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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 28, 1998
GREEN TREE FINANCIAL CORPORATION
as originator of Recreational, Equipment &
Consumer Trust 1998-C
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(Exact name of registrant as specified in its charter)
Delaware 01-08916 41-1807858
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(State or other Jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
1100 Landmark Towers, 345 St. Peter Street, Saint Paul, Minnesota 55102-1639
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(Address of principal executive offices)
Registrant's telephone number, including area code: (651) 293-3400
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Not Applicable
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(Former name or former address, if changed since last report)
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ITEM 1. Changes in Control of Registrant.
- ------- --------------------------------
Not applicable.
ITEM 2. Acquisition or Disposition of Assets.
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Not applicable
ITEM 3. Bankruptcy or Receivership.
- ------- --------------------------
Not applicable
ITEM 4. Changes in Registrant's Certifying Accounting.
- ------- ---------------------------------------------
Not applicable
ITEM 5. Other Events.
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On September 28, 1998, the Registrant sold approximately $800,000,000
of Floating Rate Asset-Backed Notes and Asset-Backed Certificates
issued by Green Tree Recreational, Equipment & Consumer Trust 1998-C,
consisting of a pool of retail installment sales contracts for the
purchase of a variety of consumer products and equipment and certain
related property conveyed by Green Tree Financial Corporation.
ITEM 6. Resignations of Registrant's Directors.
- ------- --------------------------------------
Not applicable
ITEM 7. Financial Statements and Exhibits.
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(a) Financial statements of businesses acquired.
Not applicable
(b) Pro forma financial information.
Not applicable
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(c) Exhibits.
The following is filed herewith. The exhibit numbers correspond
with Item 601(b) of Regulation S-K.
Exhibit No. Description
----------- -----------
4.1 Sale and Servicing Agreement between Green Tree
Recreational, Equipment & Consumer Trust 1998-C and
Green Tree Financial Corporation, as Seller and
Servicer, dated as of September 1, 1998.
4.2 Trust Agreement dated as of September 1, 1998,
among Green Tree Financial Corporation, as
depositor, Green Tree Second GP Inc., and
Wilmington Trust Company, as owner trustee.
4.3 Indenture dated as of September 1, 1998, between
Green Tree Recreational, Equipment & Consumer Trust
1998-C and U.S. Bank Trust National Association,
as trustee.
8.1 Tax opinion of Briggs and Morgan Professional
Association, dated September 28, 1998, relating to
REMIC matters.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: October 15, 1998 GREEN TREE FINANCIAL
CORPORATION
as originator of Recreational, Equipment
& Consumer Trust 1998-C
By: /s/ Scott T. Young
------------------------------------
Scott T. Young
Senior Vice President and Controller
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INDEX TO EXHIBITS
Exhibit
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Number
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4.1 Sale and Servicing Agreement between Green Tree
Recreational, Equipment & Consumer Trust 1997-D and
Green Tree Financial Corporation, as Seller and
Servicer, dated as of September 1, 1998.
4.2 Amended and Restated Trust Agreement dated as of September 1,
1998, among Green Tree Financial Corporation, as depositor,
Green Tree Second GP Inc., and Wilmington Trust Company,
as owner trustee.
4.3 Indenture dated as of September 1, 1998, between Green
Tree Recreational, Equipment & Consumer Trust
1997-D and First Trust National Association, as
trustee.
8.1 Tax opinion of Briggs and Morgan Professional Association, dated
September 28, 1998, relating to REMIC matters.
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EXHIBIT 4.1
GREEN TREE RECREATIONAL, EQUIPMENT & CONSUMER TRUST 1998-C
SALE AND SERVICING AGREEMENT
between
GREEN TREE RECREATIONAL, EQUIPMENT &
CONSUMER TRUST 1998-C
and
GREEN TREE FINANCIAL CORPORATION
as Seller and Servicer
Dated as of September 1, 1998
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TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS......................................................1-1
SECTION 1.01. General..................................................1-1
SECTION 1.02. Specific Terms...........................................1-1
ARTICLE II TRANSFER OF CONTRACTS...........................................2-1
SECTION 2.01. Transfer of Contracts....................................2-1
SECTION 2.02. Conditions to Acceptance by Owner Trustee................2-1
ARTICLE III REPRESENTATIONS AND WARRANTIES.................................3-1
SECTION 3.01. Representations and Warranties Regarding the Company.....3-1
SECTION 3.02. Representations and Warranties Regarding Each Contract...3-2
SECTION 3.03. Representations and Warranties Regarding the Contracts
in the Aggregate..................................3-4
SECTION 3.04. Representations and Warranties Regarding the
Contract Files....................................3-5
SECTION 3.05. Repurchase of Contracts for Breach of Representations and
Warranties........................................3-5
ARTICLE IV PERFECTION OF TRANSFER AND PROTECTION OF
SECURITY INTERESTS.............................................4-1
SECTION 4.01. Custody of Contracts.....................................4-1
SECTION 4.02. Filings..................................................4-2
SECTION 4.03. Name Change or Relocation................................4-2
SECTION 4.04. Chief Executive Office...................................4-2
SECTION 4.05. Costs and Expenses.......................................4-2
ARTICLE V SERVICING OF CONTRACTS.........................................5-1
SECTION 5.01. Responsibility for Contract Administration...............5-1
SECTION 5.02. Standard of Care.........................................5-1
SECTION 5.03. Records..................................................5-1
SECTION 5.04. Inspection; Computer Tape................................5-1
SECTION 5.05. Collections..............................................5-2
SECTION 5.06. Enforcement..............................................5-3
SECTION 5.07. Satisfaction of Contracts................................5-4
SECTION 5.08. Costs and Expenses.......................................5-4
SECTION 5.09. Maintenance of Insurance.................................5-4
SECTION 5.10. Repossession.............................................5-5
SECTION 5.11. Commingling of Funds.....................................5-6
SECTION 5.12. Retitling; Security Interests............................5-6
SECTION 5.13. Servicer Advances........................................5-6
SECTION 5.14. Monthly Reports; Certificate of Servicing Officer........5-7
SECTION 5.15. Annual Report of Accountants.............................5-7
SECTION 5.16. Certain Duties of the Servicer Under the Trust Agreement.5-7
SECTION 5.17. INTENTIONALLY OMITTED.
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SECTION 5.18. Annual Statement as to Compliance; Notice of Servicer
Termination Event.................................5-7
SECTION 5.19. INTENTIONALLY OMITTED
SECTION 5.20. Maintenance of Security Interests in Products............5-8
SECTION 5.21. Covenants, Representations, and Warranties of Servicer...5-8
SECTION 5.22. Purchase of Contracts Upon Breach of Covenant............5-9
ARTICLE VI DISTRIBUTIONS; TRUST ACCOUNTS; LIMITED GUARANTY;
STATEMENTS TO SECURITYHOLDERS...................................6-1
SECTION 6.01. Trust Accounts...........................................6-1
SECTION 6.02. Collection Account Deposits..............................6-2
SECTION 6.03. Permitted Withdrawals....................................6-2
SECTION 6.04. INTENTIONALLY OMITTED
SECTION 6.05. Limited Guaranty.........................................6-3
SECTION 6.06. Distributions............................................6-3
SECTION 6.07. INTENTIONALLY OMITTED
SECTION 6.08. Statements to Securityholders............................6-5
ARTICLE VII SERVICE TRANSFER...............................................7-1
SECTION 7.01. Event of Termination.....................................7-1
SECTION 7.02. Transfer.................................................7-2
SECTION 7.03. Indenture Trustee to Act; Appointment of Successor.......7-2
SECTION 7.04. Notification to Securityholders..........................7-3
SECTION 7.05. Effect of Transfer.......................................7-3
SECTION 7.06. Transfer of Collection Account...........................7-4
SECTION 7.07. Limits on Liability......................................7-4
SECTION 7.08. Waiver of Past Defaults..................................7-4
ARTICLE VIII TERMINATION...................................................8-1
SECTION 8.01. Company's or Servicer's Repurchase Option................8-1
SECTION 8.02. Liquidation or Sale of Trust Estate......................8-2
ARTICLE IX INDEMNITIES....................................................9-1
SECTION 9.01. Company's Indemnities....................................9-1
SECTION 9.02. Liabilities to Obligors..................................9-1
SECTION 9.03. Servicer's Indemnities...................................9-1
SECTION 9.04. Operation of Indemnities.................................9-1
ARTICLE X MISCELLANEOUS..................................................10-1
SECTION 10.01. Servicer Not to Assign Duties or Resign; Delegation of
Servicing Duties................................10-1
SECTION 10.02. Assignment or Delegation by Company.....................10-1
SECTION 10.03. Amendment...............................................10-2
SECTION 10.04. Notices.................................................10-3
SECTION 10.05. Merger and Integration..................................10-4
SECTION 10.06. Headings................................................10-4
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SECTION 10.07. Governing Law...........................................10-5
SECTION 10.08. Limitation of Liability.................................10-5
EXHIBIT A - FORM OF ASSIGNMENT.............................................A - 1
EXHIBIT B - FORM OF CERTIFICATE REGARDING REPURCHASED
CONTRACTS......................................................B - 1
EXHIBIT C - FORM OF MONTHLY REPORT.........................................C - 1
EXHIBIT D - FORM OF CERTIFICATE OF SERVICING OFFICER.......................D - 1
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THIS SALE AND SERVICING AGREEMENT, dated as of September 1, 1998,
between Green Tree Recreational, Equipment & Consumer Trust 1998-C (the "Issuer"
or the "Trust") and Green Tree Financial Corporation, a corporation organized
and existing under the laws of the State of Delaware, as Seller and Servicer
(the "Company").
WHEREAS, the Issuer wishes to purchase from the Company certain retail
installment sales contracts and promissory notes for the purchase of a variety
of consumer products, including but not limited to motorcycles; marine products
(including boats, boat trailers and outboard motors); pianos and organs; horse
trailers; sport vehicles (including snowmobiles, personal watercraft and
all-terrain vehicles); trucks; personal aircraft; and recreational vehicles
(collectively, the "Products"), each of which contracts provides for installment
payments by or on behalf of the purchaser and grants a lien on or security
interest in a Product; and
WHEREAS, the Company and the Issuer wish to set forth the terms and
conditions pursuant to which the Issuer will acquire the "Contracts," as
hereinafter defined, and the Company will service the Contracts;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, the Company and the Issuer agree as provided
herein:
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ARTICLE I
DEFINITIONS
SECTION 1.01. General.
For the purpose of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires, the terms defined in this
Article include the plural as well as the singular, the words "herein," "hereof"
and "hereunder" and other words of similar import refer to this Agreement as a
whole and not to any particular Article, Section or other subdivision, and
Section references refer to Sections of this Agreement.
SECTION 1.02. Specific Terms.
All terms defined in any Related Document and not otherwise defined in
this Agreement shall have the meanings given them in such Related Document.
"Additional Contracts" means all Contracts other than the Initial
Contracts.
"Advance Payment" means, with respect to any Monthly Period, any
payment by an Obligor that was not due under the related Contract during or
before such Monthly Period and which payment is not a Principal Prepayment.
"Affiliate" of any specified Person means any other Person controlling
or controlled by or under common control with such specified Person. For the
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" or "controlled" have meanings
correlative to the foregoing.
"Agreement" means this Sale and Servicing Agreement as the same may be
amended or supplemented from time to time.
"Amount Available" means, as to any Distribution Date, an amount equal
to the Collected Funds for that Distribution Date plus any amounts required to
be deposited in the Collection Account on or before such Distribution Date
pursuant to Sections 6.05, 8.01 and 8.02 of this Agreement.
"Amount Held for Future Distribution" means, as to any Distribution
Date, the total of the amounts held in the Collection Account on the last day of
the related Monthly Period on account of Advance Payments in respect of such
Monthly Period.
"Business Day" means any day other than (a) a Saturday, Sunday, legal
holiday or other day on which commercial banking institutions in Minneapolis,
Minnesota, New York, New York, Wilmington, Delaware or any other location of any
successor Servicer, successor Owner Trustee or successor Trustee are authorized
or obligated by law, executive order or governmental decree to be closed.
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"Calculation Agent" means the Person appointed by the Indenture Trustee
to establish LIBOR with respect to each Interest Reset Period. The Calculation
Agent shall be the Indenture Trustee unless the Indenture Trustee is unable or
unwilling so to act, in which case the Calculation Agent shall be a financial
institution appointed by the Trust.
"Certificate Distribution Account" means the account established and
maintained pursuant to Section 6.01(c).
"Certificate Majority" means Holders of Certificates representing more
than 50% of the Class B-1 Principal Balance and more than 50% of the Class B-2
Principal Balance.
"Certificates" means the 8.07% Asset-Backed Certificates, Class B-1,
and the 8.31% Asset-Backed Certificates, Class B-2, issued under the Trust
Agreement.
"Class" means pertaining to each Class of Notes or Certificates, as
applicable.
"Class A-1 Notes" means the Class A-1 Asset-Backed Notes issued by the
Trust pursuant to the Indenture.
"Class A-1 Final Scheduled Distribution Date" means August 15, 1999
(or, if such day is not a Business Day, the next succeeding Business Day
thereafter).
"Class A-1 Interest Amount" means, with respect to any Distribution
Date, an amount equal to interest at the Class A-1 Interest Rate on the Class
A-1 Principal Balance.
"Class A-1 Interest Carryover Shortfall" means, with respect to any
Distribution Date, the amount, if any, by which the amount distributed to
Holders of the Class A-1 Notes on such Distribution Date pursuant to Section
8.02(c)(1)(i) of the Indenture is less than the Class A-1 Interest Amount for
such Distribution Date.
"Class A-1 Interest Rate" means a per annum rate of interest equal to
5.55375%, calculated on the basis of the actual number of days elapsed and a
year of 360 days.
"Class A-1 Principal Balance" means, as to any Distribution Date, the
Original Class A-1 Principal Balance less all amounts distributed to Holders of
Class A-1 Notes on any prior Distribution Date on account of principal pursuant
to Section 8.02(c) of the Indenture.
"Class A-2 Final Scheduled Distribution Date" means March 15, 2005 (or,
if such day is not a Business Day, the next succeeding Business Day thereafter).
"Class A-2 Interest Amount" means, with respect to any Distribution
Date and the related Interest Reset Period, and amount equal to interest at the
Class A-2 Interest Rate on the Class A-2 Principal Balance.
"Class A-2 Interest Carryover Shortfall" means, with respect to any
Distribution Date, the amount, if any, by which the amount distributed to
Holders of the Class A-2 Notes on such
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Distribution Date pursuant to Section 8.02(c)(1)(i) of the Indenture is less
than the Class A-2 Interest Amount for such Distribution Date.
"Class A-2 Interest Rate" means, with respect to any Interest Reset
Period, a per annum rate of interest equal to the lesser of (a) LIBOR plus 0.13%
or (b) 9.0% calculated on the basis of the actual number of days elapsed and a
year of 360 days.
"Class A-2 Notes" means the Class A-2 Floating Rate Asset-Backed Notes
issued by the Trust pursuant to the Indenture.
"Class A-2 Principal Balance" means, as to any Distribution Date the
Original Class A-2 Principal Balance less all amounts distributed to Holders of
Class A-2 Notes on prior Distribution Dates on account of principal pursuant to
Section 8.02(c) of the Indenture.
"Class A-3 Final Scheduled Distribution Date" means February 15, 2009
(or, if such day is not a Business Day, the next succeeding business Day
thereafter).
"Class A-3 Interest Amount" means, with respect to any Distribution
Date, an amount equal to one month's interest (or, with respect to the first
Distribution Date, interest from and including the Closing Date to but excluding
the first Distribution Date) at the Class A-3 Interest Rate on the Class A-3
Principal Balance.
"Class A-3 Interest Carryover Shortfall" means, with respect to any
Distribution Date, the amount, if any, by which the amount distributed to
Holders of the Class A-3 Notes on such Distribution Date pursuant to Section
8.02(c)(1)(i) of the Indenture is less than the Class A-3 Interest Amount for
such Distribution Date.
"Class A-3 Interest Rate" means a per annum rate of interest equal to
5.92%, calculated on the basis of a year of 360 days consisting of twelve 30-day
months.
"Class A-3 Notes" means the Class A-3 Asset-Backed Notes issued by the
Trust pursuant to the Indenture.
"Class A-3 Principal Balance" means, as to any Distribution Date, the
Original Class A-3 Principal Balance less all amounts distributed to Holders of
Class A-3 Notes on prior Distribution Dates on account of principal pursuant to
Section 8.02(c) of the Indenture.
"Class A-4 Final Scheduled Distribution Date" means February 15, 2011
(or, if such day is not a Business Day, the next succeeding Business Day
thereafter).
"Class A-4 Interest Amount" means, with respect to any Distribution
Date, an amount equal to one month's interest (or, with respect to the first
Distribution Date, interest from and including the Closing Date to but excluding
the first Distribution Date) at the Class A-4 Interest Rate on the Class A-4
Principal Balance.
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"Class A-4 Interest Carryover Shortfall" means, with respect to any
Distribution Date, the amount, if any, by which the amount distributed to
Holders of the Class A-4 Notes on such Distribution Date pursuant to Section
8.02(c)(1)(i) of the Indenture is less than the Class A-4 Interest Amount for
such Distribution Date.
"Class A-4 Interest Rate" means a per annum rate of interest equal to
6.17%, calculated on the basis of a year of 360 days consisting of twelve 30-day
months.
"Class A-4 Notes" means the Class A-4 Asset-Backed Notes issued by the
Trust pursuant to the Indenture.
"Class A-4 Principal Balance" means, as to any Distribution Date, the
Original Class A-4 Principal Balance less all amounts distributed to Holders of
Class A-4 Notes on prior Distribution Dates on account of principal pursuant to
Section 8.02(c) of the Indenture.
"Class A-5 Final Scheduled Distribution Date" means February 15, 2014
(or, if such day is not a Business Day, the next succeeding Business Day
thereafter).
"Class A-5 Interest Amount" means, with respect to any Distribution
Date, an amount equal to one month's interest (or, with respect to the first
Distribution Date, interest from and including the Closing Date to but excluding
the first Distribution Date) at the Class A-5 Interest Rate on the Class A-5
Principal Balance.
"Class A-5 Interest Carryover Shortfall" means, with respect to any
Distribution Date, the amount, if any, by which the amount distributed to
Holders of the Class A-5 Notes on such Distribution Date pursuant to Section
8.02(c)(1)(i) of the Indenture is less than the Class A-5 Interest Amount for
such Distribution Date.
"Class A-5 Interest Rate" means a per annum rate of interest equal to
6.28%, calculated on the basis of a year of 360 days consisting of twelve 30-day
months.
"Class A-5 Notes" means the Class A-5 Asset-Backed Notes issued by the
Trust pursuant to the Indenture.
"Class A-5 Principal Balance" means, as to any Distribution Date, the
Original Class A-5 Principal Balance less all amounts distributed to Holders of
Class A-5 Notes on prior Distribution Dates on account of principal pursuant to
Section 8.02(c) of the Indenture.
"Class A-6 Final Scheduled Distribution Date" means February 15, 2014
(or, if such day is not a Business Day, the next succeeding Business Day
thereafter).
"Class A-6 Interest Amount" means, with respect to any Distribution
Date, an amount equal to one month's interest (or, with respect to the first
Distribution Date, interest from and including the Closing Date to but excluding
the first Distribution Date) at the Class A-6 Interest Rate on the Class A-6
Principal Balance.
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"Class A-6 Interest Carryover Shortfall" means, with respect to any
Distribution Date, the amount, if any, by which the amount distributed to
Holders of the Class A-6 Notes on such Distribution Date pursuant to Section
8.02(c)(3)(i) of the Indenture is less than the Class A-6 Interest Amount for
such Distribution Date.
"Class A-6 Interest Rate" means a per annum rate of interest equal to
6.70%, calculated on the basis of a year of 360 days consisting of twelve 30-day
months.
"Class A-6 Notes" means the Class A-6 Asset-Backed Notes issued by the
Trust pursuant to the Indenture.
"Class A-6 Principal Balance" means, as to any Distribution Date, the
Original Class A-6 Principal Balance less all amounts distributed to Holders of
Class A-6 Notes on prior Distribution Dates on account of principal pursuant to
Section 8.02(c) of the Indenture.
"Class A-7 Final Scheduled Distribution Date" means March 15, 2014 (or,
if such day is not a Business Day, the next succeeding Business Day thereafter).
"Class A-7 Interest Amount" means, with respect to any Distribution
Date, an amount equal to one month's interest (or with respect to the first
Distribution Date, interest from and including the Closing Date to but excluding
the first Distribution Date) at the Class A-7 Interest Rate on the Class A-7
Principal Balance.
"Class A-7 Interest Carryover Shortfall" means, with respect to any
Distribution Date, the amount, if any, by which the amount distributed to
Holders of the Class A-7 Notes on such Distribution Date pursuant to Section
8.02(c)(5)(i) of the Indenture is less than the Class A-7 Interest Amount for
such Distribution Date.
"Class A-7 Interest Rate" means a per annum rate of interest equal to
7.00%, calculated on the basis of a year of 360 days consisting of twelve 30-day
months.
"Class A-7 Notes" means the Class A-7 Asset-Backed Notes issued by the
Trust pursuant to the Indenture.
"Class A-7 Principal Balance" means, as to any Distribution Date, the
Original Class A-7 Principal Balance less all amounts distributed to Holders of
Class A-7 Notes on prior Distribution Dates on account of principal pursuant to
Section 8.02(c) of the Indenture.
"Class B-1 Interest Amount" means, as to any Distribution Date, an
amount equal to one month's interest (or, with respect to the first Distribution
Date, interest from and including the Closing Date to but excluding the first
Distribution Date) at the Class B-1 Rate on the Class B-1 Principal Balance.
"Class B-1 Interest Carryover Shortfall" means as to any Distribution
Date, the amount, if any, by which the amount distributed to Holders of the
Class B-1 Certificates on such Distribution
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Date pursuant to Section 5.2(a)(1) of the Trust Agreement is less than the Class
B-1 Interest Amount for such Distribution Date.
"Class B-1 Rate" means 8.07% per annum, computed on the basis of a year
of 360 days consisting of twelve 30-day months.
"Class B-1 Pool Factor" means, with respect to any Distribution Date,
an eight-digit decimal figure equal to the outstanding principal balance of the
Class B-1 Certificates as of such Distribution Date (after giving effect to all
distributions on such date) divided by the Original Class B-1 Principal Balance.
"Class B-1 Principal Balance" means, as to any Distribution Date, the
Original Class B-1 Principal Balance less all amounts distributed to Holders of
Class B-1 Certificates on prior Distribution Dates on account of principal
pursuant to Section 5.2(a) of the Trust Agreement.
"Class B-2 Distributable Amount" means, with respect to any
Distribution Date, the sum of the Class B-2 Principal Distributable Amount and
the Class B-2 Interest Distributable Amount.
"Class B-2 Interest Amount" means, as to any Distribution Date, an
amount equal to one month's interest (or, with respect to the first Distribution
Date, interest from and including the Closing Date to but excluding the first
Distribution Date) at the Class B-2 Rate on the Class B-2 Principal Balance.
"Class B-2 Interest Carryover Shortfall" means, with respect to any
Distribution Date, the amount, if any, by which the amount distributed to
Holders of the Class B-2 Certificates on such Distribution Date pursuant to
Section 5.2(a)(4) of the Trust Agreement is less than the Class B-2 Interest
Amount for such Distribution Date.
"Class B-2 Interest Distributable Amount" means, with respect to any
Distribution Date, the sum of the amounts payable in respect of the Class B-2
Certificates pursuant to Section 5.2(a)(4) of the Trust Agreement.
"Class B-2 Rate" means 8.31% per annum, computed on the basis of a
360-day year consisting of twelve 30-day months.
"Class B-2 Pool Factor" means, with respect to any Distribution Date,
an eight-digit decimal figure equal to the outstanding principal balance of the
Class B-2 Certificates as of such Distribution Date (after giving effect to all
distributions on such date) divided by the Original Class B-2 Principal Balance.
"Class B-2 Principal Balance" means, as to any Distribution Date, the
Original Class B-2 Certificate Principal Balance less all amounts distributed to
Holders of Class B-2 Certificates on prior Distribution Dates on account of
principal pursuant to Section 5.2(a)(5) of the Trust Agreement.
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"Class B-2 Principal Liquidation Loss" means, as to any Distribution
Date, the lesser of: (a) the amount, if any, by which the Class B-1 Certificate
Principal Balance and the Class B-2 Principal Balance and Note Principal Balance
as of the immediately preceding Distribution Date, minus the aggregate amount of
principal distributed on account of the Notes and Class B-1 Certificates on that
Distribution Date (exclusive of any Guaranty Payment on that Distribution Date
in respect of any Class B-2 Principal Liquidation Loss), exceeds the Pool
Scheduled Principal Balance as of such Distribution Date, or (b) the Class B-2
Principal Balance as of the immediately preceding Distribution Date minus the
aggregate amount of principal distributed on account of the Class B-2
Certificates on that Distribution Date (exclusive of any Guaranty Payment on
that Distribution Date in respect of any Class B-2 Principal Liquidation Loss).
"Class B-2 Principal Distributable Amount" means, with respect to any
Distribution Date, the sum of (i) after the Class B-1 Principal Balance has been
reduced to $0, the Total Principal Distribution Amount minus, on the
Distribution Date on which the Class B-1 Principal Balance is reduced to $0,
amounts deposited in the Certificate Distribution Account on such Distribution
Date pursuant to Section 5.02(a) of the Trust Agreement to reduce the Class B-1
Principal Balance to zero, plus (ii) the Class B-2 Principal Liquidation Loss,
if any, but in no event more than the Class B-2 Principal Balance.
"Class B-2 Underwriting Agreement" means the Underwriting Agreement and
related Terms Agreement, each dated September 15, 1998, by and between Merrill
Lynch, Pierce, Fenner & Smith Incorporated and the Company, relating to the
Class B-2 Certificates.
"Class Percentage Interest" means, as to any Note or Certificate, the
percentage interest evidenced thereby in distributions made on the related
Class, such percentage interest being equal to the percentage (carried to eight
places) obtained from dividing the denomination of such Note or Certificate by
the aggregate denomination of all Notes or Certificates of the related Class
(which equals the Original Class A-1 Principal Balance in the case of a Class
A-1 Note, the Original Class A-2 Principal Balance in the case of a Class A-2
Note, the Original Class A-3 Principal Balance in the case of a Class A-3 Note,
the Original Class A-4 Principal Balance in the case of a Class A-4 Note, the
Original Class A-5 Principal Balance in the case of a Class A-5 Note, the
Original Class A-6 Principal Balance in the case of a Class A-6 Note, the
Original Class A-7 Principal Balance in the case of a Class A-7 Note, the
Original Class B-1 Principal Balance in the case of a Class B-1 Certificate or
the Original Class B-2 Principal Balance in the case of a Class B-2
Certificate). The aggregate Class Percentage Interests for each Class of Notes
or Certificates shall equal 100%.
"Class Principal Balance" means, as to any date, the Class A-1
Principal Balance, the Class A-2 Principal Balance, the Class A-3 Principal
Balance, the Class A-4 Principal Balance, the Class A-5 Principal Balance, the
Class A-6 Principal Balance, the Class A-7 Principal Balance, the Class B-1
Principal Balance or the Class B-2 Principal Balance, as appropriate.
"Closing Date" means September 28, 1998.
"Code" means the Internal Revenue Code of 1986, as amended.
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"Collateral Security" means, with respect to any Contract, (i) the
security interests, if any, granted by or on behalf of the related Obligor with
respect thereto, including a first priority perfected security interest in the
related Product, (ii) all other security interests or liens and property subject
thereto from time to time purporting to secure payment of such Contract, whether
pursuant to the agreement giving rise to such Contract or otherwise, together
with all financing statements signed by the Obligor describing any collateral
securing such Contract, (iii) all security agreements granting a security
interest in the related Product and all guarantees, insurance and other
agreements or arrangements of whatever character from time to time supporting or
securing payment of such Contract whether pursuant to the agreement giving rise
to such Contract or otherwise, and (iv) all records in respect of such Contract.
"Collected Funds" means, as to any Distribution Date, an amount equal
to (a) the sum of (i) the amount on deposit in the Collection Account as of the
close of business on the last day of the related Monthly Period (exclusive of
any amounts deposited therein pursuant to Sections 6.05, 8.01 or 8.02 of this
Agreement), (ii) any amounts required to be deposited in the Collection Account
on or before the Business Day immediately preceding such Distribution Date
pursuant to Sections 5.09 or 5.13, and (iii) any amount deposited in the
Collection Account in respect of principal on the Contracts (exclusive of any
amounts deposited therein pursuant to Sections 6.05, 8.01 or 8.02 of this
Agreement), after the last day of the related Monthly Period through and
including the third Business Day prior to the Distribution Date, but in no event
later than the 10th day of the month in which such Distribution Date occurs,
reduced by (b) the sum as of the close of business on the last day of the
related Monthly Period of (i) the Amount Held for Future Distribution, (ii)
amounts permitted to be withdrawn by the Trustee from the Collection Account
pursuant to clauses (b) - (e), inclusive, of Section 6.03; and (iii) with
respect to all Distribution Dates other than the first Distribution Date, any
amount deposited in the Collection Account in respect of principal on the
Contracts (exclusive of any amounts deposited therein pursuant to Sections 6.05,
8.01 or 8.02 of this Agreement) on or after the first day of the related Monthly
Period and through and including the third Business Day of the preceding
Distribution Date, but in no event later than the 10th day of the related
Monthly Period.
"Collection Account" means the account established and maintained
pursuant to Section 6.01.
"Computer Tape" means the computer tape generated by the Company which
provides information relating to the Contracts and which was used by the Company
in selecting the Contracts, and includes the master file and the history file.
"Contract File" means, as to each Contract, (a) the original copy of
the Contract, including the executed evidence of the obligation of the Obligor;
(b) either (i) the original title document for the related Product or a
duplicate certified by the appropriate governmental authority which issued the
original thereof or the application for such title document or (ii) if the laws
of the jurisdiction in which the related Product is located do not provide for
the issuance of title documents for goods of the type including the Product,
other evidence of ownership of the related Product which is customarily relied
upon in such jurisdiction as evidence of title to such goods; (c) evidence of
one or more of the following types of perfection of the security interest in the
related Product granted by such Contract, as appropriate: (i) notation of such
security interest on the title document, (ii) a financing statement meeting the
requirements of the UCC, with evidence of recording indicated
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thereon (if required to perfect a security interest in the related Product under
the UCC as in force in the relevant state), (iii) in the case of a Contract
secured by a security interest in an aircraft, evidence of filing with the
Federal Aviation Administration Aircraft Registry or (iv) such other evidence of
perfection of a security interest in goods of the type including the Product as
is customarily relied upon in the jurisdiction in which the related Product is
located; (d) the assignment of the Contract from the originator (if other than
the Company or a wholly-owned subsidiary of the Company) to the Company or a
wholly-owned subsidiary of the Company; (e) any extension, modification or
waiver agreement(s); (f) a credit application signed by the Obligor, or a copy
thereof; and (g) if required by Section 5.09 with respect to such Contract, a
certificate of insurance or application form for insurance signed by the
Obligor, or copies thereof.
"Contract Rate" means, with respect to any particular Contract, the
rate of interest specified in that Contract and computed in accordance with the
method specified in that Contract.
"Contracts" means the retail installment sales contracts and promissory
notes described in the List of Contracts and constituting part of the corpus of
the Trust, which Contracts are to be assigned and conveyed by the Company to the
Trust, and includes, without limitation, all related security interests and any
and all rights to receive payments which are due pursuant thereto on or after
the Cutoff Date, but excluding any rights to receive payments which are due
pursuant thereto prior to the Cutoff Date.
"Corporate Trust Office" means with respect to the Owner Trustee, the
principal office of the Owner Trustee at which at any particular time its
corporate trust business shall be administered, which office at the Closing Date
is located at Rodney Square North, 1100 North Market Street, Wilmington,
Delaware 19890-0001, Attention: Corporate Trust Administration; the telecopy
number for the Corporate Trust Office of the Owner Trustee on the date of the
execution of this Agreement is 302-651-8882; with respect to the Indenture
Trustee, the principal office of the Indenture Trustee at which at any
particular time its corporate trust business shall be administered, which office
at the Closing Date is located at U.S. Bank Trust National Association, 180 East
Fifth Street, St. Paul, Minnesota 55101 Attention: Corporate Trust Department;
the telecopy number for the Corporate Trust Office of the Indenture Trustee on
the date of execution of this Agreement is 612-244-0089.
"Counsel for the Company" means Briggs and Morgan, P.A., or other legal
counsel for the Company.
"Cutoff Date" means August 1, 1998 or the date of origination, if
later.
"Cutoff Date Pool Principal Balance" means the aggregate of the Cutoff
Date Principal Balances of the Contracts.
"Cutoff Date Principal Balance" means, as to any Contract, the unpaid
principal balance thereof at the Cutoff Date after giving effect to all
installments of principal due prior thereto.
"Defaulted Contract" means a Contract with respect to which the
Servicer commenced repossession or foreclosure procedures, made a sale of such
Contract to a third party for
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repossession, foreclosure or other enforcement, or as to which there was a
payment delinquent 180 or more days (excluding any Contract deemed delinquent
solely because the Obligor's required monthly payment was reduced as a result of
bankruptcy or similar proceedings).
"Delinquent Payment" means, as to any Contract, with respect to any
Monthly Period, any payment or portion of a payment of principal or interest
that was originally scheduled to be made during such Monthly Period under such
Contract and was not received or applied during such Monthly Period, whether or
not any payment extension has been granted by the Servicer.
"Determination Date" means the third Business Day prior to each
Distribution Date during the term of this Agreement.
"Distribution Date" means the fifteenth day of each calendar month
during the term of this Agreement, or if such day is not a Business Day, the
next succeeding Business Day, commencing on October 15, 1998.
"Due Date" means, as to any Contract, the date of the month on which
the scheduled monthly payment for such Contract is due.
"Electronic Ledger" means the electronic master record of installment
sale contracts of the Company.
"Eligible Account" means, at any time, an account which is any of the
following: (i) an account maintained with an Eligible Institution; (ii) a trust
account (which shall be a "segregated trust account") maintained with the
corporate trust department of a federal or state chartered depository
institution or trust company with trust powers and acting in its fiduciary
capacity for the benefit of the Indenture Trustee, which depository institution
or trust company shall have capital and surplus (or, if such depository
institution or trust company is a subsidiary of a bank holding company system,
the capital and surplus of the bank holding company) of not less than
$50,000,000 and the securities of such depository institution (or, if such
depository institution is a subsidiary of a bank holding company system and such
depository institution's securities are not rated, the securities of the bank
holding company) shall have a credit rating from Standard & Poor's (if rated by
Standard & Poor's) and Fitch (if rated by Fitch) in one of its generic credit
rating categories which signifies investment grade; or (iii) an account that
will not cause Standard & Poor's and Fitch to downgrade or withdraw their
then-current ratings assigned to the Notes, as confirmed in writing by Standard
& Poor's and Fitch.
"Eligible Institution" means any depository institution (which may be
the Owner Trustee, the Indenture Trustee or an Affiliate of either) organized
under the laws of the United States or any State, the deposits of which are
insured to the full extent permitted by law by the Bank Insurance Fund
(currently administered by the Federal Deposit Insurance Corporation), which is
subject to supervision and examination by federal or state authorities and whose
short-term deposits have been rated A-1 by Standard & Poor's and F-1 by Fitch
(if rated by Fitch), or whose unsecured long-term debt has been rated in one of
the two highest rating categories by Standard & Poor's and Fitch (if rated by
Fitch) in the case of unsecured long-term debt, or who shall otherwise be
acceptable to Standard & Poor's and Fitch.
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"Eligible Investments" are any of the following:
(i) direct obligations of, and obligations fully guaranteed
by, the United States of America, the Federal Home Loan Mortgage
Corporation, the Federal National Mortgage Association, or any agency
or instrumentality of the United States of America the obligations of
which are backed by the full faith and credit of the United States of
America and which are noncallable;
(ii) demand and time deposits in, certificates of deposit of,
bankers' acceptances issued by, or federal funds sold by any depository
institution or trust company (including the Indenture Trustee or any
Affiliate of the Indenture Trustee, acting in its commercial capacity)
incorporated under the laws of the United States of America or any
State thereof and subject to supervision and examination by federal
and/or state authorities, so long as, at the time of such investment or
contractual commitment providing for such investment, the commercial
paper or other short-term deposits of such depository institution or
trust company (or, in the case of a depository institution which is the
principal subsidiary of a holding company, the commercial paper or
other short-term debt obligations of such holding company) are rated at
least A-1+ by Standard & Poor's and at least F-1+ by Fitch (if rated by
Fitch);
(iii) shares of an investment company registered under the
Investment Company Act of 1940, whose shares are registered under the
Securities Act of 1933 and have the highest credit rating then
available from Fitch (if rated by Fitch) and Standard & Poor's and
whose only investments are in securities described in clauses (i) and
(ii) above;
(iv) repurchase obligations with respect to (A) any security
described in clause (i) above or (B) any other security issued or
guaranteed by an agency or instrumentality of the United States of
America, in either case entered into with a depository institution or
trust company (acting as principal) described in clause (ii) above;
(v) securities bearing interest or sold at a discount issued
by any corporation incorporated under the laws of the United States of
America or any State thereof which have a credit rating of at least AAA
by Standard & Poor's and in one of the two highest rating categories
from Fitch (if rated by Fitch) at the time of such investment;
provided, however, that securities issued by any particular corporation
will not be Eligible Investments to the extent that investment therein
will cause the then outstanding principal amount of securities issued
by such corporation and held as part of the corpus of the Trust to
exceed 10% of amounts held in the Collection Account; and
(vi) commercial paper having a rating of at least A-1+ from
Standard & Poor's and at least F-1+ by Fitch (if rated by Fitch) at the
time of such investment or pledge as a security.
Notwithstanding the foregoing, securities that represent the right to receive
payments only of interest due on underlying obligations shall not be included as
Eligible Investments, whether or not such securities otherwise fall within (i)
through (vi) above.
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Each of the Indenture Trustee and the Owner Trustee may trade with
itself or an Affiliate in the purchase or sale of such Eligible Investments.
"Eligible Servicer" means the Company or any Person qualified to act as
Servicer of the Contracts under applicable federal and state laws and
regulations, which Person services not less than an aggregate of $100,000,000 in
outstanding principal amount of retail installment sales contracts and/or
consumer installment loans.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Errors and Omissions Protection Policy" means the employee errors and
omissions policy maintained by the Servicer or any similar replacement policy
covering errors and omissions by the Servicer's employees, and meeting the
requirements of Section 5.09, all as such policy relates to Contracts comprising
a portion of the corpus of the Trust.
"Event of Termination" has the meaning assigned in Section 7.01.
"Excess Proceeds" means an amount equal to the excess, if any, of (a)
the aggregate of the Original Note Principal Balance and Original Certificate
Principal Balances over (b) the Cutoff Date Pool Principal Balance.
"Fidelity Bond" means the fidelity bond maintained by the Servicer or
any similar replacement bond, meeting the requirements of Section 5.09, as such
bond relates to Contracts comprising a portion of the corpus of the Trust.
"Final Scheduled Distribution Date" means with respect to each Class of
Notes and Certificates, the following dates (or, if such day is not a Business
Day, the next succeeding Business Day): Class A-1 Notes -- August 15, 1999;
Class A-2 Notes -- March 15, 2005; Class A-3 Notes -- February 15, 2009; Class
A-4 Notes -- February 15, 2011; Class A-5 Notes -- February 15, 2014; Class A-6
Notes -- February 15, 2014; Class A-7 Notes -- March 15, 2014; Class B-1
Certificates -- September 15, 2018; Class B-2 Certificates -- March 15, 2019;
"First Priority Principal Distribution Amount" means with respect to
any Distribution Date, the amount, if any, by which
(i) the aggregate Principal Balance of the Senior Notes
is greater than
(ii) the Pool Scheduled Principal Balance as of the
immediately preceding Distribution Date, minus the aggregate Scheduled
Principal Balance of all Defaulted Contracts.
"Fitch" means Fitch IBCA, Inc., or any successor thereto; provided that
if Fitch no longer has a rating outstanding on any Class of Notes or
Certificates, then references herein to "Fitch" shall be deemed to refer to the
NRSRO then rating any Class of the Notes or Certificates (or, if more than
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one such NRSRO is then rating any Class of the Notes or Certificates, to such
NRSRO as may be designated by the Servicer), and references herein to ratings by
or requirements of Fitch's shall be deemed to have the equivalent meanings with
respect to ratings by or requirements of such NRSRO.
"Formula Principal Distribution Amount" means, as of any Distribution
Date (but subject to the last sentence of this definition), the sum of the
following amounts with respect to the related Monthly Period, in each case
computed in accordance with the method specified in the relevant Contract:
(i) all scheduled payments of principal due on each
outstanding Contract during the related Monthly Period as specified in
the amortization schedule at the time applicable thereto (after
adjustments for previous Partial Principal Prepayments and after any
adjustment to such amortization schedule by reason of any bankruptcy of
an Obligor or similar proceeding or any moratorium or similar waiver or
grace period); plus
(ii) the Scheduled Principal Balance of each Contract which,
during the related Monthly Period, was purchased by Green Tree pursuant
to this Agreement on account of a breach of a representation or
warranty; plus
(iii) all Partial Principal Prepayments applied and all
Principal Prepayments in Full received on Contracts during the related
Monthly Period; plus
(iv) the aggregate Scheduled Principal Balance of all
Contracts that became Liquidated Contracts during the related Monthly
Period; plus the amounts of any reduction in the outstanding principal
balance of a Contract during such Monthly Period ordered as a result of
a bankruptcy or similar proceeding involving the related Obligor; plus
(v) without duplication of the foregoing, all collections in
respect of principal on the Contracts received during the current month
up to and including the third business day prior to such Distribution
Date (but in no event later than the 10th day of the month in which
such Distribution Date occurs), minus
(vi) the amount, if any, included in the Formula Principal
Distribution Amount for the preceding Distribution Date by virtue of
clause (v) above.
The Formula Principal Distribution Amount for the Distribution Date in March
2019 shall be the sum of the Note Principal Balance and the Certificate
Principal Balance.
"Formula Principal Shortfall" means, with respect to any Distribution
Date, the Formula Principal Distribution Amount for such Distribution Date less
the funds available to pay such Formula Principal Distribution Amount pursuant
to Section 6.06(a)(xi).
"Fourth Priority Principal Distribution Amount" means with respect to
any Distribution Date, the amount, if any, by which
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(i) the aggregate Principal Balance of the Notes plus the
Class B-1 Principal Balance, minus the amount of any First Priority
Principal Distribution Amount paid on such Distribution Date, minus the
amount of any Second Priority Principal Distribution Amount paid on
such Distribution Date and minus the amount of any Third Priority
Principal Distribution Amount paid on such Distribution Date,
is greater than
(ii) the Pool Scheduled Principal Balance as of the
immediately preceding Distribution Date, minus the aggregate Scheduled
Principal Balance of all Defaulted Contracts.
"GTGP" means Green Tree Second GP Inc., a Minnesota corporation.
"Guaranty Payment" means, as of any Distribution Date, the amount, if
any, by which (A) the Class B-2 Distributable Amount on such Distribution Date
exceeds (B) the remainder of (x) the sum of the Collected Funds as of that
Distribution Date plus any amounts on deposit in the Collection Account as of
that Distribution Date pursuant to Sections 8.01 or 8.02 of this Agreement,
minus (y) the amounts to be distributed from the Collection Account on that
Distribution Date pursuant to clauses (i) through (xii) of Section 6.06(a).
"Indenture" means the Indenture, dated as of September 1, 1998, between
the Trust and U.S. Bank Trust National Association, as Indenture Trustee, as the
same may be amended and supplemented from time to time.
"Indenture Trustee" means the Person acting as Trustee under the
Indenture, its successors in interest and any successor Trustee under the
Indenture.
"Independent" means, when used with respect to any specified Person,
Briggs and Morgan, P.A., or any Person who (i) is in fact independent of the
Company and the Servicer, (ii) does not have any direct financial interest or
any material indirect financial interest in the Company or the Servicer or in an
Affiliate of either and (iii) is not connected with the Company or the Servicer
as an officer, employee, promoter, underwriter, trustee, partner, director or
person performing similar functions. Whenever it is provided herein that any
Independent Person's opinion or certificate shall be furnished to the Trustee,
such opinion or certificate shall state that the signatory has read this
definition and is Independent within the meaning set forth herein.
"Initial Contracts" means those Contracts identified as such in the
List of Contracts, all of which were originated on or before July 31, 1998, and
having an aggregate Cutoff Date Principal Balance of $498,904,486.09.
"Insurance Policy" means, with respect to each Contract, the policy of
insurance (if any) required to be maintained for the related Product by Section
5.09, and which, as provided in said Section 5.09, may be a blanket policy
maintained by the Servicer in accordance with the terms and conditions of said
Section 5.09.
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"Insurance Proceeds" means proceeds paid by any insurer pursuant to any
insurance policy or contract.
"Interest Reset Period" means, with respect to any Distribution Date,
the period from and including the prior Distribution Date (or, with respect to
the first Distribution Date, from and including the Closing Date) to but
excluding such Distribution Date.
"LIBOR" means, with respect to any Interest Reset Period, the offered
rate, as established by the Calculation Agent, for United States dollar deposits
for one month that appears on Telerate Page 3750 as of 11:00 A.M., London time,
on the LIBOR Determination Date for such Interest Reset Period. If on any LIBOR
Determination Date the offered rate does not appear on Telerate Page 3750, the
Calculation Agent will request each of the reference banks (which shall be major
banks that are engaged in transactions in the London interbank market selected
by the Calculation Agent) to provide the Calculation Agent with its offered
quotation for United States dollar deposits for one month to prime banks in the
London interbank market as of 11:00 A.M., London time, on such date. If at least
two reference banks provide the Calculation Agent with such offered quotations,
LIBOR on such date will be the arithmetic mean, rounded upwards, if necessary,
to the nearest 1/100,000 of 1% (.00001%), with five one-millionths of a
percentage point rounded upward, of all such quotations. If on such date fewer
than two of the reference banks provide the Calculation Agent with such offered
quotations, LIBOR on such date will be the arithmetic mean, rounded upwards, if
necessary, to the nearest 1/100,000 of 1% (.00001%), with five one-millionths of
a percentage point rounded upward, of the offered per annum rates that one or
more leading banks in The City of New York selected by the Calculation Agent are
quoting as of 11:00 A.M., New York City time, on such date to leading European
banks for United States dollar deposits for one month; provided, however, that
if such banks are not quoting as described above, LIBOR for such date will be
LIBOR applicable to the Interest Reset Period immediately preceding such
Interest Reset Period.
"LIBOR Business Day" as used herein means a day that is both a Business
Day and a day on which banking institutions in the City of London, England are
not required or authorized by law to be closed.
"LIBOR Determination Date" means the second LIBOR Business Day prior to
the first day of the related Interest Reset Period.
"Limited Guaranty" means the obligation of the Company to make Guaranty
Payments pursuant to Section 6.05.
"Liquidated Contract" means any Defaulted Contract as to which the
Servicer has determined that all amounts which it expects to recover from or on
account of such Contract through the date of disposition of the related Product
have been recovered; provided that any defaulted Contract in respect of which
the related Product has been realized upon and disposed of and the proceeds of
such disposition have been received shall be deemed to be a Liquidated Contract.
"Liquidation Expenses" means out-of-pocket expenses (exclusive of any
overhead expenses) which are incurred by the Servicer in connection with the
liquidation of any Defaulted Contract, on
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or prior to the date on which the related Product is disposed of, including,
without limitation, legal fees and expenses, and any related and unreimbursed
expenditures for property taxes, property preservation or restoration of the
property to marketable condition.
"Liquidation Proceeds" means cash (including Insurance Proceeds and
proceeds realized on the repurchase of any Product by the originating dealer for
breach of warranties) received in connection with the liquidation of Defaulted
Contracts, whether through repossession, foreclosure sale or otherwise,
including any rental income realized from any repossessed Product.
"List of Contracts" means the list identifying each Contract
constituting part of the corpus of the Trust, which list (a) identifies each
Contract and (b) sets forth as to each Contract (i) the Cutoff Date Principal
Balance, (ii) the amount of monthly payments due from the Obligor, (iii) the
Contract Rate and (iv) the maturity date, and which is attached to the
Assignment from the Company to the Trust, conveying the Company's right, title
and interest in and to the Contracts (substantially in the form of Exhibit A).
"Monthly Period" means a calendar month during the term of this
Agreement. With respect to a Distribution Date other than the first Distribution
Date, "related Monthly Period" means the calendar month immediately preceding
the month in which the Distribution Date occurs. With respect to the first
Distribution Date, "related Monthly Period" means the period from the Cutoff
Date through and including September 30, 1998.
"Monthly Report" has the meaning assigned in Section 5.13.
"Monthly Servicing and Guaranty Fee" means, as to any Distribution
Date, the Amount Available in the Collection Account on that Distribution Date
after payment in full of all amounts payable under Section 6.06(a)(i) through
(xiii).
"Monthly Servicing Fee" means, as of any Distribution Date on which the
Company is not acting as Servicer, any amount agreed to by the Trustee and the
successor Servicer that does not exceed one-twelfth of the product of 0.75% and
the Pool Scheduled Principal Balance for the immediately preceding Distribution
Date.
"Net Liquidation Loss" means, as to a Liquidated Contract, the amount,
if any, by which (a) the outstanding principal balance of such Liquidated
Contract plus accrued and unpaid interest thereon to the date on which such
Liquidated Contract became a Liquidated Contract exceeds (b) the Net Liquidation
Proceeds for such Liquidated Contract.
"Net Liquidation Proceeds" means, as to a Liquidated Contract, all
Liquidation Proceeds received on or prior to the last day of the Monthly Period
in which such Contract became a Liquidated Contract, net of Liquidation
Expenses.
"Note Distribution Account" means the account designated as such,
established and maintained pursuant to Section 6.01.
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"Note Majority" means, as to each Class of Notes, Holders of Notes
representing a majority of the Principal Balance of such Class of Notes.
"Note Pool Factor" means, with respect to any Distribution Date and
each Class of Notes, an eight-digit decimal figure equal to the outstanding
principal balance of such class of Notes as of such Distribution Date (after
giving effect to all distributions on such date) divided by the Original
Principal Balance of such Class of Notes as of the Closing Date.
"Note Principal Balance" means, as of any Distribution Date, the sum of
the Class A-1 Principal Balance, the Class A-2 Principal Balance, the Class A-3
Principal Balance, the Class A-4 Principal Balance, the Class A-5 Principal
Balance, the Class A-6 Principal Balance and the Class A-7 Principal Balance.
"Notes" means the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes,
Class A-4 Notes, Class A-5 Notes, Class A-6 Notes or Class A-7 Notes.
"NRSRO" means any nationally recognized statistical rating
organization.
"MN UCC" means the Uniform Commercial Code as in effect in the State of
Minnesota.
"Obligor" means a Product buyer or other Person who is indebted under a
Contract.
"Officer's Certificate" means a certificate signed by the Chairman of
the Board, President or any Vice President of the Company and delivered to the
Owner Trustee and/or the Trustee as applicable.
"Opinion of Counsel" means a written opinion of counsel, who may,
except as expressly provided herein, be salaried counsel for the Company,
acceptable to the Indenture Trustee, the Owner Trustee and the Company.
"Original Certificate Principal Balances" means $52,000,000.
"Original Class A-1 Principal Balance" means $122,000,000.
"Original Class A-2 Principal Balance" means $193,000,000.
"Original Class A-3 Principal Balance" means $150,000,000.
"Original Class A-4 Principal Balance" means $111,000,000.
"Original Class A-5 Principal Balance" means $104,000,000.
"Original Class A-6 Principal Balance" means $36,000,000.
"Original Class A-7 Principal Balance" means $32,000,000.
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"Original Class B-1 Principal Balance" means $16,000,000.
"Original Class B-2 Principal Balance" means $36,000,000.
"Original Class Principal Balance" means, with respect to any Class,
the Original Class A-1 Principal Balance, the Original Class A-2 Principal
Balance, the Original Class A-3 Principal Balance, the Original Class A-4
Principal Balance, the Original Class A-5 Principal Balance, the Original Class
A-6 Principal Balance, the Original Class A-7 Principal Balance, the Original
Class B-1 Principal Balance or the Original Class B-2 Principal Balance, as
appropriate.
"Original Note Principal Balance" means the sum of the Original Class
A-1 Principal Balance, Original Class A-2 Principal Balance, Original Class A-3
Principal Balance, Original Class A-4 Principal Balance, Original Class A-5
Principal Balance, Original Class A-6 Principal Balance and Original Class A-7
Principal Balance.
"Owner Trustee" means Wilmington Trust Company, acting not individually
but solely as trustee, or its successor in interest, and any successor appointed
as provided in the Trust Agreement.
"Partial Principal Prepayment" means (a) any Principal Prepayment other
than a Principal Prepayment in Full and (b) any cash amount deposited in the
Collection Account pursuant to the proviso in Section 3.05(a).
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or government
or any agency or political subdivision thereof.
"Pool Scheduled Principal Balance" means, as of any Distribution Date,
the aggregate Scheduled Principal Balance of all Contracts that were outstanding
during the related Monthly Period.
"Principal Prepayment" means a payment or other recovery of principal
on a Contract (exclusive of Liquidation Proceeds) which is received in advance
of its scheduled due date and applied upon receipt (or, in the case of a Partial
Principal Prepayment, upon the next scheduled payment date on such Contract) to
reduce the outstanding principal amount due on such Contract prior to the date
or dates on which such principal amount is due.
"Principal Prepayment in Full" means any Principal Prepayment of the
entire principal balance of a Contract.
"Products" means motorcycles; marine products (including boats, boat
trailers and outboard motors); pianos and organs; horse trailers; sport vehicles
(including snowmobiles, personal watercraft and all-terrain vehicles); trucks;
personal aircraft; and recreational vehicles, financed by and securing the
Contracts.
"Record Date" means the Business Day immediately preceding the related
Distribution Date.
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"Related Documents" means the Trust Agreement, the Indenture, the
Administration Agreement, the Certificates, the Notes and the Underwriting
Agreements. The Related Documents executed by any party are referred to herein
as "such party's Related Documents," "its Related Documents" or by a similar
expression.
"Repurchase Price" means, with respect to a Contract to be repurchased
pursuant to Section 3.05 or Section 5.22, an amount equal to (a) the remaining
principal amount outstanding on such Contract, plus (b) interest at the Contract
Rate on such Contract from the end of the Monthly Period with respect to which
the Obligor last made a payment through the end of the immediately preceding
Monthly Period.
"Responsible Officer" means, with respect to the Owner Trustee, the
chairman and any vice chairman of the board of directors, the president, the
chairman and vice chairman of any executive committee of the board of directors,
every vice president, assistant vice president, the secretary, every assistant
secretary, cashier or any assistant cashier, controller or assistant controller,
the treasurer, every assistant treasurer, every trust officer, assistant trust
officer and every other officer or assistant officer of the Trustee customarily
performing functions similar to those performed by persons who at the time shall
be such officers, respectively, or to whom a corporate trust matter is referred
because of knowledge of, familiarity with, and authority to act with respect to
a particular matter.
"Scheduled Principal Balance" means, as to any Contract and any
Distribution Date or the Cutoff Date, the principal balance of such Contract as
of the Due Date in the Monthly Period immediately preceding such Distribution
Date or as of the Due Date immediately preceding the Cutoff Date, as the case
may be, as specified in the amortization schedule at the time relating thereto
(before any adjustment to such amortization schedule by reason of any bankruptcy
of an Obligor or similar proceeding or any moratorium or similar waiver or grace
period) after giving effect to any previous Partial Principal Prepayments and to
the payment of principal due on such Due Date and irrespective of any
delinquency in payment by, or extension granted to, the related Obligor.
"Second Priority Principal Distribution Amount" shall mean with respect
to any Distribution Date, the amount, if any, by which
(i) the aggregate Principal Balance of the Senior Notes, plus
the Class A-6 Principal Balance, minus the amount of any First Priority
Principal Distribution Amount paid on such Distribution Date,
is greater than
(ii) the Pool Scheduled Principal Balance as of the
immediately preceding Distribution Date, minus the aggregate Scheduled
Principal Balance of all Defaulted Contracts.
"Securities" means the Notes and the Certificates.
"Securityholders" means the Noteholders and the Certificateholders.
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"Senior Interest Amount" means as to any Distribution Date, the sum of
the Class A-1 Interest Amount, the Class A-2 Interest Amount, the Class A-3
Interest Amount, the Class A-4 Interest Amount and the Class A-5 Interest
Amount.
"Service Transfer" has the meaning assigned in Section 7.02.
"Servicer" means the Company until any Service Transfer hereunder and
thereafter means the new servicer appointed pursuant to Article VII.
"Servicer Advance" means, with respect to any Distribution Date, the
amount, if any, deposited by the Servicer in the Collection Account pursuant to
Section 5.13.
"Servicing Officer" means any officer of the Servicer involved in, or
responsible for, the administration and servicing of Contracts whose name
appears on a list of servicing officers appearing in an Officer's Certificate
furnished to the Trustee by the Servicer, as the same may be amended from time
to time.
"Standard & Poor's" means Standard & Poor's Ratings Service, or any
successor thereto; provided that if Standard & Poor's no longer has a rating
outstanding on any Class of Notes or Certificates, then references herein to
"Standard & Poor's" shall be deemed to refer to the NRSRO then rating any Class
of the Notes or Certificates (or, if more than one such NRSRO is then rating any
Class of the Notes or Certificates, to such NRSRO as may be designated by the
Servicer), and references herein to ratings by or requirements of Standard &
Poor's shall be deemed to have the equivalent meanings with respect to ratings
by or requirements of such NRSRO.
"Telerate Page 3750" means the display page so designated on the Dow
Jones Telerate Service (or such other page as may replace that page on that
service, or such other service as may be nominated as the information vendor by
the Calculation Agent, for the purpose of displaying London interbank offered
rates of major banks).
"Third Priority Principal Distribution Amount" shall mean with respect
to any Distribution Date, the amount, if any, by which
(i) the aggregate Principal Balance of the Notes, minus the
amount of any First Priority Principal Distribution Amount paid on such
Distribution Date, and minus the amount of any Second Priority
Principal Distribution Amount paid on such Distribution Date,
is greater than
(ii) the Pool Scheduled Principal Balance as of the
immediately preceding Distribution Date, minus the aggregate Scheduled
Principal Balance of all Defaulted Contracts.
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"Total Principal Distribution Amount" means, for any Distribution Date,
the sum of:
(i) the Formula Principal Distribution Amount for such
Distribution Date, plus
(ii) the aggregate of all Formula Principal Shortfalls, if
any, for prior Distribution Dates, plus
(iii) the First Priority Principal Distribution Amount, if
any, the Second Priority Principal Distribution Amount, if any, the
Third Priority Principal Distribution Amount, if any, and the Fourth
Priority Principal Distribution Amount, if any, for such Distribution
Date, minus
(iv) all amounts actually paid on the Notes and Certificates
on prior Distribution Dates in respect of a First Priority Principal
Distribution Amount, Second Priority Principal Distribution Amount,
Third Priority Principal Distribution Amount, or Fourth Priority
Principal Distribution Amount.
"Trust" means the Green Tree Recreational, Equipment & Consumer Trust
1998-C.
"Trust Accounts" means the Collection Account, the Note Distribution
Account and the Certificate Distribution Account.
"Trust Agreement" means the Trust Agreement dated as of September 1,
1998 between the Company, GTGP and the Owner Trustee, as the same may be amended
and supplemented from time to time.
"Trust Property" means the property conveyed to the Trust pursuant to
Section 2.01(a).
"Uncollectible Advance" means, with respect to any Determination Date,
the portion of any Servicer Advances which the Servicer has determined in good
faith will not be ultimately recoverable by the Servicer from insurance policies
on the Product, the Obligor or out of Net Liquidation Proceeds. The
determination by the Servicer that it has made an Uncollectible Advance shall be
evidenced by an Officer's Certificate delivered to the Trustee.
"Underwriting Agreement" means the Underwriting Agreement and related
Terms Agreement, each dated September 4, 1998, by and among Merrill Lynch
Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities, Inc., Lehman
Brothers Inc., NationsBanc Montgomery Securities LLC, and the Company, relating
to the Notes and the Class B-1 Certificates.
"Underwriting Agreements" means the Underwriting Agreement and the
Class B-2 Underwriting Agreement..
"Unpaid Class A-1 Interest Shortfall" means, as to any Distribution
Date, the amount, if any, of the remainder of (x) the Class A-1 Interest
Carryover Shortfall, if any, for the immediately prior Distribution Date, plus
(y) the Unpaid Class A-1 Interest Shortfall determined as of such immediately
prior Distribution Date, minus (z) all amounts distributed to the Holders of
Class A-1
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Notes on account of any Unpaid Class A-1 Interest Shortfalls pursuant to Section
8.02(c)(1)(ii) of the Indenture on such immediately prior Distribution Date,
plus accrued interest (to the extent payment thereof is legally permissible) at
the Class A-1 Interest Rate on such remainder from such immediately prior
Distribution Date to the current Distribution Date.
"Unpaid Class A-2 Interest Shortfall" means, as to any Distribution
Date, the amount, if any, of the remainder of (x) the Class A-2 Interest
Carryover Shortfall, if any, for the immediately prior Distribution Date, plus
(y) the Unpaid Class A-2 Interest Shortfall determined as of such immediately
prior Distribution Date, minus (z) all amounts distributed to the Holders of
Class A-2 Notes on account of any Unpaid Class A-2 Interest Shortfalls pursuant
to Section 8.02(c)(1)(ii) of the Indenture on such immediately prior
Distribution Date, plus accrued interest (to the extent payment thereof is
legally permissible) at the Class A-2 Interest Rate on such remainder from such
immediately prior Distribution Date to the current Distribution Date.
"Unpaid Class A-3 Interest Shortfall" means, as to any Distribution
Date, the amount, if any, of the remainder of (x) the Class A-3 Interest
Carryover Shortfall, if any, for the immediately prior Distribution Date, plus
(y) the Unpaid Class A-3 Interest Shortfall determined as of such immediately
prior Distribution Date, minus (z) all amounts distributed to the Holders of
Class A-3 Notes on account of any Unpaid Class A-3 Interest Shortfall pursuant
to Section 8.02(c)(1)(ii) of the Indenture on such immediately prior
Distribution Date, plus accrued interest (to the extent payment thereof is
legally permissible) at the Class A-3 Interest Rate on such remainder from such
immediately prior Distribution Date to the current Distribution Date.
"Unpaid Class A-4 Interest Shortfall" means, as to any Distribution
Date, the amount, if any, of the remainder of (x) the Class A-4 Interest
Carryover Shortfall, if any, for the immediately prior Distribution Date, plus
(y) the Unpaid Class A-4 Interest Shortfall determined as of such immediately
prior Distribution Date, minus (z) all amounts distributed to the Holders of
Class A-4 Notes on account of any Unpaid Class A-4 Interest Shortfall pursuant
to Section 8.02(c)(1)(ii) of the Indenture on such immediately prior
Distribution Date, plus accrued interest (to the extent payment thereof is
legally permissible) at the Class A-4 Interest Rate on such remainder from such
immediately prior Distribution Date to the current Distribution Date.
"Unpaid Class A-5 Interest Shortfall" means, as to any Distribution
Date, the amount, if any, of the remainder of (x) the Class A-5 Interest
Carryover Shortfall, if any, for the immediately prior Distribution Date, plus
(y) the Unpaid Class A-5 Interest Shortfall determined as of such immediately
prior Distribution Date, minus (z) all amounts distributed to the Holders of
Class A-5 Notes on account of any Unpaid Class A-5 Interest Shortfall pursuant
to Section 8.02(c)(1)(ii) of the Indenture on such immediately prior
Distribution Date, plus accrued interest (to the extent payment thereof is
legally permissible) at the Class A-5 Interest Rate on such remainder from such
immediately prior Distribution Date to the current Distribution Date.
"Unpaid Class A-6 Interest Shortfall" means, as to any Distribution
Date, the amount, if any, of the remainder of (x) the Class A-6 Interest
Carryover Shortfall, if any, for the immediately prior Distribution Date, plus
(y) the Unpaid Class A-6 Interest Shortfall determined as of such immediately
prior Distribution Date, minus (z) all amounts distributed to the Holders of
Class A-6 Notes on account of any Unpaid Class A-6 Interest Shortfall pursuant
to Section 8.02(c)(3)(ii) of the
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Indenture on such immediately prior Distribution Date, plus accrued interest (to
the extent payment thereof is legally permissible) at the Class A-6 Interest
Rate on such remainder from such immediately prior Distribution Date to the
current Distribution Date.
"Unpaid Class A-7 Interest Shortfall" means, as to any Distribution
Date, the amount, if any, of the remainder of (x) the Class A-7 Interest
Carryover Shortfall, if any, for the immediately prior Distribution Date, plus
(y) the Unpaid Class A-7 Interest Shortfall determined as of such immediately
prior Distribution Date, minus (z) all amounts distributed to the Holders of
Class A-7 Notes on account of any Unpaid Class A-7 Interest Shortfall pursuant
to Section 8.02(c)(5)(ii) of the Indenture on such immediately prior
Distribution Date, plus accrued interest (to the extent payment thereof is
legally permissible) at the Class A-7 Interest Rate on such remainder from such
immediately prior Distribution Date to the current Distribution Date.
"Unpaid Class B-1 Interest Shortfall" means, as to any Distribution
Date, the amount, if any, of the remainder of (x) the Class B-1 Interest
Carryover Shortfall, if any, for the immediately prior Distribution Date, plus
(y) the Unpaid Class B-1 Certificate Interest Shortfall determined as of such
immediately prior Distribution Date, minus (z) all amounts distributed to the
Holders of Class B-1 Certificates on account of any Unpaid Class B-1 Interest
Shortfall pursuant to Section 5.2(a)(1) of the Trust Agreement on such
immediately prior Distribution Date, plus accrued interest (to the extent
payment thereof is legally permissible) at the Class B-1 Rate on such remainder
from such immediately prior Distribution Date to the current Distribution Date.
"Unpaid Class B-2 Interest Shortfall" means, as to any Distribution
Date, the amount, if any, of the remainder of (x) the Class B-2 Interest
Carryover Shortfall, if any, for the immediately prior Distribution Date, plus
(y) the Unpaid Class B-2 Interest Shortfall determined as of such immediately
prior Distribution Date, minus (z) all amounts distributed to the Holders of
Class B-2 Certificates on account of any Unpaid Class B-2 Interest Shortfall
pursuant to Section 5.2(a)(4) of the Trust Agreement on such immediately prior
Distribution Date, plus accrued interest (to the extent payment thereof is
legally permissible) at the Class B-2 Rate on such remainder from such
immediately prior Distribution Date to the current Distribution Date.
"Unpaid Class B-2 Principal Liquidation Loss" means, as to any
Distribution Date, the amount, if any, by which the sum of all Class B-2
Certificate Principal Liquidation Losses for all prior Distribution Dates is in
excess of the amounts distributed on prior Distribution Dates to the Holders of
Class B-2 Certificates pursuant to Section 5.2(a)(5) of the Trust Agreement or
pursuant to a Guaranty Payment.
"Unpaid Senior Interest Shortfall" means as to any Distribution Date,
the sum of Unpaid Class A-1 Interest Shortfall, Unpaid Class A-2 Interest
Shortfall, Unpaid Class A-3 Interest Shortfall, Unpaid Class A-4 Interest
Shortfall and Unpaid Class A-5 Interest Shortfall for such Distribution Date.
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ARTICLE II
TRANSFER OF CONTRACTS
SECTION 2.01. Transfer of Contracts.
(a) Subject to the terms and conditions of this Agreement, the Company
hereby transfers, assigns, sets over and otherwise conveys to the Trust by
execution of an Assignment substantially in the form of Exhibit A hereto all
right, title and interest of the Company in and to (1) the Contracts (including,
without limitation, the Collateral Security), and all moneys payable thereon or
in respect to the Contracts, including any liquidation proceeds therefrom but
excluding payments due on the Contracts prior to the Cutoff Date, (2) the
Insurance Policies on any Products securing a Contract for the benefit of the
creditor of such Contract and all blanket insurance policies to the extent they
relate to the Contracts, (3) all rights the Company may have against the
originating dealer with respect to Contracts not originated by the Company, (4)
the Errors and Omissions Protection Policy as such policy relates to the
Contracts, (5) all items contained in the Contract Files, (6) the Trust Accounts
and all funds on deposit therein from time to time and all investments and
proceeds thereof (including all income thereon), and (7) all proceeds and
products of the foregoing.
(b) Although the parties intend that the conveyance of the Company's
right, title and interest in and to the Contracts and the Collateral Security
pursuant to this Agreement shall constitute a purchase and sale and not a pledge
of security for loans from the Certificateholders and/or the Noteholders, if
such conveyances are deemed to be a pledge of security for loans from the
Certificateholders, the Noteholders or any other Persons (the "Secured
Obligations"), the parties intend that the rights and obligations of the parties
to the Secured Obligations shall be established pursuant to the terms of this
Agreement. The parties also intend and agree that the Company shall be deemed to
have granted to the Trust, and the Company does hereby grant to the Trust, a
perfected first-priority security interest in the items designated in Section
2.01(a)(1) through 2.01(a)(6) above, and all proceeds thereof, to secure the
Secured Obligations, and that this Agreement shall constitute a security
agreement under applicable law. If the trust created by this Agreement
terminates prior to the satisfaction of the claims of any Person under any
Certificates, any Notes or the Secured Obligations, the security interest
created hereby shall continue in full force and effect and the Owner Trustee
shall be deemed to be the collateral agent for the benefit of such Person.
SECTION 2.02. Conditions to Acceptance by Owner Trustee.
As conditions to the Owner Trustee's execution and delivery of the
Notes on behalf of the Trust and the execution, authentication and delivery of
the Certificates on behalf of the Trust on the Closing Date, the Owner Trustee
on behalf of the Trust shall have received the following on or before the
Closing Date:
(a) The List of Contracts for all Initial and Additional
Contracts, certified by the Chairman of the Board, President or any
Vice President of the Company (which certification may be part of the
Assignment delivered pursuant to Section 2.02(f)).
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(b) A letter from PricewaterhouseCoopers LLP or another
nationally recognized accounting firm, stating that such firm has
reviewed the Initial Contracts on a statistical sampling basis and,
based on such sampling, concluding that, except with respect to those
Initial Contracts so specified in the letter, the Initial Contracts
conform in all material respects to the List of Contracts, to a
confidence level of 97.5%, with an error rate generally not in excess
of 1.8%.
(c) Copies of resolutions of the board of directors of the
Company or of the executive committee of the board of directors of the
Company approving the execution, delivery and performance of this
Agreement, the Related Documents and the transactions contemplated
hereunder, certified in each case by the secretary or an assistant
secretary of the Company.
(d) Officially certified recent evidence of due incorporation
and good standing of the Company under the laws of the State of
Delaware.
(e) Evidence of filing with the Secretary of State of
Minnesota of a UCC-1 financing statement, executed by the Company as
debtor, naming the Trust as secured party and describing the Contracts
as collateral.
(f) An executed copy of the Assignment substantially in the
form of Exhibit A hereto.
(g) Evidence of continued coverage of the Company under the
Errors and Omissions Protection Policy.
(h) Evidence of deposit in the Collection Account of all funds
received with respect to the Contracts prior to the Closing Date which
were due on or after the Cutoff Date, together with an Officer's
Certificate to the effect that such amount is correct.
(i) An Officer's Certificate confirming that the Company's
internal audit department has reviewed the original or a copy of each
Contract and each Contract File, that each Contract and Contract File
conforms in all material respects with the List of Contracts and that
each Contract File is complete in all material respects and that each
Product securing a Contract is covered by an Insurance Policy as
required by Section 3.02(f).
(j) Evidence of deposit of the Excess Proceeds in the Note
Distribution Account.
(k) Such other documents and certificates as the Trust may
request.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Company makes the following representations and warranties,
effective as of the Closing Date, on which the Trust will rely in accepting the
Contracts and the other Trust Property in trust and on which the Owner Trustee
relies in executing and delivering, on behalf of the Trust, the Certificates and
the Notes. The repurchase obligation of the Company set forth in Section 3.05
constitutes the sole remedy available to the Trust, the Owner Trustee, the
Indenture Trustee, and the Securityholders for a breach of a representation or
warranty of the Company set forth in the Officer's Certificate delivered
pursuant to Section 2.02(i) or Section 3.02, 3.03 or 3.04 of this Agreement.
SECTION 3.01. Representations and Warranties Regarding the Company.
(a) Organization and Good Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has the corporate power to own its assets
and to transact the business in which it is currently engaged. The Company is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction in which the character of the business transacted by it or
properties owned or leased by it requires such qualification and in which the
failure so to qualify would have a material adverse effect on the business,
properties, assets, or condition (financial or other) of the Company.
(b) Authorization; Binding Obligations. The Company has the power and
authority to make, execute, deliver and perform this Agreement and its Related
Documents and all of the transactions contemplated under this Agreement and
thereunder and to sell and assign the Trust Property to be sold and assigned to
the Trust by it and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement and its Related Documents.
When executed and delivered, this Agreement and its Related Documents will
constitute the legal, valid and binding obligations of the Company enforceable
in accordance with their terms, except as enforcement of such terms may be
limited by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally and by the availability of equitable remedies.
(c) No Violations. The execution, delivery and performance by the
Company of this Agreement and its Related Documents and the fulfillment of their
terms will not violate any provision of any existing law or regulation or any
order or decree of any court or the Certificate of Incorporation or Bylaws of
the Company, or constitute a material breach of any mortgage, indenture,
contract or other agreement to which the Company is a party or by which the
Company may be bound.
(d) Litigation. No litigation or administrative proceeding of or before
any court, tribunal or governmental body is currently pending, or to the
knowledge of the Company threatened, against the Company or any of its
properties or with respect to this Agreement, the Related Documents, or the
Securities which, if adversely determined, would in the opinion of the Company
have a material adverse effect on the transactions contemplated by this
Agreement and Related Documents.
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(e) Licensing. The Company is duly registered as a finance company in
each state in which Contracts were originated, to the extent such registration
is required by applicable law.
(f) Chief Executive Office. The chief executive office of the Company
is at 1100 Landmark Towers, 345 St. Peter Street, St. Paul, Minnesota
55102-1639.
(g) Absolute Sale. The Company intends that the transfer of Contracts
and the Collateral Security constitute a complete and absolute sale, removing
the Contracts and the Collateral Security from the Company's estate, for
purposes of Section 541 of the United States Bankruptcy Code, as amended.
SECTION 3.02. Representations and Warranties Regarding Each Contract.
(a) List of Contracts. The information set forth in the List of
Contracts is true and correct as of its date.
(b) Payments. The most recent scheduled payment was made by or on
behalf of the Obligor (without any advance from the Company or any Person acting
at the request of the Company) or was not delinquent for more than 59 days.
(c) No Waivers. The terms of the Contract have not been waived, altered
or modified in any respect, except by instruments or documents identified in the
Contract File.
(d) Binding Obligation. The Contract is the legal, valid and binding
obligation of the Obligor thereunder and is enforceable in accordance with its
terms, except as such enforceability may be limited by laws affecting the
enforcement of creditors' rights generally.
(e) No Defenses. The Contract is not subject to any right of
rescission, setoff, counterclaim or defense, including the defense of usury, and
the operation of any of the terms of the Contract or the exercise of any right
thereunder will not render the Contract unenforceable in whole or in part or
subject to any right of rescission, setoff, counterclaim or defense, including
the defense of usury, and no such right of rescission, setoff, counterclaim or
defense has been asserted with respect thereto.
(f) Insurance Coverage. The Product securing the Contract is covered by
an Insurance Policy to the extent (if any) required by Section 5.09. All
premiums due as of the Closing Date on such insurance have been paid in full.
(g) Origination. The Contract was originated by a dealer of goods of a
class including the Product subject to the Contract, or by the Company, in the
regular course of its business and, if originated by a dealer, was purchased by
the Company in the regular course of its business.
(h) Lawful Assignment. The Contract was not originated in and is not
subject to the laws of any jurisdiction whose laws would make the transfer of
the Contract pursuant to this Agreement, or pursuant to transfers of the
Securities, unlawful or render the Contract unenforceable.
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<PAGE>
(i) Compliance with Law. At the date of origination of the Contract,
all requirements of any federal and state laws, rules and regulations applicable
to the Contract, including, without limitation, usury, truth in lending and
equal credit opportunity laws, have been complied with, and the Company shall
for at least the period of this Agreement, maintain in its possession, available
for the Owner Trustee's inspection, and shall deliver to the Owner Trustee upon
demand, evidence of compliance with all such requirements. Such compliance is
not affected by the Trust's ownership of the Contract.
(j) Contract in Force. The Contract has not been satisfied or
subordinated in whole or in part or rescinded, and the Product securing the
Contract has not been released from the lien of the Contract in whole or in
part.
(k) Valid Security Interest. The Contract creates a valid and
enforceable perfected first priority security interest in favor of the Company
in the Product covered thereby as security for payment of the Cutoff Date
Principal Balance of such Contract. The Company has assigned all of its right,
title and interest in such Contract, including the security interest in the
Product covered thereby, to the Trust. The Trust has and will have a valid and
perfected and enforceable first priority security interest in such Contract and
Product.
(l) Capacity of Parties. The signature(s) of the Obligor(s) on the
Contract are genuine and all parties to the Contract had full legal capacity to
execute the Contract.
(m) Good Title. In the case of a Contract purchased from a dealer, the
Company purchased the Contract for fair value and took possession thereof in the
ordinary course of its business, without knowledge that the Contract was subject
to a security interest. The Company has not sold, assigned or pledged the
Contract to any person and prior to the transfer of the Contract by the Company
to the Trust, the Company had good and marketable title thereto free and clear
of any encumbrance, equity, loan, pledge, charge, claim or security interest and
was the sole owner thereof with full right to transfer the Contract to the
Trust. No financing statement describing or referring to any Contract (other
than any financing statement naming the Trust as secured party, or filed by the
Company as secured party to perfect its interest in a Contract purchased from a
dealer) is on file in any public office.
(n) No Defaults. There was no default, breach, violation or event
permitting acceleration existing under the Contract and no event which, with
notice and the expiration of any grace or cure period, would constitute such a
default, breach, violation or event permitting acceleration under such Contract
(except payment delinquencies permitted by clause (b) above). The Company has
not waived any such default, breach, violation or event permitting acceleration
except payment delinquencies permitted by clause (b) above. As of the Closing
Date, the related Product is, to the best of the Company's knowledge, free of
damage and in good repair.
(o) No Liens. There are, to the best of the Company's knowledge, no
liens or claims which have been filed for work, labor or materials affecting the
Product securing the Contract which are or may be liens prior to, or equal or
coordinate with, the lien of the Contract.
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(p) Equal Installments. Each Contract has a fixed Contract Rate and
provides for substantially level monthly payments which fully amortize the loan
over its term.
(q) Enforceability. The Contract contains customary and enforceable
provisions so as to render the rights and remedies of the holder thereof
adequate for the realization against the collateral of the benefits of the
security provided thereby.
(r) One Original. There is only one original executed Contract (other
than an original in the possession of the relevant Obligor), which Contract has
been delivered to the Trust or its custodian on or before the Closing Date. Each
Contract has been stamped to reflect the assignment of such Contract to the
Trust.
(s) Notation of Security Interest. With respect to each Contract, if
the related Product is located in a state in which notation of a security
interest on the title document is required or permitted to perfect such security
interest, the title document shows, or if a new or replacement title document
with respect to such Product is being applied for such title document will be
issued within 180 days and will show, the Company as the holder of a first
priority security interest in such Product; if the related Product is located in
a state in which the filing of a financing statement under the UCC is required
to perfect a security interest in goods of the type including the Product, such
filings or recordings have been duly made and show the Company as secured party;
and if the related Product is an aircraft subject to registration with the
Federal Aviation Administration's Aircraft Registry, and the recordation of a
mortgage, security agreement or similar conveyance with such Registry is
required to perfect the lien created thereby, such recordation has been duly
made and shows the Company as secured party or mortgagee. In any case, the Trust
has the same rights as the secured party of record would have (if such secured
party were still the owner of the Contract) against all Persons (including the
Company and any trustee in bankruptcy of the Company) claiming an interest in
such Product.
(t) No Government Contracts. No Obligor is the United States government
or an agency, authority, instrumentality or other political subdivision of the
United States government.
SECTION 3.03. Representations and Warranties Regarding the Contracts in
the Aggregate.
(a) Amounts. The aggregate principal amounts payable by Obligors under
the Contracts as of the Cutoff Date, plus the Excess Proceeds, if any, equal the
Cutoff Date Pool Principal Balance.
(b) Characteristics. The Contracts have the following characteristics
as of the Cutoff Date: (i) the Obligors on not more than 10% of the Contracts by
Cutoff Date Pool Principal Balance were located in any one state (except for
Contracts with Obligors located in California and Texas which represent 15.53%
and 11.98%, respectively, of the Contracts by Cut-off Date Pool Principal
Balance); (ii) no Contract has a remaining maturity of fewer than 5 months or
more than 240 months; (iii) the final scheduled payment date on the Contract
with the latest maturity is in October 2018 ; (iv) each Contract had an original
principal balance of at least $1526.39 and not more than $5,525,000.00 and a
remaining principal balance as of the Cutoff Date of at least $1003.65 and not
more than $5,525,000.00; and (v) each Contract had a contractual rate of
interest of at least 6.00% and not more than 21%.
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(c) Computer Tape. The Computer Tape made available by the Company was
complete and accurate as of its date and includes a description of the same
Contracts that are described in the List of Contracts.
(d) Marking Records. The Company has caused the portions of the
Electronic Ledger relating to the Contracts to be clearly and unambiguously
marked to indicate that such Contracts constitute part of the Trust and are
owned by the Trust in accordance with the terms of the trust created hereunder.
(e) No Adverse Selection. Except for the effect of the representations
and warranties made in Sections 3.02 and 3.03 hereof, no adverse selection
procedures have been employed in selecting the Contracts.
SECTION 3.04. Representations and Warranties Regarding the Contract
Files.
(a) Possession. Immediately prior to the Closing Date, the Company will
have possession of each original Contract and the related Contract File and
there are and there will be no custodial agreements in effect materially and
adversely affecting the rights of the Company to make, or cause to be made, any
delivery required hereunder.
(b) Bulk Transfer Laws. The transfer, assignment and conveyance of the
Contracts and the Contract Files by the Company pursuant to this Agreement is
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction.
SECTION 3.05. Repurchase of Contracts for Breach of Representations and
Warranties.
(a) The Company shall repurchase a Contract, at its Repurchase Price,
not later than the last day of the Monthly Period prior to the Monthly Period
that is 90 days after the day on which the Company, the Servicer, the Owner
Trustee or the Indenture Trustee first discovers, or the Company or the Servicer
should have discovered, a breach of a representation or warranty of the Company
set forth in Sections 3.02, 3.03 or 3.04 of this Agreement or the Officer's
Certificate delivered pursuant to Section 2.02(i) that materially adversely
affects the interest of the Trust or the Securityholders in such Contract and
which breach has not been cured; provided, however, that (i) in the event that a
party other than the Company first becomes aware of such a breach, such
discovering party shall notify the Company in writing within five Business Days
of the date of such discovery and (ii) with respect to any Contract incorrectly
described on the List of Contracts with respect to unpaid principal balance,
which the Company would otherwise be required to repurchase pursuant to this
Section, the Company may, in lieu of repurchasing such Contract, deposit in the
Collection Account no later than the first Determination Date that is 90 or more
days from the date of such discovery cash in an amount sufficient to cure such
deficiency or discrepancy. Any such cash so deposited shall be accounted for as
a collection of principal or interest on such Contract, according to the nature
of the deficiency or discrepancy. Notwithstanding any other provision of this
Agreement, the obligation of the Company under this Section shall not terminate
upon a Service Transfer pursuant to Article VII. Notwithstanding the foregoing,
the Company shall repurchase any Contract, at such Contract's Repurchase Price,
if the Company has failed to deliver the related Contract File to the Servicer,
for the benefit of the Trust, within 30 days of the Closing Date.
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(b) Upon receipt by the Trust by deposit in the Collection Account of
the Repurchase Price under subsection (a) above, and upon receipt of a
certificate of a Servicing Officer in the form attached hereto as Exhibit B, the
Indenture Trustee shall release its security interest in such Contract and the
Owner Trustee on behalf of the Trust shall convey and assign to the Company all
of the Securityholders' right, title and interest in the repurchased Contract
without recourse, representation or warranty, except as to the absence of liens,
charges or encumbrances created by or arising as a result of actions of the
Trust.
(c) The Company shall defend and indemnify the Owner Trustee, the
Trust, the Indenture Trustee, and the Securityholders against all costs,
expenses, losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel, arising out of any claims which may be asserted against or
incurred by any of them as a result of any third-party action arising out of any
breach of any representation set forth in the Officer's Certificate delivered
pursuant to Section 2.02(i) or in Section 3.02, 3.03 or 3.04 of this Agreement.
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ARTICLE IV
PERFECTION OF TRANSFER AND
PROTECTION OF SECURITY INTERESTS
SECTION 4.01. Custody of Contracts.
(a) Subject to the terms and conditions of this Section the Trust
appoints the Servicer to maintain custody of the Contract Files for the benefit
of the Trust and the Servicer shall maintain custody of the Contract Files for
the benefit of the Trust and shall act as custodian therefor.
(b) The Servicer agrees to maintain the related Contract Files at its
office where they are currently maintained, or at such other offices of the
Servicer in the State of Minnesota as shall from time to time be identified to
the Trust by written notice. The Servicer may temporarily move individual
Contract Files or any portion thereof without notice as necessary to conduct
collection and other servicing activities in accordance with its customary
practices and procedures.
(c) As custodian, the Servicer shall have and perform the following
powers and duties:
(i) hold the Contract Files on behalf of the Trust, Indenture
Trustee and the Securityholders, maintain accurate records pertaining
to each Contract to enable it to comply with the terms and conditions
of this Agreement, maintain a current inventory thereof, conduct annual
physical inspections of Contract Files held by it under this Agreement
and certify to the Trust and the Indenture Trustee annually that it
continues to maintain possession of such Contract Files;
(ii) implement policies and procedures, in writing and signed
by a Servicing Officer, with respect to persons authorized to have
access to the Contract Files on the Servicer's premises and the
receipting for Contract Files taken from their storage area by an
employee of the Servicer for purposes of servicing or any other
purposes; and
(iii) attend to all details in connection with maintaining
custody of the Contract Files on behalf of the Trust, the Indenture
Trustee and the Securityholders.
(d) In performing its duties under this Section, the Servicer agrees to
act with reasonable care, using that degree of skill and care that it exercises
with respect to similar contracts owned and/or serviced by it. The Servicer
shall promptly report to the Trust and the Indenture Trustee any failure by it
to hold the Contract Files as herein provided and shall promptly take
appropriate action to remedy any such failure. In acting as custodian of the
Contract Files, the Servicer agrees further not to assert any beneficial
ownership interests in the Contracts or the Contract Files. The Servicer agrees
to indemnify the Trust, Owner Trustee, the Indenture Trustee and the
Securityholders for any and all liabilities, obligations, losses, damages,
payments, costs or expenses of any kind whatsoever which may be imposed on,
incurred or asserted against them as the result of any act or omission by the
Servicer relating to the maintenance and custody of the Contract Files;
provided, however, that the Servicer will not be liable for any portion of any
such amount resulting from the negligence or willful misconduct of any
indemnified party.
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SECTION 4.02. Filings.
On or prior to the Closing Date, the Company shall cause the UCC-1
financing statement referred to in Section 2.02(e) to be filed. The
Administrator on behalf of the Trust shall cause to be filed all necessary
continuation statements of the UCC-1 financing statement. From time to time the
Servicer shall take and cause to be taken such actions and execute such
documents as are necessary to perfect and protect the Securityholders' interests
in the Contracts and their proceeds and the Products against all other persons,
including, without limitation, the filing of financing statements, amendments
thereto and continuation statements, the execution of transfer instruments and
the making of notations on or taking possession of all records or documents of
title. The Servicer will maintain the first priority perfected security interest
of the Trust in each Product so long as the related Contract is property of the
Trust.
SECTION 4.03. Name Change or Relocation.
(a) During the term of this Agreement, the Company shall not change its
name, identity or structure or relocate its chief executive office without first
giving notice thereof to the Owner Trustee, the Indenture Trustee and the
Servicer. In addition, following any such change in the name, identity,
structure or location of the chief executive office of the Company, the Company
shall given written notice of any such change to Standard & Poor's and Fitch.
(b) If any change in the Company's name, identity or structure or the
relocation of its chief executive office would make any financing or
continuation statement or notice of lien filed under this Agreement seriously
misleading within the meaning of applicable provisions of the UCC or any title
statute or would cause the security interest evidenced by any such financing or
continuation statement or notice of lien to become unperfected (whether
immediately or with lapse of time), the Company, no later than five days after
the effective date of such change, shall file, or cause to be filed, such
amendments or financing statements as may be required to preserve, perfect and
protect the Securityholders' interests in the Contracts, including the
Collateral Security and all proceeds thereof.
SECTION 4.04. Chief Executive Office.
During the term of this Agreement, the Company will maintain its chief
executive office in one of the States of the United States, except Tennessee.
SECTION 4.05. Costs and Expenses.
The Servicer agrees to pay all reasonable costs and disbursements in
connection with the perfection and the maintenance of perfection, as against all
third parties, of the Securityholders' right, title and interest in and to the
Contracts, including the Collateral Security and all proceeds thereof.
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ARTICLE V
SERVICING OF CONTRACTS
SECTION 5.01. Responsibility for Contract Administration.
The Servicer will have the sole obligation to manage, administer,
service and make collections on the Contracts and perform or cause to be
performed all contractual and customary undertakings of the holder of the
Contracts to the Obligor. The Servicer may delegate duties under this Agreement
to any of the Servicer's Affiliates. In addition, the Servicer may at any time
perform the specific duty of repossessing Products through subcontractors who
are in the business of servicing consumer receivables. The Servicer may also
perform other specific duties through subcontractors; provided that the Servicer
gives notice to each of the Trust, the Indenture Trustee, Standard & Poor's and
Fitch of the use of any such subcontractors; and provided further that no such
delegation of duties by the Servicer shall relieve the Servicer of its
responsibility with respect thereto. The Owner Trustee, on behalf of the Trust
and at the request of a Servicing Officer, shall furnish the Servicer with any
powers of attorney or other documents necessary or appropriate to enable the
Servicer to carry out its servicing and administrative duties hereunder. The
Company is hereby appointed the Servicer until such time as any Service Transfer
shall be effected under Article VII.
SECTION 5.02. Standard of Care.
In managing, administering, servicing and making collections on the
Contracts pursuant to this Agreement, the Servicer will exercise that degree of
skill and care consistent with the highest degree of skill and care that the
Servicer exercises with respect to similar contracts serviced by the Servicer;
provided, however, that notwithstanding the foregoing, the Servicer shall not
release or waive the right to collect the unpaid balance on any Contract.
SECTION 5.03. Records.
The Servicer shall, during the period it is servicer hereunder,
maintain such books of account and other records as will enable the Trust and
the Indenture Trustee to determine the status of each Contract.
SECTION 5.04. Inspection; Computer Tape.
(a) At all times during the term hereof, the Servicer shall afford the
Trust and Indenture Trustee and their authorized agents reasonable access during
normal business hours to the Servicer's records relating to the Contracts and
will cause its personnel to assist in any examination of such records by the
Trust and Indenture Trustee or their authorized agents. The examination referred
to in this Section will be conducted in a manner which does not unreasonably
interfere with the Servicer's normal operations or customer or employee
relations. Without otherwise limiting the scope of the examination the Trust and
Indenture Trustee may make, the Trust and Indenture Trustee may, using generally
accepted audit procedures, verify the status of each Contract and review the
Electronic Ledger and records relating thereto for conformity to Monthly Reports
prepared pursuant
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to Section 5.14 and compliance with the standards represented to exist as to
each Contract in this Agreement.
The Servicer shall provide to any Securityholder such access to the
records relating to the Contracts only in such cases where the Servicer is
required by applicable statutes or regulations, whether applicable to the
Servicer or to such Securityholder, to permit Securityholder to review such
documentation. In each case, such access shall be afforded without charge but
only upon reasonable request and during normal business hours. Nothing in this
Section shall derogate from the obligation of the Servicer to observe any
applicable law prohibiting disclosure of information regarding the Obligors, and
the failure of the Servicer to provide access as provided in this Section as a
result of such obligation shall not constitute a breach of this Section. Any
Securityholder, by its acceptance of a Certificate or Note (or by acquisition of
its beneficial interest therein), as applicable, shall be deemed to have agreed
to keep confidential and not to use for its own benefit any information obtained
by it pursuant to this Section, except as may be required by applicable law.
(b) At all times during the term hereof, the Servicer shall keep
available a copy of the List of Contracts at its principal executive office for
inspection by the Trust and the Indenture Trustee.
(c) On or before the ninth Business Day of each month, the Servicer
will provide to the Indenture Trustee a Computer Tape setting forth a list of
all the outstanding Contracts and the outstanding principal balance of each such
Contract as of the end of the next preceding Monthly Period.
SECTION 5.05. Collections.
(a) The Servicer shall pay into the Collection Account: (i) as promptly
as practicable (not later than the next Business Day) following receipt thereof
all payments from Obligors and Net Liquidation Proceeds (other than late payment
penalty fees, extension fees and assumption fees, which shall be retained by the
Servicer as additional compensation for servicing the Contracts, and any
payments that were due prior to the Cutoff Date, which shall be remitted to the
Company); and (ii) on the Business Day immediately prior to each Distribution
Date, all Servicer Advances required to be made with respect to such
Distribution Date pursuant to Section 5.13.
(b) If the Servicer so directs, the institution maintaining the
Collection Account shall, in the name of the Indenture Trustee in its capacity
as such, invest the amounts in the Collection Account in Eligible Investments
that mature not later than one Business Day prior to the next succeeding
Distribution Date. Once such funds are invested, such institution shall not
change the investment of such funds. All income and gain from such investments
shall be added to the Collection Account and distributed on such Distribution
Date pursuant to Section 8.03(a). The Company, the Servicer and the Indenture
Trustee shall in no way be liable for losses on amounts invested in accordance
with the provisions hereof. The Servicer shall deposit in the Collection Account
an amount equal to any net loss on such investments immediately as realized.
Funds in the Collection Account not so invested must be insured to the extent
permitted by law by the Federal Deposit Insurance Corporation.
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SECTION 5.06. Enforcement.
(a) The Servicer shall, consistent with customary servicing procedures
and the terms of this Agreement, act with respect to the Contracts in such
manner as will maximize the receipt of principal and interest on such Contracts
and Liquidation Proceeds with respect to Liquidated Contracts.
(b) The Servicer may sue to enforce or collect upon Contracts, in its
own name, if possible, or as agent for the Trust. If the Servicer elects to
commence a legal proceeding to enforce a Contract, the act of commencement shall
be deemed to be an automatic assignment of the Contract to the Servicer for
purposes of collection only. If, however, in any enforcement suit or legal
proceeding it is held that the Servicer may not enforce a Contract on the ground
that it is not a real party in interest or a holder entitled to enforce the
Contract, the Owner Trustee on behalf of the Trust shall, at the Servicer's
expense, take such steps as the Servicer deems necessary to enforce the
Contract, including bringing suit in its name or the names of the
Securityholders.
(c) The Servicer shall exercise any rights of recourse against third
persons that exist with respect to any Contract in accordance with the
Servicer's usual practice. Without limitation of the foregoing, in exercising
recourse rights, the Servicer is authorized on behalf of the Trust to reassign
the Contract or to resell the related Product to the person against whom
recourse exists at the price set forth in the document creating the recourse.
(d) So long as the Company is the Servicer, the Servicer may grant to
the Obligor on any Contract any rebate, refund or adjustment out of the
Collection Account that the Servicer in good faith believes is required because
of prepayment in full of the Contract. The Servicer will not permit any
rescission or cancellation of any Contract.
(e) So long as the Company is the Servicer, the Servicer may,
consistent with its customary servicing procedures and consistent with Section
5.02, grant to the Obligor on any Contract an extension of payments due under
such Contract, provided that Obligors may not be solicited for extensions and no
more than one extension of payments under a Contract may be granted in any
twelve-month period. The Servicer may not permit the extension of any payment
beyond March 2018.
(f) The Servicer shall enforce any due-on-sale clause in a Contract if
such enforcement is called for under its then current servicing policies for
obligations similar to the Contracts, provided that such enforcement is
permitted by applicable law and will not adversely affect any applicable
insurance policy. If an assumption of a Contract is permitted by the Servicer,
upon conveyance of the related real property or Product the Servicer shall use
its best efforts to obtain an assumption agreement in connection therewith.
(g) Any provision of this Agreement to the contrary notwithstanding,
the Servicer shall not agree to the modification or waiver of any provision of a
Contract, if such modification or waiver, when aggregated with all previous
modifications or waivers of the provisions of Contracts, would cause any Notes
to be treated as having been exchanged for other Notes in a taxable exchange
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under Section 1001 of the Code or any proposed, temporary or final Treasury
Regulations issued thereunder.
SECTION 5.07. Satisfaction of Contracts.
Upon payment in full on any Contract, the Servicer will notify the
Trust, the Indenture Trustee, and the Company (if the Company is not the
Servicer) on the next succeeding Distribution Date by certification of a
Servicing Officer (which certification shall include a statement to the effect
that all amounts received in connection with such payments which are required to
be deposited in the Collection Account pursuant to Section 5.05 have been so
deposited). The Servicer is authorized to execute an instrument in satisfaction
of such Contract and to do such other acts and execute such other documents as
the Servicer deems necessary to discharge the Obligor thereunder and eliminate
the lien on the related Product. The Servicer shall determine when a Contract
has been paid in full; to the extent that insufficient payments are received on
a Contract credited by the Servicer as prepaid or paid in full and satisfied,
the shortfall shall be paid by the Servicer out of its own funds.
SECTION 5.08. Costs and Expenses.
All costs and expenses incurred by the Servicer in carrying out its
duties hereunder, including all fees and expenses incurred in connection with
the enforcement of Contracts (including enforcement of defaulted Contracts and
repossessions of Products securing such Contracts) shall be paid by the Servicer
and the Servicer shall not be entitled to reimbursement hereunder, except that
the Servicer shall be reimbursed out of the Liquidation Proceeds of a Liquidated
Contract for Liquidation Expenses incurred by it. The Servicer shall not incur
such Liquidation Expenses unless it determines in its good faith business
judgment that incurring such expenses will increase the Net Liquidation Proceeds
on the related Contract.
SECTION 5.09. Maintenance of Insurance.
(a) Except as otherwise provided in subsection (b) of this Section
5.09, the Servicer shall cause to be maintained:
(i) with respect to each Contract financing the purchase of an
aircraft, one or more insurance policies providing complete coverage in
flight and on the ground;
(ii) with respect to each Contract financing the purchase of a
truck, one or more physical damage insurance policies; and
(iii) with respect to each Contract financing the purchase of
a Product other than an aircraft, truck or keyboard instrument, with an
original principal balance of $7,501 or more, one or more insurance
policies providing comprehensive and collision coverage that is
customary for goods of the class including the relevant Product;
in each case, issued by a company authorized to issue such policies in the state
in which the related Product is located and in an amount which is not less than
the maximum insurable value of such Product or the principal balance due from
the Obligor on the related Contract, whichever is less;
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provided, however, that the amount of coverage provided by each Insurance Policy
shall be sufficient to avoid the application of any co-insurance clause
contained therein; and provided, further, that such Insurance Policies may
provide for customary deductible amounts. Each Insurance Policy caused to be
maintained by the Servicer shall contain a standard loss payee clause in favor
of the Servicer and its successors and assigns. If any Obligor is in default in
the payment of premiums on its Insurance Policy or Policies, the Servicer shall
pay such premiums out of its own funds and may separately add such premium to
the Obligor's obligation as provided by the Contract, but shall not add such
premium to the remaining principal balance of the Contract.
(b) The Servicer may, in lieu of causing individual Insurance Policies
to be maintained pursuant to subsection (a) of this Section 5.09, maintain one
or more blanket insurance policies covering any losses caused by damage to such
Product that would have been covered by an individual Insurance Policy. Any such
blanket policy shall be substantially in the form and in the amount carried by
the Servicer as of the date of this Agreement. The Servicer shall pay the
premium for such policy on the basis described therein and shall deposit into
the Collection Account from its own funds any deductible amount with respect to
claims under such blanket insurance policy relating to the Contracts. The
Servicer shall not, however, be required to deposit any deductible amount with
respect to claims under individual Insurance Policies maintained pursuant to
subsection (a) of this Section. If the insurer under such blanket insurance
policy shall cease to be acceptable to the Servicer, the Servicer shall exercise
its best reasonable efforts to obtain from another insurer a replacement policy
comparable to such policy.
(c) With respect to each Product that has been repossessed in
connection with a defaulted Contract, the Servicer shall either (i) maintain one
or more Insurance Policies thereon or (ii) self-insure such Products and deposit
into the Collection Account from its own funds any losses caused by damage to
such Product that would have been covered by an Insurance Policy.
(d) The Servicer shall keep in force throughout the term of this
Agreement (i) a policy or policies of insurance covering errors and omissions
for failure to maintain insurance as required by this Agreement and (ii) a
fidelity bond. Such policy or policies and such fidelity bond shall be in such
form and amount as is generally customary among Persons which service a
portfolio of retail installment sales agreements having an aggregate principal
amount of $100,000,000 or more and which are generally regarded as servicers
acceptable to institutional investors.
SECTION 5.10. Repossession.
Notwithstanding the standard of care specified in Section 5.02, the
Servicer shall commence procedures for the repossession of any Product or take
such other steps that in the Servicer's reasonable judgment will maximize the
receipt of principal and interest or Net Liquidation Proceeds with respect to
the Contract secured by such Product (which may include retitling) subject to
the requirements of the applicable state and federal law, no later than five
Business Days after the time when such Contract becomes a Defaulted Contract. In
connection with such repossession or other conversion, the Servicer shall follow
such practices and procedures as it shall deem necessary or advisable and as
shall be consistent with Section 5.02. In the event that title to any Product is
acquired in foreclosure or by deed in lieu of foreclosure, the deed or
certificate of sale shall be issued
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to the Indenture Trustee, as trustee, or, at its election, to its nominee on
behalf of the Indenture Trustee, as trustee.
SECTION 5.11. Commingling of Funds.
So long as the Company is Servicer, any collections in respect of
Contracts collected by the Company shall, prior to the deposit thereof in the
Collection Account, be held in bank accounts entitled substantially as follows:
"[name of depository], as agent for U.S. Bank Trust National Association and
other trustees and Green Tree Financial Corporation, as their interests may
appear."
SECTION 5.12. Retitling; Security Interests.
(a) If, at any time, a Service Transfer has occurred and the Company is
no longer the Servicer and the new Servicer is unable to foreclose upon a
Product because the title document for such Product does not show such Servicer
or the Indenture Trustee as the holder of the first priority security interest
in the Product, such Servicer shall take all necessary steps to apply for a
replacement title document showing it or the Indenture Trustee as the secured
party.
(b) In order to facilitate the Servicer's actions, as described in
subsection (a) of this Section, the Company will provide the Servicer with any
necessary power of attorney permitting it to retitle the Product. If the
Servicer is still unable to retitle the Product, the Company will take all
actions necessary to act with the Servicer to foreclose upon the Product.
(c) If at any time during the term of this Agreement the Trust or the
Indenture Trustee receives written notice from the Company or the Servicer that
the Company does not have a long-term senior debt rating from Standard & Poor's
of BBB- or higher and from Fitch of BBB or higher, or if the Trust or the
Indenture Trustee otherwise becomes aware of the same, the Trust, the Indenture
Trustee and the Servicer, at the Company's expense, shall take such action as
may, in the opinion of counsel to the Indenture Trustee, be necessary to perfect
the security interests in the Products securing the Contracts in the name of the
Indenture Trustee by amending the title documents of such Products or by such
other reasonable means as may, in the opinion of counsel to the Indenture
Trustee, be necessary or prudent; provided, however, that such action shall not
be required if the Trust or Indenture Trustee receives written confirmation from
both Standard & Poor's and Fitch that the ratings of the Securities would not be
reduced or withdrawn by the failure to execute and file such assignments. The
Company agrees to pay all expenses related to such perfection and to take all
action necessary therefor.
SECTION 5.13. Servicer Advances.
Not later than the Business Day immediately preceding each Distribution
Date, the Servicer shall advance to the Trust (each such advance, a "Servicer
Advance") all Delinquent Payments for the immediately preceding Monthly Period
by depositing the aggregate amount of such Delinquent Payments in the Collection
Account, provided, however, that the Servicer shall be obligated to advance
Delinquent Payments only to the extent that the Servicer, in its sole
discretion, expects to be able to recover such advances from subsequent
collections, including Net Liquidation Proceeds.
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SECTION 5.14. Monthly Reports; Certificate of Servicing Officer.
(a) No later than 1:00 p.m. on each Determination Date, the Servicer
shall deliver to the Trust, the Indenture Trustee, the Paying Agent, the Company
(if the Company is not the Servicer), Standard & Poor's and Fitch a "Monthly
Report," substantially in the form of Exhibit C hereto.
(b) Each Monthly Report pursuant to Section 5.14(a) shall be
accompanied by a certificate of a Servicing Officer substantially in the form of
Exhibit D, certifying the accuracy of the Monthly Report and that no Event of
Termination or event that with notice or lapse of time or both would become an
Event of Termination has occurred, or if such event has occurred and is
continuing, specifying the event and its status.
(c) The Company and (if different from the Company) the Servicer shall,
on request of the Trust, the Indenture Trustee, Standard & Poor's, Fitch or a
Securityholder, furnish the Trust, the Indenture Trustee, Standard & Poor's,
Fitch or a Securityholder such underlying data as may be reasonably requested.
SECTION 5.15. Annual Report of Accountants.
On or before March 31 of each year, commencing March 31, 1999, the
Servicer at its expense shall cause a firm of independent public accountants
which is a member of the American Institute of Certified Public Accountants to
make available to the Trust, the Indenture Trustee, Standard & Poor's and Fitch
a report stating that such firm has examined selected documents and records
relating to the servicing of retail installment sales contracts, including the
contracts covered by this Agreement, in accordance with the Mortgage Bankers
Association of America's Uniform Single Attestation Program for Mortgage
Bankers, or any successor uniform program, and that, on the basis of such
examination, such servicing has been conducted in compliance with the minimum
servicing standards identified therein, except for such significant exceptions
or errors in records that, in the opinion of such firm, generally accepted
auditing standards requires it to report.
SECTION 5.16. Certain Duties of the Servicer Under the Trust
Agreement.
The Servicer shall, and hereby agrees that it will, monitor the Trust's
compliance with all applicable provisions of state and federal securities laws,
notify the Trust and the Administrator of any actions to be taken by the Trust
necessary for compliance with such laws and prepare on behalf of the Trust and
the Administrator all notices, filings or other documents or instruments
required to be filed under such laws.
SECTION 5.17. INTENTIONALLY OMITTED.
SECTION 5.18. Annual Statement as to Compliance; Notice of Servicer
Termination Event.
(a) The Servicer shall deliver to the Trust, the Indenture Trustee, and
each of Standard & Poor's and Fitch, on or before March 31 (or 90 days after the
end of the Servicer's fiscal year, if other than December 31) of each year,
beginning on March 31, 1999, an officer's certificate signed by any Responsible
Officer of the Servicer, dated as of December 31 (or other applicable date) of
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the immediately preceding year, stating that (i) a review of the activities of
the Servicer during the preceding 12-month period (or such other period as shall
have elapsed from the Closing Date to the date of the first such certificate)
and of its performance under this Agreement has been made under such officer's
supervision, and (ii) to such officer's knowledge, based on such review, the
Servicer has fulfilled all its obligations under this Agreement throughout such
period, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer and the nature
and status thereof.
(b) The Company or the Servicer shall deliver to the Trust, the
Indenture Trustee, the Servicer or the Company (as applicable) and each Rating
Agency promptly after having obtained knowledge thereof, but in no event later
than 2 Business Days thereafter, written notice in an officer's certificate of
any event which with the giving of notice or lapse of time, or both, would
become an Event of Termination under Section 7.01.
SECTION 5.19. INTENTIONALLY OMITTED.
SECTION 5.20. Maintenance of Security Interests in Products.
(a) Consistent with the policies and procedures required by this
Agreement, the Servicer shall take such steps as are necessary to maintain
perfection of the security interest created by each Contract in the related
Product on behalf of the Trust, including but not limited to obtaining the
execution by the Obligors and the recording, registering, filing, re-recording,
re-filing, and re-registering of all security agreements, financing statements
and continuation statements as are necessary to maintain the security interest
granted by the Obligors under the respective Contracts. The Trust hereby
authorizes the Servicer, and the Servicer agrees, to take any and all steps
necessary to re-perfect such security interest on behalf of the Trust as
necessary because of the relocation of a Product or for any other reason. In the
event that the assignment of a Contract to the Trust is insufficient, without a
notation on the related Product's certificate of title, or without fulfilling
any additional administrative requirements under the laws of the state in which
the Product is located, to perfect a security interest in the related Product in
favor of the Trust, the Servicer hereby agrees that the Servicer's designation
as the secured party on the certificate of title is in its capacity as agent of
the Trust.
(b) Upon the occurrence of an Event of Termination, the Trust and the
Servicer shall take or cause to be taken such action as may, in the opinion of
counsel to the Trust, be necessary to perfect or re-perfect the security
interests in the Products securing the Contracts in the name of the Trust by
amending the title documents of such Products or by such other reasonable means
as may, in the opinion of counsel to the Trust, be necessary or prudent. The
Servicer hereby agrees to pay all expenses related to such perfection or
re-perfection and to take all action necessary therefor.
SECTION 5.21. Covenants, Representations, and Warranties of Servicer.
By its execution and delivery of this Agreement, the Servicer makes the
following representations, warranties and covenants on which the Trust relies in
accepting the Contracts and issuing the Notes and the Certificates and on which
the Indenture Trustee relies in authenticating the Notes and the Owner Trustee
relies in authenticating the Certificates.
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(a) Liens in Force. The Product securing each Contract shall not be
released in whole or in part from the security interest granted by the Contract,
except upon payment in full of the Contract or as otherwise contemplated herein;
(b) No Impairment. The Servicer shall do nothing to impair the rights
of the Trust, the Indenture Trustee or the Securityholders in the Contracts, the
Insurance Policies or the other Trust Property; and
(c) No Amendments. The Servicer shall not extend or otherwise amend the
terms of any Contract, except in accordance with Section 5.06.
SECTION 5.22. Purchase of Contracts Upon Breach of Covenant. Upon
discovery by any of the Servicer, the Trust or the Indenture Trustee of a breach
of any of the covenants set forth in Section 5.20(a) or 5.21, the party
discovering such breach shall give prompt written notice to the others;
provided, however, that the failure to give any such notice shall not affect any
obligation of the Servicer. Not later than the last day of the Monthly Period
that is 90 days after its discovery or receipt of notice of any breach of any
such covenant which materially and adversely affects the interests of the
Securityholders or the Trust in any Contract (including any Liquidated
Contract), the Servicer shall, unless it shall have cured such breach in all
material respects, purchase from the Trust the Contract affected by such breach
and pay the related Repurchase Price. It is understood and agreed that the
obligation of the Servicer to purchase any Contract (including any Liquidated
Contract) with respect to which such a breach has occurred and is continuing
shall, if such obligation is fulfilled, constitute the sole remedy against the
Servicer for such breach available to the Securityholders, the Trust, or the
Indenture Trustee on behalf of the Noteholders; provided, however, that the
Servicer shall indemnify the Owner Trustee, the Trust, the Indenture Trustee,
and the Securityholders against all costs, expenses, losses, damages, claims and
liabilities, including reasonable fees and expenses of counsel, which may be
asserted against or incurred by any of them as a result of third party claims
arising out of the events or facts giving rise to such breach.
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ARTICLE VI
DISTRIBUTIONS; TRUST ACCOUNTS; LIMITED GUARANTY;
STATEMENTS TO SECURITYHOLDERS
SECTION 6.01. Trust Accounts.
(a) The Servicer shall establish the Collection Account in the name of
the Indenture Trustee for the benefit of the Securityholders. The Collection
Account shall be an Eligible Account and initially shall be a segregated trust
account established with the Indenture Trustee and maintained with the Indenture
Trustee.
(b) The Servicer shall establish the Note Distribution Account in the
name of the Indenture Trustee for the benefit of the Noteholders. The Note
Distribution Account shall be an Eligible Account and initially shall be a
segregated trust account established with the Indenture Trustee and maintained
with the Indenture Trustee.
(c) The Servicer shall establish the Certificate Distribution Account
in the name of the Owner Trustee for the benefit of the Certificateholders. The
Certificate Distribution Account shall be an Eligible Account and initially
shall be a segregated trust account established with the Indenture Trustee and
maintained with the Indenture Trustee, so long as the Indenture Trustee is
acting as Paying Agent under Section 3.9 of the Trust Agreement.
(d) All amounts held in the Collection Account and the Note
Distribution Account (but not the Certificate Distribution Account) shall, to
the extent permitted by applicable laws, rules and regulations, be invested, as
directed by the Servicer, in Eligible Investments that mature not later than one
Business Day prior to the Distribution Date for the Monthly Period to which such
amounts relate. Any such written direction shall certify that any such
investment is authorized by this Section 6.01(d). Such investments in Eligible
Investments shall be made in the name of the Indenture Trustee on behalf of the
Trust, and such investments shall not be sold or disposed of prior to their
maturity. Any investment of funds in the Collection Account or the Note
Distribution Account shall be made in Eligible Investments held by a financial
institution with respect to which (a) such institution has noted the Indenture
Trustee's interest therein by book entry or otherwise and (b) a confirmation of
the Indenture Trustee's interest has been sent to the Indenture Trustee by such
institution, provided that such Eligible Investments are (i) specific
certificated securities (as such term is used in MN UCC ss. 336.8-313(1)(d)(i)),
and (ii) either (A) in the possession of such institution or (B) in the
possession of a clearing corporation (as such term is used in MN UCC ss.
336.8-313(1)(g)) in New York or Minnesota, registered in the name of such
clearing corporation, not endorsed for collection or surrender or any other
purpose not involving transfer, not containing any evidence of a right or
interest inconsistent with the Indenture Trustee's security interest therein,
and held by such clearing corporation in an account of such institution. Subject
to the other provisions hereof, the Indenture Trustee shall have sole control
over each such investment and the income thereon, and any certificate or other
instrument evidencing any such investment, if any, shall be delivered directly
to the Indenture Trustee or its agent, together with each document of transfer,
if any, necessary to transfer title to such investment to the Indenture Trustee
in a manner which complies with this Section 6.01. All interest, dividends,
gains upon sale and other income from, or
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earnings on, investments of funds in the Collection Account and the Note
Distribution Account shall be deposited in the Collection Account and
distributed on the next Distribution Date pursuant to Section 6.06. The Servicer
shall deposit in the applicable Collection Account and the Note Distribution
Account an amount equal to any net loss on such investments immediately as
realized.
SECTION 6.02. Collection Account Deposits.
(a) Collections. The Servicer shall remit directly to the Collection
Account (no later than the next Business Day as specified in Section 5.05) all
payments by or on behalf of the Obligors on the Contracts and all Liquidation
Proceeds received by the Servicer.
(b) Servicer Advances. The Servicer shall deposit in the Collection
Account immediately prior to each Distribution Date all Servicer Advances
required to be made pursuant to Section 5.13.
(c) Repurchased Contracts. The Company shall deposit in the Collection
Account the Repurchase Price for each Contract repurchased by it under Section
3.05. The Servicer shall deposit in the Collection Account the Repurchase Price
for each Contract repurchased by it under Section 5.22.
SECTION 6.03. Permitted Withdrawals.
The Indenture Trustee may, from time to time as provided herein, make
withdrawals from the Collection Account of amounts deposited in said account
that are attributable to the Contracts only for the following purposes:
(a) to make payments in the amounts and in the manner provided
for in Section 6.06;
(b) to pay to the Company with respect to each Contract or
property acquired in respect thereof that has been repurchased pursuant
to Section 3.05, all amounts received thereon and not required to be
distributed to Noteholders or Certificateholders as of the date on
which the related Scheduled Principal Balance or Repurchase Price is
determined;
(c) to reimburse the Servicer out of Liquidation Proceeds for
Liquidation Expenses incurred by it, to the extent such reimbursement
is permitted pursuant to Section 5.08;
(d) to withdraw any amount deposited in the Collection Account
that was not required to be deposited therein; or
(e) to make any rebates or adjustments deemed necessary by the
Servicer pursuant to Section 5.06(d).
Since, in connection with withdrawals pursuant to clauses (a) and (b),
the Company's or the Servicer's entitlement thereto is limited to collections or
other recoveries on the related Contract, the
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Servicer shall keep and maintain a separate accounting, on a Contract by
Contract basis, for the purpose of justifying any withdrawal from the Collection
Account pursuant to such clauses.
SECTION 6.04. INTENTIONALLY OMITTED
SECTION 6.05. Limited Guaranty.
(a) No later than the Determination Date prior to each Distribution
Date, the Servicer (if other than the Company) shall notify the Company of the
amount of the Guaranty Payment (if any) for such Distribution Date. Not later
than the Business Day preceding each Distribution Date, the Company shall
deposit the Guaranty Payment, if any, for such Distribution Date into the
Collection Account.
(b) The obligations of the Company under this Section shall not
terminate upon or otherwise be affected by a Service Transfer pursuant to
Article VII of this Agreement.
(c) The obligation of the Company to provide the Limited Guaranty under
this Agreement shall terminate on the Final Scheduled Distribution Date.
(d) The obligation of the Company to make the Guaranty Payments
described in subsection (a) above shall be unconditional and irrevocable. The
Company acknowledges that its obligation to make the Guaranty Payments described
in subsection (a) above shall be deemed a guaranty by the Company of that
portion of the Obligors' obligations under the Contracts that is allocable to
the Certificateholders.
(e) If the Company fails to make a Guaranty Payment in whole or in
part, the Company shall promptly notify the Owner Trustee, and the Owner Trustee
shall promptly notify Standard & Poor's and Fitch.
SECTION 6.06. Distributions.
(a) On each Distribution Date, the Servicer shall instruct the
Indenture Trustee (based on the information contained in the Monthly Certificate
delivered pursuant to Section 5.14) to make the following deposits and
distributions by 11:00 a.m. (Minnesota time), to the extent of the Amount
Available for such Distribution Date and in the following order of priority,
provided that any Guaranty Payment shall be distributed solely to the
Certificate Distribution Account pursuant to Section 6.06(b):
(i) Servicing Fee. If the Company or an Affiliate is not the
Servicer, then to the Servicer, the Servicing Fee for the related
Monthly Period.
(ii) Servicer Advances. After payment of the amount specified
in clause (i) above, to reimburse the Servicer for Uncollectible
Advances and for Servicer Advances made with respect to Delinquent
Payments that were recovered during the related Monthly Period.
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(iii) Senior Note Interest. After payment of the amounts
specified in clauses (i) and (ii) above, to the Note Distribution
Account, the sum of the Senior Interest Amount and any Unpaid Senior
Interest Shortfall;
(iv) First Priority Principal Distribution Amount. After
payment of the amounts specified in clauses (i) through (iii) above, to
the Note Distribution Account, any First Priority Principal
Distribution Amount;
(v) Class A-6 Interest. After payment of the amounts specified
in clauses (i) through (iv) above, to the Note Distribution Account,
the Class A-6 Interest Amount and any Unpaid Class A-6 Interest
Shortfall;
(vi) Second Priority Principal Distribution Amount. After
payment of the amounts specified in clauses (i) through (v) above, to
the Note Distribution Account, any Second Priority Principal
Distribution Amount;
(vii) Class A-7 Interest. After payment of the amounts
specified in clauses (i) through (vi) above, to the Note Distribution
Account, the Class A-7 Interest Amount and any Unpaid Class A-7
Interest Shortfall;
(viii) Third Priority Principal Distribution Amount. After
payment of the amounts specified in clauses (i) through (vii) above, to
the Note Distribution Account, any Third Priority Principal
Distribution Amount;
(ix) Class B-1 Certificate Interest. After payment of the
amounts specified in clauses (i) through (viii) above, to the
Certificate Distribution Account, the sum of the Class B-1 Interest
Amount and any Unpaid Class B-1 Interest Shortfall.
(x) Fourth Priority Principal Distribution Amount. After
payment of the amounts specified in clauses (i) through (ix) above, to
the Note Distribution Account, any Fourth Priority Principal
Distribution Amount payable to any Class of Notes then entitled to
receive the Total Principal Distribution Amount, or if all the Notes
have been paid in full, to the Certificate Distribution Account, any
Fourth Priority Principal Distribution Amount then payable to the Class
B-1 Certificates.
(xi) Formula Principal. After payment of the amounts specified
in clauses (i) through (x) above, to the Note Distribution Account (or,
if all the Notes have been paid in full, to the Certificate
Distribution Account), the Formula Principal Distribution Amount, plus
the aggregate of all Formula Principal Shortfalls, if any, for prior
Distribution Dates, minus all First Priority Principal Distribution
Amounts (if any), all Second Priority Principal Distribution Amounts
(if any), all Third Priority Principal Distribution Amounts (if any),
and all Fourth Priority Principal Distribution Amounts (if any), paid
on prior Distribution Dates.
(xii) Class B-2 Certificate Interest. After payment of the
amounts specified in clauses (i) through (xi) above, to the Certificate
Distribution Account, the sum of the Class B-2 Interest Amount and any
Unpaid Class B-2 Interest Shortfall.
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(xiii) Class B-2 Certificate Principal. After payment of the
amounts specified in clauses (i) through (xii) above, and after payment
of all Notes and all Class B-1 Certificates in full, to the Certificate
Distribution Account, the Class B-2 Principal Distributable Amount.
(xiv) Monthly Servicing and Guaranty Fee. After payment of the
amounts specified in clauses (i) through (xiii) above, to the Company,
the Monthly Servicing and Guaranty Fee (which shall be due and payable
even if the Company is no longer acting as Servicer) equal to the
remaining Amount Available as compensation for its providing the
Limited Guaranty and acting as initial Servicer and (if the Company is
acting as Servicer) any other compensation owed to the Servicer
pursuant to Section 7.02.
(b) Guaranty Payments. On each Distribution Date the Servicer shall
instruct the Indenture Trustee to distribute to the Certificate Distribution
Account any Guaranty Payment deposited in the Collection Account pursuant to
Section 6.05.
SECTION 6.07. INTENTIONALLY OMITTED
SECTION 6.08. Statements to Securityholders.
(a) On each Distribution Date, the Indenture Trustee shall include with
each distribution to each Noteholder, and the Owner Trustee shall include with
each distribution to each Certificateholder, a statement (which statement shall
also be provided to each Rating Agency) based on information in the Monthly
Report delivered on the related Determination Date pursuant to Section 5.14,
setting forth the following information:
(i) the amount of such distribution to Holders of each Class
of Notes and the Certificates allocable to interest, separately
identifying any Unpaid Class A-1 Interest Shortfall, Unpaid Class A-2
Interest Shortfall, Unpaid Class A-3 Interest Shortfall, Unpaid Class
A-4 Interest Shortfall, Unpaid Class A-5 Interest Shortfall, Unpaid
Class A-6 Interest Shortfall, Unpaid Class A-7 Interest Shortfall, and
any Unpaid Class B-1 Interest Shortfall and Unpaid Class B-2 Interest
Shortfall included in such distribution and any remaining Unpaid Class
A-1 Interest Shortfall, Unpaid Class A-2 Interest Shortfall, Unpaid
Class A-3 Interest Shortfall, Unpaid Class A-4 Interest Shortfall,
Unpaid Class A-5 Interest Shortfall, Unpaid Class A-6 Interest
Shortfall, Unpaid Class A-7 Interest Shortfall, any Unpaid Class B-1
Interest Shortfall and Unpaid Class B-2 Interest Shortfall after giving
effect to such distribution;
(ii) the Class A-1 Interest Carryover Shortfall, the Class A-2
Interest Carryover Shortfall, the Class A-3 Interest Carryover
Shortfall, the Class A-4 Interest Carryover Shortfall, the Class A-5
Interest Carryover Shortfall, the Class A-6 Interest Carryover
Shortfall, the Class A-7 Interest Carryover Shortfall, the Class B-1
Interest Carryover Shortfall and the Class B-2 Interest Carryover
Shortfall, if any, for such Distribution Date;
(iii) the amount of such distribution to Holders of each Class
of Notes and the Certificates allocable to principal, separately
identifying the Formula Principal Distribution Amount, any Formula
Principal Shortfall, any First Priority Principal Distribution Amount,
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any Second Priority Principal Distribution Amount, any Third Priority
Principal Distribution Amount and any Fourth Priority Principal
Distribution Amount included therein;
(iv) the Class A-1 Principal Balance, the Class A-2 Principal
Balance, the Class A-3 Principal Balance, the Class A-4 Principal
Balance, the Class A-5 Principal Balance, the Class A-6 Principal
Balance, the Class A-7 Principal Balance, the Class B-1 Principal
Balance and the Class B-2 Principal Balance after giving effect to the
distribution of principal on such Distribution Date;
(v) the amount, if any, of the Guaranty Payment on such
Distribution Date;
(vi) the amount of the Monthly Servicing and Guaranty Fee, if
any, paid to the Company with respect to the related Monthly Period and
(if the Company is not acting as Servicer) the amount of the Monthly
Servicing Fee paid to the Servicer with respect to such Monthly Period;
(vii) the amount of any payment to GTGP;
(viii) the Pool Scheduled Principal Balance for such
Distribution Date;
(ix) the Note Pool Factor for each Class, the Class B-1
Certificate Pool Factor and Class B-2 Certificate Pool Factor after
giving effect to the distribution of principal on such Distribution
Date;
(x) the number and aggregate principal balances of Contracts
delinquent (a) 30-59 days and (b) 60 or more days;
(xi) the number and aggregate Scheduled Principal Balance of
Contracts that become Defaulted Contracts during the related Monthly
Period;
(xii) the number and aggregate Scheduled Principal Balance of
Defaulted Contracts as of the last day of the related Monthly Period;
(xiii) the number and aggregate Schedule Principal Balance of
Contracts that became Liquidated Contracts during the related Monthly
Period and the related Net Liquidation Losses; and
(xiv) the aggregate amount of Servicer Advances made by the
Servicer with respect to such Distribution Date, and the aggregate
amount paid to the Servicer as reimbursement of Servicer Advances made
on prior Distribution Dates.
In the case of information furnished pursuant to clauses (i) through
(vi) above, the amounts shall be expressed as a dollar amount per $1,000
denomination of Note or Certificate, as applicable.
(b) The Owner Trustee and the Indenture Trustee shall inform any of the
Noteholders, Certificateholders or Merrill Lynch Pierce, Fenner & Smith
Incorporated, Lehman Brothers Inc., J.P.
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Morgan, Securities Inc., or NationsBanc Montgomery Securities LLC inquiring by
telephone of the information contained in the most recent Monthly Report.
(c) Certificateholders may obtain copies of the statements delivered by
the Owner Trustee pursuant to subsection (a) above upon written request to the
Owner Trustee at the Corporate Trust Office (together with a certification that
such Person is a Certificateholder and payment of any expenses associated with
the distribution thereof). Noteholders may obtain copies of the statements
delivered by the Indenture Trustee pursuant to subsection (a) above upon written
request to the Indenture Trustee at its Corporate Trust Office (together with a
certification that such Person is a Noteholder and payment of any expenses
associated with the distribution thereof).
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ARTICLE VII
SERVICE TRANSFER
SECTION 7.01. Event of Termination.
"Event of Termination" means the occurrence of any of the following:
(a) Any failure by the Servicer to make any deposit into an account
required to be made hereunder and the continuance of such failure for a period
of five Business Days after the Servicer has become aware, or should have become
aware, that such deposit was required;
(b) Failure on the Servicer's part to observe or perform in any
material respect any covenant or agreement in this Agreement (other than a
covenant or agreement which is elsewhere in this Section specifically dealt
with), which failure shall (i) materially and adversely affect the rights of the
Trust, the Indenture Trustee, or the Securityholders and (ii) continue
unremedied for 30 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Servicer by the
Indenture Trustee or to the Servicer and the Indenture Trustee by Holders of
Notes evidencing not less than 25% of the Note Principal Balance or, if the
Notes have been paid in full, by Certificateholders evidencing not less than 25%
of the Certificate Principal Balance.
(c) Any assignment by the Servicer of its duties hereunder except as
specifically permitted hereunder, or any attempt to make such an assignment;
(d) A court or other governmental authority having jurisdiction in the
premises shall have entered a decree or order for relief in respect of the
Servicer in an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar official) of
the Servicer, as the case may be, or for any substantial liquidation of its
affairs, and such order remains undischarged and unstayed for at least 60 days;
(e) The Servicer shall have commenced a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or shall have consented to the entry of an order for relief in an
involuntary case under any such law, or shall have consented to the appointment
of or taking possession by a receiver, liquidator, assignee, trustee, custodian
or sequestrator (or other similar official) of the Servicer or for any
substantial part of its property, or shall have made any general assignment for
the benefit of its creditors, or shall have failed to, or admitted in writing
its inability to, pay its debts as they become due, or shall have taken any
corporate action in furtherance of the foregoing; or
(f) The failure of the Servicer to be an Eligible Servicer.
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SECTION 7.02. Transfer.
If an Event of Termination has occurred and is continuing, either the
Trust, the Indenture Trustee, a Note Majority, or a Certificate Majority, by
notice in writing to the Servicer (and to the Indenture Trustee and Trust if
given by the Certificateholders or Noteholders) may terminate all (but not less
than all) of the Servicer's management, administrative, servicing and collection
functions (such termination being herein called a "Service Transfer"). On
receipt of such notice (or, if later, on a date designated therein), or upon
resignation of the Servicer in accordance with Section 10.01, all authority and
power of the Servicer under this Agreement, whether with respect to the
Contracts, the Contract Files or otherwise (except with respect to the
Collection Account, the transfer of which shall be governed by Section 7.06),
shall pass to and be vested in the Indenture Trustee pursuant to and under this
Section 7.02; and, without limitation, the Indenture Trustee is authorized and
empowered to execute and deliver on behalf of the Servicer, as attorney-in-fact
or otherwise, any and all documents and other instruments (including, without
limitation, documents required to make the Indenture Trustee or a successor
servicer the sole lienholder or legal title holder of record of each Product)
and to do any and all acts or things necessary or appropriate to effect the
purposes of such notice of termination. Each of the Company and the Servicer
agrees to cooperate with the Indenture Trustee in effecting the termination of
the responsibilities and rights of the Servicer hereunder, including, without
limitation, the transfer to the Indenture Trustee for administration by it of
all cash amounts which shall at the time be held by the Servicer for deposit, or
have been deposited by the Servicer, in the Collection Account, or for its own
account in connection with its services hereafter or thereafter received with
respect to the Contracts and the execution of any documents required to make the
Indenture Trustee or a successor servicer the sole lienholder or legal title
holder of record in respect of each Product. The Servicer shall be entitled to
receive any other amounts which are payable to the Servicer under this
Agreement, at the time of the termination of its activities as Servicer. The
Servicer shall transfer to the new servicer (i) the Servicer's records relating
to the Contracts in such electronic form as the new servicer may reasonably
request and (ii) any Contracts and Contract Files in the Servicer's possession.
SECTION 7.03. Indenture Trustee to Act; Appointment of Successor.
On and after the time the Servicer receives a notice of termination
pursuant to Section 7.02 or the resignation of the Servicer in accordance with
Section 10.01, the Indenture Trustee shall be the successor in all respects to
the Servicer in its capacity as servicer under this Agreement and the
transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Servicer
by the terms and provisions hereof and the Servicer shall be relieved of such
responsibilities, duties and liabilities arising after such Service Transfer;
provided, however, that (i) the Indenture Trustee will not assume any
obligations of the Company pursuant to Section 3.05 and (ii) the Indenture
Trustee shall not be liable for any acts or omissions of the Servicer occurring
prior to such Service Transfer or for any breach by the Servicer of any of its
obligations contained herein or in any related document or agreement. As
compensation therefor, the Indenture Trustee shall be entitled to receive
reasonable compensation not in excess of the Monthly Servicing Fee.
Notwithstanding the above, the Indenture Trustee may, if it shall be unwilling
so to act, or shall, if it is legally unable so to act, appoint, or petition a
court of competent jurisdiction to appoint, an Eligible Servicer as the
successor to the Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Servicer hereunder.
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Pending appointment of a successor to the Servicer hereunder, unless the
Indenture Trustee is prohibited by law from so acting, the Indenture Trustee
shall act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the Indenture Trustee may make such arrangements for
the compensation of such successor out of payments on Contracts as it and such
successor shall agree; provided, however, that no such monthly compensation
shall, without the written consent of 100% of the Noteholders, exceed the
Monthly Servicing Fee. The Indenture Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession.
SECTION 7.04. Notification to Securityholders.
(a) Promptly following the occurrence of any Event of Termination, the
Servicer shall give written notice thereof to the Indenture Trustee, the Trust,
Standard & Poor's, and Fitch.
(b) Within ten days following any termination or appointment of a
successor to the Servicer pursuant to this Article VII, the Owner Trustee on
behalf of the Trust shall give written notice thereof to Standard & Poor's,
Fitch and the Certificateholders at their respective addresses appearing on the
Certificate Register and the Indenture Trustee shall give written notice thereof
to Noteholders at their respective addresses appearing in the Note Register.
(c) The Owner Trustee on behalf of the Trust shall give written notice
to Standard & Poor's and Fitch at least 30 days prior to the date upon which any
Eligible Servicer (other than the Trustee) is to assume the responsibilities of
Servicer pursuant to Section 7.03, naming such successor Servicer.
SECTION 7.05. Effect of Transfer.
(a) After the Service Transfer, the Indenture Trustee or new Servicer
may notify Obligors to make payments directly to the new Servicer that are due
under the Contracts after the effective date of the Service Transfer.
(b) After the Service Transfer, the replaced Servicer shall have no
further obligations with respect to the management, administration, servicing or
collection of the Contracts and the new Servicer shall have all of such
obligations, except that the replaced Servicer will transmit or cause to be
transmitted directly to the new Servicer for its own account, promptly on
receipt and in the same form in which received, any amounts (properly endorsed
where required for the new Servicer to collect them) received as payments upon
or otherwise in connection with the Contracts.
(c) A Service Transfer shall not affect the rights and duties of the
parties hereunder (including but not limited to the indemnities of the Servicer
and the Company pursuant to Article IX and Sections 3.05 and 5.19) other than
those relating to the management, administration, servicing or collection of the
Contracts.
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SECTION 7.06. Transfer of Collection Account.
Notwithstanding the provisions of Section 7.02, if the Collection
Account shall be maintained with the Servicer and an Event of Termination shall
occur and be continuing, the Servicer shall, after five days' written notice
from the Indenture Trustee, or in any event within ten days after the occurrence
of the Event of Termination, establish an Eligible Account with an institution
other than the Servicer and promptly transfer all funds in the Collection
Account to such new account, which shall thereafter be deemed the Collection
Account for the purposes hereof.
SECTION 7.07. Limits on Liability.
The Servicer will be liable to the Trust, the Owner Trustee, the
Indenture Trustee and the Securityholders only to the extent of the obligations
specifically undertaken by the Servicer under this Agreement and will have no
other obligations or liabilities hereunder. Neither the Servicer nor any of its
directors, officers, employees or agents will have any liability to the Trust,
the Owner Trustee, the Indenture Trustee or the Securityholders (except as
explicitly provided in this Agreement) for any action taken, or for refraining
from taking any action, pursuant to this Agreement, other than any liability
that would otherwise be imposed by reason of the Servicer's breach of this
Agreement or willful misfeasance, bad faith or negligence (including errors in
judgment) in the performance of its duties, or by reason of reckless disregard
of obligations and duties under this Agreement or any violation of law.
SECTION 7.08. Waiver of Past Defaults.
A Note Majority and Certificate Majority may, on behalf of all Holders
of Notes and Certificates, waive any default by the Servicer in the performance
of its obligations hereunder and its consequences. Upon any such waiver of a
past default, such default shall cease to exist, and any Event of Termination
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.
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ARTICLE VIII
TERMINATION
SECTION 8.01. Company's or Servicer's Repurchase Option.
(a) Subject to the conditions in subsection (b) below, the Company or
the Servicer may repurchase all of the Contracts and all Products acquired in
respect of any Contract remaining in the Trust at a price equal to the greatest
of:
(i) the sum of (x) 100% of the principal balance of each
Contract (other than any Contract as to which title to the underlying
Product has been acquired and whose fair market value is included
pursuant to clause (y) below), plus (y) the fair market value of such
acquired Product (as determined by the Company);
(ii) the aggregate fair market value (as determined by the
Company) of all of the assets of the Trust (but in no event more than
the amount sufficient to pay all principal and interest outstanding on
the Securities, plus any unpaid fees and expenses of the Indenture
Trustee and the Owner Trustee); or
(iii) the aggregate Note Principal Balance, Class B-1
Principal Balance and Class B-2 Principal Balance,
plus, one month's interest at the applicable Contract Rate on the
Scheduled Principal Balance of each Contract (including any Contract as
to which the related Product has been repossessed).
(b) The purchase by the Company or the Servicer of all of the Contracts
pursuant to Section 8.01(a) shall be at the option of the Company or the
Servicer on any Distribution Date, but shall be conditioned upon (1) the Pool
Scheduled Principal Balance, as of the end of the Monthly Period immediately
preceding such Distribution Date, aggregating an amount equal to or less than
10% of the Cutoff Date Pool Principal Balance, (2) the Company or the Servicer
having provided the Indenture Trustee and the Owner Trustee and the Depository
(if any) with at least 30 days' written notice (which may be given prior to the
end of the Monthly Period referred to in clause (1) above) and (3) the Company
or the Servicer (as applicable) shall have delivered to the Indenture Trustee
and the Owner Trustee an unqualified Opinion of Counsel stating that payment of
the purchase price to the Securityholders will not constitute a voidable
preference or fraudulent transfer under the United States Bankruptcy Code. In
the event the notice described in the preceding sentence is given in connection
with the Company's election to purchase the Contracts, the Company shall deposit
in the Collection Account on the relevant Distribution Date in immediately
available funds an amount equal to the above-described purchase price and the
Indenture Trustee shall distribute the amounts so deposited in accordance with
Section 6.06. Upon certification to the Indenture Trustee by a Servicing
Officer, following such final deposit, the Indenture Trustee shall promptly
release to the Company the Contract Files for the remaining Contracts, and the
Indenture Trustee and Owner Trustee on behalf of the Trust shall execute all
assignments, endorsements and other instruments necessary to effectuate such
transfer.
8-1
<PAGE>
SECTION 8.02. Liquidation of Trust Estate.
Upon any sale of the assets of the Trust pursuant to Section 10.03 of
the Indenture or Section 9.2 of the Trust Agreement, the Trust shall instruct
the Indenture Trustee or the Owner Trustee, as the case may be, to deposit the
proceeds from such sale after all payments and reserves therefrom have been made
in the Collection Account. On the Distribution Date on which such proceeds are
deposited in the Collection Account (or, if such proceeds are not so deposited
on a Distribution Date, on the Distribution Date immediately following such
deposit), the Trust shall instruct the Indenture Trustee to distribute such
funds, together with all other amounts available, in accordance with the terms
of Section 6.06(a).
8-2
<PAGE>
ARTICLE IX
INDEMNITIES
SECTION 9.01. Company's Indemnities.
The Company will defend and indemnify the Trust, the Owner Trustee, the
Indenture Trustee (including the paying agent and any other agents of the Owner
Trustee and the Indenture Trustee), and the Securityholders against any and all
costs, expenses, losses, damages, taxes, claims and liabilities, including
reasonable fees and expenses of counsel and expenses of litigation of any
third-party claims arising out of or resulting from (i) the origination of any
Contract (including but not limited to truth in lending requirements) or the
servicing of such Contract prior to its transfer to the Trust (but only to the
extent such cost, expense, loss, damage, tax, claim or liability is not provided
for by the Company's repurchase of such Contract pursuant to Section 3.05), (ii)
the use or ownership of any Products by the Company or the Servicer or any
Affiliate of either, or (iii) the Company's or the Trust's violation of federal
or state securities laws in connection with the offering and sale of the
Securities. Notwithstanding any other provision of this Agreement, the
obligation of the Company under this Section shall not terminate upon a Service
Transfer pursuant to Article VII, except that the obligation of the Company
under this Section shall not relate to the actions of any subsequent Servicer
after a Service Transfer.
SECTION 9.02. Liabilities to Obligors.
No obligation or liability to any Obligor under any of the Contracts is
intended to be assumed by the Trust, the Owner Trustee, Indenture Trustee, or
the Securityholders under or as a result of this Agreement and the transactions
contemplated hereby and, to the maximum extent permitted and valid under
mandatory provisions of law, the Trust, the Owner Trustee, Indenture Trustee,
and the Securityholders expressly disclaim such assumption.
SECTION 9.03. Servicer's Indemnities.
The Servicer shall defend and indemnify the Trust, the Owner Trustee,
the Indenture Trustee (including the Paying Agent and any other agents of the
Owner Trustee and the Indenture Trustee) and the Securityholders against any and
all costs, expenses, losses, damages, taxes, claims and liabilities, including
reasonable fees and expenses of counsel and expenses of litigation, in respect
of any action taken or omitted to be taken by the Servicer with respect to any
Contract. This indemnity shall survive any Service Transfer (but the original
Servicer's obligations under this Section 9.03 shall not relate to any actions
of any subsequent Servicer after a Service Transfer) and any payment of the
amount owing under, or any repurchase by the Company of, any such Contract.
SECTION 9.04. Operation of Indemnities.
Indemnification under this Article shall include, without limitation,
reasonable fees and expenses of counsel and expenses of litigation. If the
Company or the Servicer has made any indemnity payments pursuant to this Article
and the recipient thereafter collects any of such amounts
9-1
<PAGE>
from others, the recipient will repay such amounts collected to the Company or
the Servicer, as the case may be, without interest.
9-2
<PAGE>
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Servicer Not to Assign Duties or Resign; Delegation of
Servicing Duties.
The Servicer may not sell or assign its rights and duties as Servicer
hereunder, except as expressly provided for herein, provided that the Servicer
may pledge or assign the right to receive all or any portion of the Monthly
Servicing Fee or Monthly Servicing and Guaranty Fee payable to it. The Servicer
shall not resign from the obligations and duties hereby imposed on it except
upon determination that the performance of its duties hereunder is no longer
permissible under applicable law or is in material conflict by reason of
applicable law with any other activities carried on by it. Any such
determination permitting the resignation of the Servicer shall be evidenced by
an Opinion of Counsel for the Servicer to such effect addressed and delivered to
the Trust and the Indenture Trustee. No such resignation shall become effective
until the Indenture Trustee or a successor servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance with Sections
7.02 and 7.03.
Notwithstanding the foregoing:
(a) Any person into which the Servicer may be merged or
consolidated, or any corporation resulting from any merger, conversion
or consolidation to which the Servicer shall be a party, or any Person
succeeding to the business of the Servicer, shall be the successor of
the Servicer hereunder, 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; provided, however, that the
successor or surviving Person to the Servicer shall satisfy the
criteria set forth in the definition of an Eligible Servicer. The
Servicer shall promptly notify Standard & Poor's and Fitch of any such
merger to which it is a party.
(b) The Servicer may delegate duties under this Agreement to
any of the Servicer's Affiliates. In addition, the Servicer may at any
time perform the specific duty of repossessing Products through
subcontractors who are in the business of servicing consumer
receivables, and may also perform other specific duties through
subcontractors; provided that the Servicer gives notice to the Trust
and the Indenture Trustee and each of Standard & Poor's and Fitch, and
provided further that no such delegation of duties by the Servicer
shall relieve the Servicer of its responsibility with respect thereto.
SECTION 10.02. Assignment or Delegation by Company.
Except as specifically authorized hereunder, and except for its
obligations as Servicer which are dealt with under Article V and Article VII,
the Company may not convey and assign or delegate any of its rights or
obligations hereunder absent the prior written consent of a Note Majority and a
Certificate Majority, and any attempt to do so without such consent shall be
void. It is understood that the foregoing does not prohibit the pledge or
assignment by the Company of any right to payment pursuant to Article VI.
10-1
<PAGE>
Notwithstanding the foregoing, any person into which the Company may be
merged or consolidated, or any corporation resulting from any merger, conversion
or consolidation to which the Company shall be a party, or any Person succeeding
to the business of the Company, shall be the successor of the Company hereunder,
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. The
Company shall promptly notify Standard & Poor's and Fitch of any such merger to
which it is a party.
SECTION 10.03. Amendment.
(a) This Agreement may be amended from time to time by the Company, the
Servicer and the Trust, with the prior written consent of the Indenture Trustee
but without the consent of any of the Securityholders, to correct manifest
error, to cure any ambiguity, to correct or supplement any provisions herein
which may be inconsistent with any other provisions herein, as the case may be,
including, without limitation, to add or amend any provision as required by
Standard & Poor's, Fitch, or any other nationally recognized statistical rating
organization in order to improve or maintain the rating of any Class of Notes or
the Certificates, provided, however, that such action shall not, as evidenced by
an Opinion of Counsel for the Company, adversely affect in any material respect
the interests of any Securityholder.
(b) This Agreement may also be amended from time to time by the
Company, the Servicer and the Trust with the prior written consent of the
Indenture Trustee and with the consent of a Certificate Majority and a Note
Majority with respect to each Class (which consent of any Holder of a
Certificate or Note given pursuant to this Section or pursuant to any other
provision of this Agreement shall be conclusive and binding on such Holder and
on all future Holders of such Certificate or Note and of any Certificate or Note
issued upon the transfer thereof or in exchange thereof or in lieu thereof
whether or not notation of such consent is made upon the Certificate or Note)
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement, or of modifying in any
manner the rights of the Holders of Certificates or Notes; provided, however, no
such amendment shall (a) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments on Contracts or
distributions required to be made on any Certificate or Note or the Class B-1
Rate, the Class B-2 Rate, the Class A-1 Interest Rate, Class A-2 Interest Rate,
Class A-3 Interest Rate, Class A-4 Interest Rate, Class A-5 Interest Rate, Class
A-6 Interest Rate or Class A-7 Interest Rate, (b) amend any provisions of
Section 6.06 in such a manner as to affect the priority of payment of interest,
principal or premium to Noteholders or Certificateholders, or (c) reduce the
aforesaid percentage required to consent to any such amendment or any waiver
hereunder, without the consent of the Holders of all Securities then
outstanding, and provided further, that the Rating Agency Condition has been
satisfied.
(c) Concurrently with the solicitation of any consent pursuant to this
Section 10.03, the Indenture Trustee shall furnish written notification to
Standard & Poor's and Fitch of such solicitation. Promptly after the execution
of any amendment pursuant to this Section 10.03, the Indenture Trustee shall
furnish written notification of the substance of such amendment to Standard &
Poor's, Fitch and each Securityholder.
10-2
<PAGE>
(d) It shall not be necessary for the consent of Securityholders under
this Section 10.03 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 Securityholders shall be subject to such reasonable
requirements as the Indenture Trustee may prescribe.
(e) Each of the Owner Trustee and Indenture Trustee may, but shall not
be obligated to, enter into any such amendment which affects its own rights,
duties or immunities under this Agreement or otherwise.
(f) In connection with any amendment pursuant to this Section, the
Owner Trustee and Indenture Trustee shall be entitled to receive an unqualified
Opinion of Counsel to the Servicer to the effect that such amendment is
authorized or permitted by the Agreement.
(g) Upon the execution of any amendment or consent pursuant to this
Section 10.03, this Agreement shall be modified in accordance therewith, and
such amendment or consent shall form a part of this Agreement for all purposes,
and every Securityholder hereunder shall be bound thereby.
SECTION 10.04. Notices.
All communications and notices pursuant hereto to the Servicer, the
Company, the Trust, the Owner Trustee, the Indenture Trustee, Standard & Poor's
and Fitch shall be in writing and delivered (by facsimile or other means) or
mailed to it at the appropriate following address:
If to the Company or the Servicer:
Green Tree Financial Corporation
1100 Landmark Towers
345 St. Peter Street
St. Paul, Minnesota 55102-1639
Attention: Chief Financial Officer
Telecopier Number: (651) 293-5746
If to the Trust or Owner Trustee:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
Telecopier Number: 302-651-8882
10-3
<PAGE>
If to the Indenture Trustee:
U.S. Bank Trust National Association
180 East Fifth Street
St. Paul, Minnesota 55101
Attention: Corporate Trust Administration, Structured Finance
Telecopier Number: (651) 244-0089
If to Standard & Poor's:
Standard & Poor's Ratings Services
25 Broadway
New York, New York 10004
Attention: Asset-Backed Surveillance
Telecopier Number: (212) 208-8208
If to Fitch:
Fitch IBCA, Inc.
One State Street Plaza
New York, New York 10004
Attention: ABS Surveillance Group
Telecopier Number: (212) 635-0476
or at such other address as the party may designate by notice to the other
parties hereto, which notice shall be effective when received.
All communications and notices pursuant hereto to a Securityholder
shall be in writing and delivered or mailed at the address shown in the Note
Register or the Certificate Register, as applicable.
SECTION 10.05. 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 10.06. Headings.
The headings herein are for purposes of reference only and shall not
otherwise affect the meaning or interpretation of any provision hereof.
10-4
<PAGE>
SECTION 10.07. Governing Law.
This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of Minnesota.
SECTION 10.08. Limitation of Liability.
It is expressly understood and agreed by the parties hereto that (a)
this Agreement is executed and delivered by Wilmington Trust Company, not
individually or personally but solely as trustee of Green Tree Recreational,
Equipment & Consumer Trust 1998-C under the Trust Agreement, in the exercise of
the powers and authority conferred and vested in it, (b) each of the
representations, undertakings and agreements herein made on the part of the
Trust is made and intended not as personal representations, undertakings and
agreements by Wilmington Trust Company but is made and intended for the purpose
for binding only the Trust, (c) nothing herein contained shall be construed as
creating any liability on Wilmington Trust Company, individually or personally,
to perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the parties hereto and by any
Person claiming by, through or under the parties hereto and (d) under no
circumstances shall Wilmington Trust Company be personally liable for the
payment of any indebtedness or expenses of the Trust or be liable for the breach
or failure of any obligation, representation, warranty or covenant made or
undertaken by the Trust under this Agreement or the other Related Documents.
10-5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized this 28th
day of September, 1998.
ISSUER:
GREEN TREE RECREATIONAL,
EQUIPMENT & CONSUMER TRUST
1998-C
By WILMINGTON TRUST COMPANY, not in its
individual capacity but solely on behalf
of the Issuer as Owner Trustee under the
Trust Agreement
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
SELLER AND SERVICER:
GREEN TREE FINANCIAL
CORPORATION
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
Acknowledged and Accepted:
U.S. BANK TRUST NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Indenture Trustee
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
10-6
<PAGE>
EXHIBIT A
FORM OF ASSIGNMENT
In accordance with the Sale and Servicing Agreement (the "Agreement")
dated as of September 1, 1998 between Green Tree Financial Corporation (the
"Company") and Green Tree Recreational, Equipment & Consumer Trust 1998-C, the
Company does hereby transfer, assign, set over and otherwise convey to the Trust
all right, title and interest of the Company in (i) the retail installment sales
contracts and promissory notes for the purchase of a variety of Products
(collectively, the "Contracts") identified in the List of Contracts, a copy of
which is attached hereto, including, without limitation, all related Collateral
Security, all security interests created thereby and any and all rights to
receive payments which are due pursuant thereto from and after the Cutoff Date,
but excluding any rights to receive payments which were due pursuant thereto
prior to the Cutoff Date, (ii) the Insurance Policies on any Products securing a
Contract for the benefit of the creditor of such Contract and all rights under
all blanket insurance policies to the extent they relate to the Contracts, (iii)
all rights the Company may have against the originating dealer with respect to
Contracts not originated by the Company, (iv) the Errors and Omissions
Protection Policy as such policy relates to the Contracts, (v) all items
contained in the Contract Files, (vi) the Trust Accounts and all funds on
deposit therein from time to time and all investments and proceeds thereof
(including all income thereon), and (vii) all proceeds in any way derived from
any of the foregoing. Capitalized terms used herein but not defined herein have
the meanings assigned to them in the Agreement.
This Assignment is made pursuant to and upon the representation and
warranties on the part of the undersigned contained in Article III of the
Agreement and no others.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed this ____ day of September, 1998.
GREEN TREE FINANCIAL CORPORATION
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
A - 1
<PAGE>
EXHIBIT B
FORM OF CERTIFICATE REGARDING
REPURCHASED CONTRACTS
GREEN TREE FINANCIAL CORPORATION
CERTIFICATE REGARDING REPURCHASED CONTRACTS
The undersigned certifies that he is a [title] of Green Tree Financial
Corporation, a Delaware corporation (the "Company"); he is duly authorized to
execute and deliver this certificate on behalf of the Servicer pursuant to
Section 3.05 of the Sale and Servicing Agreement (the "Agreement"), dated as of
September 1, 1998 between the Company and Green Tree Recreational, Equipment &
Consumer Trust 1998-C (the "Trust") (all capitalized terms used herein without
definition having the respective meanings specified in the Agreement):
1.The Contracts on the attached schedule are to be repurchased
by the [Company] [Servicer] on the date hereof pursuant to Section
[3.05] [5.22] of the Agreement.
2. Upon deposit of the Repurchase Price for such Contracts,
such Contracts may, pursuant to Section [3.05] [5.22] of the Agreement,
be assigned by the Trust to the [Company] [Servicer].
IN WITNESS WHEREOF, I have affixed hereunto my signature this ____ day
of September, 1998.
GREEN TREE FINANCIAL CORPORATION
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
B - 1
<PAGE>
EXHIBIT C
FORM OF MONTHLY REPORT
GREEN TREE RECREATIONAL, EQUIPMENT & CONSUMER TRUST 1998-C
Distribution Date: ________
1. Amount Available _______
(a) Collection Account balance as of last day
of related Monthly Period _______
(b) Payments on account
of principal deposited during _______
first 10 days of current month
(c) Less payments on account of principal
deposited during first 10 days of
preceding month _______
(d) Repurchase Proceeds _______
(e) Servicer Advances _______
(f) Guaranty Payment _______
(g) Self-Insurance Payments _______
(h) Termination Payments _______ _______
(j) Payments on Liquidation of Trust Estate _______
2. Monthly Servicing Fee (if Green Tree is not the
Servicer) _______
3. Servicer Advances reimbursed _______
Senior Note Interest
4. Amount actually distributed on account of Class A-1,
Class A-2, Class A-3, Class A-4 plus Class A-5
interest (current plus carryover) _______
5. Class A-1 Principal Balance _______
6. Class A-1 Interest Amount _______
7. Class A-2 Principal Balance _______
7. Class A-2 Interest Amount _______
8. Class A-3 Principal Balance _______
C - 1
<PAGE>
9. Class A-3 Interest Amount _______
10. Class A-4 Principal Balance _______
11. Class A-4 Interest Amount _______
12. Class A-5 Principal Balance _______
13. Class A-5 Interest Amount _______
14. Amount applied to Class A-1 Interest Amount _______
15. Amount applied to Class A-2 Interest Amount _______
16. Amount applied to Class A-3 Interest Amount _______
17. Amount applied to Class A-4 Interest Amount _______
18. Amount applied to Class A-5 Interest Amount _______
19. Class A-1 Interest Carryover Shortfall _______
20. Amount applied to Unpaid Class A-1 Interest Shortfall _______
21. Remaining Unpaid Class A-1 Interest Shortfall _______
22. Class A-2 Interest Carryover Shortfall _______
23. Amount applied to Unpaid Class A-2 Interest Shortfall _______
24. Remaining Unpaid Class A-2 Interest Shortfall _______
25. Class A-3 Interest Carryover Shortfall _______
26. Amount applied to Unpaid Class A-3 Interest Shortfall _______
27. Remaining Unpaid Class A-3 Interest Shortfall _______
28. Class A-4 Interest Carryover Shortfall _______
29. Amount applied to Unpaid Class A-4 Interest Shortfall _______
30. Remaining Unpaid Class A-4 Interest Shortfall _______
31. Class A-5 Interest Carryover Shortfall _______
C - 2
<PAGE>
32. Amount applied to Unpaid Class A-5 Interest Shortfall _______
33. Remaining Unpaid Class A-5 Interest Shortfall _______
First Priority Principal Distribution Amount
34. Senior Note Principal Balance _______
35. Pool Scheduled Principal Balance for prior
Distribution Date, minus Scheduled Principal Balance
of all Defaulted Contracts _______
36. First Priority Principal Distribution Amount (line 34
minus line 35, but not less than zero) _______
37. Amount actually distributed in respect of First
Priority Principal Distribution Amount (lesser of
line 36 or remaining Amount Available) _______
Class A-6 Interest
38. Amount actually distributed on account of Class A-6
interest (current plus carryover) _______
39. Class A-6 Principal Balance _______
40. Class A-6 Interest Amount _______
41. Amount applied to Class A-6 Interest Amount _______
42. Class A-6 Interest Carryover Shortfall _______
43. Amount applied to Unpaid Class A-6 Interest Shortfall _______
44. Remaining Unpaid Class A-6 Interest Shortfall _______
Second Priority Principal Distribution Amount
45. Senior Note Principal Balance, plus Class A-6
Principal Balance, minus any First Priority Principal
Distribution Amount paid on this Distribution Date _______
46. Pool Scheduled Principal Balance, minus Scheduled
Principal Balance of all Defaulted Contracts _______
C - 3
<PAGE>
47. Second Priority Principal Distribution Amount (line 45
minus line 46, but not less than zero) _______
48. Amount actually distributed in respect of Second
Priority Principal Distribution Amount (lesser of
line 47 or remaining Amount Available) _______
Class A-7 Interest
49. Amount actually distributed on account of Class A-7
interest (current plus carryover) _______
50. Class A-7 Principal Balance _______
51. Class A-7 Interest Amount _______
52. Amount applied to Class A-7 Interest Amount _______
53. Class A-7 Interest Carryover Shortfall _______
54. Amount applied to Unpaid Class A-7 Interest Shortfall _______
55. Remaining Unpaid Class A-7 Interest Shortfall _______
Third Priority Principal Distribution Amount
56. Senior Note Principal Balance, plus Class A-6
Principal Balance, plus Class A-7 Principal Balance,
minus any First Priority Principal Distribution
Amount paid on this Distribution Date, minus any
Second Priority Principal Distribution Amount paid
on this Distribution Date _______
57. Pool Scheduled Principal Balance, minus Scheduled
Principal Balance of all Defaulted Contracts _______
58. Third Priority Principal Distribution Amount (line 56
minus line 57, but not less than zero) _______
C - 4
<PAGE>
59. Amount actually distributed in respect of Third
Priority Principal Distribution Amount (lesser of
line 58 or remaining Amount Available) _______
Class B-1 Interest
60. Amount actually distributed on account of Class B-1
interest (current plus carryover) _______
61. Class B-1 Principal Balance _______
62. Class B-1 Interest Amount _______
63. Amount applied to Class B-1 Interest Amount _______
64. Class B-1 Interest Carryover Shortfall _______
65. Amount applied to Unpaid Class B-1 Interest Shortfall _______
66. Remaining Unpaid Class B-1 Interest Shortfall _______
Fourth Priority Principal Distribution Amount
67. Senior Note Principal Balance, plus Class A-6
Principal Balance, plus Class A-7 Principal Balance,
plus Class B-1 Principal Balance, minus any First
Priority Principal Distribution Amount paid on this
Distribution Date, minus any Second Priority Principal
Distribution Amount paid on this Distribution Date,
minus any Third Priority Principal Distribution Amount
paid on this Distribution Date _______
68. Pool Scheduled Principal Balance, minus Scheduled
Principal Balance of all Defaulted Contracts _______
69. Fourth Priority Principal Distribution Amount (line 67
minus line 68, but not less than zero) _______
70. Amount actually distributed in respect of Fourth
Priority Principal Distribution Amount (lesser of
line 69 or remaining Amount Available) _______
Total Principal Distribution Amount
71. Formula Principal Distribution Amount: _______
(a) Scheduled principal _______
(b) Principal Prepayments _______
C - 5
<PAGE>
(c) Liquidated Contracts _______
(d) Repurchases _______
72. Aggregate of Formula Principal Shortfalls from prior
Distribution Dates _______
73. First Priority Principal Distribution Amount, plus
Second Priority Principal Distribution Amount, plus
Third Priority Principal Distribution Amount, plus
Fourth Priority Principal Distribution Amount, for
this Distribution Date _______
74. Total amounts actually paid in respect of any
First Priority Principal Distribution Amount, plus
any Second Priority Principal Distribution Amount,
plus any Third Priority Principal Distribution Amount,
plus any Fourth Priority Principal Distribution
Amount, for all prior Distribution Dates _______
75. Total Principal Distribution Amount (line 71, plus
line 72, plus line 73, minus line 74) _______
76. Amount actually distributed on account of principal
(lesser of line 75 or remaining Amount Available):
(a) Class A-1 _______
(b) Class A-2 _______
(c) Class A-3 _______
(d) Class A-4 _______
(e) Class A-5 _______
(f) Class A-6 _______
(g) Class A-7 _______
(h) Class B-1 _______
77. Formula Principal Shortfall for this Distribution Date
(line 71 minus line 76, but not less than zero) _______
C - 6
<PAGE>
Class B-2 Certificates
Class B-2 Interest
78. Amount actually distributed on account of Class B-2
interest (current plus carryover) _______
79. Class B-2 Principal Balance _______
80. Class B-2 Interest Amount _______
81. Amount applied to Class B-2 Certificate Interest
Amount _______
82. Class B-2 Interest Carryover Shortfall _______
83. Amount applied to Unpaid Class B-2 Interest
Carryover Shortfall _______
84. Remaining Unpaid Class B-2 Interest
Carryover Shortfall _______
85. Amount of Guaranty Payment in respect of Class B-2
interest _______
Class B-2 Principal
86. Amount actually distributed on account of Class B-2
principal _______
87. Total Principal Distribution Amount (after Class B-1
is retired) _______
88. Class B-2 Liquidation Loss Amount _______
89. Class B-2 Principal Distribution Amount (line 87 plus
line 88) _______
90. Amount of Guaranty Payment in respect of Class B-2
principal _______
C - 7
<PAGE>
Portfolio Information
91. Monthly Servicing and Guaranty Fee _______
92. GTGP Fee _______
93. Pool Scheduled Principal Balance _______
94. Pool Factor
(a) Class A-1 _______
(b) Class A-2 _______
(c) Class A-3 _______
(d) Class A-4 _______
(e) Class A-5 _______
(f) Class A-6 _______
(g) Class A-7 _______
(h) Class B-1 _______
(i) Class B-2 _______
Aggregate Scheduled Balances of delinquent Contracts as of Determination Date
95. 30 - 59 days
(a) Number _______
(b) Aggregate Principal Amount _______
96. 60 - 89 days
(a) Number _______
(b) Aggregate Principal Amount _______
97. 90 days or more
(a) Number _______
(b) Aggregate Principal Amount _______
98. Aggregate Scheduled Balances and number of Contracts
that became Defaulted Contracts this month (by Product
type) _______
99. Aggregate Scheduled Balances and number of all
Defaulted Contracts as of end of month (by Product
type) _______
100. Number of Contracts that became Liquidated Contracts _______
101. Aggregate Amount of Servicer Advances with
respect to current Distribution Date _______
C - 8
<PAGE>
102. Amount paid to Servicer as reimbursement for
prior Servicer Advances _______
The amounts of principal and interest distributions set out above are
expressed as a dollar amount per Note or Certificate with a 1% Class Percentage
Interest or per $1,000 denomination of Note or Certificate.
Please contact ____________________ of U.S. Bank Trust National
Association, ____________________ with any questions regarding this Statement or
your Distribution.
C - 9
<PAGE>
EXHIBIT D
FORM OF CERTIFICATE OF SERVICING OFFICER
GREEN TREE FINANCIAL CORPORATION
The undersigned certifies that he is a [title] of Green Tree Financial
Corporation, a Delaware corporation (the "Servicer"), and that as such he is
duly authorized to execute and deliver this certificate on behalf of the
Servicer pursuant to Section 5.14 of the Sale and Servicing Agreement (the
"Agreement") dated as of , 1998 between the Company and Green Tree Recreational,
Equipment & Consumer Trust 1998-C (all capitalized terms used herein without
definition having the respective meanings specified in the Agreement), and
further certifies that:
1. The Monthly Report for the period from _____________ to
____________ attached to this certificate is complete and accurate in
accordance with the requirements of Section 5.14 of the Agreement; and
2. As of the date hereof, no Event of Termination or event
that with notice or lapse of time or both would become an Event of
Termination has occurred.
IN WITNESS WHEREOF, I have affixed hereunto my signature this day of
September, 1998.
GREEN TREE FINANCIAL CORPORATION
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
D - 1
<PAGE>
Exhibit 4.2
GREEN TREE RECREATIONAL, EQUIPMENT & CONSUMER TRUST 1998-C
TRUST AGREEMENT
Dated as of September 1, 1998
among
GREEN TREE FINANCIAL CORPORATION,
as Depositor
GREEN TREE SECOND GP INC.
and
WILMINGTON TRUST COMPANY,
as Owner Trustee
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I - DEFINITIONS.....................................................1-1
SECTION 1.1. Definitions...........................................1-1
SECTION 1.2. Usage of Terms........................................1-4
SECTION 1.3. Calculations..........................................1-4
SECTION 1.4. Section References....................................1-4
SECTION 1.5. Action by or Consent of Certificateholders............1-4
ARTICLE II - CREATION OF TRUST..............................................2-1
SECTION 2.1. Creation of Trust.....................................2-1
SECTION 2.2. Office................................................2-1
SECTION 2.3. Purposes and Powers...................................2-1
SECTION 2.4. Appointment of Owner Trustee..........................2-2
SECTION 2.5. Initial Capital Contribution of Trust Estate..........2-2
SECTION 2.6. Declaration of Trust..................................2-2
SECTION 2.7. Liability of the Certificateholders...................2-3
SECTION 2.8. Title to Trust Property...............................2-3
SECTION 2.9. Situs of Trust........................................2-3
SECTION 2.10.Representations and Warranties of the Depositor
and GTGP.........................................2-4
SECTION 2.11.Federal Income Tax Allocations........................2-6
SECTION 2.12.Covenants of the General Partner......................2-7
SECTION 2.13.Covenants of the Certificateholders...................2-7
ARTICLE III - THE CERTIFICATES..............................................3-1
SECTION 3.1. Initial Ownership.....................................3-1
SECTION 3.2. The Certificates......................................3-1
SECTION 3.3. Authentication of Certificates........................3-1
SECTION 3.4. Registration of Transfer and Exchange of Certificates.3-1
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen Certificates.....3-3
SECTION 3.6. Persons Deemed Owners.................................3-3
SECTION 3.7. Access to List of Certificateholders' Names and
Addresses........................................3-4
SECTION 3.8. Maintenance of Office or Agency.......................3-4
SECTION 3.9. Appointment of Paying Agent...........................3-4
ARTICLE IV - ACTIONS BY OWNER TRUSTEE.......................................4-1
SECTION 4.1. Restriction on Power of Certificateholders............4-1
SECTION 4.2. Prior Notice to Certificateholders with Respect to
Certain Matters..................................4-1
SECTION 4.3. Action by Certificateholders with Respect to
Bankruptcy.......................................4-1
SECTION 4.4. Restrictions on Certificateholders' Power.............4-1
i
<PAGE>
ARTICLE V - APPLICATION OF TRUST FUNDS; CERTAIN DUTIES.....................5-1
SECTION 5.1. Trust Accounts........................................5-1
SECTION 5.2. Application of Funds in Certificate Distribution
Account..........................................5-2
SECTION 5.3. Method of Payment.....................................5-3
SECTION 5.4. No Segregation of Monies; No Interest.................5-3
SECTION 5.5. Accounting; Reports; Tax Returns......................5-4
ARTICLE VI - AUTHORITY AND DUTIES OF OWNER TRUSTEE..........................6-1
SECTION 6.1. General Authority.....................................6-1
SECTION 6.2. General Duties........................................6-1
SECTION 6.3. Action upon Instruction...............................6-1
SECTION 6.4. No Duties Except as Specified in this Agreement
or in Instructions...............................6-3
SECTION 6.5. No Action Except under Specified Documents or
Instructions.....................................6-3
SECTION 6.6. Restrictions..........................................6-3
SECTION 6.7. Administration Agreement..............................6-4
ARTICLE VII - CONCERNING THE OWNER TRUSTEE..................................7-1
SECTION 7.1. Acceptance of Trust and Duties........................7-1
SECTION 7.2. Furnishing of Documents...............................7-3
SECTION 7.3. Representations and Warranties........................7-3
SECTION 7.4. Reliance; Advice of Counsel...........................7-3
SECTION 7.5. Not Acting in Individual Capacity.....................7-4
SECTION 7.6. Owner Trustee Not Liable for Certificates, Notes or
Contracts........................................7-4
SECTION 7.7. Owner Trustee May Own Certificates and Notes..........7-4
ARTICLE VIII - COMPENSATION OF OWNER TRUSTEE................................8-1
SECTION 8.1. Owner Trustee's Fees and Expenses.....................8-1
SECTION 8.2. Indemnification.......................................8-1
SECTION 8.3. Nonrecourse Obligations...............................8-1
ARTICLE IX - TERMINATION....................................................9-1
SECTION 9.1. Termination of the Trust..............................9-1
SECTION 9.2. Dissolution Events with respect to General Partner....9-2
ARTICLE X - SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES..........10-1
SECTION 10.1. Eligibility Requirements for Owner Trustee...........10-1
SECTION 10.2. Resignation or Removal of Owner Trustee..............10-1
SECTION 10.3. Successor Owner Trustee..............................10-2
SECTION 10.4. Merger or Consolidation of Owner Trustee.............10-2
SECTION 10.5. Appointment of Co-Trustee or Separate Trustee........10-2
ii
<PAGE>
ARTICLE XI - MISCELLANEOUS PROVISIONS.......................................11-1
SECTION 11.1. Amendment............................................11-1
SECTION 11.2. No Recourse..........................................11-2
SECTION 11.3. Governing Law........................................11-2
SECTION 11.4. Severability of Provisions...........................11-2
SECTION 11.5. Certificates Nonassessable and Fully Paid............11-2
SECTION 11.6. Third-Party Beneficiaries............................11-3
SECTION 11.7. Counterparts.........................................11-3
SECTION 11.8. Notices..............................................11-3
EXHIBIT A - CERTIFICATE OF TRUST ..........................................A-1
EXHIBIT B-1 - FORM OF CERTIFICATE..........................................B-1-1
EXHIBIT B-2 - FORM OF CERTIFICATE..........................................B-2-1
EXHIBIT C - FORM OF REPRESENTATION LETTER AND CERTIFICATION................C-1
iii
<PAGE>
THIS TRUST AGREEMENT, dated as of September 1, 1998, is made among
Green Tree Financial Corporation, a Delaware corporation, as depositor (the
"Seller"), Green Tree Second GP Inc., a Minnesota corporation, as General
Partner ("GTGP"), and Wilmington Trust Company, a Delaware banking corporation,
as owner trustee (in such capacity, the "Owner Trustee").
In consideration of the mutual agreements herein contained, and of
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions.
Unless otherwise expressly defined herein, the terms defined in the
Sale and Servicing Agreement (defined below) shall have the same meanings in
this Agreement. Whenever capitalized and used in this Agreement, the following
words and phrases, unless otherwise specified, shall have the following
meanings:
Administration Agreement: The Administration Agreement, dated as of
September 1, 1998, among the Administrator, the Trust, and the Indenture
Trustee, as the same may be amended and supplemented from time to time.
Administrator: Green Tree Financial Servicing Corporation, a Delaware
corporation, or any successor Administrator under the Administration Agreement.
Agreement or this Agreement: This Trust Agreement, all amendments and
supplements thereto and all exhibits and schedules to any of the foregoing.
Authentication Agent: Wilmington Trust Company, or its successor in
interest, and any successor authentication agent appointed as provided in this
Agreement.
Business Trust Statute: Chapter 38 of Title 12 of the Delaware Code, 12
Del. Code ss. 3801 ET SEQ., as the same may be amended from time to time.
Certificates: The Class B-1 Certificates and the Class B-2
Certificates.
Certificate Distribution Account: The account designated as the
Certificate Distribution Account in, and which is established and maintained
pursuant to, Section 5.1.
Certificate of Trust: The Certificate of Trust substantially in the
form of Exhibit A hereto, filed for the Trust pursuant to Section 3810(a) of the
Business Trust Statute.
1-1
<PAGE>
Certificate Register and Certificate Registrar: The register maintained
and the registrar appointed pursuant to Section 3.4.
Certificateholder or Holder: A Person in whose name a Certificate is
registered in the Certificate Register.
Class B-1 Certificates: The Class B-1 Asset-Backed Certificates
evidencing a beneficial interest of an Owner in the Trust, substantially in the
form attached as Exhibit B-1.
Class B-2 Certificates: The Class B-2 Asset-Backed Certificates
evidencing a beneficial interest of an Owner in the Trust, substantially in the
form attached as Exhibit B-2.
Class B-2 Underwriting Agreement: The Underwriting Agreement and
related Terms Agreement, each dated September 15, 1998, by and between Green
Tree and Merrill Lynch, Pierce Fenner & Smith Incorporated, relating to the
Class B-2 Certificates.
Code: The Internal Revenue Code of 1986, as amended.
Corporate Trust Office: The principal office of the Owner Trustee at
which at any particular time its corporate trust business shall be administered,
which office at the Closing Date is located at Rodney Square North, 1100 North
Market Street, Wilmington, Delaware 19890-0001, Attention: Corporate Trust
Administration; the telecopy number for the Corporate Trust Office on the date
of the execution of this Agreement is 302-651-8882.
Depositor: The Seller in its capacity as depositor hereunder.
Dissolution Event: With respect to any General Partner, the withdrawal
or expulsion of such Person as General Partner of the Trust or the termination
or dissolution of such Person, or the occurrence of an Insolvency Event with
respect to such Person.
ERISA: The meaning assigned to such term in Section 3.4(e).
Expenses: The meaning assigned to such term in Section 8.2.
General Partner: GTGP or any subsequent General Partner as permitted by
this Agreement.
GTGP: Green Tree Second GP Inc., a Minnesota corporation.
Green Tree: Green Tree Financial Corporation, a Delaware corporation,
and its successors in interest.
Indemnified Parties: The meaning assigned to such term in Section 8.2.
Insolvency Event: With respect to a specified Person, (a) the
commencement of an involuntary case against such Person under the federal
bankruptcy laws, as now or hereinafter in effect, or another present or future
federal or state bankruptcy, insolvency or similar law, and such
1-2
<PAGE>
case is not dismissed within 60 days; or (b) the filing of a decree or entry of
an order for relief by a court having jurisdiction in the premises in respect of
such Person or any substantial part of its property in an involuntary case under
any applicable federal or state bankruptcy, insolvency or other similar law now
or hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or ordering the winding-up or liquidation of
such Person's affairs; or (c) the commencement by such Person of a voluntary
case under any applicable federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or the consent by such Person to the
entry of an order for relief in an involuntary case under any such law, or the
consent by such Person to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its property, or the making by such
Person of any general assignment for the benefit of creditors, or the failure by
such Person generally to pay its debts as such debts become due, or the taking
of action by such Person in furtherance of any of the foregoing.
Note Depository Agreement: The agreement among the Trust, the Indenture
Trustee, the Administrator and The Depository Trust Company, dated as of the
Closing Date, relating to the Notes, substantially in the form attached as
Exhibit B to the Indenture.
Original Class B-1 Certificate Principal Balance: $16,000,000.
Original Class B-2 Certificate Principal Balance: $36,000,000.
Owner Trustee: Wilmington Trust Company, or its successor in interest,
acting not individually but solely as trustee hereunder, and any successor
trustee appointed as provided in this Agreement.
Paying Agent: Any paying agent or co-paying agent appointed pursuant to
Section 3.9, which initially shall be U.S. Bank Trust National Association.
Record Date: With respect to any Distribution Date, the close of
business on the last Business Day immediately preceding such Distribution Date.
Related Documents: The Sale and Servicing Agreement, the Indenture, the
Certificates, the Notes, the Administration Agreement, the Note Depository
Agreement and the Underwriting Agreements. The Related Documents executed by any
party are referred to herein as "such party's Related Documents," "its Related
Documents" or by a similar expression.
Sale and Servicing Agreement: The Sale and Servicing Agreement, dated
as of September 1, 1998 between the Trust and Green Tree, as Seller and as
Servicer, as the same may be amended and supplemented from time to time.
Secretary of State: The Secretary of State of the State of Delaware.
Seller: Green Tree, or its successor in interest.
1-3
<PAGE>
Servicer's Certificate: The Monthly Report delivered by the Servicer to
the Trust pursuant to Section 5.14 of the Sale and Servicing Agreement.
Trust: The trust created by this Agreement, the estate of which
consists of the Trust Property, which trust shall be known as "Green Tree
Recreational, Equipment & Consumer Trust 1998-C."
Trust Accounts: The Collection Account, the Certificate Distribution
Account and the Note Distribution Account.
Trust Property: The property and proceeds of every description conveyed
pursuant to Section 2.5 hereof and Section 2.01 of the Sale and Servicing
Agreement, together with the Trust Accounts (including all Eligible Investments
therein and all proceeds therefrom).
Underwriters: Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Lehman Brothers Inc., J.P. Morgan Securities Inc. and NationsBanc Montgomery
Securities LLC.
Underwriting Agreement: The Underwriting Agreement and related Terms
Agreement, each dated September 4, 1998, by and among Green Tree and the
Underwriters, relating to the Notes and the Class B-1 Certificates.
Underwriting Agreements: The Underwriting Agreement and the Class B-2
Underwriting Agreement.
Wilmington Trust: Wilmington Trust Company, a Delaware banking
corporation.
SECTION 1.2. Usage of Terms.
With respect to all terms used in this Agreement, the singular includes
the plural and the plural the singular; words importing any gender include the
other genders; references to "writing" include printing, typing, lithography,
and other means of reproducing words in a visible form; references to agreements
and other contractual instruments include all subsequent amendments thereto or
changes therein entered into in accordance with their respective terms and not
prohibited by this Agreement; references to Persons include their permitted
successors and assigns; and the terms "include" or "including" mean "include
without limitation" or "including without limitation." To the extent that
definitions are contained in this Agreement, or in any such certificate or other
document, such definitions shall control.
SECTION 1.3. Calculations.
All calculations of the amount of interest accrued on the Certificates
shall be made on the basis of a 360-day year consisting of twelve 30-day months.
SECTION 1.4. Section References.
All references to Articles, Sections, paragraphs, subsections, clauses,
exhibits and schedules shall be to such portions of this Agreement unless
otherwise specified.
1-4
<PAGE>
SECTION 1.5. Action by or Consent of Certificateholders.
(a) Except as expressly provided herein, any action that may be taken
by the Certificateholders under this Agreement may be taken by a majority of the
Certificateholders voting together. Except as expressly provided herein, any
written notice or consent of the Certificateholders delivered pursuant to this
Agreement shall be effective if signed by Holders of the Certificates evidencing
not less than a Certificate Majority at the time of the delivery of such notice.
(b) Whenever any provision of this Agreement refers to action to be
taken, or consented to, by Certificateholders, such provision shall be deemed to
refer to Certificateholders of record as of the Record Date immediately
preceding the date on which such action is to be taken, or consent given, by
Certificateholders. Solely for the purposes of any action to be taken, or
consented to, by Certificateholders, any Certificate owned by or registered in
the name of GTGP, Green Tree or any Affiliate thereof shall be deemed not to be
outstanding and the Class B-1 Principal Balance or Class B-2 Principal Balance,
as applicable, represented thereby shall not be taken into account in
determining whether the requisite percentage of the Class B-1 or Class B-2
Principal Balance, as applicable, necessary to effect any such action or consent
has been obtained; provided, however, that, solely for the purpose of
determining whether the Owner Trustee is entitled to rely upon any such action
or consent, only Certificates which the Owner Trustee knows to be so owned shall
be so disregarded.
1-5
<PAGE>
ARTICLE II
CREATION OF TRUST
SECTION 2.1. Creation of Trust.
There is hereby formed a trust to be known as "Green Tree Recreational,
Equipment & Consumer Trust 1998-C," in which name the Trust may conduct
business, make and execute contracts and other instruments and sue and be sued.
SECTION 2.2. Office.
The office of the Trust shall be in care of the Owner Trustee at the
Corporate Trust Office or at such other address in Delaware as the Owner Trustee
may designate by written notice to the Certificateholders and the Depositor.
SECTION 2.3. Purposes and Powers.
The sole purpose of the Trust is to conserve the Trust Property and
collect and disburse the periodic income therefrom for the use and benefit of
the Owners and the Noteholders and in furtherance of such purpose the Trust
shall have the power and authority to engage in the following activities:
(i) to issue the Notes pursuant to the Indenture and the Certificates
pursuant to this Agreement and to sell the Notes and the Class B-1 Certificates;
(ii) with the proceeds of the sale of the Notes and the Certificates,
to pay the organizational, start-up and transactional expenses of the Trust and
to pay the balance to the Seller pursuant to the Sale and Servicing Agreement;
(iii) to assign, grant, transfer, pledge, mortgage and convey the Trust
Estate to the Indenture Trustee pursuant to the Indenture for the benefit of the
Noteholders and to hold, manage and distribute to the Certificateholders
pursuant to the terms of the Sale and Servicing Agreement any portion of the
Trust Property released from the lien of, and remitted to the Trust pursuant to,
the Indenture;
(iv) to enter into and perform its obligations under the Related
Documents to which it is or is to be a party;
(v) to engage in those activities, including entering into agreements,
that are necessary, suitable or convenient to accomplish the foregoing or are
incidental thereto or connected therewith; and
(vi) subject to compliance with the Related Documents, to engage in
such other activities as may be required in connection with conservation of the
Trust Property and the making of distributions to the Certificateholders and the
Noteholders.
2-1
<PAGE>
The Trust is hereby authorized to engage in the foregoing activities and any
activities that are necessary or incidental thereto. The Trust shall not engage
in any activity other than in connection with the foregoing or other than as
required or expressly authorized by the terms of this Agreement or the Related
Documents. Similarly, the Owner Trustee shall have no discretionary duties other
than performing those ministerial acts set forth above necessary to accomplish
the purpose of this Trust as set forth in the introductory sentence of this
Section.
SECTION 2.4. Appointment of Owner Trustee.
The Depositor hereby appoints the Owner Trustee as trustee of the Trust
effective as of the date hereof, to have all the rights, powers and duties set
forth herein and in the Business Trust Statute, and the Owner Trustee hereby
accepts such appointment.
SECTION 2.5. Initial Capital Contribution of Trust Estate.
The Depositor hereby sells, assigns, transfers, conveys and sets over
to the Owner Trustee, as of the date hereof, the sum of $10.00. The Owner
Trustee hereby acknowledges receipt in trust from the Depositor, as of the date
hereof, of the foregoing contribution, which shall constitute the initial Trust
Property and shall be deposited in the Certificate Distribution Account. The
Depositor shall pay organizational expenses of the Trust as they may arise or
shall, upon the request of the Owner Trustee, promptly reimburse the Owner
Trustee for any such expenses paid by the Owner Trustee.
SECTION 2.6. Declaration of Trust.
The Owner Trustee hereby declares that it will hold the Trust Property
in trust upon and subject to the conditions set forth herein for the use and
benefit of the Certificateholders, subject to the interests and rights in the
Trust Property granted to other Persons by the Related Documents. It is the
intention and agreement of the parties hereto that the Trust constitute a
business trust under the Business Trust Statute and that this Agreement
constitute the governing instrument of such business trust. It is the intention
and agreement of the parties hereto that, solely for income and franchise tax
purposes, the Trust shall be treated as a partnership, with the assets of the
partnership being the Contracts and other assets held by the Trust, the partners
of the partnership being the Certificateholders and the General Partner, and the
Notes being debt of the partnership. None of the parties hereto shall make the
election provided in Treasury Regulation ss. 301.7701-3(c) to have the Trust
classified as an association taxable as a corporation. The parties agree that,
unless otherwise required by appropriate tax authorities, the Trust will file or
cause to be filed annual or other necessary returns, reports and other forms
consistent with the characterization of the Trust as a partnership for such tax
purposes. On or before the date hereof, the Owner Trustee shall file in the
Office of the Secretary of State the Certificate of Trust required by Section
3810(a) of the Business Trust Statute, to be effective on the Closing Date.
Effective as of the date hereof, the Owner Trustee shall have all rights, powers
and duties set forth herein and in the Business Trust Statute with respect to
accomplishing the purposes of the Trust.
2-2
<PAGE>
SECTION 2.7. Liability of the Certificateholders.
(a) The General Partner shall be liable directly to indemnify each
injured party for all actions, suits, losses, claims, damages, liabilities,
taxes and expenses of the Trust, to the extent not paid out of the Trust
Property, to the extent that such Person would be liable if the Trust were a
partnership under the Delaware Revised Uniform Limited Partnership Act and such
Person were a general partner; provided, however, that the General Partner shall
not be liable for any losses incurred by a Certificateholders in the capacity of
an investor in the Certificates or a Note Owner in the capacity of an investor
in the Notes; provided, further, that the General Partner shall not be liable to
indemnify any injured party if such party has agreed that its recourse against
the Trust for any obligation or liability of the Trust to such party shall be
limited to the assets of the Trust. In addition, any third party creditors of
the Trust (other than in connection with the obligations described in the
provisos to the preceding sentence for which the General Partner shall not be
liable) shall be deemed third party beneficiaries of this paragraph.
(b) No Certificateholder, other than to the extent set forth in
paragraph (a), shall have any personal liability for any liability or obligation
of the Trust or by reason of any action taken by the parties to this Agreement
pursuant to any provisions of this Agreement or any Related Document.
SECTION 2.8. Title to Trust Property.
(a) Legal title to all the Trust Property shall be vested at all times
in the Trust as a separate legal entity except where applicable law in any
jurisdiction requires title to any part of the Trust Property to be vested in a
trustee or trustees, in which case title shall be deemed to be vested in the
Owner Trustee, a co-trustee and/or a separate trustee, as the case may be.
(b) The Certificateholders shall not have legal title to any part of
the Trust Property. The Certificateholders shall be entitled to receive
distributions with respect to their undivided ownership interest therein only in
accordance with Articles V and IX. No transfer, by operation of law or
otherwise, of any right, title or interest by any Certificateholder of its
ownership interest in the Trust Property shall operate to terminate this
Agreement or the trusts hereunder or entitle any transferee to an accounting or
to the transfer to it of legal title to any part of the Trust Property.
SECTION 2.9. Situs of Trust.
The Trust will be located and administered in the State of Delaware.
All bank accounts maintained by the Owner Trustee on behalf of the Trust shall
be located in the State of Delaware or the State of Minnesota. The Trust shall
not have any employees in any state other than Delaware; provided, however, that
nothing herein shall restrict or prohibit the Owner Trustee, the Servicer or any
agent of the Trust from having employees within or without the State of
Delaware. Payments will be received by the Trust only in Delaware, and payments
will be made by the Trust only from Delaware. The only office of the Trust will
be at the Corporate Trust Office in Delaware.
2-3
<PAGE>
SECTION 2.10. Representations and Warranties of the Depositor and GTGP.
(a) By execution of this Agreement, the Depositor makes the following
representations and warranties with respect to itself on which the Owner Trustee
relies in accepting the Trust Property in trust and issuing the Certificates.
(i) Organization and Good Standing. It has been duly organized and is
validly existing as a corporation in good standing under the laws of the State
of Delaware, with power and authority to own its properties and to conduct its
business as such properties are currently owned and as such business is
currently conducted and is proposed to be conducted pursuant to this Agreement
and the Related Documents.
(ii) Due Qualification. It is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals, in all jurisdictions in which the ownership or lease of its
property, the conduct of its business and the performance of its obligations
under this Agreement and the Related Documents requires such qualification.
(iii) Power and Authority; Binding Obligations. It has the power and
authority to execute and deliver this Agreement and its Related Documents and to
perform its obligations pursuant thereto; and the execution, delivery and
performance of this Agreement and its Related Documents have been duly
authorized by all necessary corporate action. When executed and delivered, this
Agreement and the Related Documents will constitute the legal, valid and binding
obligations of the Depositor enforceable in accordance with their terms, except
as enforcement of such terms may be limited by bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally and by the
availability of equitable remedies.
(iv) No Consent Required. No consent, license, approval or
authorization or registration or declaration with any Person or with any
governmental authority, bureau or agency is required in connection with the
execution, delivery or performance of this Agreement and the Related Documents,
except for such as have been obtained, effected or made.
(v) No Violation. The consummation of the transactions contemplated by
this Agreement and the Depositor's Related Documents and the fulfillment of its
obligations under this Agreement and its Related Documents shall not conflict
with, result in any breach of any of the terms and provisions of or constitute
(with or without notice, lapse of time or both) a default under, its certificate
of incorporation or bylaws, or any indenture, agreement, mortgage, deed of trust
or other instrument to which it is a party or by which it is bound, or result in
the creation or imposition of any Lien upon any of its properties pursuant to
the terms of any such indenture, agreement, mortgage, deed of trust or other
instrument, or violate any law, order, rule or regulation applicable to it of
any court or of any federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over it or any of its
properties.
(vi) No Proceedings. There are no proceedings or investigations pending
or, to its knowledge, threatened against it before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality having
jurisdiction over it or its properties (A) asserting the invalidity of this
Agreement or any of the Related Documents, (B) seeking to prevent the issuance
2-4
<PAGE>
of the Certificates or the Notes or the consummation of any of the transactions
contemplated by this Agreement or any of the Related Documents, (C) seeking any
determination or ruling that might materially and adversely affect its
performance of its obligations under, or the validity or enforceability of, this
Agreement or any of the Related Documents, or (D) seeking to adversely affect
the federal income tax or other federal, state or local tax attributes of the
Certificates.
(b) By execution of this Agreement GTGP makes the following
representations and warranties with respect to itself on which the Owner Trustee
relies in accepting the Trust Property in trust and issuing the Certificates.
(i) Organization and Good Standing. It has been duly organized and is
validly existing as a corporation in good standing under the laws of the State
of Minnesota, with power and authority to own its properties and to conduct its
business as such properties are currently owned and as such business is
currently conducted and is proposed to be conducted pursuant to this Agreement
and the Related Documents.
(ii) Due Qualification. It is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals, in all jurisdictions in which the ownership or lease of its
property, the conduct of its business and the performance of its obligations
under this Agreement and the Related Documents requires such qualification.
(iii) Power and Authority; Binding Obligation. It has the power and
authority to execute and deliver this Agreement and its Related Documents and to
perform its obligations pursuant thereto; and the execution, delivery and
performance of this Agreement and its Related Documents have been duly
authorized by all necessary corporate action. When executed and delivered, this
Agreement and the Related Documents will constitute the legal, valid and binding
obligations of GTGP enforceable in accordance with their terms, except as
enforcement of such terms may be limited by bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally and by the
availability of equitable remedies.
(iv) No Consent Required. No consent, license, approval or
authorization or registration or declaration with, any Person or with any
governmental authority, bureau or agency is required in connection with the
execution, delivery or performance of this Agreement and the Related Documents,
except for such as have been obtained, effected or made.
(v) No Violation. The consummation of the transactions contemplated by
this Agreement and GTGP's Related Documents and the fulfillment of its
obligations under this Agreement and its Related Documents shall not conflict
with, result in any breach of any of the terms and provisions of or constitute
(with or without notice, lapse of time or both) a default under, its certificate
of incorporation or bylaws, or any indenture, agreement, mortgage, deed of trust
or other instrument to which it is a party or by which it is bound, or result in
the creation or imposition of any Lien upon any of its properties pursuant to
the terms of any such indenture, agreement, mortgage, deed of trust or other
instrument, or violate any law, order, rule or regulation applicable to it of
any court or of any federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over it or any of its
properties.
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(vi) No Proceedings. There are no proceedings or investigations pending
or, to its knowledge, threatened against it before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality having
jurisdiction over it or its properties (A) asserting the invalidity of this
Agreement or any of the Related Documents, (B) seeking to prevent the issuance
of the Certificates or the Notes or the consummation of any of the transactions
contemplated by this Agreement or any of the Related Documents, (C) seeking any
determination or ruling that might materially and adversely affect its
performance of its obligations under, or the validity or enforceability of, this
Agreement or any of the Related Documents, or (D) seeking to adversely affect
the federal income tax or other federal, state or local tax attributes of the
Certificates.
SECTION 2.11. Federal Income Tax Allocations.
Net income of the Trust for any month as determined for Federal income
tax purposes (and each item of income, gain, loss and deduction entering into
the computation thereof) shall be allocated:
(a) among the Certificateholders as of the first Record Date following
the end of such month, in proportion to their ownership of the sum of the Class
B-1 Principal Balance plus the Class B-2 Principal Balance on such date, an
amount of net income up to the sum of (i) the interest payable in respect of the
Certificates of the applicable class for such month pursuant to Section 5.2(a),
and (ii) the portion of the market discount on the Contracts accrued during such
month that is allocable to the excess of the Original Principal Balance of such
class over their initial aggregate issue price; and
(b) next, to the General Partner to the extent of any remaining net
income.
If the net income of the Trust for any month is insufficient for the allocations
described in clause (a) above, subsequent net income shall first be allocated to
make up such shortfall before being allocated as provided in clause (b). Net
losses of the Trust, if any, for any month as determined for Federal income tax
purposes (and each item of income, gain, loss and deduction entering into the
computation thereof) shall be allocated to the General Partner to the extent the
General Partner is reasonably expected to bear the economic burden of such net
losses, then net losses shall be allocated among the Certificateholders as of
the first Record Date following the end of such month in proportion to their
ownership of principal amount of Certificates on such Record Date until the
total amount of losses allocated to the Certificateholders pursuant to this
Section 2.11 plus the total principal amount distributed to the
Certificateholder(s) equals the sum of the Original Class B-1 Principal Balance
plus the Original Class B-2 Principal Balance, and any remaining net losses
shall be allocated to the General Partner. The General Partner 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 General Partner, the Certificateholders, or to comply with the
provisions of the Code and the accompanying Treasury Regulations.
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SECTION 2.12. Covenants of the General Partner.
The General Partner agrees and covenants for the benefit of each
Certificateholder and the Owner Trustee, during the term of this Agreement, and
to the fullest extent permitted by applicable law, that:
(a) it shall not sell, assign, transfer, give or encumber, by operation
of law or otherwise, in whole or in part, its general partnership interest in
the Trust;
(b) it shall not create, incur or suffer to exist any indebtedness or
engage in any business, except, in each case, as permitted by its articles of
incorporation and the Related Documents;
(c) it shall not, for any reason, institute proceedings for the Trust
to be adjudicated a bankrupt or insolvent, or consent to the institution of
bankruptcy or insolvency proceedings against the Trust, or file a petition
seeking or consenting to reorganization or relief under any applicable federal
or state law relating to the bankruptcy of the Trust, or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Trust or a substantial part of the property of the
Trust or cause or permit the Trust to make any assignment for the benefit of
creditors, or admit in writing the inability of the Trust to pay its debts
generally as they become due, or declare or effect a moratorium on the debt of
the Trust or take any action in furtherance of any such action;
(d) it shall obtain from each counterparty to each Related Document to
which it or the Trust is a party and each other agreement entered into on or
after the date hereof to which it or the Trust is a party, an agreement by each
such counterparty that prior to the occurrence of the event specified in Section
9.1(e) such counterparty shall not institute against, or join any other Person
in instituting against, it or the Trust, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceedings
under the laws of the United States or any state of the United States; and
(e) it shall not, for any reason, withdraw or attempt to withdraw from
this Agreement, dissolve, institute proceedings for it to be adjudicated a
bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency
proceedings against it, or file a petition seeking or consenting to
reorganization or relief under any applicable federal or state law relating to
bankruptcy, or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of it or a substantial part of
its property, or make any assignment for the benefit of creditors, or admit in
writing its inability to pay its debts generally as they become due, or declare
or effect a moratorium on its debt or take any action in furtherance of any such
action.
SECTION 2.13. Covenants of the Certificateholders.
Each Certificateholder by becoming a Certificateholder agrees:
(a) to be bound by the terms and conditions of the Certificates and of
this Agreement, including any supplements or amendments hereto and to perform
the obligations of a Certificateholder as set forth therein or herein, in all
respects as if it were a signatory hereto. This
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undertaking is made for the benefit of the Trust, the Owner Trustee and all
other Certificateholders present and future.
(b) to hereby appoint the General Partner as such Certificateholder's
agent and attorney-in-fact to sign any federal income tax information return
filed on behalf of the Trust and agree that, if requested by the Trust, it will
sign such federal income tax information return in its capacity as holder of an
interest in the Trust. Each Certificateholder also hereby agrees that in its tax
returns it will not take any position inconsistent with those taken in any tax
returns filed by the Trust.
(c) if such Certificateholder is other than an individual or other
entity holding its Certificate through a broker who reports securities sales on
Form 1099-B, to notify the Owner Trustee of any transfer by it of a Certificate
in a taxable sale or exchange, within 30 days of the date of the transfer.
(d) until the completion of the events specified in Section 9.1(e),
not, for any reason, to institute proceedings for the Trust, the Seller or the
General Partner to be adjudicated a bankrupt or insolvent, or consent to the
institution of bankruptcy or insolvency proceedings against the Trust, the
Seller or the General Partner, or file a petition seeking or consenting to
reorganization or relief under any applicable federal or state law relating to
bankruptcy, or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of the Trust, the Seller or
the General Partner or a substantial part of its property, or cause or permit
the Trust, the Seller or the General Partner to make any assignment for the
benefit of its creditors, or admit in writing its inability to pay its debts
generally as they become due, or declare or effect a moratorium on its debt or
take any action in furtherance of any such action.
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ARTICLE III
THE CERTIFICATES
SECTION 3.1. Initial Ownership.
Upon the formation of the Trust by the contribution by the Depositor
pursuant to Section 2.5 and until the issuance of the Certificates, the
Depositor shall be the sole beneficiary of the Trust.
SECTION 3.2. The Certificates.
Class B-1 Certificates, in an aggregate principal amount of
$16,000,000, and Class B-2 Certificates, in an aggregate principal amount of
$36,000,000, shall be issued in denominations of $1,000 initial principal amount
and integral multiples thereof. The Certificates shall be executed on behalf of
the Trust by manual or facsimile signature of any authorized signatory of the
Owner Trustee having such authority under the Owner Trustee's seal imprinted or
otherwise affixed thereon and attested on behalf of the Owner Trustee by the
manual or facsimile signature of any authorized signatory of the Owner Trustee.
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures were affixed, authorized to sign on behalf of
the Owner Trustee shall be validly issued and entitled to the benefits of this
Agreement, notwithstanding that such individuals or any of them have ceased to
be so authorized prior to the authentication and delivery of such Certificates.
SECTION 3.3. Authentication of Certificates.
Simultaneously with the sale, assignment and transfer to the Trust of
the Contracts and the delivery to the Trust of the Contract Files and the other
Trust Property pursuant to the Sale and Servicing Agreement, the Owner Trustee
shall cause Class B-1 Certificates in authorized denominations in an aggregate
principal amount equal to the Original Class B-1 Certificate Principal Balance,
and Class B-2 Certificates in authorized denominations in an aggregate principal
amount equal to the Original Class B-2 Principal Balance to be executed on
behalf of the Trust, authenticated and delivered to or upon the order of the
Depositor. No Certificate shall entitle its Holder to any benefit under this
Agreement, or shall be valid for any purpose, unless there shall appear on such
Certificate a certificate of authentication substantially in the form set forth
in Exhibit B-1 or B-2, as applicable, executed by the Owner Trustee or the
Authentication Agent, by manual or facsimile signature; such authentication
shall constitute conclusive evidence that such Certificate shall have been duly
authenticated and delivered hereunder. Wilmington Trust Company is hereby
initially appointed Authentication Agent. All Certificates shall be dated the
date of their authentication.
SECTION 3.4. Registration of Transfer and Exchange of Certificates.
(a) The Certificate Registrar shall maintain, or cause to be
maintained, at the office or agency maintained pursuant to Section 3.8, a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Owner Trustee shall provide for the registration of Certificates
and of transfers and exchanges of Certificates as provided in this Agreement.
The
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Owner Trustee is hereby initially appointed Certificate Registrar for the
purpose of registering Certificates and transfers and exchanges of Certificates
as provided in this Agreement.
(b) Upon surrender for registration of transfer of any Certificate at
the office or agency maintained pursuant to Section 3.8, the Owner Trustee shall
execute, authenticate and deliver (or shall cause the Authentication Agent to
authenticate and deliver), in the name of the designated transferee or
transferees, one or more new Certificates in authorized denominations of a like
class and aggregate proportion of the Class B-1 Principal Balance or the Class
B-2 Principal Balance, as applicable, dated the date of authentication by the
Owner Trustee or any authenticating agent. At the option of a Holder,
Certificates may be exchanged for other Certificates of the same class in
authorized denominations of a like aggregate amount upon surrender of the
Certificates to be exchanged at the office or agency maintained pursuant to
Section 3.8.
(c) Every Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by (i) a written instrument of
transfer in form satisfactory to the Owner Trustee and the Certificate
Registrar, duly executed by the Holder or his attorney duly authorized in
writing, and (ii) a representation letter and certification in the form of
Exhibit C hereto, duly executed by the transferee Holder. Each Certificate
surrendered for registration of transfer or exchange shall be canceled and
subsequently disposed of by the Owner Trustee in accordance with its customary
practice.
(d) No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Owner Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
(e) The Certificates may not be acquired by or for the account of (i)
an employee benefit plan (as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")) that is subject to the
provisions of Title 1 of ERISA, (ii) a plan described in Section 4975(e)(1) of
the Internal Revenue Code of 1985, as amended, or (iii) any entity whose
underlying assets include "plan assets" (within the meaning of Department of
Labor ("DOL") Regulation Section 2510.3-101, 29 C.F.R. ss. 2510.3-101 or
otherwise under ERISA) by reason of a plan's investment in the entity,
including, without limitation, an insurance company acting on behalf of its
general account; provided, however, that a Certificate or an interest therein
may be transferred to an insurance company acting on behalf of its general
account if such insurance company represents and covenants in writing to the
Company, the Owner Trustee, the Underwriters and the Servicer that (i) on the
date of such transfer, less than 25% of the assets of such general account (as
reasonably determined by such insurance company) constitute "plan assets" for
purposes of Title I of ERISA and Section 4975 of the Code, (ii) the purchase and
holding of such Certificate are eligible for exemptive relief under Sections (1)
and (3) of Prohibited Transaction Class Exemption 95-60 and (iii) if, after the
initial acquisition of such Certificate, at any time during any calendar quarter
25% or more of the assets of such general account (as reasonably determined by
such insurance company no less frequently than each calendar quarter) constitute
"plan assets" for purposes of Title I of ERISA or Section 4975 of the Code and
no exemption or exception from the prohibited transaction rules applies to the
continued holding of such Certificate under Section 401(c) of ERISA and the
final regulations thereunder or under an exemption or regulation issued by the
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DOL under ERISA, then such insurance company will dispose of all of the
Certificates then held in its general account by the end of the next following
calendar quarter.
(f) Notwithstanding anything contained herein to the contrary, the
Owner Trustee and the Certificate Registrar shall not be responsible for
ascertaining whether any transfer complies with the registration provisions or
exemptions from the Securities Act of 1933, as amended, the Securities and
Exchange Act of 1934, as amended, applicable state securities law or the
Investment Company Act of 1940, as amended, or the exemption provisions of
ERISA; provided, however, that if a certificate is specifically required to be
delivered to the Owner Trustee by a purchaser or transferee of a Certificate,
the Owner Trustee shall be under a duty to examine the same to determine whether
it conforms to the requirements of this Agreement and shall promptly notify the
party delivering the same if such certificate does not so conform.
(g) Notwithstanding the preceding provisions of this Section, the Owner
Trustee shall not be required to make, and the Certificate Registrar shall not
be required to register, transfers or exchanges of Certificates for a period of
15 days preceding the due date for any payment with respect to the Certificate.
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Certificate
Registrar, or the Certificate Registrar receives evidence to its satisfaction of
the destruction, loss or theft of any Certificate, and (b) there is delivered to
the Certificate Registrar and the Owner Trustee such security or indemnity as
may be required by them to save each of them harmless, then, in the absence of
notice to the Certificate Registrar or the Owner Trustee that such Certificate
has been acquired by a bona fide purchaser, the Owner Trustee on behalf of the
Trust shall execute, authenticate and deliver (or the Authentication Agent shall
authenticate and deliver), in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like tenor and
portion of Certificate Principal Balance. In connection with the issuance of any
new Certificate under this Section 3.5, the Owner Trustee may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Owner Trustee and the Certificate Registrar) connected
therewith. Any duplicate Certificate issued pursuant to this Section 3.5 shall
constitute conclusive evidence of ownership in the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Certificate shall be found
at any time.
SECTION 3.6. Persons Deemed Owners.
Prior to due presentation of a Certificate for registration of
transfer, the Owner Trustee, the Certificate Registrar and any agent of the
Owner Trustee or the Certificate Registrar may treat the person in whose name
any Certificate is registered as the owner of such Certificate for the purpose
of receiving distributions pursuant to Section 5.2 and for all other purposes
whatsoever, and neither the Owner Trustee, the Certificate Registrar nor any
agent of the Owner Trustee or the Certificate Registrar shall be affected by any
notice to the contrary.
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SECTION 3.7. Access to List of Certificateholders' Names and Addresses.
The Owner Trustee shall furnish or cause to be furnished to the
Servicer, within 15 days after receipt by the Owner Trustee of a written request
therefor, a list, in such form as the Servicer may reasonably require, of the
names and addresses of the Certificateholders as of the most recent Record Date
for payment of distributions to Certificateholders. If three or more
Certificateholders of a Class, or one or more Certificateholders evidencing not
less than 25% of the Class B-1 Principal Balance or the Class B-2 Principal
Balance (hereinafter referred to as "Applicants"), apply in writing to the Owner
Trustee, and such application states that the Applicants desire to communicate
with other Certificateholders with respect to their rights under this Agreement
or under the Certificates and is accompanied by a copy of the communication that
such Applicants propose to transmit, then the Owner Trustee shall, within five
Business Days after the receipt of such application, afford such Applicants
access, during normal business hours, to the current list of Certificateholders.
Every Certificateholder, by receiving and holding a Certificate, agrees that
none of the Servicer or the Owner Trustee, nor any agent thereof, shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Certificateholders under this Agreement, regardless of the
source from which such information was derived.
SECTION 3.8. Maintenance of Office or Agency.
The Owner Trustee shall maintain in Wilmington, Delaware, an office or
offices or agency or agencies where Certificates may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Owner Trustee in respect of the Certificates and the Related Documents may
be served. The Owner Trustee initially designates its Corporate Trust Office for
such purposes. The Owner Trustee shall give prompt written notice to the
Depositor and to the Certificateholders of any change in the location of the
Certificate Register or any such office of agency.
SECTION 3.9. Appointment of Paying Agent.
The Paying Agent shall make distributions to Certificateholders from
the Certificate Distribution Account pursuant to Section 5.2 and shall report
the amounts of such distributions to the Owner Trustee. Any Paying Agent shall
have the revocable power to withdraw funds from the Certificate Distribution
Account for the purpose of making the distributions referred to above. The Owner
Trustee may revoke such power and remove the Paying Agent if the Owner Trustee
determines in its sole discretion that the Paying Agent shall have failed to
perform its obligations under this Agreement in any material respect. The Paying
Agent shall initially be U.S. Bank Trust National Association. U.S. Bank Trust
National Association shall be permitted to resign as Paying Agent upon 30 days'
written notice to the Owner Trustee. In the event that U.S. Bank Trust National
Association shall no longer be the Paying Agent, the Owner Trustee shall appoint
a successor to act as Paying Agent (which shall be a bank or trust company). The
Owner Trustee shall cause such successor Paying Agent or any additional Paying
Agent appointed by the Owner Trustee to execute and deliver to the Owner Trustee
an instrument in which such successor Paying Agent or additional Paying Agent
shall agree with the Owner Trustee that as Paying Agent, such successor Paying
Agent or additional Paying Agent will hold all sums, if any, held by it for
payment to the Certificateholders in trust for the benefit of the
Certificateholders entitled thereto until such sums shall be paid to such
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Certificateholders. The Paying Agent shall return all unclaimed funds to the
Owner Trustee, and upon removal of a Paying Agent, such Paying Agent shall also
return all funds in its possession to the Owner Trustee. The provisions of
Sections 7.1, 7.3, 7.4 and 8.1 shall apply to the Owner Trustee also in its role
as Paying Agent for so long as the Owner Trustee shall act as Paying Agent and,
to the extent applicable, to any other Paying Agent appointed hereunder. Any
reference in this Agreement to the Paying Agent shall include any co-paying
agent unless the context requires otherwise.
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ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.1. Restriction on Power of Certificateholders.
No Certificateholder shall have any right to vote or in any manner
otherwise control the operation and management of the Trust except as expressly
provided in this Agreement.
SECTION 4.2. Prior Notice to Certificateholders with Respect to Certain
Matters.
The Owner Trustee shall not take any of the following actions, unless
at least 30 days (or such shorter period as shall be required under the
circumstances) before the taking of such action, the Owner Trustee shall have
notified the Certificateholders in writing of the proposed action and the
Certificateholders shall not have notified the Owner Trustee in writing prior to
the 30th day after such notice is given that such Certificateholders have
withheld consent or provided alternative direction:
(a) the election by the Trust to file an amendment to the Certificate
of Trust unless such amendment is required to be filed under the Business Trust
Statute or unless such amendment would not materially and adversely affect the
interests of the Certificateholders;
(b) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required unless such
amendment would not materially and adversely affect the interests of the
Certificateholders; or
(c) the amendment, change or modification of the Administration
Agreement, unless such amendment would not materially and adversely affect the
interests of the Certificateholders.
SECTION 4.3. Action by Certificateholders with Respect to Bankruptcy.
The Owner Trustee shall not have the power to commence a voluntary
proceeding in bankruptcy relating to the Trust without the unanimous prior
approval of all Certificateholders and the delivery to the Owner Trustee by each
such Certificateholder of a certificate certifying that such Certificateholder
reasonably believes that the Trust is insolvent.
SECTION 4.4. Restrictions on Certificateholders' Power.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action, or
proceeding in equity or at law upon or under or with respect to this Agreement
or any Related Document, unless the Certificateholders are the instructing party
pursuant to Section 6.3 and unless a Certificateholder previously shall have
given to the Owner Trustee a written notice of default and of the continuance
thereof, as provided in this Agreement and unless Holders of Certificates
evidencing in the aggregate not less than 25% of the sum of the Class B-1
Principal Balance and the Class B-2 Principal Balance shall have made written
request upon the Owner Trustee to institute such action, suit or proceeding in
its own name as Owner Trustee under
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this Agreement and shall have offered to the Owner Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Owner Trustee, for 30 days after its
receipt of such notice, request, and offer of indemnity, shall have neglected or
refused to institute any such action, suit, or proceeding, and during such
30-day period no request or waiver inconsistent with such written request has
been given to the Owner Trustee pursuant to and in compliance with this Section
or Section 6.3; it being understood and intended, and being expressly covenanted
by each Certificateholder with every other Certificateholder and the Owner
Trustee, that no one or more Holders of Certificates shall have any right in any
manner whatever by virtue or by availing itself or themselves of any provisions
of this Agreement to affect, disturb, or prejudice the rights of the Holders of
any other of the Certificates, or to obtain or seek to obtain priority over or
preference to any other such Holder, or to enforce any right under this
Agreement, except in the manner provided in this Agreement and for the equal,
ratable, and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section 4.4, each and every
Certificateholder and the Owner Trustee shall be entitled to such relief as can
be given either at law or in equity.
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ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
SECTION 5.1. Trust Accounts.
(a) On or prior to the Closing Date, the Depositor shall cause the
Servicer to establish the Certificate Distribution Account in the name of the
Owner Trustee for the benefit of the Certificateholders as provided in Section
6.01(c) of the Sale and Servicing Agreement. The Certificate Distribution
Account shall be an Eligible Account and initially shall be a segregated trust
account established with the Indenture Trustee and maintained with the Indenture
Trustee, so long as the Indenture Trustee is acting as Paying Agent under
Section 3.9.
(b) The Owner Trustee shall possess all right, title and interest in
all funds on deposit from time to time in the Certificate Distribution Account
and in all proceeds thereof. If, at any time, the Certificate Distribution
Account ceases to be an Eligible Account, the Owner Trustee shall within 5
Business Days (or such longer period, not to exceed 30 calendar days, as to
which each Rating Agency may consent) establish a new Certificate Distribution
Account as an Eligible Account and shall transfer any cash and/or any
investments to such new Certificate Distribution Account.
(c) All amounts held in the Certificate Distribution Account shall, to
the extent permitted by applicable laws, rules and regulations, be invested by
the Owner Trustee in Eligible Investments as provided in Section 6.01 of the
Sale and Servicing Agreement and pursuant to the written instructions of the
Administrator that mature not later than one Business Day prior to the
Distribution Date for the Monthly Period to which such amounts relate.
Investments in Eligible Investments shall be made in the name of the Trust, and
such investments shall not be sold or disposed of prior to their maturity. Any
investment of funds in the Certificate Distribution Account shall be made in
Eligible Investments held by a financial institution with respect to which (a)
such institution has noted the Owner Trustee's interest therein by book entry or
otherwise and (b) a confirmation of the Owner Trustee's interest has been sent
to the Owner Trustee by such institution, provided that such Eligible
Investments are (i) specific certificated securities, and (ii) either (A) in the
possession of such institution or (B) in the possession of a clearing
corporation in New York or Delaware, registered in the name of such clearing
corporation, not endorsed for collection or surrender or any other purpose not
involving transfer, not containing any evidence of a right or interest
inconsistent with the Owner Trustee's security interest therein, and held by
such clearing corporation in an account of such institution. Subject to the
other provisions hereof, the Owner Trustee shall have sole control over each
such investment and the income thereon, and any certificate or other instrument
evidencing any such investment, if any, shall be delivered directly to the Owner
Trustee or its agent, together with each document of transfer, if any, necessary
to transfer title to such investment to the Owner Trustee in a manner which
complies with this Section 5.1. All interest, dividends, gains upon sale and
other income from, or earnings on investment of funds in the Certificate
Distribution Account shall be distributed on the next Distribution Date pursuant
to Section 5.2(a). The Seller shall deposit in the Certificate Distribution
Account an amount equal to any net loss on such investments immediately as
realized.
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SECTION 5.2. Application of Funds in Certificate Distribution Account.
(a) On each Distribution Date the Owner Trustee or the Paying Agent
will, based on the information contained in the Servicer's Certificate delivered
on the related Determination Date pursuant to Section 5.14 of the Sale and
Servicing Agreement, distribute to Certificateholders, on a pro rata basis to
the extent of the funds available, amounts deposited in the Certificate
Distribution Account in the amounts and in the priority set forth below:
1. To the holders of the Class B-1 Certificates, the Class B-1 Interest
Amount and any Unpaid Class B-1 Interest Shortfall.
2. To the holders of the Class B-1 Certificates, any Fourth Priority
Principal Distribution Amount.
3. To the holders of the Class B-1 Certificates, the Total Principal
Distribution Amount, to the extent deposited in the Certificate Distribution
Account, but in no event more than the Class B-1 Principal Balance.
4. To the holders of the Class B-2 Certificates, the Class B-2 Interest
Amount and any Unpaid Class B-2 Interest Shortfall.
5. To the holders of the Class B-2 Certificates, the Class B-2
Principal Distributable Amount.
(b) On the Distribution Date following the date on which amounts
received in respect of the Seller's or the Servicer's exercise of its option to
purchase the corpus of the Trust pursuant to Section 8.01 of the Sale and
Servicing Agreement, or pursuant to the auction of the Contracts as described in
Section 10.04 of the Indenture or Section 9.3 of this Agreement, are deposited
in the Certificate Distribution Account, the Owner Trustee or the Paying Agent
will distribute such amounts to Certificateholders in the manner described in
Section 5.2(a).
(c) On the Distribution Date on which proceeds are deposited in the
Certificate Distribution Account pursuant to Section 8.02 of the Sale and
Servicing Agreement (or on the Distribution Date immediately following such
deposit if such proceeds are not deposited in the Certificate Distribution
Account on a Distribution Date), the Owner Trustee will distribute the proceeds
so deposited in the Certificate Distribution Account to Certificateholders in
the manner described in Section 5.2(a).
(d) On the Distribution Date following the date on which the Indenture
Trustee makes payments of money or property in respect of liquidation of the
Trust Property pursuant to Section 5.06 of the Indenture and deposits funds
received in connection with such liquidation in the Certificate Distribution
Account, the Owner Trustee will distribute such funds to Certificateholders in
the manner described in Section 5.2(a).
(e) On each Distribution Date, the Owner Trustee shall send to each
Certificateholder the statement required pursuant to Section 6.08 of the Sale
and Servicing Agreement.
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(f) The Owner Trustee agrees, to the extent required by the Internal
Revenue Code, and applicable federal regulations promulgated thereunder, as the
same may be amended from time to time (collectively, the "Code"), to withhold
from each payment due hereunder or under any Certificate, United States
withholding taxes at the appropriate rate, and, on a timely basis, to deposit
such amounts with an authorized depository and make such returns, filings and
other reports in connection therewith as are required of it under the Code. Any
Certificateholder which is eligible for an exemption from or reduction of
withholding of United States federal income taxes shall, from time to time,
provide to the Owner Trustee in a timely manner all appropriate and properly
completed forms indicating such eligibility, as may be necessary to permit the
Owner Trustee not to withhold taxes from payments due to such Certificateholder.
In connection with the foregoing, the Owner Trustee shall promptly furnish to
each Certificateholder in a timely fashion such U.S. Treasury forms as are
required by the Code to be furnished to such Certificateholder indicating
payment of any taxes withheld from any payments by the Owner Trustee to such
Certificateholder. The Owner Trustee shall be fully protected in relying upon,
and each Certificateholder by its acceptance of a Certificate hereunder agrees
to indemnify and hold the Owner Trustee harmless against all claims or liability
of any kind arising in connection with or related to the Owner Trustee's
reliance upon any documents, forms or information provided by any
Certificateholder to the Owner Trustee. In addition, if the Owner Trustee has
not withheld taxes on any payment made to any Certificateholder, and the Owner
Trustee is subsequently required to remit to any taxing authority any such
amount not withheld, such Certificateholder shall return such amount to the
Owner Trustee upon written demand by the Owner Trustee. In no event shall the
Owner Trustee be liable for consequential damages to any Certificateholder.
(g) Any funds remaining in the Certificate Distribution Account after
distribution of all amounts specified in this Section 5.2 shall be distributed
to the General Partner.
SECTION 5.3. Method of Payment.
Subject to Section 9.1(c), distributions required to be made to
Certificateholders on any Distribution Date shall be made to each
Certificateholder of record on the preceding Record Date either by wire
transfer, in immediately available funds, to the account of such Holder at a
bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have provided to the Certificate Registrar appropriate
written instructions at least five Business Days prior to such Distribution Date
and such Holder's Certificates in the aggregate evidence a denomination of not
less than $1,000,000, or, if not, by check mailed to such Certificateholder at
the address of such holder appearing in the Certificate Register.
SECTION 5.4. No Segregation of Monies; No Interest.
Subject to Sections 5.1 and 5.2, monies received by the Owner Trustee
hereunder need not be segregated in any manner except to the extent required by
law or by the Sale and Servicing Agreement and may be deposited under such
general conditions as may be prescribed by law, and the Owner Trustee shall not
be liable for any interest thereon.
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SECTION 5.5. Accounting; Reports; Tax Returns.
(a) The Administrator has agreed pursuant to the Administration
Agreement that the Administrator shall (i) maintain (or cause to be maintained)
the books of the Trust on a calendar year basis on the accrual method of
accounting, (ii) deliver to each Certificateholder and the General Partner, as
may be required by the Code and applicable Treasury Regulations, such
information as may be required (including Schedule K-1) to enable each
Certificateholder and the General Partner to prepare its Federal and state
income tax returns, (iii) obtain a federal tax identification number for the
Trust, and file or cause to be filed such tax returns relating to the Trust
(including a partnership information return, Form 1065), and direct the Owner
Trustee to make such elections as may from time to time be required or
appropriate under any applicable state or Federal statute or rule or regulation
thereunder so as to maintain the Trust's characterization as a partnership for
Federal income tax purposes, (iv) collect or cause to be collected any
withholding tax as described in and in accordance with Section 5.2(f) with
respect to income or distributions to Certificateholders and (v) file or cause
to be filed all documents required to be filed by the Trust with the Commission
and otherwise take or cause to be taken all such actions as are notified by the
Servicer to the Administrator as being required for the Trust's compliance with
all applicable provisions of state and federal securities laws.
(b) The Owner Trustee shall make all elections pursuant to this Section
5.5 as directed in writing by the General Partner. The Owner Trustee shall elect
under Section 1278 of the Code to include in income currently any market
discount that accrues with respect to the Contracts. The Owner Trustee shall not
make the election provided under Section 754 of the Code.
(c) The Owner Trustee shall sign on behalf of the Trust the tax returns
of the Trust, unless applicable law requires a Certificateholder or the General
Partner to sign such documents, in which case such documents shall be signed by
the General Partner. In signing any tax return of the Trust, the Owner Trustee
shall rely entirely upon, and shall have no liability for, information or
calculations provided by the General Partner.
(d) The General Partner shall be the "tax matters partner" of the Trust
pursuant to the Code.
(e) None of the parties hereto shall make the election provided in
Treasury Regulation ss. 301.7701-3(c) to have the Trust classified as an
association taxable as a corporation.
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ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.1. General Authority.
The Owner Trustee is authorized and directed to execute and deliver the
Related Documents to which the Trust is to be a party and each certificate or
other document attached as an exhibit to or contemplated by the Related
Documents to which the Trust is to be a party and any amendment thereto, and on
behalf of the Trust, to direct the Indenture Trustee to authenticate and deliver
the Class A-1 Notes in the aggregate principal amount of 122,000,000, the Class
A-2 Notes in the aggregate principal amount of $193,000,000, the Class A-3 Notes
in the aggregate principal amount of $150,000,000, the Class A-4 Notes in the
aggregate principal amount of $111,000,000, the Class A-5 Notes in the aggregate
principal amount of $104,000,000, the Class A-6 Notes in the aggregate principal
amount of $36,000,000 and the Class A-7 Notes in the aggregate principal amount
of $32,000,000. In addition to the foregoing, the Owner Trustee is authorized,
but shall not be obligated, to take all actions required of the Trust pursuant
to the Related Documents. The Owner Trustee is further authorized, on behalf of
the Trust, to enter into the Administration Agreement, to appoint a successor
Administrator and to take from time to time such action as the General Partner
recommends with respect to the Related Documents so long as such actions are
consistent with the terms of the Related Documents.
SECTION 6.2. General Duties.
It shall be the duty of the Owner Trustee to discharge (or cause to be
discharged through the Administrator or such agents as shall be appointed) all
of its responsibilities pursuant to the terms of this Agreement and the Related
Documents and to administer the Trust in the interest of the Certificateholders,
subject to the Related Documents and in accordance with the provisions of this
Agreement. The Owner Trustee undertakes to perform such duties, and only such
duties, as are specifically set forth in this Agreement or as it shall be
directed in writing by the instructing party. No implied covenants or agreements
shall be read into this Agreement. Notwithstanding the foregoing, the Owner
Trustee shall be deemed to have discharged its duties and responsibilities
hereunder and under the Related Documents to the extent the Administrator has
agreed in the Administration Agreement to perform any act or to discharge any
duty of the Owner Trustee hereunder or under any Related Document, and the Owner
Trustee shall not be liable for the default or failure of the Administrator to
carry out its obligations under the Administration Agreement.
SECTION 6.3. Action upon Instruction.
(a) Subject to Article IV, the Certificateholders shall have the
exclusive right to direct the actions of the Owner Trustee in the management of
the Trust, so long as such instructions are not inconsistent with the express
terms set forth herein or in any Related Document. The Certificateholders shall
not instruct the Owner Trustee in a manner inconsistent with this Agreement or
the Related Documents.
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(b) The Owner Trustee shall not be required to take any action
hereunder or under any Related Document if the Owner Trustee shall have
reasonably determined, or shall have been advised by counsel, that such action
is contrary to the terms hereof or of any Related Document or is otherwise
contrary to law.
(c) No provision of this Agreement shall require the Owner Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of its duties hereunder or in the exercise of any of its rights or
powers if it shall have reasonable grounds to believe that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
(d) In accepting the trusts hereby created, the Owner Trustee acts
solely as trustee hereunder and not in its individual capacity. The Owner
Trustee agrees to disburse all moneys actually received by it constituting part
of the Trust Property upon the terms of this Agreement. Notwithstanding anything
in this Agreement to the contrary, the Owner Trustee, when acting in such
capacity, shall not be personally liable or accountable to any Person, under any
circumstances, except by reason of its gross negligence, willful misconduct or
breach of its representations, warranties or covenants.
(e) The Owner Trustee shall be under no liability (except as provided
in (d) above) for any action taken by the Owner Trustee in good faith in
reliance upon any paper, order, list, demand, request, consent, affidavit,
notice, opinion, direction, endorsement, assignment, resolution, draft or other
document, believed by it to be genuine and to have been signed by the proper
party or parties or for the disposition of moneys or Trust Property pursuant to
this Agreement. As to any fact or matter, the manner of ascertainment of which
is not specifically prescribed herein, the Owner Trustee may for all purposes
hereof rely on a certificate, signed by the president or any vice president or
by the treasurer or other authorized officer of the relevant party, as to such
fact or matter, and such certificate shall constitute full protection to the
Owner Trustee for any action taken or omitted to be taken by it in good faith in
reliance thereon.
(f) Whenever the Owner Trustee is unable to decide between alternative
courses of action permitted or required by the terms of this Agreement or any
Related Document, the Owner Trustee shall promptly give notice (in such form as
shall be appropriate under the circumstances) to the Certificateholders
requesting instruction as to the course of action to be adopted, and to the
extent the Owner Trustee acts in good faith in accordance with any written
instruction received from the Certificateholders, the Owner Trustee shall not be
liable on account of such action to any Person. If the Owner Trustee shall not
have received appropriate instruction within ten days of such notice (or within
such shorter period of time as reasonably may be specified in such notice or may
be necessary under the circumstances) it may, but shall be under no duty to,
take or refrain from taking such action, not inconsistent with this Agreement or
the Related Documents, as it shall deem to be in the best interests of the
Owners, and shall have no liability to any Person for such action or inaction.
(g) In the event that the Owner Trustee is unsure as to the application
of any provision of this Agreement or any Related Document or any such provision
is ambiguous as to its application, or is, or appears to be, in conflict with
any other applicable provision, or in the event that this Agreement permits any
determination by the Owner Trustee or is silent or is incomplete as to the
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course of action that the Owner Trustee is required to take with respect to a
particular set of facts, the Owner Trustee may give notice (in such form as
shall be appropriate under the circumstances) to the Certificateholders
requesting instruction and, to the extent that the Owner Trustee acts or
refrains from acting in good faith in accordance with any such instruction
received, the Owner Trustee shall not be liable, on account of such action or
inaction, to any Person. If the Owner Trustee shall not have received
appropriate instruction within 10 days of such notice (or within such shorter
period of time as reasonably may be specified in such notice or may be necessary
under the circumstances) it may, but shall be under no duty to, take or refrain
from taking such action, not inconsistent with this Agreement or the Related
Documents, as it shall deem to be in the best interests of the
Certificateholders, and shall have no liability to any Person for such action or
inaction.
SECTION 6.4. No Duties Except as Specified in this Agreement or in
Instructions.
The Owner Trustee shall not have any duty or obligation to manage, make
any payment with respect to, register, record, sell, dispose of, or otherwise
deal with the Trust Property, or to otherwise take or refrain from taking any
action under, or in connection with, any document contemplated hereby to which
the Trust is a party, except as expressly provided by the terms of this
Agreement (including as provided in Section 6.2) or in any written instruction
received by the Owner Trustee pursuant to Section 6.3; and no implied duties or
obligations shall be read into this Agreement or any Related Document against
the Owner Trustee. The Owner Trustee shall have no responsibility for preparing,
monitoring or filing any financing or continuation statements in any public
office at any time or otherwise to perfect or maintain the perfection of any
security interest or lien granted to it hereunder or to record this Agreement or
any Related Document; however, the Owner Trustee will from time to time execute
and deliver such financing or continuation statements as are prepared by the
Servicer and delivered to the Owner Trustee in final execution form for its
execution on behalf of the Trust for the purpose of perfecting or maintaining
the perfection of such a security interest or lien or effecting such a
recording. The Owner Trustee nevertheless agrees that it will, at its own cost
and expense (and not at the expense of the Trust), promptly take all action as
may be necessary to discharge any liens on any part of the Trust Property that
are attributable to claims against the Owner Trustee in its individual capacity
that are not related to the ownership or the administration of the Trust
Property.
SECTION 6.5. No Action Except under Specified Documents or
Instructions.
The Owner Trustee shall not manage, control, use, sell, dispose of or
otherwise deal with any part of, the Trust Property except (i) in accordance
with the powers granted to and the authority conferred upon the Owner Trustee
pursuant to this Agreement, (ii) in accordance with the Related Documents and
(iii) in accordance with any document or instruction delivered to the Owner
Trustee pursuant to Section 6.3.
SECTION 6.6. Restrictions.
The Owner Trustee shall not take any action (a) that is inconsistent
with the purposes of the Trust set forth in Section 2.3 or (b) that, to the
actual knowledge of the Owner Trustee, would result in the Trust's becoming
taxable as a corporation for Federal income tax purposes. The
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Certificateholders shall not direct the Owner Trustee to take action that would
violate the provisions of this Section.
SECTION 6.7. Administration Agreement.
(a) The Administrator is authorized to execute on behalf of the Trust
all documents, reports, filings, instruments, certificates and opinions as it
shall be the duty of the Trust to prepare, file or deliver pursuant to the
Related Documents. Upon written request, the Owner Trustee shall execute and
deliver to the Administrator a power of attorney appointing the Administrator
its agent and attorney-in-fact to execute all such documents, reports, filings,
instruments, certificates and opinions.
(b) If the Administrator shall resign or be removed pursuant to the
terms of the Administration Agreement, the Owner Trustee may, and is hereby
authorized and empowered to, appoint or consent to the appointment of a
successor Administrator pursuant to the Administration Agreement.
(c) If the Administration Agreement is terminated, the Owner Trustee
may, and is hereby authorized and empowered to, appoint or consent to the
appointment of a Person to perform substantially the same duties as are assigned
to the Administrator in the Administration Agreement pursuant to an agreement
containing substantially the same provisions as are contained in the
Administration Agreement.
(d) The Owner Trustee shall promptly notify each Owner of any default
by or misconduct of the Administrator under the Administration Agreement of
which the Owner Trustee has received written notice or of which a Responsible
Officer has actual knowledge.
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ARTICLE VII
CONCERNING THE OWNER TRUSTEE
SECTION 7.1. Acceptance of Trust and Duties.
The Owner Trustee accepts the trusts hereby created and agrees to
perform its duties hereunder with respect to such trusts but only upon the terms
of this Agreement. The Owner Trustee also agrees to disburse all monies actually
received by it constituting part of the Trust Property upon the terms of the
Related Documents and this Agreement. The Owner Trustee shall not be answerable
or accountable hereunder or under any Related Document under any circumstances,
except (i) for its own willful misconduct or gross negligence, (ii) in the case
of the inaccuracy of any representation or warranty contained in Section 7.3,
(iii) for liabilities arising from the failure of the Owner Trustee to perform
obligations expressly undertaken by it in the last sentence of Section 6.4
hereof, (iv) for any investments issued by the Owner Trustee or any branch or
affiliate thereof in its commercial capacity or (v) for taxes, fees or other
charges on, based on or measured by, any fees, commissions or compensation
received by the Owner Trustee in connection with any of the transactions
contemplated by this Agreement or any Related Document. In particular, but not
by way of limitation (and subject to the exceptions set forth in the preceding
sentence):
(a) the Owner Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Owner Trustee;
(b) the Owner Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
instructions of the Certificateholders;
(c) no provision of this Agreement or any Related Document shall
require the Owner Trustee to expend or risk funds or otherwise incur any
financial liability in the performance of any of its rights or powers hereunder
or under any Related Document if the Owner Trustee shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured or provided to it;
(d) under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under this Agreement or any of the Related
Documents, including the principal of and interest on the Certificates or the
Notes;
(e) the Owner Trustee shall not be responsible for or in respect of the
recitals herein, the validity or sufficiency of this Agreement or for the due
execution hereof by the Depositor or the General Partner or for the form,
character, genuineness, sufficiency, value or validity of any of the Trust
Property or for or in respect of the validity or sufficiency of the Related
Documents, other than the certificate of authentication on the Certificates, and
the Owner Trustee shall in no event assume or incur any liability, duty, or
obligation to the Indenture Trustee, any Noteholder or to any Certificateholder,
other than as expressly provided for herein and in the Related Documents;
(f) the Owner Trustee shall not be liable for the default or misconduct
of the Administrator, the Indenture Trustee or the Servicer under any of the
Related Documents or
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otherwise and the Owner Trustee shall have no obligation or liability to monitor
the performance of or to perform the obligations of the Trust under this
Agreement or the Related Documents that are required to be performed by the
Administrator under the Administration Agreement, the Indenture Trustee under
the Indenture or the Servicer under the Sale and Servicing Agreement;
(g) the Owner Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement, or to institute, conduct or
defend any litigation under this Agreement or otherwise or in relation to this
Agreement or any Related Document, at the request, order or direction of the
Certificateholders, unless such Certificateholders have offered to the Owner
Trustee security or indemnity satisfactory to it against the costs, expenses and
liabilities that may be incurred by the Owner Trustee therein or thereby. The
right of the Owner Trustee to perform any discretionary act enumerated in this
Agreement or in any Related Document shall not be construed as a duty, and the
Owner Trustee shall not be answerable for other than its gross negligence or
willful misconduct in the performance of any such act;
(h) the Owner Trustee shall not be under any obligation to appear in,
prosecute or defend any action, which in its opinion may require it to incur any
out-of-pocket expense or any liability unless it shall be furnished with such
reasonable security and indemnity against such expense or liability as it may
require in accordance with the terms hereof. The Owner Trustee may, but shall be
under no duty to, undertake such action as it may deem necessary at any and all
times to protect the Trust Property and the respective rights and interests of
the Noteholders and the Certificate Owners pursuant to the terms of the
Indenture and this Agreement;
(i) the Owner Trustee may (at the expense of the Seller) consult with
counsel, and the written advice of counsel or any opinion of counsel shall be
full and complete authorization and protection in respect of any action taken or
omitted by the Owner Trustee in good faith reliance thereon; and
(j) notwithstanding anything contained herein to the contrary, neither
Wilmington Trust nor the Owner Trustee shall be required to take any action in
any jurisdiction other than in the State of Delaware if the taking of such
action will (i) require the consent or approval or authorization or order of or
giving of notice to, or the registration with or the taking of any other action
in respect of, any state or other governmental authority or agency of any
jurisdiction other than the State of Delaware; (ii) result in any fee, tax or
other governmental charge under the laws of any jurisdiction or any political
subdivisions thereof in existence on the date hereof other than the State of
Delaware becoming payable by Wilmington Trust; or (iii) subject Wilmington Trust
to personal jurisdiction in any jurisdiction other than the State of Delaware
for causes of action arising from acts unrelated to the consummation of the
transactions by Wilmington Trust or the Owner Trustee as the case may be,
contemplated hereby. The Owner Trustee shall be entitled to obtain (at the
expense of the Seller) an opinion of counsel to determine whether any action
required to be taken pursuant to this Agreement results in the consequences
described in clauses (i), (ii) and (iii) of the preceding sentence. In the event
that said counsel advises the Owner Trustee that such action will result in such
consequences, the Owner Trustee will appoint an additional or separate trustee
to proceed with such action.
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SECTION 7.2. Furnishing of Documents.
The Owner Trustee shall furnish to the Owners, promptly upon receipt of
a written request therefor, duplicates or copies of all reports, notices,
requests, demands, certificates, financial statements and any other instruments
furnished to the Owner Trustee under the Related Documents unless the
Certificateholders have previously received such items.
SECTION 7.3. Representations and Warranties.
The Owner Trustee hereby represents and warrants to the Depositor and
the Certificateholders that:
(a) It is a banking corporation duly organized and validly existing in
good standing under the laws of the State of Delaware. It has all requisite
corporate power and authority and all franchises, grants, authorizations,
consents, orders and approvals from all governmental authorities necessary to
execute, deliver and perform its obligations under this Agreement.
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement and each Related Document to
which the Trust is a party, and this Agreement and each Related Document will be
executed and delivered by one of its officers who is duly authorized to execute
and deliver this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this Agreement, nor
the consummation by it of the transactions contemplated hereby nor compliance by
it with any of the terms or provisions hereof will contravene any Federal or
Delaware law, governmental rule or regulation governing the banking or trust
powers of the Owner Trustee or any judgment or order binding on it, or
constitute any default under its charter documents or bylaws or any indenture,
mortgage, contract, agreement or instrument to which it is a party or by which
any of its properties may be bound or result in the creation or imposition of
any lien, charge or encumbrance on the Trust Property resulting from actions by
or claims against the Owner Trustee individually which are unrelated to this
Agreement or the Related Documents.
SECTION 7.4. Reliance; Advice of Counsel.
(a) The Owner Trustee shall incur no liability to anyone in acting upon
any signature, instrument, notice, resolution, request, consent, order,
certificate, report, opinion, bond, or other document or paper believed by it to
be genuine and believed by it to be signed by the proper party or parties. The
Owner Trustee may accept a certified copy of a resolution of the board of
directors or other governing body of any corporate party as conclusive evidence
that such resolution has been duly adopted by such body and that the same is in
full force and effect. As to any fact or matter the method of the determination
of which is not specifically prescribed herein, the Owner Trustee may for all
purposes hereof rely on a certificate, signed by the president or any vice
president or by the treasurer or other authorized officers of the relevant
party, as to such fact or matter, and such certificate shall constitute full
protection to the Owner Trustee for any action taken or omitted to be taken by
it in good faith in reliance thereon.
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(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Agreement or the
Related Documents, the Owner Trustee (i) may act directly or through its agents
or attorneys pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the conduct or misconduct of such agents or
attorneys if such agents or attorneys shall have been selected by the Owner
Trustee with reasonable care, and (ii) may consult with counsel, accountants and
other skilled persons to be selected with reasonable care and employed by it.
The Owner Trustee shall not be liable for anything done, suffered or omitted in
good faith by it in accordance with the written opinion or advice of any such
counsel, accountants or other such persons and not contrary to this Agreement or
any Related Document.
SECTION 7.5. Not Acting in Individual Capacity.
Except as provided in this Article VII, in accepting the trusts hereby
created Wilmington Trust Company acts solely as Owner Trustee hereunder and not
in its individual capacity and all Persons having any claim against the Owner
Trustee by reason of the transactions contemplated by this Agreement or any
Related Document shall look only to the Trust Property for payment or
satisfaction thereof.
SECTION 7.6. Owner Trustee Not Liable for Certificates, Notes or
Contracts.
The recitals contained herein and in the Certificates and the Notes
(other than the signature and counter-signature of the Owner Trustee on the
Certificates and the Notes) shall be taken as the statements of the Depositor,
and the Owner Trustee assumes no responsibility for the correctness thereof. The
Owner Trustee makes no representations as to the validity or sufficiency of this
Agreement, of any Related Document or of the Certificates (other than the
signature and counter-signature of the Owner Trustee on the Certificates) or the
Notes (other than the signature or countersignature of the Owner Trustee on the
Notes), or of any Contract or related documents. The Owner Trustee shall at no
time have any responsibility or liability for or with respect to the legality,
validity and enforceability of any Contract, or the perfection and priority of
any security interest created by any Contract in any Product or the maintenance
of any such perfection and priority of any security interest created by any
Contract in any Product, or for or with respect to the sufficiency of the Trust
Property or its ability to generate the payments to be distributed to
Certificateholders under this Agreement or the Noteholders under the Indenture,
including, without limitation: the existence, condition and ownership of any
Product; the existence and enforceability of any insurance thereon; the
existence and contents of any Contract or any computer or other record thereof;
the validity of the assignment of any Contract to the Trust or of any
intervening assignment; the completeness of any Contract; the performance or
enforcement of any Contract; the compliance by the Seller or the Servicer with
any warranty or representation made under any Related Document or in any related
document or the accuracy of any such warranty or representation or any action of
the Indenture Trustee or the Servicer taken in the name of the Owner Trustee.
SECTION 7.7. Owner Trustee May Own Certificates and Notes.
The Owner Trustee in its individual or any other capacity may become
the owner or pledgee of Certificates or Notes and may deal with the Depositor,
the Seller, GTGP, the General Partner, the
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Indenture Trustee and the Servicer in banking or other transactions with the
same rights as it would have if it were not Owner Trustee.
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ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE
SECTION 8.1. Owner Trustee's Fees and Expenses.
The Owner Trustee shall receive as compensation for its services
hereunder such fees as have been separately agreed upon before the date hereof
between Green Tree and the Owner Trustee (or, with respect to any successor
Owner Trustee, reasonable compensation for all services rendered by it
hereunder), and the Owner Trustee shall be entitled to be reimbursed by Green
Tree for its other reasonable expenses hereunder, including the reasonable
compensation, expenses and disbursements of such agents, representatives,
experts and counsel as the Owner Trustee may employ in connection with the
exercise and performance of its rights and its duties hereunder; provided,
however, that the Owner Trustee shall only be entitled to reimbursement for
expenses hereunder to the extent such expenses (i) are fees of outside counsel
engaged by the Owner Trustee in respect of the performance of its obligations
hereunder or (ii) relate to the performance of its obligations pursuant to
Section 5.5 hereof.
SECTION 8.2. Indemnification.
Green Tree shall be liable as primary obligor for, and shall indemnify
the Owner Trustee in its individual capacity and its successors, assigns, agents
and servants, and any co-trustee (collectively, the "Indemnified Parties") from
and against, any and all liabilities, obligations, losses, damages, taxes,
claims, actions and suits, and any and all reasonable costs, expenses and
disbursements (including reasonable legal fees and expenses) of any kind and
nature whatsoever (collectively, "Expenses") which may at any time be imposed
on, incurred by, or asserted against the Owner Trustee or any Indemnified Party
in any way relating to or arising out of this Agreement, the Related Documents,
the Trust Property, the administration of the Trust Property or the action or
inaction of the Owner Trustee hereunder, except only that Green Tree shall not
be liable for or required to indemnify the Owner Trustee from and against
Expenses arising or resulting from any of the matters described in the third
sentence of Section 7.1. The indemnities contained in this Section shall survive
the resignation or termination of the Owner Trustee or the termination of this
Agreement.
SECTION 8.3. Nonrecourse Obligations.
Notwithstanding anything in this Agreement or any Related Document, the
Owner Trustee agrees in its individual capacity and in its capacity as Owner
Trustee for the Trust that all obligations of the Trust to the Owner Trustee
individually or as Owner Trustee for the Trust shall be recourse to the Trust
Property only and specifically shall not be recourse to the assets of any
Certificateholder.
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ARTICLE IX
TERMINATION
SECTION 9.1. Termination of the Trust.
(a) Unless sooner terminated pursuant to Section 9.2, the respective
obligations and responsibilities of the Depositor, the General Partner and the
Owner Trustee created by this Agreement and the Trust created by this Agreement
shall terminate upon the later of (i) the maturity or other liquidation of the
last Contract (including the purchase as of any Distribution Date by the Seller
or the Servicer at its option of the corpus of the Trust as described in Section
8.01 of the Sale and Servicing Agreement) and the subsequent distribution of
amounts in respect of such Contracts as provided in the Related Documents, or
(ii) the payment to Certificateholders of all amounts required to be paid to
them pursuant to this Agreement. In any case, there shall be delivered to the
Owner Trustee, the Indenture Trustee and the Rating Agencies an Opinion of
Counsel that all applicable preference periods under federal, state and local
bankruptcy, insolvency and similar laws have expired with respect to the
payments pursuant to clause (ii); provided, however, that in no event shall the
trust created by this Agreement continue beyond the expiration of 21 years from
the death of the last survivor of the descendants living on the date of this
Agreement of Rose Kennedy of the Commonwealth of Massachusetts; and provided,
further, that the rights to indemnification under Section 8.2 shall survive the
termination of the Trust. The Servicer shall promptly notify the Owner Trustee
of any prospective termination pursuant to this Section 9.1. Except as provided
in Section 9.2, the bankruptcy, liquidation, dissolution, termination,
resignation, expulsion, withdrawal, death or incapacity of any Owner, shall not
(x) operate to terminate this Agreement or the Trust, nor (y) entitle such
Owner's legal representatives or heirs to claim an accounting or to take any
action or proceeding in any court for a partition or winding up of all or any
part of the Trust or Trust Property nor (z) otherwise affect the rights,
obligations and liabilities of the parties hereto.
(b) Except as provided in Section 9.1(a), neither the Depositor nor any
Certificate Owner shall be entitled to revoke or terminate the Trust.
(c) Within five Business Days of receipt of notice of final
distribution on the Certificates from the Seller or the Servicer given pursuant
to Section 8.01(b) of the Sale and Servicing Agreement , the Owner Trustee shall
mail written notice to the Certificateholders specifying (i) the Distribution
Date upon which final payment of the Certificates shall be made upon
presentation and surrender of Certificates at the office of the Paying Agent
therein specified, (ii) the amount of any such final payment, and (iii) that the
Record Date otherwise applicable to such Distribution Date is not applicable,
payments being made only upon presentation and surrender of the Certificates at
the office of the Paying Agent therein specified. The Owner Trustee shall give
such notice to the Certificate Registrar at the time such notice is given to
Certificateholders. In the event such notice is given, (i) the Indenture Trustee
shall make deposits into the Certificate Distribution Account in accordance with
Section 6.06 of the Sale and Servicing Agreement, or, (ii) in the case of an
optional purchase of Contracts pursuant to Section 8.01 of the Sale and
Servicing Agreement, the Indenture Trustee shall deposit the amount specified in
Section 8.01 of the Sale and Servicing Agreement. Upon presentation and
surrender of the Certificates, the Paying Agent shall cause to be distributed to
Certificateholders amounts distributable on such Distribution Date pursuant to
Section 5.2.
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(d) In the event that all of the Certificateholders shall not surrender
their Certificates for cancellation within six months after the date specified
in the above-mentioned written notice, the Owner Trustee shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within one year after the second notice all the Certificates shall
not have been surrendered for cancellation, the Owner Trustee may take
appropriate steps, or may appoint an agent to take appropriate steps, to contact
the remaining Certificateholders concerning surrender of their Certificates, and
the cost thereof shall be paid out of the funds and other assets that remain
subject to this Agreement. Any funds which are payable to Certificateholders
remaining in the Trust after exhaustion of such remedies shall be distributed by
the Owner Trustee to The United Way (but only upon termination of this
Agreement), and the Certificateholders, by acceptance of their Certificates,
hereby waive any rights with respect to such funds.
(e) Upon the winding up of the Trust and its termination, the Owner
Trustee shall cause the Certificate of Trust to be canceled by filing a
certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3810 of the Business Trust Statute.
SECTION 9.2. Dissolution Events with respect to General Partner.
In the event that a Dissolution Event shall occur with respect to the
General Partner, the Trust will terminate unless, within 90 days after the
occurrence of the Dissolution Event with respect to the General Partner, (x) the
Holders of a majority of the sum of the Class B-1 Principal Balance and the
Class B-2 Principal Balance agree in writing to continue the business of the
Trust and to the appointment of a Person to become the General Partner and to
assume the liabilities incident thereto and (y) the Owner Trustee requests and
obtains an Opinion of Counsel acceptable to Green Tree to the effect that the
Trust will not thereafter be an association (or publicly traded partnership)
taxable as a corporation for federal income tax purposes. Promptly after the
occurrence of a Dissolution Event, (i) the General Partner shall give the
Indenture Trustee and the Owner Trustee written notice of the occurrence of such
event, (ii) the Owner Trustee shall, upon the receipt of such written notice,
give prompt written notice to the Certificateholders and the Indenture Trustee
of the occurrence of such event and (iii) the Indenture Trustee shall, upon
receipt of written notice of the occurrence of such event from the Owner Trustee
or the Seller, give prompt written notice to the Noteholders of the occurrence
of such event; provided, however, that any failure to give a notice required by
this sentence shall not prevent or delay, in any manner, a termination of the
Trust pursuant to the first sentence of this Section 9.2. Upon a termination
pursuant to this Section, the Owner Trustee shall direct the Indenture Trustee
to sell the assets of the Trust (other than the Trust Accounts) at one or more
private or public sales conducted in any manner permitted by law. The proceeds
of such a sale of the assets of the Trust shall be distributed as provided in
Section 8.02 of the Sale and Servicing Agreement.
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ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 10.1. Eligibility Requirements for Owner Trustee.
The Owner Trustee shall at all times be a corporation (i) satisfying
the provisions of Section 3807(a) of the Business Trust Statute; (ii) authorized
to exercise corporate trust powers; (iii) having a combined capital and surplus
of at least $50,000,000 and subject to supervision or examination by Federal or
State authorities; (iv) having (or having a parent which has) a rating of at
least F-1 by Fitch or A-1 by Standard & Poor's or otherwise be acceptable to
Fitch and Standard & Poor's; and (v) shall not be an Affiliate of the Seller. If
such corporation shall publish reports of condition at least annually, pursuant
to law or to the requirements of the aforesaid supervising or examining
authority, then for the purpose of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Owner Trustee shall cease to be eligible in accordance with
the provisions of this Section, the Owner Trustee shall resign immediately in
the manner and with the effect specified in Section 10.2.
SECTION 10.2. Resignation or Removal of Owner Trustee.
The Owner Trustee may at any time resign and be discharged from the
trusts hereby created by giving written notice thereof to the General Partner
and the Servicer at least 30 days before the date specified in such instrument.
Upon receiving such notice of resignation, the General Partner shall promptly
appoint a successor Owner Trustee meeting the qualifications set forth in
Section 10.1 by written instrument, in duplicate, one copy of which instrument
shall be delivered to the resigning Owner Trustee and one copy to the successor
Owner Trustee. If no successor Owner Trustee shall have been so appointed and
have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Owner Trustee may petition any court of competent
jurisdiction for the appointment of a successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.1 and shall fail to resign after
written request therefor by the General Partner or if at any time the Owner
Trustee shall be legally unable to act, or shall be adjudged bankrupt or
insolvent, or a receiver of the Owner Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Owner
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the General Partner may remove the Owner
Trustee. If the General Partner shall remove the Owner Trustee under the
authority of the immediately preceding sentence, the General Partner shall
promptly appoint a successor Owner Trustee meeting the qualification
requirements of Section 10.1 by written instrument, in duplicate, one copy of
which instrument shall be delivered to the outgoing Owner Trustee so removed and
one copy to the successor Owner Trustee and payment of all fees owed to the
outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until all fees and expenses, including any indemnity
payments, due to the outgoing Owner Trustee have been paid and
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until acceptance of appointment by the successor Owner Trustee pursuant to
Section 10.3. The General Partner shall provide notice of such resignation or
removal of the Owner Trustee to each of the Rating Agencies.
SECTION 10.3. Successor Owner Trustee.
Any successor Owner Trustee appointed pursuant to Section 10.2 shall
execute, acknowledge and deliver to the General Partner and to its predecessor
Owner Trustee an instrument accepting such appointment under this Agreement, and
thereupon the resignation or removal of the predecessor Owner Trustee shall
become effective and such successor Owner Trustee, without any further act, deed
or conveyance, shall become fully vested with all the rights, powers, duties,
and obligations of its predecessor under this Agreement, with like effect as if
originally named as Owner Trustee. The predecessor Owner Trustee shall deliver
to the successor Owner Trustee all documents and statements and monies held by
it under this Agreement; and the General Partner and the predecessor Owner
Trustee shall execute and deliver such instruments and do such other things as
may reasonably be required for fully and certainly vesting and confirming in the
successor Owner Trustee all such rights, powers, duties, and obligations.
No successor Owner Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Owner Trustee shall
be eligible pursuant to Section 10.1.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section, the Administrator shall mail notice of the successor of such Owner
Trustee to all Certificateholders, the Indenture Trustee, the Noteholders and
the Rating Agencies. If the Administrator shall fail to mail such notice within
10 days after acceptance of appointment by the successor Owner Trustee, the
successor Owner Trustee shall cause such notice to be mailed at the expense of
the Administrator.
SECTION 10.4. Merger or Consolidation of Owner Trustee.
Any corporation into which the Owner Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Owner Trustee shall be a party,
or any corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall be the successor of the Owner Trustee
hereunder, provided such corporation shall be eligible pursuant to Section 10.1,
without the execution or filing of any instrument or any further act on the part
of any of the parties hereto, anything herein to the contrary notwithstanding,
and provided further that the Owner Trustee shall mail notice of such merger or
consolidation to the Rating Agencies.
SECTION 10.5. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Property or any Product may at the time be located, the
Administrator and the Owner Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Owner Trustee to act as co-trustee, jointly with the Owner
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Property, and to vest in such Person, in such
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capacity, such title to the Trust, or any part thereof, and, subject to the
other provisions of this Section, such powers, duties, obligations, rights and
trusts as the Administrator and the Owner Trustee may consider necessary or
desirable. If the Administrator shall not have joined in such appointment within
15 days after the receipt by it of a request so to do, the Owner Trustee shall
have the power to make such appointment. No co-trustee or separate trustee under
this Agreement shall be required to meet the terms of eligibility as a successor
trustee pursuant to Section 10.1 and no notice of the appointment of any
co-trustee or separate trustee shall be required pursuant to Section 10.1.
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties, and obligations conferred or imposed
upon the Owner Trustee shall be conferred upon and exercised or performed by the
Owner Trustee and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not authorized to act
separately without the Owner Trustee joining in such act), except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed the Owner Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties, and obligations
(including the holding of title to the Trust Property or any portion thereof in
any such jurisdiction) shall be exercised and performed singly by such separate
trustee or co-trustee, but solely at the direction of the Owner Trustee;
(ii) no trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Agreement; and
(iii) the Administrator and the Owner Trustee acting jointly may at any
time accept the resignation of or remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Owner Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Owner
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Owner Trustee. Each such instrument shall be filed with the Owner
Trustee and a copy thereof given to the Administrator.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Owner Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.1. Amendment.
(a) This Agreement may be amended by the Depositor, the General Partner
and the Owner Trustee, without the consent of any of the Certificateholders or
Noteholders, (i) to cure any ambiguity, or (ii) to correct, supplement or modify
any provisions in this Agreement; provided, however, that such action shall not,
as evidenced by an Opinion of Counsel, adversely affect in any material respect
the interests of any Certificateholder or Noteholder.
(b) This Agreement may also be amended from time to time, by the
Depositor, the General Partner and the Owner Trustee with the consent of a
Certificate Majority of the Certificates and, if such amendment materially and
adversely affects the interests of Noteholders, the consent of a Note Majority
(which consent of any Holder of a Certificate or Note given pursuant to this
Section or pursuant to any other provision of this Agreement shall be conclusive
and binding on such Holder and on all future Holders of such Certificate or Note
and of any Certificate or Note issued upon the transfer thereof or in exchange
thereof or in lieu thereof whether or not notation of such consent is made upon
the Certificate or Note) for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Agreement, or of
modifying in any manner the rights of the Holders of Certificates or Notes;
provided, however, that no such amendment shall (a) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, collections of
payments on Contracts or distributions that shall be required to be made on any
Certificate or Note or the Class B-1 Rate, the Class B-2 Rate, the Class A-1
Interest Rate, the Class A-2 Interest Rate, the Class A-3 Interest Rate, the
Class A-4 Interest Rate, the Class A-5 Interest Rate, the Class A-6 Interest
Rate or the Class A-7 Interest Rate, or (b) reduce the aforesaid percentage
required to consent to any such amendment or any waiver hereunder, without the
consent of the Holders of all Certificates and Notes then outstanding.
(c) Prior to the execution of any such amendment or consent, the
General Partner shall furnish written notification of the substance of such
amendment or consent to each Rating Agency.
(d) Promptly after the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder and the Indenture Trustee unless
such parties have previously received such notification.
(e) It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to Section 11.1(b) to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents (and any
other consents of Certificateholders and Noteholders provided for in this
Agreement) and of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable requirements as the Owner
Trustee may prescribe, including the establishment of record dates.
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<PAGE>
(f) Prior to the execution of any amendment to this Agreement, the
Owner Trustee shall be entitled to receive and rely upon an Opinion of Counsel
stating that the execution of such amendment is authorized or permitted by this
Agreement and that all conditions precedent to the execution and delivery of
such amendment have been satisfied. The Owner Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Owner Trustee's
own rights, duties or immunities under this Agreement or otherwise.
(g) The Depositor, the General Partner and the Owner Trustee may amend
this Agreement in order to effect a "financial asset securitization investment
trust" ("FASIT") election for all or a portion of the Trust; provided, that (i)
the Depositor delivers an Opinion of Counsel to the Owner Trustee to the effect
that such election will not adversely affect the Federal or applicable state
income tax characterization of any outstanding Notes or Certificates or the
taxability of the Trust under Federal or applicable state income tax laws or
otherwise have a material adverse effect on the Certificates or Notes, and (ii)
the requirements of clauses (c), (d) and (f) above are met.
SECTION 11.2. No Recourse.
Each Certificateholder by accepting a Certificate acknowledges that
such Certificateholder's Certificates represent beneficial interests in the
Trust only and do not represent interests in or obligations of the Seller, the
General Partner, the Servicer, the Owner Trustee, the Indenture Trustee or any
Affiliate of any of the foregoing and no recourse may be had against such
parties or their assets, except as may be expressly set forth or contemplated in
this Agreement, the Certificates or the Related Documents.
SECTION 11.3. Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware without regard to the principles of conflicts
of laws thereof and the obligations, rights and remedies of the parties under
this Agreement shall be determined in accordance with such laws.
SECTION 11.4. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
SECTION 11.5. Certificates Nonassessable and Fully Paid.
Certificateholders shall not be personally liable for obligations of
the Trust. The fractional undivided interests in the Trust represented by the
Certificates shall be nonassessable for any losses or expenses of the Trust or
for any reason whatsoever, and Certificates upon execution thereof by the Owner
Trustee pursuant to Section 3.3 are and shall be deemed fully paid.
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SECTION 11.6. Third-Party Beneficiaries.
This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns. Except as
otherwise provided in this Agreement, no other Person shall have any right or
obligation hereunder.
SECTION 11.7. Counterparts.
For the purpose of facilitating its execution and for other purposes,
this Agreement may be executed simultaneously in any number of counterparts,
each of which counterparts shall be deemed to be an original, and all of which
counterparts shall constitute but one and the same instrument.
SECTION 11.8. Notices.
All demands, notices and communications under this Agreement shall be
in writing, personally delivered or mailed by certified mail, return receipt
requested, and shall be deemed to have been duly given upon receipt (a) in the
case of the GTGP or the Depositor, at the following address: c/o Green Tree
Financial Corporation, 1100 Landmark Towers, 345 St. Peter Street, St. Paul,
Minnesota 55102-1639, Attention: Chief Financial Officer, (b) in the case of the
Owner Trustee, at the Corporate Trust Office, and (c) in the case of each Rating
Agency, 1 State Street Plaza, New York, New York 10004 (for Fitch) and 25
Broadway, New York, New York 10004 (for Standard & Poor's) Attention:
Asset-Backed Surveillance or at such other address as shall be designated by any
such party in a written notice to the other parties. Notwithstanding the
foregoing, any notice required or permitted to be mailed to a Certificateholder
shall be given by first class mail, postage prepaid, at the address of such
Holder as shown in the Certificate Register, and any notice so mailed within the
time prescribed in this Agreement shall be conclusively presumed to have been
duly given, whether or not the Certificateholder receives such notice.
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IN WITNESS WHEREOF, the Depositor, GTGP and the Owner Trustee have
caused this Trust Agreement to be duly executed by their respective officers as
of the day and year first above written.
GREEN TREE FINANCIAL CORPORATION,
as Depositor
By
-------------------------------
Name: Scott T. Young
Title: Vice President and Controller
GREEN TREE SECOND GP INC.
By
--------------------------------
Name: Joel H. Gottesman
Title: Sr. Vice President and Secretary
WILMINGTON TRUST COMPANY,
as Owner Trustee
By
--------------------------------
Name: Emmett R. Harmon
Title: Vice President
<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST OF
GREEN TREE RECREATIONAL, EQUIPMENT &
CONSUMER TRUST 1998-C
THIS Certificate of Trust of GREEN TREE RECREATIONAL, EQUIPMENT &
CONSUMER TRUST 1998-C (the "Trust") is being duly executed and filed by the
undersigned trustee, to form a business trust under the Delaware Business Trust
Act (12 Del. Code, ss. 3801 et seq.) (the "Act").
1. Name. The name of the business trust formed hereby is GREEN TREE
RECREATIONAL, EQUIPMENT & CONSUMER TRUST 1998-C.
2. Delaware Trustee. The name and business address of the trustee of
the Trust in the State of Delaware is Wilmington Trust Company, Rodney Square
North, 1100 North Market Street, Wilmington, Delaware 19890-0001, Attention:
Corporate Trust Administration.
3. This Certificate of Trust will be effective September , 1998.
IN WITNESS WHEREOF, the undersigned has duly executed this Certificate
of Trust in accordance with Section 3811(a) of the Act.
WILMINGTON TRUST COMPANY,
as trustee
By
--------------------------------
Name:
-----------------------------
Title:
----------------------------
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EXHIBIT B-1
FORM OF CERTIFICATE
THIS TRUST CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT
TO THE NOTES TO THE EXTENT DESCRIBED IN THE INDENTURE
REFERRED TO HEREIN.
GREEN TREE RECREATIONAL, EQUIPMENT &
CONSUMER TRUST 1998-C
8.07% CLASS B-1 ASSET-BACKED CERTIFICATE
evidencing a fractional undivided interest in the Trust, as defined below, the
property of which includes a pool of retail installment sale contracts and
promissory notes secured by new and used motorcycles; marine products (including
boats, boat trailers and outboard motors); keyboard instruments; horse trailers;
sport vehicles (including snowmobiles, personal watercraft and all-terrain
vehicles); trucks; personal aircraft; and recreational vehicles, all sold to the
Trust by Green Tree Financial Corporation.
This Certificate does not represent an obligation of, or an interest in, Green
Tree Financial Corporation or any affiliate thereof.
Certificate No. Denomination: $
Aggregate Denomination of all Class B-1
Certificates: $16,000,000
First Distribution Date: Pass-Through Rate: 8.07%
October 15, 1998
Final Scheduled Distribution Date:
September 15, 2018
Servicer: CUSIP: __________
Green Tree Financial Corporation
THIS CERTIFICATE MAY NOT BE ACQUIRED BY (A) AN EMPLOYEE BENEFIT PLAN (AS DEFINED
IN SECTION 3(3) OF ERISA) THAT IT IS SUBJECT TO THE PROVISIONS OF TITLE I OF
ERISA, (B) A PLAN DESCRIBED IN SECTION 4975(E)(1) OF THE CODE OR (C) ANY ENTITY
WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF SUCH PLAN'S INVESTMENT
IN THE ENTITY (INCLUDING AN INSURANCE COMPANY ACTING ON BEHALF OF ITS GENERAL
ACCOUNT) (EACH, A "BENEFIT PLAN INVESTOR"). PRIOR TO ITS PURCHASE OF THIS
CERTIFICATE, THE PROPOSED TRANSFEREE OF SUCH CERTIFICATE MUST CERTIFY IN WRITING
(IN THE FORM OF LETTER ATTACHED AS EXHIBIT C TO THE TRUST AGREEMENT) TO THE
SELLER, THE SERVICER, THE OWNER TRUSTEE AND THE UNDERWRITERS THAT IT IS NOT A
BENEFIT PLAN INVESTOR OR THAT ITS PURCHASE OF THIS CERTIFICATE WILL SATISFY
CERTAIN CONDITIONS SPECIFIED IN THE EXEMPTIVE RELIEF GRANTED BY, AND THE
B-1-1
<PAGE>
REGULATIONS PROPOSED BY, THE DEPARTMENT OF LABOR). ANY TRANSFER OF THIS
CERTIFICATE IN VIOLATION OF THE FOREGOING SHALL BE VOID AND OF NO EFFECT.
THIS CERTIFIES THAT __________________ is the registered owner of a
nonassessable, fully paid, fractional undivided interest in the Green Tree
Recreational Equipment & Consumer Trust 1998-C (the "Trust"). The Trust was
created pursuant to a Trust Agreement, dated as of September 1, 1998 (the "Trust
Agreement"), among Green Tree Financial Corporation, as depositor (the
"Depositor"), Green Tree Second GP Inc. (the "General Partner"), and Wilmington
Trust Company, not in its individual capacity but solely as owner trustee (the
"Owner Trustee"), a summary of certain of the pertinent provisions of which is
set forth below. To the extent not otherwise defined herein, the capitalized
terms used herein have the meanings assigned to them in the Trust Agreement or
the Sale and Servicing Agreement, dated as of September 1, 1998 (the "Sale and
Servicing Agreement"), between the Trust and Green Tree Financial Corporation
(the "Seller"), in its individual capacity and as servicer (the "Servicer").
This Certificate is one of the duly authorized Certificates designated
as "8.07% Class B-1 Asset-Backed Certificates" (herein called the "Class B-1
Certificates"). The Trust has also issued its Class B-2 Asset-Backed
Certificates (together with the Class B-1 Certificates, the "Certificates") and
has issued under the Indenture, dated as of September 1, 1998, between the Trust
and U.S. Bank Trust National Association, as trustee, the Asset-Backed Notes
(the "Notes") designated as the Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5, Class A-6 and Class A-7 Notes. This Certificate is issued under and
is subject to the terms, provisions and conditions of the Trust Agreement, to
which Trust Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound. The property of the Trust
includes (as more fully described in the Trust Agreement) a pool of retail
installment sale contracts and promissory notes (the "Contracts") for new and
used motorcycles; marine products (including boats, boat trailers and outboard
motors); keyboard instruments; horse trailers; sport vehicles (including
snowmobiles, personal watercraft and all-terrain vehicles); trucks; personal
aircraft; and recreational vehicles (the "Products"), certain monies due
thereunder on or after the Cutoff Date, an assignment of the Seller's security
interests in the Products, certain bank accounts and property (including the
right to receive Liquidation Proceeds) securing the Contracts, and proceeds of
all of the foregoing.
Under the Trust Agreement, there will be distributed on the 15th day of
each month or, if such 15th day is not a Business Day, the next succeeding
Business Day (the "Distribution Date"), commencing on October 15, 1998 to the
person in whose name this Certificate is registered at the close of business on
the Business Day immediately preceding such Distribution Date (the "Record
Date"), such Certificateholder's fractional undivided interest in the interest
and principal then distributable on the Class B-1 Certificates to the extent of
the funds available therefor.
It is the intent and agreement of the Depositor, the General Partner,
the Servicer and the Certificateholders that, for purposes of Federal income,
state and local income and franchise and any other income taxes, the Trust will
be treated as a partnership and the Certificateholders will be treated as
partners in that partnership. The Certificateholders, by acceptance of a
Certificate, agree to treat, and to take no action inconsistent with the
treatment of, the Certificates for such tax purposes as partnership interests in
the Trust.
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<PAGE>
Each Certificateholder, by its acceptance of a Certificate, covenants
and agrees that such Certificateholder will not at any time institute against
the General Partner or join in any institution against the Depositor, the Trust
or the General Partner of any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any United
States Federal or state bankruptcy or similar law in connection with any
obligations relating to the Certificates, the Notes, the Trust Agreement or any
of the Related Documents.
Except as provided in the Trust Agreement, distributions on this
Certificate will be made by the Owner Trustee by check or money order mailed to
the Certificateholder of record in the Certificate Register without the
presentation or surrender of this Certificate or the making of any notation
hereon. Except as otherwise provided in the Trust Agreement and notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Owner Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency
maintained for that purpose by the Owner Trustee. The Record Date otherwise
applicable to distributions shall not be applicable to such final distribution.
The Certificates do not represent an obligation of, or an interest in,
the Depositor, the Servicer, the Owner Trustee or any Affiliate of any of them.
The Certificates are limited in right of payment to certain collections and
recoveries respecting the Contracts, all as more specifically set forth in the
Trust Agreement. A copy of the Trust Agreement may, upon request, be examined by
any Certificateholder during normal business hours at the principal office of
the Seller and at such other places, if any, designated by the Seller.
The Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
parties thereto and the rights of the Certificateholders under the Trust
Agreement at any time by the Depositor, the General Partner and the Owner
Trustee. In certain limited circumstances, the Trust Agreement may only be
amended with the consent of the Holders of Certificates evidencing not less than
a majority of each of the Class B-1 Principal Balance and the Class B-2
Principal Balance and, in certain circumstances, 100% of each of the Class B-1
Principal Balance and the Class B-2 Principal Balance. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and on
all future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate.
As provided in the Trust Agreement and subject to certain limitations
set forth therein, the transfer of this Certificate is registrable in the
Certificate Registrar upon surrender of this Certificate for registration of
transfer at the offices or agencies of the Certificate Registrar maintained by
the Owner Trustee in Wilmington, Delaware accompanied by a written instrument of
transfer in form satisfactory to the Owner Trustee and the Certificate Registrar
duly executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of authorized denominations
evidencing the same aggregate fractional undivided interest in the Trust issued
to the designated transferee. The initial Certificate Registrar appointed under
the Trust Agreement is Wilmington Trust Company.
B-1-3
<PAGE>
The Certificates are issuable only as registered Certificates without
coupons in denominations of $1,000 and integral multiples thereof. As provided
in the Trust Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
of a like aggregate fractional undivided interest, as requested by the Holder
surrendering the same. No service charge will be made for any such registration
of transfer or exchange, but the Owner Trustee may require payment of a sum
sufficient to cover any tax or governmental charges payable in connection
therewith.
The Owner Trustee, the Certificate Registrar and any agent of the Owner
Trustee or the Certificate Registrar may treat the person in whose name this
Certificate is registered as the owner hereof for the purpose of receiving
distributions and for all other purposes, and neither the Owner Trustee, the
Certificate Registrar nor any such agent shall be affected by any notice to the
contrary.
The obligations and responsibilities created by the Trust Agreement and
the Trust created thereby shall terminate upon the payment to Certificateholders
of all amounts required to be paid to them pursuant to the Trust Agreement and
the disposition of all property held as part of the Trust. The Servicer or the
Seller may at its option purchase the corpus of the Trust at a price specified
in the Sale and Servicing Agreement, and such purchase of the Contracts and
other property of the Trust will effect early retirement of the Certificates;
provided, however, such right of purchase is exercisable only as of a Record
Date as of which the Pool Scheduled Principal Balance is less than or equal to
10% of the Cutoff Date Pool Principal Balance.
The recitals contained herein shall be taken as the statements of the
Depositor, the General Partner or the Servicer, as the case may be, and the
Owner Trustee assumes no responsibility for the correctness thereof. The Owner
Trustee makes no representations as to the validity or sufficiency of this
Certificate or of any Contract or related document.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual or facsimile
signature, this Certificate shall not entitle the Holder hereof to any benefit
under the Trust Agreement or the Sale and Servicing Agreement or be valid for
any purpose.
B-1-4
<PAGE>
IN WITNESS WHEREOF, the Owner Trustee on behalf of the Trust and not in
its individual capacity has caused this Certificate to be duly executed.
Dated: ____________, ____
GREEN TREE RECREATIONAL, EQUIPMENT &
CONSUMER TRUST 1998-C
By WILMINGTON TRUST COMPANY, not in
its individual capacity but solely
on behalf of the Issuer as Owner
Trustee under the Trust Agreement
By
--------------------------------
Name:
--------------------------
Title:
-------------------------
Attest
----------------------------
Name:
--------------------------
Title:
-------------------------
B-1-5
<PAGE>
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Trust Agreement.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Owner Trustee
By
--------------------------------
as Authenticating Agent
B-1-6
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto ___________________________ (PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE)
(Please print or typewrite name and address, including postal zip code, of
assignee)
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
Attorney to transfer said Certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.
Dated: *
---------------------------------
Signature Guaranteed:
*
---------------------------------
*NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatsoever. Such signature must be
guaranteed by a member firm of The New York Stock Exchange, Inc. or a commercial
bank or trust company.
B-1-7
<PAGE>
EXHIBIT B-2
FORM OF CERTIFICATE
THIS TRUST CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT
TO THE NOTES TO THE EXTENT DESCRIBED IN THE INDENTURE
REFERRED TO HEREIN, AND TO THE CLASS B-1 CERTIFICATES
REFERRED TO HEREIN.
GREEN TREE RECREATIONAL, EQUIPMENT &
CONSUMER TRUST 1998-C
8.31% CLASS B-2 ASSET-BACKED CERTIFICATE
evidencing a fractional undivided interest in the Trust, as defined below, the
property of which includes a pool of retail installment sale contracts and
promissory notes secured by new and used motorcycles; marine products (including
boats, boat trailers and outboard motors); keyboard instruments; horse trailers;
sport vehicles (including snowmobiles, personal watercraft and all-terrain
vehicles); trucks; personal aircraft; and recreational vehicles, all sold to the
Trust by Green Tree Financial Corporation.
Certificate No. Denomination: $
Aggregate Denomination of all Class B-2
Certificates: $36,000,000
First Distribution Date: Pass-Through Rate: 8.31%
October 15, 1998
Final Scheduled Distribution Date:
March 15, 2019
Servicer: CUSIP:____________
Green Tree Financial Corporation
THIS CERTIFICATE MAY NOT BE ACQUIRED BY (A) AN EMPLOYEE BENEFIT PLAN (AS DEFINED
IN SECTION 3(3) OF ERISA) THAT IT IS SUBJECT TO THE PROVISIONS OF TITLE I OF
ERISA, (B) A PLAN DESCRIBED IN SECTION 4975(E)(1) OF THE CODE OR (C) ANY ENTITY
WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF SUCH PLAN'S INVESTMENT
IN THE ENTITY (INCLUDING AN INSURANCE COMPANY ACTING ON BEHALF OF ITS GENERAL
ACCOUNT) (EACH, A "BENEFIT PLAN INVESTOR"). PRIOR TO ITS PURCHASE OF THIS
CERTIFICATE, THE PROPOSED TRANSFEREE OF SUCH CERTIFICATE MUST CERTIFY IN WRITING
(IN THE FORM OF LETTER ATTACHED AS EXHIBIT C TO THE TRUST AGREEMENT) TO THE
SELLER, THE SERVICER, THE OWNER TRUSTEE AND THE UNDERWRITERS THAT IT IS NOT A
BENEFIT PLAN INVESTOR OR THAT ITS PURCHASE OF THIS CERTIFICATE WILL SATISFY
CERTAIN CONDITIONS SPECIFIED IN THE EXEMPTIVE RELIEF GRANTED BY, AND THE
REGULATIONS PROPOSED BY, THE DEPARTMENT OF LABOR). ANY TRANSFER OF THIS
CERTIFICATE IN VIOLATION OF THE FOREGOING SHALL BE VOID AND OF NO EFFECT.
B-2-1
<PAGE>
THIS CERTIFIES THAT _______________ is the registered owner of a
nonassessable, fully paid, fractional undivided interest in the Green Tree
Recreational Equipment & Consumer Trust 1998-C (the "Trust"). The Trust was
created pursuant to a Trust Agreement, dated as of September 1, 1998 (the "Trust
Agreement"), among Green Tree Financial Corporation, as depositor (the
"Depositor"), Green Tree Second GP Inc. (the "General Partner"), and Wilmington
Trust Company, not in its individual capacity but solely as owner trustee (the
"Owner Trustee"), a summary of certain of the pertinent provisions of which is
set forth below. To the extent not otherwise defined herein, the capitalized
terms used herein have the meanings assigned to them in the Trust Agreement or
the Sale and Servicing Agreement, dated as of September 1, 1998 (the "Sale and
Servicing Agreement"), between the Trust and Green Tree Financial Corporation
(the "Seller"), in its individual capacity and as servicer (the "Servicer").
This Certificate is one of the duly authorized Certificates designated
as "8.31% Class B-2 Asset-Backed Certificates" (herein called the "Class B-2
Certificates"). The Trust has also issued its Class B-1 Asset-Backed
Certificates (together with the Class B-2 Certificates, the "Certificates") and
has issued under the Indenture, dated as of September 1, 1998, between the Trust
and U.S. Bank Trust National Association, as trustee, the Asset-Backed Notes
(the "Notes") designated as the Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5, Class A-6 and Class A-7 Notes. This Certificate is issued under and
is subject to the terms, provisions and conditions of the Trust Agreement, to
which Trust Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound. The property of the Trust
includes (as more fully described in the Trust Agreement) a pool of retail
installment sale contracts and promissory notes (the "Contracts") for new and
used motorcycles; marine products (including boats, boat trailers and outboard
motors); keyboard instruments; horse trailers; sport vehicles (including
snowmobiles, personal watercraft and all-terrain vehicles); trucks; personal
aircraft; and recreational vehicles (the "Products"), certain monies due
thereunder on or after the Cutoff Date, an assignment of the Seller's security
interests in the Products, certain bank accounts and property (including the
right to receive Liquidation Proceeds) securing the Contracts, and proceeds of
all of the foregoing.
Under the Trust Agreement, there will be distributed on the 15th day of
each month or, if such 15th day is not a Business Day, the next succeeding
Business Day (the "Distribution Date"), commencing on October 15, 1998 to the
person in whose name this Certificate is registered at the close of business on
the Business Day immediately preceding such Distribution Date (the "Record
Date"), such Certificateholder's fractional undivided interest in the Class B-2
Distributable Amount to the extent of the funds available therefor. Such
distributions shall be made only after distributions due on such date on the
Class B-1 Certificates have been made in full.
It is the intent and agreement of the Depositor, the General Partner,
the Servicer and the Certificateholders that, for purposes of Federal income,
state and local income and franchise and any other income taxes, the Trust will
be treated as a partnership and the Certificateholders will be treated as
partners in that partnership. The Certificateholders, by acceptance of a
Certificate, agree to treat, and to take no action inconsistent with the
treatment of, the Certificates for such tax purposes as partnership interests in
the Trust.
Each Certificateholder, by its acceptance of a Certificate, covenants
and agrees that such Certificateholder will not at any time institute against
the General Partner or join in any institution
B-2-2
<PAGE>
against the Depositor, the Trust or the General Partner of any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Certificates, the Notes, the
Trust Agreement or any of the Related Documents.
Except as provided in the Trust Agreement, distributions on this
Certificate will be made by the Owner Trustee by check or money order mailed to
the Certificateholder of record in the Certificate Register without the
presentation or surrender of this Certificate or the making of any notation
hereon. Except as otherwise provided in the Trust Agreement and notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Owner Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency
maintained for that purpose by the Owner Trustee. The Record Date otherwise
applicable to distributions shall not be applicable to such final distribution.
The Certificates do not represent an obligation of, or an interest in,
the Depositor, the Servicer, the Owner Trustee or any Affiliate of any of them.
The Certificates are limited in right of payment to certain collections and
recoveries respecting the Contracts, all as more specifically set forth in the
Trust Agreement. A copy of the Trust Agreement may, upon request, be examined by
any Certificateholder during normal business hours at the principal office of
the Seller and at such other places, if any, designated by the Seller.
The Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
parties thereto and the rights of the Certificateholders under the Trust
Agreement at any time by the Depositor, the General Partner and the Owner
Trustee. In certain limited circumstances, the Trust Agreement may only be
amended with the consent of the Holders of Certificates evidencing not less than
a majority of each of the Class B-1 Principal Balance and the Class B-2
Principal Balance and, in certain circumstances, 100% of each of the Class B-1
Principal Balance and the Class B-2 Principal Balance. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and on
all future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate.
As provided in the Trust Agreement and subject to certain limitations
set forth therein, the transfer of this Certificate is registrable in the
Certificate Registrar upon surrender of this Certificate for registration of
transfer at the offices or agencies of the Certificate Registrar maintained by
the Owner Trustee in Wilmington, Delaware accompanied by a written instrument of
transfer in form satisfactory to the Owner Trustee and the Certificate Registrar
duly executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of authorized denominations
evidencing the same aggregate fractional undivided interest in the Trust issued
to the designated transferee. The initial Certificate Registrar appointed under
the Trust Agreement is Wilmington Trust Company.
The Certificates are issuable only as registered Certificates without
coupons in denominations of $1,000 and integral multiples thereof. As provided
in the Trust Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized
B-2-3
<PAGE>
denominations of a like aggregate fractional undivided interest, as requested by
the Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange, but the Owner Trustee may require payment
of a sum sufficient to cover any tax or governmental charges payable in
connection therewith.
The Owner Trustee, the Certificate Registrar and any agent of the Owner
Trustee or the Certificate Registrar may treat the person in whose name this
Certificate is registered as the owner hereof for the purpose of receiving
distributions and for all other purposes, and neither the Owner Trustee, the
Certificate Registrar nor any such agent shall be affected by any notice to the
contrary.
The obligations and responsibilities created by the Trust Agreement and
the Trust created thereby shall terminate upon the payment to Certificateholders
of all amounts required to be paid to them pursuant to the Trust Agreement and
the disposition of all property held as part of the Trust. The Servicer or the
Seller may at its option purchase the corpus of the Trust at a price specified
in the Sale and Servicing Agreement, and such purchase of the Contracts and
other property of the Trust will effect early retirement of the Certificates;
provided, however, such right of purchase is exercisable only as of a Record
Date as of which the Pool Scheduled Principal Balance is less than or equal to
10% of the Cutoff Date Pool Principal Balance.
The recitals contained herein shall be taken as the statements of the
Depositor, the General Partner or the Servicer, as the case may be, and the
Owner Trustee assumes no responsibility for the correctness thereof. The Owner
Trustee makes no representations as to the validity or sufficiency of this
Certificate or of any Contract or related document.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual or facsimile
signature, this Certificate shall not entitle the Holder hereof to any benefit
under the Trust Agreement or the Sale and Servicing Agreement or be valid for
any purpose.
B-2-4
<PAGE>
IN WITNESS WHEREOF, the Owner Trustee on behalf of the Trust and not in
its individual capacity has caused this Certificate to be duly executed.
Dated: _________________, ____
GREEN TREE RECREATIONAL, EQUIPMENT &
CONSUMER TRUST 1998-C
By WILMINGTON TRUST COMPANY, not in
its individual capacity but solely on
behalf of the Issuer as Owner Trustee
under the Trust Agreement
By
--------------------------------
Name:
--------------------------
Title:
-------------------------
Attest
----------------------------
Name:
--------------------------
Title:
-------------------------
B-2-5
<PAGE>
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Trust Agreement.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Owner Trustee
By
--------------------------------
as Authenticating Agent
B-2-6
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto ___________________________ (PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE)
(Please print or typewrite name and address, including postal zip code, of
assignee)
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
Attorney to transfer said Certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.
Dated: *
---------------------------------
Signature Guaranteed:
*
---------------------------------
*NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatsoever. Such signature must be
guaranteed by a member firm of The New York Stock Exchange, Inc. or a commercial
bank or trust company.
B-2-7
<PAGE>
EXHIBIT C
FORM OF REPRESENTATION LETTER AND CERTIFICATION
_____, 199_
Green Tree Financial Corporation
1100 Landmark Towers
345 St. Peter Street
St. Paul, MN 55102
Attention: Chief Financial Officer
Wilmington Trust Company
1100 North Market Street
Wilmington, Delaware 19890-0001
Merrill Lynch, Pierce, Fenner & Smith Incorporated
[AS REPRESENTATIVE OF THE SEVERAL UNDERWRITERS]
250 Vesey Street
World Financial Center
North Tower - 10th Floor
New York, New York 10281
Re: Green Tree Recreational, Equipment & Consumer Trust 1998-C
Asset-Backed Certificates, Class [B-1/B-2]
Ladies and Gentlemen:
This is to notify you as to the transfer of $________ of Asset-Backed
Certificates, Class [B-1/B-2] (the "Class [B-1/B-2] Certificates") of Green Tree
Recreational, Equipment & Consumer Trust 1998-C (the "Trust").
The undersigned is the holder of the Class [B-1/B-2] Certificates and
with this notice hereby deposits with the Trustee a certificate representing the
Class [B-1/B-2] Certificates and requests that Class [B-1/B-2] Certificates in
the same principal amount be issued and executed on behalf of the Trust and
authenticated by the Trustee, as specified in the Trust Agreement, and
registered to the purchaser on ________,____, as follows:
Name:
Denominations:
Address:
Taxpayer I.D. No.:
C-1
<PAGE>
In connection with the proposed purchase, the undersigned hereby
confirms that:
1. The undersigned either:
(a) 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")), including governmental plans and church plans, (ii) a plan
described in Section 4975(e)(1) of the Internal Revenue Code of 1986,
as amended (the "Code"), including individual retirement accounts and
Keogh plans, or (iii) any other entity whose underlying assets include
"plan assets" (as defined in United States Department of Labor ("DOL")
Regulation Section 2510.3-101, 29 C.F.R. ss. 2510.3-101 or otherwise
under ERISA) by reason of a plan's investment in the entity, including,
without limitation, an insurance company general account, or
(b) is an insurance company acting on behalf of a general account and
(i) on the date hereof less than 25% of the assets of such general
account (as reasonably determined by us) constitute "plan assets" for
purposes of Title I of ERISA and Section 4975 of the Code, (ii) the
purchase and holding of such Certificate are eligible for exemptive
relief under Sections (1) and (3) of Prohibited Transaction Class
Exemption 95-60, and (iii) the undersigned agrees that if, after the
undersigned's initial acquisition of the Class [B-1/B-2] Certificates,
at any time during any calendar quarter 25% or more of the assets of
such general account (as reasonably determined by us no less frequently
than each calendar quarter) constitute "plan assets" for purposes of
Title I of ERISA or Section 4975 of the Code and no exemption or
exception from the prohibited transaction rules applies to the
continued holding of the Class [B-1/B-2] Certificates under Section
401(c) of ERISA and the final regulations thereunder or under an
exemption or regulation issued by the DOL under ERISA, we will dispose
of all Certificates issued by the Trust then held in our general
account by the end of the next following calendar quarter.
2. The undersigned understands that any purported transfer of any
Certificate in contravention of the restrictions and conditions set forth in
paragraph 1 above (including any violation of the representation in paragraph 1
by an investor who continues to hold a Certificate occurring any time after the
transfer in which it acquired such Certificate) shall be null and void, and the
purported transferee shall not be recognized by the Trust or any other person as
a Certificateholder for any purpose.
3. The person signing this letter on behalf of the ultimate beneficial
purchaser of the Certificates has been duly authorized by such beneficial
purchaser of the Certificates to do so.
4. The Class [B-1/B-2] Certificates purchased by the undersigned should
be registered in the name and issued in the denominations set forth on Schedule
1 hereto. All payments on the Class [B-1/B-2] Certificates held by the
undersigned should be wired in accordance with the instructions set forth on
Schedule 1 hereto unless the undersigned otherwise notifies the Trustee in
writing.
You are entitled to rely upon this letter, and the undersigned
understands that, in granting their respective consents to the purchase of Class
[B-1/B-2] Certificates, the Company, the Servicer,
C-2
<PAGE>
the Trustee and the Underwriters will rely on the undersigned's representations
and warranties in this letter and on the undersigned's certifications in the
documents delivered by the undersigned to the Company, the Servicer, the Trustee
or the Underwriters in conjunction with the purchase of Class [B-1/B-2]
Certificates by the undersigned. You are irrevocably authorized to produce this
letter or a copy hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered hereby.
Very truly yours,
[NAME OF HOLDER OF CERTIFICATE]
By:
-------------------------------
Name, Chief Financial
or other Executive Officer
C-3
<PAGE>
Schedule 1
Registration and Payment Instructions
Registration Instructions:
Full Legal Name of Purchaser:
---------------------------------------------------
Name in Which Certificates Should be Registered:
--------------------------------
Number and Denomination of Certificates:
----------------------------------------
Payment Instructions:
Name of Bank:
---------------------------------
Address of Bank:
---------------------------------
Account Name:
---------------------------------
Account Number:
---------------------------------
ABA Number:
---------------------------------
Reference:
---------------------------------
Notice Information:
Address:
---------------------------------
---------------------------------
Attention:
---------------------------------
Telephone:
---------------------------------
Telefax:
---------------------------------
C-4
<PAGE>
EXHIBIT 4.3
GREEN TREE RECREATIONAL, EQUIPMENT & CONSUMER TRUST 1998-C
--------------------
INDENTURE
Dated as of September 1, 1998
--------------------
U.S. BANK TRUST NATIONAL ASSOCIATION
Trustee
<PAGE>
CROSS REFERENCE TABLE
TIA Indenture
Section Section
- ------- --------
310(a)(1)...................................................... 6.11
(a)(2)...................................................... 6.11
(a)(3)...................................................... 6.10
(a)(4)...................................................... N.A.
(a)(5)...................................................... 6.11
(b)......................................................... 6.08; 6.11
(c)......................................................... N.A.
311(a)......................................................... 6.12
(b)......................................................... 6.12
(c)......................................................... N.A.
312(a)......................................................... 7.01
(b)......................................................... 7.02
(c)......................................................... 7.02
313(a)......................................................... 7.04
(b)(1)...................................................... 7.04
(b)(2)...................................................... 7.04
(c)......................................................... 11.05
(d)......................................................... 7.04
314(a)......................................................... 7.03
(b)......................................................... 3.06 11.15
(c)(1)...................................................... 11.01
(c)(2)...................................................... 11.01
(c)(3)...................................................... 11.01
(d)......................................................... 11.01
(e)......................................................... 11.01
(f)......................................................... 11.01
315(a)......................................................... 6.01
(b)......................................................... 6.05 11.05
(c)......................................................... 6.01
(d)......................................................... 6.01
(e)......................................................... 5.14
316(a)(last sentence).......................................... 1.01
(a)(1)(A)................................................... 5.12
(a)(1)(B)................................................... 5.13
(a)(2)...................................................... N.A.
(b)......................................................... 5.08
(c)......................................................... N.A.
317(a)(1)...................................................... 5.03
(a)(2)...................................................... 5.03
(b)......................................................... 3.03
318(a)......................................................... 11.07
- ---------------
Note: This Cross Reference Table shall not, for any purpose, be deemed to
be part of this Indenture.
N.A. means Not Applicable.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I - DEFINITIONS AND INCORPORATION BY REFERENCE............................................1 - 1
SECTION 1.01. Definitions...............................................................1 - 1
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.........................1 - 9
SECTION 1.03. Rules of Construction.....................................................1 - 9
ARTICLE II - THE NOTES............................................................................2 - 1
SECTION 2.01. Form......................................................................2 - 1
SECTION 2.02. Execution, Authentication and Delivery....................................2 - 1
SECTION 2.03. Temporary Notes...........................................................2 - 2
SECTION 2.04. Registration; Registration of Transfer and Exchange.......................2 - 2
SECTION 2.05. Mutilated, Destroyed, Lost or Stolen Notes................................2 - 3
SECTION 2.06. Person Deemed Owner.......................................................2 - 4
SECTION 2.07. Payment of Principal and Interest; Defaulted Interest.....................2 - 4
SECTION 2.08. Cancellation..............................................................2 - 5
SECTION 2.09. Book-Entry Notes..........................................................2 - 5
SECTION 2.10. Notices to Depository.....................................................2 - 6
SECTION 2.11. Definitive Notes..........................................................2 - 6
ARTICLE III - COVENANTS..........................................................................3 - 1
SECTION 3.01. Payment of Principal, Interest and Premium................................3 - 1
SECTION 3.02. Maintenance of Office or Agency...........................................3 - 1
SECTION 3.03. Money for Payments To Be Held in Trust....................................3 - 1
SECTION 3.04. Existence.................................................................3 - 3
SECTION 3.05. Protection of Trust Estate................................................3 - 3
SECTION 3.06. Opinions as to Trust Estate...............................................3 - 3
SECTION 3.07. Performance of Obligations; Servicing of Contracts........................3 - 4
SECTION 3.08. Negative Covenants........................................................3 - 5
SECTION 3.09. Annual Statement as to Compliance.........................................3 - 5
SECTION 3.10. Issuer May Consolidate, etc. Only on Certain Terms........................3 - 6
SECTION 3.11. Successor or Transferee...................................................3 - 8
SECTION 3.12. No Other Business.........................................................3 - 8
SECTION 3.13. No Borrowing..............................................................3 - 8
SECTION 3.14. Servicer's Obligations....................................................3 - 8
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities.........................3 - 8
SECTION 3.16. Capital Expenditures......................................................3 - 9
SECTION 3.17. Restricted Payments.......................................................3 - 9
SECTION 3.18. Notice of Events of Default...............................................3 - 9
SECTION 3.19. Further Instruments and Acts..............................................3 - 9
SECTION 3.20. Compliance with Laws......................................................3 - 9
SECTION 3.21. Amendments of Sale and Servicing Agreement and
Trust Agreement...........................................................3 - 9
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SECTION 3.22. Removal of Administrator..................................................3 - 9
SECTION 3.23. Income Tax Characterization...............................................3 - 9
ARTICLE IV - SATISFACTION AND DISCHARGE...........................................................4 - 1
SECTION 4.01. Satisfaction and Discharge of Indenture...................................4 - 1
SECTION 4.02. Application of Trust Money................................................4 - 2
SECTION 4.03. Repayment of Moneys Held by Paying Agent..................................4 - 2
SECTION 4.04. Release of Trust Estate...................................................4 - 2
ARTICLE V - REMEDIES..............................................................................5 - 1
SECTION 5.01. Events of Default.........................................................5 - 1
SECTION 5.02. Rights upon Event of Default..............................................5 - 2
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement
by Trustee; Authority of Trustee..........................................5 - 2
SECTION 5.04. Remedies..................................................................5 - 4
SECTION 5.05. Optional Preservation of the Contracts....................................5 - 5
SECTION 5.06. Priorities................................................................5 - 5
SECTION 5.07. Limitation of Suits.......................................................5 - 6
SECTION 5.08. Unconditional Rights of Noteholders To Receive
Principal and Interest....................................................5 - 7
SECTION 5.09. Restoration of Rights and Remedies........................................5 - 7
SECTION 5.10. Rights and Remedies Cumulative............................................5 - 7
SECTION 5.11. Delay or Omission Not a Waiver............................................5 - 7
SECTION 5.12. Control by Noteholders....................................................5 - 7
SECTION 5.13. Waiver of Past Defaults...................................................5 - 8
SECTION 5.14. Undertaking for Costs.....................................................5 - 8
SECTION 5.15. Waiver of Stay or Extension Laws..........................................5 - 8
SECTION 5.16. Action on Notes...........................................................5 - 9
SECTION 5.17. Performance and Enforcement of Certain Obligations........................5 - 9
ARTICLE VI - THE TRUSTEE..........................................................................6 - 1
SECTION 6.01. Duties of Trustee.........................................................6 - 1
SECTION 6.02. Rights of Trustee.........................................................6 - 2
SECTION 6.03. Individual Rights of Trustee..............................................6 - 3
SECTION 6.04. Trustee's Disclaimer......................................................6 - 4
SECTION 6.05. Notice of Defaults........................................................6 - 4
SECTION 6.06. Reports by Trustee to Holders.............................................6 - 4
SECTION 6.07. Compensation and Indemnity................................................6 - 4
SECTION 6.08. Replacement of Trustee....................................................6 - 5
SECTION 6.09. Successor Trustee by Merger...............................................6 - 6
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee.............................6 - 6
SECTION 6.11. Eligibility; Disqualification.............................................6 - 7
SECTION 6.12. Preferential Collection of Claims Against Issuer..........................6 - 8
</TABLE>
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ARTICLE VII - NOTEHOLDERS' LISTS AND REPORTS......................................................7 - 1
SECTION 7.01. Issuer To Furnish Trustee Names and Addresses to
Noteholders...............................................................7 - 1
SECTION 7.02. Preservation of Information; Communications to
Noteholders...............................................................7 - 1
SECTION 7.03. Reports by Issuer.........................................................7 - 1
SECTION 7.04. Reports by Trustee........................................................7 - 2
ARTICLE VIII - ACCOUNTS, DISBURSEMENTS AND RELEASES...............................................8 - 1
SECTION 8.01. Collection of Money.......................................................8 - 1
SECTION 8.02. Trust Accounts............................................................8 - 1
SECTION 8.03. General Provisions Regarding Accounts.....................................8 - 3
ARTICLE IX - SUPPLEMENTAL INDENTURES..............................................................9 - 1
SECTION 9.01. Supplemental Indentures Without Consent of Noteholders....................9 - 1
SECTION 9.02. Supplemental Indentures With Consent of Noteholders.......................9 - 2
SECTION 9.03. Execution of Supplemental Indentures......................................9 - 3
SECTION 9.04. Effect of Supplemental Indenture..........................................9 - 3
SECTION 9.05. Conformity With Trust Indenture Act.......................................9 - 4
SECTION 9.06. Reference in Notes to Supplemental Indentures.............................9 - 4
ARTICLE X - REDEMPTION OF NOTES..................................................................10 - 1
SECTION 10.01. Redemption...............................................................10 - 1
SECTION 10.02. Form of Redemption Notice................................................10 - 1
SECTION 10.03. Notes Payable on Redemption Date.........................................10 - 2
ARTICLE XI - MISCELLANEOUS.......................................................................11 - 1
SECTION 11.01. Compliance Certificates and Opinions, etc................................11 - 1
SECTION 11.02. Form of Documents Delivered to Trustee...................................11 - 2
SECTION 11.03. Acts of Noteholders......................................................11 - 3
SECTION 11.04. Notices, etc., to Trustee, Issuer and Rating Agencies....................11 - 4
SECTION 11.05. Notices to Noteholders; Waiver...........................................11 - 4
SECTION 11.06. Alternate Payment and Notice Provisions..................................11 - 5
SECTION 11.07. Conflict with Trust Indenture Act........................................11 - 5
SECTION 11.08. Effect of Headings and Table of Contents.................................11 - 5
SECTION 11.09. Successors and Assigns...................................................11 - 5
SECTION 11.10. Severability.............................................................11 - 6
SECTION 11.11. Benefits of Indenture....................................................11 - 6
SECTION 11.12. Legal Holidays...........................................................11 - 6
SECTION 11.13. Governing Law............................................................11 - 6
SECTION 11.14. Counterparts.............................................................11 - 6
SECTION 11.15. Recording of Indenture...................................................11 - 6
SECTION 11.16. Trust Obligation.........................................................11 - 6
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SECTION 11.17. No Petition..............................................................11 - 7
SECTION 11.18. Inspection...............................................................11 - 7
EXHIBIT A - Schedule of Contracts................................................................ A - 1
EXHIBIT B - Form of Depository Agreement......................................................... B - 1
EXHIBIT C-1...................................................................................... C - 1 - 1
EXHIBIT C-2...................................................................................... C - 2 - 1
EXHIBIT C-3...................................................................................... C - 3 - 1
EXHIBIT C-4...................................................................................... C - 4 - 1
EXHIBIT C-5...................................................................................... C - 5 - 1
EXHIBIT C-6...................................................................................... C - 6 - 1
EXHIBIT C-7...................................................................................... C - 7 - 1
</TABLE>
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INDENTURE, dated as of September 1, 1998, between Green Tree
Recreational, Equipment & Consumer Trust 1998-C, a Delaware business trust (the
"Issuer"), and U.S. Bank Trust National Association, a national banking
association organized and existing under the laws of the United States of
America, in its capacity as trustee (the "Trustee") and not in its individual
capacity.
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Issuer's Class A-1
Asset-Backed Notes (the "Class A-1 Notes"), Class A-2 Floating Rate Asset-Backed
Notes (the "Class A-2 Notes"), Class A-3 Asset-Backed Notes (the "Class A-3
Notes"), Class A-4 Asset-Backed Notes (the "Class A-4 Notes"), Class A-5
Asset-Backed Notes (the "Class A-5 Notes"), Class A-6 Asset-Backed Notes (the
"Class A-6 Notes") and Class A-7 Asset-Backed Notes (the "Class A-7 Notes"),
(the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class A-4
Notes and the Class A-5 Notes are referred to collectively as the "Senior
Notes," and the Class A-6 Notes and the Class A-7 Notes are referred to
collectively as "Subordinated Notes" and the Senior Notes and Subordinated Notes
are referred to collectively as the "Notes"):
As security for the payment and performance by the Issuer of its
obligations under this Indenture and the Notes, the Issuer has agreed to assign
the Indenture Collateral (as defined below) as collateral for the benefit of the
Trustee on behalf of the Noteholders.
GRANTING CLAUSE
The Issuer hereby Grants, transfers and assigns to the Trustee on the
Closing Date, on behalf of and for the benefit of the Noteholders, without
recourse, all of the Issuer's right, title and interest in and to: (a) the
Contracts (including but not limited to the Collateral Security), and all moneys
payable thereon or in respect to the Contracts, including any liquidation
proceeds therefrom but excluding payments due on the Contracts prior to the
Cutoff Date; (b) the Insurance Policies on any Products securing a Contract for
the benefit of the creditor of such Contract and all blanket insurance policies
to the extent they relate to the Contracts; (c) all rights the Company may have
against the originating dealer with respect to Contracts not originated by the
Company; (d) the Errors and Omissions Protection Policy as such policy relates
to the Contracts; (e) all items contained in the Contract Files; (f) the Trust
Accounts (other than the Certificate Distribution Account) and all funds on
deposit therein from time to time, and all investments and proceeds thereof
(including all income thereon); (g) the Sale and Servicing Agreement; and (h)
all present and future claims, demands, causes and choses in action in respect
of any or all of the foregoing and all payments on or under and all proceeds and
products of every kind and nature whatsoever in respect of any or all of the
foregoing, including all proceeds of the conversion, voluntary or involuntary,
into cash or other liquid property, all cash proceeds, accounts, accounts
receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts,
insurance proceeds, condemnation awards, rights to payment of any and every kind
and other forms of obligations and Contracts, instruments and other property
which at any time constitute all or part of or are included in the proceeds of
any of the foregoing (collectively, the "Indenture Collateral").
<PAGE>
The foregoing Grant is made in trust to secure the payment of principal
of and interest on, and any other amounts owing in respect of, the Notes,
equally and ratably without prejudice, priority or distinction, and to secure
compliance with the provisions of this Indenture, all as provided in this
Indenture.
The Trustee, for the benefit of the Holders of the Notes acknowledges
such Grant. The Trustee on behalf of the Holders of the Notes accepts the trusts
under this Indenture in accordance with the provisions of this Indenture and
agrees to perform its duties required in this Indenture to the best of its
ability to the end that the interests of the Holders of the Notes may be
adequately and effectively protected.
2
<PAGE>
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
Except as otherwise specified herein or as the context may otherwise
require, the following terms have the respective meanings set forth below for
all purposes of this Indenture. Except as otherwise defined herein, all terms
defined in the Sale and Servicing Agreement or the Trust Agreement have the
meanings given them in such Related Document.
"Act" has the meaning specified in Section 11.03(a).
"Administration Agreement" means the Administration Agreement, dated as
of September 1, 1998, among the Administrator, the Issuer and the Trustee, as
the same may be amended and supplemented from time to time.
"Administrator" means Green Tree Financial Servicing Corporation, a
Delaware corporation, or any successor Administrator under the Administration
Agreement.
"Affiliate" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Authorized Officer" means, with respect to the Issuer, any officer of
the Owner Trustee who is authorized to act for the Owner Trustee in matters
relating to the Issuer and who is identified on the list of Authorized Officers
delivered by the Owner Trustee to the Trustee on the Closing Date (as such list
may be modified or supplemented from time to time thereafter).
"Book-Entry Note" means any Note registered in the name of the
Depository or its nominee, ownership of which is reflected on the books of the
Depository or on the books of a person maintaining an account with such
Depository (directly or as an indirect participant in accordance with the rules
of such Depository).
"Business Day" means any day other than a Saturday, Sunday, legal
holiday or other day on which commercial banking institutions in Minneapolis,
Minnesota, New York, New York, Wilmington, Delaware or any other location of any
successor Servicer, successor Owner Trustee or successor Trustee are authorized
or obligated by law, executive order or governmental decree to remain closed.
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"Certificate of Trust" means the Certificate of Trust of the Issuer
substantially in the form of Exhibit A to the Trust Agreement.
"Certificates" means the 8.07% Class B-1 and 8.24% Class B-2
Asset-Backed Certificates issued under the Trust Agreement.
"Class A-1 Notes" means the Class A-1 Asset-Backed Notes substantially
in the form of Exhibit C-1.
"Class A-2 Notes" means the Class A-2 Floating Rate Asset-Backed Notes
substantially in the form of Exhibit C-2.
"Class A-3 Notes" means the Class A-3 Asset-Backed Notes substantially
in the form of Exhibit C-3.
"Class A-4 Notes" means the Class A-4 Asset-Backed Notes substantially
in the form of Exhibit C-4.
"Class A-5 Notes" means the Class A-5 Asset-Backed Notes substantially
in the form of Exhibit C-5.
"Class A-6 Notes" means the Class A-6 Asset-Backed Notes substantially
in the form of Exhibit C-6.
"Class A-7 Notes" means the Class A-7 Asset-Backed Notes substantially
in the form of Exhibit C-7.
"Closing Date" means September 28, 1998.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
"Collection Account" means the account established and maintained
pursuant to Section 6.01 of the Sale and Servicing Agreement.
"Company" means Green Tree Financial Corporation.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered
which office at date of the execution of this Indenture is located at 180 East
Fifth Street, St. Paul, Minnesota 55101, Attention: Corporate Trust
Administration, Structured Finance; or at such other address as the Trustee may
designate from time to time by notice to the Noteholders and the Issuer, or the
principal corporate trust office of any
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<PAGE>
successor Trustee (and such successor Trustee will notify the Noteholders and
the Issuer of its address).
"Default" means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.
"Definitive Notes" has the meaning specified in Section 2.09.
"Depository" means the initial Depository, The Depository Trust
Company, the nominee of which is Cede & Co., as the registered Holder of
$122,000,000 in aggregate principal amount of the Class A-1 Notes, $193,000,000
in aggregate principal amount of the Class A-2 Notes, $150,000,000 in aggregate
principal amount of the Class A-3 Notes, $111,000,000 in aggregate principal
amount of the Class A-4 Notes, $104,000,000 in aggregate principal amount of the
Class A-5 Notes, $36,000,000 in aggregate principal amount of the Class A-6
Notes and $32,000,000 in aggregate principal amount of the Class A-7 Notes, as
of the Closing Date, and any permitted successor depository. The Depository
shall at all times be a "clearing corporation" as defined in the Uniform
Commercial Code of the State of New York.
"Depository Agreement" means the agreement among the Issuer, the
Trustee, the Administrator, and The Depository Trust Company, as the initial
Depository, dated as of the Closing Date, relating to the Notes, substantially
in the form of Exhibit B.
"Depository Participant" means a broker, dealer, bank or other
financial institution or other Person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
"Distribution Date" means the fifteenth day of each calendar month
during the term of this Indenture or if such day is not a Business Day, the next
succeeding Business Day, commencing in October 1998.
"Event of Default" has the meaning specified in Section 5.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Executive Officer" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, President,
Executive Vice President, any Vice President, any Responsible Officer, the
Secretary or the Treasurer of such corporation; and with respect to any
partnership, any general partner thereof.
"Final Scheduled Distribution Date" means with respect to each Class of
Notes, the Distribution Date occurring in the month and year indicated: Class
A-1-- August 1999; Class A-2 -- March 2005; Class A-3 -- February 2009; Class
A-4 -- February 2011; Class A-5 -- February 2014; Class A-6 -- February 2014;
and Class A-7 -- March 2014.
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<PAGE>
"General Partner" means each Certificateholder obligated to pay the
expenses of the Issuer pursuant to Section 2.7 of the Trust Agreement.
"Grant" means mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create, and grant a lien upon and a
security interest in and right of set-off against, deposit, set over and confirm
pursuant to this Indenture. A Grant of the Indenture Collateral or of any other
agreement or instrument shall include all rights, powers and options (but none
of the obligations) of the Granting party thereunder, including the immediate
and continuing right to claim for, collect, receive and give receipt for
principal and interest payments in respect of the Indenture Collateral and all
other moneys payable thereunder, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all rights and
options, to bring Proceedings in the name of the Granting party or otherwise and
generally to do and receive anything that the Granting party is or may be
entitled to do or receive thereunder or with respect thereto.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Note Register.
"Indebtedness" means, with respect to any Person at any time, (a)
indebtedness or liability of such Person for borrowed money whether or not
evidenced by bonds, debentures, notes or other instruments, or for the deferred
purchase price of property or services (including trade obligations); (b)
obligations of such Person as lessee under leases which should have been or
should be, in accordance with generally accepted accounting principles, recorded
as capital leases; (c) current liabilities of such Person in respect of unfunded
vested benefits under plans covered by Title IV of ERISA; (d) obligations issued
for or liabilities incurred on the account of such Person; (e) obligations or
liabilities of such Person arising under acceptance facilities; (f) obligations
of such Person under any guarantees, endorsements (other than for collection or
deposit in the ordinary course of business) and other contingent obligations to
purchase, to provide funds for payment, to supply funds to invest in any Person
or otherwise to assure a creditor against loss; (g) obligations of such Person
secured by any lien on property or assets of such Person, whether or not the
obligations have been assumed by such Person; or (h) obligations of such Person
under any interest rate or currency exchange agreement.
"Indenture" means this Indenture as amended or supplemented from time
to time.
"Indenture Collateral" has the meaning specified in the Granting Clause
of this Indenture.
"Independent" means, when used with respect to any specified Person,
that the Person (a) is in fact independent of the Issuer, any other obligor upon
the Notes, the Company and any Affiliate of any of the foregoing Persons, (b)
does not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Company or any Affiliate of
any of the foregoing Persons and (c) is not connected with the Issuer, any such
other obligor, the Company or any Affiliate of any of the foregoing Persons as
an officer, employee, promoter, underwriter, trustee, partner, director or
person performing similar functions.
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<PAGE>
"Independent Certificate" means a certificate or opinion to be
delivered to the Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01, made by an
Independent appraiser or other expert appointed by an Issuer Order and approved
by the Trustee in the exercise of reasonable care, and such opinion or
certificate shall state that the signer has read the definition of "Independent"
in this Indenture and that the signer is Independent within the meaning thereof.
"Interest Rate" means the Class A-1 Interest Rate, the Class A-2
Interest Rate, the Class A-3 Interest Rate, the Class A-4 Interest Rate, the
Class A-5 Interest Rate, the Class A-6 Interest Rate or the Class A-7 Interest
Rate, as applicable.
"Issuer" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained herein and required by the TIA, each other obligor on
the Notes.
"Issuer Order" and "Issuer Request" means a written order or request
signed in the name of the Issuer by any one of its Authorized Officers and
delivered to the Trustee.
"Note" means a Class A-1 Note, a Class A-2 Note, a Class A-3 Note, a
Class A-4 Note, a Class A-5 Note, a Class A-6 Note or a Class A-7 Note.
"Note Distribution Account" means the account designated as such,
established and maintained pursuant to Section 6.01 of the Sale and Servicing
Agreement.
"Note Owner" means, with respect to a Book-Entry Note, the Person who
is the owner of such Book-Entry Note, as reflected on the books of the
Depository, or on the books of a Person maintaining an account with such
Depository (directly as a Depository participant or as an indirect participant,
in each case in accordance with the rules of such Depository) and with respect
to any Definitive Notes, the Holder.
"Note Register" and "Note Registrar" have the respective meanings
specified in Section 2.04.
"Officers' Certificate" means a certificate signed by any Authorized
Officer of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01, and delivered to,
the Trustee. Unless otherwise specified, any reference in this Indenture to an
Officers' Certificate shall be to an Officers' Certificate of any Authorized
Officer of the Issuer.
"Opinion of Counsel" means one or more written opinions of counsel who
may, except as otherwise expressly provided in this Indenture, be employees of
or counsel to the Issuer and who shall be satisfactory to the Trustee and which
shall comply with any applicable requirements of Section 11.01, and shall be in
form and substance satisfactory to the Trustee.
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<PAGE>
"Original Class A-1 Principal Balance" means $122,000,000.
"Original Class A-2 Principal Balance" means $193,000,000.
"Original Class A-3 Principal Balance" means $150,000,000.
"Original Class A-4 Principal Balance" means $111,000,000.
"Original Class A-5 Principal Balance" means $104,000,000.
"Original Class A-6 Principal Balance" means $36,000,000.
"Original Class A-7 Principal Balance" means $32,000,000.
"Original Note Principal Balance" means the sum of the Original Class
A-1 Principal Balance, Original Class A-2 Principal Balance, Original Class A-3
Principal Balance, Original Class A-4 Principal Balance, Original Class A-5
Principal Balance, Original Class A-6 Principal Balance and Original Class A-7
Principal Balance.
"Outstanding" means, as of the date of determination, all Notes
theretofore authenticated and delivered under this Indenture except:
(i) Notes theretofore canceled by the Note Registrar or delivered
to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Trustee or
any Paying Agent in trust for the Holders of such Notes (provided,
however, that if such Notes are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision
therefor, satisfactory to the Trustee, has been made); and
(iii) Notes in exchange for or in lieu of other Notes which have
been authenticated and delivered pursuant to this Indenture unless
proof satisfactory to the Trustee is presented that any such Notes are
held by a bona fide purchaser;
provided, however, that in determining whether the Holders of the requisite
Outstanding Amount of the Notes have given any request, demand, authorization,
direction, notice, consent or waiver hereunder or under any Related Document,
Notes owned by the Issuer, any other obligor upon the Notes, the Company or any
Affiliate of any of the foregoing Persons shall be disregarded and deemed not to
be Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Notes that the Trustee knows to be so owned
shall be so disregarded. Notes so owned that have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the satisfaction
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<PAGE>
of the Trustee the pledgee's right so to act with respect to such Notes and that
the pledgee is not the Issuer, any other obligor upon the Notes, the Company or
any Affiliate of any of the foregoing Persons.
"Outstanding Amount" means the aggregate principal amount of all Notes,
or class of Notes, as applicable, Outstanding at the date of determination.
"Owner Trustee" means Wilmington Trust Company, not in its individual
capacity but solely as Owner Trustee under the Trust Agreement, or any successor
owner trustee under the Trust Agreement.
"Paying Agent" means the Trustee or any other Person that meets the
eligibility standards for the Trustee specified in Section 6.11 and is
authorized by the Issuer to make the distributions from the Note Distribution
Account, including payment of principal of or interest on the Notes on behalf of
the Issuer.
"Person" means any individual, corporation, estate, partnership,
limited liability company, joint venture, association, joint stock company,
trust (including any beneficiary thereof), unincorporated organization or
government or any agency or political subdivision thereof.
"Predecessor Note" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.05 in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
"Proceeding" means any suit in equity, action at law or other judicial
or administrative proceeding.
"Rating Agency" means each of Standard & Poor's and Fitch, so long as
such Persons maintain a rating on the Notes; and if either Standard & Poor's or
Fitch no longer maintains a rating on the Notes, such other nationally
recognized statistical rating organization selected by the Company.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days (or such shorter period as is
acceptable to each Rating Agency) prior notice thereof and that each of the
Rating Agencies shall have notified the Company, the Servicer, the Trustee, the
Owner Trustee and the Issuer in writing that such action will not result in a
reduction or withdrawal of the then current rating of the Notes.
"Record Date" means, with respect to a Distribution Date or Redemption
Date, the close of business on the last Business Day immediately preceding such
Distribution Date or Redemption Date.
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<PAGE>
"Redemption Date" means in the case of a redemption of the Notes
pursuant to Section 10.01(a) or a payment to Noteholders pursuant to Section
10.01(b), the Distribution Date specified by the Servicer or the Issuer pursuant
to Section 10.01(a) or 10.01(b), as applicable.
"Redemption Price" means (a) in the case of a redemption of the Notes
pursuant to Section 10.01(a), an amount equal to the principal amount of the
Notes redeemed plus accrued and unpaid interest on the principal amount of each
class of Notes at the respective Interest Rate for each such class of Notes
being so redeemed to but excluding the Redemption Date, or (b) in the case of a
payment made to Noteholders pursuant to Section 10.01(b), the amount on deposit
in the Note Distribution Account, but not in excess of the amount specified in
clause (a) above.
"Registered Holder" means the Person in whose name a Note is registered
on the Note Register on the applicable Record Date.
"Related Documents" means the Trust Agreement, the Certificates, the
Notes, the Sale and Servicing Agreement, the Administration Agreement, the
Depository Agreement and the Underwriting Agreements. The Related Documents
executed by any party are referred to herein as "such party's Related
Documents," "its Related Documents" or by a similar expression.
"Responsible Officer" means, with respect to the Trustee, any officer
of the Trustee assigned by the Trustee to administer its corporate trust affairs
relating to the Trust Estate.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement,
dated as of September 1, 1998, among the Issuer, the Company and the Servicer.
"Schedule of Contracts" means the listing of the Contracts set forth in
Exhibit A.
"Secured Obligations" means all amounts and obligations which the
Issuer may at any time owe to or on behalf of the Trustee for the benefit of the
Noteholders under this Indenture or the Notes.
"Senior Notes" means the Class A-1 Notes, the Class A-2 Notes, the
Class A-3 Notes, the Class A-4 Notes and the Class A-5 Notes.
"State" means any one of the 50 states of the United States of America
or the District of Columbia.
"Termination Date" means the date on which the Trustee shall have
received payment and performance of all Secured Obligations.
"Trust Estate" means all money, instruments, rights and other property
that are subject or intended to be subject to the lien and security interest of
this Indenture for the benefit of the
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<PAGE>
Noteholders (including, without limitation, the Indenture Collateral Granted to
the Trustee), including all proceeds thereof.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as
in force on the date hereof, unless otherwise specifically provided.
"Trustee" means U.S. Bank Trust National Association, a national
banking association organized under the laws of the United States, as Trustee
under this Indenture, or any successor Trustee under this Indenture.
"UCC" means, unless the context otherwise requires, the Uniform
Commercial Code, as in effect in the relevant jurisdiction, as amended from time
to time.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule have
the meaning assigned to them by such definitions.
SECTION 1.03. Rules of Construction. Unless otherwise specified:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
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(v) words in the singular include the plural and words in the
plural include the singular; and
(vi) references to Sections, Subsections, Schedules and Exhibits
shall refer to such portions of this Indenture.
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ARTICLE II
THE NOTES
SECTION 2.01. Form. The Class A-1 Notes, the Class A-2 Notes, the Class
A-3 Notes, the Class A-4 Notes, the Class A-5 Notes, the Class A-6 Notes and the
Class A-7 Notes, in each case together with the Trustee's certificate of
authentication, shall be in substantially the forms set forth in Exhibits C-1,
C-2, C-3, C-4, C-5, C-6 and C-7, respectively, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may,
consistently herewith, be determined by the officers executing such Notes, as
evidenced by their execution of the Notes. Any portion of the text of any Note
may be set forth on the reverse thereof, with an appropriate reference thereto
on the face of the Note.
The Notes shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods all as determined by the officers
executing such Notes, as evidenced by their execution of such Notes.
Each Note shall be dated the date of its authentication. The terms of
the Notes set forth in Exhibits C-1, C-2, C-3, C-4, C-5, C-6 and C-7 are part of
the terms of this Indenture.
SECTION 2.02. Execution, Authentication and Delivery. The Notes shall
be executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile. Notes bearing the manual or facsimile signature of individuals who
were at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The Trustee shall, upon receipt of an Issuer Order, authenticate and
deliver Class A-1 Notes in an aggregate principal amount of $122,000,000, Class
A-2 Notes in an aggregate principal amount of $193,000,000, Class A-3 Notes in
an aggregate principal amount of $150,000,000, Class A-4 Notes in an aggregate
principal amount of $111,000,000, Class A-5 Notes in an aggregate principal
amount of $104,000,000, Class A-6 Notes in an aggregate principal amount of
$36,000,000 and Class A-7 Notes in an aggregate principal amount of $32,000,000.
The aggregate principal amount of Class A-1 Notes, Class A-2 Notes, Class A-3
Notes, Class A-4 Notes, Class A-5 Notes, Class A-6 Notes and Class A-7 Notes
outstanding at any time may not exceed that amount except as provided in Section
2.05.
Each Note shall be dated the date of its authentication. The Notes
shall be issuable as registered Notes in the minimum denomination of $1,000 and
in integral multiples thereof.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form
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provided for herein executed by the Trustee by the manual signature of one of
its authorized signatories, and such certificate upon any Note shall be
conclusive evidence, and the only evidence, that such Note has been duly
authenticated and delivered hereunder.
SECTION 2.03. Temporary Notes. Pending the preparation of Definitive
Notes, the Issuer may execute, and upon receipt of an Issuer Order the Trustee
shall authenticate and deliver, temporary Notes which are printed, lithographed,
typewritten, mimeographed or otherwise produced, of the tenor of the Definitive
Notes in lieu of which they are issued and with such variations not inconsistent
with the terms of this Indenture as the officers executing such Notes may
determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer will cause Definitive Notes
to be prepared without unreasonable delay. After the preparation of Definitive
Notes, the temporary Notes shall be exchangeable for Definitive Notes upon
surrender of the temporary Notes at the office or agency of the Issuer to be
maintained as provided in Section 3.02, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Notes, the Issuer shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
like principal amount of Definitive Notes of authorized denominations. Until so
exchanged, the temporary Notes shall in all respects be entitled to the same
benefits under this Indenture as Definitive Notes.
SECTION 2.04. Registration; Registration of Transfer and Exchange. The
Issuer shall cause to be kept a register (the "Note Register") in which, subject
to such reasonable regulations as it may prescribe, the Issuer shall provide for
the registration of Notes and the registration of transfers of Notes. The
Trustee shall be "Note Registrar" for the purpose of registering Notes and
transfers of Notes as herein provided. Upon any resignation of any Note
Registrar, the Issuer shall promptly appoint a successor or, if it elects not to
make such an appointment, assume the duties of Note Registrar.
If a Person other than the Trustee is appointed by the Issuer as Note
Registrar, the Issuer will give the Trustee prompt written notice of the
appointment of such Note Registrar and of the location, and any change in the
location, of the Note Register, and the Trustee shall have the right to inspect
the Note Register at all reasonable times and to obtain copies thereof, and the
Trustee shall have the right to rely upon a certificate executed on behalf of
the Note Registrar by an Executive Officer thereof as to the names and addresses
of the Holders of the Notes and the principal amounts and number of such Notes.
Upon surrender for registration of transfer of any Note at the office
or agency of the Issuer to be maintained as provided in Section 3.02, the Issuer
shall execute, and the Trustee shall authenticate and the Noteholder shall
obtain from the Trustee, in the name of the designated transferee or
transferees, one or more new Notes in any authorized denominations, of a like
aggregate principal amount.
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At the option of the Holder, Notes may be exchanged for other Notes in
any authorized denominations, of a like aggregate principal amount, upon
surrender of the Notes to be exchanged at such office or agency. Whenever any
Notes are so surrendered for exchange, the Issuer shall execute, and the Trustee
shall authenticate and the Noteholder shall obtain from the Trustee, the Notes
which the Noteholder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument of
transfer in form satisfactory to the Trustee duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing, with such
signature guaranteed by a commercial bank or trust company located, or having a
correspondent located, in The City of New York or the city in which the
Corporate Trust Office is located, or by a member firm of a national securities
exchange, and such other documents as the Trustee may require.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Issuer or the Trustee may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of Notes,
other than exchanges pursuant to Section 2.03 or 9.06 not involving any
transfer.
The preceding provisions of this section notwithstanding, the Issuer
shall not be required to make and the Note Registrar need not register transfers
or exchanges of Notes selected for redemption or of any Note for a period of 15
days preceding the due date for any payment with respect to the Note.
SECTION 2.05. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Trustee, or the Trustee receives evidence
to its satisfaction of the destruction, loss or theft of any Note, and (ii)
there is delivered to the Trustee and such security or indemnity as may be
required by them to hold the Issuer and the Trustee harmless, then, in the
absence of notice to the Issuer, the Note Registrar or the Trustee that such
Note has been acquired by a bona fide purchaser, the Issuer shall execute and
upon its request the Trustee shall authenticate and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Note, a replacement
Note; provided, however, that if any such destroyed, lost or stolen Note, but
not a mutilated Note, shall have become or within seven days shall be due and
payable, or shall have been called for redemption, instead of issuing a
replacement Note, the Issuer may pay such destroyed, lost or stolen Note when so
due or payable or upon the Redemption Date without surrender thereof. If, after
the delivery of such replacement Note or payment of a destroyed, lost or stolen
Note pursuant to the proviso to the preceding sentence, a bona fide purchaser of
the original Note in lieu of which such replacement Note was issued presents for
payment such original Note, the Issuer and the Trustee shall be entitled to
recover such replacement Note (or such payment) from the Person to whom it was
delivered or
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any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer or the Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section, the
Issuer or the Trustee may require the payment by the Holder of such Note of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other reasonable expenses (including the fees and
expenses of the Trustee or the Note Registrar) connected therewith.
Every replacement Note issued pursuant to this Section in replacement
of any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.06. Person Deemed Owner. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Trustee and any agent of
the Issuer or the Trustee may treat the Person in whose name any Note is
registered (as of the day of determination) as the owner of such Note for the
purpose of receiving payments of principal of and interest, if any, on such Note
and for all other purposes whatsoever, whether or not such Note be overdue, and
none of the Issuer, the Trustee nor any agent of the Issuer or the Trustee shall
be affected by notice to the contrary.
SECTION 2.07. Payment of Principal and Interest; Defaulted Interest.
(a) The Notes shall accrue interest as provided in the forms of the
Class A-1 Note, the Class A-2 Note, the Class A-3 Note, the Class A-4 Note, the
Class A-5 Note, the Class A-6 Note and the Class A-7 Note set forth in Exhibits
C-1, C-2, C-3, C-4, C-5, C-6 and C-7, respectively, and such interest shall be
payable on each Distribution Date as specified therein, subject to Section 3.01.
Any installment of interest or principal, if any, payable on any Note which is
punctually paid or duly provided for by the Issuer on the applicable
Distribution Date shall be paid to the Person in whose name such Note (or one or
more Predecessor Notes) is registered on the Record Date, by check mailed
first-class, postage prepaid to such Person's address as it appears on the Note
Register on such Record Date, except that, unless Definitive Notes have been
issued pursuant to Section 2.11, with respect to Notes registered on the Record
Date in the name of the nominee of the Depository, payment will be made by wire
transfer in immediately available funds to the account designated by such
nominee and except for (i) the final installment of principal payable with
respect to such Note on a Distribution Date and (ii) the Redemption Price for
any Note called for redemption pursuant
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to Section 10.01(a), which shall be payable as provided below. The funds
represented by any such checks returned undelivered shall be held in accordance
with Section 3.03.
(b) The principal of each Note shall be payable in installments on each
Distribution Date as provided in the forms of the Class A-1 Note, the Class A-2
Note, the Class A-3 Note, the Class A-4 Note, the Class A-5 Note, the Class A-6
Note and the Class A-7 Note set forth in Exhibits C-1, C-2, C-3, C-4, C-5, C-6
and C-7, respectively. Notwithstanding the foregoing, the entire unpaid
principal amount of the Notes shall be due and payable, if not previously paid,
on the date on which an Event of Default shall have occurred and be continuing
and the Trustee or a Note Majority have declared the Notes to be immediately due
and payable in the manner provided in Section 5.02. All principal payments on a
Class of Notes shall be made pro rata to the Noteholders of such Class entitled
thereto. The Trustee shall notify the Person in whose name a Note is registered
at the close of business on the Record Date preceding the Distribution Date on
which the Issuer expects that the final installment of principal of and interest
on such Note will be paid. Such notice shall be mailed no later than five days
prior to such final Distribution Date and shall specify that such final
installment will be payable only upon presentation and surrender of such Note
and shall specify the place where such Note may be presented and surrendered for
payment of such installment. Notices in connection with redemptions of Notes
shall be mailed to Noteholders as provided in Section 10.02.
SECTION 2.08. Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee and shall be promptly
canceled by the Trustee. The Issuer may at any time deliver to the Trustee for
cancellation any Notes previously authenticated and delivered hereunder which
the Issuer may have acquired in any manner whatsoever, and all Notes so
delivered shall be promptly canceled by the Trustee. No Notes shall be
authenticated in lieu of or in exchange for any Notes canceled as provided in
this Section, except as expressly permitted by this Indenture. All canceled
Notes may be held or disposed of by the Trustee in accordance with its standard
retention or disposal policy as in effect at the time unless the Issuer shall
direct by an Issuer Order that they be destroyed or returned to it, provided
that such Issuer Order is timely and the Notes have not been previously disposed
of by the Trustee.
SECTION 2.09. Book-Entry Notes. The Notes, upon original issuance, will
be issued in the form of a typewritten Note or Notes representing the Book-Entry
Notes, to be delivered to The Depository Trust Company, the initial Depository,
by, or on behalf of, the Issuer. Each such Note shall initially be registered on
the Note Register in the name of Cede & Co., the nominee of the initial
Depository, and no Note Owner will receive a Definitive Note representing such
Note Owner's interest in such Note, except as provided in Section 2.11. Unless
and until definitive, fully registered Notes (the "Definitive Notes") have been
issued to Note Owners pursuant to Section 2.11:
(i) the provisions of this Section shall be in full force and
effect;
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(ii) the Note Registrar and the Trustee shall be entitled to deal
with the Depository for all purposes of this Indenture (including the
payment of principal of and interest on the Notes and the giving of
instructions or directions hereunder) as the sole holder of the Notes,
and shall have no obligation to the Note Owners;
(iii) to the extent that the provisions of this Section conflict
with any other provisions of this Indenture, the provisions of this
Section shall control;
(iv) the rights of Note Owners shall be exercised only through
the Depository and shall be limited to those established by law and
agreements between such Note Owners and the Depository and/or the
Depository Participants. Pursuant to the Depository Agreement, unless
and until Definitive Notes are issued pursuant to Section 2.11, the
initial Depository will make book-entry transfers among the Depository
Participants and receive and transmit payments of principal of and
interest on the Notes to such Depository Participants; and
(v) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Holders of Notes
evidencing a specified percentage of the Outstanding Amount of the
Notes, the Depository shall be deemed to represent such percentage
only to the extent that it has received instructions to such effect
from Note Owners and/or Depository Participants owning or
representing, respectively, such required percentage of the beneficial
interest in the Notes and has delivered such instructions to the
Trustee.
SECTION 2.10. Notices to Depository. Whenever a notice or other
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Note Owners pursuant to Section
2.11, the Trustee shall give all such notices and communications specified
herein to be given to Holders of the Notes to the Depository and shall have no
obligation to the Note Owners.
SECTION 2.11. Definitive Notes. If (i) the Administrator advises the
Trustee in writing that the Depository is no longer willing or able properly to
discharge its responsibilities with respect to the Notes, and the Administrator
is unable to locate a qualified successor, (ii) the Administrator at its option
advises the Trustee in writing that it elects to terminate the book-entry system
through the Depository or (iii) after the occurrence of an Event of Default, a
Note Majority advises the Depository in writing that the continuation of a
book-entry system through the Depository is no longer in the best interests of
the Note Owners, then the Depository shall notify all Note Owners and the
Trustee of the occurrence of any such event and of the availability of
Definitive Notes to Note Owners requesting the same. Upon surrender to the
Trustee of the Note or Notes representing the Book-Entry Notes by the
Depository, accompanied by registration instructions, the Issuer shall execute
and the Trustee shall authenticate the Definitive Notes in accordance with the
instructions of the Depository. None of the Issuer, the Note Registrar or the
Trustee shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on,
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such instructions. Upon the issuance of Definitive Notes, the Trustee shall
recognize the Holders of the Definitive Notes as Noteholders.
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ARTICLE III
COVENANTS
SECTION 3.01. Payment of Principal, Interest and Premium. The Issuer
will duly and punctually pay the principal and interest on the Notes in
accordance with the terms of the Notes and this Indenture. Without limiting the
foregoing, the Issuer will cause to be distributed all amounts on deposit in the
Note Distribution Account on a Distribution Date in accordance with Section
8.02(c). Amounts properly withheld under the Code by any Person from a payment
to any Noteholder of interest and/or principal shall be considered as having
been paid by the Issuer to such Noteholder for all purposes of this Indenture.
SECTION 3.02. Maintenance of Office or Agency. The Issuer will maintain
in St. Paul, Minnesota, an office or agency where Notes may be surrendered for
registration of transfer or exchange, and where notices and demands to or upon
the Issuer in respect of the Notes and this Indenture may be served. The Issuer
hereby initially appoints the Trustee to serve as its agent for the foregoing
purposes. The Issuer will give prompt written notice to the Trustee of the
location, and of any change in the location, of any such office or agency. If at
any time the Issuer shall fail to maintain any such office or agency or shall
fail to furnish the Trustee with the address thereof, such surrenders, notices
and demands may be made or served at the Corporate Trust Office, and the Issuer
hereby appoints the Trustee as its agent to receive all such surrenders, notices
and demands.
SECTION 3.03. Money for Payments To Be Held in Trust. As provided in
Section 8.02, all payments of amounts due and payable with respect to any Notes
that are to be made pursuant to Section 8.02(c) from amounts withdrawn from the
Note Distribution Account shall be made on behalf of the Issuer by the Trustee
or by another Paying Agent, and no amounts so withdrawn from the Note
Distribution Account for payment of Notes shall be paid over to the Issuer.
On or before each Distribution Date or Redemption Date, the Issuer
shall deposit or cause to be deposited in the Note Distribution Account an
aggregate sum sufficient to pay the amounts then becoming due, such sum to be
held in trust for the benefit of the Persons entitled thereto and (unless the
Paying Agent is the Trustee) shall promptly notify the Trustee of its action or
failure so to act.
The Issuer will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee (and if the Trustee acts as Paying Agent, it hereby
so agrees), subject to the provisions of this Section, that such Paying Agent
will:
(i) hold all sums held by it for the payment of amounts due
with respect to the Notes in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided;
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(ii) give the Trustee notice of any default (of which it has
actual knowledge) by the Issuer (or any other obligor upon the Notes)
in the making of any payment required to be made with respect to the
Notes;
(iii) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to
the Trustee all sums held by it in trust for the payment of Notes if at
any time it ceases to meet the standards required to be met by a Paying
Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to
the withholding from any payments made by it on any Notes of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Paying Agent to pay to the Trustee all sums held in trust by
such Paying Agent, such sums to be held by the Trustee upon the same trusts as
those upon which the sums were held by such Paying Agent; and upon such payment
by any Paying Agent to the Trustee, such Paying Agent shall be released from all
further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money
held by the Trustee or any Paying Agent in trust for the payment of any amount
due with respect to any Note and remaining unclaimed for two years after such
amount has become due and payable shall be discharged from such trust and upon
Issuer Request shall be deposited by the Trustee in the Collection Account; and
the Holder of such Note shall thereafter, as an unsecured general creditor, look
only to the Issuer for payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such repayment, may at the expense of the Issuer cause to be published once,
in a newspaper published in the English language, customarily published on each
Business Day and of general circulation in The City of New York, notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to or for the account of the
Issuer. The Trustee may also adopt and employ, at the expense of the Issuer, any
other reasonable means of notification of such repayment (including, but not
limited to, mailing notice of such repayment to Holders whose Notes have been
called but have not been surrendered for redemption or whose right to or
interest in moneys due and payable but not claimed is determinable from the
records of the Trustee or of any Paying Agent, at the last address of record for
each such Holder).
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SECTION 3.04. Existence. The Issuer will keep in full effect its
existence, rights and franchises as a business trust under the laws of the State
of Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other state or of the United States of America,
in which case the Issuer will keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Indenture Collateral and each
other instrument or agreement included in the Trust Estate.
SECTION 3.05. Protection of Trust Estate. The Issuer intends the
security interest Granted pursuant to this Indenture in favor of the Trustee to
be prior to all other liens in respect of the Trust Estate, and the Issuer shall
take all actions necessary to obtain and maintain, in favor of the Trustee, for
the benefit of the Noteholders, a first lien on and a first priority, perfected
security interest in the Trust Estate. The Issuer will from time to time execute
and deliver all such supplements and amendments hereto and all such financing
statements, continuation statements, instruments of further assurance and other
instruments, all as prepared by the Servicer and delivered to the Issuer, and
will take such other action necessary or advisable to:
(i) grant more effectively all or any portion of the Trust
Estate;
(ii) maintain or preserve the lien and security interest (and the
priority thereof) created by this Indenture or carry out more
effectively the purposes hereof;
(iii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(iv) enforce any of the Indenture Collateral;
(v) preserve and defend title to the Trust Estate and the rights
of the Trustee in such Trust Estate against the claims of all persons
and parties; or
(vi) pay all taxes or assessments levied or assessed upon the
Trust Estate when due.
The Issuer hereby designates the Trustee its agent and attorney-in-fact to
execute any financing statement, continuation statement or other instrument
required by the Trustee pursuant to this Section.
SECTION 3.06. Opinions as to Trust Estate.
(a) Promptly after the execution and delivery of this Indenture, the
Issuer shall furnish to the Trustee an Opinion of Counsel to the effect that, in
the opinion of such counsel, either (i) all financing statements and
continuation statements have been executed and filed that are necessary to
create and continue the Trustee's first priority perfected security interest in
the collateral for the
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benefit of the Noteholders, and reciting the details of such filings or
referring to prior Opinions of Counsel in which such details are given, or (ii)
no such action shall be necessary to perfect such security interest; and
(b) Within 90 days after the beginning of each calendar year beginning
with the first calendar year beginning more than three months after the Cutoff
Date, the Issuer shall furnish to the Trustee an Opinion of Counsel, dated as of
a date during such 90-day period, to the effect that, in the opinion of such
counsel, either (i) all financing statements and continuation statements have
been executed and filed that are necessary to create and continue the Trustee's
first priority perfected security interest in the collateral for the benefit of
the Noteholders, and reciting the details of such filing or referring to prior
Opinions of Counsel in which such details are given, or (ii) no such action
shall be necessary to perfect such security interest.
SECTION 3.07. Performance of Obligations; Servicing of Contracts.
(a) The Issuer will not take any action and will use its best efforts
not to permit any action to be taken by others that would release any Person
from any of such Person's material covenants or obligations under any instrument
or agreement included in the Trust Estate or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any such instrument or agreement, except as
expressly provided in this Indenture, the Sale and Servicing Agreement or such
other instrument or agreement.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Trustee in an Officers' Certificate of the Issuer
shall be deemed to be action taken by the Issuer. Initially, the Issuer has
contracted with the Servicer and the Administrator to assist the Issuer in
performing its duties under this Indenture.
(c) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Related Documents
and in the instruments and agreements included in the Trust Estate, including
but not limited to filing or causing to be filed all UCC financing statements
and continuation statements required to be filed by the terms of this Indenture
and the Sale and Servicing Agreement in accordance with and within the time
periods provided for herein and therein.
(d) If the Issuer shall have knowledge of the occurrence of an "Event
of Termination" under the Sale and Servicing Agreement, the Issuer shall
promptly notify the Trustee and the Rating Agencies thereof, and shall specify
in such notice the action, if any, the Issuer is taking with respect of such
default. If an "Event of Termination" shall arise from the failure of the
Servicer to perform any of its duties or obligations under the Sale and
Servicing Agreement with respect to the Contracts, the Issuer shall take all
reasonable steps available to it to remedy such failure.
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(e) If the Issuer has given notice of termination to the Servicer of
the Servicer's rights and powers pursuant to Section 7.02 of the Sale and
Servicing Agreement, as promptly as possible thereafter, a successor servicer
shall be appointed in accordance with Section 7.03 of the Sale and Servicing
Agreement.
(f) Upon any termination of the Servicer's rights and powers pursuant
to the Sale and Servicing Agreement, the Issuer shall promptly notify the
Trustee. As soon as a successor Servicer is appointed, the Issuer shall notify
the Trustee of such appointment, specifying in such notice the name and address
of such successor Servicer.
(g) The Issuer agrees that it will not waive timely performance or
observance by the Servicer, the Trustee or the Company of their respective
duties under the Related Documents if the effect thereof would adversely affect
the Holders of the Notes.
SECTION 3.08. Negative Covenants. Until the Termination Date, the
Issuer shall not:
(i) except as expressly permitted by this Indenture or the
Sale and Servicing Agreement, sell, transfer, exchange or otherwise
dispose of any of the properties or assets of the Issuer, including
those included in the Trust Estate, unless directed to do so by the
Trustee;
(ii) claim any credit on, or make any deduction from the
principal, interest or premium payable in respect of, the Notes (other
than amounts properly withheld from such payments under the Code) or
assert any claim against any present or former Noteholder by reason of
the payment of the taxes levied or assessed upon any part of the Trust
Estate; or
(iii) (A) permit the validity or effectiveness of this
Indenture to be impaired, or permit the lien in favor of the Trustee
created by this Indenture to be amended, hypothecated, subordinated,
terminated or discharged, or permit any Person to be released from any
covenants or obligations with respect to the Notes under this Indenture
except as may be expressly permitted hereby, (B) permit any lien,
charge, excise, claim, security interest, mortgage or other encumbrance
(other than the lien in favor of the Trustee created by this Indenture)
to be created on or extend to or otherwise arise upon or burden the
Trust Estate or any part thereof or any interest therein or the
proceeds thereof (other than tax liens, mechanics' liens and other
liens that arise by operation of law, in each case on a Financed
Product and arising solely as a result of an action or omission of the
related Obligor), (C) permit the lien in favor of the Trustee created
by this Indenture not to constitute a valid first priority (other than
with respect to any such tax, mechanics' or other lien) security
interest in the Trust Estate, or (D) amend, modify or fail to comply
with the provisions of the Related Documents without the prior written
consent of the Trustee.
SECTION 3.09. Annual Statement as to Compliance. The Issuer will
deliver to the Trustee, within 120 days after the end of each fiscal year of the
Issuer (commencing with the fiscal year ended
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December 31, 1998), an Officers' Certificate stating, as to the Authorized
Officer signing such Officer's Certificate, that
(i) a review of the activities of the Issuer during such year and
of performance under this Indenture has been made under such
Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based on
such review, the Issuer has complied with all conditions and covenants
under this Indenture throughout such year, or, if there has been a
default in the compliance of any such condition or covenant,
specifying each such default known to such Authorized Officer and the
nature and status thereof.
SECTION 3.10. Issuer May Consolidate, etc. Only on Certain Terms.
(a) The Issuer shall not consolidate or merge with or into any other
Person, unless
(i) the Person (if other than the Issuer) formed by or surviving
such consolidation or merger shall be a Person organized and existing
under the laws of the United States of America or any State and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form and substance satisfactory to the
Trustee, the due and punctual payment of the principal of and interest
on all Notes and the performance or observance of every agreement and
covenant of this Indenture and each other Related Document on the part
of the Issuer to be performed or observed, all as provided herein;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel which
shall be delivered to and shall be satisfactory to the Trustee to the
effect that such transaction will not have any material adverse tax
consequence to the Trust, any Noteholder or any Certificateholder;
(v) any action as is necessary to maintain the lien and security
interest created in favor of the Trustee by this Indenture shall have
been taken;
(vi) the Issuer shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel (which shall describe the
actions taken as required by clause (a)(v) of this Section 3.10 or
that no such actions will be taken) each stating that such
consolidation or merger and such supplemental indenture comply with
this Article III and that all conditions precedent herein provided for
relating to such transaction have been compiled with (including any
filing required by the Exchange Act); and
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(vii) the Issuer or the Person (if other than the Issuer) formed
by or surviving such consolidation or merger has a net worth,
immediately after such consolidation or merger, that is (a) greater
than zero and (b) not less than the net worth of the Issuer
immediately prior to giving effect to such consolidation or merger.
(b) The Issuer shall not convey or transfer all or substantially all of
its properties or assets, including those included in the Trust Estate, to any
Person (except as expressly permitted by the Indenture or the Sale and Servicing
Agreement), unless
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer shall (A) be a United States
citizen or a Person organized and existing under the laws of the
United States of America or any State, (B) expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee,
in form and substance satisfactory to the Trustee, the due and
punctual payment of the principal of and interest on all Notes and the
performance or observance of every agreement and covenant of this
Indenture and each Related Document on the part of the Issuer to be
performed or observed, all as provided herein, (C) expressly agree by
means of such supplemental indenture that all right, title and
interest so conveyed or transferred shall be subject and subordinate
to the rights of Holders of the Notes, (D) unless otherwise provided
in such supplemental indenture, expressly agree to indemnify, defend
and hold harmless the Issuer against and from any loss, liability or
expense arising under or related to this Indenture and the Notes and
(E) expressly agree by means of such supplemental indenture that such
Person (or if a group of Persons, then one specified Person) shall
make all filings with the Commission (and any other appropriate
Person) required by the Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel which
shall be delivered to and shall be satisfactory to the Trustee to the
effect that such transaction will not have any material adverse tax
consequence to the Trust, any Noteholder or any Certificateholder;
(v) any action as is necessary to maintain the lien and security
interest created in favor of the Trustee by this Indenture shall have
been taken;
(vi) the Issuer shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel (which shall describe the
actions taken as required by clause (b)(v) of this Section 3.10 or
that no such actions will be taken) each stating that such conveyance
or transfer and such supplemental indenture comply with this Article
III and that all conditions
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precedent herein provided for relating to such transaction have been
complied with (including any filing required by the Exchange Act); and
(vii) the Person acquiring by conveyance or transfer the
properties or assets of the Issuer has a net worth, immediately after
such conveyance or transfer, that is (a) greater than zero and (b) not
less than the net worth of the Issuer immediately prior to giving
effect to such conveyance or transfer.
SECTION 3.11. Successor or Transferee.
(a) Upon any consolidation or merger of the Issuer in accordance with
Section 3.10(a), the Person formed by or surviving such consolidation or merger
(if other than the Issuer) shall succeed to, and be substituted for, and may
exercise every right and power of, the Issuer under this Indenture with the same
effect as if such Person had been named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 3.10(b), the Issuer will be released from every
covenant and agreement of this Indenture to be observed or performed on the part
of the Issuer with respect to the Notes immediately upon the delivery of written
notice to the Trustee stating that the Issuer is to be so released.
SECTION 3.12. No Other Business. The Issuer shall not engage in any
business other than financing, purchasing, owning, selling and managing the
Contracts in the manner contemplated by this Indenture and the Related Documents
and activities incidental thereto.
SECTION 3.13. No Borrowing. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
Indebtedness except for (i) the Notes and (ii) any other Indebtedness permitted
by or arising under the Related Documents. The proceeds of the Notes and the
Certificates shall be used exclusively to fund the Issuer's purchase of the
Contracts and the other assets specified in the Sale and Servicing Agreement,
and to pay the Issuer's organizational, transactional and start-up expenses.
SECTION 3.14. Servicer's Obligations. The Issuer shall cause the
Servicer to fulfill its obligations under the Sale and Servicing Agreement.
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities. Except
as contemplated by the Sale and Servicing Agreement or this Indenture, the
Issuer shall not make any loan or advance or credit to, or guarantee (directly
or indirectly or by an instrument having the effect of assuming another's
payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or own,
purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, any other interest in, or make any capital
contribution to, any other Person.
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SECTION 3.16. Capital Expenditures. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
SECTION 3.17. Restricted Payments. Except as expressly permitted by
this Indenture or the Sale and Servicing Agreement, the Issuer shall not,
directly or indirectly, (i) make any distribution (by reduction of capital or
otherwise), whether in cash, property, securities or a combination thereof, to
the Owner Trustee or any owner of a beneficial interest in the Issuer or
otherwise with respect to any ownership or equity interest or security in or of
the Issuer or to the Servicer, (ii) redeem, purchase, retire or otherwise
acquire for value any such ownership or equity interest or security or (iii) set
aside or otherwise segregate any amounts for any such purpose. The Issuer will
not, directly or indirectly, make payments to or distributions from the
Collection Account except in accordance with this Indenture and the Related
Documents.
SECTION 3.18. Notice of Events of Default. The Issuer agrees to give
the Trustee and the Rating Agencies prompt written notice of each Event of
Default hereunder and each default on the part of the Servicer or the Company of
its obligations under the Sale and Servicing Agreement.
SECTION 3.19. Further Instruments and Acts. Upon request of the
Trustee, the Issuer will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 3.20. Compliance with Laws. The Issuer shall comply with the
requirements of all applicable laws, the noncompliance with which would,
individually or in the aggregate, materially and adversely affect the ability of
the Issuer to perform its obligations under the Notes, this Indenture or any
Related Document.
SECTION 3.21. Amendments of Sale and Servicing Agreement and Trust
Agreement. The Issuer shall not agree to any amendment to Section 10.03 of the
Sale and Servicing Agreement or Section 11.1 of the Trust Agreement to eliminate
the requirements thereunder that the Trustee or the Holders of the Notes consent
to amendments thereto as provided therein.
SECTION 3.22. Removal of Administrator. So long as any Notes are issued
and Outstanding, the Issuer shall not remove the Administrator without cause
unless the Rating Agency Condition shall have been satisfied in connection with
such removal.
SECTION 3.23. Income Tax Characterization. For purposes of federal
income, state and local income and franchise and any other income taxes, the
Issuer will treat the Notes as indebtedness of the Issuer. The Issuer, by
entering into this Indenture, and each Noteholder, by its acceptance of its Note
(and each Note Owner by its acceptance of an interest in the applicable
Book-Entry Note), agree to treat the Notes for federal, state and local income,
single business and franchise tax purposes as indebtedness of the Issuer.
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ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01. Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect with respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal, interest and premium, if any, thereon, (iv) Sections 3.03, 3.04,
3.05, 3.07, 3.08, 3.10, 3.12, 3.13, 3.20, 3.21 and 3.23, (v) the rights,
obligations and immunities of the Trustee hereunder (including the rights of the
Trustee under Section 6.07 and the obligations of the Trustee under Section
4.02) and (vi) the rights of Noteholders as beneficiaries hereof with respect to
the property so deposited with the Trustee payable to all or any of them, and
the Trustee, on demand of and at the expense of the Issuer, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture with
respect to the Notes, when
(A) either
(1) all Notes theretofore authenticated and delivered (other than
(i) Notes that have been destroyed, lost or stolen and that have been
replaced or paid as provided in Section 2.05 and (ii) Notes for whose
payment money has theretofore been deposited in trust or segregated
and held in trust by the Issuer and thereafter repaid to the Issuer or
discharged from such trust, as provided in Section 3.03) have been
delivered to the Trustee for cancellation; or
(2) all Notes not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at the applicable Final
Scheduled Distribution Date within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of
the Issuer,
and the Issuer, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee as part of the Trust Estate cash or direct obligations of or
obligations guaranteed by the United States of America (which will
mature prior to the date such amounts are payable), in trust in an
Eligible Account in the name of the Trustee for such purpose, in an
amount sufficient to pay and discharge the entire indebtedness on such
Notes not theretofore delivered to the Trustee for cancellation when
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due to the applicable Final Scheduled Distribution Date or Redemption
Date (if Notes shall have been called for redemption pursuant to
Section 10.01(a)), as the case may be;
(B) the Issuer has paid or caused to be paid all Secured Obligations;
and
(C) the Issuer has delivered to the Trustee an Officers' Certificate,
an Opinion of Counsel and (if required by the TIA or the Trustee) an
Independent Certificate from a firm of certified public accountants, each
meeting the applicable requirements of Section 11.01(a) and each stating
that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with and
the Rating Agency Condition has been satisfied.
SECTION 4.02. Application of Trust Money. All moneys deposited with the
Trustee pursuant to Section 4.01 hereof shall be held in trust and applied by
it, in accordance with the provisions of the Notes and this Indenture, to the
payment, either directly or through any Paying Agent, as the Trustee may
determine, to the Holders of the particular Notes for the payment or redemption
of which such moneys have been deposited with the Trustee, of all sums due and
to become due thereon for principal and interest; but such moneys need not be
segregated from other funds except to the extent required herein or in the Sale
and Servicing Agreement or required by law.
SECTION 4.03. Repayment of Moneys Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to the Notes,
all moneys then held by any Paying Agent other than the Trustee under the
provisions of this Indenture with respect to such Notes shall, upon demand of
the Issuer, be paid to the Trustee to be held and applied according to Section
3.03 and thereupon such Paying Agent shall be released from all further
liability with respect to such moneys.
SECTION 4.04. Release of Trust Estate. The Trustee shall, on or after
the Termination Date, release any remaining portion of the Trust Estate from the
lien created by this Indenture and deposit in the Collection Account any funds
then on deposit in any other Trust Account. The Trustee shall release property
from the lien created by this Indenture pursuant to this Section 4.04 only upon
receipt of an Issuer Request accompanied by an Officer's Certificate, an Opinion
of Counsel and (if required by the TIA) Independent Certificates in accordance
with TIA ss.ss. 314(c) and 314(d)(1) meeting the applicable requirements of
Section 11.01.
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ARTICLE V
REMEDIES
SECTION 5.01. Events of Default. "Event of Default," wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) default in the payment of any interest on any Senior Note when the
same becomes due and payable, and such default shall continue for a period
of five days; or if all interest and principal due on the Senior Notes has
been paid in full, default in the payment of any interest on any Class A-6
Note when the same becomes due and payable, and such default shall continue
for a period of five days; or if all interest and principal due on the
Senior Notes and the Class A-6 Notes has been paid in full, default in the
payment of any interest on any Class A-7 Note when the same becomes due,
and such default shall continue for a period of five days; or
(ii) default in the payment of the principal of any Note on the Final
Scheduled Distribution Date for the Notes of such Class; or
(iii) default in the observance or performance of any covenant or
agreement of the Issuer made in this Indenture (other than a covenant or
agreement, a default in the observance or performance of which is elsewhere
in this Section specifically dealt with), or any representation or warranty
of the Issuer made in this Indenture or in any certificate or other writing
delivered pursuant hereto or in connection herewith proving to have been
incorrect in any material respect as of the time when the same shall have
been made, and such default shall continue or not be cured, or the
circumstance or condition in respect of which such misrepresentation or
warranty was incorrect shall not have been eliminated or otherwise cured,
for a period of 30 days after there shall have been given, by registered or
certified mail, to the Issuer by the Trustee or to the Issuer and the
Trustee by the Holders of at least 25% of the Outstanding Amount of the
Notes, a written notice specifying such default or incorrect representation
or warranty and requiring it to be remedied and stating that such notice is
a "Notice of Default" hereunder; or
(iv) the commencement of an involuntary case against the Issuer under
any applicable Federal or state bankruptcy, insolvency or other similar law
now or hereafter in effect, and such case is not dismissed within 60 days;
or
(v) the commencement by the Issuer of a voluntary case under any
applicable Federal or state bankruptcy, insolvency or other similar law now
or hereafter in effect, the entry of an order for relief in an involuntary
case against the Issuer under any such law, the consent by the Issuer to
the entry of any such order for relief, the consent by the Issuer to the
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appointment or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Issuer or for
any substantial part of the Trust Estate, the making by the Issuer of any
general assignment for the benefit of creditors, the failure by the Issuer
generally to pay its debts as such debts become due, or the taking of
action by the Issuer in furtherance of any of the foregoing.
The Issuer shall deliver to the Trustee, within five days after
obtaining knowledge of the occurrence thereof, written notice in the form of an
Officers' Certificate of any event which with the giving of notice and the lapse
of time would become an Event of Default under clause (iii), its status and what
action the Issuer is taking or proposes to take with respect thereto.
SECTION 5.02. Rights upon Event of Default.
If an Event of Default shall have occurred and be continuing, the
Trustee in its discretion may, or if so requested in writing by Holders holding
Notes representing (i) at least 66-2/3% of the Outstanding Amount of each Class
of Senior Notes if any Senior Notes are then Outstanding, or (ii) if no Senior
Notes are Outstanding, at least 66-2/3% of the Outstanding Amount of the Class
A-6 Notes, or (iii) if no Class A-6 Notes are then Outstanding, at least 66-2/3%
of the Outstanding Amount of the Class A-7 Notes, shall, upon prior written
notice to the Rating Agencies, declare by written notice to the Issuer that the
Notes become, whereupon they shall become, immediately due and payable at par,
together with accrued interest thereon. Notwithstanding anything to the contrary
in this Section, if an Event of Default specified in Section 5.01(iv) or (v)
shall occur and be continuing the Notes shall become immediately due and payable
at par, together with accrued interest thereon. If an Event of Default shall
have occurred and be continuing, the Trustee may exercise any of the remedies
specified in Section 5.04(a).
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by
Trustee; Authority of Trustee.
(a) The Issuer covenants that if any Notes are accelerated following
the occurrence of an Event of Default, the Issuer will, upon demand of the
Trustee, pay to it, for the benefit of the Holders of such Notes, the whole
amount then due and payable on such Notes for principal and interest, with
interest upon the overdue principal, and, to the extent payment at such rate of
interest shall be legally enforceable, upon overdue installments of interest, at
the applicable Interest Rate and in addition thereto such further amount as
shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee and
its agents and counsel.
(b) If an Event of Default occurs and is continuing, the Trustee may,
in its discretion, proceed to protect and enforce its rights and the rights of
the Noteholders, by such appropriate Proceedings as the Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise
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of any power granted herein, or to enforce any other proper remedy or legal or
equitable right vested in the Trustee by this Indenture or by law.
(c) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Trust Estate, Proceedings under Title 11 of the United States Code or any
other applicable Federal or state bankruptcy, insolvency or other similar law,
or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial Proceedings relative to the Issuer
or other obligor upon the Notes, or to the creditors or property of the Issuer
or such other obligor, the Trustee, irrespective of whether the principal of any
Notes shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand
pursuant to the provisions of this Section, shall be entitled and empowered, by
intervention in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal, interest and premium, if any, owing and unpaid in respect of the
Notes and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim
for reasonable compensation to the Trustee and each predecessor Trustee,
and their respective agents, attorneys and counsel, and for reimbursement
of all expenses and liabilities incurred, and all advances made, by the
Trustee and each predecessor Trustee, except as a result of negligence or
bad faith) and of the Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote on
behalf of the Holders of Notes in any election of a trustee, a standby
trustee or Person performing similar functions in any such Proceedings;
(iii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute all amounts received with
respect to the claims of the Noteholders and of the Trustee on their
behalf; and
(iv) to file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee or the
Holders of Notes allowed in any judicial proceedings relative to the
Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Trustee, and, in the event that the Trustee shall consent to the
making of payments directly to such Noteholders, to pay to the Trustee such
amounts as shall be sufficient to cover reasonable compensation to the Trustee,
each predecessor Trustee and their respective agents, attorneys and counsel, and
all other expenses and liabilities incurred, and all advances made, by the
Trustee and each predecessor Trustee except as a result of negligence or bad
faith.
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(d) Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or vote for or accept or adopt on behalf of any
Noteholder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof or to authorize the
Trustee to vote in respect of the claim of any Noteholder in any such proceeding
except, as aforesaid, to vote for the election of a trustee in bankruptcy or
similar Person.
(e) All rights of action and of asserting claims under this Indenture
or under any of the Notes, may be enforced by the Trustee without the possession
of any of the Notes or the production thereof in any trial or other Proceedings
relative thereto, and any such action or Proceedings instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment, subject to the payment of the expenses, disbursements and
compensation of the Trustee, each predecessor Trustee and their respective
agents and attorneys, shall be for the ratable benefit of the Holders of the
Notes.
(f) In any Proceedings brought by the Trustee (including any
Proceedings involving the interpretation of any provision of this Indenture),
the Trustee shall be held to represent all the Holders of the Notes, and it
shall not be necessary to make any Noteholder a party to any such Proceedings.
SECTION 5.04. Remedies. (a) If an Event of Default shall have
occurred and be continuing, the Trustee may (subject to Section 5.05):
(i) institute Proceedings in its own name and as or on behalf of a
trustee of an express trust for the collection of all amounts then payable
on the Notes or under this Indenture with respect thereto, whether by
declaration or otherwise, enforce any judgment obtained, and collect from
the Issuer and any other obligor upon such Notes moneys adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC and any
other remedy available to the Trustee and take any other appropriate action
to protect and enforce the rights and remedies of the Trustee on behalf of
the Noteholders; and
(iv) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private sales called and
conducted in any manner permitted by law; provided, however, that the
Trustee may not sell or otherwise liquidate the Trust Estate following an
Event of Default unless (A) such Event of Default is of the type described
in Section 5.01(i) or (ii), or (B) either (I) the Holders of 100% of the
Outstanding Amount of the Notes consent thereto, (II) the proceeds of such
sale or liquidation distributable to the Noteholders will be sufficient to
discharge in full all amounts then due and unpaid upon such Notes for
principal and interest, or (III) the Trustee determines that the Trust
Estate will not
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continue to provide sufficient funds for the payment of principal of and
interest on the Notes as they would have become due if the Notes had not
been declared due and payable, and in each case the Trustee provides prior
written notice to the Rating Agencies and obtains the consent of Holders of
66-2/3% of the Outstanding Amount of each Class of Notes. In determining
such sufficiency or insufficiency with respect to clause (II) or (III), the
Trustee may, but need not, obtain and rely upon an opinion of an
Independent investment banking or accounting firm of national reputation as
to the feasibility of such proposed action and as to the sufficiency of the
Trust Estate for such purpose.
SECTION 5.05. Optional Preservation of the Contracts. If any Notes have
been declared to be due and payable under Section 5.02 following an Event of
Default and such declaration and its consequences have not been rescinded and
annulled, the Trustee may, but need not, elect to maintain possession of the
Trust Estate. It is the desire of the parties hereto and the Noteholders that
there be at all times sufficient funds for the payment of principal of and
interest on the Notes, and the Trustee shall take such desire into account when
determining whether or not to maintain possession of the Trust Estate. In
determining whether to maintain possession of the Trust Estate, the Trustee may,
but need not, obtain and rely upon an opinion of an Independent investment
banking or accounting firm of national reputation as to the feasibility of such
proposed action and as to the sufficiency of the Trust Estate for such purpose.
SECTION 5.06. Priorities.
If the Trustee collects any money or property pursuant to this Article
V, including any money or property in respect of liquidation of the Trust Estate
pursuant to Section 5.04(a)(iv), the Trustee shall pay out the money or property
as promptly as practicable in the following order:
(i) amounts due and owing and required to be distributed to
the Servicer, pursuant to priorities (i) and (ii) of Section 6.06(a) of
the Sale and Servicing Agreement and not previously distributed, in the
order of such priorities and without preference or priority of any kind
within such priorities;
(ii) interest due and principal outstanding under the Senior
Notes, to the Holders thereof, ratably, without preference or priority
of any kind, according to such respective amounts of interest and
principal;
(iii) for interest due and principal outstanding under the
Class A-6 Notes, to the Holders thereof, ratably, without preference or
priority of any kind, according to such respective amounts of interest
and principal;
(iv) for interest due and principal outstanding under the
Class A-7 Notes, to the Holders thereof, ratably, without preference or
priority of any kind, according to such respective amounts of interest
and principal;
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(v) amounts due and unpaid on the Certificates for interest and
principal, to the Owner Trustee for distribution to Certificateholders
in accordance with Section 5.2(a) of the Trust Agreement;
and the excess shall be paid to the General Partner.
SECTION 5.07. Limitation of Suits. No Holder of any Class A-6 Note or
any Class A-7 Note shall have any right to institute any proceeding, judicial or
otherwise, with respect to this Indenture, or for the appointment of a receiver
or trustee, or for any other remedy hereunder, if any Senior Notes are then
outstanding and unpaid. No Holder of any Class A-7 Note shall have any right to
institute such remedial actions if any Class A-6 Notes remain Outstanding and
unpaid. No Holder of any Note shall have any right to institute any Proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless:
(i) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Outstanding Amount
of the Notes have made written request to the Trustee to institute
such Proceeding in respect of such Event of Default in its own name as
Trustee hereunder;
(iii) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in complying with such request;
(iv) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute such
Proceedings; and
(v) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority of the Outstanding Amount of the Notes;
it being understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Notes or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except in the
manner herein provided.
In the event the Trustee shall receive conflicting or inconsistent
requests and indemnity from two or more groups of Holders of Notes, each
representing less than a majority of the Outstanding Amount of the Notes, the
Trustee in its sole discretion may determine what action, if any, shall be
taken, notwithstanding any other provisions of this Indenture.
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SECTION 5.08. Unconditional Rights of Noteholders To Receive Principal
and Interest. Notwithstanding any other provisions in this Indenture, the Holder
of any Note shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest on such Note on or after the
respective due dates thereof expressed in such Note or in this Indenture (or, in
the case of redemption, on or after the Redemption Date) and to institute suit
for the enforcement of any such payment, and such right shall not be impaired
without the consent of such Holder.
SECTION 5.09. Restoration of Rights and Remedies. If the Trustee or any
Noteholder has instituted any Proceeding to enforce any right or remedy under
this Indenture and such Proceeding has been discontinued or abandoned for any
reason or has been determined adversely to the Trustee or to such Noteholder,
then and in every such case the Issuer, the Trustee and the Noteholders shall,
subject to any determination in such Proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter all rights and
remedies of the Trustee and the Noteholders shall continue as though no such
Proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Trustee or to the Noteholders is intended to
be exclusive of any other right or remedy, and every right and remedy shall, to
the extent permitted by law, be cumulative and in addition to every other right
and remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 5.11. Delay or Omission Not a Waiver. No delay or omission of
the Trustee or any Holder of any Note to exercise any right or remedy accruing
upon any Default or Event of Default shall impair any such right or remedy or
constitute a waiver of any such Default or Event of Default or an acquiescence
therein. Every right and remedy given by this Article V or by law to the Trustee
or to the Noteholders may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Noteholders, as the case may be.
SECTION 5.12. Control by Noteholders. The Holders of a majority of the
Outstanding Amount of (i) the Senior Notes, or (ii) the Class A-6 Notes if all
Senior Notes have been paid in full, or (iii) the Class A-7 Notes if all Senior
Notes and Class A-6 Notes have been paid in full, shall have the right to direct
the time, method and place of conducting any Proceeding for any remedy available
to the Trustee with respect to the Notes or exercising any trust or power
conferred on the Trustee; provided that
(i) such direction shall not be in conflict with any rule of law
or with this Indenture;
(ii) subject to the express terms of Section 5.04, any direction
to the Trustee to sell or liquidate all or any portion of the Trust
Estate shall be by the Holders of Notes representing not less than
100% of the Outstanding Amount of the Notes;
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(iii) the Trustee may take any other action deemed proper by the
Trustee that is not inconsistent with such direction; provided,
however, that, subject to Section 6.01, the Trustee need not take any
action that it determines might involve it in liability or might
materially adversely affect the rights of any Noteholders not
consenting to such action.
SECTION 5.13. Waiver of Past Defaults. The Holders of Notes of not less
than a majority of the Outstanding Amount of (i) the Senior Notes, or (ii) the
Class A-6 Notes if all Senior Notes have been paid in full, or (iii) the Class
A-7 Notes if all Senior Notes and Class A-6 Notes have been paid in full, may
waive any past Default or Event of Default and its consequences except a Default
(a) in payment of principal of or interest on any of the Notes or (b) in respect
of a covenant or provision hereof which cannot be modified or amended without
the consent of the Holder of each Note. In the case of any such waiver, the
Issuer, the Trustee and the Holders of the Notes shall be restored to their
former positions and rights hereunder, respectively; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereto. Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereto.
SECTION 5.14. Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Note by such Holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken, suffered or omitted by it as Trustee,
the filing by any party litigant in such suit of an undertaking to pay the costs
of such suit and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to (a)
any suit instituted by the Trustee, (b) any suit instituted by any Noteholder,
or group of Noteholders, in each case holding in the aggregate more than 10% of
the Outstanding Amount of the Notes or (c) any suit instituted by any Noteholder
for the enforcement of the payment of principal of or interest on any Note on or
after the respective due dates expressed in such Note and in this Indenture (or,
in the case of redemption, on or after the Redemption Date).
SECTION 5.15. Waiver of Stay or Extension Laws. The Issuer covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead or in any manner whatsoever, claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantages of any such law, and covenants that
it will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
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SECTION 5.16. Action on Notes. The Trustee's right to seek and recover
judgment on the Notes or under this Indenture shall not be affected by the
seeking, obtaining or application of any other relief under or with respect to
this Indenture. Neither the lien of this Indenture nor any rights or remedies of
the Trustee or the Noteholders shall be impaired by the recovery of any judgment
by the Trustee against the Issuer or by the levy of any execution under such
judgment upon any portion of the Trust Estate or upon any of the assets of the
Issuer.
SECTION 5.17. Performance and Enforcement of Certain Obligations.
(a) Promptly following a request from the Trustee to do so and at the
Company's expense, the Issuer agrees to take all such lawful action as the
Trustee may request to compel or secure the performance and observance by the
Company or the Servicer, as applicable, of each of their obligations to the
Issuer under or in connection with the Sale and Servicing Agreement in
accordance with the terms thereof, and to exercise any and all rights, remedies,
powers and privileges lawfully available to the Issuer under or in connection
with the Sale and Servicing Agreement to the extent and in the manner directed
by the Trustee, including the transmission of notices of default on the part of
the Company or the Servicer thereunder and the institution of legal or
administrative actions or proceedings to compel or secure performance by the
Company or the Servicer of each of their obligations under the Sale and
Servicing Agreement.
(b) If an Event of Default has occurred and is continuing, the Trustee
may, and at the direction (which direction shall be in writing, including
facsimile) of the Holders of 66-2/3% of the Outstanding Amount of (i) each Class
of Senior Notes or (ii) the Class A-6 Notes if all Senior Notes have been paid
in full, or (iii) the Class A-7 Notes if all Senior Notes and Class A-6 Notes
have been paid in full, shall exercise all rights, remedies, powers, privileges
and claims of the Issuer against the Company or the Servicer under or in
connection with the Sale and Servicing Agreement, including the right or power
to take any action to compel or secure performance or observance by the Company
or the Servicer of each of their obligations to the Issuer thereunder and to
give any consent, request, notice, direction, approval, extension or waiver
under the Sale and Servicing Agreement, and any right of the Issuer to take such
action shall be suspended.
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ARTICLE VI
THE TRUSTEE
SECTION 6.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture with the
same degree of care and skill in their exercise as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture; however, the Trustee shall examine the certificates
and opinions to determine whether or not they conform to the
requirements of this Indenture and, if applicable, the Trustee's other
Related Documents.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 5.12.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Issuer.
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(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law or the terms of this Indenture
or the Sale and Servicing Agreement.
(g) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or
powers, if it shall have reasonable grounds to believe that repayments of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
(i) In no event shall the Trustee be required to perform, or be
responsible for the manner of performance of, any of the obligations of the
Servicer, or any other party, under the Sale and Servicing Agreement unless and
until appointed successor Servicer in accordance with Section 7.03 thereof.
(j) The Trustee shall, and hereby agrees that it will, perform all of
the obligations and duties required of it under the Sale and Servicing
Agreement.
(k) Without limiting the generality of this Section 6.01, the Trustee
shall have no duty (i) to see to any recording, filing or depositing of this
Indenture or any agreement referred to herein or any financing statement
evidencing a security interest in the Products, or to see to the maintenance of
any such recording or filing or depositing or to any recording, refiling or
redepositing of any thereof, (ii) to see to any insurance of the Products or
Obligors or to effect or maintain any such insurance, (iii) to see to the
payment or discharge of any tax, assessment or other governmental charge or any
lien or encumbrance of any kind owing with respect to, assessed or levied
against any part of the Trust, (iv) to confirm or verify the contents of any
reports or certificates delivered to the Trustee pursuant to this Indenture or
the Sale and Servicing Agreement believed by the Trustee to be genuine and to
have been signed or presented by the proper party or parties, or (v) to inspect
the Products at any time or ascertain or inquire as to the performance of
observance of any of the Issuer's, the Company's or the Servicer's
representations, warranties or covenants or the Servicer's duties and
obligations as Servicer and as custodian of the Contract Files under the Sale
and Servicing Agreement.
SECTION 6.02. Rights of Trustee.
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate (with respect to factual matters) or an Opinion of
Counsel, as applicable. The Trustee shall not be
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liable for any action it takes or omits to take in good faith in reliance on the
Officers' Certificate or Opinion of Counsel, as applicable, or as directed by
the requisite amount of Note Owners as provided herein.
(c) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian or nominee, and the Trustee shall not be responsible
for any misconduct or negligence on the part of, or for the supervision of, any
such agent, attorney, custodian or nominee appointed with due care by it
hereunder.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute
willful misconduct, negligence or bad faith.
(e) The Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the Notes
shall be full and complete authorization and protection from liability in
respect to any action taken, omitted or suffered by it hereunder in good faith
and in accordance with the advice or opinion of such counsel.
(f) The Trustee shall be under no obligation to institute, conduct or
defend any litigation under this Indenture or in relation to this Indenture, at
the request, order or direction of any of the Holders of Notes, pursuant to the
provisions of this Indenture, unless such Holders of Notes shall have offered to
the Trustee reasonable security or indemnity against the costs, expenses and
liabilities that may be incurred therein or thereby; provided, however, that the
Trustee shall, upon the occurrence of an Event of Default (that has not been
cured), exercise the rights and powers vested in it by this Indenture with
reasonable care and skill.
(g) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other paper
or document, unless requested in writing to do so by the Holders of Notes
evidencing not less than 25% of the Outstanding Amount thereof; provided,
however, that if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to the
Trustee by the security afforded to it by the terms of this Indenture or the
Sale and Servicing Agreement, the Trustee may require reasonable indemnity
against such cost, expense or liability as a condition to so proceeding; the
reasonable expense of every such examination shall be paid by the Person making
such request, or, if paid by the Trustee, shall be reimbursed by the Person
making such request upon demand.
SECTION 6.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Issuer or its Affiliates with the same rights it
would have if it were not Trustee. Any Paying Agent, Note
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Registrar, co-registrar or co-paying agent may do the same with like rights.
However, the Trustee is required to comply with Sections 6.11 and 6.12.
SECTION 6.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture, the Trust Estate or the Notes, it shall not be accountable for
the Issuer's use of the proceeds from the Notes, and it shall not be responsible
for any statement of the Issuer in the Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Trustee's
certificate of authentication.
SECTION 6.05. Notice of Defaults. If a Default occurs and is continuing
and if it is known to a Responsible Officer of the Trustee, the Trustee shall
mail to each Noteholder notice of the Default within 90 days after it occurs.
Except in the case of a Default in payment of principal of or interest on any
Note (including payments pursuant to the mandatory redemption provisions of such
Note), the Trustee may withhold the notice if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice is in
the interests of Noteholders.
SECTION 6.06. Reports by Trustee to Holders. The Trustee shall deliver
to each Noteholder such information as may be required to enable such holder to
prepare its federal and state income tax returns.
SECTION 6.07. Compensation and Indemnity. The Issuer shall or shall
cause the Administrator to pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Issuer shall or
shall cause the Administrator to reimburse the Trustee for all reasonable
out-of-pocket expenses incurred or made by it, including the costs of
collection, in addition to the compensation for its services. Such expenses
shall include the reasonable compensation and expenses, disbursements and
advances of the Trustee's agents, counsel, accountants and experts. The Issuer
shall or shall cause the Administrator to indemnify the Trustee against any and
all loss, liability or expense (including attorneys' fees) incurred by it in
connection with the administration of this trust and the performance of its
duties hereunder. The Trustee shall notify the Issuer and the Administrator
promptly of any claim for which it may seek indemnity. Failure by the Trustee to
so notify the Issuer and the Administrator shall not relieve the Issuer or the
Administrator of its obligations hereunder. The Issuer shall or shall cause the
Administrator to defend any such claim, and the Trustee may have separate
counsel and the Issuer shall or shall cause the Administrator to pay the fees
and expenses of such counsel. Neither the Issuer not the Administrator need
reimburse any expense or indemnify against any loss, liability or expense
incurred by the Trustee through the Trustee's own wilful misconduct, negligence
or bad faith.
The Issuer's payment obligations to the Trustee pursuant to this
Section shall survive the discharge of this Indenture. When the Trustee incurs
expenses after the occurrence of a Default specified in Section 5.01(iv) or (v)
with respect to the Issuer, the expenses are intended to constitute expenses of
administration under Title 11 of the United States Code or any other applicable
federal or state bankruptcy, insolvency or similar law.
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SECTION 6.08. Replacement of Trustee. The Trustee may resign at any
time by so notifying the Issuer. The Issuer may remove the Trustee if:
(i) the Trustee fails to comply with Section 6.11;
(ii) a court having jurisdiction in the premises in respect of the
Trustee in an involuntary case or proceeding under federal or state banking
or bankruptcy laws, as now or hereafter constituted, or any other
applicable federal or state bankruptcy, insolvency or other similar law,
shall have entered a decree or order granting relief or appointing a
receiver, liquidator, assignee, custodian, trustee, conservator,
sequestrator (or similar official) for the Trustee or for any substantial
part of the Trustee's property, or ordering the winding-up or liquidation
of the Trustee's affairs;
(iii) an involuntary case under the federal bankruptcy laws, as now or
hereafter in effect, or another present or future federal or state
bankruptcy, insolvency or similar law is commenced with respect to the
Trustee and such case is not dismissed within 60 days;
(iv) the Trustee commences a voluntary case under any federal or state
banking or bankruptcy laws, as now or hereafter constituted, or any other
applicable federal or state bankruptcy, insolvency or other similar law, or
consents to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, conservator, sequestrator (or
other similar official) for the Trustee or for any substantial part of the
Trustee's property, or makes any assignment for the benefit of creditors or
fails generally to pay its debts as such debts become due or takes any
corporate action in furtherance of any of the foregoing; or
(v) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Issuer shall promptly appoint a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuer. Thereupon the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Noteholders. The retiring Trustee shall promptly transfer all property held by
it as Trustee to the successor Trustee.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuer or the
Holders of a majority in Outstanding Amount of the Notes may petition any court
of competent jurisdiction for the appointment of a successor Trustee.
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If the Trustee fails to comply with Section 6.11, any Noteholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor Trustee
pursuant to this Section and payment of all fees and expenses owed to the
outgoing Trustee. Notwithstanding the replacement of the Trustee pursuant to
this Section, the retiring Trustee shall be entitled to payment or reimbursement
of such amounts as such Person is entitled pursuant to Section 6.07.
SECTION 6.09. Successor Trustee by Merger. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee; provided that such corporation or
banking association shall be otherwise qualified and eligible under Section
6.11. The Trustee shall provide the Rating Agencies prompt notice of any such
transaction.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Notes shall have been authenticated but not delivered, any
such successor to the Trustee may adopt the certificate of authentication of any
predecessor trustee, and deliver such Notes so authenticated; and in case at
that time any of the Notes shall not have been authenticated, any successor to
the Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor to the Trustee; and in all such cases
such certificates shall have the full force which it is anywhere in the Notes or
in this Indenture provided that the certificate of the Trustee shall have.
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust may at the time be located, the Trustee shall have
the power and may execute and deliver all instruments to appoint one or more
Persons to act as a co-trustee or co-trustees, or separate trustee or separate
trustees, of all or any part of the Trust, and to vest in such Person or
Persons, in such capacity and for the benefit of the Noteholders, such title to
the Trust Estate, or any part hereof, and, subject to the other provisions of
this Section, such powers, duties, obligations, rights and trusts as the Trustee
may consider necessary or desirable. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor Trustee under
Section 6.11 and no notice to Noteholders of the appointment of any co-trustee
or separate trustee shall be required under Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
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(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
the Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust or any portion thereof in
any such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the
Trustee;
(ii) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) the Trustee may at any time accept the resignation of
or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VI. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Indenture,
specifically including every provision of this Indenture relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee. Notwithstanding anything to the contrary in this Indenture,
the appointment of any separate trustee or co-trustee shall not relieve the
Trustee of its obligations and duties under this Indenture.
SECTION 6.11. Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA ss. 310(a). The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition and shall not be an Affiliate of the
Company. The Trustee shall comply with TIA ss. 310(b), including the optional
provision permitted by the second sentence of TIA ss. 310(b)(9); provided,
however, that there shall be excluded from the operation of TIA ss. 310(b)(1)
any indenture or indentures under which other securities of the Issuer are
outstanding if the requirements for such exclusion set forth in TIA ss.
310(b)(1) are met.
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SECTION 6.12. Preferential Collection of Claims Against Issuer. The
Trustee shall comply with TIA ss. 311(a), excluding any creditor relationship
listed in TIA ss. 311(b). A Trustee who has resigned or been removed shall be
subject to TIA ss. 311(a) to the extent indicated.
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ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.01. Issuer To Furnish Trustee Names and Addresses to
Noteholders. The Issuer will furnish or cause to be furnished to the Trustee (a)
not more than five days after the earlier of (i) each Record Date and (ii) three
months after the last Record Date, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders of Notes as of
such Record Date, (b) at such other times as the Trustee may request in writing,
within 30 days after receipt by the Issuer of any such request, a list of
similar form and content as of a date not more than 10 days prior to the time
such list is furnished; provided, however, that so long as the Trustee is the
Note Registrar, no such list shall be required to be furnished.
SECTION 7.02. Preservation of Information; Communications to
Noteholders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders of Notes contained in the
most recent list furnished to the Trustee as provided in Section 7.01 and the
names and addresses of Holders of Notes received by the Trustee in its capacity
as Note Registrar. The Trustee may destroy any list furnished to it as provided
in such Section 7.01 upon receipt of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA ss. 312(b) with other
Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Trustee and the Note Registrar shall have the
protection of TIA ss. 312(c).
SECTION 7.03. Reports by Issuer.
(a) The Issuer shall:
(i) file with the Trustee, within 15 days after the Issuer is
required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Issuer may
be required to file with the Commission pursuant to Section 13 or 15(d)
of the Exchange Act;
(ii) file with the Trustee and the Commission in accordance
with rules and regulations prescribed from time to time by the
Commission such additional information, documents and reports with
respect to compliance by the Issuer with the conditions and covenants
of this Indenture as may be required from time to time by such rules
and regulations; and
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(iii) supply to the Trustee (and the Trustee shall transmit by
mail to all Noteholders described in TIA ss. 313(c)) such summaries of
any information, documents and reports required to be filed by the
Issuer pursuant to clauses (i) and (ii) of this Section 7.03(a) as may
be required by rules and regulations prescribed from time to time by
the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
SECTION 7.04. Reports by Trustee. If required by TIA ss. 313(a), within
60 days after each March 31 beginning with March 31, 1999, the Trustee shall
mail to each Noteholder as required by TIA ss. 313(c) a brief report dated as of
such date that complies with TIA ss. 313(a). The Trustee also shall comply with
TIA ss. 313(b).
A copy of each report at the time of its mailing to Noteholders shall
be filed by the Trustee with the Commission and each stock exchange, if any, on
which the Notes are listed. The Issuer shall notify the Trustee if and when the
Notes are listed on any stock exchange.
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ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.01. Collection of Money. Except as otherwise expressly
provided herein, the Trustee may demand payment or delivery of, and shall
receive and collect, directly and without intervention or assistance of any
fiscal agent or other intermediary, all money and other property payable to or
receivable by the Trustee pursuant to this Indenture. The Trustee shall apply
all such money received by it as provided in this Indenture. Except as otherwise
expressly provided in this Indenture, if any default occurs in the making of any
payment or performance under any agreement or instrument that is part of this
Indenture or the Notes, the Trustee may take such action as may be appropriate
to enforce such payment or performance, including the institution and
prosecution of appropriate Proceedings. Any such action shall be without
prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.
SECTION 8.02. Trust Accounts.
(a) On or prior to the Closing Date, the Issuer shall cause the
Servicer to establish and maintain, in the name of the Trustee, for the benefit
of the Noteholders and the Certificateholders, the Trust Accounts as provided in
Section 6.01 of the Sale and Servicing Agreement.
(b) All collections in respect of the Contracts will be deposited in
the Collection Account as provided in Section 6.02 of the Sale and Servicing
Agreement.
(c) On each Payment Date, the Trustee shall distribute all amounts on
deposit in the Note Distribution Account to Noteholders in respect of the Notes
to the extent of amounts due and unpaid on the Notes for principal and interest,
in accordance with the instructions of the Servicer in the following order of
priority, except as provided in Sections 8.02(f) and (g):
1. To pay the Holders of the Senior Notes pro rata in accordance
with the amount of interest payable to each Class:
(i) the Senior Interest Amount; and
(ii) any Unpaid Senior Interest Shortfall.
2. To pay to that Class of Notes then entitled to principal, any
First Priority Principal Distribution Amount.
3. To pay the Holders of Class A-6 Notes pro rata in accordance
with the amount of interest payable to that Class:
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(i) the Class A-6 Interest Amount; and
(ii) any Unpaid Class A-6 Interest Shortfall.
4. To pay to that Class of Notes then entitled to principal, any
Second Priority Principal Distribution Amount.
5. To pay the Holders of Class A-7 Notes pro rata in accordance
with the amount of interest payable to that Class:
(i) the Class A-7 Interest Amount; and
(ii) any Unpaid Class A-7 Interest Shortfall.
6. To pay to that Class of Notes then entitled to principal, any
Third Priority Principal Distribution Amount.
7. To pay to that Class of Notes then entitled to principal, the
Total Principal Distribution Amount remaining after payment of the
amounts set forth above in clauses (2), (4) and (6).
The Class of Notes "then entitled to principal" means the Class A-1 Notes until
paid in full, then the Class A-2, Class A-3, Class A-4, Class A-5, Class A-6 and
Class A-7 Notes, successively, until each is paid in full.
(d) If the Trustee shall not have received the applicable Monthly
Report by any Distribution Date, the Trustee shall distribute all funds then in
the Note Distribution Account to Noteholders in accordance with Section 8.02(c),
to the extent of such funds, on such Distribution Date.
(e) The Trustee agrees, to the extent required by the Code, to withhold
from each payment due hereunder or under any Note, United States withholding
taxes at the appropriate rate, and, on a timely basis, to deposit such amounts
with an authorized depository and make such returns, filings and other reports
in connection therewith as are required of it under the Code. Any Noteholder
which is eligible for an exemption from or reduction of withholding of United
States federal income taxes shall, from time to time, provide to the Trustee in
a timely manner all appropriate and properly completed forms indicating such
eligibility, as may be necessary to permit the Trustee not to withhold taxes
from payments due to such Noteholder. In connection with the foregoing, the
Trustee shall promptly furnish to each Noteholder in a timely fashion such U.S.
Treasury forms as are required by the Code to be furnished to such Noteholder
indicating payment of any taxes withheld from any payments by the Trustee to
such Noteholder. The Trustee shall be fully protected in relying upon, and each
Noteholder by its acceptance of a Note hereunder agrees to indemnify and hold
the Trustee harmless against all claims or liability of any kind arising in
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connection with or related to the Trustee's reliance upon any documents, forms
or information provided by any Noteholder to the Trustee. In addition, if the
Trustee has not withheld taxes on any payment made to any Noteholder, and the
Trustee is subsequently required to remit to any taxing authority any such
amount not withheld, such Noteholder shall return such amount to the Trustee
upon written demand by the Trustee. In no event shall the Trustee be liable for
consequential damages to any Noteholder.
(f) Upon the occurrence and during the continuance of an Event of
Default that has resulted in the Notes becoming immediately due and payable, or
upon the occurrence of an Insolvency Event with respect to, or the dissolution
of, the General Partner, no distribution of principal or interest on any Class
A-6 Note shall be made until full payment of all principal and interest on the
Senior Notes, and no distributions of principal or interest on any Class A-7
Note shall be made until full payment of all principal and interest on the
Senior Notes and the Class A-6 Notes.
(g) Any Excess Proceeds on deposit in the Note Distribution Account
shall be paid to the Holders of Class A-1 Notes on the first Distribution Date
as a payment of principal.
SECTION 8.03. General Provisions Regarding Accounts.
(a) So long as no Default or Event of Default shall have occurred and
be continuing, all or a portion of the funds in the Collection Account and Note
Distribution Account shall be invested and reinvested in Eligible Investments in
accordance with the provisions of Section 6.01(d) of the Sale and Servicing
Agreement. All income or other gain from investments of moneys deposited in such
accounts shall be deposited by the Trustee in the Collection Account, and any
loss resulting from such investments shall be charged to the account. The Issuer
will not direct the Trustee to make any investment of any funds or to sell any
investment held in either the Collection Account or the Note Distribution
Account unless the security interest Granted and perfected in such account will
continue to be perfected in such investment or the proceeds of such sale, in
either case without any further action by any Person, and, in connection with
any direction to the Trustee to make any such investment or sale, if requested
by the Trustee, the Issuer shall deliver to the Trustee an Opinion of Counsel,
acceptable to the Trustee, to such effect.
(b) Subject to Section 6.01(c), the Trustee shall not in any way be
held liable by reason of any insufficiency in any of the Trust Accounts
resulting from any loss on any Eligible Investment included therein except for
losses attributable to the Trustee's failure to make payments on such Eligible
Investments issued by the Trustee, in its commercial capacity as principal
obligor and not as Trustee, in accordance with their terms.
(c) If (i) the Issuer shall have failed to give investment directions
for any funds on deposit in the Collection Account and Note Distribution Account
to the Trustee by 11:00 a.m., New York City time (or such other time as may be
agreed by the Issuer and Trustee), on any Business Day or (ii) a Default or
Event of Default shall have occurred and be continuing with respect to the Notes
but the Notes shall not have been declared due and payable pursuant to Section
5.02 or (iii) if such Notes
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shall have been declared due and payable following an Event of Default, amounts
collected or receivable from the Trust Estate are being applied in accordance
with Section 5.05 as if there had not been such a declaration, then the Trustee
shall, to the fullest extent practicable, invest and reinvest funds in the
Collection Account and Note Distribution Account in one or more Eligible
Investments.
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ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Holders of any Notes but with prior
notice to the Rating Agencies, the Issuer and the Trustee, when authorized by an
Issuer Order, at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at
any time subject to the lien of this Indenture, or better to assure,
convey and confirm unto the Trustee any property subject or required to
be subjected to the lien created by this Indenture, or to subject to
the lien created by this Indenture additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another Person to the Issuer, and the
assumption by any such successor of the covenants of the Issuer herein
and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit
of the Holders of the Notes, or to surrender any right or power herein
conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Trustee;
(v) to cure any ambiguity, to correct or supplement any
provision herein or in any supplemental indenture which may be
inconsistent with any other provision herein or in any supplemental
indenture or to make any other provisions with respect to matters or
questions arising under this Indenture or in any supplemental
indenture; provided that such action shall not adversely affect the
interests of the Holders of the Notes;
(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor Trustee with respect to the Notes
and to add to or change any of the provisions of this Indenture as
shall be necessary to facilitate the administration of the trusts
hereunder by more than one trustee, pursuant to the requirements of
Article VI; or
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
federal statute hereafter enacted and to add to this Indenture such
other provisions as may be expressly required by the TIA.
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The Trustee is hereby authorized to join in the execution of any such
supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained.
(b) The Issuer and the Trustee, when authorized by an Issuer Order,
may, also without the consent of any of the Holders of the Notes but with prior
notice to the Rating Agencies, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Holders of the Notes under this
Indenture; provided, however, that such action shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the interests of
any Noteholder.
SECTION 9.02. Supplemental Indentures With Consent of Noteholders. The
Issuer and the Trustee, when authorized by an Issuer Order, also may, with prior
notice to the Rating Agencies, and with the consent of the Holders of not less
than a majority of the Outstanding Amount of the Notes, by Act of such Holders
delivered to the Issuer and the Trustee, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Holders of the Notes under this
Indenture; provided, however, that, no such supplemental indenture shall,
without the consent of the Holder of each Outstanding Note affected thereby:
(i) change the date of payment of any installment of principal
of or interest on any Note, or reduce the principal amount thereof, the
interest rate thereon or the Redemption Price with respect thereto,
change the provision of this Indenture relating to the application of
collections on, or the proceeds of the sale of, the Trust Estate to
payment of principal of or interest on the Notes, or change any place
of payment where, or the coin or currency in which, any Note or the
interest thereon is payable, or impair the right to institute suit for
the enforcement of the provisions of this Indenture requiring the
application of funds available therefor, as provided in Article V, to
the payment of any such amount due on the Notes on or after the
respective due dates thereof (or, in the case of redemption, on or
after the Redemption Date);
(ii) reduce the percentage of the Outstanding Amount of the
Notes, the consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which is
required for any waiver of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences provided
for in this Indenture;
(iii) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(iv) reduce the percentage of the Outstanding Amount of the
Notes required to direct the Trustee to direct the Issuer to sell or
liquidate the Trust Estate pursuant to Section 5.04;
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(v) modify any provision of this Section except to increase
any percentage specified herein or to provide that certain additional
provisions of this Indenture or the Related Documents cannot be
modified or waived without the consent of the Holder of each
Outstanding Note affected thereby;
(vi) modify any of the provisions of this Indenture in such
manner as to affect the calculation of the amount of any payment of
interest or principal due on any Note on any Distribution Date
(including the calculation of any of the individual components of such
calculation) or to affect the rights of the Holders of Notes to the
benefit of any provisions for the mandatory redemption of the Notes
contained herein; or
(vii) permit the creation of any lien ranking prior to or on a
parity with the lien created by this Indenture with respect to any part
of the Trust Estate or, except as otherwise permitted or contemplated
herein, terminate the lien created by this Indenture on any property at
any time subject hereto or deprive the Holder of any Note of the
security provided by the lien created by this Indenture.
The Trustee may in its discretion determine whether or not any Notes
would be affected by any supplemental indenture, and any such determination
shall be conclusive upon the Holders of all Notes, whether theretofore or
thereafter authenticated and delivered hereunder. The Trustee shall not be
liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to this Section, the Trustee shall mail to the
Holders of the Notes to which such amendment or supplemental indenture relates a
notice setting forth in general terms the substance of such supplemental
indenture. Any failure of the Trustee to mail such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
such supplemental indenture.
SECTION 9.03. Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts created
by this Indenture, the Trustee shall be entitled to receive, and subject to
Sections 6.01 and 6.02 shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture that affects the Trustee's own
rights, duties, liabilities or immunities under this Indenture or otherwise.
SECTION 9.04. Effect of Supplemental Indenture. Upon the execution
of any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified
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and amended in accordance therewith with respect to the Notes affected thereby,
and the respective rights, limitations of rights, obligations, duties,
liabilities and immunities under this Indenture of the Trustee, the Issuer and
the Holders of the Notes shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments, and all
the terms and conditions of any such supplemental indenture shall be and be
deemed to be part of the terms and conditions of this Indenture for any and all
purposes.
SECTION 9.05. Conformity With Trust Indenture Act. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as then
in effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.
SECTION 9.06. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Trustee shall, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Issuer or the Trustee shall so determine, new
notes so modified as to conform, in the opinion of the Trustee and the Issuer,
to any such supplemental indenture may be prepared and executed by the Issuer
and authenticated and delivered by the Trustee in exchange for Outstanding
Notes.
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ARTICLE X
REDEMPTION OF NOTES
SECTION 10.01. Redemption.
(a) In the event that the Company or the Servicer pursuant to Article
VIII of the Sale and Servicing Agreement purchases the corpus of the Trust, the
Notes are subject to redemption in whole, but not in part, on the Distribution
Date on which such repurchase or sale occurs, for a purchase price equal to the
Redemption Price; provided, however, that the Issuer has available funds
sufficient to pay the Redemption Price. The Company, the Servicer or the Issuer
shall furnish the Rating Agencies notice of such redemption. If the Notes are to
be redeemed pursuant to this Section 10.01(a), the Servicer or the Issuer shall
furnish notice of such election to the Trustee not later than 25 days prior to
the Redemption Date, and the Issuer shall deposit with the Trustee in the Note
Distribution Account the Redemption Price of the Notes to be redeemed, whereupon
all such Notes shall be due and payable on the Redemption Date upon the
furnishing of a notice complying with Section 10.02 to each Holder of the Notes.
(b) In the event that the assets of the Trust are sold pursuant to
Section 9.2 of the Trust Agreement, the proceeds of such sale shall be
distributed as provided in Section 5.06. If amounts are to be paid to
Noteholders pursuant to this Section 10.01(b), the Servicer or the Issuer shall,
to the extent practicable, furnish notice of such event to the Trustee not later
than 25 days prior to the Redemption Date whereupon all such amounts shall be
payable on the Redemption Date.
SECTION 10.02. Form of Redemption Notice.
(a) Notice of redemption under Section 10.01(a) shall be given by the
Trustee by first-class mail, postage prepaid, mailed not less than five days
prior to the applicable Redemption Date to each Holder of Notes, as of the close
of business on the Record Date with respect to the Distribution Date immediately
preceding the applicable Redemption Date, at such Holder's address appearing in
the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price; and
(iii) the place where such Notes are to be surrendered for
payment of the Redemption Price (which shall be the office or agency
of the Issuer to be maintained as provided in Section 3.02).
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Notice of redemption of the Notes shall be given by the Trustee in the
name and at the expense of the Issuer. Failure to give notice of redemption, or
any defect therein, to any Holder of any Note shall not impair or affect the
validity of the redemption of any other Note.
(b) Prior notice of redemption under Section 10.01(b) is not required
to be given to Noteholders.
SECTION 10.03. Notes Payable on Redemption Date. The Notes or portions
thereof to be redeemed shall, following notice of redemption (if any) as
required by Section 10.02, on the Redemption Date become due and payable at the
Redemption Price and (unless the Issuer shall default in the payment of the
Redemption Price) no interest shall accrue on the Redemption Price for any
period after the date to which accrued interest is calculated for purposes of
calculating the Redemption Price.
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ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer to the Trustee to
take any action under any provision of this Indenture, the Issuer shall furnish
to the Trustee (i) an Officers' Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with, (ii) an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with and (iii) (if required by the TIA) an Independent Certificate from
a firm of certified public accountants meeting the applicable requirements of
this Section, except that, in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory,
such signatory has made such examination or investigation as is
necessary to enable such signatory to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Indenture Collateral or other
property or securities with the Trustee that is to be made the basis
for the release of any property subject to the lien created by this
Indenture, the Issuer shall, in addition to any obligation imposed in
Section 11.01(a) or elsewhere in this Indenture, furnish to the Trustee
an Officers' Certificate certifying or stating the opinion of each
person signing such certificate as to the fair value (within 90 days of
such deposit) to the Issuer of the Indenture Collateral or other
property or securities to be so deposited.
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(ii) Whenever the Issuer is required to furnish to the Trustee an
Officers' Certificate certifying or stating the opinion of any signer
thereof as to the matters described in clause (i) above, the Issuer
shall also deliver to the Trustee an Independent Certificate as to the
same matters, if the fair value to the Issuer of the property to be so
deposited and of all other such property made the basis of any such
withdrawal or release since the commencement of the then-current
fiscal year of the Issuer, as set forth in the certificates delivered
pursuant to clause (i) above and this clause (ii), is 10% or more of
the Outstanding Amount of the Notes, but such a certificate need not
be furnished with respect to any property so deposited, if the fair
value thereof to the Issuer as set forth in the related Officers'
Certificate is less than $25,000 or less than one percent of the
Outstanding Amount of the Notes.
(iii) Other than with respect to any release described in clause
(A) or (B) of Section 11.01(b)(v), whenever any property or securities
are to be released from the lien created by this Indenture, the Issuer
shall also furnish to the Trustee an Officers' Certificate certifying
or stating the opinion of each person signing such certificate as to
the fair value (within 90 days of such release) of the property or
securities proposed to be released and stating that in the opinion of
such person the proposed release will not impair the security created
by this Indenture in contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the Trustee an
Officers' Certificate certifying or stating the opinion of any signer
thereof as to the matters described in clause (iii) above, the Issuer
shall also furnish to the Trustee an Independent Certificate as to the
same matters if the fair value of the property or securities and of
all other property or securities (other than property described in
clauses (A) or (B) of Section 11.01(b)(v)) released from the lien
created by this Indenture since the commencement of the then current
fiscal year, as set forth in the certificates required by clause (iii)
above and this clause (iv), equals 10% or more of the Outstanding
Amount of the Notes, but such certificate need not be furnished in the
case of any release of property or securities if the fair value
thereof as set forth in the related Officers' Certificate is less than
$25,000 or less than one percent of the then Outstanding Amount of the
Notes.
(v) Notwithstanding any other provision of this Section, the
Issuer may, without compliance with the other provisions of this
Section, (A) collect, liquidate, sell or otherwise dispose of
Contracts as and to the extent permitted or required by the Related
Documents (including as provided in Section 5.06 of the Sale and
Servicing Agreement) and (B) make cash payments out of the Trust
Accounts as and to the extent permitted or required by the Related
Documents.
SECTION 11.02. Form of Documents Delivered to Trustee. In any case
where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give
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an opinion with respect to some matters and one or more other such Persons
as to other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Servicer, the Company or the Issuer, stating that the information with
respect to such factual matters is in the possession of the Servicer, the
Company or the Issuer, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Trustee, it is provided that the Issuer shall
deliver any document as a condition of the granting of such application, or as
evidence of the Issuer's compliance with any term hereof, it is intended that
the truth and accuracy, at the time of the granting of such application or at
the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Trustee's right to rely upon the truth and accuracy of
any statement or opinion contained in any such document as provided in Article
VI.
SECTION 11.03. Acts of Noteholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by agents
duly appointed in writing; and except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the Trustee, and, where it is hereby expressly required, to the
Issuer. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Noteholders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 6.01) conclusive in
favor of the Trustee and the Issuer, if made in the manner provided in this
Section.
11 - 3
<PAGE>
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Trustee deems
sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of every
Note issued upon the registration thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to be done by the
Trustee or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Note.
SECTION 11.04. Notices, etc., to Trustee, Issuer and Rating Agencies.
Any request, demand, authorization, direction, notice, consent, waiver or Act of
Noteholders or other documents provided or permitted by this Indenture to be
made upon, given or furnished to or filed with:
(a) the Trustee by any Noteholder or by the Issuer shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
(b) the Issuer by the Trustee or by any Noteholder shall be
sufficient for every purpose hereunder if made in writing and mailed,
first-class, postage prepaid, to the Issuer addressed to: Green Tree
Recreational, Equipment & Consumer Trust 1998-C, in care of Wilmington
Trust Company, as Owner Trustee, Rodney Square North, 1100 North Market
Street, Wilmington, Delaware 19890-0001, Attention: Corporate Trust
Administration or at any other address previously furnished in writing
to the Trustee by Issuer. The Issuer shall promptly transmit any notice
received by it from the Noteholders to the Trustee, or
(c) the Rating Agencies by the Issuer, the Trustee or the
Owner Trustee shall be sufficient for every purpose hereunder if made
in writing, personally delivered or mailed by certified mail, return
receipt requested to (i) in the case of Fitch IBCA, Inc., at the
following address: One State Street Plaza, New York, New York 10004,
Attention: ABS Surveillance Group and (ii) in the case of Standard &
Poor's, at the following address: Standard & Poor's Ratings Service, 25
Broadway, New York, New York 10004; or as to each of the foregoing, at
such other address as shall be designated by written notice to the
other parties.
SECTION 11.05. Notices to Noteholders; Waiver. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at his address as it appears on the Note Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other
11 - 4
<PAGE>
Noteholders, and any notice that is mailed in the manner herein provided shall
conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Trustee but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event of Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute a Default or
Event of Default.
SECTION 11.06. Alternate Payment and Notice Provisions. Notwithstanding
any provision of this Indenture or any of the Notes to the contrary, the Issuer
may enter into any agreement with any Holder of a Note providing for a method of
payment, or notice by the Trustee or any Paying Agent to such Holder, that is
different from the methods provided for in this Indenture for such payments or
notices. The Issuer will furnish to the Trustee a copy of each such agreement
and the Trustee will cause payments to be made and notices to be given in
accordance with such agreements.
SECTION 11.07. Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this indenture by any of the provisions of the Trust
Indenture Act, such required provision shall control.
The provisions of TIA ss.ss. 310 through 317 that impose duties on any
Person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
SECTION 11.08. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 11.09. Successors and Assigns. All covenants and agreements
in this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not.
All agreements of the Trustee in this Indenture shall bind its
successors.
11 - 5
<PAGE>
SECTION 11.10. Severability. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 11.11. Benefits of Indenture. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the Noteholders, and any other party
secured hereunder, and any other Person with an ownership interest in any part
of the Trust Estate, any benefit or any legal or equitable right, remedy or
claim under this Indenture.
SECTION 11.12. Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
SECTION 11.13. Governing Law. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF MINNESOTA, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.14. Counterparts. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 11.15. Recording of Indenture. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the Trustee or any other counsel reasonably acceptable
to the Trustee,) to the effect that such recording is necessary either for the
protection of the Noteholders or any other Person secured hereunder or for the
enforcement of any right or remedy granted to the Trustee under this Indenture.
SECTION 11.16. Trust Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Trustee on the Notes or under this Indenture or any certificate or other
writing delivered in connection herewith or therewith, against (i) the Trustee
or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial
interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer,
director, employee or agent of the Trustee or the Owner Trustee in its
individual capacity, any holder of a beneficial interest in the Issuer, the
Owner Trustee or the Trustee or of any successor or assign of the Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed (it being understood that the Trustee and the Owner Trustee
have no such obligations in their individual capacity) and except that any such
partner, owner or beneficiary shall be fully liable, to the extent
11 - 6
<PAGE>
provided by applicable law, for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any installment or call owing to such
entity. For all purposes of this Indenture, in the performance of any duties or
obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and
entitled to the benefits of, the terms and provisions of Articles VI, VII and
VIII of the Trust Agreement.
SECTION 11.17. No Petition. The Trustee, by entering into this
Indenture, and each Noteholder, by accepting a Note, hereby covenant and agree
that they will not at any time institute against the Company, the Issuer or any
General Partner, or join in any institution against the Company, the Issuer or
any General Partner of, any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings, or other proceedings under any United States federal
or state bankruptcy or similar law in connection with any obligations relating
to the Notes, this Indenture or any of the Related Documents.
SECTION 11.18. Inspection. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Trustee, during the Issuer's
normal business hours, to examine all the books of account, records, reports,
and other papers of the Issuer, to make copies and extracts therefrom, to cause
such books to be audited by independent certified public accountants, and to
discuss the Issuer's affairs, finances and accounts with the Issuer's officers,
employees, and independent certified public accountants, all at such reasonable
times and as often as may be reasonably requested. The Trustee shall and shall
cause its representatives to hold in confidence all such information except to
the extent disclosure may be required by law (and all reasonable applications
for confidential treatment are unavailing) and except to the extent that the
Trustee may reasonably determine that such disclosure is consistent with its
obligations hereunder.
11 - 7
<PAGE>
IN WITNESS WHEREOF, the Issuer and the Trustee have caused this
Indenture to be duly executed by their respective officers, thereunto duly
authorized, all as of the day and year first above written.
GREEN TREE RECREATIONAL, EQUIPMENT
& CONSUMER TRUST 1998-C
By WILMINGTON TRUST COMPANY, not
in its individual capacity but solely
on behalf of the Issuer as Owner
Trustee under the Trust Agreement
By:
----------------------------
Name:
-------------------------
Title:
------------------------
U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Trustee
By:
----------------------------
Name:
-------------------------
Title:
------------------------
11 - 8
<PAGE>
EXHIBIT A
Schedule of Contracts
A - 1
<PAGE>
EXHIBIT B
Form of Depository Agreement
B - 1
<PAGE>
EXHIBIT C-1
Unless this Note is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the issuer or its agent for
registration of transfer, exchange or payment, and any Note issued is registered
in the name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
GREEN TREE RECREATIONAL, EQUIPMENT & CONSUMER TRUST 1998-C
CLASS A-1 5.55375% ASSET-BACKED NOTE
REGISTERED $___________
NO. R-___ CUSIP NO.________
Green Tree Recreational, Equipment & Consumer Trust 1998-C, a business
trust organized and existing under the laws of the State of Delaware (herein
referred to as the "Issuer"), for value received, hereby promises to pay to Cede
& Co., or registered assigns, the principal sum of _________________________
DOLLARS ($___________) payable on each Distribution Date in an amount equal to
the result obtained by multiplying (i) a fraction, the numerator of which is
$__________ and the denominator of which is $122,000,000 by (ii) the aggregate
amount, if any, payable from the Note Distribution Account in respect of
principal on the Class A-1 Notes pursuant to Section 3.01 of the Indenture;
provided, however, that the entire unpaid principal amount of this Note shall be
due and payable on the earlier of the August, 1999 Distribution Date (the "Class
A-1 Final Scheduled Distribution Date") and the Redemption Date, if any,
pursuant to Section 10.01(a) or (b) of the Indenture referred to on the reverse
hereof.
The Issuer will pay interest on this Note at the Class A-1 Interest Rate on
each Distribution Date until the principal of this Note is paid or made
available for payment, on the principal amount of this Note outstanding on the
preceding Distribution Date (after giving effect to all payments of principal
made on the preceding Distribution Date). Interest on this Note will accrue for
each Distribution Date from the most recent Distribution Date on which interest
has been paid to but excluding such Distribution Date or, if no interest has yet
been paid, from September 28, 1998. Interest will be computed on the basis of
actual days elapsed and a year of 360 days. Such principal of and interest on
this Note shall be paid in the manner specified on the reverse hereof.
C - 1 - 1
<PAGE>
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse hereof,
or be valid or obligatory for any purpose.
C - 1 - 2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer.
Date: ____________________
GREEN TREE RECREATIONAL, EQUIPMENT
& CONSUMER TRUST 1998-C
By WILMINGTON TRUST COMPANY, not
in its individual capacity but solely
on behalf of the Issuer as Owner
Trustee under the Trust Agreement
By
--------------------------------
Name:
Title:
C - 1 - 3
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Trustee
By
--------------------------------
Authorized Signatory
C - 1 - 4
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-1 5.55375% Asset-Backed Notes (herein called the
"Class A-1 Notes"), all issued under an Indenture dated as of September 1, 1998
(such indenture, as supplemented or amended, herein called the "Indenture"),
between the Issuer and U.S. Bank Trust National Association, as trustee (the
"Trustee," which term includes any successor Trustee under the Indenture) to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights and obligations thereunder of the
Issuer, the Trustee and the Holders of the Class A-1 Notes. The Class A-1 Notes
are subject to all terms of the Indenture. All terms used in this Note that are
defined in the Indenture, as supplemented or amended, shall have the meanings
assigned to them in or pursuant to the Indenture, as so supplemented or amended.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes and the Class A-5 Notes (collectively, the "Senior Notes") are
and will be equally and ratably secured by the collateral pledged as security
therefor as provided in the Indenture, and are and will be senior in payment
prior and collateral rights to the Class A-6 Notes and the Class A-7 Notes
(collectively, the "Subordinated Notes," and together with the Senior Notes, the
"Notes").
Principal of the Class A-1 Notes will be payable on each Distribution
Date in an amount described on the face hereof. "Distribution Date" means the
fifteenth day of each month, or, if any such date is not a Business Day, the
next succeeding Business Day, commencing October 15, 1998.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Class A-1 Final Scheduled
Distribution Date and the Redemption Date, if any, pursuant to Section 10.01(a)
or 10.01(b) of the Indenture. All principal payments on the Class A-1 Notes
shall be made pro rata to the Class A-1 Noteholders entitled thereto.
Payments of interest on this Note due and payable on each Distribution
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register as of the close of business on each Record Date,
except that with respect to Notes registered on the Record Date in the name of
the nominee of the Depository (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of this
Note (or any one or more Predecessor Notes) affected by any payments made on any
Distribution Date shall be binding upon all future Holders of this Note and of
any Note issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not noted hereon. If funds are expected to be
available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Note on a Distribution Date, then the
Trustee, in the name of and on behalf of the Issuer, will notify the Person
C - 1 - 5
<PAGE>
who was the Registered Holder hereof as of the Record Date with respect to the
Distribution Date immediately preceding such Redemption Date by notice mailed
within five days of such Redemption Date and the amount then due and payable
shall be payable only upon presentation and surrender of this Note at the
Trustee's principal Corporate Trust Office or at the office of the Trustee's
agent appointed for such purposes located in The City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Class A-1 Interest Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed pursuant to
Section 10.01(a) of the Indenture, in whole, but not in part, at the option of
the Company or the Servicer on any Distribution Date on or after the date on
which the Pool Scheduled Principal Balance is less than or equal to 10% of the
Cutoff Date Pool Principal Balance.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by the Holder hereof or his attorney duly authorized in
writing, with such signature guaranteed by a commercial bank or trust company
located, or having a correspondent located, in the city in which the Corporate
Trust Office is located, or a member firm of a national securities exchange, and
such other documents as the Trustee may require, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Trustee or the Owner Trustee in its individual capacity, (ii)
any owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director or employee of the Trustee or the Owner
Trustee in its individual capacity, any holder of a beneficial interest in the
Issuer, the Owner Trustee or the Trustee or of any successor or assign of the
Trustee or the Owner Trustee in its individual capacity, except as any such
Person may have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid consideration for stock, unpaid capital contribution or failure to
pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture
C - 1 - 6
<PAGE>
and such Note that such Noteholder or Note Owner will not at any time institute
against the Company, the Issuer or any General Partner, or join in any
institution against the Company, the Issuer or any General Partner of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under any United States Federal or state bankruptcy or similar law in connection
with any obligations relating to the Notes, the Indenture or the Related
Documents.
It is the intent and agreement of the Issuer, the Trustee, the
Noteholders and Note Owners that, for purposes of federal income, state and
local income and franchise and any other income taxes, the Notes will be treated
as indebtedness of the Issuer. Each Noteholder and Note Owner, by acceptance of
this Note or, in the case of a Note Owner, a beneficial interest in this Note,
covenants and agrees to treat this Note as indebtedness for such tax purposes
and to take no action inconsistent with such treatment.
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
Person in whose name this Note (as of the day of determination or as of such
other date as may be specified in the Indenture) is registered as the owner
hereof for all purposes, whether or not this Note shall be overdue, and neither
the Issuer, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Holders of Notes representing a
majority of the Outstanding Amount of each Class of Notes. The Indenture also
contains provisions permitting the Holders of Notes representing specified
percentages of the Outstanding Amount of Notes, on behalf of the Holders of all
the Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one or more
Predecessor Notes) shall be conclusive and binding upon such Holders and upon
all future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits the
Trustee to amend or waive certain terms and conditions set forth in the
Indenture without the consent of Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Trustee and the Holder of
Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
C - 1 - 7
<PAGE>
This Note and the Indenture shall be construed in accordance with the
laws of the State of Minnesota, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.
C - 1 - 8
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
- -------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.
Dated: _____________
Signature Guaranteed:
- -------------------------
- -------------------
** NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
C - 1 - 9
<PAGE>
EXHIBIT C-2
Unless this Note is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the issuer or its agent for
registration of transfer, exchange or payment, and any Note issued is registered
in the name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
GREEN TREE RECREATIONAL, EQUIPMENT & CONSUMER TRUST 1998-C
CLASS A-2 FLOATING RATE ASSET-BACKED NOTE
REGISTERED $___________
NO. R-___ CUSIP NO.________
Green Tree Recreational, Equipment & Consumer Trust 1998-C, a business
trust organized and existing under the laws of the State of Delaware (herein
referred to as the "Issuer"), for value received, hereby promises to pay to Cede
& Co., or registered assigns, the principal sum of _________________________
DOLLARS ($___________) payable on each Distribution Date in an amount equal to
the result obtained by multiplying (i) a fraction, the numerator of which is
$__________ and the denominator of which is $193,000,000 by (ii) the aggregate
amount, if any, payable from the Note Distribution Account in respect of
principal on the Class A-2 Notes pursuant to Section 3.01 of the Indenture;
provided, however, that the entire unpaid principal amount of this Note shall be
due and payable on the earlier of the March 2005 Distribution Date (the "Class
A-2 Final Scheduled Distribution Date") and the Redemption Date, if any,
pursuant to Section 10.01(a) or (b) of the Indenture referred to on the reverse
hereof.
The Issuer will pay interest on this Note at the Class A-2 Interest
Rate on each Distribution Date until the principal of this Note is paid or made
available for payment, on the principal amount of this Note outstanding on the
preceding Distribution Date (after giving effect to all payments of principal
made on the preceding Distribution Date). Interest on this Note will accrue for
each Distribution Date from the most recent Distribution Date on which interest
has been paid to but excluding such Distribution Date or, if no interest has yet
been paid, from September 28, 1998. Interest will be computed on the basis of
actual days elapsed and a year of 360 days. Such principal of and interest on
this Note shall be paid in the manner specified on the reverse hereof.
C - 2 - 1
<PAGE>
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse hereof,
or be valid or obligatory for any purpose.
C - 2 - 2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer.
Date: ____________________ GREEN TREE RECREATIONAL, EQUIPMENT &
CONSUMER TRUST 1998-C
By WILMINGTON TRUST COMPANY, not in
its individual capacity but solely on
behalf of the Issuer as Owner Trustee
under the Trust Agreement
By
--------------------------------
Name:
Title:
C - 2 - 3
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Trustee
By
---------------------------------
Authorized Signatory
C - 2 - 4
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-2 Floating Rate Asset-Backed Notes (herein called the
"Class A-2 Notes"), all issued under an Indenture dated as of September 1, 1998
(such indenture, as supplemented or amended, herein called the "Indenture"),
between the Issuer and U.S. Bank Trust National Association, as trustee (the
"Trustee," which term includes any successor Trustee under the Indenture) to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights and obligations thereunder of the
Issuer, the Trustee and the Holders of the Class A-2 Notes. The Class A-2 Notes
are subject to all terms of the Indenture. All terms used in this Note that are
defined in the Indenture, as supplemented or amended, shall have the meanings
assigned to them in or pursuant to the Indenture, as so supplemented or amended.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes and the Class A-5 Notes (collectively, the "Senior Notes") are
and will be equally and ratably secured by the collateral pledged as security
therefor as provided in the Indenture, and are and will be senior in payment
priority and collateral rights to the Class A-6 Notes and the Class A-7 Notes
(collectively, the "Subordinated Notes," and together with the Senior Notes, the
"Notes").
Principal of the Class A-2 Notes will be payable on each Distribution
Date in an amount described on the face hereof. "Distribution Date" means the
fifteenth day of each month, or, if any such date is not a Business Day, the
next succeeding Business Day, commencing October 15, 1998.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Class A-2 Final Scheduled
Distribution Date and the Redemption Date, if any, pursuant to Section 10.01(a)
or 10.01(b) of the Indenture. All principal payments on the Class A-2 Notes
shall be made pro rata to the Class A-2 Noteholders entitled thereto.
Payments of interest on this Note due and payable on each Distribution
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register as of the close of business on each Record Date,
except that with respect to Notes registered on the Record Date in the name of
the nominee of the Depository (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of this
Note (or any one or more Predecessor Notes) affected by any payments made on any
Distribution Date shall be binding upon all future Holders of this Note and of
any Note issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not noted hereon. If funds are expected to be
available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Note on a Distribution Date, then the
Trustee, in the name of and on behalf of the Issuer, will notify the Person
C - 2 - 5
<PAGE>
who was the Registered Holder hereof as of the Record Date with respect to the
Distribution Date immediately preceding such Redemption Date by notice mailed
within five days of such Redemption Date and the amount then due and payable
shall be payable only upon presentation and surrender of this Note at the
Trustee's principal Corporate Trust Office or at the office of the Trustee's
agent appointed for such purposes located in The City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Class A-2 Interest Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed pursuant to
Section 10.01(a) of the Indenture, in whole, but not in part, at the option of
the Company or the Servicer on any Distribution Date on or after the date on
which the Pool Scheduled Principal Balance is less than or equal to 10% of the
Cutoff Date Pool Principal Balance.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by the Holder hereof or his attorney duly authorized in
writing, with such signature guaranteed by a commercial bank or trust company
located, or having a correspondent located, in the city in which the Corporate
Trust Office is located, or a member firm of a national securities exchange, and
such other documents as the Trustee may require, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Trustee or the Owner Trustee in its individual capacity, (ii)
any owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director or employee of the Trustee or the Owner
Trustee in its individual capacity, any holder of a beneficial interest in the
Issuer, the Owner Trustee or the Trustee or of any successor or assign of the
Trustee or the Owner Trustee in its individual capacity, except as any such
Person may have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid consideration for stock, unpaid capital contribution or failure to
pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture
C - 2 - 6
<PAGE>
and such Note that such Noteholder or Note Owner will not at any time institute
against the Company, the Issuer or any General Partner, or join in any
institution against the Company, the Issuer or any General Partner of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under any United States Federal or state bankruptcy or similar law in connection
with any obligations relating to the Notes, the Indenture or the Related
Documents.
It is the intent and agreement of the Issuer, the Trustee, the
Noteholders and Note Owners that, for purposes of federal income, state and
local income and franchise and any other income taxes, the Notes will be treated
as indebtedness of the Issuer. Each Noteholder and Note Owner, by acceptance of
this Note or, in the case of a Note Owner, a beneficial interest in this Note,
covenants and agrees to treat this Note as indebtedness for such tax purposes
and to take no action inconsistent with such treatment.
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
Person in whose name this Note (as of the day of determination or as of such
other date as may be specified in the Indenture) is registered as the owner
hereof for all purposes, whether or not this Note shall be overdue, and neither
the Issuer, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Holders of Notes representing a
majority of the Outstanding Amount of each Class of Notes. The Indenture also
contains provisions permitting the Holders of Notes representing specified
percentages of the Outstanding Amount of Notes, on behalf of the Holders of all
the Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one or more
Predecessor Notes) shall be conclusive and binding upon such Holders and upon
all future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits the
Trustee to amend or waive certain terms and conditions set forth in the
Indenture without the consent of Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Trustee and the Holder of
Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
C - 2 - 7
<PAGE>
This Note and the Indenture shall be construed in accordance with the
laws of the State of Minnesota, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.
C - 2 - 8
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
- -------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.
Dated: ________
**
Signature Guaranteed:
- ----------------------------------
- ------------------------
** NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
C - 2 - 9
<PAGE>
EXHIBIT C-3
Unless this Note is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the issuer or its agent for
registration of transfer, exchange or payment, and any Note issued is registered
in the name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
GREEN TREE RECREATIONAL, EQUIPMENT & CONSUMER TRUST 1998-C
CLASS A-3 5.92% ASSET-BACKED NOTE
REGISTERED $___________
NO. R-___ CUSIP NO.________
Green Tree Recreational, Equipment & Consumer Trust 1998-C, a business
trust organized and existing under the laws of the State of Delaware (herein
referred to as the "Issuer"), for value received, hereby promises to pay to Cede
& Co., or registered assigns, the principal sum of _________________________
DOLLARS ($____________) payable on each Distribution Date in an amount equal to
the result obtained by multiplying (i) a fraction, the numerator of which is
$__________ and the denominator of which is $150,000,000 by (ii) the aggregate
amount, if any, payable from the Note Distribution Account in respect of
principal on the Class A-3 Notes pursuant to Section 3.01 of the Indenture;
provided, however, that the entire unpaid principal amount of this Note shall be
due and payable on the earlier of the February 2009 Distribution Date (the
"Class A-3 Final Scheduled Distribution Date") and the Redemption Date, if any,
pursuant to Section 10.01(a) or (b) of the Indenture referred to on the reverse
hereof.
The Issuer will pay interest on this Note at the Class A-3 Interest
Rate on each Distribution Date until the principal of this Note is paid or made
available for payment, on the principal amount of this Note outstanding on the
preceding Distribution Date (after giving effect to all payments of principal
made on the preceding Distribution Date). Interest on this Note will accrue for
each Distribution Date from the most recent Distribution Date on which interest
has been paid to but excluding such Distribution Date or, if no interest has yet
been paid, from September 28, 1998. Interest will be computed on the basis of a
360-day year consisting of twelve 30-day months. Such principal of and interest
on this Note shall be paid in the manner specified on the reverse hereof.
C - 3 - 1
<PAGE>
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse hereof,
or be valid or obligatory for any purpose.
C - 3 - 2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer.
Date: ____________________
GREEN TREE RECREATIONAL,
EQUIPMENT & CONSUMER TRUST 1998-C
By WILMINGTON TRUST COMPANY, not in
its individual capacity but solely
on behalf of the Issuer as Owner
Trustee under the Trust Agreement
By
--------------------------------
Name:
Title:
C - 3 - 3
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Trustee
By
--------------------------------
Authorized Signatory
C - 3 - 4
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-3 5.92% Asset-Backed Notes (herein called the "Class
A-3 Notes"), all issued under an Indenture dated as of September 1, 1998 (such
indenture, as supplemented or amended, herein called the "Indenture"), between
the Issuer and U.S. Bank Trust National Association, as trustee (the "Trustee,"
which term includes any successor Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights and obligations thereunder of the Issuer, the
Trustee and the Holders of the Class A-3 Notes. The Class A-3 Notes are subject
to all terms of the Indenture. All terms used in this Note that are defined in
the Indenture, as supplemented or amended, shall have the meanings assigned to
them in or pursuant to the Indenture, as so supplemented or amended.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class
A-4 Notes and the Class A-5 Notes (collectively, the "Senior Notes") are and
will be equally and ratably secured by the collateral pledged as security
therefor as provided in the Indenture, and are and will be senior in payment
priority and collateral rights to the Class A-6 Notes and the Class A-7 Notes
(collectively, the "Subordinated Notes," and together with the Senior Notes, the
"Notes").
Principal of the Class A-3 Notes will be payable on each Distribution Date
in an amount described on the face hereof. "Distribution Date" means the
fifteenth day of each month, or, if any such date is not a Business Day, the
next succeeding Business Day, commencing October 15, 1998.
As described above, the entire unpaid principal amount of this Note shall
be due and payable on the earlier of the Class A-3 Final Scheduled Distribution
Date and the Redemption Date, if any, pursuant to Section 10.01(a) or 10.01(b)
of the Indenture. All principal payments on the Class A-3 Notes shall be made
pro rata to the Class A-3 Noteholders entitled thereto.
Payments of interest on this Note due and payable on each Distribution
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register as of the close of business on each Record Date,
except that with respect to Notes registered on the Record Date in the name of
the nominee of the Depository (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of this
Note (or any one or more Predecessor Notes) affected by any payments made on any
Distribution Date shall be binding upon all future Holders of this Note and of
any Note issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not noted hereon. If funds are expected to be
available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Note on a Distribution Date, then the
Trustee, in the name of and on behalf of the Issuer, will notify the Person
C - 3 - 5
<PAGE>
who was the Registered Holder hereof as of the Record Date with respect to the
Distribution Date immediately preceding such Redemption Date by notice mailed
within five days of such Redemption Date and the amount then due and payable
shall be payable only upon presentation and surrender of this Note at the
Trustee's principal Corporate Trust Office or at the office of the Trustee's
agent appointed for such purposes located in The City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Class A-3 Interest Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed pursuant to
Section 10.01(a) of the Indenture, in whole, but not in part, at the option of
the Company or the Servicer on any Distribution Date on or after the date on
which the Pool Scheduled Principal Balance is less than or equal to 10% of the
Cutoff Date Pool Principal Balance.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by the Holder hereof or his attorney duly authorized in
writing, with such signature guaranteed by a commercial bank or trust company
located, or having a correspondent located, in the city in which the Corporate
Trust Office is located, or a member firm of a national securities exchange, and
such other documents as the Trustee may require, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Trustee or the Owner Trustee in its individual capacity, (ii)
any owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director or employee of the Trustee or the Owner
Trustee in its individual capacity, any holder of a beneficial interest in the
Issuer, the Owner Trustee or the Trustee or of any successor or assign of the
Trustee or the Owner Trustee in its individual capacity, except as any such
Person may have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid consideration for stock, unpaid capital contribution or failure to
pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture
C - 3 - 6
<PAGE>
and such Note that such Noteholder or Note Owner will not at any time institute
against the Company, the Issuer or any General Partner, or join in any
institution against the Company, the Issuer or any General Partner of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under any United States Federal or state bankruptcy or similar law in connection
with any obligations relating to the Notes, the Indenture or the Related
Documents.
It is the intent and agreement of the Issuer, the Trustee, the
Noteholders and Note Owners that, for purposes of federal income, state and
local income and franchise and any other income taxes, the Notes will be treated
as indebtedness of the Issuer. Each Noteholder and Note Owner, by acceptance of
this Note or, in the case of a Note Owner, a beneficial interest in this Note,
covenants and agrees to treat this Note as indebtedness for such tax purposes
and to take no action inconsistent with such treatment.
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
Person in whose name this Note (as of the day of determination or as of such
other date as may be specified in the Indenture) is registered as the owner
hereof for all purposes, whether or not this Note shall be overdue, and neither
the Issuer, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Holders of Notes representing a
majority of the Outstanding Amount of each Class of Notes. The Indenture also
contains provisions permitting the Holders of Notes representing specified
percentages of the Outstanding Amount of Notes, on behalf of the Holders of all
the Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one or more
Predecessor Notes) shall be conclusive and binding upon such Holders and upon
all future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits the
Trustee to amend or waive certain terms and conditions set forth in the
Indenture without the consent of Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Trustee and the Holder of
Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
C - 3 - 7
<PAGE>
This Note and the Indenture shall be construed in accordance with the
laws of the State of Minnesota, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.
C - 3 - 8
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
- ---------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.
Dated: ________
**
Signature Guaranteed:
- ----------------------------------
- ------------------------
** NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
C - 3 - 9
<PAGE>
EXHIBIT C-4
Unless this Note is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the issuer or its agent for
registration of transfer, exchange or payment, and any Note issued is registered
in the name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
GREEN TREE RECREATIONAL, EQUIPMENT & CONSUMER TRUST 1998-C
CLASS A-4 6.17% ASSET-BACKED NOTE
REGISTERED $___________
NO. R-___ CUSIP NO.________
Green Tree Recreational, Equipment & Consumer Trust 1998-C a business
trust organized and existing under the laws of the State of Delaware (herein
referred to as the "Issuer"), for value received, hereby promises to pay to Cede
& Co., or registered assigns, the principal sum of _________________________
DOLLARS ($___________) payable on each Distribution Date in an amount equal to
the result obtained by multiplying (i) a fraction, the numerator of which is
$__________ and the denominator of which is $111,000,000 by (ii) the aggregate
amount, if any, payable from the Note Distribution Account in respect of
principal on the Class A-4 Notes pursuant to Section 3.01 of the Indenture;
provided, however, that the entire unpaid principal amount of this Note shall be
due and payable on the earlier of the February 2011 Distribution Date (the
"Class A-4 Final Scheduled Distribution Date") and the Redemption Date, if any,
pursuant to Section 10.01(a) or (b) of the Indenture referred to on the reverse
hereof.
The Issuer will pay interest on this Note at the Class A-4 Interest
Rate on each Distribution Date until the principal of this Note is paid or made
available for payment, on the principal amount of this Note outstanding on the
preceding Distribution Date (after giving effect to all payments of principal
made on the preceding Distribution Date). Interest on this Note will accrue for
each Distribution Date from the most recent Distribution Date on which interest
has been paid to but excluding such Distribution Date or, if no interest has yet
been paid, from September 28, 1998. Interest will be computed on the basis of a
360-day year consisting of twelve 30-day months. Such principal of and interest
on this Note shall be paid in the manner specified on the reverse hereof.
C - 4 - 1
<PAGE>
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse hereof,
or be valid or obligatory for any purpose.
C - 4 - 2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer.
Date: ________
GREEN TREE RECREATIONAL, EQUIPMENT
& CONSUMER TRUST 1998-C
By WILMINGTON TRUST COMPANY, not in its
individual capacity but solely on
behalf of the Issuer as Owner Trustee
under the Trust Agreement
By
--------------------------------
Name:
Title:
C - 4 - 3
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Trustee
By
--------------------------------
Authorized Signatory
C - 4 - 4
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-4 6.17% Asset-Backed Notes (herein called the "Class
A-4 Notes"), all issued under an Indenture dated as of September 1, 1998 (such
indenture, as supplemented or amended, herein called the "Indenture"), between
the Issuer and U.S. Bank Trust National Association, as trustee (the "Trustee,"
which term includes any successor Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights and obligations thereunder of the Issuer, the
Trustee and the Holders of the Class A-4 Notes. The Class A-4 Notes are subject
to all terms of the Indenture. All terms used in this Note that are defined in
the Indenture, as supplemented or amended, shall have the meanings assigned to
them in or pursuant to the Indenture, as so supplemented or amended.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes and Class A-5 Notes (collectively, the "Senior Notes") are and
will be equally and ratably secured by the collateral pledged as security
therefor as provided in the Indenture, and are and will be senior in payment
priority and collateral rights to the Class A-6 Notes and the Class A-7 Notes
(collectively, the "Subordinated Notes," and together with the Senior Notes, the
"Notes").
Principal of the Class A-4 Notes will be payable on each Distribution
Date in an amount described on the face hereof. "Distribution Date" means the
fifteenth day of each month, or, if any such date is not a Business Day, the
next succeeding Business Day, commencing October 15, 1998.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Class A-4 Final Scheduled
Distribution Date and the Redemption Date, if any, pursuant to Section 10.01(a)
or 10.01(b) of the Indenture. All principal payments on the Class A-4 Notes
shall be made pro rata to the Class A-4 Noteholders entitled thereto.
Payments of interest on this Note due and payable on each Distribution
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register as of the close of business on each Record Date,
except that with respect to Notes registered on the Record Date in the name of
the nominee of the Depository (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of this
Note (or any one or more Predecessor Notes) affected by any payments made on any
Distribution Date shall be binding upon all future Holders of this Note and of
any Note issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not noted hereon. If funds are expected to be
available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Note on a Distribution Date, then the
Trustee, in the name of and on behalf of the Issuer, will notify the Person
C - 4 - 5
<PAGE>
who was the Registered Holder hereof as of the Record Date with respect to the
Distribution Date immediately preceding such Redemption Date by notice mailed
within five days of such Redemption Date and the amount then due and payable
shall be payable only upon presentation and surrender of this Note at the
Trustee's principal Corporate Trust Office or at the office of the Trustee's
agent appointed for such purposes located in The City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Class A-4 Interest Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed pursuant to
Section 10.01(a) of the Indenture, in whole, but not in part, at the option of
the Company or the Servicer on any Distribution Date on or after the date on
which the Pool Scheduled Principal Balance is less than or equal to 10% of the
cutoff Date Pool Principal Balance.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by the Holder hereof or his attorney duly authorized in
writing, with such signature guaranteed by a commercial bank or trust company
located, or having a correspondent located, in the city in which the Corporate
Trust Office is located, or a member firm of a national securities exchange, and
such other documents as the Trustee may require, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Trustee or the Owner Trustee in its individual capacity, (ii)
any owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director or employee of the Trustee or the Owner
Trustee in its individual capacity, any holder of a beneficial interest in the
Issuer, the Owner Trustee or the Trustee or of any successor or assign of the
Trustee or the Owner Trustee in its individual capacity, except as any such
Person may have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid consideration for stock, unpaid capital contribution or failure to
pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture
C - 4 - 6
<PAGE>
and such Note that such Noteholder or Note Owner will not at any time institute
against the Company, the Issuer or any General Partner, or join in any
institution against the Company, the Issuer or any General Partner of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under any United States Federal or state bankruptcy or similar law in connection
with any obligations relating to the Notes, the Indenture or the Related
Documents.
It is the intent and agreement of the Issuer, the Trustee, the
Noteholders and Note Owners that, for purposes of federal income, state and
local income and franchise and any other income taxes, the Notes will be treated
as indebtedness of the Issuer. Each Noteholder and Note Owner, by acceptance of
this Note or, in the case of a Note Owner, a beneficial interest in this Note,
covenants and agrees to treat this Note as indebtedness for such tax purposes
and to take no action inconsistent with such treatment.
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
Person in whose name this Note (as of the day of determination or as of such
other date as may be specified in the Indenture) is registered as the owner
hereof for all purposes, whether or not this Note shall be overdue, and neither
the Issuer, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Holders of Notes representing a
majority of the Outstanding Amount of each Class of Notes. The Indenture also
contains provisions permitting the Holders of Notes representing specified
percentages of the Outstanding Amount of Notes, on behalf of the Holders of all
the Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one or more
Predecessor Notes) shall be conclusive and binding upon such Holders and upon
all future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits the
Trustee to amend or waive certain terms and conditions set forth in the
Indenture without the consent of Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Trustee and the Holder of
Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
C - 4 - 7
<PAGE>
This Note and the Indenture shall be construed in accordance with the
laws of the State of Minnesota, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.
C - 4 - 8
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
- -------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.
Dated: ________
**
Signature Guaranteed:
_______________________________
- ----------
** NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
C - 4 - 9
<PAGE>
EXHIBIT C-5
Unless this Note is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the issuer or its agent for
registration of transfer, exchange or payment, and any Note issued is registered
in the name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
GREEN TREE RECREATIONAL, EQUIPMENT & CONSUMER TRUST 1998-C
CLASS A-5 6.28% ASSET-BACKED NOTE
REGISTERED $___________
NO. R-___ CUSIP NO.________
Green Tree Recreational, Equipment & Consumer Trust 1998-C, a business
trust organized and existing under the laws of the State of Delaware (herein
referred to as the "Issuer"), for value received, hereby promises to pay to Cede
& Co., or registered assigns, the principal sum of ________________________
DOLLARS ($___________) payable on each Distribution Date in an amount equal to
the result obtained by multiplying (i) a fraction, the numerator of which is
$__________ and the denominator of which is $104,000,000 by (ii) the aggregate
amount, if any, payable from the Note Distribution Account in respect of
principal on the Class A-5 Notes pursuant to Section 3.01 of the Indenture;
provided, however, that the entire unpaid principal amount of this Note shall be
due and payable on the earlier of the February 2014 Distribution Date (the
"Class A-5 Final Scheduled Distribution Date") and the Redemption Date, if any,
pursuant to Section 10.01(a) or (b) of the Indenture referred to on the reverse
hereof.
The Issuer will pay interest on this Note at the Class A-5 Interest
Rate on each Distribution Date until the principal of this Note is paid or made
available for payment, on the principal amount of this Note outstanding on the
preceding Distribution Date (after giving effect to all payments of principal
made on the preceding Distribution Date). Interest on this Note will accrue for
each Distribution Date from the most recent Distribution Date on which interest
has been paid to but excluding such Distribution Date or, if no interest has yet
been paid, from September 28, 1998. Interest will be computed on the basis of a
360-day year consisting of twelve 30-day months. Such principal of and interest
on this Note shall be paid in the manner specified on the reverse hereof.
C - 5 - 1
<PAGE>
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse hereof,
or be valid or obligatory for any purpose.
C - 5 - 2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer.
Date: ____________________
GREEN TREE RECREATIONAL, EQUIPMENT
& CONSUMER TRUST 1998-C
By WILMINGTON TRUST COMPANY, not in its
individual capacity but solely on
behalf of the Issuer as Owner Trustee
under the Trust Agreement
By -------------------------------
Name:
--------------------------
Title:
-------------------------
C - 5 - 3
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Trustee
By
--------------------------------
Authorized Signatory
C - 5 - 4
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-5 6.28% Asset-Backed Notes (herein called the "Class
A-5 Notes"), all issued under an Indenture dated as of September 1, 1998 (such
indenture, as supplemented or amended, herein called the "Indenture"), between
the Issuer and U.S. Bank Trust National Association, as trustee (the "Trustee,"
which term includes any successor Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights and obligations thereunder of the Issuer, the
Trustee and the Holders of the Class A-5 Notes. The Class A-5 Notes are subject
to all terms of the Indenture. All terms used in this Note that are defined in
the Indenture, as supplemented or amended, shall have the meanings assigned to
them in or pursuant to the Indenture, as so supplemented or amended.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes and the Class A-5 Notes (collectively, the "Senior Notes") are
and will be equally and ratably secured by the collateral pledged as security
therefor as provided in the Indenture, and are and will be senior in payment
priority and collateral rights to the Class A-6 Notes and the Class A-7 Notes
(collectively, the "Subordinated Notes," and together with the Senior Notes, the
"Notes").
Principal of the Class A-5 Notes will be payable on each Distribution
Date in an amount described on the face hereof. "Distribution Date" means the
fifteenth day of each month, or, if any such date is not a Business Day, the
next succeeding Business Day, commencing October 15, 1998.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Class A-5 Final Scheduled
Distribution Date and the Redemption Date, if any, pursuant to Section 10.01(a)
or 10.01(b) of the Indenture. All principal payments on the Class A-5 Notes
shall be made pro rata to the Class A-5 Noteholders entitled thereto.
Payments of interest on this Note due and payable on each Distribution
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register as of the close of business on each Record Date,
except that with respect to Notes registered on the Record Date in the name of
the nominee of the Depository (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of this
Note (or any one or more Predecessor Notes) affected by any payments made on any
Distribution Date shall be binding upon all future Holders of this Note and of
any Note issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not noted hereon. If funds are expected to be
available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Note on a Distribution Date, then the
Trustee, in the name of and on behalf of the Issuer, will notify the Person
C - 5 - 5
<PAGE>
who was the Registered Holder hereof as of the Record Date with respect to the
Distribution Date immediately preceding such Redemption Date by notice mailed
within five days of such Redemption Date and the amount then due and payable
shall be payable only upon presentation and surrender of this Note at the
Trustee's principal Corporate Trust Office or at the office of the Trustee's
agent appointed for such purposes located in The City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Class A-5 Interest Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed pursuant to
Section 10.01(a) of the Indenture, in whole, but not in part, at the option of
the Company or the Servicer (with the consent of the Security Insurer under
certain circumstances), on any Distribution Date on or after the date on which
the Pool Scheduled Principal Balance is less than or equal to 10% of the Cutoff
Date Pool Principal Balance.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by the Holder hereof or his attorney duly authorized in
writing, with such signature guaranteed by a commercial bank or trust company
located, or having a correspondent located, in the city in which the Corporate
Trust Office is located, or a member firm of a national securities exchange, and
such other documents as the Trustee may require, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Trustee or the Owner Trustee in its individual capacity, (ii)
any owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director or employee of the Trustee or the Owner
Trustee in its individual capacity, any holder of a beneficial interest in the
Issuer, the Owner Trustee or the Trustee or of any successor or assign of the
Trustee or the Owner Trustee in its individual capacity, except as any such
Person may have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid consideration for stock, unpaid capital contribution or failure to
pay any installment or call owing to such entity.
C - 5 - 6
<PAGE>
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture and such Note that such Noteholder or
Note Owner will not at any time institute against the Company, the Issuer or any
General Partner, or join in any institution against the Company, the Issuer or
any General Partner of, any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings under any United States Federal or state bankruptcy
or similar law in connection with any obligations relating to the Notes, the
Indenture or the Related Documents.
It is the intent and agreement of the Issuer, the Trustee, the
Noteholders and Note Owners that, for purposes of federal income, state and
local income and franchise and any other income taxes, the Notes will be treated
as indebtedness of the Issuer. Each Noteholder and Note Owner, by acceptance of
this Note or, in the case of a Note Owner, a beneficial interest in this Note,
covenants and agrees to treat this Note as indebtedness for such tax purposes
and to take no action inconsistent with such treatment.
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
Person in whose name this Note (as of the day of determination or as of such
other date as may be specified in the Indenture) is registered as the owner
hereof for all purposes, whether or not this Note shall be overdue, and neither
the Issuer, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Holders of Notes representing a
majority of the Outstanding Amount of each Class of Notes. The Indenture also
contains provisions permitting the Holders of Notes representing specified
percentages of the Outstanding Amount of Notes, on behalf of the Holders of all
the Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one or more
Predecessor Notes) shall be conclusive and binding upon such Holders and upon
all future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits the
Trustee to amend or waive certain terms and conditions set forth in the
Indenture without the consent of Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Trustee and the Holder of
Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
C - 5 - 7
<PAGE>
This Note and the Indenture shall be construed in accordance with the
laws of the State of Minnesota, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.
C - 5 - 8
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
- -------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.
Dated: ________
**
Signature Guaranteed:
________________________________
- ----------
** NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
C - 5 - 9
<PAGE>
EXHIBIT C-6
Unless this Note is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the issuer or its agent for
registration of transfer, exchange or payment, and any Note issued is registered
in the name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
GREEN TREE RECREATIONAL, EQUIPMENT & CONSUMER TRUST 1998-C
CLASS A-6 6.70% ASSET-BACKED NOTE
REGISTERED $___________
NO. R-___ CUSIP NO.________
Green Tree Recreational, Equipment & Consumer Trust 1998-C, a business
trust organized and existing under the laws of the State of Delaware (herein
referred to as the "Issuer"), for value received, hereby promises to pay to Cede
& Co., or registered assigns, the principal sum of _________________________
DOLLARS ($___________) payable on each Distribution Date in an amount equal to
the result obtained by multiplying (i) a fraction, the numerator of which is
$__________ and the denominator of which is $36,000,000 by (ii) the aggregate
amount, if any, payable from the Note Distribution Account in respect of
principal on the Class A-6 Notes pursuant to Section 3.01 of the Indenture;
provided, however, that the entire unpaid principal amount of this Note shall be
due and payable on the earlier of the February 2014 Distribution Date (the
"Class A-6 Final Scheduled Distribution Date") and the Redemption Date, if any,
pursuant to Section 10.01(a) or (b) of the Indenture referred to on the reverse
hereof.
The Issuer will pay interest on this Note at the Class A-6 Interest
Rate on each Distribution Date until the principal of this Note is paid or made
available for payment, on the principal amount of this Note outstanding on the
preceding Distribution Date (after giving effect to all payments of principal
made on the preceding Distribution Date). Interest on this Note will accrue for
each Distribution Date from the most recent Distribution Date on which interest
has been paid to but excluding such Distribution Date or, if no interest has yet
been paid, from September 28, 1998. Interest will be computed on the basis of a
360-day year consisting of twelve 30-day months. Such principal of and interest
on this Note shall be paid in the manner specified on the reverse hereof.
C - 6 - 1
<PAGE>
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse hereof,
or be valid or obligatory for any purpose.
C - 6 - 2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer.
Date: ____________________
GREEN TREE RECREATIONAL, EQUIPMENT
& CONSUMER TRUST 1998-C
By WILMINGTON TRUST COMPANY, not in its
individual capacity but solely on behalf
of the Issuer as Owner Trustee under the
Trust Agreement
By
--------------------------------
Name:
Title:
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<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Trustee
By
--------------------------------
Authorized Signatory
C - 6 - 4
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-6 6.70% Asset-Backed Notes (herein called the "Class
A-6 Notes"), all issued under an Indenture dated as of September 1, 1998 (such
indenture, as supplemented or amended, herein called the "Indenture"), between
the Issuer and U.S. Bank Trust National Association, as trustee (the "Trustee,"
which term includes any successor Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights and obligations thereunder of the Issuer, the
Trustee and the Holders of the Class A-6 Notes. The Class A-6 Notes are subject
to all terms of the Indenture. All terms used in this Note that are defined in
the Indenture, as supplemented or amended, shall have the meanings assigned to
them in or pursuant to the Indenture, as so supplemented or amended.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes and the Class A-5 Notes (collectively, the "Senior Notes") are
and will be equally and ratably secured by the collateral pledged as security
therefor as provided in the Indenture, and are and will be senior in payment
priority and collateral rights to the Class A-6 Notes and the Class A-7 Notes
(collectively, the "Subordinated Notes," and together with the Senior Notes, the
"Notes").
Principal of the Class A-6 Notes will be payable on each Distribution
Date in an amount described on the face hereof. "Distribution Date" means the
fifteenth day of each month, or, if any such date is not a Business Day, the
next succeeding Business Day, commencing October 15, 1998.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Class A-6 Final Scheduled
Distribution Date and the Redemption Date, if any, pursuant to Section 10.01(a)
or 10.01(b) of the Indenture. All principal payments on the Class A-6 Notes
shall be made pro rata to the Class A-6 Noteholders entitled thereto.
Payments of interest on this Note due and payable on each Distribution
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register as of the close of business on each Record Date,
except that with respect to Notes registered on the Record Date in the name of
the nominee of the Depository (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of this
Note (or any one or more Predecessor Notes) affected by any payments made on any
Distribution Date shall be binding upon all future Holders of this Note and of
any Note issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not noted hereon. If funds are expected to be
available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Note on a Distribution Date, then the
Trustee, in the name of and on behalf of the Issuer, will notify the Person
C - 6 - 5
<PAGE>
who was the Registered Holder hereof as of the Record Date with respect to the
Distribution Date immediately preceding such Redemption Date by notice mailed
within five days of such Redemption Date and the amount then due and payable
shall be payable only upon presentation and surrender of this Note at the
Trustee's principal Corporate Trust Office or at the office of the Trustee's
agent appointed for such purposes located in The City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Class A-6 Interest Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed pursuant to
Section 10.01(a) of the Indenture, in whole, but not in part, at the option of
the Company or the Servicer (with the consent of the Security Insurer under
certain circumstances), on any Distribution Date on or after the date on which
the Pool Scheduled Principal Balance is less than or equal to 10% of the Cutoff
Date Pool Principal Balance.
The payment of interest and principal on this Note is subordinated to
the Senior Notes, and the rights of the Holder of this Note to institute legal
remedies or to accelerate repayment of principal due hereunder is restricted, as
provided in the Indenture.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by the Holder hereof or his attorney duly authorized in
writing, with such signature guaranteed by a commercial bank or trust company
located, or having a correspondent located, in the city in which the Corporate
Trust Office is located, or a member firm of a national securities exchange, and
such other documents as the Trustee may require, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Trustee or the Owner Trustee in its individual capacity, (ii)
any owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director or employee of the Trustee or the Owner
Trustee in its individual capacity, any holder of a beneficial interest in the
Issuer, the Owner Trustee or the Trustee or of any successor or assign of the
Trustee or the Owner Trustee in its individual capacity, except as any such
Person may have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable
C - 6 - 6
<PAGE>
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture and such Note that such Noteholder or
Note Owner will not at any time institute against the Company, the Issuer or any
General Partner, or join in any institution against the Company, the Issuer or
any General Partner of, any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings under any United States Federal or state bankruptcy
or similar law in connection with any obligations relating to the Notes, the
Indenture or the Related Documents.
It is the intent and agreement of the Issuer, the Trustee, the
Noteholders and Note Owners that, for purposes of federal income, state and
local income and franchise and any other income taxes, the Notes will be treated
as indebtedness of the Issuer. Each Noteholder and Note Owner, by acceptance of
this Note or, in the case of a Note Owner, a beneficial interest in this Note,
covenants and agrees to treat this Note as indebtedness for such tax purposes
and to take no action inconsistent with such treatment.
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
Person in whose name this Note (as of the day of determination or as of such
other date as may be specified in the Indenture) is registered as the owner
hereof for all purposes, whether or not this Note shall be overdue, and neither
the Issuer, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Holders of Notes representing a
majority of the Outstanding Amount of each Class of Notes. The Indenture also
contains provisions permitting the Holders of Notes representing specified
percentages of the Outstanding Amount of Notes, on behalf of the Holders of all
the Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one or more
Predecessor Notes) shall be conclusive and binding upon such Holders and upon
all future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits the
Trustee to amend or waive certain terms and conditions set forth in the
Indenture without the consent of Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Trustee and the Holder of
Notes under the Indenture.
C - 6 - 7
<PAGE>
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of Minnesota, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.
C - 6 - 8
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
- -------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.
Dated: ________ **
Signature Guaranteed:
- -------------------------
- ----------
** NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
C - 6 - 9
<PAGE>
EXHIBIT C-7
Unless this Note is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the issuer or its agent for
registration of transfer, exchange or payment, and any Note issued is registered
in the name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
GREEN TREE RECREATIONAL, EQUIPMENT & CONSUMER TRUST 1998-C
CLASS A-7 7.00% ASSET-BACKED NOTE
REGISTERED $___________
NO. R-___ CUSIP NO.________
Green Tree Recreational, Equipment & Consumer Trust 1998-C, a business
trust organized and existing under the laws of the State of Delaware (herein
referred to as the "Issuer"), for value received, hereby promises to pay to Cede
& Co., or registered assigns, the principal sum of _________________________
DOLLARS ($____________) payable on each Distribution Date in an amount equal to
the result obtained by multiplying (i) a fraction, the numerator of which is
$__________ and the denominator of which is $32,000,000 by (ii) the aggregate
amount, if any, payable from the Note Distribution Account in respect of
principal on the Class A-7 Notes pursuant to Section 3.01 of the Indenture;
provided, however, that the entire unpaid principal amount of this Note shall be
due and payable on the earlier of the March 2014 Distribution Date (the "Class
A-7 Final Scheduled Distribution Date") and the Redemption Date, if any,
pursuant to Section 10.01(a) or (b) of the Indenture referred to on the reverse
hereof.
The Issuer will pay interest on this Note at the Class A-7 Interest
Rate on each Distribution Date until the principal of this Note is paid or made
available for payment, on the principal amount of this Note outstanding on the
preceding Distribution Date (after giving effect to all payments of principal
made on the preceding Distribution Date). Interest on this Note will accrue for
each Distribution Date from the most recent Distribution Date on which interest
has been paid to but excluding such Distribution Date or, if no interest has yet
been paid, from September 28, 1998. Interest will be computed on the basis of a
360-day year consisting of twelve 30-day months. Such principal of and interest
on this Note shall be paid in the manner specified on the reverse hereof.
C - 7 - 1
<PAGE>
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse hereof,
or be valid or obligatory for any purpose.
C - 7 - 2
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer.
Date: _____________________
GREEN TREE RECREATIONAL, EQUIPMENT
& CONSUMER TRUST 1998-C
By WILMINGTON TRUST COMPANY, not in its
individual capacity but solely on
behalf of the Issuer as Owner Trustee
under the Trust Agreement
By
-------------------------------
Name:
Title:
C - 7 - 3
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Trustee
By
--------------------------------
Authorized Signatory
C - 7 - 4
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-7 7.00% Asset-Backed Notes (herein called the "Class
A-7 Notes"), all issued under an Indenture dated as of September 1, 1998 (such
indenture, as supplemented or amended, herein called the "Indenture"), between
the Issuer and U.S. Bank Trust National Association, as trustee (the "Trustee,"
which term includes any successor Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights and obligations thereunder of the Issuer, the
Trustee and the Holders of the Class A-7 Notes. The Class A-7 Notes are subject
to all terms of the Indenture. All terms used in this Note that are defined in
the Indenture, as supplemented or amended, shall have the meanings assigned to
them in or pursuant to the Indenture, as so supplemented or amended.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes and the Class A-5 Notes (collectively, the "Senior Notes") are
and will be equally and ratably secured by the collateral pledged as security
therefor as provided in the Indenture, and are and will be senior in payment
priority and collateral rights to the Class A-6 Notes and the Class A-7 Notes
(collectively, the "Subordinated Notes," and together with the Senior Notes, the
"Notes").
Principal of the Class A-7 Notes will be payable on each Distribution
Date in an amount described on the face hereof. "Distribution Date" means the
fifteenth day of each month, or, if any such date is not a Business Day, the
next succeeding Business Day, commencing October 15, 1998.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Class A-7 Final Scheduled
Distribution Date and the Redemption Date, if any, pursuant to Section 10.01(a)
or 10.01(b) of the Indenture. All principal payments on the Class A-7 Notes
shall be made pro rata to the Class A-7 Noteholders entitled thereto.
Payments of interest on this Note due and payable on each Distribution
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register as of the close of business on each Record Date,
except that with respect to Notes registered on the Record Date in the name of
the nominee of the Depository (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of this
Note (or any one or more Predecessor Notes) affected by any payments made on any
Distribution Date shall be binding upon all future Holders of this Note and of
any Note issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not noted hereon. If funds are expected to be
available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Note on a Distribution Date, then the
Trustee, in the name of and on behalf of the Issuer, will notify the Person
C - 7 - 5
<PAGE>
who was the Registered Holder hereof as of the Record Date with respect to the
Distribution Date immediately preceding such Redemption Date by notice mailed
within five days of such Redemption Date and the amount then due and payable
shall be payable only upon presentation and surrender of this Note at the
Trustee's principal Corporate Trust Office or at the office of the Trustee's
agent appointed for such purposes located in The City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Class A-7 Interest Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed pursuant to
Section 10.01(a) of the Indenture, in whole, but not in part, at the option of
the Company or the Servicer (with the consent of the Security Insurer under
certain circumstances), on any Distribution Date on or after the date on which
the Pool Scheduled Principal Balance is less than or equal to 10% of the Cutoff
Date Pool Principal Balance.
The payment of interest and principal on this Note is subordinated to
the Senior Notes and the Class A-6 Notes, and the rights of the Holder of this
Note to institute legal remedies or to accelerate repayment of principal due
hereunder is restricted, as provided in the Indenture.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by the Holder hereof or his attorney duly authorized in
writing, with such signature guaranteed by a commercial bank or trust company
located, or having a correspondent located, in the city in which the Corporate
Trust Office is located, or a member firm of a national securities exchange, and
such other documents as the Trustee may require, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Trustee or the Owner Trustee in its individual capacity, (ii)
any owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director or employee of the Trustee or the Owner
Trustee in its individual capacity, any holder of a beneficial interest in the
Issuer, the Owner Trustee or the Trustee or of any successor or assign of the
Trustee or the Owner Trustee in its individual capacity, except as any such
Person may have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable
C - 7 - 6
<PAGE>
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture and such Note that such Noteholder or
Note Owner will not at any time institute against the Company, the Issuer or any
General Partner, or join in any institution against the Company, the Issuer or
any General Partner of, any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings under any United States Federal or state bankruptcy
or similar law in connection with any obligations relating to the Notes, the
Indenture or the Related Documents.
It is the intent and agreement of the Issuer, the Trustee, the
Noteholders and Note Owners that, for purposes of federal income, state and
local income and franchise and any other income taxes, the Notes will be treated
as indebtedness of the Issuer. Each Noteholder and Note Owner, by acceptance of
this Note or, in the case of a Note Owner, a beneficial interest in this Note,
covenants and agrees to treat this Note as indebtedness for such tax purposes
and to take no action inconsistent with such treatment.
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
Person in whose name this Note (as of the day of determination or as of such
other date as may be specified in the Indenture) is registered as the owner
hereof for all purposes, whether or not this Note shall be overdue, and neither
the Issuer, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Holders of Notes representing a
majority of the Outstanding Amount of each Class of Notes. The Indenture also
contains provisions permitting the Holders of Notes representing specified
percentages of the Outstanding Amount of Notes, on behalf of the Holders of all
the Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one or more
Predecessor Notes) shall be conclusive and binding upon such Holders and upon
all future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits the
Trustee to amend or waive certain terms and conditions set forth in the
Indenture without the consent of Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Trustee and the Holder of
Notes under the Indenture.
C - 7 - 7
<PAGE>
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of Minnesota, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency herein prescribed.
C - 7 - 8
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
- -------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.
Dated: ________ **
Signature Guaranteed:
- -------------------------
- ----------
** NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
C - 7 - 9
<PAGE>
Exhibit 8.1
September 28, 1998
Merrill Lynch, Pierce, Fenner Wilmington Trust Company
& Smith Incorporated Rodney Square North
North Tower 1100 North Market Street
World Financial Center Wilmington, Delaware 19890-0001
New York, New York 10281
U.S. Bank Trust National Association
Lehman Brothers Inc. 180 East Fifth Street
Three World Financial Center St. Paul, MN 55101
New York, New York 10285
NationsBanc Montgomery Securities LLC
J.P. Morgan Securities Inc. 100 N. Tryon Street
60 Wall Street Charlotte, NorthCarolina 28255
New York, New York 10260
Re: Green Tree Financial Corporation Green Tree Recreational,
Equipment & Consumer Trust 1998-C
Ladies and Gentlemen:
We have acted as special counsel to Green Tree Financial Corporation, a
Delaware corporation ("Green Tree"), in connection with the establishment of
Green Tree Recreational, Equipment & Consumer Trust 1998-C, a Delaware business
trust (the "Issuer"), pursuant to a Trust Agreement dated as of September 1,
1998 (the "Trust Agreement") among Green Tree, Green Tree Second GP Inc. (the
"General Partner") and Wilmington Trust Company, as Owner Trustee (the "Owner
Trustee"), and Green Tree's execution of a Sale and Servicing Agreement dated as
of September 1, 1998, between Green Tree and the Issuer. The Issuer will issue
(approximately) $52,000,000 aggregate amount of Asset-Backed Certificates (the
"Certificates") pursuant to the Trust Agreement and $748,000,000 aggregate
principal amount of fixed rate and floating rate Asset-Backed Notes (the
"Notes") pursuant to an Indenture dated as of September 1,
<PAGE>
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
U.S. Bank Trust National Association
Wilmington Trust Company
Lehman Brothers Inc.
J.P. Morgan Securities Inc.
NationsBanc Montgomery Securities LLC
September 28, 1998
Page 2
1998 (the "Indenture"), between the Issuer and U.S. Bank Trust National
Association, as Trustee.
In connection with the issuance of the Certificates and Notes and
related transactions, Green Tree has filed with the Securities and Exchange
Commission a Registration Statement on Form S-3 (File No. 333-52233) (the
"Registration Statement"), and has prepared a prospectus dated September 4, 1998
(as supplemented on September 15, 1998, the "Base Prospectus") and a prospectus
supplement dated September 4, 1998 and a supplement to the Prospectus Supplement
dated September 15, 1998 (the "Prospectus Supplement" and together with the Base
Prospectus, the "Prospectus").
This opinion is being delivered pursuant to Section 2.02(i) of the Sale
and Servicing Agreement, Section 5(b)(1) of the Underwriting Agreement, and
Section 5(b)(1) of the Class B-2 Underwriting Agreement. Capitalized terms used
and not otherwise defined herein have the meanings assigned to them in the Sale
and Servicing Agreement.
In rendering our opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of such documents,
corporate records, certificates of public officials and other instruments as we
have deemed necessary or advisable for purposes of this opinion, including the
Indenture, the Trust Agreement, the Sale and Servicing Agreement, the
Registration Statement and the related documents and agreements contemplated
therein (collectively, the "Transaction Documents").
Our opinion is based upon existing law and currently applicable
Treasury Department regulations, current published administrative positions of
the Internal Revenue 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. In
rendering this opinion, we have relied upon the representations and warranties
set forth in the Trust Agreement and have assumed that the General Partner and
the Owner Trustee will at all times comply with the requirements of the Trust
Agreement and that the Certificates and the Notes will be issued as described in
the Prospectus Supplement.
<PAGE>
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
U.S. Bank Trust National Association
Wilmington Trust Company
Lehman Brothers Inc.
J.P. Morgan Securities Inc.
NationsBanc Montgomery Securities LLC
September 28, 1998
Page 3
Based on the foregoing, it is our opinion that the statements set forth
in the Base Prospectus under the headings "Prospectus Summary -- Tax Status",
"Certain Federal Income Tax Consequences" and "Certain State Income Tax
Consequences" and in the Prospectus Supplement under the headings "Summary of
Terms -- Tax Status" and "Certain Federal and State Income Tax Consequences", to
the extent that they constitute matters of law or legal consideration with
respect thereto, including our conclusions as set forth therein that for federal
and Minnesota income tax purposes (i) the Trust will be neither an association
taxable as a corporation nor a publicly traded partnership taxable as a
corporation and (ii) the Notes will constitute indebtedness, are correct in all
material respects.
Based on the federal income tax characterization of the Trust and the
Notes set forth above and the provisions of Minnesota law as of the date hereof,
it is our opinion that, for Minnesota income, franchise and excise tax purposes
(i) the Trust will not be classified as an association taxable as a corporation
nor as a publicly traded partnership taxable as a corporation and (ii) the Notes
will be treated as debt. It is also our opinion that for holders of Certificates
or Notes who are not residents of, or otherwise subject to tax in, Minnesota,
ownership of a Certificate or a Note will not be a factor in determining whether
such holder is subject to Minnesota income, franchise or excise taxes.
The opinion set forth herein is expressly subject to there being no
additional facts that would materially affect the validity of the assumptions
and conclusions set forth herein or upon which this opinion is based.
We express no opinion as to the laws of any jurisdiction other than the
laws of the state of Minnesota and the federal laws of the United States of
America. This opinion is delivered to you solely for your use. This opinion may
not be circulated or republished to, or relied upon by, any other person without
our prior written consent.
Very truly yours,
