be issued to investors
pursuant to the Pooling and Servicing Agreement, each of which will represent an
Undivided Interest in the Trust. This Certificate shall not represent any
interest in any Enhancement, except to the extent provided in the Pooling and
Servicing Agreement. The Transferor Interest on any date of determination will
be an amount equal to the aggregate amount of Principal Receivables at the end
of the day immediately prior to such date of determination plus amounts on
deposit in the Excess Funding Account (but not including any investment earnings
thereon) minus the Aggregate Invested Amount at the end of such day.
This Certificate does not represent a recourse obligation of, or any
interest in, the Transferor or the Servicer. This Certificate is limited in
right of payment to certain Collections respecting the Receivables, all as more
specifically set forth hereinabove and in the Pooling and Servicing Agreement.
Upon the termination of the Trust pursuant to Section 12.1 of the Pooling
and Servicing Agreement, the Trustee shall assign and convey to the Holder of
the Certificate (without recourse, representation or warranty) all right, title
and interest of the Trust in the Receivables, whether then existing or
thereafter created, and all proceeds relating thereto. The Trustee shall
execute and deliver such instruments of transfer and assignment, in each case
without recourse, as shall be reasonably
A-2
<PAGE>
requested by the Holder of the
Certificate to vest in such Holder all right, title and interest which the
Trustee had in the Receivables.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling and Servicing Agreement, or be valid
for any purpose.
IN WITNESS WHEREOF, the Transferor has caused this Certificate to be duly
executed.
GREEN TREE FLOORPLAN FUNDING CORP.
By:
----------------------------------------
Name:
Title:
Date:
CERTIFICATE OF AUTHENTICATION
This is the Exchangeable Transferor Certificate referred to in the within-
mentioned Pooling and Servicing Agreement.
-------------------------------------------
Authenticating Agent
By:
----------------------------------------
Name:
Title:
A-5
<PAGE>
EXHIBIT B
---------
FORM OF DAILY REPORT
--------------------
GREEN TREE FLOORPLAN FUNDING CORP.
_________________________
GREEN TREE FLOORPLAN RECEIVABLES MASTER TRUST
_________________________
The undersigned, a duly authorized representative of Green Tree Financial
Corporation (the "Servicer"), as Servicer pursuant to the Pooling and Servicing
Agreement dated as of December 1, 1995 (the "Pooling and Servicing Agreement")
by and among Green Tree Floorplan Funding Corp. (the "Transferor"), the Servicer
and Norwest Bank Minnesota, National Association, as Trustee, does hereby
certify as follows:
B-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT C
---------
- --------------------------------------------------------------------------------------------------------------------
Green Tree Floorplan Green Tree
Funding Corp. Floorplan Receivables Master Trust Monthly Report
Certificateholder's Statement Series 1995-1 -95
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Section 5.2 Class A Class B Class C Class D Total
(i) Certificate Amount
(ii) Certificate Principal Distributed
(iii) Certificate Interest Distributed
Local Distribution per $1.000 Certificates
Certificate Principal Distributed per $1,000
Certificate Interest Distributed per $1,000
(iv) Principal Collections
(v) Interest Collections
Total Collections
(vi) Aggregate Amount of Principal Receivables
Invested Amount
Floating Allocation Percentage
(vii) Receivable Delinquencies
Current
30 Days to 99 Days
60 Days to 89 Days
90 Day and Over
Total Receivables
(viii) Aggregate Investor Default Amount
(ix) Charge-Offs
Class A
Class B
Class C
Class D
Total Charge-Offs
(x) Servicing Fee
Class A
Class B
Class C
Total Charge-Offs
(xi) Reallocated Principal Collections
Class A
Class B
Class C
(xii) Excess Funding Account Balance
Average Portfolio Yield
</TABLE>
C-1
<PAGE>
EXHIBIT D
---------
FORM OF ANNUAL SERVICER'S CERTIFICATE
-------------------------------------
GREEN TREE FLOORPLAN FUNDING CORP.
--------------------------
GREEN TREE FLOORPLAN RECEIVABLES MASTER TRUST
--------------------------
The undersigned, a duly authorized representative of Green Tree Financial
Corporation ("Green Tree"), as Servicer pursuant to the Pooling and Servicing
Agreement dated as of December 1, 1995 (the "Pooling and Servicing Agreement")
by and among Green Tree Floorplan Funding Corp. (the "Transferor"), Green Tree,
as Servicer and Norwest Bank Minnesota, National Association, as trustee (the
"Trustee") does hereby certify that:
1. Green Tree is Servicer under the Pooling and Servicing Agreement.
2. The undersigned is duly authorized pursuant to the Pooling and
Servicing Agreement to execute and deliver this Certificate to the Trustee.
3. This Certificate is delivered pursuant to Section 3.5 of the
Pooling and Servicing Agreement.
4. A review of the activities of the Servicer during (the period
from the Closing Date until) (the twelve fiscal month period ended)
__________, 19__ was conducted under our supervision.
5. Based on such review, the Servicer has, to the best of our
knowledge, fully performed all its obligations under the Pooling and
Servicing Agreement throughout such period and no default in the
performance of such obligations has occurred or is continuing except as set
forth in paragraph 6 below.
6. The following is a description of each default in the performance
of the Servicer's obligations under the provisions of the Pooling and
Servicing Agreement, including any Supplement, known to us to have been
made during such period which sets forth in detail (i) the nature of each
such default, (ii) the action taken by the Servicer, if any, to remedy each
such default and (iii) the current status of each such default:
[If applicable, insert "None."]
D-1
<PAGE>
IN WITNESS WHEREOF, the undersigned has duly executed this certificate this
___ day of __________, ____.
GREEN TREE FINANCIAL CORPORATION, as
Servicer
___________________________________
Name:
Title:
D-2
<PAGE>
EXHIBIT E-1
-----------
FORM OF ANNUAL OPINION OF COUNSEL
---------------------------------
The opinion set forth below, which is to be delivered pursuant to
subsection 13.2(d)(ii) of the Pooling and Servicing Agreement, may be subject to
certain qualifications, assumptions, limitations and exceptions taken or made in
the opinion of counsel delivered on the Initial Closing Date with respect to
similar matters.
No filing or other action, other than such filing or action described in
such opinion, is necessary from the date of such opinion through __________ of
the following year to continue the perfected status of the interest of the Trust
in the collateral described in the financing statements referred to in such
opinion.
E-1-1
<PAGE>
EXHIBIT E-2
-----------
FORM OF OPINION OF COUNSEL
--------------------------
Provisions to be Included in
Opinion of Counsel Delivered Pursuant
to Section 13.1(g)
(a) The Amendment to the [Pooling and Servicing Agreement]
[Supplement], attached hereto as Schedule 1 (the "Amendment"), has been duly
authorized, executed and delivered by the Seller and constitutes the legal,
valid and binding agreement of the Seller, enforceable in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally from time to time in effect. The enforceability of the Seller's
obligations is also subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
(b) The Amendment has been entered into in accordance with the terms
and provisions of Section 13.1 of the Pooling and Servicing Agreement.
(c) The Amendment will not adversely affect in any material respect
the interests of the Investor Certificateholders. [Include this clause (iii)
only in the case of amendments effected pursuant to Section 13.01(a) of the
Pooling and Servicing Agreement.]
E-2-1
<PAGE>
EXHIBIT E-3
-----------
FORM OF OPINION OF COUNSEL
--------------------------
Provisions to be Included in
Opinion of Counsel Delivered Pursuant
to Sections 2.6 and 13.2(d)*
The opinions set forth below may be subject to all the qualifications,
assumptions, limitations and exceptions taken or made in the opinion of counsel
to Green Tree Floorplan Funding Corp. (the "Seller") delivered on any Closing
Date. Capitalized terms used but not defined herein are used as defined in the
Pooling and Servicing Agreement, dated as of December 1, 1995 (as amended and
supplemented, the "Agreement"), among the Seller, as seller, Green Tree
Financial Corporation, as servicer, and Norwest Bank Minnesota, National
Association, as trustee.
[(a) The Assignment has been duly authorized, executed and delivered
by the Seller, and constitutes the valid and legally binding obligation of the
Seller, enforceable against the Seller in accordance with its terms.]
(b) Assuming the Receivables [in the Additional Accounts] are created
under, and are evidenced solely by, Wholesale Financing Agreements and Asset-
Based Financing Agreements, such Receivables will constitute "chattel paper,"
"accounts" or "general intangibles" as defined under Section 9-105 of the UCC.
We note that the Seller has given us an Officer's Certificate to the effect that
the Receivables are created under Wholesale Financing Agreements and Asset-Based
Financing Agreements.
(c) If the transfer of the Receivables [in the Additional Accounts]
and all [of the related] Collateral Security to the Trust pursuant to the
Pooling and Servicing Agreement constitutes a true sale of such Receivables and
Collateral Security to the Trust:
(i) with respect to such Receivables and Collateral Security in
existence on the date hereof, such sale transfers all of the right, title
and interest of the Seller in and to such Receivables and Collateral
Security to the Trust, free and clear of any liens now existing or
hereafter created, but subject to the rights of the holder of the
Exchangeable Transferor Certificate and except for Liens permitted under
Section 2.5(a) of the Agreement;
____________
* Include bracketed language only in the case of additions of Accounts
effected pursuant to Section 2.6 of the Pooling and Servicing Agreement.
E-3-1
<PAGE>
(ii) with respect to such Receivables and Collateral Security
which come into existence after the date hereof, upon the creation of such
Receivables and Collateral Security and the subsequent transfer of such
Receivables and Collateral Security to the Trust in accordance with the
Pooling and Servicing Agreement and receipt by the Seller of the
consideration therefor required pursuant to the Pooling and Servicing
Agreement, such sale will transfer all of the right, title and interest of
the Seller in and to such Receivables and Collateral Security to the Trust
free and clear of any liens but subject to the rights of the holder of the
Exchangeable Transferor Certificate and except for Liens permitted under
Section 2.5(a) of the Agreement;
and, in either case, no further action will thereafter be required under
Minnesota law to protect the Trust's ownership interest in the Receivables
against creditors of, or subsequent purchasers from, the Seller.
(d) If the transfer of the Receivables and Collateral Security to the
Trust pursuant to the Pooling and Servicing Agreement does not constitute a true
sale of the Receivables and the Collateral Security to the Trust, then the
Pooling and Servicing Agreement as amended and supplemented by the Assignment
creates a valid security interest in favor of the Trustee, for the benefit of
the Certificateholders, in the Seller's right, title and interest in and to the
Receivables and the Collateral Security and the proceeds thereof securing the
obligations of the Seller thereunder. Financing statements on Form UCC-1 having
been filed in the Offices of the Secretaries of State of the State of Minnesota
and [other applicable states] [and counties] and accordingly, such security
interest constitutes a perfected security interest in such Receivables and the
proceeds thereof subject to no prior liens (but subject to the Liens permitted
by Section 2.5(a) of the Agreement), enforceable as such against creditors of,
and subsequent purchasers from, the Seller, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws relating to or
affecting creditors' rights generally and to general equity principles.
E-3-2
<PAGE>
EXHIBIT F
---------
FORM OF REASSIGNMENT OF RECEIVABLES IN REMOVED ACCOUNTS
-------------------------------------------------------
(As required by Section 2.6 of the Receivables
Purchase Agreement referred to below)
REASSIGNMENT NO. ____ OF RECEIVABLES, dated as
of __________, ____, by and between GREEN TREE
FLOORPLAN FUNDING CORP., as buyer (the "Buyer"),
and GREEN TREE FINANCIAL CORPORATION, as seller
(the "Seller"), pursuant to the Receivables Purchase
Agreement referred to below.
WITNESSETH
WHEREAS the Seller and the Buyer are parties to the Receivables Purchase
Agreement dated as of December 1, 1995 (as amended or supplemented, the
"Receivable Purchase Agreement");
WHEREAS, pursuant to the Receivables Purchase Agreement, the Seller wishes
to remove all Receivables from certain Accounts, the Collateral Security thereof
and the related Floorplan Rights (the "Removed Accounts") and to cause the Buyer
to reconvey the Receivables of such Removed Accounts and such Collateral
Security and Floorplan Rights, whether now existing or hereafter created, and
all amounts currently held by the Buyer or thereafter received by the Trust in
respect of such Removed Accounts, from the Buyer to the Seller (as each such
term is defined in the Receivables Purchase Agreement); and
WHEREAS the Buyer is willing to accept such removal and to reconvey the
Receivables in the Removed Accounts, such Collateral Security and any related
amounts held or received by the Trust subject to the terms and conditions
hereof.
NOW, THEREFORE, the Seller and the Buyer hereby agree as follows:
1. Defined Terms. All terms defined in the Agreement and used herein
shall have such defined meanings when used herein, unless otherwise defined
herein.
"Removal Date" shall mean, with respect to the Removed Accounts designated
hereby, __________________.
2. Notice of Removed Accounts. The Seller shall deliver to the Buyer,
the Trustee, any Enhancement Providers and the Rating Agencies a computer file
or microfiche or written list containing a true and complete list of the Removed
F-1
<PAGE>
Accounts specifying for each such Account, as of the Removal Commencement Date,
its account number, the aggregate amount of Receivables outstanding in such
Accounts and the Designated Balance. Such list shall be marked as Schedule 1 to
this Reassignment and shall be incorporated into and made a part of this
Reassignment as of the Removal Date and shall amend Schedule 1 to the
Receivables Purchase Agreement.
3. Conveyance of Receivables and Accounts.
(a) The Buyer does hereby transfer, assign, set over and otherwise convey
to the Seller, without recourse, representation or warranty on and after the
Removal Date, all right, title and interest of the Trust in, to and under all
Receivables now existing at the close of business on the Removal Date and
thereafter created from time to time until the termination of the Trust in
Removed Accounts designated hereby, all Collateral Security thereof, the
related Floorplan Rights, all monies due or to become due and all amounts
received with respect thereto (Interest Receivables), all proceeds (as defined
in Section 9-306 of the UCC as in effect in the State of Minnesota and
Recoveries) thereof relating thereto.
(b) If requested by the Seller, in connection with such transfer, the Buyer
agrees to execute and deliver to the Seller, on or prior to the date of this
Reassignment, a termination statement with respect to the Receivables existing
at the close of business on the Removal Date and thereafter created from time to
time and Collateral Security thereof in the Removed Accounts reassigned hereby
(which may be a single termination statement with respect to all such
Receivables and Collateral Security) evidencing the release by the Trust of its
lien on the Receivables in the Removed Accounts and the Collateral Security, and
meeting the requirements of applicable state law, in such manner and such
jurisdictions as are necessary to remove such lien.
4. Acceptance by Buyer. The Buyer hereby acknowledges that, prior to or
simultaneously with the execution and delivery of this Reassignment, the Seller
delivered to the Buyer the computer file or such microfiche or written list
described in section 2(b) of this Reassignment.
5. Representations and Warranties of the Seller. The Seller hereby
represents and warrants to the Buyer as of the date of this Reassignment and as
of the Removal Date:
(a) Legal, Valid and Binding Obligation. This Reassignment constitutes a
legal, valid and binding obligation of the Seller, enforceable against the
Seller in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect affecting the enforcement of
creditors' rights generally and except as such enforceability may be limited by
general principles of equity (whether considered in a suit at law or in equity);
F-2
<PAGE>
(b) No Pay Out Event. The removal of the Accounts hereby removed shall
not, in the reasonable belief of the Seller, cause a Pay Out Event to occur or
cause the Pool Balance to be less than the Minimum Aggregate Principal
Receivables;
(c) Selection Procedures. No selection procedures believed by the Seller
to be adverse to the interests of the Beneficiaries were utilized in selecting
the Accounts to be removed; and
(d) True and Complete List. The list of Removed Accounts described in
Section 2(b) of this Assignment is, as of the Removal Commencement Date, true
and complete in all material respects.
provided, however, that in the event that the removal on such Removal Date
relates solely to Ineligible Accounts, the Seller shall be deemed to make only
the representations and warranties contained in paragraph 5(a) above.
6. Condition Precedent. In addition to the conditions precedent set
forth in Section 2.6 of the Receivables Purchase Agreement, the obligation of
the Buyer to execute and deliver this Reassignment is subject to the Seller
having delivered on or prior to the Removal Date to the Trustee and the Buyer,
any Agent, and any Enhancement Providers an Officers' Certificate certifying
that (i) as of the Removal Date, all requirements set forth in Section 2.6 of
the Agreement for removing such Accounts and reconveying the Receivables of such
Removed Accounts, the Collateral Security and the related Floorplan Rights,
whether existing at the close of business on the Removal Date or thereafter
created from time to time until the termination of the Trust, have been
satisfied, and (ii) each of the representations and warranties made by the
Seller in Section 5 hereof is true and correct as of the date of this
Reassignment and as of the Removal Date. The Buyer may conclusively rely on
such Officer's Certificate, shall have no duty to make inquiries with regard to
the matters set forth therein and shall incur no liability in so relying.
7. Ratification of Agreement. As supplemented by this Reassignment the
Receivables Purchase Agreement is in all respects ratified and confirmed and the
Receivables Purchase Agreement as so supplemented by this Reassignment shall be
read, taken and construed as one and the same instrument.
8. Counterparts. This Reassignment may be executed in two or more
counterparts, and by different parties on separate counterparts, each of which
shall be an original, but all of which shall constitute one and the same
instrument.
F-3
<PAGE>
9. GOVERNING LAW. THIS REASSIGNMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF MINNESOTA, WITHOUT REFERENCE TO ITS CONFLICT OF
LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the undersigned have caused this Reassignment to be
duly executed and delivered by their respective duly authorized officers on the
day and year first above written.
GREEN TREE FLOORPLAN
FUNDING CORP., Buyer
By:______________________
Name:____________________
Title:___________________
GREEN TREE FINANCIAL
CORPORATION, Seller
By:______________________
Name:____________________
Title:___________________
F-4
<PAGE>
EXHIBIT G
---------
FORM OF ASSIGNMENT OF RECEIVABLES IN ADDITIONAL ACCOUNTS
--------------------------------------------------------
(As required by Section 2.4
of the Receivables Purchase Agreement)
ASSIGNMENT No. _____ OF RECEIVABLES IN ADDITIONAL ACCOUNTS dated as of
__________, ____, between Green Tree Floorplan Funding Corp., as buyer (the
"Buyer"), and Green Tree Financial Corporation, as seller (the "Seller"),
pursuant to the Receivables Purchase Agreement referred to below.
W I T N E S S E T H:
-------------------
WHEREAS the Seller and the Buyer are parties to a Receivables Purchase
Agreement dated as of December 1, 1995 (as amended or supplemented, the
"Receivables Purchase Agreement");
WHEREAS, pursuant to the Receivables Purchase Agreement, the Seller wishes
to designate Additional Accounts to be included as Accounts and to convey the
Receivables and related Collateral Security of such Additional Accounts, whether
now existing or hereafter created, to the Buyer as part of the corpus of the
Trust (as each such term is defined in the Receivables Purchase Agreement); and
WHEREAS the Buyer is willing to accept such designation and conveyance
subject to the terms and conditions hereof;
NOW, THEREFORE, the Seller and the Buyer hereby agree as follows:
1. Defined Terms. All capitalized terms used herein shall have the
meanings ascribed to them in the Receivables Purchase Agreement unless otherwise
defined herein.
"Addition Date" shall mean, with respect to the Additional Accounts
designated hereby, __________, 19__.
2. Designation of Additional Accounts. The Seller hereby delivers
herewith a computer file or microfiche or written list containing a true and
complete list of all such Additional Accounts specifying for each such Account,
as of the Additional Cut-off Date, its account number, the aggregate amount of
Receivables outstanding in such Account and the aggregate amount of Principal
Receivables in such Account. Such file or list shall, as of the date of this
Assignment, supplement Schedule 1 to the Receivables Purchase Agreement.
G-1
<PAGE>
3. Conveyance of Receivables.
(a) The Seller does hereby sell, transfer, assign, set over and otherwise
convey, without recourse (other than the Limited Guaranty of the Seller for the
benefit of the Class C Certificateholders and except as expressly provided in
the Receivables Purchase Agreement), to the Buyer, on the Addition Date all of
its right, title and interest in, to and under the Receivables in such
Additional Accounts, all Collateral Security and the related Floorplan Rights
with respect thereto, owned by the Seller and existing at the close of business
on the Additional Cut-off Date and thereafter created from time to time, all
monies due or to become due and all amounts received with respect thereto and
all proceeds (including "proceeds" as defined in Section 9-306 of the UCC as in
effect in the State of Minnesota and Recoveries) thereof. The foregoing sale,
transfer, assignment, set-over and conveyance does not constitute and is not
intended to result in the creation or an assumption by the Buyer of any
obligation of the Servicer, the Seller or any other Person in connection with
the Accounts, the Receivables or under any agreement or instrument relating
thereto, including any obligation under any Financing Agreement or Floorplan
Agreement, including any other obligation to any Dealer or Manufacturer.
(b) In connection with such sale, the Seller agrees to record and file, at
its own expense, a financing statement on form UCC-1 (and continuation
statements when applicable) with respect to the Receivables now existing and
hereafter created for the sale of chattel paper, accounts and general
intangibles (as defined in Section 9-105 or 9-106 of the UCC as in effect in any
state where the Seller's or the Servicer's chief executive offices or books and
records relating to the Receivables are located) meeting the requirements of
applicable state law in such manner and in such jurisdictions as are necessary
to perfect the sale and assignment of the Receivables and the Collateral
Security to the Buyer, and to deliver a file-stamped copy of such financing
statements or other evidence of such filing to the Buyer on or prior to the
Addition Date to the extent, if any, that the UCC-1 financing statements filed
pursuant to Section 2.1 of the Receivables Purchase Agreement are not sufficient
for such purpose. In addition, the Seller shall cause to be timely filed in the
appropriate filing office any UCC-1 financing statement and continuation
statement necessary to perfect any sale of Receivables to the Seller. The Buyer
shall be under no obligation whatsoever to file such financing statement, or a
continuation statement to such financing statement, or to make any other filing
under the UCC in connection with such sale. The parties hereto intend that the
sales of Receivables effected by this Agreement be sales.
(c) In connection with such sale, the Seller further agrees, at its own
expense, on or prior to the Addition Date, to indicate in its books and records,
which may include its computer files, that the Receivables created in connection
with the Additional Accounts designated hereby have been sold and the Collateral
Security assigned to the Buyer pursuant to this Assignment and sold to the Trust
pursuant to
G-2
<PAGE>
the Pooling and Servicing Agreement for the benefit of the Certificateholders
and the other Beneficiaries.
4. Acceptance by Buyer. Subject to the satisfaction of the conditions
set forth in Section 6 of this Assignment, the Buyer hereby acknowledges its
acceptance of all right, title and interest to the property, now existing and
hereafter created, conveyed to the Buyer pursuant to Section 3(a) of this
Assignment. The Buyer further acknowledges that, prior to or simultaneously
with the execution and delivery of this Assignment, the Seller delivered to the
Buyer the computer file or microfiche or written list relating to the Additional
Accounts described in Section 2 of this Assignment.
5. Representations and Warranties of the Seller. The Seller hereby
represents and warrants to the Buyer, on behalf of the Trust, as of the date of
this Assignment and as of the Addition Date that:
(a) Legal, Valid and Binding Obligation. This Assignment constitutes a
legal, valid and binding obligation of the Seller, enforceable against the
Seller in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect affecting creditors' rights in
general and except as such enforceability may be limited by general principles
of equity (whether considered in a suit at law or in equity);
(b) Organization and Good Standing. The Seller is a corporation duly
organized and validly existing and in good standing under the law of the State
of Delaware and has, in all material respects, full corporate power, authority
and legal right to own its properties and conduct its business as such
properties are presently owned and such business is presently conducted, and to
execute, deliver and perform its obligations under this Assignment;
(c) Due Qualification. The Seller is duly qualified to do business and,
where necessary, is in good standing as a foreign corporation (or is exempt from
such requirement) and has obtained all necessary licenses and approvals in each
jurisdiction in which the conduct of its business requires such qualification
except where the failure to so qualify or obtain licenses or approvals would not
have a material adverse effect on its ability to perform its obligations
hereunder;
(d) Eligible Accounts. Each Additional Account designated hereby is an
Eligible Account;
(e) Selection Procedures. No selection procedures believed by the Seller
to be adverse to the interests of the Beneficiaries were utilized in selecting
the Additional Accounts designated hereby;
G-3
<PAGE>
(f) Insolvency. As of the Notice Date and the Addition Date, the Seller is
not insolvent nor, after giving effect to the conveyance set forth in Section 3
of this Assignment, will it have been made insolvent, nor is it aware of any
pending insolvency;
(g) Valid Transfer. This Assignment constitutes a valid sale, transfer and
assignment to the Buyer of all right, title and interest of the Seller in the
Receivables and the Collateral Security and the proceeds thereof and upon the
filing of the financing statements described in Section 3 of this Assignment
with the Secretary of State of the State of Minnesota and other applicable
states and counties and, in the case of the Receivables and the Collateral
Security hereafter created and the proceeds thereof, upon the creation thereof,
the Buyer shall have a first priority perfected ownership interest in such
property, except for Liens permitted under Section 2.6(a) of the Receivables
Purchase Agreement;
(h) Due Authorization. The execution and delivery of this Assignment and
the consummation of the transactions provided for or contemplated by this
Assignment have been duly authorized by the Seller by all necessary corporation
action on the part of the Seller;
(i) No Conflict. The execution and delivery of this Assignment, the
performance of the transactions contemplated by this Assignment and the
fulfillment of the terms hereof, will not conflict with, result in any breach of
any of the material terms and provisions of, or constitute (with or without
notice or lapse of time or both) a material default under, any indenture,
contract, agreement, mortgage, deed of trust, or other instrument to which the
Seller is a party or by which it or its properties are bound;
(j) No Violation. The execution and delivery of this Assignment by the
Seller, the performance of the transactions contemplated by this Assignment and
the fulfillment of the terms hereof will not conflict with or violate any
material Requirements of Law applicable to the Seller;
(k) No Proceedings. There are no proceedings or, to the best knowledge of
the Seller, investigations pending or threatened against the Seller before any
Governmental Authority (i) asserting the invalidity of this Assignment, (ii)
seeking to prevent the consummation of any of the transactions contemplated by
this Assignment, (iii) seeking any determination or ruling that, in the
reasonable judgment of the Seller, would materially and adversely affect the
performance by the Seller of its obligations under this Assignment, (iv) seeking
any determination or ruling that would materially and adversely affect the
validity or enforceability of this Assignment or (v) seeking to affect adversely
the income tax attributes of the Trust under the United States federal or any
State income, single business or franchise tax systems;
G-4
<PAGE>
(l) Record of Accounts. As of the Addition Date, Schedule 1 to this
Assignment is an accurate and complete listing in all material respects of all
the Additional Accounts as of the Additional Cut-off Date and the information
contained therein with respect to the identity of such Accounts and the
Receivables existing thereunder is true and correct in all material respects as
of the Additional Cut-off Date;
(m) No Liens. Each Receivable and all Collateral Security existing on the
Addition Date has been conveyed to the Buyer free and clear of any Lien;
(n) All Consents Required. With respect to each Receivable and all
Collateral Security existing on the Addition Date, all consents, licenses,
approvals or authorizations of or registrations or declarations with any
Governmental Authority required to be obtained, effected or given by the Seller
in connection with the conveyance of such Receivable or Collateral Security to
the Buyer, the execution and delivery of this Assignment and the performance of
the transactions contemplated hereby have been duly obtained, effected or given
and are in full force and effect; and
(o) Eligible Receivables. On the Additional Cut-off Date each Receivable
conveyed to the Buyer as of such date is an Eligible Receivable or, if such
Receivable is not an Eligible Receivable, such Receivable is conveyed to the
Buyer in accordance with Section 2.8 of the Receivables Purchase Agreement.
6. Conditions Precedent. The acceptance of the Trustee set forth in
Section 4 of this Assignment is subject to the satisfaction, on or prior to the
Addition Date, of the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by the Seller in Section 5 of this Assignment shall be true and
correct as of the date of this Assignment and as of the Addition Date;
(b) Agreement. Each of the conditions set forth in Section 2.4(b) of the
Receivables Purchase Agreement applicable to the designation of the Additional
Accounts to be designated hereby shall have been satisfied; and
(c) Addition Information. The Seller shall have delivered to the Buyer
such information as was reasonably requested by the Buyer to satisfy itself as
to the accuracy of the representation and warranty set forth in Section 5(d) of
this Assignment.
7. Ratification of Agreement. As supplemented by this Assignment, the
Receivables Purchase Agreement is in all respects ratified and confirmed and the
Receivables Purchase Agreement as so supplemented by this Assignment shall be
read, taken and construed as one and the same instrument.
G-5
<PAGE>
8. Counterparts. This Assignment may be executed in two or more
counterparts (and by different parties in separate counterparts), each of which
shall be an original but all of which together shall constitute one and the same
instrument.
9. GOVERNING LAW. THIS ASSIGNMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF MINNESOTA, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the Seller and the Buyer have caused this Assignment to
be duly executed and delivered by their respective duly authorized officers as
of the day and the year first above written.
GREEN TREE FLOORPLAN
FUNDING CORP., Buyer
By:______________________
Name:____________________
Title:___________________
GREEN TREE FINANCIAL
CORPORATION, Seller
By:______________________
Name:____________________
Title:___________________
G-6
<PAGE>
EXHIBIT H
---------
FORM OF AGREED UPON PROCEDURES
------------------------------
The Servicer and Trustee will engage a first of nationally recognized
independent public accountants (who may also render other services to the
Servicer or any of its subsidiaries) to perform certain agreed-upon procedures
substantially similar to the following:
1) The accountants will obtain the Master Trust schedules showing the daily
amount of eligible accounts receivable activity (hereinafter referred to as
the "Daily Report") for five days within the period and compare amounts set
forth on the Daily Report representing sales, returns, cash collections,
exchanges, allowances and bad debt charge offs with the corresponding
amounts set forth in the Servicer's accounts receivable reports and verify
the mathematical accuracy of the Daily Report.
2) For five days within the period, the accountants will compare the cash
collections appearing on the Servicer's accounts receivable reports to an
entry on the relevant Daily Report. The accountants will compare the cash
transfers indicated on the Daily Reports to entries on the relevant Master
Trust bank statements.
3) The accountants will compare the aggregate Dealer balances in the "current"
and "90 days and over" categories as reflected on the monthly Settlement
Statement to the corresponding amounts set ford in the Servicer's accounts
receivable aging reports as of three month-ends within the period.
4) For five weekly periods, the accountants will compare beginning and ending
total receivables balances on the Servicer's accounts receivable reports
with the corresponding balances on the corresponding Daily Report and will
verify the mathematical accuracy of the calculation of beginning and ending
principal receivable balances and beginning and ending imputed yield
receivable balances.
5) For five days within the period, the accountants will recompute the daily
allocation of Principal, Finance Charge and Imputed Yield collections to
each series based upon information appearing on the Daily Reports.
6) For monthly Settlement Statement during the period, the accountants will
compare the information appearing therein to the information appearing in
the corresponding Daily Reports.
7) The public accountants will inquire as to changes in the Discount Factor.
H-1
<PAGE>
EXHIBIT I
---------
FORM OF RECONVEYANCE OF RECEIVABLES
-----------------------------------
RECONVEYANCE OF RECEIVABLES, dated as of __________, 19__ by and between
GREEN TREE FLOORPLAN FUNDING CORP., a corporation organized and existing under
the laws of the State of Delaware (the "Transferor"), and Norwest Bank
Minnesota, National Association, a national banking association (the "Trustee")
pursuant to the Pooling and Servicing Agreement referred to below.
W I T N E S S E T H:
WHEREAS, the Transferor and the Trustee are parties to the Pooling and
Servicing Agreement dated as of December 1, 1995 (hereinafter as such agreement
may have been, or may from time to time be, amended, supplemented or otherwise
modified, the "Pooling and Servicing Agreement") by and among the Transferor,
Green Tree Financial Corporation as Servicer, and the Trustee;
WHEREAS, pursuant to the Pooling and Servicing Agreement, the Transferor
wishes to cause the Trustee to reconvey all of the Receivables and proceeds
thereof, whether now existing or hereafter created, from the Trust to the
Transferor pursuant to the terms of Section 12.4 of the Pooling and Servicing
Agreement upon termination of the Trust pursuant to subsection 12.1(a) of the
Pooling and Servicing Agreement (as each such term is defined in the Pooling and
Servicing Agreement);
WHEREAS, the Trustee is willing to reconvey the Receivables subject to the
terms and conditions hereof;
NOW THEREFORE, the Transferor and the Trustee hereby agree as follows:
1. Defined Terms. All terms defined in the Pooling and Servicing
Agreement and used herein shall have such defined meanings when used herein,
unless otherwise defined herein.
"Reconveyance Date" shall mean __________, 19__.
2. Return of Lists of Receivables. The Trustee shall deliver to the
Transferor or the bailee of the Transferor, not later than three Business Days
after the Reconveyance Date, each and every computer file or microfiche list of
Receivables delivered to the Trustee pursuant to the terms of the Pooling and
Servicing Agreement.
3. Conveyance of Receivables. (a) The Trustee does hereby reconvey to
the Transferor, without recourse, representation or warranty, on and after the
Reconveyance Date, all right, title and interest of the Trust in and to each and
every
I-1
<PAGE>
Receivable now existing and hereafter created, all monies due or to become
due with respect thereto (including all Imputed Yield Receivables), all proceeds
(as defined in Section 9-306 of the UCC as in effect in the Relevant UCC State)
of such Receivables, except for amounts, if any, held by the Trustee pursuant to
subsection 12.3(b) of the Pooling and Servicing Agreement.
(b) In connection with such transfer, the Trustee agrees to execute and
deliver to the Transferor on or prior to the date of this Reconveyance, such UCC
termination statements as the Transferor may reasonably request, evidencing the
release by the Trust of its lien on the Receivables.
4. Counterparts. This Reconveyance may be executed in two or more
counterparts (and by different parties on separate counterparts), each of which
shall be an original, but all of which together shall constitute one and the
same instrument.
5. Governing Law. THIS RECONVEYANCE SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF MINNESOTA, WITHOUT REFERENCE TO ITS CONFLICT OF
LAW PROVISIONS.
IN WITNESS WHEREOF, the undersigned have caused this Reconveyance of
Receivables to be duly executed and delivered by their respective duly
authorized officers on the day and year first above written.
GREEN TREE FLOORPLAN
FUNDING CORP.
By:______________________
Name:____________________
Title:___________________
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By:______________________
Name:____________________
Title:___________________
I-2
<PAGE>
SCHEDULE 1
----------
LIST OF ACCOUNTS
----------------
<PAGE>
SCHEDULE 2
----------
DESIGNATION OF COLLECTION ACCOUNT
---------------------------------
<PAGE>
Exhibit 4.2
- --------------------------------------------------------------------------------
GREEN TREE FLOORPLAN FUNDING CORP.
Transferor
GREEN TREE FINANCIAL CORPORATION
Servicer
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
Trustee
on behalf of the Series 1995-1 Certificateholders
----------------------------
SERIES 1995-1 SUPPLEMENT
Dated as of December 1, 1995
to
POOLING AND SERVICING AGREEMENT
Dated as of December 1, 1995
----------------------------
GREEN TREE FLOORPLAN RECEIVABLES MASTER TRUST
$__________ Floating Rate Floorplan Receivable Trust
Certificates, Series 1995-1, Class A
$__________ Floating Rate Floorplan Receivable Trust
Certificates, Series 1995-1, Class B
$__________ Floorplan Receivable Trust
Certificates, Series 1995-1, Class C
$__________ Floorplan Receivable Trust
Certificates, Series 1995-1, Class D
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
----
SECTION 1. Designation................................................... 1
SECTION 2. Definitions................................................... 1
SECTION 3. Optional Repurchase........................................... 18
SECTION 4. Delivery and Payment for the Series 1995-1
Certificates.................................................. 18
SECTION 5. Form of Delivery of Series 1995-1 Certificates................ 18
SECTION 6. Article IV of Agreement....................................... 18
ARTICLE IV
Rights of Certificateholders and
--------------------------------
Allocation and Application of Collections
-----------------------------------------
Section 4.4 Rights of Certificateholders........................... 18
Section 4.5 Collections and Allocation; Payments on
Exchangeable Transferor Certificate.................... 19
Section 4.6 Determination of Monthly Interest for the Series
1995-1 Certificates.................................... 20
Section 4.7 Determination of Principal Amounts..................... 21
Section 4.8 Shared Principal Collections........................... 23
Section 4.9 Application of Funds on Deposit in the Collection
Account for the Certificates........................... 23
Section 4.10 Coverage of Required Amount for the Series
1995-1 Certificates.................................... 31
Section 4.11 Payment of Certificate Interest........................ 31
Section 4.12 Payment of Certificate Principal....................... 31
Section 4.13 Investor Charge-Off.................................... 33
Section 4.14 Reallocated Principal Collections for the Series
1995-1 Certificates.................................... 33
Section 4.15 Determination of LIBOR................................. 34
SECTION 7. Article V of the Agreement.................................... 36
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<PAGE>
ARTICLE V
Distributions and Reports to Investor Certificateholders
--------------------------------------------------------
Section 5.1 Distributions.......................................... 36
Section 5.2 Certificateholders' Statement.......................... 37
SECTION 8. Series 1995-1 Pay Out Events................................. 39
SECTION 9. Series 1995-1 Termination.................................... 39
SECTION 10. Legends; Transfer and Exchange; Restrictions on Transfer
of Series 1995-1 Certificates; Tax Treatment................. 40
SECTION 11. Ratification of Agreement.................................... 43
SECTION 12. Registration of the Class A Certificates under the
Securities Exchange Act of 1934.............................. 43
SECTION 13. Counterparts................................................. 44
SECTION 14. Governing Law................................................ 44
SECTION 15. Instructions in Writing...................................... 44
EXHIBITS
- --------
EXHIBIT A Form of Class A Investor Certificate
EXHIBIT B Form of Class B Investor Certificate
EXHIBIT C Form of Class C Investor Certificate
EXHIBIT D Form of Class D Investor Certificate
EXHIBIT E Form of Monthly Certificateholder's Statement
EXHIBIT F Form of 144A Exchange Notice and Certification
-ii-
<PAGE>
SERIES 1995-1 SUPPLEMENT, dated as of December 1, 1995 (the "Series
Supplement") by and among GREEN TREE FLOORPLAN FUNDING CORP., a corporation
organized and existing under the laws of the State of Delaware, as Transferor
(the "Transferor"), GREEN TREE FINANCIAL CORPORATION, a corporation organized
and existing under the laws of Delaware, as Servicer (the "Servicer"), and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking association, as
trustee (together with its successors in trust thereunder as provided in the
Agreement referred to below, the "Trustee") under the Pooling and Servicing
Agreement dated as of December 1, 1995 (as supplemented, the "Agreement") among
the Transferor, the Servicer and the Trustee.
Section 6.9 of the Agreement provides, among other things, that the
Transferor and the Trustee may at any time and from time to time enter into a
supplement to the Agreement for the purpose of authorizing the issuance by the
Trustee to the Transferor, for execution and redelivery to the Trustee for
authentication, of one or more Series of Certificates.
Pursuant to this Series Supplement, the Transferor and the Trustee shall
create a new Series of Investor Certificates and shall specify the Principal
Terms thereof.
SECTION 1. Designation. There is hereby created a Series of Investor
Certificates to be issued pursuant to the Agreement and this Series Supplement
to be known generally as the "Series 1995-1 Certificates." The Series 1995-1
Certificates shall be issued in four Classes, which shall be designated
generally as the Floating Rate Floorplan Receivable Trust Certificates, Series
1995-1, Class A (the "Class A Certificates"), the Floating Rate Floorplan
Receivable Trust Certificates, Series 1995-1, Class B (the "Class B
Certificates"), the Floorplan Receivable Trust Certificates, Series 1995-1,
Class C (the "Class C Certificates") and the Floorplan Receivable Trust
Certificates, Series 1995-1, Class D (the "Class D Certificates").
SECTION 2. Definitions. In the event that any term or provision contained
herein shall conflict with or be inconsistent with any provision contained in
the Agreement, the terms and provisions of this Series Supplement shall govern
with respect to the Series 1995-1 Certificates. All Article, Section or
subsection references herein shall mean Article, Section or subsections of the
Agreement, as amended or supplemented by this Series Supplement, except as
otherwise provided herein. All capitalized terms not otherwise defined herein
are defined in the Agreement. Each capitalized term defined herein shall relate
only to the Series 1995-1 Certificates and no other Series of Certificates
issued by the Trust.
"ABC Fixed/Floating Allocation Percentage" means, for any Business Day, the
percentage equivalent of a fraction, the numerator of which is the sum of the
Class A Invested Amount, the Class B Invested Amount and the Class C Invested
Amount at the end of the last day of the Revolving Period and the denominator of
<PAGE>
which is the greater of (a) the sum of the aggregate amount of the Pool Balance
and the amount on deposit in the Excess Funding Account at the end of the
preceding Business Day and (b) the sum of the numerators used to calculate the
allocation percentages with respect to Principal Receivables for all Series.
"ABC Investor Default Amount" means an amount equal to the product of (a)
the sum of the Class A Floating Allocation Percentage, the Class B Floating
Allocation Percentage and the Class C Floating Allocation Percentage applicable
on such Business Day and (b) the aggregate principal amount of Defaulted
Receivables identified since the prior reporting date.
"Accumulation Period Commencement Date" means the first day of the August
1998 Monthly Period, provided, however, if the Accumulation Period Length has
been determined to be less than four months and, after such determination, any
outstanding Series enters into an early amortization period, the Accumulation
Period Commencement Date shall be the earlier of (i) the date that such
outstanding Series entered into its early amortization period and (ii) the
Accumulation Period Commencement Date, as previously determined.
"Accumulation Period Length" means the one, two, three or four month(s)
period, determined on July 13, 1998, and shall be calculated as the product,
rounded upwards to the nearest integer, of (a) four and (b) a fraction, the
numerator of which is the Invested Amount as of July 13, 1998 (after giving
effect to all changes therein on such date) and the denominator of which is the
sum of such Invested Amount and the invested amounts as of July 13, 1998 (after
giving effect to all changes therein on such date) of all other outstanding
Series whose respective revolving periods are not scheduled to end before the
last day of the November 1998 Monthly Period.
"Accumulation Shortfall" means, for the succeeding Monthly Period, the
amount by which the Controlled Deposit Amount exceeds the amount deposited in
the Principal Account for any Monthly Period.
"Additional Class D Invested Amount" means any increase in the Class D
Invested Amount agreed to in connection with an increase by the Transferor in
any of the percentages used to calculate the Overconcentration Amounts.
"Additional Interest" means, at any time of determination, the sum of Class
A Additional Interest and Class B Additional Interest.
"Base Rate" means the sum of (i) the weighted average of the Class A
Certificate Rate and the Class B Certificate Rate, plus (ii) 2% per annum.
"Carryover Class A Interest" means (a) any Class A Monthly Interest due but
not paid on any previous Distribution Date plus (b) any Class A Additional
Interest.
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<PAGE>
"Carryover Class B Interest" means (a) any Class B Monthly Interest due but
not paid on any previous Distribution Date plus (b) any Class B Additional
Interest.
"Class A Additional Interest" shall have the meaning specified in
subsection 4.6(a).
"Class A Certificate Rate" means the rate at which interest on the
outstanding principal balance of the Class A Certificates will accrue, which
will be at a rate per annum equal to the lesser of (i) the applicable one-month
LIBOR plus ___% per annum or (ii) the Net Receivables Rate.
"Class A Certificateholder" means the Person in whose name a Class A
Certificate is registered in the Certificate Register.
"Class A Certificateholders' Interest" means the portion of the
Certificateholder's Interest evidenced by the Class A Certificates.
"Class A Certificates" means any of the certificates executed by the
Transferor and authenticated by or on behalf of the Trustee, substantially in
the form of Exhibit A hereto.
"Class A Fixed/Floating Allocation Percentage" means, with respect to any
Business Day, the percentage equivalent of a fraction, the numerator of which is
the Class A Invested Amount at the end of the last day of the Revolving Period
and the denominator of which is the greater of (a) the sum of the Pool Balance
and the amount on deposit in the Excess Funding Account at the end of the
preceding Business Day and (b) the sum of the numerators used to calculate the
allocation percentages with respect to Principal Collections for all Series.
"Class A Floating Allocation Percentage" means, with respect to any
Business Day, the percentage equivalent of a fraction, the numerator of which is
the Class A Invested Amount as of the end of the preceding Business Day and the
denominator of which is the greater of (a) the sum of the Pool Balance and the
amount on deposit in the Excess Funding Account as of the end of the preceding
Business Day and (b) when used with respect to Principal Collections only, the
sum of the numerators with respect to all Classes of all Series then outstanding
used to calculate the applicable allocation percentage.
"Class A Initial Invested Amount" means the aggregate initial principal
amount of the Class A Certificates, which is $__________.
"Class A Interest Shortfall" shall have the meaning specified in subsection
4.6(a).
"Class A Invested Amount" means an amount equal to (a) the initial
principal balance of the Class A Certificates, minus (b) the aggregate amount of
-3-
<PAGE>
principal payments made to Class A Certificateholders prior to such date, minus
(c) the aggregate amount of Class A Investor Charge-Offs for all prior
Distribution Dates, and plus (d) the aggregate amount allocated and available on
all prior Business Days pursuant to subsection 4.9(a)(vi) for the purpose of
reimbursing amounts deducted pursuant to the foregoing clause (c).
"Class A Investor Charge-Off" shall have the meaning specified in
subsection 4.13(d).
"Class A Investor Percentage" means, for any Business Day, (a) with respect
to Interest Receivables and Defaulted Receivables at any time or Principal
Receivables during the Revolving Period, the Class A Floating Allocation
Percentage and (b) with respect to Principal Receivables during the Controlled
Accumulation Period or Early Amortization Period, the ABC Fixed/Floating
Allocation Percentage.
"Class A Monthly Interest" means the interest distributable in respect of
the Class A Certificates as calculated in accordance with subsection 4.6(a).
"Class A Percentage" means a fraction, the numerator of which is the Class
A Invested Amount and the denominator of which is the sum of the Class A
Invested Amount, the Class B Invested Amount and the Class C Invested Amount.
"Class A Principal" means the principal distributable in respect of the
Class A Certificates as calculated in accordance with subsection 4.7(a).
"Class A Required Amount" means the amount determined by the Servicer on
each Business Day equal to the excess, if any, of (x) the sum of (i) Class A
Monthly Interest for the prior Monthly Period, (ii) any Class A Monthly Interest
due but not paid on any previous Distribution Date plus any Class A Additional
Interest previously due but not paid to the Class A Certificateholders on a
prior Distribution Date, (iii) if Green Tree or an Affiliate of Green Tree is no
longer the Servicer, the Class A Floating Allocation Percentage of the Servicing
Fee for the prior Monthly Period and (iv) the Class A Floating Allocation
Percentage of the Default Amount, to the extent not previously paid, for any
Business Day in the prior Monthly Period over (y) the Series Available Interest
Collections plus any Excess Interest Collections from other Series allocated
with respect to the amounts described in clauses (x)(i) through (iv).
"Class A Scheduled Payment Date" means the Distribution Date in December
1998.
"Class B Additional Interest" shall have the meaning specified in
subsection 4.6(b).
"Class B Certificate Rate" means the rate at which interest on the
outstanding principal balance of the Class B Certificates will accrue which
shall be at a rate per
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<PAGE>
annum equal to the lesser of (i) the applicable one-month LIBOR plus ___% per
annum or (ii) the Net Receivables Rate.
"Class B Certificateholder" means the Person in whose name a Class B
Certificate is registered in the Certificate Register.
"Class B Certificateholders' Interest" means the portion of the
Certificateholders' Interest evidenced by the Class B Certificates.
"Class B Certificates" means any of the certificates executed by the
Transferor and authenticated by or on behalf of the Trustee, substantially in
the form of Exhibit B hereto.
"Class B Daily Principal Amount" shall have the meaning specified in
subsection 4.9(c)(ii).
"Class B Fixed/Floating Allocation Percentage" means, with respect to any
Business Day, the percentage equivalent of a fraction, the numerator of which is
the Class B Invested Amount at the end of the last day of the Revolving Period
and the denominator of which is the greater of (a) the sum of the Pool Balance
and the amount on deposit in the Excess Funding Account at the end of the
preceding Business Day and (b) the sum of the numerators used to calculate the
allocation percentages with respect to Principal Collections for all Series.
"Class B Floating Allocation Percentage" means, with respect to any
Business Day, the percentage equivalent of a fraction, the numerator of which is
the Class B Invested Amount as of the end of the preceding Business Day and the
denominator of which is the greater of (a) the sum of the Pool Balance and the
amount on deposit in the Excess Funding Account as of the end of the preceding
Business Day and (b) when used with respect to Principal Collections only, the
sum of the numerators with respect to all Classes of all Series then outstanding
used to calculate the applicable allocation percentage.
"Class B Initial Invested Amount" means the aggregate initial principal
amount of the Class B Certificates, which is $_________.
"Class B Interest Shortfall" shall have the meaning specified in subsection
4.6(b).
"Class B Invested Amount" for any date means an amount equal to (a) the
initial principal balance of the Class B Certificates minus (b) the aggregate
amount of principal payments made to Class B Certificateholders prior to such
date, minus (c) the aggregate amount of the Class B Investor Charge-Offs for all
prior Distribution Dates, minus (d) the aggregate amount of Reallocated Class B
Principal Collections for which neither the Class D Invested Amount nor the
Class C Invested
-5-
<PAGE>
Amount has been reduced for all prior Distribution Dates, and plus (e) the
aggregate amount allocated and available on all prior Business Days pursuant to
subsection 4.9(a)(viii) for the purpose of reimbursing amounts deducted pursuant
to the foregoing clauses (c) and (d).
"Class B Investor Charge-Off" shall have the meaning specified in
subsection 4.13(c).
"Class B Investor Percentage" means, for any Distribution Date, (a) with
respect to Interest Receivables and Defaulted Receivables at any time or
Principal Receivables during the Revolving Period, the Class B Floating
Allocation Percentage and (b) with respect to Principal Receivables during the
Controlled Accumulation Period or Early Amortization Period, the ABC
Fixed/Floating Allocation Percentage.
"Class B Monthly Interest" means the interest distributable in respect of
the Class B Certificates as calculated in accordance with subsection 4.6(b).
"Class B Percentage" means a fraction, the numerator of which is the Class
B Invested Amount and the denominator of which is the sum of the Class A
Invested Amount, the Class B Invested Amount and the Class C Invested Amount.
"Class B Principal" means the principal distributable in respect of the
Class B Certificates as calculated in accordance with subsection 4.7(b).
"Class B Principal Commencement Date" means the earlier of (a) the
Distribution Date in the Controlled Accumulation Period on which the Class A
Invested Amount is paid in full or, if there are no Principal Collections
allocable to the Series 1995-1 Investor Certificates remaining after payments
have been made to the Class A Certificates on such Distribution Date, the
Distribution Date following the Distribution Date on which the Class A Invested
Amount is paid in full and (b) the Distribution Date following a sale or
repurchase of the Receivables as set forth in Sections 2.4(e), 9.2, 10.2, 12.1
or 12.2 of the Agreement and Section 3 of this Series Supplement.
"Class B Required Amount" means the amount determined by the Servicer on
each Business Day equal to the excess, if any, of (x) the sum of (i) Class B
Monthly Interest for the prior Monthly Period, (ii) any Class B Monthly Interest
due but not paid on any previous Distribution Date plus any Class B Additional
Interest previously due but not paid to the Class B Certificateholders on a
prior Distribution Date, (iii) if Green Tree or an Affiliate of Green Tree is no
longer the Servicer, the Class B Floating Allocation Percentage of the Servicing
Fee for the prior Monthly Period and (iv) the Class B Floating Allocation
Percentage of the Default Amount, to the extent not previously paid, for any
Business Day in the prior Monthly Period over (y) the Series Available Interest
Collections plus any Excess Interest Collections from other Series allocated
with respect to the amounts described in clauses (x)(i) through (iv).
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"Class B Scheduled Payment Date" means the Distribution Date in January
1999.
"Class C Certificateholder" means the Person in whose name a Class C
Certificate is registered in the Certificate Register.
"Class C Certificateholders' Interest" means the portion of the
Certificateholders' Interest evidenced by the Class C Certificates.
"Class C Certificates" means any of the certificates executed by the
Transferor and authenticated by or on behalf of the Trustee, substantially in
the form of Exhibit C hereto.
"Class C Daily Principal Amount" shall have the meaning specified in
subsection 4.9(c)(iii).
"Class C Fixed/Floating Allocation Percentage" means, with respect to any
Business Day, the percentage equivalent of a fraction, the numerator of which is
the Class C Invested Amount at the end of the last day of the Revolving Period
and the denominator of which is the greater of (a) the sum of the Pool Balance
and the amount on deposit in the Excess Funding Account at the end of the
preceding Business Day and (b) the sum of the numerators used to calculate the
allocation percentages with respect to Principal Collections for all Series.
"Class C Floating Allocation Percentage" means, with respect to any
Business Day, the percentage equivalent of a fraction, the numerator of which is
the Class C Invested Amount as of the end of the preceding Business Day and the
denominator of which is the greater of (a) the sum of the Pool Balance and the
amount on deposit in the Excess Funding Account as of the end of the preceding
Business Day and (b) when used with respect to Principal Collections only, the
sum of the numerators with respect to all Classes of all Series then outstanding
used to calculate the applicable allocation percentage.
"Class C Initial Invested Amount" means the aggregate initial principal
amount of the Class C Certificates, which is $__________.
"Class C Invested Amount" for any date means an amount equal to (a) the
initial principal balance of the Class C Certificates minus (b) the aggregate
amount of principal payments made to Class C Certificateholders prior to such
date, minus (c) the aggregate amount of the Class C Investor Charge-Offs for all
prior Distribution Dates, minus (d) the aggregate amount of Reallocated Class C
Principal Collections for which the Class D Invested Amount has not been reduced
for all prior Distribution Dates, and plus (e) the aggregate amount allocated
and available on all prior Business Days pursuant to subsection 4.9(a)(ix) for
the purpose of reimbursing amounts deducted pursuant to the foregoing clauses
(c) and (d).
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"Class C Investor Charge-Off" shall have the meaning specified in
subsection 4.13(b).
"Class C Investor Percentage" means, for any Distribution Date, (a) with
respect to Interest Receivables and Defaulted Receivables at any time or
Principal Receivables during the Revolving Period, the Class C Floating
Allocation Percentage and (b) with respect to Principal Receivables during the
Controlled Accumulation Period or Early Amortization Period, the ABC
Fixed/Floating Allocation Percentage.
"Class C Percentage" means a fraction, the numerator of which is the Class
C Invested Amount and the denominator of which is the sum of the Class A
Invested Amount, the Class B Invested Amount and the Class C Invested Amount.
"Class C Principal" with respect to any Distribution Date on or after the
Class C Principal Commencement Date will equal the sum of (i) an amount equal to
the ABC Fixed/Floating Allocation Percentage of all Principal Collections (less
the amount of Reallocated Class C Principal Collections) received during the
Monthly Period immediately preceding such Distribution Date (or, in the case of
the first Distribution Date following the date on which an amount equal to the
Class B Invested Amount is deposited in the Principal Account to be applied to
the payment of Class B Principal, the ABC Fixed/Floating Allocation Percentage
of Principal Collections from the date on which such deposit is made), (ii) any
amount on deposit in the Excess Funding Account allocated to the Class C
Certificates with respect to the preceding Monthly Period, (iii) the aggregate
ABC Investor Default Amount paid from Available Series Interest Collections,
Excess Interest Collections or Reallocated Principal Collections with respect to
the preceding Monthly Period and any reimbursements from Available Series
Interest Collections, Excess Interest Collections or Reallocated Principal
Collections of unreimbursed Class C Investor Charge-Offs and Class D Investor
Charge-Offs and (iv) Shared Principal Collections allocated to the Class C
Certificates; provided, that with respect to the Series 1995-1 Termination Date,
Class C Principal will be an amount equal to the Class C Invested Amount.
"Class C Principal Commencement Date" means the earlier of (a) the
Distribution Date during the Controlled Accumulation Period on which the Class B
Invested Amount is paid in full or, if there are no Principal Collections
allocable to the Series 1995-1 Investor Certificates remaining after payments
have been made to the Class B Certificates on such Distribution Date, the
Distribution Date following the Distribution Date on which the Class B Invested
Amount is paid in full and (b) the Distribution Date following a sale or
repurchase of the Receivables as set forth in the Pooling and Servicing
Agreement and the 1995-1 Series Supplement.
"Class C Required Amount" means the amount determined by the Servicer on
each Business Day equal to the excess, if any, of (x) the sum of (i) if Green
Tree or an Affiliate of Green Tree is no longer the Servicer, the Class C
Floating Allocation
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Percentage of the Servicing Fee for the prior Monthly Period and (ii) the Class
C Floating Allocation Percentage of the Default Amount, to the extent not
previously paid, for any Business Day in the prior Monthly Period over (y) the
Series Available Interest Collections plus any Excess Interest Collections from
other Series allocated with respect to the amounts described in clauses (x)(i)
and (ii).
"Class D Certificateholder" means the person in whose name a Class D
Certificate is registered in the Certificate Register.
"Class D Certificateholders' Interest" means the portion of the
Certificateholders' Interest evidenced by the Class D Certificates.
"Class D Certificates" means any of the certificates executed by the
Transferor and authenticated by or on behalf of the Trustee, substantially in
the form of Exhibit D hereto.
"Class D Fixed/Floating Allocation Percentage" means, with respect to any
Business Day, the percentage equivalent of a fraction, the numerator of which is
the Class D Invested Amount at the end of the last day of the Revolving Period
and the denominator of which is the greater of (a) the sum of the Pool Balance
and the amount on deposit in the Excess Funding Account as of the end of the
preceding Business Day and (b) when used with respect to Principal Collections
only, the sum of the numerators with respect to all Classes of all Series then
outstanding used to calculate the applicable allocation percentage.
"Class D Floating Allocation Percentage" means, with respect to any
Business Day, the percentage equivalent of a fraction, the numerator of which is
the Class D Invested Amount as of the end of the preceding Business Day and the
denominator of which is the greater of (a) the total amount of Principal
Receivables and the amount on deposit in the Excess Funding Account at the end
of the preceding Business Day and (b) when used with respect to Principal
Collections only, the sum of the numerators with respect to all Classes of all
Series then outstanding used to calculate the applicable allocation percentage.
"Class D Incremental Invested Amount" means, for any Monthly Period, the
product of (a) a fraction, the numerator of which is the sum of the Invested
Amount (exclusive of the Class D Incremental Invested Amount) on the last day of
the immediately preceding Monthly Period and the denominator of which is the
Pool Balance on such last day, times (b) the Overconcentration Amount for such
Monthly Period.
"Class D Initial Invested Amount" means the aggregate initial principal
amount of the Class D Certificates, which is $__________.
"Class D Invested Amount" means an amount equal to (a) the initial
principal balance of the Class D Certificates, plus (b) the Class D Incremental
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Invested Amount for the related Monthly Period, plus (c) any Additional Class D
Invested Amount, minus (d) the aggregate amount of principal payments made to
Class D Certificateholders prior to such date, minus (e) the aggregate amount of
Class D Investor Charge-Offs for all prior Distribution Dates, minus (f) the
aggregate amount of Reallocated Class D Principal Collections for all prior
Distribution Dates, plus (g) the aggregate amount allocated and available on all
prior Business Days pursuant to subsection 4.9(a)(x) for the purpose of
reimbursing amounts deducted pursuant to the foregoing clauses (e) and plus (f).
"Class D Investor Charge-Off" shall have the meaning specified in
subsection 4.13(a).
"Class D Investor Default Amount" means the portion of all Defaulted
Receivables in an amount equal to the product of (a) the Class D Floating
Allocation Percentage and (b) the aggregate principal amount of Defaulted
Receivables identified since the prior reporting date.
"Class D Investor Percentage" means, for any Business Day, (a) with respect
to Interest Receivables and Defaulted Receivables at any time or Principal
Receivables during the Revolving Period, the Class D Floating Allocation
Percentage and (b) with respect to Principal Receivables during the Controlled
Accumulation Period or Early Amortization Period, the Class D Fixed/Floating
Allocation Percentage.
"Class D Principal" means the principal distributable in respect of the
Class D Certificates as calculated in accordance with subsection 4.7(d).
"Class D Principal Payment Commencement Date" means the earlier of (a) the
Distribution Date on which the Class C Invested Amount is paid in full or, if
there are no Principal Collections allocable to the Series 1995-1 Investor
Certificates remaining after payments have been made to the Class C Certificates
on such Distribution Date, the Distribution Date following the Distribution Date
on which the Class C Invested Amount is paid in full and (b) the Distribution
Date following a sale or repurchase of the Receivables as set forth in Pooling
and Servicing Agreement and the 1995-1 Series Supplement.
"Class D Subaccount" means a subaccount of the Excess Funding Account, into
which Principal Collections allocable to Class D Certificates will be deposited
during any Early Amortization Period.
"Closing Date" means December 20, 1995.
"Controlled Accumulation Amount" means, for any Monthly Period during the
Controlled Accumulation Period, the amount determined pursuant to Section __.
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"Controlled Accumulation Period" means, with respect to the Series 1995-1
Certificates, unless a Pay Out Event shall have occurred with respect to such
Series prior thereto, the period commencing on the Controlled Accumulation
Period Commencement Date and ending upon the earliest to occur of (i) the
commencement of the Early Amortization Period, (ii) the Initial Principal
Payment Date, (iii) payment in full to the Investor Certificateholders of the
Invested Amount, and (iv) the Series 1995-1 Termination Date.
"Controlled Accumulation Period Commencement Date" means the date
determined pursuant to Section __.
"Controlled Deposit Amount" means, for any Monthly Period, the sum of the
(i) Controlled Accumulation Amount for such Monthly Period plus (ii) the
Accumulation Shortfall for the related Monthly Period.
"Cut-off Date" means November 10, 1995.
"Distribution Date" means the 13th day of each month, or if such day is not
a Business Day, the next succeeding Business Day, beginning January 16, 1996.
"Early Amortization Period" means the period beginning on the date that a
Pay Out Event occurs and ending on the earlier of (i) the date on which the
Class A Invested Amount, the Class B Invested Amount, the Class C Invested
Amount and the Class D Invested Amount have been paid in full and (ii) the
Series 1995-1 Termination Date.
"Enhancement" means, with respect to the Class A Certificates, the
subordination of the Class B Invested Amount, the Class C Invested Amount, and
the Class D Invested Amount, with respect to the Class B Certificates, the
subordination of the Class C Invested Amount and the Class D Invested Amount,
and with respect to the Class C Certificates, the subordination of the Class D
Invested Amount.
"Excess Interest Collections" means, with respect to any Business Day, as
the context requires, either (x) the amount described in subsection 4.9(a)(xiii)
allocated to the Series 1995-1 Certificates but available to cover shortfalls in
amounts paid from Interest Collections for other Series, if any or (y) the
aggregate amount of Interest Collections allocable to other Series in excess of
the amounts necessary to make required payments with respect to such Series, if
any, and available to cover shortfalls with respect to the Series 1995-1
Certificates.
"Fixed/Floating Allocation Percentage" means for a Series the percentage
equivalent of a fraction, the numerator of which is the Class A Invested Amount,
the Class B Invested Amount, the Class C Invested Amount or the Class D Invested
Amount, respectively, at the end of the last day of the Revolving Period and the
denominator of which is the greater of (a) the Pool Balance (plus amounts, if
any, on
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deposit in the Excess Funding Account) at the end of the preceding Business Day
and (b) the sum of the numerators used to calculate allocation percentages with
respect to Principal Collections for all Series.
"Floating Allocation Percentage" means for any Business Day, the percentage
equivalent of a fraction, the numerator of which is the Class A Invested Amount,
the Class B Invested Amount, the Class C Invested Amount, or the Class D
Invested Amount, respectively, at the end of the preceding Business Day and the
denominator of which is the greater of (a) the Pool Balance (plus amounts, if
any, on deposit in the Excess Funding Account) as of the end of the preceding
Business Day and (b) with respect to Principal Collections only, the sum of the
numerator for all classes of all Series then outstanding used to calculate the
applicable allocation percentage.
"Initial Invested Amount" means the aggregate initial principal amount of
the Investor Certificates of Series 1995-1, which is $__________.
"Initial Principal Payment Date" means initially the December 1997
Distribution Date, but will successively and automatically be extended to the
next Distribution Date after the then-current Initial Principal Payment Date
unless the Servicer elects not to so extend; provided, however, that the Initial
Principal Payment Date may not be later than the Class A Scheduled Payment Date.
"Interest Accrual Period" means, with respect to a Distribution Date, the
period during which interest will accrue from and including the preceding
Distribution Date (or, in the case of the first Distribution Date, from and
including the Closing Date) to but excluding such Distribution Date.
"Invested Amount" means, when used with respect to any Business Day, an
amount equal to the sum of (a) the Class A Invested Amount as of such Business
Day, (b) the Class B Invested Amount as of such Business Day, (c) the Class C
Invested Amount as of such Business Day and (d) the Class D Invested Amount as
of such Business Day.
"Investor Certificateholder" means the Holder of record of an Investor
Certificate of Series 1995-1.
"Investor Certificates" means the Class A Certificates, the Class B
Certificates, the Class C Certificates and the Class D Certificates.
"Investor Charge-Off" means the sum of the Class A Investor Charge-Off, the
Class B Investor Charge-Off, the Class C Investor Charge-Off and the Class D
Investor Charge-Off.
"Investor Default Amount" means a portion of all Defaulted Receivables
which will be allocated to the Certificateholders in an amount equal to the
product
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of the Floating Allocation Percentage applicable during the related Monthly
Period and the Principal Amount of Defaulted Receivables for such Monthly
Period.
"Investor Percentage" means for any Business Day, (a) with respect to
Interest Receivables and Defaulted Receivables at any time or Principal
Receivables during the Revolving Period, the Floating Allocation Percentage and
(b) with respect to Principal Receivables during the Controlled Accumulation
Period, the Fixed/Floating Allocation Percentage.
"Issuance Date" means the Closing Date.
"LIBOR" means, for any Interest Period, the London interbank offered
quotations for one-month Dollar deposits determined by the Trustee for each
Interest Accrual Period in accordance with the provisions of Section 4.15.
"LIBOR Determination Date" means, for any Interest Accrual period following
the initial Interest Accrual Period, the second Business Day prior to the
commencement of the second and each subsequent Interest Accrual Period. With
respect to the initial Interest Accrual Period, the Trustee will determine LIBOR
on ________, 1995 for the period from December ___, 1995 through January 15,
1996.
"Minimum Transferor Interest" means, as of any date of determination, the
product of (i) the sum of the Invested Amount and the aggregate invested amounts
for all other Series and (ii) the Minimum Transferor Percentage.
"Minimum Transferor Percentage" means 4% with respect to the Series 1995-1
Certificates.
"Monthly Payment Rate" means, for any Monthly Period, the percentage
equivalent of a fraction, the numerator of which is the aggregate of the
Receivables balances (without deducting therefrom the discount portion, if any)
collected during such Monthly Period and the denominator of which is the average
daily aggregate Receivables balance (without deducting therefrom the discount
portion, if any) for such Monthly Period.
"Monthly Period" shall have the meaning specified in the Agreement, except
that the first Monthly Period with respect to the Series 1995-1 Certificates
shall begin on and include the Closing Date and shall end on and include
December 31, 1995.
"Monthly Servicing Fee" means the portion of the servicing fee allocable to
the Certificateholders' Interest during each Monthly Period, which will be equal
to one-twelfth of the product of (x) the Servicing Fee Rate per annum and (y)
the Invested Amount on the preceding Record Date or, in the case of the first
Distribution Date, the initial principal amount of the Certificates.
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"Negative Carry Amount" means, for any Business Day, to the extent that any
amounts are on deposit in the Excess Funding Account on such Business Day, an
amount equal to the excess of (x) the product of (a) the Base Rate, (b) the
amount on deposit in the Excess Funding Account and (c) the number of days
elapsed since the previous Business Day divided by the actual number of days in
such year over (y) the aggregate amount of all earnings since the previous
Business Day available from the Cash Equivalents in which funds on deposit in
the Excess Funding Account are invested.
"Net Receivables Rate" means, for any Distribution Date (i) the weighted
average of the interest rates borne by the Receivables during the second
preceding Monthly Period (because interest payments on the Receivables at such
rates will be due and payable in the Monthly Period preceding such Distribution
Date), plus (ii) the product of (x) the Monthly Payment Rate for the Monthly
Period preceding such Distribution Date, the (y) Discount Factor, if any, for
such Distribution Date, and (z) twelve, less 2% per annum.
"Paying Agent" means, for the Series 1995-1 Certificates, Norwest Bank
Minnesota, National Association and Banque de Luxembourg.
"Period Length Determination Date" means the Determination Date immediately
preceding the _________, 199__ Distribution Date and on each Determination Date
thereafter until the Controlled Accumulation Period commences.
"Portfolio Yield" means, with respect to any Monthly Period, the annualized
percentage equivalent of a fraction, the numerator of which is the sum of the
aggregate amount of Available Series Interest Collections for such Monthly
Period, calculated on a cash basis, minus the aggregate Investor Default Amount
for such Monthly Period, and the denominator of which is the average daily
Invested Amount during the preceding Monthly Period.
"Principal Funding Investment Shortfall" means, for any day, the difference
between the amount of interest actually earned on investments int he Principal
Account on any day and the amount of interest that would have been earned on
such investments at the Base Rate for such day.
"Principal Investment Proceeds" means investment earnings (net of
investment losses and expenses) on funds on deposit in the Principal Account
during the Controlled Accumulation Period.
"Principal Shortfalls" means the amounts representing scheduled or
permitted principal distributions to certificateholders and deposits to
principal
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funding accounts, if any, for any Series that have not been covered out of the
Principal Collections allocable to such Series and certain other amounts.
"Purchase Agreement" means the Receivables Purchase Agreement dated as of
December 1, 1995, between the Transferor and Green Tree Financial Corporation.
"Rating Agency" means each of Standard & Poor's Rating Services, a Division
of The McGraw-Hill Companies, Inc. ("Standard & Poor's") and Moody's Investors
Service, Inc. ("Moody's").
"Reallocated Class B Principal Collections" shall have the meaning
specified in subsection 4.14(c).
"Reallocated Class C Principal Collections" shall have the meaning
specified in subsection 4.14(b).
"Reallocated Class D Principal Collections" shall have the meaning
specified in subsection 4.14(a).
"Reallocated Principal Collections" means the sum of Reallocated Class B
Principal Collections, Reallocated Class C Principal Collections and Reallocated
Class D Principal Collections.
"Required Amount" shall have the meaning specified in Section 4.10.
"Revolving Period" with respect to Series 1995-1 means the period from and
including the Closing Date to, but not including, the earlier of (a) the Initial
Principal Payment Date, (b) the commencement of the Controlled Accumulation
Period and (c) the commencement of the Early Amortization Period.
"Series 1995-1" means the Series of the Green Tree Floorplan Receivables
Master Trust represented by the Series 1995-1 Certificates.
"Series 1995-1 Certificateholder" means the holder of record of any Series
1995-1 Investor Certificate.
"Series 1995-1 Certificateholders' Interest" shall have the meaning
specified in Section 4.4.
"Series 1995-1 Pay Out Event" shall have the meaning specified in Section 8
of this Series Supplement.
"Series 1995-1 Termination Date" means the earlier of (i) the date in which
the final distribution of principal and interest on the Certificates is made and
(ii) the ___ Distribution Date.
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"Series Allocation Percentage" means, on any date of determination, the
percentage equivalent of a fraction the numerator of which is the Invested
Amount of such Series and the denominator of which is the sum of the Invested
Amounts of all Series then outstanding.
"Series Available Interest Collections" means, for any Business Day, the
Floating Allocation Percentage of Interest Collections for such Business Day.
"Series Issuance Date" means the date of issuance of any other Series.
"Series Servicing Fee Percentage" means 2.00% per annum.
"Servicing Compensation" means the Monthly Servicing Fee and certain other
amounts (as specified in the Pooling and Servicing Agreement and the Series
Supplement) which the Servicer will receive from the Trust.
"Servicing Fee" means for any Monthly Period, an amount equal to the
product of (i) one-twelfth, (ii) the applicable Series Servicing Fee Percentage
and (iii) the Invested Amount as of the preceding Record Date, or, in the case
of the first Distribution Date, the Initial Invested Amount.
"Servicing Fee Rate" means 2.00% per annum.
"Shared Principal Collections" means the amount of Principal Collections
for any Business Day allocated by the Servicer to the Class A, Class B and Class
C Certificateholders' Interest (other than amounts allocated to the Transferor
Retained Class) remaining after covering required deposits or payments to the
Certificateholders and any similar amount remaining for any other Series.
"Termination Payment Date" means the earlier of the first Distribution Date
following the liquidation or sale of the Receivables as a result of an
Insolvency Event and the occurrence of the Series 1995-1 Termination Date.
"Transferor Interest Collections" means, on any Business Day, the Series
Allocation Percentage of the Interest Collections allocable to the Transferor
Interest for such Business Day.
"Transferor Percentage" (a) when used with respect to Principal Collections
during the Revolving Period and Interest Collections and the amount of Defaulted
Receivables at all times, 100% minus the sum of the Floating Allocation
Percentage and the floating allocation percentages for all other Series and (b)
when used with respect to Principal Collections during the Controlled
Accumulation Period or Early Amortization Period, 100% minus the sum of the
Fixed/Floating Allocation Percentage and the allocation percentages used with
respect to Principal Collections for all other Series.
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"Transferor Retained Certificates" means investor certificates of any
Series, including the Class D Certificates, which the Transferor retains, but
only to the extent that and for so long as the Transferor is the Holder of such
Certificates.
"Trust" means the Green Tree Floorplan Receivables Master Trust.
"Trust Accounts" means the Interest Funding Account, the Principal Account,
the Distribution Account, the Collection Account, the Excess Funding Account and
the Class D Subaccount of the Excess Funding Account.
SECTION 3. Optional Repurchase. The Series 1995-1 Certificates shall be
subject to termination by the Transferor at its option, in accordance with the
terms specified in subsection 12.2(a) of the Agreement, on any Distribution Date
on or after the Distribution Date on which the sum of the Class A Invested
Amount, the Class B Invested Amount and the Class C Invested Amount is reduced
to an amount less than or equal to 10% of the sum of the Class A Initial
Invested Amount, the Class B Initial Invested Amount and the Class C Initial
Invested Amount. The deposit required in connection with any such termination
and final distribution shall be equal to the sum of the Class A Invested Amount,
the Class B Invested Amount and the Class C Invested Amount plus accrued and
unpaid interest on the Series 1995-1 Certificates through the day prior to the
Distribution Date on which the final distribution occurs.
SECTION 4. Delivery and Payment for the Series 1995-1 Certificates. The
Transferor shall execute and deliver the Series 1995-1 Certificates to the
Trustee for authentication in accordance with Section 6.1 of the Agreement. The
Trustee shall deliver the Series 1995-1 Certificates to or upon the order of the
Transferor when authenticated in accordance with Section 6.2 of the Agreement.
SECTION 5. Form of Delivery of Series 1995-1 Certificates. The Class A
Certificates, the Class B Certificates, the Class C Certificates and the Class D
Certificates, shall be delivered as Registered Certificates as provided in
Section 6.1 of the Agreement.
SECTION 6. Article IV of Agreement. Sections 4.1, 4.2 and 4.3 of the
Agreement shall read in their entirety as provided in the Agreement. Article IV
of the Agreement (except for Sections 4.1, 4.2 and 4.3 thereof) shall read in
its entirety as follows and shall be applicable only to the Series 1995-1
Certificates:
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND
--------------------------------
ALLOCATION AND APPLICATION OF COLLECTIONS
-----------------------------------------
Section 4.4 Rights of Certificateholders. The Series 1995-1 Certificates
shall represent undivided interests in the Trust, consisting of the right to
receive, to the
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extent necessary to make the required payments with respect to such Series
1995-1 Certificates at the times and in the amounts specified in this Agreement,
(a) the Floating Allocation Percentage and the Fixed/Floating Allocation
Percentage (as applicable from time to time) of Collections available in the
Collection Account, (b) funds allocable to the Series 1995-1 Certificates on
deposit in the Excess Funding Account and the Class D Subaccount of the Excess
Funding Account and (c) funds on deposit in the Interest Funding Account, the
Principal Account and the Distribution Account (for such Series, the "Series
1995-1 Certificateholders' Interest"). The Class B Invested Amount, the Class C
Invested Amount and the Class D Invested Amount shall be subordinated to the
Class A Certificates, the Class C Invested Amount and the Class D Invested
Amount shall be subordinated to the Class B Certificates, and the Class D
Invested Amount shall be subordinated to the Class C Certificates, in each case
to the extent provided in this Article IV. The Class B Certificates will not
have the right to receive payments of principal until the Class A Invested
Amount has been paid in full. The Class C Certificates will not have the right
to receive payments of principal until the Class A Invested Amount and the Class
B Invested Amount have been paid in full. The Class D Certificates will not have
the right to receive payments of principal until the Class A Invested Amount,
the Class B Invested Amount and the Class C Invested Amount have been paid in
full.
Section 4.5 Collections and Allocation; Payments on Exchangeable
Transferor Certificate.
(a) Collections. The Servicer will apply or will instruct the Trustee to
apply all funds on deposit in the Collection Account and the Excess Funding
Account allocable to the Series 1995-1 Certificates, and all funds on deposit in
the Interest Funding Account, the Principal Account and the Distribution Account
maintained for this Series, as described in this Article IV.
(b) Payments to the Holder of the Exchangeable Transferor Certificate. On
each Business Day, the Servicer shall determine whether a Pay Out Event is
deemed to have occurred with respect to the Series 1995-1 Certificates, and the
Servicer shall allocate and pay Collections in accordance with the Daily Report
with respect to such Business Day to the Holder of the Exchangeable Transferor
Certificate as follows:
(i) For each Business Day with respect to the Revolving Period, in
addition to amounts allocated and paid to the Holder of the Exchangeable
Transferor Certificate or pursuant to subsection 4.3(b) of the Agreement,
an amount equal (x) to the product of the Class D Floating Allocation
Percentage and the amount of Principal Collections on such Business Day,
minus (y) the Reallocated Class D Principal Collections;
(ii) For each Business Day with respect to the Controlled Accumulation
Period or Early Amortization Period, prior to the Business Day on which an
amount equal to the Class C Invested Amount has been deposited in the
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Principal Account to be applied to the payment of Class C Principal, in
addition to amounts allocated and paid to the Holder of the Exchangeable
Transferor Certificate pursuant to subsection 4.3(b) of the Agreement, an
amount equal to (x) the product of the Class D Fixed/Floating Allocation
Percentage and the amount of Principal Collections on such Business Day
minus (y) the Reallocated Class D Principal Collections; and
(iii) For each Business Day on and after the day on which
Principal Collections are being deposited in the Principal Account pursuant
to Section 4.9(c)(iv), the amount of payments of Principal Collections made
to the Holder of the Exchangeable Transferor Certificate shall be
determined only as provided in subsection 4.3(b) of the Agreement.
Notwithstanding the foregoing, amounts payable to the Transferor pursuant
to subsection 4.5(b)(i) or (ii) shall instead be deposited in the Excess Funding
Account to the extent necessary to prevent the Transferor Interest from being
less than the Minimum Transferor Interest.
The allocations to be made pursuant to this subsection 4.5(b) also apply to
deposits into the Collection Account that are treated as Collections, including
payment of the reassignment price pursuant to Section 2.4(d) of the Agreement
and proceeds from the sale, disposition or liquidation of the Receivables
pursuant to Section 9.2, 10.2, 12.1 or 12.2 of the Agreement and Section 3 of
this Series Supplement. Such deposits to be treated as Collections will be
allocated as Interest Receivables or Principal Receivables as provided in the
Agreement.
Section 4.6 Determination of Monthly Interest for the Series 1995-1
Certificates.
(a) The amount of monthly interest (the "Class A Monthly Interest")
allocable to the Class A Certificates with respect to any Interest Accrual
Period shall be an amount equal to the product of (i) the Class A Certificate
Rate and (ii) a fraction, the numerator of which is the actual number of days in
the related Interest Accrual Period and the denominator of which is 360 and
(iii) the principal balance of the Class A Certificates on the related Record
Date or, with respect to the first Distribution Date, the initial outstanding
principal balance of the Class A Certificates.
On the Determination Date preceding each Distribution Date, the Servicer
shall determine an amount (the "Class A Interest Shortfall") equal to the
excess, if any, of (x) the Class A Monthly Interest for the Interest Accrual
Period applicable to the Distribution Date over (y) the amount available to be
paid to the Class A Certificateholders in respect of interest on such
Distribution Date. If there is a Class A Interest Shortfall with respect to any
Distribution Date, an additional amount ("Class A Additional Interest") shall be
payable as provided herein with respect to the Class A Certificates on each
Distribution Date following such
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Distribution Date, to and including the Distribution Date on which such Class A
Interest Shortfall is paid to Class A Certificateholders, equal to the product
of (i) the Class A Certificate Rate and (ii) such Class A Interest Shortfall
remaining unpaid calculated on the basis of a fraction, the numerator of which
is the actual number of days in the related Interest Accrual Period and the
denominator of which is 360. Notwithstanding anything to the contrary herein,
Class A Additional Interest shall be payable or distributed to Class A
Certificateholders only to the extent permitted by applicable law.
(b) The amount of monthly interest (the "Class B Monthly Interest")
allocable to the Class B Certificates with respect to any Interest Accrual
Period shall be an amount equal to the product of (i) the Class B Certificate
Rate and (ii) a fraction, the numerator of which is the actual number of days in
the related Interest Accrual Period and the denominator of which is 360 and
(iii) the Class B Invested Amount on the related Record Date or, with respect
to the first Distribution Date, the initial outstanding principal balance of the
Class B Certificates.
On the Determination Date preceding each Distribution Date, the Servicer
shall determine an amount (the "Class B Interest Shortfall") equal to the
excess, if any, of (x) the aggregate Class B Monthly Interest for the Interest
Accrual Period applicable to the Distribution Date over (y) the amount available
to be paid to the Class B Certificateholders in respect of interest on such
Distribution Date. If there is a Class B Interest Shortfall with respect to any
Distribution Date, an additional amount ("Class B Additional Interest") shall be
payable as provided herein with respect to the Class B Certificates on each
Distribution Date following such Distribution Date, to and including the
Distribution Date on which such Class B Interest Shortfall is paid to Class B
Certificateholders, equal to the product of (i) the Class B Certificate Rate and
(ii) such Class B Interest Shortfall remaining unpaid calculated on the basis of
a fraction, the numerator of which is the actual number of days in the related
Interest Accrual Period and the denominator of which is 360. Notwithstanding
anything to the contrary herein, Class B Additional Interest shall be payable or
distributed to Class B Certificateholders only to the extent permitted by
applicable law.
Section 4.7 Determination of Principal Amounts.
(a) The amount of principal (the "Class A Principal") distributable from
the Distribution Account with respect to the Class A Certificates on each
Distribution Date during the Controlled Accumulation Period or Early
Amortization Period shall be equal to an amount calculated as follows: the sum
of (i) an amount equal to the product of the ABC Fixed/Floating Allocation
Percentage and the aggregate amount of Principal Collections (less the amount of
Reallocated Class B Principal Collections and Reallocated Class C Principal
Collections) with respect to the preceding Monthly Period, (ii) any amount on
deposit in the Excess Funding Account allocated to the Class A Certificates
pursuant to subsection 4.9(d) of the Agreement, with respect to the preceding
Monthly Period, (iii) the amount, if any,
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allocated to the Class A Certificates pursuant to subsections 4.9(a)(iv), (vi),
(viii), (ix) and (x) of the Agreement and, with respect to such subsections,
pursuant to subsections 4.10(a) and (b) and 4.14(a), (b) and (c) of the
Agreement, and (iv) the amount of Shared Principal Collections allocated to the
Class A Certificates with respect to the preceding Monthly Period pursuant to
Section 4.3(e) of the Agreement; provided, however, that with respect to any
Distribution Date during the Controlled Accumulation Period, Class A Principal
may not exceed the lesser of (i) the Controlled Deposit Amount for such
Distribution Date and (ii) the Class A Invested Amount; provided, further, that
with respect to the Series 1995-1 Termination Date, the Class A Principal shall
be an amount equal to the Class A Invested Amount.
(b) The amount of principal (the "Class B Principal") distributable from
the Distribution Account with respect to the Class B Certificates on each
Distribution Date on or after the Class A Scheduled Payment Date shall equal an
amount calculated as follows: the sum of (i) an amount equal to the product of
the ABC Fixed/ Floating Allocation Percentage and the aggregate amount of
Principal Collections (less the amount of Reallocated Class B Principal
Collections and Reallocated Class C Principal Collections) with respect to the
preceding Monthly Period (or, in the case of the first Distribution Date
following the date on which an amount equal to the Class A Invested Amount is
deposited in the Principal Account to be applied to the payment of Class A
Principal, the ABC Fixed/Floating Allocation Percentage of Principal Collections
from the date on which such deposit is made), (ii) any amount on deposit in the
Excess Funding Account allocated to the Class B Certificates pursuant to
subsection 4.9(d) of the Agreement with respect to the preceding Monthly Period,
(iii) the amount, if any, allocated to the Class B Certificates pursuant to
subsections 4.9(a)(iv), (viii), (ix) and (x) of the Agreement and, with respect
to such subsections, pursuant to subsections 4.10(a) and (b) and 4.14(a) and (b)
of the Agreement with respect to such Distribution Date and (iv) the amount of
Shared Principal Collections allocated to the Class B Certificates with respect
to the preceding Monthly Period pursuant to Section 4.3(e) of the Agreement on
or after the Class A Scheduled Payment Date; provided, however, that, with
respect to any Distribution Date during the Controlled Accumulation Period,
Class B Principal may not exceed the lesser of (i) the Controlled Deposit Amount
for such Distribution Date and (ii) the Class B Invested Amount; provided,
further, that with respect to the Series 1995-1 Termination Date, the Class B
Principal shall be an amount equal to the Class B Invested Amount.
(c) The amount of principal (the "Class C Principal") distributable from
the Distribution Account with respect to the Class C Certificates on each
Distribution Date beginning on or after the Class C Principal Commencement Date
shall equal an amount calculated as follows: the sum of (i) an amount equal to
the product of the ABC Fixed/ Floating Allocation Percentage and the aggregate
amount of Principal Collections (less the amount of Reallocated Class C
Principal Collections) with respect to the preceding Monthly Period (or, in the
case of the first Distribution Date following the date on which an amount equal
to the Class B Invested Amount is
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deposited in the Principal Account to be applied to the payment of Class B
Principal, the ABC Fixed/Floating Allocation Percentage of Principal Collections
from the date on which such deposit is made), (ii) any amounts on deposit in the
Excess Funding Account allocated to the Class C Certificates pursuant to
subsection 4.9(d) of the Agreement, with respect to the preceding Monthly
Period, (iii) the amount, if any, allocated to the Class C Certificates pursuant
to subsections 4.9(a)(iv), (ix) and (x) of the Agreement with respect to such
Distribution Date and (iv) the amount of Shared Principal Collections allocated
to the Class C Certificates with respect to the preceding Monthly Period
pursuant to Section 4.3(e) of the Agreement on and after the Class C Principal
Commencement Date; provided, that with respect to any Distribution Date, Class C
Principal may not exceed the Class C Invested Amount; provided, further, that
with respect to the Series 1995-1 Termination Date, the Class C Principal shall
be an amount equal to the Class C Invested Amount.
(d) The amount of principal (the "Class D Principal") distributable from
the Distribution Account with respect to the Class D Certificates on the
Transfer Date preceding the Class D Principal Commencement Date, and on each
Transfer Date thereafter until the Trust is terminated or until the Class D
Invested Amount is paid in full, shall equal an amount calculated as follows:
the sum of (i) an amount equal to the product of the Class D Fixed/Floating
Allocation Percentage of Principal Collections (less the amount of Reallocated
Class D Principal Collections) with respect to the preceding Monthly Period (or,
in the case of the first Distribution Date following the date on which an amount
equal to the Class C Invested Amount is deposited in the Principal Account to be
applied to the payment of Class C Principal, the Class D Fixed/Floating
Allocation Percentage of Principal Collections from the date on which such
deposit is made), (ii) any amount on deposit in the Excess Funding Account
allocated to the Class D Certificates pursuant to subsection 4.9(d) of the
Agreement with respect to the preceding Monthly Period, and (iii) the amount, if
any, allocated to the Class D Certificates pursuant to subsections 4.9(a)(v) and
(x) of the Agreement and, with respect to such subsections, pursuant to
subsection 4.10(a) and (b) of the Agreement with respect to such Distribution
Date; provided, however, that with respect to the Series 1995-1 Termination
Date, the Class D Principal shall be an amount equal to the Class D Invested
Amount.
Section 4.8 Shared Principal Collections. Shared Principal Collections
allocated to the Series 1995-1 Certificates and to be applied pursuant to
subsections 4.9(c)(i)(y), 4.9(c)(ii)(y), 4.9(c)(iii)(y) and 4.9(c)(iv)(z) for
any Business Day with respect to the Controlled Accumulation Period shall mean
an amount equal to the product of (x) Shared Principal Collections for all
Series for such Business Day and (y) a fraction, the numerator of which is the
Principal Shortfall for the Series 1995-1 Certificates for such Business Day and
the denominator of which is the aggregate amount of Principal Shortfalls for all
Series for such Business Day. For any Business Day with respect to the
Revolving Period, Shared Principal Collections allocated to the Series 1995-1
Certificates shall be zero.
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Section 4.9 Application of Funds on Deposit in the Collection Account for
the Certificates.
(a) On each Business Day, the Servicer shall deliver to the Trustee a Daily
Report in which it shall instruct the Trustee to withdraw, and the Trustee,
acting in accordance with such instructions, shall withdraw the extent of the
amount of the Floating Allocation Percentage of Interest Collections available
in the Collection Account (the "Series Available Interest Collections") required
to be withdrawn from the Collection Account pursuant to subsections 4.9(a)(i)
through 4.9(a) (xii).
(i) Class A Interest. On each Business Day during a Monthly Period,
the Trustee, acting in accordance with instructions from the Servicer,
shall withdraw from the Collection Account and deposit into the Interest
Funding Account for distribution on the next Distribution Date to the Class
A Certificateholders, to the extent of the Series Available Interest
Collections for such Business Day, an amount equal to the lesser of (x) the
Series Available Interest Collections and (y) the excess of (1) the sum of
Class A Monthly Interest and Carryover Class A Interest over (2) any
amounts with respect thereto previously deposited into the Interest Funding
Account on any prior Business Day during such Monthly Period.
Notwithstanding anything to the contrary herein, the portion of Carryover
Class A Interest that constitutes Class A Additional Interest shall be
payable or distributable to Class A Certificateholders only to the extent
permitted by applicable law.
(ii) Class B Interest. On each Business Day during a Monthly Period,
the Trustee, acting in accordance with instructions from the Servicer,
shall withdraw from the Collection Account and deposit into the Interest
Funding Account for distribution on the next Distribution Date to the Class
B Certificateholders, to the extent of any Series Available Interest
Collections remaining after giving effect to the withdrawal pursuant to
subsection 4.9(a)(i), an amount equal to the lesser of (x) any such
remaining Series Available Interest Collections and (y) the excess of (1)
the sum of Class B Monthly Interest and Carryover Class B Interest over (2)
any amounts with respect thereto previously deposited into the Interest
Funding Account on any prior Business Day during such Monthly Period.
Notwithstanding anything to the contrary herein, the portion of Carryover
Class B Interest that constitutes Class B Additional Interest shall be
payable or distributable to Class B Certificateholder only to the extent
permitted by applicable law.
(iii) Investor Servicing Fee. On each Business Day on which Green
Tree or an Affiliate of Green Tree is not the Servicer, the Trustee, acting
in accordance with instructions from the Servicer, shall withdraw from the
Collection Account and distribute to the Servicer, to the extent of any
Series Available Interest Collections remaining after giving effect to the
withdrawals pursuant to subsections 4.9(a)(i) and (ii), an amount equal to
the lesser of (x) any such remaining Series Available Interest Collections
and (y) the excess of
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(i) the Servicing Fee for such Monthly Period plus
any unpaid Servicing Fees from prior Monthly Periods over (ii) any amounts
with respect thereto previously distributed to the Servicer during such
Monthly Period.
(iv) ABC Investor Default Amount. On each Business Day, the Trustee,
acting in accordance with instructions from the Servicer, shall withdraw
from the Collection Account, to the extent of any Available Series 1995-1
Interest Collections remaining after giving effect to the withdrawals
pursuant to subsections 4.9(a)(i) through (iii), an amount equal to the
lesser of (x) any such remaining Series Available Interest Collections and
(y) the sum of (1) the aggregate ABC Investor Default Amount for such
Business Day plus (2) the unpaid ABC Investor Default Amount for each
previous Business Day during such Monthly Period, such amount to be (A)
treated as Shared Principal Collections during the Revolving Period, and
(B) to the extent allocated to Class A Principal, Class B Principal or
Class C Principal pursuant to Section 4.7 during the Controlled
Accumulation Period or Early Amortization Period, deposited in the
Principal Account for distribution to the applicable Class or Classes of
Certificateholders on the next Distribution Date.
(v) Class D Investor Default Amount. On each Business Day, the
Trustee, acting in accordance with instructions from the Servicer, shall
withdraw from the Collection Account, to the extent of any Available Series
1995-1 Interest Collections remaining after giving effect to the with-
drawals pursuant to subsections 4.9(a)(i) through (iv), an amount equal to
the lesser of (x) any such remaining Series Available Interest Collections
and (y) the sum of (1) the aggregate Class D Investor Default Amount for
such Business Day plus (2) the unpaid Class D Investor Default Amount for
each previous Business Day during such Monthly Period, such amount to be
(A) paid to the Transferor during the Revolving Period and the Controlled
Accumulation Period prior to the payment in full of the Class C Invested
Amounts, (B) to the extent allocated to Class D Principal pursuant to
Section 4.7 during the Controlled Accumulation Period or Early Amortiza-
tion Period following the payment in full of the Class C Invested Amount,
deposited in the Principal Account for distribution to the Class D
Certificateholders on the next Distribution Date and (C) to be available
to be applied as Reallocated Class D Principal Collections during the Early
Amortization Period prior to the payment of the Class C Invested Amount in
full, deposited in the Class D Subaccount of the Excess Funding Account, to
be held until the Class C Invested Amount has been paid in full.
(vi) Reimbursement of Class A Investor Charge-Off. On each Business
Day, the Trustee, acting in accordance with instructions from the Servicer,
shall withdraw from the Collection Account, to the extent of any Series
Available Interest Collections remaining after giving effect to the
withdrawals pursuant to subsections 4.9(a)(i) through (v), an amount equal
to
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the lesser of (x) any such remaining Series Available Interest
Collections and (y) the unreimbursed Class A Investor Charge-Off, if any,
will be applied to reimburse Class A Investor Charge-Off, such amount
during the Revolving Period to be treated as Shared Principal Collections,
and during the Controlled Accumulation Period or Early Amortization Period
on and prior to the day on which an amount equal to the Class A Invested
Amount is deposited in the Principal Account, to be deposited in the
Principal Account for distribution to the Class A Certificateholders on the
next Distribution Date.
(vii) Unpaid Class B Interest. On each Business Day, the Trustee,
acting in accordance with the instructions from the Servicer, shall
withdraw from the Collection Account and deposit in the Interest Funding
Account for distribution to the Class B Certificateholders on the next
Distribution Date, to the extent of any Series Available Interest
Collections remaining after giving effect to the withdrawals pursuant to
subsections 4.9(a)(i) through (vi), an amount equal to the lesser of (x)
any such remaining Series Available Interest Collections and (y) the sum
of (1) the amount of interest which has accrued with respect to the
outstanding aggregate principal amount of the Class B Certificates at the
Class B Certificate Rate but which has not been deposited into the Interest
Funding Account with respect to the Class B Certificateholders and (2) any
additional interest (to the extent permitted by applicable law) at the
Class B Certificate Rate accrued on interest that was due during a prior
Monthly Period pursuant to this subsection but was not deposited in the
Interest Funding Account or paid to the Class B Certificateholders.
(viii) Reimbursement of Class B Investor Charge-Off. On each
Business Day, the Trustee, acting in accordance with instructions from the
Servicer, shall withdraw from the Collection Account, to the extent of any
Series Available Interest Collections remaining after giving effect to the
withdrawals pursuant to subsections 4.9(a)(i) through (vii), an amount
equal to the lesser of (x) any such remaining Series Available Interest
Collections and (y) the unreimbursed amount by which the Class B Invested
Amount has been reduced on prior Business Days pursuant to clauses (c) and
(d) of the definition of Class B Invested Amount, if any, such amount, (i)
during the Revolving Period, to be treated as Shared Principal Collections,
(ii) during the Controlled Accumulation Period or Early Amortization
Period, on and prior to the day on which an amount equal to the Class A
Invested Amount is deposited in the Principal Account, to be deposited in
the Principal Account for distribution to the Class A Certificateholders on
the next Distribution Date, and (iii) during the Controlled Accumulation
Period or Early Amortization Period, on and after the day on which such
deposit has been made and on and prior to the day on which the Class B
Invested Amount has been deposited in the Principal Account but prior to
the Class C Principal Commencement Date, to be deposited in the Principal
Account for payment to the Class B Certificateholders on the next
Distribution Date.
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(ix) Reimbursement of Class C Investor Charge-Off. On each Business
Day, the Trustee, acting in accordance with instructions from the Servicer,
shall withdraw from the Collection Account, to the extent of any Series
Available Interest Collections remaining after giving effect to the
withdrawals pursuant to subsections 4.9(a)(i) through (viii), an amount
equal to the lesser of (x) any such remaining Series Available Interest
Collections and (y) the unreimbursed amount by which the Class C Invested
Amount has been reduced on prior Business Days pursuant to clauses (c) and
(d) of the definition of Class C Invested Amount, if any, such amount, (i)
during the Revolving Period, to be treated as Shared Principal Collections,
(ii) during the Controlled Accumulation Period or Early Amortization
Period, on and prior to the day on which an amount equal to the Class A
Invested Amount is deposited in the Principal Account, to be deposited in
the Principal Account for distribution to the Class A Certificateholders on
the next Distribution Date, (iii) during the Controlled Accumulation Period
or Early Amortization Period, on and prior to the day on which an amount
equal to the Class B Invested Amount is deposited in the Principal Account
but prior to the Class C Principal Commencement Date, to be deposited in
the Principal Account for distribution to the Class B Certificateholders on
the next Distribution Date and (iv) during the Controlled Accumulation
Period or Early Amortization Period, on and after the day on which such
deposit has been made and on and prior to the day on which an amount equal
to the Class B Invested Amount is deposited in the Principal Account, to be
deposited in the Principal Account for payment to the Class C Certificate-
holders on the next Distribution Date.
(x) Reimbursement of Class D Investor Charge-Off. On each Business
Day, the Trustee, acting in accordance with instructions from the Servicer,
shall withdraw from the Collection Account, to the extent of any Series
Available Interest Collections remaining after giving effect to the
withdrawals pursuant to subsections 4.9(a)(i) through (ix), an amount equal
to the lesser of (x) any such remaining Series Available Interest
Collections and (y) the unreimbursed amount by which the Class D Invested
Amount has been reduced on prior Business Days pursuant to clauses (e) and
(f) of the definition of Class D Invested Amount, if any, such amount, (i)
during the Revolving Period, and during the Controlled Accumulation Period
on and prior to the day on which an amount equal to the Class C Invested
Amount is deposited in the Principal Account, paid to the Transferor, (ii)
during the Early Amortization Period, be deposited in the Class D
Subaccount of the Excess Funding Account, to be held until the Class C
Invested Amount has been paid in full, and to be available to be applied as
Reallocated Class D Principal Collections and (iii) during the Controlled
Accumulation Period on and after the day such deposit to the Principal
Account with respect to Class C Invested Amount has been made, deposited in
the Principal Account for payment to the Class D Certificateholders.
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(xi) Investor Servicing Fee. On each Business Day, if Green Tree or
an Affiliate of Green Tree is the Servicer, the Trustee, acting in
accordance with instructions from the Servicer, shall withdraw from the
Collection Account and distribute to the Servicer, to the extent of Series
Available Interest Collections for such Business Day (after giving effect
to the withdrawals pursuant to subsections 4.9(a)(i) through (x) of the
Agreement), the Investor Servicing Fee accrued since the preceding Business
Day plus any Investor Servicing Fee due with respect to any prior Business
Day but not distributed to the Servicer.
(xii) Excess Interest Collections. Any amounts remaining in the
Collection Account to the extent of any Series Available Interest
Collections remaining after giving effect to the withdrawals pursuant to
subsection 4.9(a)(i) through (xi), shall be treated as Excess Interest
Collections, and the Servicer shall direct the Trustee in writing on each
Business Day to withdraw such amounts from the Collection Account and to
first make such amounts available to pay to Certificateholders of other
Series to the extent of shortfalls, if any, in amounts payable to such
certificateholders from Interest Collections allocated to such other
Series, then to pay any unpaid commercially reasonable costs and expenses
of a Successor Servicer, if any, and then pay any remaining Excess Interest
Collections to the Transferor.
(b) For each Business Day with respect to the Revolving Period, the funds
on deposit in the Collection Account to the extent of the product of (i) the sum
of the Class A Floating Allocation Percentage, the Class B Floating Allocation
Percentage and the Class C Floating Allocation Percentage and (ii) Principal
Collections with respect to such Business Day (less the amount of Reallocated
Class C Principal Collections and Reallocated Class B Principal Collections on
such Business Day) will be treated as Shared Principal Collections and applied,
pursuant to the written direction of the Servicer in the Daily Report for such
Business Day, as provided in Section 4.3(e) of the Agreement.
(c) For each Business Day on and after the Controlled Accumulation Period
Commencement Date or the Initial Principal Payment Date, the amount of funds on
deposit in the Collection Account as described below will be distributed,
pursuant to the written direction of the Servicer in the Daily Report for such
Business Day, in the following priority:
(i) on and prior to the day on which an amount equal to the Class A
Invested Amount has been deposited in the Principal Account to be applied
to the payment of Class A Principal, an amount (not in excess of the Class
A Invested Amount) equal to the sum of (v) the product of the ABC Fixed/
Floating Allocation Percentage and Principal Collections in the Collection
Account at the end of the preceding Business Day (less the amount thereof
to be applied as Reallocated Class B Principal Collections or Reallocated
Class C Principal Collections on such Business Day), (w) any amount on
deposit in
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the Excess Funding Account allocated to the Class A Certificates
on such Business Day pursuant to subsection 4.9(d), (x) amounts to be paid
pursuant to subsections 4.9(a)(iv), (vi), (viii), (ix) and (x) of the
Agreement from Available Series Interest Collections and from amounts
available pursuant to subsections 4.10(a) and (b) and 4.14(a), (b) and (c)
of the Agreement on such Business Day and (y) the amount of Shared
Principal Collections allocated to the Series 1995-1 Certificates in
accordance with Section 4.8 on such Business Day, will be deposited into
the Principal Account;
(ii) on and after the day on which an amount equal to the Class A
Invested Amount has been deposited in the Principal Account to be applied
to the payment of Class A Principal, an amount (not in excess of the Class
B Invested Amount) equal to the sum of (v) an amount equal to the product
of the ABC Fixed/Floating Allocation Percentage and Principal Collections
in the Collection Account at the end of the preceding Business Day (less
the amount thereof to be applied as Reallocated Class B Principal
Collections or Reallocated Class C Principal Collections on such Business
Day), (w) any amount on deposit in the Excess Funding Account allocated to
the Class B Certificates on such Business Day pursuant to subsection
4.9(d), (x) the amount, if any, allocated to be paid to the Class B
Certificates pursuant to subsections 4.9(a)(iv), (viii), (ix) and (x) of
the Agreement from Available Series Interest Collections and from amounts
available pursuant to subsections 4.10(a) and (b) and 4.14(a) and (b) of
the Agreement with respect to such Business Day and (y) the amount of
Shared Principal Collections allocated to the Series 1995-1 Certificates in
accordance with Section 4.8 on such Business Day (such sum, the "Class B
Daily Principal Amount") will be deposited into the Principal Account;
(iii) on and after the day on which an amount equal to the Class B
Invested Amount has been deposited in the Principal Account to be applied
to the payment of Class B Principal, an amount (not in excess of the Class
C Invested Amount) equal to the sum of (v) an amount equal to the product
of the ABC Fixed/Floating Allocation Percentage and Principal Collections
in the Collection Account at the end of the preceding Business Day (less
the amount thereof to be applied as Reallocated Class C Principal
Collections on such Business Day), (w) any amount on deposit in the Excess
Funding Account allocated to the Class C Certificates on such Business Day
pursuant to subsection 4.9(d), (x) the amount, if any, allocated to be paid
to the Class C Certificates pursuant to subsections 4.9(a)(iv), (ix) and
(x) of the Agreement from Available Series Interest Collections and from
amounts available pursuant to subsections 4.10(a) and (b) and 4.14(a) of
the Agreement with respect to such Business Day and (y) the amount of
Shared Principal Collections allocated to the Series 1995-1 Certificates in
accordance with Section 4.8 on such Business Day (such sum, the "Class C
Daily Principal Amount") will be deposited into the Principal Account;
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(iv) on and after the day on which an amount equal to the Class C
Invested Amount has been deposited in the Principal Account to be applied
to the payment of Class C Principal, an amount equal to the sum of (w) an
amount equal to the product of the Class D Fixed/Floating Allocation
Percentage and Principal Collections in the Collection Account at the end
of the preceding Business Day (less the amount thereof to be applied as
Reallocated Class D Principal Collections on such Business Day), (x) any
amount on deposit in the Excess Funding Account allocated to the Class D
Certificates on such Business Day pursuant to subsection 4.9(d), (y) the
amount, if any, allocated to be paid to the Class D Certificates pursuant
to subsections 4.9(a)(v) and (x) of the Agreement from Available Series
Interest Collections and from amounts available pursuant to subsections
4.10(a) and (b) of the Agreement with respect to such Business Day and (z)
the amount of Shared Principal Collections allocated to the Series 1995-1
Certificates in accordance with Section 4.8 on such Business Day (such sum,
the "Class D Daily Principal Amount") will be distributed to the Class D
Certificateholders; and
(v) an amount equal to the excess, if any, of (A) the sum of the
amounts described in clauses (i)(v) and (x), (ii)(v) and (x) and (iii)(v)
and (x) above over (B) the sum of Class A Principal, Class B Principal and
Class C Principal will be treated as Shared Principal Collections and
applied as provided in subsection 4.3(e) of the Agreement.
(d) On the first Business Day of the Controlled Accumulation Period or
Early Amortization Period or on the Business Day preceding the Initial Principal
Payment Date, funds on deposit in the Excess Funding Account will be deposited
in the Principal Account. Such amounts will be allocated in the following order
of priority: (i) to the Class A Certificates in an amount not to exceed the
Class A Principal after subtracting therefrom any amounts to be deposited in the
Principal Account with respect thereto pursuant to subsections 4.9(c)(i)(v), (x)
and (y), (ii) to the Class B Certificates in an amount not to exceed the Class B
Principal after subtracting therefrom any amounts to be deposited in the
Principal Account with respect thereto pursuant to subsections 4.9(c)(ii)(v),
(x) and (y), and (iii) to the Class C Certificates in an amount not to exceed
the Class C Principal after subtracting therefrom any amounts to be deposited in
the Principal Account with respect thereto pursuant to subsections
4.9(c)(iii)(v), (x) and (y). On and after the Class D Principal Commencement
Date any amounts remaining on deposit in the Excess Funding Account and
allocated to the Series 1995-1 Certificates will be deposited in the Principal
Account in an amount not to exceed the Class D Invested Amount after subtracting
therefrom any amounts to be deposited in the Principal Account with respect
thereto pursuant to subsections 4.9(c)(iv)(v), (x), (y) and (z).
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Section 4.10 Coverage of Required Amount for the Series 1995-1
Certificates.
(a) To the extent that any amounts are on deposit in the Excess Funding
Account on any Business Day, the Servicer shall apply Transferor Interest
Collections in an amount equal to the sum of the Negative Carry Amount and the
Principal Funding Investment Shortfall, if any, for such Business Day in the
manner specified for application of Series Available Interest Collections in
subsections 4.9(a)(i) through (xi).
(b) To the extent that on the first Business Day following a Monthly Period
payments are being made pursuant to any of subsections 4.9(a)(i) through (xi),
respectively, and the full amount to be paid pursuant to any such subsection
receiving payments on such Business Day for such prior Monthly Period is not
paid in full on such Business Day, the Servicer shall apply all or a portion of
the Excess Interest Collections from other Series with respect to such Business
Day for such prior Monthly Period allocable to the Series 1995-1 Certificates in
an amount equal to the excess of the full amount to be allocated or paid
pursuant to the applicable subsection over the amount applied with respect
thereto from Available Series 1995-1 Interest Collections and Transferor
Interest Collections on such Business Day (the "Required Amount"). Excess
Interest Collections allocated to the Series 1995-1 Certificates for any
Business Day shall mean an amount equal to the product of (x) Excess Interest
Collections available from all other Series for such Business Day for the prior
Monthly Period and (y) a fraction, the numerator of which is the Required Amount
for such Business Day for the prior Monthly Period and the denominator of which
is the aggregate amount of shortfalls in required amounts or other amounts to be
paid from Interest Collections for all Series for such Business Day.
Section 4.11 Payment of Certificate Interest. On each Transfer Date, the
Trustee, acting in accordance with instructions from the Servicer set forth in
the Daily Report for such day, shall withdraw the amount on deposit in the
Interest Funding Account with respect to the prior Monthly Period allocable to
the Series 1995-1 Certificates and deposit such amount in the Distribution
Account. On each Distribution Date, the Paying Agent shall pay in accordance
with Section 5.1 of the Agreement to (x) the Class A Certificateholders from the
Distribution Account such amount deposited into the Distribution Account on the
related Transfer Date allocable thereto pursuant to subsection 4.9(a)(i) and (y)
the Class B Certificateholders from the Distribution Account the amount
deposited into the Distribution Account allocable thereto pursuant to
subsections 4.9(a)(ii) and (vii).
Section 4.12 Payment of Certificate Principal.
(a) On the Transfer Date preceding each Distribution Date with respect to
the Controlled Accumulation Period or following the Initial Principal Payment
Date, the Trustee, acting in accordance with instructions from the Servicer set
forth in the Daily Report for such day, shall withdraw from the Principal
Account and
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deposit in the Distribution Account, to the extent of funds
available, an amount equal to the Class A Principal for such Distribution Date.
On the Class A Scheduled Payment Date (or the Initial Principal Payment Date, if
applicable), the Paying Agent shall pay in accordance with Section 5.1 to the
Class A Certificateholders from the Distribution Account such amount deposited
into the Distribution Account on the related Transfer Date.
(b) On the Transfer Date preceding the Class A Scheduled Payment (or the
Initial Principal Payment Date, if applicable) and each Distribution Date
thereafter, the Trustee, acting in accordance with instructions from the
Servicer set forth in the Daily Report for such day, shall withdraw from the
Principal Account and deposit in the Distribution Account, to the extent of
funds available, an amount equal to the Class B Principal for such Distribution
Date. On the Class A Scheduled Payment Date, after the payment of any principal
amounts to the Class A Certificates on such day, and on each Distribution Date
thereafter until the Class B Invested Amount is paid in full, the Paying Agent
shall pay in accordance with Section 5.1 to the Class B Certificateholders from
the Distribution Account such amount deposited into the Distribution Account on
the related Transfer Date.
(c) On the Transfer Date preceding the Class C Principal Commencement Date
and each Distribution Date thereafter, the Trustee, acting in accordance with
instructions from the Servicer set forth in the Daily Report for such day, shall
withdraw from the Principal Account and deposit in the Distribution Account an
amount equal to the lesser of the Class C Invested Amount and the amount on
deposit in the Principal Account allocable to the Series 1995-1 Certificates
(after giving effect to transfers pursuant to subsection 4.12(a) and (b)). On
the Class C Principal Commencement Date, after the payment of any principal
amounts to the Class B Certificates on such day, and on each Distribution Date
thereafter until the Class C Invested Amount is paid in full, the Paying Agent
shall pay in accordance with Section 5.1 to the Class C Certificateholders from
the Distribution Account such amount deposited into the Distribution Account on
the related Transfer Date.
(d) On the Transfer Date preceding the Class D Principal Commencement Date
and each Business Day thereafter, the Trustee, acting in accordance with
instructions from the Servicer set forth in the Daily Report for such day, shall
make payments of principal to the Class D Certificateholders in accordance with
subsection 4.9(c)(iv) of the Agreement.
Any amounts remaining in the Principal Account and allocable to the Series
1995-1 Certificates, after the Class D Invested Amount has been paid in full,
will be treated as Shared Principal Collections and applied in accordance with
Section 4.3(e) of the Agreement.
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Section 4.13 Investor Charge-Off.
(a) If, on any Determination Date, the aggregate Investor Default Amount,
if any, for each Business Day in the preceding Monthly Period exceeded the
Available Series 1995-1 Interest Collections applied to the payment thereof
pursuant to subsections 4.9(a)(iv) and (v) of the Agreement and the amount of
Transferor Interest Collections and Excess Interest Collections allocated
thereto pursuant to Section 4.10 of the Agreement, and the amount of Reallocated
Principal Collections applied with respect thereto pursuant to Section 4.14 of
the Agreement, the Class D Invested Amount will be reduced by the amount by
which the remaining aggregate Investor Default Amount exceeds the amount applied
with respect thereto during such preceding Monthly Period (a "Class D Investor
Charge-Off").
(b) In the event that any such reduction of the Class D Invested Amount
would cause the Class D Invested Amount to be a negative number, the Class D
Invested Amount will be maintained at or reduced to zero, and, the Class C
Invested Amount will be reduced by the amount by which the Class D Invested
Amount would have been reduced below zero, but not more than the aggregate
Investor Default Amount for such Monthly Period (a "Class C Investor Charge-
Off").
(c) In the event that any such reduction of the Class C Invested Amount
would cause the Class C Invested Amount to be a negative number, the Class C
Invested Amount will be reduced to zero, and, the Class B Invested Amount will
be reduced by the amount by which the Class C Invested Amount would have been
reduced below zero, but not more than the remaining aggregate Investor Default
Amount for such Monthly Period (a "Class B Investor Charge-Off").
(d) In the event that any such reduction of the Class B Invested Amount
would cause the Class B Invested Amount to be a negative number, the Class B
Invested Amount will be reduced to zero, and the Class A Invested Amount will be
reduced by the amount by which the Class B Invested Amount would have been
reduced below zero, but not more than the remaining aggregate Investor Default
Amount for such Monthly Period (a "Class A Investor Charge-Off").
Section 4.14 Reallocated Principal Collections for the Series 1995-1
Certificates.
(a) On each Business Day, the Servicer will determine an amount equal to
the lesser of (i) the Class D Invested Amount, (ii) the product of (x)(I) during
the Revolving Period, the Class D Floating Allocation Percentage or (II) during
the Controlled Accumulation Period or Early Amortization Period, the Class D
Fixed/Floating Allocation Percentage and (y) the amount of Principal Collections
with respect to such Business Day and (iii) an amount equal to the sum of (a)
the remaining Class A Required Amount, if any, with respect to the prior Monthly
Period, (b) the remaining Class B Required Amount, if any, with respect to the
prior Monthly Period and (c) the remaining Class C Required Amount, if any, with
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respect to the prior Monthly Period (such amount called "Reallocated Class D
Principal Collections") and shall apply Principal Collections in an amount equal
to such amount first to the components of the Class A Required Amount, then to
the components of the Class B Required Amount and then to the components of the
Class C Required Amount in the same priority as amounts are applied to such
components from Series Available Interest Collections pursuant to subsection
4.9(a).
(b) On each Business Day, the Servicer will apply or cause the Trustee to
apply an amount equal to the lesser of (i) the Class C Invested Amount, (ii) the
product of (x) (I) during the Revolving Period, the Class C Floating Allocation
Percentage or (II) during the Controlled Accumulation Period or Early
Amortization Period, the Class C Fixed/Floating Allocation Percentage and (y)
the amount of Principal Collections for such Business Day and (iii) an amount
equal to the sum of (a) the remaining Class A Required Amount, if any, with
respect to the prior Monthly Period over the amount of Reallocated Class D
Principal Collections applied with respect thereto for such prior Monthly Period
and (b) the remaining Class B Required Amount, if any, with respect to the prior
Monthly Period over the amount of Reallocated Class D Principal Collections
applied with respect thereto for such prior Monthly Period (such amount called
Reallocated Class C Principal Collections") and shall apply Principal
Collections in an amount equal to such amount first to the remaining components
of the Class A Required Amount and then to the remaining components of the Class
B Required Amount in the same priority as amounts are applied to such components
from Available Series 1995-1 Interest Collections pursuant to subsection 4.9(a).
(c) On each Business Day, the Servicer will apply or cause the Trustee to
apply an amount equal to the lesser of (i) the Class B Invested Amount, (ii) the
product of (x)(I) during the Revolving Period, the Class B Floating Allocation
Percentage or (II) during the Controlled Accumulation Period or Early
Amortization Period, the Class B Fixed/Floating Allocation Percentage and (y)
the amount of Principal Collections for such Business Day and (iii) an amount
equal to the excess, if any, of the remaining Class A Required Amount, if any,
with respect to the prior Monthly Period over the sum of the amount of
Reallocated Class D Principal Collections and Reallocated Class C Principal
Collections applied with respect thereto for the prior Monthly Period (such
amount called "Reallocated Class B Principal Collections") shall apply Principal
Collections equal to such amount to the remaining components of the Class A
Required Amount in the same priority as amounts are applied to such components
from Series Available Interest Collections pursuant to subsection 4.9(a).
Section 4.15 Determination of LIBOR.
(a) On each LIBOR Determination Date, the Trustee will determine LIBOR on
the basis of quotations of the offered rates for one-month United States Dollar
deposits provided by four major banks in the London interbank market selected by
the Servicer (the "Reference Banks") as of 11:00 A.M. (London time) on such
LIBOR
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Determination Date as such quotations appear on Telerate Page 3875 of the
Dow Jones Telerate Service (or such other page as may replace Telerate Page 3875
on that service for the purpose of displaying London interbank offered rates of
major banks). LIBOR as determined by the Trustee is the arithmetic mean of such
quotations (rounded, if necessary, to the nearest whole multiple of 0.0625% per
annum).
(b) If, on any LIBOR Determination Date, at least two but fewer than all of
the Reference Banks provide quotations, LIBOR will be determined in accordance
with (a) above on the basis of the offered quotations of those Reference Banks
providing such quotations.
(c) If, on the LIBOR Determination Date, only one or none of the Reference
Banks provides such offered quotations, LIBOR shall be:
(i) the rate per annum (rounded, as aforesaid) that the Trustee
determines to be either (x) the arithmetic mean of the offered quotations
that leading banks in The City of New York selected by the Servicer are
quoting at or about 11:00 A.M. London time on the relevant LIBOR
Determination Date for one month United States Dollar deposits to the
principal London office of each of the Reference Banks or those of them
(being at least two in number) to which such offered quotations are, in the
opinion of the Servicer, being so quoted or (y) in the event that the
Trustee can determine no such arithmetic mean, the arithmetic mean of the
offered quotations that leading banks in The City of New York selected by
the Servicer are quoting at or about 11:00 A.M. London time on such LIBOR
Determination Date to leading European banks for one-month Dollar deposits;
or
(ii) if the banks selected as aforesaid by the Servicer are not
quoting as described in clause (i) above, LIBOR for such Interest Accrual
Period will be LIBOR as determined on the previous LIBOR Determination
Date.
(d) The Class A Certificate Rate and the Class B Certificate Rate
applicable to the then current and the immediately preceding Interest Accrual
Periods may be obtained by any Series 1995-1 Certificateholder by telephoning
the Trustee at its Corporate Trust Office at (612) 667-4959.
(e) On each LIBOR Determination Date, the Trustee shall send to the
Servicer by facsimile notification of LIBOR for the following Interest Accrual
Period. Following the listing of the Class A Certificates and the Class B
Certificates on the Luxembourg Stock Exchange and for so long as such
Certificates are so listed, the Trustee shall cause the Class A Certificate Rate
and the Class B Certificate Rate as well as the amount of Class A Monthly
Interest and Class B Monthly Interest applicable to an Interest Period to be
provided to the Luxembourg Stock Exchange as soon as possible after its
determination but in no event later than the first day of such Interest Accrual
Period.
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SECTION 7. Article V of the Agreement. Article V of the Agreement shall
read in its entirety as follows and shall be applicable only to the Series 1995-
1 Certificates:
ARTICLE V
DISTRIBUTIONS AND REPORTS TO INVESTOR
-------------------------------------
CERTIFICATEHOLDERS
------------------
Section 5.1 Distributions.
(a) On each Distribution Date, the Paying Agent shall distribute (in
accordance with the Settlement Statement delivered by the Servicer to the
Trustee and the Paying Agent pursuant to subsection 3.4(c)) to each Class A
Certificateholder of record on the preceding Record Date (other than as provided
in subsection 2.4(e) or in Section 12.3 respecting a final distribution) such
Certificateholder's Pro Rata share (based on the aggregate Undivided Interests
represented by Class A Certificates held by such Certificateholder) of amounts
on deposit in the Distribution Account as are payable to the Class A
Certificateholders pursuant to Sections 4.11 and 4.12 of the Agreement by check
mailed to each Class A Certificateholder at such Certificateholder's address as
it appears on the Certificate Register or, in the case of Class A
Certificateholders holding Class A Certificates evidencing Undivided Interests
aggregating not less than 80% of the Invested Amount, by wire transfer, at the
expense of such Class A Certificateholder, to an account or accounts designated
by such Class A Certificateholder by written notice given to the Paying Agent
not less than five days prior to the related Distribution Date; provided,
however, that the final payment in retirement of the Class A Certificates will
be made only upon presentation and surrender of the Class A Certificates at the
office or offices specified in the notice of such final distribution delivered
by the Trustee pursuant to Section 12.3.
(b) On each Distribution Date, the Paying Agent shall distribute (in
accordance with the Settlement Statement delivered by the Servicer to the
Trustee and the Paying Agent pursuant to subsection 3.4(c)) to each Class B
Certificateholder of record on the preceding Record Date (other than as provided
in subsection 2.4(e) or in Section 12.3 respecting a final distribution) such
Certificateholder's pro rata share (based on the aggregate Undivided Interests
represented by Class B Certificates held by such Certificateholder) of amounts
on deposit in the Distribution Account as are payable to the Class B
Certificateholders pursuant to Section 4.11 and 4.12 of the Agreement by check
mailed to each Class B Certificateholder at such Certificateholder's address as
it appears on the Certificate Register or, in the case of Class B
Certificateholders holding Class B Certificates evidencing Undivided Interest
aggregating not less than 80% of the Invested Amount, by wire transfer, at the
expense of such Class B Certificateholder, to an account or accounts designated
by such Class B Certificateholder by written notice given to the Paying Agent
not less
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than five days prior to the related Distributed Date; provided,
however, that the final payment in retirement of the Class B Certificates will
be made only upon presentation and surrender of the Class B Certificates at the
office or offices specified in the notice of such final distribution delivered
by the Trustee pursuant to Section 12.3.
(c) On each Distribution Date, the Paying Agent shall distribute (in
accordance with the Settlement Statement delivered by the Servicer to the
Trustee and the Paying Agent pursuant to subsection 3.4(c)) to each Class C
Certificateholder of record on the preceding Record Date (other than as provided
in subsection 2.4(e) or in Section 12.3 respecting a final distribution) such
Certificateholder's pro rata share (based on the aggregate Undivided Interests
represented by Class C Certificates held by such Certificateholder) of amounts
on deposit in the Distribution Account as are payable to the Class C
Certificateholders pursuant to Section 4.12 of the Agreement by wire transfer to
each Class C Certificateholder to an account or accounts designated by such
Class C Certificateholder by written notice given to the Paying Agent not less
than five days prior to the related Distribution Date; provided, however, that
the final payment in retirement of the Class C Certificates will be made only
upon presentation and surrender of the Class C Certificates at the office or
offices specified in the notice of such final distribution delivered by the
Trustee pursuant to Section 12.3.
Section 5.2 Certificateholders' Statement.
(a) On the 13th day of each calendar month (or if such day is not a
Business Day the next succeeding Business Day), the Paying Agent shall forward
to each Certificateholder and the Rating Agencies a statement substantially in
the form of Exhibit C prepared by the Servicer and delivered to the Trustee and
the Paying Agent on the preceding Determination Date setting forth the following
information (which, in the case of (i), (ii) and (iii) below, shall be stated on
the basis of an original principal amount of $1,000 per Certificate and, in the
case of (ix) and (x), shall be stated on an aggregate basis and on the basis of
an original principal amount of $1,000 per Certificate):
(i) the total amount distributed;
(ii) the amount of such distribution allocable to Certificate
Principal;
(iii) the amount of such distribution allocable to Certificate
Interest;
(iv) the amount of Principal Collections processed during the related
Monthly Period and allocated in respect of the Class A Certificates, the
Class B Certificates, the Class C Certificates and the Class D
Certificates, respectively;
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(v) the amount of Interest Collections processed during the related
Monthly Period and allocated in respect of the Class A Certificates, the
Class B Certificates, the Class C Certificates and the Class D
Certificates, respectively;
(vi) the aggregate amount of Principal Receivables, the Invested
Amount, the Class A Invested Amount, the Class B Invested Amount, the Class
C Invested Amount, the Class D Invested Amount, the Floating Allocation
Percentage and, during the Controlled Accumulation Period or Early
Amortization Period, the ABC Fixed/Floating Allocation Percentage, with
respect to the Principal Receivables in the Trust as of the close of
business on the Record Date;
(vii) the aggregate outstanding balance of Receivables which are
current, and those between (i) 30 and 59 days (ii) 60 and 89 days and (iii)
90 days or more delinquent, in each case, as of the end of the day on the
Record Date;
(viii) the aggregate Investor Default Amount for the related
Monthly Period;
(ix) the aggregate amount of Class A Investor Charge-Offs, Class B
Investor Charge-Offs, Class C Investor Charge-Offs and Class D Investor
Charge-Offs for the preceding Monthly Period;
(x) the amount of the Servicing Fee for the preceding Monthly Period;
and
(xi) the aggregate amount of funds in the Excess Funding Account as of
the last day of the Monthly Period immediately preceding the Distribution
Date.
(b) Annual Certificateholders' Tax Statement. On or before January 20 of
each calendar year, beginning with calendar year 1996, the Paying Agent shall
distribute to each Person who at any time during the preceding calendar year was
a Series 1995-1 Certificateholder, a statement prepared by the Servicer
containing the information required to be contained in the regular report to
Series 1995-1 Certificateholders, as set forth in subclauses (i), (ii) and (iii)
above, aggregated for such calendar year or the applicable portion thereof
during which such Person was a Series 1995-1 Certificateholder, together with,
on or before January 31 of each year, beginning in 1996, such other customary
information (consistent with the treatment of the Certificates as debt) as the
Trustee or the Servicer deems necessary or desirable to enable the Series 1995-1
Certificateholders to prepare their tax returns. Such obligations of the
Trustee shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Trustee pursuant to any
requirements of the Internal Revenue Code as from time to time in effect.
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SECTION 8. Series 1995-1 Pay Out Events. The occurrence of any of the
following events shall, immediately upon the occurrence thereof without notice
or other action on the part of the Trustee or the Series 1995-1
Certificateholders, be deemed to be a Pay Out Event solely with respect to
Series 1995-1:
(a) any Servicer Default occurs;
(b) on any Determination Date, the average of the Monthly Payment
Rates for the three preceding Monthly Periods where the Monthly Payment
Rate for a Monthly Period is the percentage obtained by dividing the
aggregate of the Receivables balance (without deducting therefrom any
discount portion) collected during such Monthly Period by the average daily
aggregate Receivables balance (without deducting therefrom any discount
portion) for such Monthly Period, is less than 20%;
(c) the failure to pay the outstanding principal amount of the Class
A, Class B and Class C Certificates by the Class A Scheduled Payment Date,
Class B Scheduled Payment Date or the Class C Expected Final Payment Date,
as applicable;
(d) the ratio (expressed as a percentage) of (i) the average for each
month of the net losses on the Receivables (exclusive of the Ineligible
Receivables) owned by the Trust (i.e., gross losses less recoveries on any
Receivables (including, without limitation, recoveries from collateral
security in addition to recoveries from the products, recoveries from
Manufacturers and insurance proceeds)) during any three consecutive
calendar months to (ii) the average of the month-end aggregate balances of
such Receivables (without deducting therefrom the discount portion) for
such three-month period, exceeds 5% on an annualized basis;
(e) the sum of all Cash Equivalents and other amounts on deposit in
the Excess Funding Account represents more than 50% of the sum of the
aggregate amount of Principal Receivables (without deducting therefrom any
discount portion) for each of six or more consecutive Determination Dates,
after giving effect to all payments made or to be made on the Distribution
Date next succeeding each such respective Determination Date; or
(f) if the Class D Principal has been reallocated to cover any
Required Amounts and has not been reimbursed as of the subsequent
Determination Date.
SECTION 9. Series 1995-1 Termination. The right of the Series 1995-1
Certificateholders to receive payments from the Trust will terminate on the
first Business Day following the Series 1995-1 Termination Date unless such
Series is an Affected Series as specified in subsection 12.1(c) of the Agreement
and the sale contemplated therein has not occurred by such date, in which event
the
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Series 1995-1 Certificateholders shall remain entitled to receive proceeds
of such sale when such sale occurs.
SECTION 10. Legends; Transfer and Exchange; Restrictions on Transfer of
Series 1995-1 Certificates; Tax Treatment.
(a) Each Class B Certificate, Class C Certificate and Class D Certificate
will bear a legend substantially in the following form:
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF GREEN TREE
FLOORPLAN FUNDING CORP. THAT, UNLESS SUCH PURCHASER, AT ITS EXPENSE,
DELIVERS TO THE TRUSTEE, THE SERVICER AND THE TRANSFEROR AN OPINION OF
COUNSEL SATISFACTORY TO THEM TO THE EFFECT THAT THE PURCHASE OR HOLDING OF
A CLASS B CERTIFICATE, CLASS C CERTIFICATE OR CLASS D CERTIFICATE BY SUCH
PURCHASER WILL NOT RESULT IN THE ASSETS OF THE TRUST BEING DEEMED TO BE
"ASSETS OF THE BENEFIT PLAN" AND SUBJECT TO THE PROHIBITED TRANSACTION
PROVISIONS OF ERISA AND THE CODE AND WILL NOT SUBJECT THE TRUSTEE, THE
TRANSFEROR OR THE SERVICER TO ANY OBLIGATION IN ADDITION TO THOSE
UNDERTAKEN IN THE POOLING AND SERVICING AGREEMENT, SUCH PURCHASER IS NOT
(I) AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")) THAT IS
SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA, (II) A PLAN DESCRIBED IN
SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR
(III) AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A
PLAN'S INVESTMENT IN THE ENTITY.
(b) Each Class C Certificate will bear a legend substantially in the
following form:
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAW. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES
THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE
LAWS AND ONLY PURSUANT TO RULE 144A UNDER THE SECURITIES ACT TO AN
INSTITUTIONAL INVESTOR THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A ("QIB") PURCHASING FOR
ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE
HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR
OTHER TRANSFER IS BEING MADE
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IN RELIANCE ON RULE 144A, OR TO THE
TRANSFEROR. EACH CERTIFICATE OWNER BY ACCEPTING A BENEFICIAL INTEREST IN
THIS CERTIFICATE IS DEEMED TO REPRESENT THAT IT IS A QIB PURCHASING FOR ITS
OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF ANOTHER QIB.
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, THE
TRANSFEROR MAY PREVENT ANY TRANSFER, PARTICIPATION OR OTHER DISPOSITION OF
ANY INTEREST IN ANY CLASS C CERTIFICATE IF THE TRANSFEROR, IN ITS SOLE AND
ABSOLUTE DISCRETION, DETERMINES THAT SUCH TRANSFER, PARTICIPATION OR OTHER
DISPOSITION, IF EFFECTED, WOULD CAUSE THE TRUST TO BE TREATED AS A PUBLICLY
TRADED PARTNERSHIP UNDER SECTION 7704 OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED, OR THE TREASURY REGULATIONS ISSUED THEREUNDER.
(c) Each Class D Certificate will bear a legend substantially in the
following form:
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR
ANY APPLICABLE STATE SECURITIES LAW OF ANY STATE AND MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS REGISTERED PURSUANT TO OR
EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT AND ANY OTHER APPLICABLE
SECURITIES LAW. GREEN TREE FLOORPLAN FUNDING CORP. SHALL BE PROHIBITED
FROM TRANSFERRING ANY INTEREST IN OR PORTION OF THIS CERTIFICATE UNLESS,
PRIOR TO SUCH TRANSFER, IT SHALL HAVE DELIVERED TO THE TRUSTEE AN OPINION
OF COUNSEL TO THE EFFECT THAT SUCH PROPOSED TRANSFER WILL NOT ADVERSELY
AFFECT THE FEDERAL, MINNESOTA OR DELAWARE INCOME TAX CHARACTERIZATION OF
ANY OUTSTANDING SERIES OF INVESTOR CERTIFICATES OR THE TAXABILITY (OR TAX
CHARACTERIZATION) OF THE TRUST UNDER FEDERAL, MINNESOTA OR DELAWARE INCOME
TAX LAWS. IN NO EVENT SHALL THE TRANSFEROR BE PERMITTED TO TRANSFER ANY
INTEREST IN OR PORTION OF THIS CERTIFICATE IF, AFTER GIVING EFFECT TO SUCH
PROPOSED TRANSFER, TAKING INTO ACCOUNT THE CERTIFICATES WHOSE TRANSFER IS
PROPOSED, MORE THAN 20% (BY INVESTED AMOUNT AND BY VALUE) OF THE
OUTSTANDING CERTIFICATES ISSUED BY THE TRUST WITH RESPECT TO WHICH NO
OPINION OF COUNSEL WAS ISSUED THAT THE APPLICABLE CLASS WOULD BE TREATED AS
DEBT FOR FEDERAL INCOME TAX PURPOSES (INCLUDING THE EXCHANGEABLE TRANSFEROR
CERTIFICATE AND EACH TRANSFEROR RETAINED CLASS) WOULD NOT BE BENEFICIALLY
OWNED BY GREEN TREE FLOORPLAN FUNDING CORP.
-40-
<PAGE>
(d) Upon surrender for registration of transfer of a Class C Certificate at
the office of the Transfer Agent and Registrar, accompanied by a certification
by the Class C Certificateholder substantially in the form attached as Exhibit D
(if the new purchaser is a "qualified institutional buyer" as defined in Rule
144A under the Securities Act of 1933) and by a written instrument of transfer
in the form approved by the Transferor and the Trustee (it being understood
that, until notice to the contrary is given to Class C Certificateholders, the
Transferor and the Trustee shall each be deemed to have approved the form of
instrument of transfer, if any printed on any definitive Class C Certificate),
executed by the registered owner, in person or by such Class C
Certificateholder's attorney thereunto duly authorized in writing, such Class C
Certificate shall be transferred upon the register, and the Transferor shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee one or more new registered Class C Certificates of any
authorized denominations and of a like aggregate principal amount and tenor.
Transfers and exchanges of Class C Certificates shall be subject to such
restrictions as shall be set forth in the text of the Class C Certificates and
such reasonable regulations as may be prescribed by the Transferor. Successive
registrations and registrations of transfers as aforesaid may be made from time
to time as desired, and each such registration shall be noted on the register.
(e) Green Tree Floorplan Funding Corp. shall be prohibited from
transferring any interest in or portion of the Class D Certificates unless,
prior to such transfer, it shall have delivered to the Trustee an Opinion of
Counsel to the effect that such proposed transfer will not adversely affect the
Federal, Minnesota or Delaware income tax characterization of any outstanding
Series of Investor Certificates or the taxability (or tax characterization) of
the Trust under Federal, Minnesota or Delaware income tax laws. In no event
shall the Transferor be permitted to transfer any interest in or portion of the
Class D Certificates if, after giving effect to such proposed transfer, taking
into account the certificates whose transfer is proposed, more than 20% (by
Invested Amount and by value) of the outstanding certificates issued by the
Trust with respect to which no Opinion of Counsel was issued that the applicable
class would be treated as debt for federal income tax purposes (including the
Exchangeable Transferor Certificate and each Transferor Retained Class) would
not be beneficially owned by Green Tree Floorplan Funding Corp. In no event
shall any interest in or portion of the Class D Certificates be transferred to
Green Tree. As a condition to transfer of an interest in or portion of the
Class D Certificates, the transferee shall be required to agree not to institute
against, or join any other Person in instituting against, the Trust, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding,
or other proceeding under any federal or state bankruptcy or similar law, for
one year and one day after all Investor Certificates are paid in full. The
Transferor shall provide prompt written notice to the Rating Agencies of any
such transfer.
(f) No transfer of a Class B Certificate, Class C Certificate or Class D
Certificate will be permitted to be made to a Benefit Plan unless such Benefit
Plan, at its expense, delivers to the Trustee, the Servicer and the Transferor
an opinion of
-41-
<PAGE>
counsel satisfactory to them to the effect that the purchase or
holding of a Class B Certificate, Class C Certificate or Class D Certificate by
such Benefit Plan will not result in the assets of the Trust being deemed to be
"assets of the Benefit Plan" and subject to the prohibited transaction
provisions of ERISA and the Code and will not subject the Trustee, the
Transferor or the Servicer to any obligation in addition to those undertaken in
the Agreement. Unless such opinion is delivered, each person acquiring a Class
B Certificate, Class C Certificate or Class D Certificate or the beneficial
ownership of a Class B Certificate, Class C Certificate or Class D Certificate
will be deemed to represent to the Trustee, the Transferor and the Servicer that
it is not (i) an employee benefit plan (as defined in Section 3(3) of ERISA)
that is subject to the provisions of Title I of ERISA, (ii) a plan described in
Section 4975(e)(1) of the Code, or (iii) any entity whose underlying assets
include plan assets by reason of a plan's investment in the entity.
(g) The Class C Certificateholder shall comply with its obligations under
Section 3.7 of the Agreement with respect to the tax treatment of the Class C
Certificates, except to the extent that a relevant taxing authority has
disallowed such treatment.
(h) Notwithstanding anything in this Agreement to the contrary, the
Transferor may prevent any transfer, participation or other disposition of any
interest in any Class C Certificate if the Transferor, in its sole and absolute
discretion, determines that such transfer, participation or other disposition,
if effected, would cause the Trust to be treated as a publicly traded
partnership under Section 7704 of the Internal Revenue Code of 1986, as amended,
or the Treasury Regulations issued thereunder.
SECTION 11. Ratification of Agreement.
(a) As supplemented by this Series Supplement, the Agreement is in all
respects ratified and confirmed and the Agreement as so supplemented by this
Series Supplement shall be read, taken, and construed as one and the same
instrument.
(b) For so long as any of the Class C Certificates are outstanding, each of
the Transferor, the Servicer and the Trustee agree to cooperate with each other
to provide to any Class C Certificateholders and to any prospective purchaser of
Class C Certificates designated by such a Class C Certificateholder upon the
request of such Class C Certificateholder or prospective purchaser, any
information required to be provided to such holder or prospective purchaser to
satisfy the condition set forth in Rule 144A(d)(4) under the Securities Act.
SECTION 12. Registration of the Class A Certificates under the Securities
Exchange Act of 1934. The Transferor shall cause the Class A Certificates to be
registered under the Securities Exchange Act, as amended, on or before _______,
-42-
<PAGE>
1996 and thereafter maintain such registration until the Class A Invested Amount
has been reduced to zero.
SECTION 13. Counterparts. This Series Supplement may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all of such counterparts shall together constitute but one and the
same instrument.
SECTION 14. GOVERNING LAW. THIS SERIES SUPPLEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF MINNESOTA WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 15. Instructions in Writing. All instructions or other
communications given by the Servicer or any other person to the Trustee pursuant
to this Series Supplement shall be in writing, and, with respect to the
Servicer, may be included in a Daily Report or Settlement Statement.
-43-
<PAGE>
IN WITNESS WHEREOF, the Transferor, the Servicer and the Trustee have
caused this Series 1995-1 Supplement to be duly executed by their respective
officers as of the day and year first above written.
GREEN TREE FLOORPLAN
FUNDING CORP., Transferor
By:
Name:
Title:
GREEN TREE FINANCIAL
CORPORATION, Servicer
By:
Name:
Title:
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION, Trustee
By:
Name:
Title:
-44-
<PAGE>
Exhibit A
FORM OF CLASS A INVESTOR CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO. HAS AN INTEREST HEREIN.
No. R-1 $________
GREEN TREE FLOORPLAN RECEIVABLES MASTER TRUST
FLOATING RATE FLOORPLAN RECEIVABLE TRUST
CERTIFICATE, SERIES 1995-1, CLASS A
Evidencing an undivided interest in a trust, the corpus of which consists
of receivables generated from time to time in the ordinary course of business
from the portfolio of revolving financing arrangements (the "Accounts") of Green
Tree Financial Corporation ("Green Tree" or the "Servicer") and other assets and
interests constituting the Trust under the Agreement described below.
This certificate (a "Certificate") does not represent an interest in, or
obligation of, Green Tree Floorplan Funding Corp., Green Tree or any affiliate
of either of them.
This certifies that CEDE & Co. (the "Certificateholder") is the registered
owner of a fractional undivided interest in the Green Tree Floorplan Receivables
Master Trust (the "Trust") issued pursuant to the Pooling and Servicing
Agreement, dated as of December 1, 1995 (the "Pooling and Servicing Agreement";
such term to include any amendment thereto) among Green Tree Floorplan Funding
Corp., as Transferor (the "Transferor"), Green Tree, as Servicer, and Norwest
Bank Minnesota, National Association, as Trustee (the "Trustee"), and the Series
1995-1 Supplement, dated as of December 1, 1995 (the "Series 1995-1
Supplement"), among the Transferor, Green Tree as Servicer and the Trustee. The
Pooling and Servicing Agreement, as supplemented by the Series 1995-1
Supplement, is herein referred to as the "Agreement"). The corpus of the Trust
consists of all of the Transferor's right, title and interest in, to and under
the Trust Property (as defined in the Agreement).
A-1
<PAGE>
This Certificate does not purport to summarize the Agreement and reference
is made to that Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds, and duties evidenced hereby and the rights,
duties and obligations of the Trustee. To the extent not defined herein, the
capitalized terms used herein have the meanings ascribed to them in the
Agreement. This Certificate is one of a series of Certificates entitled "Green
Tree Floorplan Receivables Master Floating Rate Trust Floorplan Receivable Trust
Certificates, Series 1995-1, Class A" (the "Class A Certificates"), each of
which represents a fractional undivided interest in the Trust, and is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement, as amended from time to time, the Certificateholder by
virtue of the acceptance hereof assents and by which the Certificateholder is
bound.
The Transferor has structured the Agreement, the Class A Certificates, the
Green Tree Floorplan Receivables Master Trust Floating Rate Floorplan Receivable
Trust Certificates, Series 1995-1, Class B (the "Class B Certificates" and
collectively with the Class A Certificates the "Offered Certificates") and the
Green Tree Floorplan Receivables Master Trust Floorplan Receivable Trust
Certificates, Series 1995-1, Class C (the "Class C Certificates") with the
intention that the Offered Certificates and the Class C Certificates will
qualify under applicable tax law as indebtedness, and both the Transferor and
each holder of a Class A Certificate (a "Class A Certificateholder") or any
interest therein by acceptance of its Certificate or any interest therein,
agrees to treat the Class A Certificates for purposes of federal, state and
local income or franchise taxes and any other tax imposed on or measured by
income, as indebtedness.
No principal will be payable to the Class A Certificateholders until the
Class A Scheduled Payment Date in the Controlled Accumulation Period. No
principal will be payable to the Class B Certificateholders, Class C
Certificateholders or Class D Certificateholders until all principal payments
have been made to the Class A Certificateholders.
Each Class A Certificate represents the right to receive the lesser of (i)
interest at the rate of ___% per annum above LIBOR determined on December __,
1995 for the period from December __, 1995 through January 14, 1996, and at a
rate equal to ___% per annum above LIBOR determined on the related LIBOR
Determination Date for each Interest Accrual Period thereafter or (ii) the Net
Receivables Rate, (such rate, as in effect from time to time, the "Class A
Certificate Rate"). Interest on the Class A Certificates will accrue from the
Closing Date and will be distributed on January 16, 1996, and on the 13th day of
each month thereafter, or if such day is not a Business Day, on the next
succeeding Business Day (each, a "Distribution Date"), in an amount equal to the
product of (a) the actual number of days in the related Interest Accrual Period
divided by 360, (b) the Class A Certificate Rate and (c) the outstanding
principal balance of the Class A Certificates as of the preceding Record Date
(or in the case of the first Distribution Date, the initial Class A Invested
Amount).
A-2
<PAGE>
On the earlier of the December 14, 1998 Distribution Date or the first
Distribution Date following the occurrence of a Pay Out Event, interest and
principal will be distributed to the Class A Certificateholders monthly on each
Distribution Date prior to the Series 1995-1 Termination Date. Interest for any
Distribution Date will include accrued interest at the Class A Certificate Rate
from and including the preceding Distribution Date or, in the case of the first
Distribution Date from and including the Closing Date, to but excluding such
Distribution Date. Interest for any Distribution Date due but not paid on any
Distribution Date will be due on the next succeeding Distribution Date together
with, to the extent permitted by applicable law, additional interest on such
amount at the Class A Certificate Rate.
"Class A Invested Amount" means an amount equal to (a) the initial
principal balance of the Class A Certificates, minus (b) the aggregate amount of
principal payments made to Class A Certificateholders prior to such date, minus
(c) the aggregate amount of Class A Investor Charge-Offs for all prior
Distribution Dates, equal to the amount by which the Class A Invested Amount has
been reduced to fund the Investor Default Amount on all prior Distribution
Dates, and plus (d) the aggregate amount of Available Series Interest
Collections, Excess Interest Collections and Reallocated Principal Collections
applied on all prior Distribution Dates for the purpose of reimbursing amounts
deducted pursuant to the foregoing clause (c).
Subject to the Agreement, payments of principal are limited to the unpaid
Class A Invested Amount of the Class A Certificates, which may be less than the
unpaid balance of the Class A Certificates pursuant to the terms of the
Agreement. All principal of and interest on the Class A Certificates is due and
payable no later than the December 14, 1998 Distribution Date (or if such day is
not a Business Day, the next succeeding Business Day) (the "Series 1995-1
Termination Date"). After the Series 1995-1 Termination Date neither the Trust
nor the Transferor will have any further obligation to distribute principal or
interest on the Class A Certificates. In the event that the Class A Invested
Amount is greater than zero on the Series 1995-1 Termination Date, the Trustee
will sell or cause to be sold, to the extent necessary, an amount of interests
in the Receivables or certain of the Receivables up to 110% of the Class A
Invested Amount, the Class B Invested Amount, the Class C Invested Amount and
the Class D Invested Amount at the close of business on such date (but not more
than the total amount of Receivables allocable to the Investor Certificates),
and shall pay the proceeds to the Class A Certificateholders pro rata in final
payment of the Class A Certificates, then to the Class B Certificateholders pro
rata in final payment of the Class B Certificates, then to the Class C
Certificateholders pro rata in final payment of the Class C Certificates and
finally to the Class D Certificateholders pro rata in final payment of the Class
D Certificates.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement, or be valid for any purpose.
A-3
<PAGE>
IN WITNESS WHEREOF, the Transferor has caused this Certificate to be duly
executed.
GREEN TREE FLOORPLAN
FUNDING CORP., Transferor
By:
Name:
Title:
Dated: __________, 1995
CERTIFICATE OF AUTHENTICATION
This is one of the Class A Certificates referred to in the within-mentioned
Pooling and Servicing Agreement.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION, Trustee
By:
Name:
Title:
A-4
<PAGE>
Exhibit B
FORM OF CLASS B INVESTOR CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO. HAS AN INTEREST HEREIN.
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF GREEN TREE
FLOORPLAN FUNDING CORP. THAT UNLESS SUCH PURCHASER, AT ITS EXPENSE,
DELIVERS TO THE TRUSTEE, THE SERVICER AND THE TRANSFEROR AN OPINION OF
COUNSEL SATISFACTORY TO THEM TO THE EFFECT THAT THE PURCHASE OR HOLDING OF
THIS CERTIFICATE BY SUCH PURCHASER WILL NOT RESULT IN THE ASSETS OF THE
TRUST BEING DEEMED TO BE "ASSETS OF THE BENEFIT PLAN" OR SUBJECT TO THE
PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE CODE AND WILL NOT
SUBJECT THE TRUSTEE, THE TRANSFEROR OR THE SERVICER TO ANY OBLIGATION IN
ADDITION TO THOSE UNDERTAKEN IN THE POOLING AND SERVICING AGREEMENT, SUCH
PURCHASER IS NOT (I) AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3)
OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA")) THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA, (II) A
PLAN DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED, OR (III) AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS
BY REASON OF A PLAN'S INVESTMENT IN THE ENTITY.
B-1
<PAGE>
No. R-1 $_________
GREEN TREE FLOORPLAN RECEIVABLES MASTER TRUST
FLOATING RATE FLOORPLAN RECEIVABLE TRUST
CERTIFICATE, SERIES 1995-1, CLASS B
Evidencing an undivided interest in a trust, the corpus of which consists
of receivables generated from time to time in the ordinary course of business
from the portfolio of revolving financing arrangements (the "Accounts") of Green
Tree Financial Corporation ("Green Tree" or the "Servicer") and other assets and
interests constituting the Trust under the Agreement described below.
This certificate (a "Certificate") does not represent an interest in, or
obligation of, Green Tree Floorplan Funding Corp., Green Tree or any affiliate
of either of them.
This certifies that CEDE & CO. (the "Certificateholder") is the registered
owner of a fractional undivided interest in the Green Tree Floorplan Receivables
Master Trust (the "Trust") issued pursuant to the Pooling and Servicing
Agreement, dated as of December 1, 1995 (the "Pooling and Servicing Agreement";
such term to include any amendment thereto) among Green Tree Floorplan Funding
Corp., as Transferor (the "Transferor"), Green Tree, as Servicer, and Norwest
Bank Minnesota, National Association, as Trustee (the "Trustee"), and the Series
1995-1 Supplement, dated as of December 1, 1995 (the "Series 1995-1
Supplement"), among the Transferor, Green Tree as Servicer and the Trustee. The
Pooling and Servicing Agreement, as supplemented by the Series 1995-1
Supplement, is herein referred to as the "Agreement." The corpus of the Trust
consists of all of the Transferor's right, title and interest in, to and under
the Trust Property (as defined in the Agreement).
This Certificate does not purport to summarize the Agreement and reference
is made to that Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds, and duties evidenced hereby and the rights,
duties and obligations of the Trustee. To the extent not defined herein, the
capitalized terms used herein have the meanings ascribed to them in the
Agreement. This Certificate is one of a series of Certificates entitled "Green
Tree Floorplan Receivables Master Trust Floating Rate Floorplan Receivable Trust
Certificates, Series 1995-1, Class B" (the "Class B Certificates"), each of
which represents a fractional undivided interest in the Trust, and is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement, as amended from time to time, the Certificateholder by
virtue of the acceptance hereof assents and by which the Certificateholder is
bound.
The Transferor has structured the Agreement, the Class B Certificates, the
Green Tree Floorplan Receivables Master Trust Floating Rate Floorplan Receivable
Trust Certificates, Series 1995-1, Class A (the "Class A Certificates" and
collectively with the Class B Certificates the "Offered Certificates") and the
Green Tree Floorplan
B-2
<PAGE>
Receivables Master Trust Floorplan Receivable Trust
Certificates, Series 1995-1, Class C (the "Class C Certificates") with the
intention that the Offered Certificates will qualify under applicable tax law as
indebtedness, and both the Transferor and each holder of a Class B Certificate
(a "Class B Certificateholder") or any interest therein by acceptance of its
Certificate or any interest therein, agrees to treat the Class B Certificates
for purposes of federal, state and local income or franchise taxes and any other
tax imposed on or measured by income, as indebtedness.
No principal will be payable to the Class B Certificateholders until the
Class B Scheduled Payment Date, which is the Distribution Date either on or
following the Distribution Date on which the Class A Invested Amount had been
paid in full. No principal will be payable to the Class B Certificateholders
until all principal payments have been made to the Class A Certificateholders.
No principal payments will be made to the Class C Certificateholder until the
Distribution Date either on or following the Distribution Date on which the
Class B Invested Amount has been paid in full.
Each Class B Certificate represents the right to receive the lesser of (i)
interest at the rate of ___% per annum above LIBOR determined on December __,
1995 for the period from December __, 1995 through January 14, 1996, and at a
rate equal to ___% per annum above LIBOR determined on the related LIBOR
Determination Date for each Interest Accrual Period thereafter or (ii) the Net
Receivables Rate (such rate, as in effect from time to time, the "Class B
Certificate Rate"). Interest on the Class B Certificates will accrue from the
Closing Date and will be distributed on January 16, 1996, and on the 13th day of
each month thereafter, or if such day is not a Business Day, on the next
succeeding Business Day (each, a "Distribution Date"), in an amount equal to the
product of (a) the actual number of days in the related Interest Accrual Period
divided by 360, (b) the Class B Certificate Rate and (c) the outstanding
principal balance of the Class B Certificates as of the preceding Record Date
(or in the case of the first Distribution Date, the initial Class B Invested
Amount).
Interest for any Distribution Date will include accrued interest at the
Class B Certificate Rate from and including the preceding Distribution Date or,
in the case of the first Distribution Date from and including the Closing Date,
to but excluding such Distribution Date. Interest for any Distribution Date due
but not paid on any Distribution Date will be due on the next succeeding
Distribution Date together with, to the extent permitted by applicable law,
additional interest on such amount at the Class B Certificate Rate.
"Class B Invested Amount" for any date means an amount equal to (a) the
initial principal balance of the Class B Certificates, minus (b) the aggregate
amount of principal payments made to Class B Certificateholders prior to such
date, minus (c) the aggregate amount of Class B Investor Charge-Offs for all
prior Distribution Dates minus (d) the aggregate amount of Reallocated Class B
Principal Collections for which neither the Class D Invested Amount nor the
Class C Invested Amount
B-3
<PAGE>
has been reduced for all prior Distribution Dates, and
plus (e) the aggregate amount of Available Series Interest Collections, Excess
Interest Collections and Reallocated Class C Principal Collections and
Reallocated Class D Principal Collections applied on all prior Distribution
Dates for the purpose of reimbursing amounts deducted pursuant to the foregoing
clauses (c) and (d).
Subject to the Agreement, payments of principal are limited to the unpaid
Class B Invested Amount of the Class B Certificates, which may be less than the
unpaid balance of the Class B Certificates pursuant to the terms of the
Agreement. All principal of and interest on the Class B Certificates is due and
payable no later than the January 13, 1999 Distribution Date (or if such day is
not a Business Day, the next succeeding Business Day) (the "Series 1995-1
Termination Date"). After the Series 1995-1 Termination Date neither the Trust
nor the Transferor will have any further obligation to distribute principal or
interest on the Class B Certificates. In the event that the Class B Invested
Amount is greater than zero on the Series 1995-1 Termination Date, the Trustee
will sell or cause to be sold, to the extent necessary, an amount of interests
in the Receivables or certain of the Receivables up to 110% of the Class A
Invested Amount, the Class B Invested Amount, the Class C Invested Amount and
the Class D Invested Amount at the close of business on such date (but not more
than the total amount of Receivables allocable to the Investor Certificates),
and shall pay the proceeds to the Class A Certificateholders pro rata in final
payment of the Class A Certificates, then to the Class B Certificateholders pro
rata in final payment of the Class B Certificates, then to the Class C
Certificateholders pro rata in final payment of the Class C Certificates and
finally to the Class D Certificateholders pro rata in final payment of the Class
D Certificates.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement, or be valid for any purpose.
B-4
<PAGE>
IN WITNESS WHEREOF, the Transferor has caused this Certificate to be duly
executed.
GREEN TREE FLOORPLAN
FUNDING CORP., Transferor
By:
Name:
Title:
Dated: _______, 1995
CERTIFICATE OF AUTHENTICATION
This is one of the Class B Certificates referred to in the within-mentioned
Pooling and Servicing Agreement.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION, Trustee
By:
Name:
Title:
B-5
<PAGE>
Exhibit C
FORM OF CLASS C INVESTOR CERTIFICATE
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAW. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES
THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE
LAWS AND ONLY PURSUANT TO RULE 144A UNDER THE SECURITIES ACT TO AN
INSTITUTIONAL INVESTOR THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A ("QIB") PURCHASING FOR
ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE
HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR
OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR TO THE
TRANSFEROR. EACH CERTIFICATE OWNER BY ACCEPTING A BENEFICIAL INTEREST IN
THIS CERTIFICATE IS DEEMED TO REPRESENT THAT IT IS A QIB PURCHASING FOR ITS
OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF ANOTHER QIB.
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF GREEN TREE
FLOORPLAN FUNDING CORP. THAT UNLESS SUCH PURCHASER, AT ITS EXPENSE,
DELIVERS TO THE TRUSTEE, THE SERVICER AND THE TRANSFEROR AN OPINION OF
COUNSEL SATISFACTORY TO THEM TO THE EFFECT THAT THE PURCHASE OR HOLDING OF
THIS CERTIFICATE BY SUCH PURCHASER WILL NOT RESULT IN THE ASSETS OF THE
TRUST BEING DEEMED TO BE "ASSETS OF THE BENEFIT PLAN" OR SUBJECT TO THE
PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE CODE AND WILL NOT
SUBJECT THE TRUSTEE, THE TRANSFEROR OR THE SERVICER TO ANY OBLIGATION IN
ADDITION TO THOSE UNDERTAKEN IN THE POOLING AND SERVICING AGREEMENT, SUCH
PURCHASER IS NOT (I) AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3)
OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA")) THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA, (II) A
PLAN DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED, OR (III) AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS
BY REASON OF A PLAN'S INVESTMENT IN THE ENTITY.
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, THE
TRANSFEROR MAY PREVENT ANY TRANSFER, PARTICIPATION OR OTHER DISPOSITION OF
ANY INTEREST IN ANY
C-1
<PAGE>
CLASS C CERTIFICATE IF THE TRANSFEROR, IN ITS SOLE AND
ABSOLUTE DISCRETION, DETERMINES THAT SUCH TRANSFER, PARTICIPATION OR OTHER
DISPOSITION, IF EFFECTED, WOULD CAUSE THE TRUST TO BE TREATED AS A PUBLICLY
TRADED PARTNERSHIP UNDER SECTION 7704 OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED, OR THE TREASURY REGULATIONS ISSUED THEREUNDER.
C-2
<PAGE>
No. $__________
GREEN TREE FLOORPLAN RECEIVABLES MASTER TRUST
FLOORPLAN RECEIVABLE TRUST CERTIFICATE,
SERIES 1995-1, Class C
Evidencing an undivided interest in a trust, the corpus of which consists
of receivables generated from time to time in the ordinary course of business
from the portfolio of revolving financing arrangements (the "Accounts") of Green
Tree Financial Corporation ("Green Tree" or the "Servicer") and other assets and
interests constituting the Trust under the Agreement described below.
This certificate (a "Certificate") does not represent an interest in, or an
obligation of, Green Tree Floorplan Funding Corp., Green Tree or any affiliate
of either of them, except to the extent set forth in the Agreement.
This certifies that ___________ (the "Certificateholder") is the registered
owner of a fractional undivided interest in the Green Tree Floorplan Receivables
Master Trust (the "Trust") issued pursuant to the Pooling and Servicing
Agreement, dated as of December 1, 1995 (the "Pooling and Servicing Agreement";
such term to include any amendment thereto) among Green Tree Floorplan Funding
Corp., as Transferor (the "Transferor"), Green Tree, as Servicer, and Norwest
Bank Minnesota, National Association, as Trustee (the "Trustee"), and the Series
1995-1 Supplement, dated as of December 1, 1995 (the "Series 1995-1
Supplement"), among the Transferor, Green Tree as Servicer and the Trustee. The
Pooling and Servicing Agreement, as supplemented by the Series 1995-1
Supplement, is herein referred to as the "Agreement." The corpus of the Trust
consists of all of the Transferor's right, title and interest in, to and under
the Trust Property (as defined in the Agreement).
This Certificate does not purport to summarize the Agreement and reference
is made to that Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds, and duties evidenced hereby and the rights,
duties and obligations of the Trustee. To the extent not defined herein, the
capitalized terms used herein have the meanings ascribed to them in the
Agreement. This Certificate is one of a series of Certificates entitled "Green
Tree Floorplan Receivables Master Trust Floorplan Receivable Trust Certificates,
Series 1995-1, Class C" (the "Class C Certificates"), each of which represents a
fractional undivided interest in the Trust, and is issued under and is subject
to the terms, provisions and conditions of the Agreement, to which Agreement, as
amended from time to time, the Certificateholder by virtue of the acceptance
hereof assents and by which the Certificateholder is bound.
The Transferor has structured the Agreement, the Class C Certificates, the
Green Tree Floorplan Receivables Master Trust Floating Rate Floorplan Receivable
Trust Certificates, Series 1995-1, Class A (the "Class A Certificates") and the
Green Tree Floorplan Receivables Master Trust Floating Rate Floorplan Receivable
Trust
C-3
<PAGE>
Certificates, Series 1995-1, Class B (the "Class B Certificates") with the
intention that the Class A, Class B and Class C Certificates will qualify under
applicable tax law as indebtedness, and both the Transferor and each holder of a
Class C Certificate (a "Class C Certificateholder") or any interest therein by
acceptance of its Certificate or any interest therein, agrees to treat the Class
C Certificates for purposes of federal, state and local income or franchise
taxes and any other tax imposed on or measured by income, as indebtedness.
No principal will be payable to the Class C Certificateholders until the
Class C Principal Commencement Date, which is the Distribution Date either on or
following the Distribution Date on which the Class A Invested Amount and the
Class B Invested Amount have been paid in full. No principal payments will be
payable to the Class C Certificateholders until the Distribution Date either on
or following the Distribution Date on which the Class B Invested Amount has been
paid in full.
Interest will not accrue on the unpaid principal amount of the Class C
Certificates.
"Class C Invested Amount" for any date means an amount equal to (a) the
initial principal balance of the Class C Certificates, minus (b) the aggregate
amount of principal payments made to Class C Certificateholders prior to such
date, minus (c) the aggregate amount of Class C Investor Charge-Offs for all
prior Distribution Dates, equal to the amount by which the Class C Invested
Amount has been reduced to fund the Investor Default Amount on all prior
Distribution Dates, minus (d) the aggregate amount of Reallocated Class C
Principal Collections for which the Class D Invested Amount has not been reduced
for all prior Distribution Dates, and plus (e) the aggregate amount of Available
Series Interest Collections, Excess Interest Collections and Reallocated Class D
Principal Collections and certain other amounts as may be available applied on
all prior Distribution Dates for the purpose of reimbursing amounts deducted
pursuant to the foregoing clauses (c) and (d).
Subject to the Agreement, payments of principal are limited to the unpaid
Class C Invested Amount of the Class C Certificates, which may be less than the
unpaid balance of the Class C Certificates pursuant to the terms of the
Agreement. All principal of and interest on the Class C Certificates is due and
payable no later than the ________, 200__ Distribution Date (or if such day is
not a Business Day, the next succeeding Business Day) (the "Series 1995-1
Termination Date"). After the Series 1995-1 Termination Date neither the Trust
nor the Transferor will have any further obligation to distribute principal on
the Class C Certificates. In the event that the Class C Invested Amount is
greater than zero on the Series 1995-1 Termination Date, the Trustee will sell
or cause to be sold, to the extent necessary, an amount of interests in the
Receivables or certain of the Receivables up to 110% of the Class A Invested
Amount, the Class B Invested Amount, the Class C Invested Amount and the Class D
Invested Amount at the close of business on such date (but not more than the
total amount of Receivables allocable to the Investor Certificates),
C-4
<PAGE>
and shall pay the proceeds to the Class A Certificateholders pro rata in final
payment of the Class A Certificates, then to the Class B Certificateholders pro
rata in final payment of the Class B Certificates, then to the Class C
Certificateholders pro rata in final payment of the Class C Certificates and
finally to the Class D Certificateholders pro rata in final payment of the Class
D Certificates.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement, or be valid for any purpose.
C-5
<PAGE>
IN WITNESS WHEREOF, the Transferor has caused this Certificate to be duly
executed.
GREEN TREE FLOORPLAN
FUNDING CORP., Transferor
By:
Name:
Title:
Dated: __________, 1995
CERTIFICATE OF AUTHENTICATION
This is one of the Class C Certificates referred to in the within-mentioned
Pooling and Servicing Agreement.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION, Trustee
By:
Name:
Title:
C-6
<PAGE>
Exhibit D
FORM OF CLASS D INVESTOR CERTIFICATE
THIS CERTIFICATE WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"). THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR ANY
APPLICABLE STATE SECURITIES LAW OF ANY STATE AND MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED UNLESS REGISTERED PURSUANT TO OR EXEMPT FROM
REGISTRATION UNDER THE SECURITIES ACT AND ANY OTHER APPLICABLE SECURITIES LAW.
GREEN TREE FLOORPLAN FUNDING CORP. SHALL BE PROHIBITED FROM TRANSFERRING ANY
INTEREST IN OR PORTION OF THIS CERTIFICATE UNLESS, PRIOR TO SUCH TRANSFER, IT
SHALL HAVE DELIVERED TO THE TRUSTEE AN OPINION OF COUNSEL TO THE EFFECT THAT
SUCH PROPOSED TRANSFER WILL NOT ADVERSELY AFFECT THE FEDERAL, MINNESOTA OR
DELAWARE INCOME TAX CHARACTERIZATION OF ANY OUTSTANDING SERIES OF INVESTOR
CERTIFICATES OR THE TAXABILITY (OR TAX CHARACTERIZATION) OF THE TRUST UNDER
FEDERAL, MINNESOTA OR DELAWARE INCOME TAX LAWS. IN NO EVENT SHALL THE
TRANSFEROR BE PERMITTED TO TRANSFER ANY INTEREST IN OR PORTION OF THIS
CERTIFICATE IF, AFTER GIVING EFFECT TO SUCH PROPOSED TRANSFER, TAKING INTO
ACCOUNT THE CERTIFICATES WHOSE TRANSFER IS PROPOSED, MORE THAN 20% (BY INVESTED
AMOUNT AND BY VALUE) OF THE OUTSTANDING CERTIFICATES ISSUED BY THE TRUST WITH
RESPECT TO WHICH NO OPINION OF COUNSEL WAS ISSUED THAT THE APPLICABLE CLASS
WOULD BE TREATED AS DEBT FOR FEDERAL INCOME TAX PURPOSES (INCLUDING THE
EXCHANGEABLE TRANSFEROR CERTIFICATE AND EACH TRANSFEROR RETAINED CLASS) WOULD
NOT BE BENEFICIALLY OWNED BY GREEN TREE FLOORPLAN FUNDING CORP.
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF GREEN TREE
FLOORPLAN FUNDING CORP. THAT SUCH PURCHASER IS NOT (I) AN EMPLOYEE BENEFIT PLAN
(AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF
ERISA, (II) A PLAN DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED, OR (III) AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN
ASSETS BY REASON OF A PLAN'S INVESTMENT IN THE ENTITY.
D-1
<PAGE>
No. _____ $_________
GREEN TREE FLOORPLAN RECEIVABLES MASTER TRUST
FLOORPLAN RECEIVABLE TRUST CERTIFICATE,
SERIES 1995-1, CLASS D
Evidencing an undivided interest in a trust, the corpus of which consists
of receivables generated from time to time in the ordinary course of business
from the portfolio of revolving financing arrangements (the "Accounts") of Green
Tree Financial Corporation ("Green Tree" or the "Servicer") and other assets and
interests constituting the Trust under the Agreement described below.
This certificate (a "Certificate") does not represent an interest in, or an
obligation of, Green Tree Floorplan Funding Corp., Green Tree or any affiliate
of either of them.
This certifies that Green Tree Floorplan Funding Corp. (the "Certificate-
holder") is the registered owner of a fractional undivided interest in the Green
Tree Floorplan Receivables Master Trust (the "Trust") issued pursuant to the
Pooling and Servicing Agreement, dated as of December 1, 1995 (the "Pooling and
Servicing Agreement"; such term to include any amendment thereto) among Green
Tree Floorplan Funding Corp., as Transferor (the "Transferor"), Green Tree, as
Servicer, and Norwest Bank Minnesota, National Association, as Trustee (the
"Trustee"), and the Series 1995-1 Supplement, dated as of December 1, 1995 (the
"Series 1995-1 Supplement"), among the Transferor, Green Tree as Servicer and
the Trustee. The Pooling and Servicing Agreement, as supplemented by the Series
1995-1 Supplement, is herein referred to as the "Agreement." The corpus of the
Trust consists of all of the Transferor's right, title and interest in, to and
under (i) the Trust Property (as defined in the Agreement) and (ii) the property
described in Sections 3A and __ of the Series 1995-1 Supplement.
This Certificate does not purport to summarize the Agreement and reference
is made to that Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds, and duties evidenced hereby and the rights,
duties and obligations of the Trustee. To the extent not defined herein, the
capitalized terms used herein have the meanings ascribed to them in the
Agreement. This Certificate is one of a series of Certificates entitled "Green
Tree Floorplan Receivables Master Trust Floorplan Receivable Trust Certificates,
Series 1995-1, Class D" (the "Class D Certificates"), each of which represents a
fractional undivided interest in the Trust, and is issued under and is subject
to the terms, provisions and conditions of the Agreement, to which Agreement, as
amended from time to time, the Certificateholder by virtue of the acceptance
hereof assents and by which the Certificateholder is bound.
Green Tree Floorplan Funding Corp. shall be prohibited from Transferring
any interest in or portion of the Class D Certificate unless, prior to such
Transfer, it
D-2
<PAGE>
shall have delivered to the Trustee an Opinion of Counsel to the effect that
such proposed Transfer will not adversely affect the Federal, Minnesota or
Delaware income tax characterization of any outstanding Series of Investor
Certificate or the taxability (or tax characterization) of the Trust under
Federal, Minnesota or Delaware income tax laws. In no event shall Green Tree
Floorplan Funding Corp. be permitted to Transfer any interest in or portion of
the Class D Certificate if, after giving effect to such proposed Transfer,
taking into account the certificates whose Transfer is proposed, more than 20%
(by Invested Amount and by value) of the outstanding certificates issued by the
Trust with respect to which no Opinion of Counsel was issued that the applicable
class would be treated as debt for federal income tax purposes (including the
Exchangeable Transferor Certificate and each Transferor Retained Class) would
not be beneficially owned by the Transferor.
No principal will be payable to the Class D Certificateholders until the
Class D Principal Commencement Date, which is the Distribution Date either on or
following the Distribution Date on which the Class C Invested Amount had been
paid in full. No principal will be payable to the Class D Certificateholders
until all principal payments have first been made to the Class A
Certificateholders and then on and after the Class B Principal Payment
Commencement Date, after all principal payments have been made to the Class B
Certificateholders and then on and after the Class C Principal Commencement
Date, after all payments have been made to the Class C Certificateholders.
Interest will not accrue on the unpaid principal amount of the Class D
Certificates.
"Class D Invested Amount" means an amount equal to (a) the initial
principal balance of the Class D Certificates plus (b) the Class D Incremental
Invested Amount for the related Monthly Period, plus (c) any Additional Class D
Invested Amount, minus (d) the aggregate amount of principal payments made to
Class D Certificateholders prior to such date, minus (e) the aggregate amount of
Class D Investor Charge-Offs for all prior Distribution Dates, equal to the
amount by which the Class D Invested Amount has been reduced to fund the
Investor Default Amount on all prior Distribution Dates, minus (f) the aggregate
amount of Reallocated Principal Collections for all prior Distribution Dates,
plus (g) the aggregate amount of Interest Collections and Excess Interest
Collections applied on all prior Distribution Dates for the purpose of
reimbursing amounts deducted pursuant to the foregoing clauses (e) and (f).
Subject to the Agreement, payments of principal are limited to the unpaid
Class D Invested Amount of the Class D Certificates, which may be less than the
unpaid balance of the Class D Certificates pursuant to the terms of the
Agreement.
All principal of and interest on the Class D Certificates is due and
payable no later than the ________, 20__ Distribution Date (or if such day is
not a Business Day, the next succeeding Business Day) (the "Series 1995-1
Termination Date").
D-3
<PAGE>
After the Series Termination Date neither the Trust nor the Transferor will have
any further obligation to distribute principal or interest on the Class D
Certificates. In the event that the Class D Invested Amount is greater than zero
on the Series Termination Date, the Trustee will sell or cause to be sold, to
the extent necessary, an amount of interests in the Receivables or certain of
the Receivables up to 110% of the Class A Invested Amount, the Class B Invested
Amount, the Class C Invested Amount and the Class D Invested Amount at the close
of business on such date (but not more than the total amount of Receivables
allocable to the Investor Certificates), and shall pay the proceeds to the Class
A Certificateholders pro rata in final payment of the Class A Certificates, then
to the Class B Certificateholders pro rata in final payment of the Class B
Certificates, then to the Class C Certificateholders pro rata in final payment
of the Class C Certificates and finally to the Class D Certificateholders pro
rata in final payment of the Class D Certificates.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement, or be valid for any purpose.
D-4
<PAGE>
IN WITNESS WHEREOF, the Transferor has caused this Certificate to be duly
executed.
GREEN TREE FLOORPLAN
FUNDING CORP., Transferor
By: _________________________
Name:
Title:
Dated: __________, 1995
CERTIFICATE OF AUTHENTICATION
This is one of the Class D Certificates referred to in the within-mentioned
Pooling and Servicing Agreement.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION, Trustee
By: __________________________
Name:
Title:
D-5
<PAGE>
EXHIBIT E
<TABLE>
<CAPTION>
Green Tree Floorplan
Green Tree Floorplan Funding Corp. Receivables Master Trust Monthly Report
Certificateholder's Statement Series 1995-1 December-95
- ---------------------------------- ------------------------ --------------
<S> <C> <C> <C> <C> <C>
Section 5.2 Class A Class B Class C Class D Total
(i) Certificate Amount
(ii) Certificate Principal Distributed
(iii) Certificate Interest Distributed
Local Distribution per $1.000 Certificates
Certificate Principal Distributed per $1,000
Certificate Interest Distributed per $1,000
(iv) Principal Collections
(v) Interest Collections
Total Collections
(vi) Aggregate Amount of Principal Receivables
Invested Amount
Floating Allocation Percentage
(vii) Receivable Delinquencies
Current
30 Days to 99 Days
60 Days to 89 Days
90 Day and Over
Total Receivables
(viii) Aggregate Investor Default Amount
(ix) Charge-Off
Class A
Class B
Class C
Class D
Total Charge-Off
(x) Servicing Fee
Class A
Class B
Class C
Total Charge-Off
(xi) Reallocated Principal Collections
Class A
Class B
Class C
(xii) Excess Funding Account Balance
Average Portfolio Yield
</TABLE>
E-1
<PAGE>
EXHIBIT F
Form of 144A Exchange Notice and Certification
_________________ , 199__
Green Tree Floorplan Funding Corp.
500 Landmark Towers
345 St. Peter Street
St. Paul, MN 55102
Attention: ______________________
Trustee
____________________
____________________
Attention: Corporate Trust Department
Ladies and Gentlemen:
This is to notify you as to the transfer of $ ______________ of Floorplan
Receivable Trust Certificates, Series 1995-1, Class C (the "Class C
Certificates") of Green Tree Floorplan Receivables Master Trust (the "Company").
The undersigned is the holder of the Certificates and with this notice
hereby deposits with the Trustee $ _________________ principal amount of Class C
Certificates and requests that Class C Certificates in the same principal amount
be issued and executed by the Company and authenticated by the Trustee and
registered to the purchaser on _________________, 19__ , as specified in the
Pooling and Servicing Agreement, as supplemented by the Series 1995-1 Supplement
thereto, as follows:
Name: Denominations:
Address:
Taxpayer I.D. No.:
The undersigned represents and warrants that the undersigned (i) reasonably
believes the purchaser is a "qualified institutional buyer," as defined in Rule
144A under the Securities Act of 1933 (the "Act"), (ii) such purchaser has
acquired the Class C Certificates in a transaction effected in accordance with
the exemption from the registration requirements of the Act provided by Rule
144A and, (iii) if the purchaser has purchased the Certificates for one or more
accounts for which it is acting as fiduciary or agent, (A) each such account is
a qualified institutional buyer and (B) each such account is acquiring the Class
C Certificates for its own account or
F-1
<PAGE>
for one or more institutional accounts for which it is acting as fiduciary or
agent in a minimum amount equivalent to not less than U.S. $250,000 for each
such account.
Very truly yours,
NAME OF HOLDER OF CERTIFICATE
By: ______________________________
Name, Chief Financial
or other Executive Officer
F-2
<PAGE>
Exhibit 4.3
===============================================================================
GREEN TREE FLOORPLAN FUNDING CORP.
Buyer
and
GREEN TREE FINANCIAL CORPORATION
Seller
RECEIVABLES PURCHASE AGREEMENT
Dated as of December 1, 1995
===============================================================================
<PAGE>
<TABLE>
<CAPTION>
Table of Contents
<S> <C> <C>
Page
----
ARTICLE I DEFINITIONS.......................................................................... 1
SECTION 1.1. Definitions..................................................................... 1
SECTION 1.2. Other Definitional Provisions................................................... 1
ARTICLE II CONVEYANCE OF RECEIVABLES............................................................ 2
SECTION 2.1. Conveyance of Receivables....................................................... 2
SECTION 2.2. Representations and Warranties of the Seller Relating to the Seller
and the Agreement............................................................... 4
SECTION 2.3. Representations and Warranties of the Seller Relating to the Receivables........ 6
SECTION 2.4. Addition of Accounts............................................................ 8
SECTION 2.5. Covenants of the Seller......................................................... 10
SECTION 2.6. Removal of Eligible Accounts.................................................... 11
SECTION 2.7. Removal of Ineligible Accounts.................................................. 12
ARTICLE III ADMINISTRATION AND SERVICING OF RECEIVABLES.......................................... 13
SECTION 3.1. Acceptance of Appointment and Other Matters Relating to the Servicer............ 13
SECTION 3.2. Servicing Compensation.......................................................... 13
ARTICLE IV RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION AND APPLICATION OF COLLECTIONS........... 14
SECTION 4.1. Allocations and Applications of Collections and Other Funds..................... 14
ARTICLE V OTHER MATTERS RELATING TO THE SELLER................................................. 14
SECTION 5.1. Merger or Consolidation of, or Assumption of, the Obligations of the Seller..... 14
SECTION 5.2. Seller's Indemnification of the Buyer........................................... 14
ARTICLE VI TERMINATION.......................................................................... 15
SECTION 7.1. Amendment....................................................................... 16
SECTION 7.2. Protection of Right, Title and Interest to Receivables.......................... 17
SECTION 7.3. Limited Recourse................................................................ 18
SECTION 7.4. No Petition..................................................................... 18
SECTION 7.5. GOVERNING LAW................................................................... 18
SECTION 7.6. Notices......................................................................... 18
SECTION 7.7. Severability of Provisions...................................................... 18
SECTION 7.8. Assignment...................................................................... 18
SECTION 7.9. Further Assurances.............................................................. 19
SECTION 7.10. No Waiver; Cumulative Remedies.................................................. 19
SECTION 7.11. Counterparts.................................................................... 19
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C> <C>
SECTION 7.12. Third-Party Beneficiaries....................................................... 19
SECTION 7.13. Merger and Integration.......................................................... 19
SECTION 7.14. Headings........................................................................ 19
EXHIBITS
Exhibit A Form of Assignment of Receivables in Additional Accounts............................. A-1
Exhibit B Form of Opinion of Counsel regarding Amendments...................................... B-1
Exhibit C Form of Reassignment of Receivables in Removed Accounts.............................. C-1
</TABLE>
Schedule 1 List of Accounts
-ii-
<PAGE>
RECEIVABLES PURCHASE AGREEMENT, dated as of December 1, 1995, by and
between GREEN TREE FLOORPLAN FUNDING CORP., a Delaware corporation, as Buyer
("Buyer"), and GREEN TREE FINANCIAL CORPORATION, a Delaware corporation ("Green
Tree" or the "Seller"), as Seller.
W I T N E S S E T H:
WHEREAS the Seller in the ordinary course of its businesses finances the
purchase of floorplan inventory and other assets of dealers in, and
manufacturers of, commercial and consumer products, thereby generating certain
payment obligations;
WHEREAS the Seller wishes to sell certain of such existing and future
payment obligations from time to time to the Buyer; and
WHEREAS the Buyer desires to sell such payment obligations to the Green
Tree Floorplan Receivables Master Trust, pursuant to a Pooling and Servicing
Agreement dated as of December 1, 1995 (as the same may from time to time be
amended, supplemented or otherwise modified, the "Pooling and Servicing
Agreement"), among the Buyer, as transferor, Green Tree, as servicer, and
Norwest Bank Minnesota, National Association, as trustee (the "Trustee").
WHEREAS the Buyer is an Affiliate of the Seller.
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. Capitalized terms used herein but not otherwise
defined shall have the meanings set forth in the Pooling and Servicing
Agreement. The rules of construction in Section 1.2 of the Pooling and
Servicing Agreement shall be applied to this Agreement. In addition, the term
"Agreement" means this Receivables Purchase Agreement, as the same may from time
to time be amended, supplemented or otherwise modified.
SECTION 1.2. Other Definitional Provisions.
(a) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; Article, Section, Schedule,
and Exhibit references are references to Articles, Sections, Schedules and
Exhibits in or to this Agreement unless otherwise specified; and the term
"including" shall mean "including without limitation."
<PAGE>
(b) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.1. Conveyance of Receivables. By execution of this Agreement,
the Seller does hereby sell, transfer, assign, set over and otherwise convey,
without recourse (other than the Limited Guaranty of the Seller for the benefit
of the Class C Certificateholders and as except as expressly provided herein),
to the Buyer on the first Closing Date, in the case of Initial Accounts, and on
the applicable Addition Date, in the case of Additional Accounts, all of its
right, title and interest in, to and under the Receivables in each Account and
all Collateral Security with respect thereto owned by the Seller at the close of
business on the Cut-off Date, in the case of the Initial Accounts, and on the
applicable Additional Cut-off Date, in the case of Additional Accounts, and all
monies due or to become due and all amounts received with respect thereto and
all proceeds (including "proceeds" as defined in Section 9-306 of the UCC as in
effect in the State of Minnesota and Recoveries) thereof and all of the Seller's
rights, remedies, powers and privileges with respect to such Receivables under
the related Floorplan Agreements. Subject to Article VI, as of each Business
Day prior to the earlier of (x) the occurrence of a Pay Out Event specified in
Section 9.1(a), (b), (c) or (d) or the occurrence of an Insolvency Event as
specified in Section 9.2(a) of the Pooling and Servicing Agreement and (y) the
Trust Termination Date, on which Receivables are created in the Accounts (a
"Transfer Date"), the Seller does hereby sell, transfer, assign, set over and
otherwise convey, without recourse (except as expressly provided herein), to the
Buyer, all of its right, title and interest in, to and under the Receivables in
each Account (other than any Receivables created in any Removed Account from and
after the applicable Removal Date) and all Collateral Security with respect
thereto owned by the Seller at the close of business on such Transfer Date and
not theretofore conveyed to the Buyer, all monies due or to become due and all
amounts received with respect thereto and all proceeds (including "proceeds" as
defined in Section 9-306 of the UCC as in effect in the State of Minnesota and
Recoveries) thereof and all of the Seller's rights, remedies, powers and
privileges with respect to such Receivables under the related Floorplan
Agreements. The foregoing sale, transfer, assignment, set over and conveyance
and any subsequent sales, transfers, assignments, set-overs and conveyances do
not constitute, and are not intended to result in, the creation or an assumption
by the Buyer of any obligation of the Servicer, the Seller or any other Person
in connection with the Accounts, the Receivables or under any agreement or
instrument relating thereto, including any obligation under the Financing
Agreements or the Floorplan Agreements and any other obligation to any Dealer or
Manufacturer.
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On the Closing Date, pursuant to the terms of this Section 2.1, (i) the
Seller shall sell to the Buyer Receivables in the amount of $___________,
together with the related Collateral Security and Floorplan Rights (defined
below). Subject to Article VI, the purchase price for the Receivables sold by
(a) the Seller to the Buyer on the Closing Date and (b) the Seller to the Buyer
on each Addition Date and on each Transfer Date thereafter shall be a price
agreed to by the Buyer and the Seller at the time of acquisition by the Buyer,
which price shall not, in the opinion of the Buyer, be materially less favorable
to the Buyer than prices for transactions of a generally similar character at
the time of the acquisition taking into account the quality of such Receivables
and other pertinent factors, including, without limitation, prevailing interest
rates; provided that such consideration shall in any event not be less than
reasonably equivalent value therefor.
In connection with such contribution and sales, the Seller agrees to record
and file, at its own expense, a financing statement on form UCC-1 (and
continuation statements when applicable) naming the Seller as "seller" and the
Buyer as "purchaser" thereon with respect to the Receivables now existing and
hereafter created for the sale of chattel paper, accounts or general intangibles
(as defined in Section 9-105 or 9-106 of the UCC as in effect in any state where
the Seller's or the Servicer's chief executive offices or books and records
relating to the Receivables are located) meeting the requirements of applicable
state law in such manner and in such jurisdictions as are necessary to perfect
the sale and assignment of the Receivables, the Collateral Security and all of
the Seller's rights, remedies, powers and privileges with respect to such
Receivables under the related Floorplan Agreements (the "Floorplan Rights") to
the Buyer, and to deliver a file-stamped copy of such financing statements or
other evidence of such filing to the Buyer on or prior to the first Closing
Date, in the case of Initial Accounts, and (if any additional filing is so
necessary) the applicable Addition Date, in the case of Additional Accounts. In
addition, the Seller shall cause to be timely filed in the appropriate filing
office any UCC-1 financing statement and continuation statement necessary to
perfect any sale of Receivables to the Buyer. The Buyer shall be under no
obligation whatsoever to file such financing statement, or a continuation
statement to such financing statement, or to make any other filing under the UCC
in connection with such contribution and sales. The parties hereto intend that
the transfers of Receivables effected by this Agreement be sales.
In connection with such contribution and sales, the Seller further agrees,
at its own expense, on or prior to the first Closing Date, in the case of
Initial Accounts, the applicable Addition Date, in the case of Additional
Accounts, and the applicable Removal Date, in the case of Removed Accounts, (a)
to indicate in its books and records, which may include computer files, that the
Receivables created in connection with the Accounts (other than Removed
Accounts) have been sold, and the Collateral Security and the Floorplan Rights
assigned, to the Buyer pursuant to this Agreement and sold to the Trust pursuant
to the Pooling and Servicing Agreement for the benefit of the Certificateholders
and the other Beneficiaries and
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(b) to deliver to the Buyer a computer file or microfiche or written list
containing a true and complete list of all such Accounts (other than Removed
Accounts) specifying for each such Account, as of the Cut-off Date, in the case
of Initial Accounts, and the applicable Additional Cut-off Date, in the case of
Additional Accounts, (i) its account number and (ii) the aggregate amount of
Principal Receivables in such Account. Such file or list, as supplemented from
time to time to reflect Additional Accounts and Removed Accounts, shall be
marked as Schedule 1 to this Agreement and is hereby incorporated into and made
a part of this Agreement.
In the event that such contributions, sales and assignments are deemed to
constitute a pledge of security for a loan, it is the intent of this Agreement
that the Seller shall be deemed to have granted to the Buyer a first priority
perfected security interest in all of the Seller's right, title and interest to
and under the Receivables, the Collateral Security and all proceeds thereof and
the Floorplan Agreements, and that this Agreement shall constitute a security
agreement under applicable law.
SECTION 2.2. Representations and Warranties of the Seller Relating to the
Seller and the Agreement. The Seller hereby represents and warrants to the
Buyer, as to itself and the Receivables being transferred and sold by it
hereunder, as of each Closing Date that:
(a) Organization and Good Standing. The Seller is a corporation duly
organized and validly existing and in good standing under the laws of the State
of Delaware and has, in all material respects, full corporate power, authority
and legal right to own its properties and conduct its business as such
properties are presently owned and such business is presently conducted, and to
execute, deliver and perform its obligations under this Agreement.
(b) Due Qualification. The Seller is duly qualified to do business
and, where necessary, is in good standing as a foreign corporation (or is exempt
from such requirement) and has obtained all necessary licenses and approvals in
each jurisdiction in which the conduct of its business requires such
qualification except where the failure to so qualify or obtain licenses or
approvals would not have a material adverse effect on its ability to perform its
obligations hereunder.
(c) Due Authorization. The execution and delivery of this Agreement
and the consummation of the transactions provided for or contemplated by this
Agreement have been duly authorized by the Seller by all necessary corporate
action on the part of the Seller and are within its corporate powers.
(d) No Conflict. The execution and delivery of this Agreement, the
performance of the transactions contemplated by this Agreement and the
fulfillment of the terms hereof and thereof, will not conflict with, result in
any breach of any of the material terms and provisions of, or constitute (with
or without
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notice or lapse of time or both) a material default under, any indenture,
contract, agreement, mortgage, deed of trust, or other instrument to which the
Seller is a party or by which it or its properties are bound.
(e) No Violation. The execution and delivery of this Agreement, the
performance of the transactions contemplated by this Agreement and the
fulfillment of the terms hereof and thereof applicable to the Seller, will not
conflict with or violate any material Requirements of Law applicable to the
Seller or conflict with, violate, result in any breach of any of the material
terms and provisions of, or constitute (with or without notice of lapse of time
or both) a material default under any indenture, contract, agreement, mortgage,
deed of trust, or other instrument to which the Seller is a party or by which
the Seller is bound.
(f) No Proceedings. There are no proceedings or, to the best
knowledge of the Seller, investigations, pending or threatened against the
Seller, before any Governmental Authority (i) asserting the invalidity of this
Agreement, (ii) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement, (iii) seeking any determination or ruling that,
in the reasonable judgment of the Seller, would materially and adversely affect
the performance by the Seller of its obligations under this Agreement, (iv)
seeking any determination or ruling that would materially and adversely affect
the validity or enforceability of this Agreement or (v) seeking to affect
adversely the income tax attributes of the Trust under the United States federal
or any state income, single business or franchise tax systems.
(g) All Consents Required. All appraisals, authorizations, consents,
orders, approvals or other actions of any Person or of any governmental body or
official required in connection with the execution and delivery of this
Agreement, the performance of the transactions contemplated by this Agreement,
and the fulfillment of the terms hereof or thereof, have been obtained.
(h) Enforceability. This Agreement constitutes a legal, valid and
binding obligation of the Seller enforceable against the Seller in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect affecting the enforcement of creditors' rights in general
and except as such enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity).
(i) Record of Accounts. As of the first Closing Date, in the case of
Initial Accounts, as of the applicable Addition Date, in the case of the
Additional Accounts, and, as of the applicable Removal Date, in the case of
Removed Accounts, Schedule 1 to this Agreement is an accurate and complete
listing in all material respects of all the Accounts as of the Cut-off Date, the
applicable Additional Cut-off Date or the applicable Removal Date, as the case
may be, and the information contained therein with respect to the identity of
such Accounts and the Receivables
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existing thereunder is true and correct in all material respects as of the Cut-
off Date, such applicable Additional Cut-off Date or such Removal Date, as the
case may be.
(j) Valid Transfer. This Agreement or, in the case of Additional
Accounts, the related Assignment constitutes a valid sale, transfer and
assignment to the Buyer of all right, title and interest of the Seller in the
Receivables and the Collateral Security and the proceeds thereof. Upon the
filing of the financing statements described in Section 2.1 with the Secretary
of State of the State of Minnesota and the County Recorder of Ramsey County in
the State of Minnesota, and, in the case of the Receivables hereafter created
and the proceeds thereof, upon the creation thereof, the Buyer shall have a
first priority perfected ownership interest in such property. Except as
otherwise provided in the Pooling and Servicing Agreement, neither the Seller
nor any Person claiming through or under the Seller has any claim to or interest
in the Trust Assets.
The representations and warranties set forth in this Section 2.2 shall
survive the transfer and assignment of the Receivables to the Buyer. Upon
discovery by the Seller or the Buyer of a breach of any of the foregoing
representations and warranties, the party discovering such breach shall give
prompt written notice to the other party.
In the event of any breach of any of the representations and warranties set
forth in this Section 2.2 and if, in connection therewith, the Buyer shall be
obligated to purchase the Certificateholders' Interest pursuant to Section 2.03
of the Pooling and Servicing Agreement, the Seller shall repurchase the
Receivables, the Collateral Security and Floorplan Rights respectively conveyed
by them and shall pay to the Buyer on the Business Day preceding the
Distribution Date on which such purchase of the Certificateholders' Interest is
to be made an amount equal to the purchase price for the Certificateholders'
Interest as specified in the Pooling and Servicing Agreement. The obligation of
the Seller to purchase the Receivables pursuant to this Section 2.2 shall
constitute the sole remedy against such Seller respecting an event of the type
specified in the first sentence of this paragraph available to the Buyer and to
the Investor Certificateholders (or the Trustee on behalf of the Investor
Certificateholders).
SECTION 2.3. Representations and Warranties of the Seller Relating to the
Receivables.
(a) Representations and Warranties. The Seller hereby represents and
warrants to the Buyer, with respect to the Receivables conveyed by the Seller,
that:
(i) Each Receivable and all Collateral Security existing on the first
Closing Date or, in the case of Additional Accounts, on the applicable
Addition Date, and on each Transfer Date, has been conveyed to the Buyer
free and clear of any Lien [other than any Permitted Lien].
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(ii) With respect to each Receivable and all Collateral Security
existing on the first Closing Date or, in the case of Additional Accounts,
on the applicable Addition Date, and on each Transfer Date, all consents,
licenses, approvals or authorizations of or registrations or declarations
with any Governmental Authority required to be obtained, effected or given
by the Seller in connection with the conveyance of such Receivable or
Collateral Security to the Buyer have been duly obtained, effected or given
and are in full force and effect.
(iii) On the Cut-off Date and each Closing Date, each Initial Account
is an Eligible Account and, in the case of Additional Accounts, on the
applicable Additional Cut-off Date and each subsequent Closing Date, each
such Additional Account is an Eligible Account.
(iv) On the first Closing Date, in the case of the Initial Accounts,
and, in the case of the Additional Accounts, on the applicable Additional
Cut-off Date, and on each Transfer Date, each Receivable conveyed to the
Buyer on such date is an Eligible Receivable.
(b) Notice of Breach. The representations and warranties set forth in this
Section 2.3 shall survive the transfer and assignment of the Receivables to the
Buyer. Upon discovery by the Seller or the Buyer of a breach of any of the
representations and warranties set forth in this Section 2.3, the party
discovering such breach shall give prompt written notice to the other party.
The Seller agrees to cooperate with the Buyer in attempting to cure any breach.
(c) Repurchase. In the event any representation or warranty under Section
2.3(a) is not true and correct as of the date specified therein with respect to
any Receivable or Account and the Buyer is, in connection therewith, required to
purchase such Receivable or all Receivables in such Account pursuant to Section
2.04(c) of the Pooling and Servicing Agreement, then, within 30 days (or such
longer period as may be agreed to by the Buyer) of the earlier to occur of the
discovery of any such event by the Seller or the Buyer, or receipt by the Seller
or the Buyer of written notice of any such event given by the Trustee or any
Enhancement Providers, the Seller shall repurchase the Receivable or Receivables
of which the Buyer is required to accept reassignment pursuant to the Pooling
and Servicing Agreement on the Business Day preceding the Determination Date on
which such reassignment is to occur.
The Seller shall purchase each such Receivable by making a payment to the
Buyer in immediately available funds on the Business Day preceding the
Distribution Date on which such reassignment is to occur in an amount equal to
the Purchase Price for such Receivable. Upon payment of the Purchase Price, the
Buyer shall automatically and without further action be deemed to sell,
transfer, assign, set over and otherwise convey to the Seller, without recourse,
representation or warranty, all the right, title and interest of the Buyer in
and to such Receivable, all
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Collateral Security, the related Floorplan Rights and all monies due or to
become due with respect thereto and all proceeds thereof. The Buyer shall
execute such documents and instruments of transfer or assignment and take such
other actions as shall reasonably be required by the Seller to effect the
conveyance of such Receivables pursuant to this Section. The obligation of the
Seller to repurchase any such Receivable shall constitute the sole remedy
respecting the event giving rise to such obligation available to the Buyer and
to the Certificateholders (or the Trustee on behalf of Certificateholders).
SECTION 2.4. Addition of Accounts.
(a) The Seller may from time to time offer to designate additional Eligible
Accounts to be included as Accounts, subject to the conditions specified in
paragraph (b) below. If any such offer is accepted by the Buyer, Receivables
and Collateral Security, if any, from such Additional Accounts shall be sold to
the Buyer effective on a date (the "Addition Date") specified in a written
notice provided by the Seller (or the Servicer on its behalf) to the Buyer and
any Enhancement Providers specifying the Additional Cut-off Date and the
Addition Date for such Additional Accounts (the "Addition Notice") on or before
the fifth Business Day but not more than the 30th day prior to the related
Addition Date or, if the Automatic Addition Condition is satisfied, on the
Determination Date following the Collection Period in which such Addition Dates
occur (the "Notice Date"). An Addition Notice may relate to one or more
Accounts on one or more Addition Dates.
(b) The Seller shall be permitted to convey to the Buyer the Receivables
and all Collateral Security, if any, related thereto in any Additional Accounts
designated by the Seller as such pursuant to Section 2.4(a) only upon
satisfaction of each of the following conditions on or prior to the related
Addition Date (except for the condition in clause (vii), if applicable, which
shall be satisfied on or before the tenth Business Day after such Notice Date):
(i) The Seller shall provide the Buyer and any Enhancement Providers
with a timely Addition Notice.
(ii) Such Additional Accounts shall all be Eligible Accounts.
(iii) The Seller shall have delivered to the Buyer a duly executed
written assignment (including an acceptance by the Buyer) covering the
Receivables specified in the Addition Notice in substantially the form of
Exhibit A (the "Assignment") and the computer file or microfiche or written
list required to be delivered pursuant to Section 2.1.
(iv) The Seller shall have delivered to the Buyer for deposit in the
Collection Account all Collections with respect to such Additional Accounts
since the Additional Cut-off Date.
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(v) (A) No selection procedures believed by the Seller to be adverse
to the interests of the Buyer or the Beneficiaries were used in selecting
such Additional Accounts; (B) the list of Additional Accounts delivered
pursuant to clause (iii) above is true and correct in all material respects
as of the Additional Cut-off Date and (C) as of each of the Notice Date and
the Addition Date, neither the Seller, the Buyer nor the Servicer are
insolvent nor will have been made insolvent by such transfer nor are aware
of any pending insolvency.
(vi) If the Automatic Addition Condition is not satisfied with respect
to such addition, the Rating Agency Condition shall have been satisfied
with respect to such addition.
(vii) If one or more of the Additional Accounts specified in such
Addition Notice will contain Receivables secured by a security interest in
a type of Product that has not been previously financed in the Floorplan
Business then, whether or not the Automatic Condition is satisfied, the
Rating Agency Condition shall have been satisfied in respect of the
addition of each such Additional Account on or prior to the related
Addition Date.
(viii) The addition of the Receivables arising in such Additional
Accounts shall not result in the occurrence of an Pay Out Event.
(ix) The Seller shall have delivered to the Buyer and any Enhancement
Providers a certificate of a Vice President or more senior officer
confirming the items set forth in paragraphs (ii) through (vi) and (viii)
above.
(x) On or before each Notice Date, the Seller shall have delivered to
the Trustee and any Enhancement Providers (A) an Opinion of Counsel with
respect to the Receivables in the Additional Accounts added since the last
delivery of such opinion substantially in the form of Exhibit E-2 to the
Pooling and Servicing Agreement and (B) except in the case of an addition
in connection with an addition of Receivables by the Buyer to the Trust
required by Section 2.6(a) of the Pooling and Servicing Agreement, a Tax
Opinion with respect to such addition; provided that if such Opinion of
Counsel and Tax Opinion are required to be delivered, they shall be
rendered by outside counsel no less frequently than quarterly.
(c) The Seller hereby represents and warrants as of the applicable Addition
Date as to the matters set forth in Section 2.4(b)(v). The representations and
warranties set forth in Section 2.4(b)(v) shall survive the sale and assignment
of the respective Receivables and Collateral Security, if any, to the Buyer.
Upon discovery by the Seller or the Buyer of a breach of any of the foregoing
representations and warranties, the party discovering the breach shall give
prompt written notice to the other parties and to any Enhancement Providers.
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SECTION 2.5. Covenants of the Seller. The Seller hereby covenants that:
(a) No Liens. Except for the conveyances hereunder, the Seller will
not sell, pledge, assign or transfer to any other Person, or grant, create,
incur, assume or suffer to exist any Lien on, any Receivable or any Collateral
Security, whether now existing or hereafter created, or any interest therein,
and the Seller shall defend the right, title and interest of the Buyer and the
Trust in, to and under the Receivables and the Collateral Security, whether now
existing or hereafter created, against all claims of third parties claiming
through or under the Seller.
(b) Financing Agreements and Guidelines. The Seller shall comply with
and perform its servicing obligations with respect to the Accounts and
Receivables in accordance with (i) the Wholesale Financing Agreements and the
Asset Based Financing Agreements relating to the Accounts and (ii) the Financing
Guidelines, except insofar as any failure to so comply or perform would not
materially and adversely affect the rights of the Buyer, the Trust or any of the
Beneficiaries. Subject to compliance with all Requirements of Law, the Seller
may change the terms and provisions of (i) the Wholesale Financing Agreements
and the Asset Based Financing Agreements or (ii) the Financing Guidelines in any
respect (including the calculation of the amount or the timing of charge-offs
and the rate of the finance charge assessed thereon) only if such change would
be permitted pursuant to Section 3.1(d) of the Pooling and Servicing Agreement.
(c) Account Allocations. In the event that the Seller is unable for
any reason to transfer Receivables to the Buyer, then the Seller agrees that it
shall allocate, after the occurrence of such event, payments on each Account
with respect to the principal balance of such Account first to the oldest
principal balance of such Account and to have such payments applied as
Collections in accordance with the terms of the Pooling and Servicing Agreement.
The parties hereto agree that Interest Receivables, whenever created, accrued in
respect of Principal Receivables which have been conveyed to the Buyer and by
the Buyer to the Trust shall continue to be a part of the Trust notwithstanding
any cessation of the transfer of additional Principal Receivables to the Buyer
and Collections with respect thereto shall continue to be allocated and paid in
accordance with Article IV of the Pooling and Servicing Agreement.
(d) Delivery of Collections. In the event that the Seller receives
Collections, the Seller agrees to pay the Servicer or any Successor Servicer all
payments received by the Seller in respect of the Receivables as soon as
practicable after receipt thereof by the Seller, but in no event later than two
Business Days after the receipt by the Seller thereof.
(e) Notice of Liens. The Seller shall notify the Buyer and the
Trustee promptly after becoming aware of any Lien on any Receivable conveyed by
the Seller other than the conveyances hereunder or under the Pooling and
Servicing Agreement.
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(f) Compliance with Law. The Seller hereby agrees to comply in all
material respects with all Requirements of Law applicable to the Seller.
(g) Performance of Floorplan Agreements. The Seller shall perform its
obligations under each Floorplan Agreement in accordance with the terms thereof
in all material respects.
SECTION 2.6. Removal of Eligible Accounts.
(a) On each Determination Date on which Accounts, including all amounts
then held by the Trust or thereafter received by the Trust with respect to such
Accounts, are removed from the Trust pursuant to Section 2.7 of the Pooling and
Servicing Agreement, the Buyer shall be deemed to have offered to the Seller
automatically and without notice to or action by or on behalf of the Buyer, the
right to remove Eligible Accounts from the operation of this Agreement in the
manner prescribed in Section 2.6(b). The termination of an Account by a Dealer
upon such Dealer's payment in full of such Account shall not be a removal of an
Account under this Section.
(b) To accept such offer and remove Accounts, including all amounts then
held by the Trust or thereafter received by the Trust with respect to such
Accounts, the Seller (or the Servicer on its behalf) shall take the following
actions and make the following determinations:
(i) not less than five Business Days prior to the Removal Date,
furnish to the Buyer, the Trustee, any Enhancement Providers and the Rating
Agencies a written notice (the "Removal Notice") specifying the
Determination Date (which may be the Determination Date on which such
notice is given) on which removal of the Receivables of one or more
Accounts (the "Removed Accounts") will occur (a "Removal Date");
(ii) from and after such Removal Date, cease to transfer to the Buyer
any and all Receivables arising in such Removed Accounts;
(iii) represent and warrant that the removal of any such Eligible
Account on any Removal Date shall not, in the reasonable belief of the
Seller, cause a Pay Out Event to occur or cause the Transferor Interest to
be less than the Minimum Transferor amount on such date;
(iv) represent and warrant that no selection procedures believed by
the Seller to be adverse to the interests of the Beneficiaries were
utilized in selecting the Accounts to be removed; and
(v) on or before the fifth Business Day after the Removal Date,
furnish to the Trustee a computer file, microfiche list or other list of
the
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Removed Accounts that were removed on the Removal Date, specifying for
each Removed Account as of the date of the Removal Notice its number, the
aggregate amount outstanding in such Removed Account and the aggregate
amount of Principal Receivables therein and represent that such computer
file, microfiche list or other list of the Removed Accounts is true and
complete in all material respects.
(c) Subject to Section 2.6(b), on the Removal Date with respect to any such
Removed Account, such Removed Account shall be deemed removed by operation of
this Agreement for all purposes. After the Removal Date and upon the written
request of the Servicer, the Buyer shall deliver to the Seller a reassignment in
substantially the form of Exhibit C (the "Reassignment").
SECTION 2.7. Removal of Ineligible Accounts.
(a) On any date on which an Account becomes an Ineligible Account (which
shall be deemed the Removal Commencement Date with respect to such Account), the
Seller shall commence removal of the Receivables of such Ineligible Account in
the manner prescribed in Section 2.7(b).
(b) With respect to each Account that becomes an Ineligible Account, the
Seller (or the Servicer on its behalf) shall take the following actions and make
the following determinations:
(i) furnish to the Buyer, the Trustee and any Enhancement Providers a
Removal Notice specifying a Removal Commencement Date and the Ineligible
Accounts to be treated as Designated Accounts;
(ii) determine on the Removal Commencement Date with respect to such
Designated Accounts the Designated Balance with respect to each such
Designated Account and amend Schedule 1 by delivering to the Buyer a
computer file or microfiche or written list containing a true and complete
list of the Removed Accounts specifying for each such Account, as of the
Removal Commencement Date, its account number, the aggregate amount of
Receivables outstanding in such Account and the Designated Balance;
(iii) from and after such Removal Commencement Date, cease to
transfer to the Buyer any and all Receivables arising in such Designated
Accounts;
(iv) from and after such Removal Commencement Date, allocate
Collections of Principal Receivables in respect of each Designated Account,
first to the oldest outstanding principal balance of such Designated
account, until the Removal Date with respect thereto; and
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(v) on each Business Day from and after such Removal Commencement Date
to and until the related Removal Date, allocate (A) to the Buyer Defaulted
Receivables and Collections of Interest Receivables in respect of each
Designated Account, based on the ratio of the aggregate amount of Principal
Receivables in all Designated Accounts sold to the Buyer on such Business
Day to the total aggregate amount of Principal Receivables in all such
Designated Accounts on such Business Day and (B) to the Seller, the
remainder of the Defaulted Receivables and Collections of Interest
Receivables in all such Designated Accounts on such Business Day.
(c) On the Removal Date with respect to any such Designated Account, the
Seller shall cease to allocate any Collections therefor in accordance herewith
and such Designated Account shall be deemed a Removed Account. After the
Removal Date and upon the written request of the Servicer, the Buyer shall
deliver to the Seller a Reassignment.
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 3.1. Acceptance of Appointment and Other Matters Relating to the
Servicer.
(a) Green Tree agrees to act as the Servicer under this Agreement and the
Pooling and Servicing Agreement, and the Buyer consents to Green Tree acting as
Servicer. Green Tree, as Servicer, may delegate some or all of its servicing
duties to a wholly owned subsidiary of Green Tree, for so long as such
subsidiary remains, directly or indirectly, a wholly owned subsidiary of Green
Tree. Green Tree will have ultimate responsibility for servicing, managing and
making collections on the Receivables and will have the authority to make any
management decisions relating to such Receivables, to the extent such authority
is granted to the Servicer under this Agreement and the Pooling and Servicing
Agreement.
(b) Green Tree shall service and administer the Receivables in accordance
with the provisions of the Pooling and Servicing Agreement.
SECTION 3.2. Servicing Compensation. As full compensation for its
servicing activities hereunder and under the Pooling and Servicing Agreement,
Green Tree shall be entitled to receive the Servicing Fee on each Distribution
Date so long as it is the Servicer under the Pooling and Servicing Agreement.
The Servicing Fee shall be paid in accordance with the terms of the Pooling and
Servicing Agreement.
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ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION 4.1. Allocations and Applications of Collections and Other Funds.
The Servicer will apply all Collections with respect to the Receivables and all
funds on deposit in the Collection Account as described in Article IV of the
Pooling and Servicing Agreement.
ARTICLE V
OTHER MATTERS RELATING TO THE SELLER
SECTION 5.1. Merger or Consolidation of, or Assumption of, the Obligations
of the Seller. The Seller shall not consolidate with or merge into any other
corporation or convey or transfer its properties and assets substantially as an
entirety to any Person, unless:
(a) the corporation formed by such consolidation or into which the Seller
is merged or the Person which acquires by conveyance or transfer the properties
and assets of the Seller substantially as an entirety shall be a corporation
organized and existing under the laws of the United States of America or any
State or the District of Columbia and, if the Seller is not the surviving
entity, such corporation shall assume, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, the
performance of every covenant and obligation of the Seller hereunder; and
(b) the Seller has delivered to the Buyer and the Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such consolidation,
merger, conveyance or transfer comply with this Section 5.1 and that all
conditions precedent herein provided for relating to such transaction have been
complied with.
SECTION 5.2. Seller's Indemnification of the Buyer. The Seller shall
indemnify and hold harmless the Buyer, from and against any loss, liability,
expense, claim, damage or injury suffered or sustained by reason of any acts,
omissions or alleged acts or omissions arising out of activities of the Seller
pursuant to this Agreement arising out of or based on the arrangement created by
this Agreement and the activities of the Seller taken pursuant thereto,
including any judgment, award, settlement, reasonable attorneys' fees and other
costs or expenses incurred in connection with the defense of any actual or
threatened action, proceeding or claim; provided, however, that the Seller shall
not indemnify the Buyer if such acts, omissions or alleged acts or omissions
constitute fraud, gross negligence or wilful misconduct by the Buyer; and
provided further, that the Seller shall not indemnify the Buyer for any
liabilities, cost or expense of the Buyer with
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<PAGE>
respect to any federal, state or local income or franchise taxes (or any
interest or penalties with respect thereto) required to be paid by the Buyer in
connection herewith to any taxing authority. Any indemnification under this
Article V shall survive the termination of the Agreement.
ARTICLE VI
TERMINATION
This Agreement will terminate immediately after the Trust terminates
pursuant to the Pooling and Servicing Agreement. In addition, the Buyer shall
not purchase Receivables from the Seller nor shall the Seller designate
Additional Accounts if (i) the Seller shall consent to the appointment of a
bankruptcy trustee or receiver or liquidator for the winding-up or liquidation
of its affairs or (ii) the Seller shall become an involuntary party to (or be
made the subject of) any proceeding provided for by any insolvency, readjustment
of debt, marshalling of assets and liabilities or similar proceedings of or
relating to the Seller or relating to all or substantially all of its property
(an "Involuntary Case") and such Involuntary Case shall have continued for a
period of ten Business Days from and including the day of receipt by the Seller
at its principal corporate office of notice of such Involuntary Case; provided,
that during such ten Business Day period, the Buyer shall suspend its purchase
of Receivables and shall hold all Collections of Principal Receivables that
would have been available to purchase Receivables in the Collection Account and
(a) if by the first Business Day after such ten Business Day period, the Buyer
has not obtained an order from the court having jurisdiction of such case or
filing which order approves the continuation of the sale of Receivables by the
Seller to the Buyer and which provided that the Buyer and any of its transferees
(including the Trustee) may rely on such order for the validity and nonavoidance
of such transfer (the "Order"), the Buyer shall hold such Collections in the
Collection Account until such time as they may be paid as elsewhere provided
herein and shall not purchase Receivables thereafter or designate Additional
Accounts for transfer to the Buyer, or (b) if by such first Business Day, the
Buyer has obtained such Order, the Seller may continue selling Receivables, and
the Buyer may continue purchasing Receivables, pursuant to the terms hereof, as
modified by the immediately succeeding sentence. During the period after the
ten Business Day period described above and before the end of the 60-day period
described below, the purchase price of the Receivables transferred during such
period, notwithstanding anything in this Agreement to the contrary, shall be
paid to the Seller by the Buyer in cash not later than the same Business Day of
any sale of Receivables. During such period, Receivables will be considered
transferred to the Buyer only to the extent that the purchase price therefor has
been paid in cash on the same Business Day. If an Order is obtained but
subsequently is reversed or rescinded or expires, the Seller shall immediately
cease selling Receivables to the Buyer and the Buyer shall immediately cease
buying Receivables. The Seller shall give prompt written notice to each of the
Buyer and the Trustee immediately upon becoming a party to an Involuntary Case.
If by the
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<PAGE>
first Business Day after the 60-day period after such involuntary filing, such
Involuntary Case has not been dismissed, the Buyer shall not purchase thereafter
Receivables or designated Additional Accounts for transfer to the Trust.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. Amendment.
(a) This Agreement may be amended from time to time by the Seller and the
Buyer; provided, however, that such action shall not, as evidenced by an Opinion
of Counsel for the Seller addressed and delivered to the Trustee, adversely
affect in any material respect the interests of any Investor Certificateholder.
(b) This Agreement may also be amended from time to time by the Buyer and
the Seller with the consent of the Holders of Investor Certificates evidencing
more than 50% of the aggregate unpaid principal amount of the Investor
Certificates of all materially adversely affected Series, for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Seller; provided, however, that no such amendment shall (i) reduce in any manner
the amount of or delay the timing of any distributions to be made to Investor
Certificateholders or deposits of amounts to be so distributed with the amount
available under any Enhancement without the consent of each affected Investor
Certificateholder, (ii) change the definition of or the manner of calculating
the interest of any Investor Certificates without the consent of each affected
Certificateholder, (iii) reduce the aforesaid percentage required to consent to
any such amendment without the consent of each Certificateholder or (iv)
adversely affect the rating of any Series or Class by any Rating Agency without
the consent of the Holders of all of the Investor Certificates of such Series or
Class. Any amendment to be effected pursuant to this paragraph shall be deemed
to materially adversely affect all outstanding Series, other than any Series
with respect to which such action shall not, as evidenced by an Opinion of
Counsel for the Seller, addressed and delivered to the Trustee, adversely affect
in any material respect the interests of any Investor Certificateholder of such
Series. The Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Trustee's rights, duties or immunities under this
Agreement or otherwise.
(c) Promptly after the execution of any such amendment or consent (other
than an amendment pursuant to paragraph (a), the Seller shall furnish
notification of the substance of such amendment to each Investor
Certificateholder, each Enhancement Provider, each Agent and each Rating Agency.
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<PAGE>
(d) It shall not be necessary for the consent of Investor
Certificateholders under this Section to approve the particular form of any
proposed amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Investor Certificateholders shall be
subject to such reasonable requirements as the Trustee may prescribe.
(e) Notwithstanding anything in this Section to the contrary, no amendment
may be made to this Agreement which would adversely affect in any material
respect the interests of any Enhancement Provider without the consent of such
Enhancement Provider.
SECTION 7.2. Protection of Right, Title and Interest to Receivables.
(a) The Seller shall cause this Agreement, all amendments hereto and/or all
financing statements and continuation statements and any other necessary
documents covering the Buyer's right, title and interest to the Receivables and
Collateral Security relating thereto to be promptly recorded, registered and
filed, and at all times to be kept recorded, registered and filed, all in such
manner and in such places as may be required by law fully to preserve and
protect the right, title and interest of the Buyer hereunder. The Seller shall
deliver to the Buyer file-stamped copies of, or filing receipts for, any
document recorded, registered or filed as provided above, as soon as available
following such recording, registration or filing. The Buyer shall cooperate
fully with the Seller in connection with the obligations set forth above and
will execute any and all documents reasonably required to fulfill the intent of
this Section 7.2(a).
(b) Within 30 days after the Seller makes any change in its name, identity
or corporate structure which would make any financing statement or continuation
statement filed in accordance with Section 7.2(a) seriously misleading within
the meaning of Section 9-402(7) of the UCC as in effect in the State of
Minnesota, or such other applicable jurisdiction, the Seller shall give the
Buyer and any Agent notice of any such change and shall file such financing
statements or amendments as may be necessary to continue the perfection of the
Buyer's security interest in the Receivables and the proceeds thereof.
(c) The Seller will give the Buyer prompt written notice of any relocation
of any office at which it keeps Records concerning the Receivables or of its
principal executive office if, as a result of such relocation, the applicable
provisions of the UCC would require the filing of any amendment of any
previously filed financing or continuation statement or of any new financing
statement and shall file such financing statements or amendments as may be
necessary to perfect or to continue the perfection of the Buyer's security
interest in the Receivables and the proceeds thereof. The Seller will at all
times maintain its principal executive offices within the United States of
America.
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<PAGE>
(d) The Seller will deliver to the Buyer upon the execution and delivery of
each amendment of this Agreement, an Opinion of Counsel to the effect specified
in Exhibit B.
SECTION 7.3. Limited Recourse. Notwithstanding anything to the contrary
contained herein, the obligations of the Buyer hereunder shall not be recourse
to the Buyer (or any person or organization acting on behalf of the Buyer or any
affiliate, officer or director of the Buyer), other than to the portion of the
Transferor Interest on any date of determination which is in excess of the
Minimum Transferor Interest; provided, however, that any payment by the Buyer
made in accordance with this Section 7.3 shall be made only after payment in
full of any amounts that the Buyer is obligated to deposit in the Collection
Account pursuant to this Agreement; provided further that the Investor
Certificateholders shall be entitled to the benefits of the subordination of the
Collections allocable to the Transferor Interest to the extent provided in any
Supplements to the Pooling and Servicing Agreement.
SECTION 7.4. No Petition. The Seller hereby covenants and agrees that it
will not at any time institute against the Buyer any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any United States Federal or state bankruptcy or similar law.
SECTION 7.5. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF MINNESOTA, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 7.6. Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by registered mail, return receipt requested, to the
parties at such addresses specified in the Pooling and Servicing Agreement.
SECTION 7.7. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or rights of the Certificateholders.
SECTION 7.8. Assignment. Notwithstanding anything to the contrary
contained herein, this Agreement may not be assigned by the Seller without the
prior consent of the Buyer and the Trustee. The Buyer may assign its rights,
remedies, powers and privileges under this Agreement to the Trust pursuant to
the Pooling and Servicing Agreement.
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<PAGE>
SECTION 7.9. Further Assurances. The Seller agrees to do and perform,
from time to time, any and all acts and to execute any and all further
instruments required or reasonably requested by the Buyer more fully to effect
the purposes of this Agreement, including the execution of any financing
statements or continuation statements relating to the Receivables for filing
under the provisions of the UCC of any applicable jurisdiction.
SECTION 7.10. No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Buyer, any right, remedy, power or
privilege under this Agreement shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege under this
Agreement preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exhaustive of any rights,
remedies, powers and privileges provided by law.
SECTION 7.11. Counterparts. This Agreement may be executed in two or more
counterparts (and by different parties on separate counterparts), each of which
shall be an original, but all of which together shall constitute one and the
same instrument.
SECTION 7.12. Third-Party Beneficiaries. This Agreement will inure to the
benefit of and be binding upon the parties hereto, the Certificateholders, the
Trustee and the other Beneficiaries and their respective successors and
permitted assigns. Except as otherwise provided in this Agreement, no other
Person will have any right or obligation hereunder.
SECTION 7.13. Merger and Integration. Except as specifically stated
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived, or supplemented except as provided herein.
SECTION 7.14. Headings. The headings herein are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
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<PAGE>
IN WITNESS WHEREOF, the Seller and the Buyer have caused this Receivables
Purchase Agreement to be duly executed by their respective officers as of the
day and year first above written.
GREEN TREE FLOORPLAN FUNDING
CORP., Buyer
By:
__________________________________
Name:
___________________________
Title:
___________________________
GREEN TREE FINANCIAL
CORPORATION, Seller
By:
__________________________________
Name:
___________________________
Title:
___________________________
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<PAGE>
EXHIBIT A
TO RPA
FORM OF ASSIGNMENT OF RECEIVABLES IN ADDITIONAL ACCOUNTS
(AS REQUIRED BY SECTION 2.4
OF THE RECEIVABLES PURCHASE AGREEMENT)
ASSIGNMENT No. _____ OF RECEIVABLES IN ADDITIONAL ACCOUNTS dated as of
__________, ____, between Green Tree Floorplan Funding Corp., as buyer (the
"Buyer"), and Green Tree Financial Corporation, as seller (the "Seller"),
pursuant to the Receivables Purchase Agreement referred to below.
W I T N E S S E T H:
-------------------
WHEREAS the Seller and the Buyer are parties to a Receivables Purchase
Agreement dated as of December 1, 1995 (as amended or supplemented, the
"Receivables Purchase Agreement");
WHEREAS, pursuant to the Receivables Purchase Agreement, the Seller wishes
to designate Additional Accounts to be included as Accounts and to convey the
Receivables and related Collateral Security of such Additional Accounts, whether
now existing or hereafter created, to the Buyer as part of the corpus of the
Trust (as each such term is defined in the Receivables Purchase Agreement); and
WHEREAS the Buyer is willing to accept such designation and conveyance
subject to the terms and conditions hereof;
NOW, THEREFORE, the Seller and the Buyer hereby agree as follows:
1. Defined Terms. All capitalized terms used herein shall have the
meanings ascribed to them in the Receivables Purchase Agreement unless otherwise
defined herein.
"Addition Date" shall mean, with respect to the Additional Accounts
designated hereby, __________, 19__.
2. Designation of Additional Accounts. The Seller hereby delivers
herewith a computer file or microfiche or written list containing a true and
complete list of all such Additional Accounts specifying for each such Account,
as of the Additional Cut-off Date, its account number, the aggregate amount of
Receivables outstanding in such Account and the aggregate amount of Principal
Receivables in such Account. Such file or list shall, as of the date of this
Assignment, supplement Schedule 1 to the Receivables Purchase Agreement.
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<PAGE>
3. Conveyance of Receivables.
(a) The Seller does hereby sell, transfer, assign, set over and otherwise
convey, without recourse (other than the Limited Guaranty of the Seller for the
benefit of the Class C Certificateholders and except as expressly provided in
the Receivables Purchase Agreement), to the Buyer, on the Addition Date all of
its right, title and interest in, to and under the Receivables in such
Additional Accounts, all Collateral Security and the related Floorplan Rights
with respect thereto, owned by the Seller and existing at the close of business
on the Additional Cut-off Date and thereafter created from time to time, all
monies due or to become due and all amounts received with respect thereto and
all proceeds (including "proceeds" as defined in Section 9-306 of the UCC as in
effect in the State of Minnesota and Recoveries) thereof. The foregoing sale,
transfer, assignment, set-over and conveyance does not constitute and is not
intended to result in the creation or an assumption by the Buyer of any
obligation of the Servicer, the Seller or any other Person in connection with
the Accounts, the Receivables or under any agreement or instrument relating
thereto, including any obligation under any Financing Agreement or Floorplan
Agreement, including any other obligation to any Dealer or Manufacturer.
(b) In connection with such sale, the Seller agrees to record and file, at
its own expense, a financing statement on form UCC-1 (and continuation
statements when applicable) with respect to the Receivables now existing and
hereafter created for the sale of chattel paper, accounts and general
intangibles (as defined in Section 9-105 or 9-106 of the UCC as in effect in any
state where the Seller's or the Servicer's chief executive offices or books and
records relating to the Receivables are located) meeting the requirements of
applicable state law in such manner and in such jurisdictions as are necessary
to perfect the sale and assignment of the Receivables and the Collateral
Security to the Buyer, and to deliver a file-stamped copy of such financing
statements or other evidence of such filing to the Buyer on or prior to the
Addition Date to the extent, if any, that the UCC-1 financing statements filed
pursuant to Section 2.1 of the Receivables Purchase Agreement are not sufficient
for such purpose. In addition, the Seller shall cause to be timely filed in the
appropriate filing office any UCC-1 financing statement and continuation
statement necessary to perfect any sale of Receivables to the Seller. The Buyer
shall be under no obligation whatsoever to file such financing statement, or a
continuation statement to such financing statement, or to make any other filing
under the UCC in connection with such sale. The parties hereto intend that the
sales of Receivables effected by this Agreement be sales.
(c) In connection with such sale, the Seller further agrees, at its own
expense, on or prior to the Addition Date, to indicate in its books and records,
which may include its computer files, that the Receivables created in connection
with the Additional Accounts designated hereby have been sold and the Collateral
Security assigned to the Buyer pursuant to this Assignment and sold to the Trust
pursuant to
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<PAGE>
the Pooling and Servicing Agreement for the benefit of the Certificateholders
and the other Beneficiaries.
4. Acceptance by Buyer. Subject to the satisfaction of the conditions
set forth in Section 6 of this Assignment, the Buyer hereby acknowledges its
acceptance of all right, title and interest to the property, now existing and
hereafter created, conveyed to the Buyer pursuant to Section 3(a) of this
Assignment. The Buyer further acknowledges that, prior to or simultaneously
with the execution and delivery of this Assignment, the Seller delivered to the
Buyer the computer file or microfiche or written list relating to the Additional
Accounts described in Section 2 of this Assignment.
5. Representations and Warranties of the Seller. The Seller hereby
represents and warrants to the Buyer, on behalf of the Trust, as of the date of
this Assignment and as of the Addition Date that:
(a) Legal, Valid and Binding Obligation. This Assignment constitutes a
legal, valid and binding obligation of the Seller, enforceable against the
Seller in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect affecting creditors' rights in
general and except as such enforceability may be limited by general principles
of equity (whether considered in a suit at law or in equity);
(b) Organization and Good Standing. The Seller is a corporation duly
organized and validly existing and in good standing under the law of the State
of Delaware and has, in all material respects, full corporate power, authority
and legal right to own its properties and conduct its business as such
properties are presently owned and such business is presently conducted, and to
execute, deliver and perform its obligations under this Assignment;
(c) Due Qualification. The Seller is duly qualified to do business and,
where necessary, is in good standing as a foreign corporation (or is exempt from
such requirement) and has obtained all necessary licenses and approvals in each
jurisdiction in which the conduct of its business requires such qualification
except where the failure to so qualify or obtain licenses or approvals would not
have a material adverse effect on its ability to perform its obligations
hereunder;
(d) Eligible Accounts. Each Additional Account designated hereby is an
Eligible Account;
(e) Selection Procedures. No selection procedures believed by the Seller
to be adverse to the interests of the Beneficiaries were utilized in selecting
the Additional Accounts designated hereby;
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<PAGE>
(f) Insolvency. As of the Notice Date and the Addition Date, the Seller is
not insolvent nor, after giving effect to the conveyance set forth in Section 3
of this Assignment, will it have been made insolvent, nor is it aware of any
pending insolvency;
(g) Valid Transfer. This Assignment constitutes a valid sale, transfer and
assignment to the Buyer of all right, title and interest of the Seller in the
Receivables and the Collateral Security and the proceeds thereof and upon the
filing of the financing statements described in Section 3 of this Assignment
with the Secretary of State of the State of Minnesota and other applicable
states and counties and, in the case of the Receivables and the Collateral
Security hereafter created and the proceeds thereof, upon the creation thereof,
the Buyer shall have a first priority perfected ownership interest in such
property, except for Liens permitted under Section 2.6(a) of the Receivables
Purchase Agreement;
(h) Due Authorization. The execution and delivery of this Assignment and
the consummation of the transactions provided for or contemplated by this
Assignment have been duly authorized by the Seller by all necessary corporation
action on the part of the Seller;
(i) No Conflict. The execution and delivery of this Assignment, the
performance of the transactions contemplated by this Assignment and the
fulfillment of the terms hereof, will not conflict with, result in any breach of
any of the material terms and provisions of, or constitute (with or without
notice or lapse of time or both) a material default under, any indenture,
contract, agreement, mortgage, deed of trust, or other instrument to which the
Seller is a party or by which it or its properties are bound;
(j) No Violation. The execution and delivery of this Assignment by the
Seller, the performance of the transactions contemplated by this Assignment and
the fulfillment of the terms hereof will not conflict with or violate any
material Requirements of Law applicable to the Seller;
(k) No Proceedings. There are no proceedings or, to the best knowledge of
the Seller, investigations pending or threatened against the Seller before any
Governmental Authority (i) asserting the invalidity of this Assignment, (ii)
seeking to prevent the consummation of any of the transactions contemplated by
this Assignment, (iii) seeking any determination or ruling that, in the
reasonable judgment of the Seller, would materially and adversely affect the
performance by the Seller of its obligations under this Assignment, (iv) seeking
any determination or ruling that would materially and adversely affect the
validity or enforceability of this Assignment or (v) seeking to affect adversely
the income tax attributes of the Trust under the United States federal or any
State income, single business or franchise tax systems;
A-4
<PAGE>
(l) Record of Accounts. As of the Addition Date, Schedule 1 to this
Assignment is an accurate and complete listing in all material respects of all
the Additional Accounts as of the Additional Cut-off Date and the information
contained therein with respect to the identity of such Accounts and the
Receivables existing thereunder is true and correct in all material respects as
of the Additional Cut-off Date;
(m) No Liens. Each Receivable and all Collateral Security existing on the
Addition Date has been conveyed to the Buyer free and clear of any Lien;
(n) All Consents Required. With respect to each Receivable and all
Collateral Security existing on the Addition Date, all consents, licenses,
approvals or authorizations of or registrations or declarations with any
Governmental Authority required to be obtained, effected or given by the Seller
in connection with the conveyance of such Receivable or Collateral Security to
the Buyer, the execution and delivery of this Assignment and the performance of
the transactions contemplated hereby have been duly obtained, effected or given
and are in full force and effect; and
(o) Eligible Receivables. On the Additional Cut-off Date each Receivable
conveyed to the Buyer as of such date is an Eligible Receivable or, if such
Receivable is not an Eligible Receivable, such Receivable is conveyed to the
Buyer in accordance with Section 2.8 of the Receivables Purchase Agreement.
6. Conditions Precedent. The acceptance of the Trustee set forth in
Section 4 of this Assignment is subject to the satisfaction, on or prior to the
Addition Date, of the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by the Seller in Section 5 of this Assignment shall be true and
correct as of the date of this Assignment and as of the Addition Date;
(b) Agreement. Each of the conditions set forth in Section 2.4(b) of the
Receivables Purchase Agreement applicable to the designation of the Additional
Accounts to be designated hereby shall have been satisfied; and
(c) Addition Information. The Seller shall have delivered to the Buyer
such information as was reasonably requested by the Buyer to satisfy itself as
to the accuracy of the representation and warranty set forth in Section 5(d) of
this Assignment.
7. Ratification of Agreement. As supplemented by this Assignment, the
Receivables Purchase Agreement is in all respects ratified and confirmed and the
Receivables Purchase Agreement as so supplemented by this Assignment shall be
read, taken and construed as one and the same instrument.
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<PAGE>
8. Counterparts. This Assignment may be executed in two or more
counterparts (and by different parties in separate counterparts), each of which
shall be an original but all of which together shall constitute one and the same
instrument.
9. GOVERNING LAW. THIS ASSIGNMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF MINNESOTA, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
A-6
<PAGE>
IN WITNESS WHEREOF, the Seller and the Buyer have caused this Assignment to
be duly executed and delivered by their respective duly authorized officers as
of the day and the year first above written.
GREEN TREE FLOORPLAN FUNDING
CORP., Buyer
By:
__________________________________
Name:
___________________________
Title:
___________________________
GREEN TREE FINANCIAL
CORPORATION, Seller
By:
__________________________________
Name:
___________________________
Title:
___________________________
A-7
<PAGE>
EXHIBIT B
TO RPA
FORM OF OPINION OF COUNSEL
(AS REQUIRED BY SECTION 7.2(D) OF
---------------------------------
THE RECEIVABLES PURCHASE AGREEMENT)
-----------------------------------
(a) The Amendment to the Receivables Purchase Agreement, attached hereto as
Schedule 1 (the "Amendment"), has been duly authorized, executed and delivered
by the Seller and constitutes the legal, valid and binding agreement of the
Seller, enforceable in accordance with its terms except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights generally from time to time in
effect. The enforceability of the Seller's obligations is also subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(b) The Amendment has been entered into in accordance with the terms and
provisions of Section 7.1 of the Receivables Purchase Agreement.
(c) The Amendment will not adversely affect in any material respect the
interests of the Investor Certificateholders. [Include this clause (iii) only
in the case of amendments effected pursuant to Section 7.1(a) of the Receivables
Purchase Agreement.]
B-1
<PAGE>
EXHIBIT C
TO RPA
FORM OF REASSIGNMENT OF RECEIVABLES IN REMOVED ACCOUNTS
(AS REQUIRED BY SECTION 2.6 OF THE RECEIVABLES
PURCHASE AGREEMENT REFERRED TO BELOW)
REASSIGNMENT NO. ____ OF RECEIVABLES, dated as of
__________, ____, by and between GREEN TREE FLOORPLAN
FUNDING CORP., as buyer (the "Buyer"), and GREEN TREE
FINANCIAL CORPORATION, as seller (the "Seller"), pursuant to the
Receivables Purchase Agreement referred to below.
WITNESSETH
WHEREAS the Seller and the Buyer are parties to the Receivables Purchase
Agreement dated as of December 1, 1995 (as amended or supplemented, the
"Receivable Purchase Agreement");
WHEREAS, pursuant to the Receivables Purchase Agreement, the Seller wishes
to remove all Receivables from certain Accounts, the Collateral Security thereof
and the related Floorplan Rights (the "Removed Accounts") and to cause the Buyer
to reconvey the Receivables of such Removed Accounts and such Collateral
Security and Floorplan Rights, whether now existing or hereafter created, and
all amounts currently held by the Buyer or thereafter received by the Trust in
respect of such Removed Accounts, from the Buyer to the Seller (as each such
term is defined in the Receivables Purchase Agreement); and
WHEREAS the Buyer is willing to accept such removal and to reconvey the
Receivables in the Removed Accounts, such Collateral Security and any related
amounts held or received by the Trust subject to the terms and conditions
hereof.
NOW, THEREFORE, the Seller and the Buyer hereby agree as follows:
1. Defined Terms. All terms defined in the Agreement and used herein
shall have such defined meanings when used herein, unless otherwise defined
herein.
"Removal Date" shall mean, with respect to the Removed Accounts designated
hereby, __________________.
2. Notice of Removed Accounts. The Seller shall deliver to the Buyer,
the Trustee, any Enhancement Providers and the Rating Agencies a computer file
or microfiche or written list containing a true and complete list of the Removed
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<PAGE>
Accounts specifying for each such Account, as of the Removal Commencement Date,
its account number, the aggregate amount of Receivables outstanding in such
Accounts and the Designated Balance. Such list shall be marked as Schedule 1 to
this Reassignment and shall be incorporated into and made a part of this
Reassignment as of the Removal Date and shall amend Schedule 1 to the
Receivables Purchase Agreement.
3. Conveyance of Receivables and Accounts.
(a) The Buyer does hereby transfer, assign, set over and otherwise convey
to the Seller, without recourse, representation or warranty on and after the
Removal Date, all right, title and interest of the Trust in, to and under all
Receivables now existing at the close of business on the Removal Date and
thereafter created from time to time until the termination of the Trust in
Removed Accounts designated hereby, all Collateral Security thereof, the related
Floorplan Rights, all monies due or to become due and all amounts received with
respect thereto (Interest Receivables), all proceeds (as defined in Section 9-
306 of the UCC as in effect in the State of Minnesota and Recoveries) thereof
relating thereto.
(b) If requested by the Seller, in connection with such transfer, the Buyer
agrees to execute and deliver to the Seller, on or prior to the date of this
Reassignment, a termination statement with respect to the Receivables existing
at the close of business on the Removal Date and thereafter created from time to
time and Collateral Security thereof in the Removed Accounts reassigned hereby
(which may be a single termination statement with respect to all such
Receivables and Collateral Security) evidencing the release by the Trust of its
lien on the Receivables in the Removed Accounts and the Collateral Security, and
meeting the requirements of applicable state law, in such manner and such
jurisdictions as are necessary to remove such lien.
4. Acceptance by Buyer. The Buyer hereby acknowledges that, prior to or
simultaneously with the execution and delivery of this Reassignment, the Seller
delivered to the Buyer the computer file or such microfiche or written list
described in section 2(b) of this Reassignment.
5. Representations and Warranties of the Seller. The Seller hereby
represents and warrants to the Buyer as of the date of this Reassignment and as
of the Removal Date:
(a) Legal, Valid and Binding Obligation. This Reassignment constitutes a
legal, valid and binding obligation of the Seller, enforceable against the
Seller in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect affecting the enforcement of
creditors' rights generally and except as such enforceability may be limited by
general principles of equity (whether considered in a suit at law or in equity);
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(b) No Pay Out Event. The removal of the Accounts hereby removed shall
not, in the reasonable belief of the Seller, cause a Pay Out Event to occur or
cause the Pool Balance to be less than the Minimum Aggregate Principal
Receivables;
(c) Selection Procedures. No selection procedures believed by the Seller
to be adverse to the interests of the Beneficiaries were utilized in selecting
the Accounts to be removed; and
(d) True and Complete List. The list of Removed Accounts described in
Section 2(b) of this Assignment is, as of the Removal Commencement Date, true
and complete in all material respects.
provided, however, that in the event that the removal on such Removal Date
relates solely to Ineligible Accounts, the Seller shall be deemed to make only
the representations and warranties contained in paragraph 5(a) above.
6. Condition Precedent. In addition to the conditions precedent set
forth in Section 2.6 of the Receivables Purchase Agreement, the obligation of
the Buyer to execute and deliver this Reassignment is subject to the Seller
having delivered on or prior to the Removal Date to the Trustee and the Buyer,
any Agent, and any Enhancement Providers an Officers' Certificate certifying
that (i) as of the Removal Date, all requirements set forth in Section 2.6 of
the Agreement for removing such Accounts and reconveying the Receivables of such
Removed Accounts, the Collateral Security and the related Floorplan Rights,
whether existing at the close of business on the Removal Date or thereafter
created from time to time until the termination of the Trust, have been
satisfied, and (ii) each of the representations and warranties made by the
Seller in Section 5 hereof is true and correct as of the date of this
Reassignment and as of the Removal Date. The Buyer may conclusively rely on
such Officer's Certificate, shall have no duty to make inquiries with regard to
the matters set forth therein and shall incur no liability in so relying.
7. Ratification of Agreement. As supplemented by this Reassignment the
Receivables Purchase Agreement is in all respects ratified and confirmed and the
Receivables Purchase Agreement as so supplemented by this Reassignment shall be
read, taken and construed as one and the same instrument.
8. Counterparts. This Reassignment may be executed in two or more
counterparts, and by different parties on separate counterparts, each of which
shall be an original, but all of which shall constitute one and the same
instrument.
9. GOVERNING LAW. THIS REASSIGNMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF MINNESOTA, WITHOUT REFERENCE TO ITS CONFLICT OF
LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
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IN WITNESS WHEREOF, the undersigned have caused this Reassignment to be
duly executed and delivered by their respective duly authorized officers on the
day and year first above written.
GREEN TREE FLOORPLAN FUNDING
CORP., Buyer
By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
GREEN TREE FINANCIAL
CORPORATION, Seller
By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
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SCHEDULE 1
----------
LIST OF ACCOUNTS
----------------
[DEEMED TO BE INCORPORATED.]
<PAGE>
Exhibit 8.1
________, 1995
Green Tree Financial Corporation
1100 Landmark Towers
345 St. Peter Street
St. Paul, Minnesota 55102-1639
Re: Registration Statement on Form S-1
File No. 33-62433
Federal Tax Characterization Issues
Gentlemen and Ladies:
We have acted as counsel to Green Tree Floorplan Funding Corp., a
Delaware corporation (the "Transferor"), in connection with the preparation of a
Registration Statement on Form S-1, File No. 33-62433, filed with the Securities
and Exchange Commission on September 7, 1995, as amended by Amendment No. 1
thereto filed on November 8, 1995, Amendment No. 2 thereto filed on December 4,
1995, and Amendment No. 3 hereto filed on December 13, 1995 (the "Registration
Statement"), relating to the registration of $________ of Floating Rate
Floorplan Receivable Trust Certificates, Series 1995-1, Class A (the "Class A
Certificates") and $________ of Floating Rate Floorplan Receivable Trust
Certificates, Series 1995-1, Class B (the "Class B Certificates" and, together
with the Class A Certificates, the "Offered Certificates") to be issued by Green
Tree Floorplan Receivables Master Trust (the "Trust"). The Offered Certificates
are to be issued under a Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement") substantially in the form filed as Exhibit 4.1 to the
Registration Statement, among the Transferor, Green Tree Financial Corporation,
a Delaware corporation, as Servicer ("Green Tree"), and Norwest Bank Minnesota,
National Association, as trustee (the "Trustee") and a Series 1995-1 Supplement
(the "Series 1995-1 Supplement") to the Pooling and Servicing Agreement
substantially in the form filed as Exhibit 4.2 to the Registration Statement.
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You have requested our opinion with respect to the federal income tax
characterization of the Offered Certificates and the Trust. For purposes of
rendering our opinion we have examined the Registration Statement, the Pooling
and Servicing Agreement, the Series 1995-1 Supplement and the related documents
and agreements contemplated therein (collectively, the "Transaction Documents")
and we have reviewed such questions of law as we have considered necessary and
appropriate. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to them in the Pooling and Servicing Agreement
or the Series 1995-1 Supplement, as applicable.
Our opinion is based upon the existing provisions of the Internal
Revenue Code of 1986, as amended (the "Code"), currently applicable Treasury
Department regulations issued thereunder, current published administrative
positions of the Internal Revenue Service (the "Service") contained in revenue
rulings and revenue procedures, and judicial decisions, all of which are subject
to change, either prospectively or retroactively, and to possibly differing
interpretations. Any change in such authorities may affect the opinions
rendered herein. In rendering our opinion, we have reviewed the partnership
anti-abuse rules contained in Section 1.701-2 of the Treasury Regulations, and
have determined that such rules will have no effect on our opinion.
Our opinion is also based on the projections, representations,
warranties, covenants and agreements set forth in the Transaction Documents and
the assumption that Green Tree, the Transferor, the Certificateholders, the
Trustee, and the holders of all other classes and series of certificates issued
by the Trust will at all times comply with the requirements of the Transaction
Documents. We have also relied in part on various factual representations made
to us by the Transferor, including the following:
1. There are and will be during the life of the Trust no contracts
or other agreements between the Transferor and the
Certificateholders other than as set forth in the Transaction
Documents.
2. The Certificateholders will not control the Transferor or
otherwise cause the Transferor to act as their agent, and will
not use the Transferor to conceal their own active involvement in
the conduct of the business of the Trust.
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3. The net worth of the Transferor shall be not less than the
Minimum Net Worth.
4. Based on Green Tree's past experience with accounts and
receivables similar to the Accounts and Receivables, Green Tree
and the Transferor believe that the average period of time that
any Receivable will be outstanding will be approximately three
months.
Although we have not undertaken an independent investigation of any
factual matters, nothing contrary to any of these representations has come to
our attention in the course of our consideration of these matters. Any
alteration of such factual representations may adversely affect our opinion.
An opinion of counsel is predicated on all the facts and conditions
set forth in the opinion and is based upon counsel's analysis of the statutes,
regulatory interpretations and case law in effect as of the date of the opinion.
It is not a guarantee of the current status of the law and should not be
accepted as a guarantee that a court of law or an administrative agency will
concur in the opinion.
I. Federal Income Tax Characterization of the Offered Certificates.
---------------------------------------------------------------
In general, for federal income tax purposes, the characterization of a
transaction as a sale of property or a secured loan is a question of fact, the
resolution of which is based upon a determination of who will receive the
benefits of, and bear the burdens relating to, the property. Thus, the
determination of whether an instrument arising from such a transaction will be
treated as debt for federal income tax purposes, or instead will be treated as a
sale of the assets which secure such debt, depends on all the facts and
circumstances in each case. In general, the substance of the transaction in
which the Offered Certificates are issued should be consistent with treatment of
the Offered Certificates as debt. Although there are certain judicial
precedents holding that, under appropriate circumstances, a taxpayer should be
required to treat a transaction in accordance with the form chosen by the
taxpayer regardless of the transaction's substance, the application of these
authorities should not prevent the treatment of the Offered Certificates as debt
because the form, as well as the substance, of the transaction is consistent
with debt treatment. Even if it should be determined that certain aspects of
the transaction are indicative of a sale of the Receivables or an interest
therein, the transaction's form as a whole would at worst be viewed as ambiguous
rather than clearly as a sale. Accordingly, the
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characterization of the sale of the Offered Certificates should be governed by
the substance of the transaction which should be viewed as most similar to the
issuance of debt by the Transferor.
A. Economic Substance of the Transaction. If the economic substance
of a transaction differs from the form in which it is cast, except in certain
limited circumstances (see discussion below), the substance, rather than the
form, governs the federal income tax consequences of the transaction. Gregory
v. Helvering, 293 U.S. 465 (1935); Helvering v. F. & R. Lazarus & Co., 308 U.S.
252, aff'g, 101 F.2d 728 (6th Cir. 1939); Gatlin v. Commissioner, 34 B.T.A. 50
(1936).
Whether the Offered Certificates are in substance debt or ownership
interests in the Receivables is based on a determination of which party to the
transaction holds the "substantial incidents of ownership." The courts have
identified a variety of factors that must be considered in making that
determination. See Town & Country Food Co. v. Commissioner, 51 T.C. 1049
(1969), acq., 1969-2 C.B. xxv; United Surgical Steel Co. v. Commissioner, 54
T.C. 1215 (1970), acq., 1971-2 C.B. 3; G.C.M. 39584 (December 3, 1986); Plumb,
The Federal Income Tax Significance of Corporate Debt: A Critical Analysis and
a Proposal, 26 Tax L. Rev. 369 (1971). In the context of this transaction, the
most important considerations are: (i) whether the Transferor bears the burdens
of ownership (i.e., the risk of loss from the Receivables) and (ii) whether the
Transferor retains the benefits of ownership (i.e., the potential for gain from
the Receivables). The following discussion considers these as well as other
relevant factors and demonstrates that each factor should be viewed as
supporting characterization of the Certificates as debt.
1. The Transferor Bears the Burdens of Ownership. The principal
burden of ownership with respect to the Receivables is risk of loss arising from
defaulted payments. The risk of loss arising from defaults, under most
reasonable default scenarios, is borne by the Transferor.
The principal amount of all Defaulted Receivables for any Business Day
will be allocated between the Transferor Interest and the Certificateholders
according to the Floating Allocation Percentage applicable for such day. Before
any such allocation of Defaulted Receivables has the effect of reducing the
Invested Amount of any class of Certificates, certain excess interest
collections will be applied to make up for any deficiency caused by such
Defaulted Receivables. If the amount of Defaulted Receivables exceeds the
amount of such excess interest collections so
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applied, the amount of any such Defaulted Receivables that are allocable to the
Certificateholders will first be allocated to reduce the Class D Invested
Amount. If the Class D Invested Amount is reduced to zero by such allocation,
Defaulted Receivables then will be allocated to reduce the Class C Invested
Amount.
The Transferor is ultimately entitled to receive the excess interest
collections from the Receivables which are not applied to payments on the
Certificates. Since payments made to fund shortfalls due to Certificateholders
will ultimately be funded out of such excess interest collections, the
Transferor ultimately bears the risk of default losses realized on the
Receivables. In addition, under the Pooling and Servicing Agreement, the
Transferor is required to retain the Class D Certificates. Thus, the Transferor
is entitled to receive the principal payments thereon, which are subordinated to
the Class A, Class B and Class C Certificates. To the extent that defaults on
the Receivables reduce the amount paid on the Class D Certificates, the
Transferor bears the risk of losses caused by such defaults. Furthermore, the
Class C Certificates initially will be issued to the Transferor, although the
Transferor may later sell the Class C Certificates in a private placement. As
long as the Transferor holds the Class C Certificates, the Transferor also will
bear the risk of losses caused by defaults which reduce the amount paid on the
Class C Certificates.
The Pooling and Servicing Agreement provides that the Offered
Certificateholders are entitled to receive a fixed principal amount and a rate
of return (i.e., a floating rate based on a spread over LIBOR which is set at
the time of the issuance of the Certificates or, if less, the Net Receivables
Rate). Thus, the economic return to the Offered Certificateholders is not
affected by any change in the value of the Receivables, and the Offered
Certificateholders do not bear the burden of any decrease in the value of the
Receivables. We note that the interest rates on the Offered Certificates are
subject to a maximum rate equal to the Net Receivables Rate. It is anticipated
that factors which cause changes in LIBOR will, under most reasonable scenarios,
cause similar changes to the rates on the Receivables and, thus, that the Net
Receivables Rate generally will experience changes similar to those of LIBOR.
Therefore, it is anticipated that the Net Receivables Rate will not be used as
the interest rate on the Offered Certificates.
2. The Transferor Retains the Benefits of Ownership. If market
interest rates for comparable receivables decrease in relation to the yield on
the Receivables, the Receivables will increase in value. If interest rates
remain constant, but customers take a longer period of time to pay their
principal balances, the value of the Receivables will also increase because the
Transferor will continue to receive the yield on the Receivables over a longer
period of time. Regardless of interest rates, a change in customer payment
patterns resulting in fewer defaults than expected based on historical
experience will also increase the value of the
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Receivables. Any increase (to the extent permitted by applicable law and the
terms of the applicable agreement) in the rate at which interest is payable on
the Accounts will also increase the value of the Receivables.
The Pooling and Servicing Agreement provides that the Offered
Certificateholders are entitled to receive a fixed principal amount and a rate
of return (i.e., a floating rate based on a spread over LIBOR which is set at
the time of the issuance of the Offered Certificates or, if less, the Net
Receivables Rate). Thus, the economic return to the Offered Certificateholders
is not affected by any change in the value of the Receivables, and the Offered
Certificateholders do not receive any benefit from any increase in the value of
the Receivables.
The Transferor has retained the sole opportunity to realize gain on
the Receivables by retaining the Transferor Interest, which represents the
interest in all of the assets of the Trust in excess of the required payments to
Certificateholders. Thus, the Transferor receives the benefit from any increase
in the value of the Receivables. When the Invested Amount of the Certificates
is reduced to less than 10% of the initial Invested Amount, the Transferor has
the option to repurchase the Certificates for an amount equal to the Invested
Amount plus accrued and unpaid interest on the Certificates.
Therefore, the Transferor retains the benefits and burdens associated
with owning the Receivables.
3. Subordination and Ratings. As mentioned above, the principal
amount of all Defaulted Receivables for any Business Day will be allocated
between the Transferor Interest and the Certificateholders according to the
Floating Allocation Percentage applicable for such day. Before any such
allocation of Defaulted Receivables has the effect of reducing the Invested
Amount of any class of Certificates, certain excess interest collections will be
applied to make up for any deficiency caused by such Defaulted Receivables. If
the amount of Defaulted Receivables exceeds the amount of such excess interest
collections so applied, the amount of any such Defaulted Receivables that are
allocable to the Certificateholders will first be allocated to reduce the Class
D Invested Amount; if the Class D Invested Amount is reduced to zero by such
allocation, then Defaulted Receivables will be allocated to reduce the Class C
Invested Amount; if the Class C Invested Amount is
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reduced to zero by such allocation, then Defaulted Receivables will be allocated
to reduce the Class B Invested Amount; if the Class B Invested Amount is reduced
to zero by such allocation, then Defaulted Receivables will be allocated to
reduce the Class A Invested Amount. Thus, the Class B Invested Amount will be
affected by Defaulted Receivables only if the Class D Invested Amount and Class
C Invested Amount are reduced to zero, and the Class A Invested Amount will be
affected by Defaulted Receivables only if the Class D Invested Amount, Class C
Invested Amount and Class B Invested Amount are reduced to zero. In addition,
even if the Class B Invested Amount or Class A Invested Amount is so reduced by
allocations of Defaulted Receivables, such Invested Amounts may be subsequently
increased by certain excess interest collections available for that purpose.
All of these factors increase the likelihood that the principal payments made to
the Offered Certificateholders ultimately will equal the initial Class A and
Class B Invested Amount.
In addition, the likelihood of the Offered Certificateholders bearing
any actual loss is considered to be relatively remote, reflected by the fact
that the Class A Certificates have an initial rating of "AAA" or its equivalent
from at least one nationally recognized rating agency, and the Class B
Certificates have an initial rating of "A" or its equivalent from at least one
nationally recognized rating agency. These ratings are based, in part, on the
fact that such losses would occur only if the excess interest collections which
are used to offset any defaults on the Receivables, as well as other
distributions due with respect to the classes of certificates which are
subordinated to the Offered Certificates, were all exhausted. These ratings are
investment grade ratings, and such ratings indicate that it is likely that all
interest and principal will be paid. Accordingly, one would reasonably expect
that the Offered Certificateholders would not bear the risk of loss associated
with ownership of the Receivables.
4. Other Factors. A number of other factors support the conclusion
that the Offered Certificates are in substance debt. The terms of the
Receivables differ materially from the terms of the Offered Certificates with
regard to their respective interest rates and maturity dates. During the
Revolving Period, the obligors on the Receivables will make payments of
principal and interest on the Receivables. During the Revolving Period, the
Offered Certificateholders will receive interest payments, but collections of
principal on the Receivables otherwise allocable to the Offered
Certificateholders will be paid to the Transferor. Payments of principal on the
Offered Certificates are scheduled to commence on the January
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1998 Distribution Date, and this date will be automatically extended until the
Class A Scheduled Payment Date unless the Servicer elects not to so extend.
The Transferor will retain control and possession of the Receivables.
The Servicer is responsible for servicing, management, collection and
administration of the Receivables and will bear all costs and expenses incurred
in connection with such activities, although the Servicer will be entitled to
receive the Servicing Fee. In addition, the Transferor will agree to indemnify
the Certificateholders for the entire amount of losses, claims, damages or
liabilities arising out of the activities of the Servicer. The Trustee, on
behalf of the Certificateholders, has the right to inspect the Servicer's
documentation on the Receivables, a right which is common in loan transactions.
In addition, the Servicer, an affiliate of the Transferor and the entity from
whom the Transferor purchases the Receivables, collects the Receivables without
significant supervision by the Trustee or Certificateholders. The foregoing
additional factors support the conclusion that the transaction described in the
Agreement with respect to the Offered Certificates constitutes an issuance of
debt by the Transferor.
B. Form versus Substance. As mentioned above, a basic premise of
federal income taxation is that the economic substance of a transaction, and not
its form, determines the tax consequences. In appropriate cases, the courts
have allowed taxpayers, as well as the IRS, to treat a transaction in accordance
with its economic substance even though they have cast it in a different form
for non-tax purposes. For example, in Helvering v. F. & R. Lazarus & Co., 308
U.S. 252, aff'g, 101 F.2d 728 (6th Cir. 1939), the taxpayer sold property to a
bank as trustee for $3.25 million and concurrently leased the property back for
99 years. The rental payments on the lease were equal to 5% of $3.25 million,
and the taxpayer was required to make payments to a fund that would be
sufficient to repay $3.25 million within 48.5 years. The IRS denied the
taxpayer's claim of depreciation deductions on the property on the ground that
the taxpayer had transferred ownership of the property. The Supreme Court,
however, upheld the taxpayer's right to show that, for tax purposes, the
transaction was in substance a loan secured by the transferred property.
There is a series of cases holding that, in certain circumstances, the
taxpayer is bound by the form of the transaction selected notwithstanding that
the characterization of the economic substance of the transaction would be
different from the form of the transaction. For example, in Commissioner v.
Danielson, 378 F.2d 771 (3rd Cir.), cert. denied, 389 U.S. 858 (1967), a
purchase agreement expressly
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allocated consideration to a covenant not to compete, while the taxpayer
reported the entire amount as proceeds from the sale of capital assets. The
court held that the taxpayer could not contradict the form of the agreement and
attack the allocation to the covenant not to compete except in cases of fraud,
duress or undue influence. See also Spector v. U.S., 641 F.2d 376 (5th Cir.
1981)(pursuant to a written agreement, a partnership deducted Section 736
guaranteed payments to a withdrawing partner; the partner, contrary to the terms
of the agreement, treated such payments as Section 741 capital gain payments
realized upon the sale of the partnership interest; the court held that the
taxpayer was bound by the terms of the agreement unless he could show mistake,
fraud or undue influence); Sullivan v. U.S., 618 F.2d 1001 (3d Cir.
1980)(taxpayer disavowed original allocation of purchase price between land and
agreements to lease space in a shopping mall to be built on the land when, upon
audit, the gain on the sale of the leases was held to be short-term capital
gain; the court held that the contract allocations must be respected). In
general, the Danielson line of cases involve taxpayers who, contrary to the
written documents, later adopt inconsistent positions regarding the allocation
of purchase price, the valuation of assets or the character of income or gain to
the detriment of the Treasury.
Under the standards in Lazarus and similar cases, the Offered
Certificates should be treated as debt and the Transferor should be treated as
the owner of the Receivables. The Offered Certificateholders do not have
possession of the Receivables or the authority to dispose of them. Like the
bank in Lazarus, the Offered Certificateholders are entitled to receive only a
specified return and do not enjoy the benefit of any increase in the value of
the Receivables.
Neither Danielson nor any similar decision would, in our opinion,
prevent the Transferor and the Certificateholders from treating the Offered
Certificates as debt for federal income tax purposes. The rules from Danielson
and such cases are not intended to require consistent treatment of a transaction
for tax and non-tax purposes. Rather, they are intended to prevent a taxpayer
from renouncing intentions previously expressed in a document governing the
transaction. In this case, treating the Offered Certificates as debt does not
contravene any statement of intent in a governing document, and the form of the
transaction is not necessarily inconsistent with characterization of the Offered
Certificates as debt. The Prospectus, the Pooling and Servicing Agreement and
the Offered Certificates will state that the Offered Certificateholders and the
Transferor will treat the transaction as a financing for federal, state, and
local tax purposes. The language in the Agreement whereby the Transferor agrees
to "transfer" all "right, title and interest" in the Receivables to the Trust is
consistent with language of transfer in
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other security arrangements where debtors pledge assets to secure debt. The
Offered Certificates will state that they represent an "undivided interest" in
the Trust. However, the only rights of an Offered Certificateholder are to
receive payments of interest on the outstanding amount of the Offered
Certificates and repayment of the Invested Amount of the Offered Certificates on
or prior to their maturity dates. The Offered Certificates will not provide the
Offered Certificateholders with any specific rights in any Receivable, but
rather will provide only for rights to receive a specified amount of payments
out of the cash flow from the Receivables pool.
Moreover, even if certain aspects of the transaction should be
determined to be inconsistent with treatment of the Offered Certificates as debt
and the form of the transaction is therefore considered ambiguous, numerous
cases hold that the economic substance of the transaction controls the
transaction's characterization. Elrod v. Commissioner, 87 T.C. 1046, 1066
(1986); Smith v. Commissioner, 82 T.C. 705, 713 (1984); Morrison v.
Commissioner, 59 T.C. 248, 256 (1972), acq., 1973-2 C.B. 3; Kreider v.
Commissioner 762 F.2d 580, 588 (7th Cir. 1985); Comdisco, Inc. v. United States,
756 F.2d 569, 578 (7th Cir. 1985). In such circumstances, it would be
inappropriate to restrict taxpayers to the "four corners" of their document,
since the written instrument by its own terms is unclear. "The Danielson rule
. . . [is not] applicable to exclude parole evidence offered with respect to an
ambiguous document." Elrod, supra, at 1066. Accordingly, it is our view that
the Danielson line of authorities is not applicable to the transaction and will
not cause the transaction to be treated as a sale of an interest in the
Receivables to the holders of the Offered Certificates. Even if the form of the
transaction is deemed to be ambiguous, the transaction's economic substance will
determine its character.
C. Accounting Treatment. In Notice 94-47, 1994-19 I.R.B. 1 (April
18, 1994), the Internal Revenue Service has taken the position, without apparent
support from existing legal authority, that the fact that an instrument is
intended to be treated differently for tax purposes than for other purposes,
including regulatory accounting purposes, is a factor to be considered in
determining whether the instrument should be characterized as debt or equity for
federal income tax purposes. That factor, however, should not by itself control
the classification of the instrument for tax purposes. Accordingly, the fact
that the Transferor intends to report the transaction as a sale to
Certificateholders for certain regulatory and financial accounting purposes
should not by itself control the result for tax purposes, and such fact is not
necessarily inconsistent with characterizing the form of the transaction as a
financing for tax purposes.
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Indeed, the Supreme Court has frequently rejected the proposition that
the financial accounting treatment of a transaction controls its tax treatment.
For example, in Cottage Savings Ass'n v. Commissioner, 499 U.S. 554 (1991),
rev'g 890 F.2d 848 (6th Cir. 1989), rev'g 90 T.C. 372 (1988), reciprocal "sales"
of mortgage loans were respected as sales for federal income tax purposes
(permitting thrifts to realize losses that produced loss carrybacks and tax
refunds) even though such transactions were not treated as sales for regulatory
accounting purposes. Thus, thrifts were able to generate tax losses without
such losses being reflected on their financial statements for regulatory
accounting purposes. (It should be noted that in Cottage Savings the legal form
of the transaction was respected. Thus, the taxpayer was not asserting a tax
position inconsistent with the form of the transaction.)
Several other Supreme Court cases demonstrate that divergence between
tax and financial accounting is not uncommon. See Thor Power Tool Co. v.
Commissioner, 439 U.S. 552, 538-44 (1979)(company's inventory deductions for
financial accounting purposes were disallowed for federal income tax purposes--
"any presumptive equivalency between tax and financial accounting would be
unacceptable"); Commissioner v. Hansen, 360 U.S. 446 (1959)(reserve to cover
contingent liability in event of nonperformance of guaranty); Lucas v. American
Code Co., 280 U.S. 445 (1930)(reserve to cover expected liability on contested
lawsuit). (These cases, however, involved taxpayer reliance on accounting
treatment rather than IRS reliance thereon.) See also Frank Lyon Co. v. United
States, supra, at 577 (financial accounting treatment of a mortgage reflected
the taxpayer's proper tax treatment of a sale leaseback transaction although tax
and accounting treatment "need not necessarily be the same").
In our opinion, although the matter is not free from doubt, the
substance and form of the transaction are more consistent with the
characterization of the Offered Certificates as debt than with the
characterization of the Offered Certificates as a form of equity interest in the
Receivables. To the extent that the form of the transaction were determined to
include some features of a sale in addition to the features indicative of a debt
financing, the form is at worst ambiguous. Accordingly, in our opinion,
pursuant to the aforementioned authorities, the Offered Certificates will be
treated as debt for federal income tax purposes.
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II. Characterization of the Trust.
-----------------------------
In many respects, the Trust is similar to trusts established to hold
collateral pledged as security in connection with lending transactions. If all
classes of Certificates issued by the Trust were debt for federal income tax
purposes, the Trust would be disregarded for federal income tax purposes and
would be characterized as a mere security arrangement. Treas. Reg. (S) 1.61-
13(b); Rev. Rul. 76-265, 1976-2 C.B. 448; see also Rev. Rul. 73-100, 1973-1 C.B.
613 (domestic corporations's transfer of securities to Canadian security holder,
to secure liabilities to policyholders in Canada, does not create a trust where
discretionary powers retained by corporation); Rev. Rul. 71-119, 1971 C.B. 163
(settlement fund administered by "trustee" not a trust). The Trust intends,
however, to issue classes of Series 1995-1 Certificates that may not clearly be
classified as debt for federal income tax purposes.
If any class of the Series 1995-1 Certificates were in fact viewed as
an equity interest in the Trust, the Trust could be viewed, pursuant to Treasury
Regulation Section 301.7701-4(c), as an entity whose characterization would be
determined under Section 7701 and Treasury Regulation Section 301.7701-2. In
two significant cases regarding the classification of limited partnerships for
tax purposes, the opinions of the Court of Claims and the United States Tax
Court closely followed the tests set forth in these regulations. See Zuckman v.
United States, 524 F.2d 79 (Ct. Cl. 1975); Larson v. Commissioner, 66 T.C. 159
(1976), acq., 1979-1 C.B. 1; see also Rev. Rul. 79-106, 1979-1 C.B. 448, Rev.
Rul. 95-9, 1995-3 I.R.B. 17, and Rev. Proc. 89-12, 1989-1 C.B. 798.
Furthermore, in Revenue Ruling 88-79, 1988-2 C.B. 361, the Service ruled that
the tests set forth in these regulations to distinguish a partnership from an
association should also be applied to determine the tax characterization of a
business trust.
Section 301.7701-2(a)(1) of the Treasury Regulations lists six major
characteristics ordinarily found in a corporation which distinguish a
corporation from other forms of organizations. Section 301.7701-2(a)(2) of the
Treasury Regulations provides that since two of these factors (associates and an
objective to carry on business and divide the gains therefrom) are generally
common to both corporations and partnerships, the determination of whether an
organization that has such characteristics is to be treated for tax purposes as
a partnership or as an association taxable as a corporation depends upon an
analysis of the remaining factors: continuity of life, free transferability of
interests, centralization of management and limited liability.
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Section 301.7701-2(a)(3) of the Treasury Regulations specifies that an
unincorporated organization shall not be classified as an association taxable as
a corporation unless such organization has more corporate characteristics than
non-corporate characteristics, excluding characteristics common to both types of
organizations. Under Section 301.7701-2(a)(3) of the Treasury Regulations, each
of the four above-described characteristics is assigned equal weight in
determining whether an organization has more corporate characteristics than non-
corporate characteristics. See Larson and Rev. Rul. 95-9, 1995-3 I.R.B. 17,
each of which applied equal weight to each of the four characteristics.
We conclude that under the Treasury Regulations' tests and relevant
judicial authorities, the Trust lacks continuity of life and limited liability
and that the Trust therefore will not be treated as an association taxable as a
corporation for federal income tax purposes. The basis for this conclusion is
discussed in more detail below.
A. Continuity of Life
------------------
Under Section 301.7701-2(b)(1) of the Treasury Regulations, an
organization is deemed to lack the corporate characteristic of continuity of
life if the death, insanity, bankruptcy, retirement, resignation or expulsion of
any member will cause a dissolution of the organization. Section 301.7701-
2(b)(1) of the Treasury Regulations further provides that a limited partnership
will not have continuity of life if such an event of withdrawal of a general
partner causes a dissolution of the partnership, notwithstanding the fact that a
dissolution upon such an event may be avoided by the remaining general partners
or at least a majority in interest of all remaining partners agreeing to
continue the partnership.
Section 9.2(a) of the Pooling and Servicing Agreement provides that on
the day of an Insolvency Event, (i) the Transferor shall immediately cease to
transfer Receivables to the Trust and (ii) the Trust shall be deemed to have
terminated, and shall begin the liquidation, winding-up and dissolution
procedures provided in the Pooling and Servicing Agreement. The dissolution
procedures provided in the Pooling and Servicing Agreement include the Trustee
selling, disposing of or otherwise liquidating the Receivables "in a
commercially reasonable manner and on commercially reasonable terms, which shall
include the solicitation of competitive bids" (a "Disposition") unless, within
no more than 90 days after the date of publication of notice of the Insolvency
Event, Holders of Certificates
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representing undivided interests aggregating in excess of 50% of the related
Invested Amount of each Series (or, in the case of a Series having more than one
Class, each Class of such Series) and the holders of any Supplemental
Certificates or any other interest in the Exchangeable Transferor Certificate
other than the Transferor instruct the Trustee not to effectuate a Disposition.
Under Section 301.7701-2(b) of the Treasury Regulations, where the
entity in question is not a limited partnership formed under RULPA, one must
determine if the legal relationship between the parties has changed under state
law. Here, upon the occurrence of an Insolvency Event, the legal relationships
between the parties do change and therefore bring about a change in the identity
of the organization. In the case of an Insolvency Event, the Transferor must
immediately cease to transfer Principal Receivables to the Trust, and the
Trustee must, unless explicitly instructed otherwise by a Holders' Majority,
begin the dissolution process. This does alter the parties' obligations and
relationships and, in effect, changes the Trust from an active enterprise into a
mere "liquidating trust" that must effect a Disposition of all the Receivables.
Therefore, the Trust would lack continuity of life.
B. Limited Liability
-----------------
Section 301.7701-2(d)(1) of the Treasury Regulations provides that an
organization has the corporate characteristic of limited liability if there is
no member who is personally liable for the debts of the organization. Section
301.7701-2(d)(1) of the Treasury Regulations further provides that in the case
of a corporate general partner of a limited partnership, personal liability
exists with respect to such general partner if the general partner has
"substantial assets" (in addition to its interest in the partnership) which
could be reached by a creditor of the partnership or if the general partner is
not merely a "dummy" acting as the agent for the limited partners. For advance
ruling purposes, a limited partnership generally will be deemed to lack limited
liability where the net worth of its corporate general partners at the time of
the ruling request equals at least 10% of the total contributions to the
partnership, and such net worth is expected to continue to equal at least 10% of
the total contributions throughout the life of the partnership. Rev. Proc. 89-
12 at (S) 4.07. In Larson, the Tax Court held that, in the case of corporate
general partners, if (1) the persons controlling the general partners are
independent from, and unrelated to, the limited partners, and (2) the general
partners are not being used by the limited partners "as a screen to conceal
their own active involvement in the conduct of the business" of the partnership,
then the general partner or partners will not be considered as agents of the
limited partners.
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Section 7.4 of the Pooling and Servicing Agreement provides that the
Transferor shall be liable for any losses, claims, damages, penalties or
liabilities (other than those incurred by a Certificateholder in the capacity of
an investor in the Investor Certificates as a result of the performance of the
Receivables, market fluctuations, a shortfall or failure by the Enhancement
Provider to make payment under any Enhancement or other similar market or
investment risks associated with ownership of the Investor Certificates) arising
out of or based on the arrangement created by the Pooling and Servicing
Agreement and the actions of the Servicer taken pursuant thereto as though the
Pooling and Servicing Agreement created a partnership under the Minnesota
Uniform Partnership Act in which the Transferor is a general partner.
Although the Transferor has represented that it will have a net worth
at least equal to the Minimum Net Worth, we have not determined if the
Transferor has "substantial assets" within the meaning of the Treasury
Regulations and therefore do not rely upon the "substantial assets" test with
respect to the limited liability issue.
The Transferor has represented, however, that the Certificateholders
will not control the Transferor or otherwise cause the Transferor to act as
their agent, and that the Certificateholders will not use the Transferor to
conceal their own active involvement in the conduct of the business of the
Trust. Thus, even if the Certificates were recharacterized as equity interests
in the Trust, the Transferor would not be a "dummy" acting as the agent of the
Certificateholders. Therefore, based on the foregoing authorities and the
representations of the Transferor, we conclude that the Trust lacks the
corporate characteristic of limited liability.
Thus, we conclude that under the tests of the applicable Treasury
Regulations, the Trust lacks the corporate characteristics of continuity of life
and limited liability. Under the Treasury Regulations, the absence of any two
of the four principal characteristics which distinguish a partnership from an
association is sufficient to establish that the Trust will not be treated as an
association for federal income tax purposes. Therefore, it is our opinion that
pursuant to Section 7701 of the Code, the Trust will not be treated as an
association taxable as a corporation for federal income tax purposes. It is not
necessary to determine and we do not express any opinion regarding whether the
Trust will possess the characteristics of free transferability or centralized
management. Accordingly, the Trust would, in the
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circumstances described above, be characterized as a partnership for federal
income tax purposes.
C. Publicly Traded Partnership. Section 7704 of the Code provides
that, subject to certain exceptions, a partnership the interests in which are
(i) traded on an established securities market or (ii) readily tradable on a
secondary market (or the substantial equivalent thereof) will be treated as a
corporation for federal income tax purposes.
Treasury Regulations Section 1.7704-1, issued on November 29, 1995
(the "PTP Regs"), provide further explanation of the rules governing publicly
traded partnerships. The PTP Regs provide that an "established securities
market" includes a national, foreign, regional or local exchange, as well as an
interdealer quotation system which regularly disseminates firm buy or sell
quotations by identified brokers or dealers, by electronic means or
otherwise. The PTP Regs also provide that interests in a partnership are readily
tradable on a secondary market or the substantial equivalent thereof if the
partners are readily able to buy, sell or exchange their partnership interests
in a manner that is economically comparable to trading on an established
securities market.
The PTP Regs provide a safe harbor pursuant to which interests in a
partnership will not be considered readily tradable on a secondary market or the
substantial equivalent thereof if (i) all interests in such partnership were
issued in a transaction (or transactions) that was not required to be registered
under the Securities Act of 1933 and (ii) the partnership does not have more
than 100 partners at any time during the taxable year of the partnership.
As discussed above, it is our opinion that the Offered Certificates
will be treated as debt for federal income tax purposes. The Class D
Certificates will be issued to the Transferor and the Transferor will be
required to retain the Class D Certificates. The Class C Certificates initially
will be issued to the Transferor, but may be sold in a private placement and
thus will be exempt from registration under the Securities Act of 1933 pursuant
to Section 4(a) of that Act. Moreover, if the Class C Certificates are sold by
the Transferor, each purchaser of Class C Certificates (and purchasers of
certain other interests which would be treated as a direct or indirect nondebt
interest in the Trust) will, in effect, make certain representations for the
benefit of the Transferor and the other purchasers (with the express
acknowledgement that this Firm will be relying on such representation for
purposes of rendering this opinion) that would be breached if any such purchaser
were to buy or sell any such interest on an "established securities
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market." In addition, Section 6.3 of the Agreement permits the Transferor to
prevent a transfer, participation or other disposition of any interest in any
Certificate with respect to which an Opinion of Counsel was not received stating
that such certificate would be treated as debt for federal income tax purposes
if the Transferor, in its sole and absolute discretion, determines that such
transfer, participation or other disposition, if effected, would cause the Trust
to be treated as a publicly traded partnership under the PTP Regs. Accordingly,
under current law, if the Trust were considered to be a partnership for federal
income tax purposes, it would not be a publicly traded partnership for purposes
of Section 7704.
We note that an entity that meets the definition of a "publicly traded
partnership" may nevertheless not be taxable as a corporation if 90% of its
income consists of interest income. Because it is not clear whether the Trust,
if viewed as an entity separate from the Transferor, would be viewed as engaged
in a "financial
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business," and thus ineligible for the exception, we have not relied on the
exception. See Code (S) 7704(d)(2).
D. Taxable Mortgage Pool. Section 7701(i) of the Code provides that
a "taxable mortgage pool" shall be treated as a corporation for federal income
tax purposes. Section 7701(i) defines taxable mortgage pool to include any
entity (other than a real estate mortgage investment conduit) which meets the
following requirements:
(i) substantially all of the assets of such entity consists of
debt obligations (or interests therein) and more than 50% of such debt
obligations (or interests) consists of real estate mortgages (or
interests therein),
(ii) such entity is the obligor under debt obligations with two or
more maturities, and
(iii) under the terms of the debt obligations referred to in clause
(ii) (or underlying arrangement), payments on such debt obligations
bear a relationship to payments on the debt obligations (or interests)
referred to in clause (i).
Proposed Treasury Regulations (S) 301.7701(i) (the "Proposed TMP
Regs") provide further explanation of the rules governing taxable mortgage
pools. The Proposed TMP Regs provide that "the purpose of Section 7701(i) is to
prevent income generated by a pool of real estate mortgages from escaping
federal income taxation when the pool is used to issue multiple class mortgage-
backed securities." The Proposed TMP Regs define real estate mortgages to
include all obligations that are principally secured by an interest in real
property. For this purpose, real property includes manufactured housing that
qualifies as a single family residence under Section 25(e)(10) of the Code.
Under a literal reading of Section 7701(i) of the Code and the
Proposed TMP Regs, one might argue that the Trust should be treated as a taxable
mortgage pool. In our opinion, however, the Trust will not be treated as a
taxable mortgage pool.
It is anticipated that a significant portion of the Receivables will
constitute obligations of dealers of manufactured housing, and that such
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Receivables will be secured by a security interest in the manufactured housing
inventory held by such dealers. Thus, such obligations would be treated as
"real estate mortgages" within the literal meaning of Section 7701(i) of the
Code and the Proposed TMP Regs. We do not believe, however, that Receivables
secured by such dealer inventory are the type of obligations intended to be
covered by the taxable mortgage pool rules. Furthermore, taxable mortgage pool
status is not dependent solely on the type of assets held by an entity. Rather,
both Section 7701(i) of the Code and the Proposed TMP Regs require that in
addition to holding real estate mortgages, in order to be a taxable mortgage
pool an entity must issue debt obligations with two or more maturities the
payments on which "bear a relationship" to payments on the debt obligations held
by the entity. The Proposed TMP Regs provide:
Payments on debt obligations under which an entity is the obligor
(liability obligations) "bear a relationship" to payments ... on debt
obligations an entity holds as assets (asset obligations) if under the
terms of the liability obligations (or underlying arrangement) the
timing and amount of payments on the liability obligations are in
large part determined by the timing and amount of payments or
projected payments on the asset obligations.
We believe that the payments to be made on the Offered Certificates
and the other classes of Certificates issued by the Trust will not bear a
relationship to the Receivables held by the Trust which is sufficient to satisfy
the requirements of Section 7701(i) of the Code and the Proposed TMP Regs.
Green Tree and the Transferor have represented to us that the average period of
time that any Receivable will be outstanding will be approximately three
months. Conversely, none of the Certificates issued by the Trust are scheduled
to receive any payments of principal until the January 1998 Distribution Date,
and this date will be automatically extended until the Class A Scheduled Payment
Date unless the Servicer elects not to so extend. Thus, because the Transferor
receives all collections of principal paid on the Receivables during the
Revolving Period, most, if not all, of the principal collections on the
Receivables which are paid to the holders of any class of Series 1995-1
Certificates issued by the Trust will arise from Receivables which are not in
existence on the date the Trust issues such Certificates. Therefore, it is our
opinion that the Trust will not constitute a taxable mortgage pool under Section
7701(i) of the Code.
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III. Minnesota State Tax Consequences.
--------------------------------
Our opinion with respect to the Minnesota state tax characterization
of the Offered Certificates and the Trust is based upon current statutory
provisions and the regulations promulgated thereunder, and applicable judicial
or ruling authority, all of which are subject to change (which may be
retroactive). No ruling on any of the issues discussed below will be sought
from the Minnesota Department of Revenue.
If the Offered Certificates are treated as debt for federal income tax
purposes, it is our opinion that this treatment will also apply for Minnesota
income tax purposes and that the Trust will not be characterized as an
association, publicly traded partnership or taxable mortgage pool taxable as a
corporation for Minnesota income tax purposes. Certificate Owners not otherwise
subject to Minnesota income or franchise taxation would not become subject to
such a tax solely because of their ownership of the Offered Certificates.
Certificate Owners already subject to income or franchise taxation in Minnesota
could, however, be required to pay such a tax on all or a portion of the income
generated from ownership of the Offered Certificates.
If the Trust is treated as a partnership (not taxable as a
corporation) for federal income tax purposes, it is our opinion that the Trust
would also be treated as such a partnership for Minnesota income tax purposes.
The partnership therefore would not be subject to Minnesota taxation.
Certificate Owners that are not otherwise subject to Minnesota income or
franchise taxation would not become subject to such a tax solely because of
their interests in the constructive partnership. Certificate Owners already
subject to income or franchise taxation in Minnesota could, however, be required
to pay such a tax on all or a portion of the income from the constructive
partnership.
If the Offered Certificates are treated as ownership interests in an
association or publicly traded partnership taxable as a corporation for federal
income tax purposes, it is our opinion that this treatment would also apply for
Minnesota income and franchise tax purposes. Pursuant to this treatment, the
Trust would be subject to the Minnesota franchise tax measured by net income
(which could result in reduced distributions to Certificate Owners). Certificate
Owners that are not otherwise subject to Minnesota income or franchise taxation
would not become subject to such a tax solely because of their interests in the
constructive corporation. Certificate Owners already subject to income or
franchise taxation in Minnesota could, however, be
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required to pay such a tax on all or a portion of the income from the
constructive corporation.
We express no opinion about the tax treatment of any features of the
Trust's activities or an investment therein other than those expressly set forth
above.
Except as provided below, the foregoing opinions are being furnished
to you solely for your benefit and may not be relied upon by, nor may copies be
delivered to, any other person without our prior written consent.
We hereby consent to the inclusion of this opinion as an exhibit to
the Registration Statement and to the use of our name under the heading "Certain
Federal Income Tax Consequences" in the prospectus forming a part of the
Registration Statement, and we hereby confirm that the discussion under such
heading accurately sets forth our advice as to the likely outcome of material
issues under the federal and Minnesota state income tax laws.
Dated: ______________, 1995
Very truly yours,
