<PAGE>
As filed with the Securities and Exchange Commission on October 22, 1999
Registration No. 333-85037
333-85037-01
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
Amendment No. 1 to
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
---------------
GREEN TREE FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
---------------
Delaware 41-1807858
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
CONSECO FINANCE SECURITIZATIONS CORP.
(Exact name of registrant as specified in its charter)
---------------
Minnesota 41-1807858
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1100 Landmark Towers
345 St. Peter Street
Saint Paul, Minnesota 55102-1639
(612) 293-3400
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
---------------
Brian F. Corey
300 Landmark Towers
345 St. Peter Street
Saint Paul, Minnesota 55102-1639
(612) 293-3400
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
Charles F. Sawyer Cathy M. Kaplan
Dorsey & Whitney LLP Brown & Wood LLP
220 South Sixth Street One World Trade Center
Minneapolis, Minnesota 55402 New York, New York 10048
---------------
Approximate date of commencement of proposed sale of securities to the
public: As soon as practicable after the effective date of this Registration
Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
---------------
Pursuant to Rule 429, the Prospectus contained in this Registration
Statement relates to and constitutes Post-Effective Amendment No. 1 to
Registration Statement No. 333-75365, which first became effective on June 2,
1999.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that the Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information contained in this prospectus supplement is not complete and +
+may be changed. We may not sell these securities until the registration +
+statement filed with the Securities and Exchange Commission is effective. +
+This prospectus supplement is not an offer to sell these securities, and it +
+is not soliciting an offer to buy these securities in any state where the +
+offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS SUPPLEMENT
(To Prospectus dated , 1999)
$ (Approximate)
GREEN TREE
Servicer
Conseco Finance Securitizations Corp.
Seller
Manufactured Housing Contract Senior/Subordinate Pass-Through Certificates
Series 1999-
The Series 1999- certificates will consist of 16 classes, but we are offering
only the classes listed below now:
<TABLE>
<CAPTION>
Remittance Approximate Price to Underwriting Proceeds to
Class Rate Principal Amount Public Discount Company
----- ---------- ---------------- ---------- ------------ -------------
<S> <C> <C> <C> <C> <C>
A-1........ % $ % % %
A-2........ % $ % % %
A-3........ % $ % % %
A-4........ % $ % % %
A-5........ % $ % % %
A-6........ % $ % % %
A-7........ % $ % % %
A-8........ %(1) $ % % %
A-9........ %(1) $ % % %
M-1........ %(1) $ % % %
M-2........ %(1) $ % % %
B-1........ %(1) $ % % %
----------- -------------
Total...... $ $
=========== =============
</TABLE>
-----
(1) Or the weighted average of the rates on the contracts in the contract
pool, if less.
The approximate principal amount of the classes of certificates may vary
plus or minus 5%. The price to public will be the percentage listed in the
table above plus any accrued interest beginning on , 1999.
Consider carefully the risk factors beginning on page S-9 in this
prospectus supplement.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus supplement and prospectus are truthful or complete. Any
representation to the contrary is a criminal offense.
These certificates will be delivered on or about , 1999.
The underwriters named below will offer these securities to the public at
the offering price listed on this cover page and they will receive the discount
listed above. See "Underwriting" on page S-78 in this prospectus supplement and
on page 67 in the prospectus.
[Underwriters]
The date of this prospectus supplement is , 1999
<PAGE>
TABLE OF CONTENTS
Prospectus Supplement
<TABLE>
<CAPTION>
Page
----
<S> <C>
Summary of the Terms of the Offered Certificates........................... S-3
Risk Factors............................................................... S-10
Structure of the Transaction............................................... S-14
The Contract Pool.......................................................... S-14
Green Tree Financial Corporation........................................... S-21
Yield and Prepayment Considerations........................................ S-24
Description of the Certificates............................................ S-42
Use of Proceeds............................................................ S-73
ERISA Considerations....................................................... S-73
Legal Investment Considerations............................................ S-78
Underwriting............................................................... S-79
Legal Matters.............................................................. S-81
</TABLE>
Prospectus
<TABLE>
<S> <C>
Important Notice About Information Presented in this Prospectus and the
Accompanying Prospectus Supplement....................................... 2
The Trust................................................................. 3
Use of Proceeds........................................................... 10
Green Tree Financial Corporation.......................................... 11
Conseco Finance Securitizations Corp...................................... 14
Yield Considerations...................................................... 14
Maturity and Prepayment Considerations.................................... 15
Description of the Certificates........................................... 16
Servicing................................................................. 29
Description of FHA Insurance and VA Guarantees............................ 34
Legal Aspects of the Contracts............................................ 35
ERISA Considerations...................................................... 43
Federal Income Tax Consequences........................................... 46
Legal Investment Considerations........................................... 66
Ratings................................................................... 67
Underwriting.............................................................. 67
Legal Matters............................................................. 68
Experts................................................................... 69
Glossary.................................................................. 70
</TABLE>
You should rely only on the information contained in this prospectus
supplement and prospectus. Green Tree, Conseco Securitizations and the
underwriters have not authorized any other person to provide you with different
information. If anyone provides you with different or inconsistent information,
you should not rely on it. Green Tree, Conseco Securitizations and the
underwriters are not making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted.
This document consists of a prospectus supplement and a prospectus. The
prospectus provides general information about Green Tree Financial Corporation,
about Green Tree's manufactured housing lending business, and about any series
of certificates for manufactured housing loans that we may wish to sell. This
prospectus supplement contains more detailed information about the specific
terms of this series of certificates. If the description of the terms of your
certificate varies between this prospectus supplement and the prospectus, you
should rely on the information in this prospectus supplement.
If you have received a copy of this prospectus supplement and prospectus
in an electronic format, and if the legal prospectus delivery period has not
expired, you may obtain a paper copy of this prospectus supplement and
prospectus from Green Tree, Conseco Securitizations or an underwriter by asking
for it.
S-2
<PAGE>
SUMMARY OF THE TERMS OF THE OFFERED CERTIFICATES
This summary highlights selected information regarding the certificates,
and does not contain all of the information that you need to consider in making
your investment decision. To understand all of the terms of the certificates,
read this entire prospectus supplement and the accompanying prospectus. In
particular, we will refer throughout this summary to sections of this
prospectus supplement or the prospectus, or both, which will contain more
complete descriptions of the matters summarized. All these references will be
to sections of this prospectus supplement only unless we note otherwise.
The 16 classes of the Series 1999- certificates listed in the table below
will represent interests in a trust. We are not offering those classes in
italics now. We or one of our affiliates initially will retain these classes of
certificates, but may sell any or all of these certificates at a later date.
The trust will own a pool of manufactured housing contracts.
<TABLE>
<CAPTION>
Approximate S&P Fitch
Class Remittance Rate Principal Amount Rating Rating
- ----- --------------- ---------------- ------ ------
<S> <C> <C> <C> <C>
A-1.............................. % $
A-2.............................. % $
A-3.............................. % $
A-4.............................. % $
A-5.............................. % $
A-6.............................. % $
A-7.............................. % $
A-8.............................. %(1) $
A-9.............................. %(1) $
M-1.............................. %(1) $
M-2.............................. %(1) $
B-1.............................. %(1) $
B-2.............................. %(1) $
B-3I............................. (2) -- -- --
C Master......................... (3) -- -- --
C Subsidiary..................... (3) -- -- --
</TABLE>
- -------
(1) Or the weighted average of the rates on the contracts in the contract pool,
if less.
(2) The Class B-3I certificates are entitled to any excess interest on each
remittance date.
(3) Neither the Class C Master nor the Class C Subsidiary certificates are
entitled to any distributions of interest.
Green Tree will not issue the certificates unless [S&P and Fitch] assign
each class the rating listed above.
The rating of each class of certificates by S&P addresses the likelihood
of timely receipt of interest and ultimate receipt of principal. The rating of
each class of certificates by Fitch addresses the likelihood of timely payment
of interest and ultimate payment of principal. A security rating is not a
recommendation to buy, sell or hold securities and may be subject to revision
or withdrawal at any time by the assigning rating agency. The ratings of the
Class B-2 certificates are based in part on an assessment of our ability to
make payments under the Class B-2 limited guarantee.
S-3
<PAGE>
Seller................ Conseco Finance Securitizations Corp.
Green Tree Financial Corporation.
Servicer..............
Trustee.................... [Trustee].
Remittance Date............ The first day of each month, or, if that first
day is not a business day, the next business day,
beginning in 1999.
Record Date................ The business day just before the related
remittance date.
Priority of Distributions on the certificates will be made
Distributions............. primarily from amounts collected on the
manufactured housing contracts during the prior
due period, which runs from the 16th day of one
month to the 15th day of the next month. The
trustee will apply the amount available to make
distributions of principal and interest on the
certificates in the following order of priority:
* Class A interest
* Class M-1 interest
* Class M-2 interest
* Class B-1 interest
* Class A principal
* Class M-1 principal
* Class M-2 principal
* Class B-1 principal
* Class B-2 interest
* Class B-2 principal
This prospectus supplement summarizes in the next
2 pages the amounts of interest and principal to
be paid. In each case, the payments will be made
only up to the amount available, after making any
payments with a higher priority. See "Description
of the Certificates--Payments on Contracts;
Distributions on Certificates."
A. Interest on the Class
A, Class M and Class B-1
Certificates.............
On each remittance date, interest will be payable
first to each class of Class A certificates
concurrently, then to the Class M-1 certificates,
then to the Class M-2 certificates, and then to
the
S-4
<PAGE>
Class B-1 certificates up to the amount available
for distribution. See "Description of the
Certificates--Distributions" and "--Losses on
Liquidated Contracts" for a more detailed
description of the calculation of interest
payable on each class.
B. Principal on the Class
A, Class M and Class B-1
Certificates.............
The portion of the amount available applied to
the payment of principal on the Class A, Class M
and Class B-1 certificates will be based on the
scheduled amounts of principal due, whether or
not collected, as well as prepayments and other
amounts received for principal, on the
manufactured housing contracts. Any principal
payable will initially be paid only on the Class
A certificates, and the Class M and Class B
Certificates will probably receive no principal
distributions before 2003. Principal on the
Class A Certificates will be paid:
. % to the Class A-9 certificates, and
. % to the Class A-1, Class A-2, Class A-3,
Class A-4, Class A-5, Class A-6, Class A-7 and
Class A-8 certificates, in sequential order
until each class is retired.
Beginning with the remittance date occurring in
2003, assuming delinquencies, defaults and
losses on the manufactured housing contracts
remain below levels specified in the pooling and
servicing agreement, the Class M and Class B-1
certificates will begin to receive a portion of
the principal to be paid on each remittance date.
See "Description of the Certificates--
Distributions."
C. Class B-2 Interest...... The remaining amount available will be used to
pay interest due on the Class B-2 Certificates.
See "Description of the Certificates--
Distributions" and "--Losses on Liquidated
Contracts."
D. Class B-2 Principal..... In general, principal will not be payable on the
Class B-2 certificates until the Class B-1
certificates have been retired. After that has
occurred, and assuming that delinquencies,
defaults and losses on the manufactured housing
contracts
S-5
<PAGE>
remain below the levels specified in the pooling
and servicing agreement, the Class B certificates
will be entitled to receive a portion of the
principal to be paid on each remittance date. See
"Description of the Certificates--Distributions"
and "--Losses on Liquidated Contracts."
Class B-2 Limited
Guarantee................. Green Tree will guarantee payment of interest and
principal on the Class B-2 certificates. See
"Description of the Certificates--Limited
Guarantee of Green Tree."
Capitalized Interest Because the trust may not acquire some of the
Account .................. contracts until after the closing date, the trust
may not have sufficient interest collections from
contracts to pay all the interest due on the
certificates on the first remittance dates. A
capitalized interest account will fund interest
payments on the certificates on the remittance
dates in August and 1999 if collections on
the manufactured housing contracts are
insufficient.
Purchase Option; Auction
Sale; Additional Principal
Distributions.........
Beginning on the remittance date when the pool
scheduled principal balance of the contracts is
less than 20% of cut-off date pool principal
balance of the contracts, the holder of the Class
C certificates will have the right to repurchase
all of the outstanding contracts, at a price
sufficient to pay the aggregate unpaid principal
balance of the certificates plus all accrued and
unpaid interest.
If the holder of the Class C certificates does
not exercise this purchase option, then on the
next remittance date the trustee will begin an
auction process to sell the contracts and the
other trust assets, but the trustee cannot sell
the trust assets and liquidate the trust unless
the proceeds of that sale are sufficient to pay
the aggregate unpaid principal balance of the
certificates plus all accrued and unpaid
interest. If the first auction of the trust
property is not successful because the highest
bid received was too low, then the trustee will
conduct an auction of the contracts every third
month after that, unless and until an acceptable
bid is received for the trust property.
S-6
<PAGE>
If the first auction of the trust property is not
successful because the highest bid received was
too low, then on each remittance date after that
the Class M-1, Class M-2, Class B-1 and Class B-2
certificates will be entitled to receive, pro
rata based on the then outstanding principal
balance of those classes of certificates, an
additional principal distribution amount equal to
the remaining amount available after paying all
interest and principal then due on the
certificates and payment of the monthly servicing
fee. See "Description of the Certificates--
Purchase Option; Auction Sale; Additional
Principal Distribution Amount."
The Contract Pool.......... The trust will own a pool of fixed rate
manufactured housing installment sale contracts
and installment loan agreements. This prospectus
supplement provides information regarding only a
portion of the contracts to be included in the
pool on the closing date. These initial contracts
represent about % of the total pool. We will
transfer additional contracts to the trust on the
closing date. If the aggregate principal balance
of these initial contracts and additional
contracts is less than the aggregate original
principal balance of the certificates, we may
transfer subsequent contracts representing that
difference to the trust no later than , 1999.
Initial Contracts.......... With respect to the initial contracts, as of ,
1999:
* [all] are conventional and none are FHA-
insured or VA-guaranteed;
* the obligors live in states, [the
District of Columbia and, in the case of one
obligor, on a military base];
* the contract rates range from % to %,
with a weighted average of %;
* the weighted average term to scheduled
maturity, as of their dates of origination,
is 316 months;
* the weighted average term to scheduled
maturity as of , 1999 is months; and
S-7
<PAGE>
* the latest scheduled maturity date is in
.
See "The Contract Pool" in this prospectus
supplement, which includes the permissible
characteristics of the other contracts that Green
Tree will transfer to Conseco Securitizations on
the closing date or later.
Pre-Funding Account........
If the aggregate principal balance of the
contracts Conseco Securitizations transfers to
the trust on the closing date is less than the
aggregate original principal balance of the
certificates, the trustee will deposit the
difference in the pre-funding account, and those
funds will be used to purchase contracts from
time to time until , 1999. If those funds are
not completely used by , 1999, any remaining
funds will be distributed as principal on the
Class A-1 and Class A-9 certificates on the next
remittance date.
Tax Status................. In the opinion of our counsel, for federal income
tax purposes the trust will consist of two
segregated asset pools--the Master REMIC and the
Subsidiary REMIC--and each will be treated as a
separate REMIC as described in the Internal
Revenue Code. The Class A certificates, the Class
M certificates and the Class B certificates will
constitute regular interests in the Master REMIC
and generally will be treated as debt instruments
of the trust for federal income tax purposes. As
a holder of certificates, you will be required to
include as income interest on your certificates,
including any original issue discount, under the
accrual method of accounting, even if you usually
use the cash method of accounting. See "Federal
Income Tax Consequences" in the Prospectus.
Money Market Eligibility... The Class A-1 certificates will have a final
maturity date of , 2000. The Class A-1
certificates will be eligible securities for
purchase by money market funds under Rule 2a-7
under the Investment Company Act of 1940. A fund
should consult with its advisor regarding the
eligibility of the Class A-1 certificates under
Rule 2a-7 and the fund's investment policies and
objectives.
S-8
<PAGE>
ERISA Considerations....... Subject to the conditions described under "ERISA
Considerations," employee benefit plans that are
subject to the Employee Retirement Income
Security Act of 1974 and qualified retirement
plans and tax-favored plans subject to Internal
Revenue Code section 4975 may purchase the Class
A certificates. These employee benefit plans may
not purchase any other class of certificates,
unless they satisfy the conditions described
under "ERISA Considerations" in this prospectus
supplement and in the prospectus.
Legal Investment The Class A certificates and the Class M-1
Considerations............ certificates will not constitute mortgage related
securities for purposes of the Secondary Mortgage
Market Enhancement Act until the amount in the
pre-funding account is zero. Then, the Class A
certificates and Class M-1 certificates will be
legal investments for some types of institutional
investors as provided in SMMEA. The Class M-2
certificates and the Class B certificates will
not constitute mortgage related securities for
purposes of SMMEA because they will not be rated
in one of the two highest ratings categories by
S&P and by Fitch. This means that many
institutions that have the legal authority to
invest in mortgage related securities may not be
legally authorized to invest in the certificates.
You should consult with your own legal advisor to
decide whether you may legally invest in the
certificates.
Reports to Holders of the
Certificates..............
Green Tree will provide to the holders of the
certificates monthly and annual reports about the
certificates and the trust. See "Description of
the Certificates--Reports to Certificateholders."
S-9
<PAGE>
RISK FACTORS
You should consider the following risk factors in deciding whether to
purchase the certificates.
The more subordinate classes of certificates have a greater risk of loss from
delinquency and defaults on the manufactured housing contracts.
Delinquencies and defaults on the manufactured housing contracts will
result in a smaller amount of cash available for distribution on a remittance
date. Because the available cash is distributed in a specified order of
priority, there is a risk that certificates that are lower in that order of
priority may not receive some or even any of the amount due to them on that
remittance date. In addition, there is a risk that a high rate of defaults and
losses on the manufactured housing contracts could result in the outstanding
principal balance of the manufactured housing contracts being lower than the
outstanding principal balance of the certificates. A discrepancy like this
would result in a liquidation loss, which would be imposed first on the Class
B-2 certificates until their principal balance was reduced to zero, then on the
Class B-1 certificates until their principal balance was reduced to zero, and
so on in increasing order of seniority.
The more senior classes of certificates have limited protection from
delinquencies and defaults.
The only protection against delinquencies and liquidation losses for the
more senior classes of certificates is the subordination of the more
subordinate classes. For example, if there are high delinquencies or
liquidation losses on the contracts, the Class B-1 certificates would lose the
protection against losses afforded by the subordination of the Class B-2
certificates, Class B-3I certificates and Class C certificates, and investors
in the Class B-1 certificates might suffer a loss on their investment. Even
higher delinquencies or liquidation losses on the contracts would eliminate the
protection the Class M-2 certificates have from the subordination of the Class
B-1 certificates, and so on for the Class M-1 certificates and then the Class A
certificates. For more information, see "Description of the Certificates--
Subordination of Class M Certificates, Class B Certificates, Class B-3I
Certificates and Class C Certificates."
Downturns in regional or local economic conditions historically have caused
increased delinquency, defaults and losses on manufactured housing contracts.
An economic downturn in any region where a number of the obligors on the
contracts are located might cause higher delinquencies, defaults and losses on
the contracts. If delinquencies, defaults or losses on the contracts are higher
than expected, you could suffer a loss on your investment.
Due to depreciation, the market value of the manufactured homes securing the
underlying contracts may decline faster than the outstanding principal balance
of the obligors' loans, which would increase the rate of defaults and the
severity of the losses.
The market value of a manufactured home may decline faster than the
outstanding principal balance of the loan for that home. If the value of the
S-10
<PAGE>
manufactured homes securing the contracts declines faster than expected, then
defaults and losses on the contracts may rise. If the losses on the contracts
are not covered by the subordination of other classes of certificates, or by
another form of credit enhancement, you will bear all the risk of loss of
default by obligors and will need to look primarily to the value of the
manufactured home to recover the outstanding principal and unpaid interest on
the defaulted contract. For more complete information on Green Tree's loss
experience in manufactured housing contracts, see the section entitled "The
Trust--The Contract Pools" in the prospectus.
The certificates are not an obligation of Green Tree and they are not insured.
Except for the Class B-2 limited guarantee and Green Tree's obligation to
repurchase manufactured housing contracts for a breach of representations and
warranties, the certificates will not represent an interest in or obligation of
our company. The certificates are not insured or guaranteed by the government,
any underwriter or its affiliates, the servicer or any other party.
The timing of distributions of principal to the Class M and Class B
certificates is uncertain.
The Class M and Class B certificates will not receive distributions of
principal until selected distribution tests are satisfied, and those
distributions of principal will stop if those tests are not met later. Those
tests depend on the rate of prepayments on the manufactured housing contracts
and on the level of delinquencies, defaults and losses of those contracts. We
cannot predict when the tests for distributions of principal on the Class M and
Class B certificates will be satisfied, or when principal will be paid on the
Class M or Class B certificates. For more information, see "Yield and
Prepayment Considerations" in this prospectus supplement and "Maturity and
Prepayment Considerations" in the prospectus.
The contracts may be prepaid before their scheduled maturity.
There is a risk that the contracts may be prepaid in full or in part at
any time before their scheduled maturity due to various factors, such as:
.homeowner mobility,
.general and regional economic conditions,
.prevailing interest rates, and
.natural disasters.
The prepayment experience on manufactured housing contracts varies
greatly and may affect the average life of the certificates. If a contract is
prepaid in full, the interest on the contract will accrue only to the date of
prepayment. If you purchase a certificate at a discount, then slower than
expected prepayments on the contracts will reduce the yield on your
certificate. If you purchase a certificate at a premium, then faster than
expected prepayments on the contracts will reduce the yield on your
certificate. You must not assume that the contracts will prepay at any
particular rate, or
S-11
<PAGE>
at a constant rate. For more information on prepayment on the contracts, see
the section entitled "Yield and Prepayment Considerations" in this prospectus
supplement and "Maturity and Prepayment Considerations" in the prospectus.
Some contracts may not be enforceable.
.The security interest in the manufactured home may not be perfected.
Every manufactured home contract will be secured by a security interest
in either (1) the manufactured home; or (2) if it is a land-and-home contract,
the mortgage or deed of trust on the real estate where the manufactured home
is permanently affixed. Several federal and state laws, including the Uniform
Commercial Code as adopted in each state, govern the perfection of security
interests in the manufactured homes and the enforcement of rights to realize
upon the value of the manufactured homes as collateral for the contracts. In
most states, certificate of title statutes, although generally not state real
estate laws, also govern the perfection of security interests and the
enforcement of these rights. The steps required to perfect a security interest
in a manufactured home vary from state to state. Green Tree will represent and
warrant that each contract is secured by a perfected security interest in the
manufactured home, and Green Tree must repurchase the contract if there is a
breach of this representation and warranty. Nevertheless, if Green Tree fails
to perfect its security interest in the manufactured homes securing a number
of contracts, it could cause an increase in losses on the contracts, and you
could suffer a loss on your investment as a result.
. The security interest in the manufactured home may not have been
assigned to the trustee.
Due to the expense and administrative inconvenience, Green Tree will not
amend a certificate of title to a manufactured home to name the trustee as the
lienholder, note the trustee's interest on the certificate of title, or
deliver the certificate of title to the trustee. As a result, in some states
the assignment of the security interest in the manufactured home to the
trustee may not be effective against Green Tree's creditors or a trustee in
the event Green Tree enters bankruptcy, or the security interest may not be
perfected. Green Tree also will not record the assignment to the trustee of
the mortgage or deed of trust securing land-and-home contracts because of the
expense and administrative inconvenience involved. As a result, in some states
the assignment of the mortgage or deed of trust to the trustee may not be
effective against Green Tree's creditors or purchasers. If Green Tree is no
longer the servicer and the trustee or a successor servicer is unable to
enforce the security interest in the manufactured home following a default on
a contract, losses on the contracts would increase and you could suffer a loss
on your investment as a result.
. Noncompliance with consumer protection laws can make a contract
partly unenforceable.
Numerous federal and state consumer protection laws impose requirements
on lenders under installment sales contracts and installment loan agreements
such as the manufactured home contracts. If the lender or seller of goods does
not comply with these requirements, the assignees may be liable for amounts
due under the contracts and
S-12
<PAGE>
the obligor may have the right of set-off against claims the assignees bring.
These laws would apply to the trust as assignee of the manufactured housing
contracts. Green Tree has been involved in litigation, including class actions,
brought under consumer or debtor protection laws. Green Tree will represent and
warrant that each contract complies with applicable federal and state consumer
protection laws, and Green Tree must repurchase the contract if there is a
breach of this representation and warranty. Nevertheless, if Green Tree fails
to comply with these laws, it could cause an increase in defaults and losses on
the contracts, and you could suffer a loss on your investment as a result.
If Green Tree becomes insolvent, there may be delays or reductions in
distributions to holders of certificates.
Green Tree intends to have each transfer of contracts to the trust
constitute a sale, rather than a pledge of the contracts to secure
indebtedness. However, if Green Tree becomes a debtor under the federal
bankruptcy code, it is possible that its creditors, a bankruptcy trustee, or
Green Tree as debtor-in-possession, may argue that its sale of the contracts
was a pledge rather than a sale. If this position is presented to or accepted
by a court, it could result in a delay in or reduction of distributions to the
holders of the certificates.
The certificates may have limited liquidity.
There is a risk that a secondary market will not develop for the
certificates of any series. There are also risks that if a secondary market
does develop:
.it may not provide you with liquidity of investment; or
.it may not continue for the term of any series of certificates.
Other rating agencies could provide unsolicited ratings on the certificates
that could be lower than the requested ratings.
Although Green Tree has not requested a rating of the certificates from
any rating agencies other than S&P and Fitch, other rating agencies may rate
the certificates. These ratings could be higher or lower than the ratings S&P
and Fitch initially give to the certificates. There is a risk that a lower
rating of your certificate from another rating agency could reduce the market
value or liquidity of your certificate.
S-13
<PAGE>
We have defined terms in the "Glossary" section at the back of the
prospectus.
STRUCTURE OF THE TRANSACTION
The Series 1999- certificates will represent interests in a trust
consisting of a pool of manufactured housing installment sale contracts and
installment loan agreements and related property conveyed by Green Tree
Financial Corporation. Green Tree will transfer the initial pool of contracts
to Conseco Securitizations under a Transfer Agreement, to be dated as of
, 1999 between Green Tree and Conseco Securitizations. Conseco
Securitizations will then establish the trust and transfer the contracts and
related rights to the trust under a pooling and servicing agreement among
Conseco Securitizations, as seller, Green Tree and the trustee. The property
of the trust will consist of:
(1) the manufactured housing contracts, including the security interest
in the manufactured home;
(2) our rights under the hazard insurance policies on each manufactured
home;
(3) all funds in the accounts we describe in this prospectus supplement;
and
(4) all proceeds of the items in (1) through (3) above.
Green Tree will service the contracts for the trust. U.S. Bank Trust National
Association will act as custodian to hold the documents relating to all land-
and-home contracts, meaning those contracts that are primarily secured by a
lien on real estate, including the manufactured home that is considered
permanently affixed to the real estate. Conseco Securitizations will hold all
the other contracts on behalf of the trustee.
Payments by obligors on the contracts will be deposited in a separate
account maintained in the name of the trustee at least one business day after
receipt. Funds in this certificate account will be applied on each remittance
date to make the distributions to certificateholders described under
"Description of the Certificates--Distributions" and to pay our monthly fees
as compensation for servicing the contracts.
Terms used and not otherwise defined in this prospectus supplement have
the meanings given to those terms in the prospectus.
THE CONTRACT POOL
This prospectus supplement contains information regarding a portion of
the contracts to be included in the pool as of the closing date. These initial
contracts consist of manufactured housing installment sale contracts and
installment loan agreements originated through , 1999. Green Tree will
transfer additional manufactured housing contracts to Conseco Securitizations
on the closing date and, if necessary, Green Tree will transfer other
subsequent manufactured housing contracts to Conseco Securitizations from time
to time after the closing date until , 1999. Although these additional
contracts and subsequent contracts will have characteristics that differ
S-14
<PAGE>
somewhat from the initial contracts we describe in this prospectus supplement,
Green Tree does not expect that their characteristics will vary materially from
the initial contracts. In addition, all additional contracts and subsequent
contracts must conform to the representations and warranties in the pooling and
servicing agreement. See "Description of the Certificates."
The trust is entitled to all payments due or made on each contract on or
after the cut-off date for that contract. The cut-off date for some of the
initial contracts is , 1999 and for the rest of the initial contracts is
, 1999. The cut-off date for the additional contracts that will be
delivered to the trust on the closing date is , 1999. The cut-off date for
any subsequent contracts delivered to the trust after the closing date will be
the first day of the month following the date we transfer that contract to the
trust.
Green Tree expects that the contracts will have an aggregate principal
balance as of the date of their transfer to the trust of approximately $ .
The initial contracts have an aggregate principal balance as of their cut-off
date of $ , or approximately % of the contract pool. All of the contracts
will have been originated by a manufactured housing dealer and purchased by
Green Tree from the dealer, or will have been originated by Green Tree
directly. The contracts will have been originated or acquired by Green Tree in
the ordinary course of business.
Manufactured housing installment sale contracts and manufactured housing
installment loan agreements are referred to in this prospectus supplement as
manufactured housing contracts or contracts. Each contract will be secured by a
manufactured home or, in the case of a land-and-home contract, will be secured
by a lien on real estate to which the manufactured home is deemed permanently
affixed. As of the cut-off date, a total of , or % by aggregate principal
amount of the initial contracts, were land-and-home contracts.
Each contract will bear a fixed rate of interest. Most of the contracts,
other than step-up rate contracts, provide for level payments over the entire
term of the contract. Of the initial contracts, a total of , or % by
aggregate principal amount, are step-up rate contracts. The contract rate of a
step-up rate contract steps up on a particular date from its initial contract
rate. A total of step-up rate contracts, or % of the initial contracts by
aggregate principal amount, provide for two increases in the contract rate from
the initial contract rate and the remaining step-up rate contracts provide for
a single increase in the contract rate. All of the initial contracts that are
step-up rate contracts are still bearing interest at their initial contract
rate. We refer to the period during which these contracts bear interest at
their initial contract rate as the low rate period. During the low rate period,
the total amount and the principal portion of each scheduled payment is
determined on a basis that would cause the contract to be fully amortized over
its term if the contract were to bear interest during its entire term at its
initial contract rate and were to have level payments over its entire term. The
total amount and principal portion of each scheduled payment due after the end
of the applicable low rate period is determined on a basis that would cause the
contract, which would then be bearing interest at a stepped-up rate, to be
fully amortized over its
S-15
<PAGE>
remaining term on a level-payment basis. Of the initial contracts, the low rate
periods for those step-up rate contracts providing for a single increase in the
contract rate will end no earlier than 2000 and no later than 2000. The
contract rates for these step-up rate contracts will increase by % or %. Of
the initial contracts, the low rate periods for those step-up rate contracts
providing for two increases in the contract rate will end no later than
2000, and the period with the interim applicable contract rate will end in
2001. [The contract rates for these step-up rate contracts will increase first
by 1.25% and then by an additional 2.50%.] The combined increases in scheduled
payments for all step-up rate contracts range from $ to $ per month. The
statistical information concerning the initial contracts which is described
below, to the extent it relates to the contract rates of the step-up rate
contracts, takes into account only their contract rates as of the cut-off date.
The initial contracts were originated between 1990 and 1999.
Approximately % of the aggregate principal amount of the initial contracts is
attributable to loans to purchase manufactured homes which were new and
approximately % is attributable to loans to purchase manufactured homes which
were used at the time the related initial contract was originated. All of the
initial contracts are conventional contracts and none are FHA-insured or VA-
guaranteed. The contract rate on the initial contracts ranged from % to %
with a weighted average of approximately %. The weighted average loan-to-
value ratio of the initial contracts, calculated as described under "Green Tree
Financial Corporation--Contract Origination" in the prospectus and not
including buydown points, was %. The initial contracts have remaining
maturities, as of the cut-off date, of at least 12 months but not more than
months and original maturities of at least 12 months but not more than
months, and a weighted average remaining term to scheduled maturity, as of the
cut-off date, of months. The average remaining principal balance per initial
contract as of the cut-off date was $ and the outstanding principal balances
of the initial contracts as of the cut-off date ranged from $ to $ . The
obligors on the initial contracts are located in states, the District of
Columbia and one obligor has a billing address on a military base. The obligors
on approximately % of the initial contracts by remaining principal balance
are located in [state], % in [state], % in [state], % in [state], % in
[state] and % in [state]. No other state represented more than 5% of the
initial contracts.
S-16
<PAGE>
The table below describes additional characteristics of the initial
contracts as of the cut-off date. The geographical distribution of the initial
contract obligors is based on the obligor's billing address.
Geographical Distribution of Initial Contract Obligors
<TABLE>
<CAPTION>
Aggregate
% of Contract Principal Balance % of Contract Pool
Number of Pool by Number of Outstanding by Outstanding
Contracts as of Contracts as of as of Cut- Principal Balance
State Cut-off Date Cut-off Date off Date as of Cut-off Date
- ----- --------------- ----------------- ----------------- ------------------
<S> <C> <C> <C> <C>
Alabama................. % $ %
Alaska..................
Arizona.................
Arkansas................
California..............
Colorado................
Connecticut.............
Delaware................
District of Columbia....
Florida.................
Georgia.................
Idaho...................
Illinois................
Indiana.................
Iowa....................
Kansas..................
Kentucky................
Louisiana...............
Maine...................
Maryland................
Massachusetts...........
Michigan................
Minnesota...............
Mississippi.............
Missouri................
Montana.................
Nebraska................
Nevada..................
New Hampshire...........
New Jersey..............
New Mexico..............
New York................
North Carolina..........
North Dakota............
Ohio....................
Oklahoma................
Oregon..................
Pennsylvania............
Rhode Island............
South Carolina..........
South Dakota............
Tennessee...............
Texas...................
Utah....................
Vermont.................
Virginia................
Washington..............
West Virginia...........
Wisconsin...............
Wyoming.................
Non-U.S. Based..........
------ ------ --------------- ------
Total................. 100.00% $ 100.00%
====== ====== =============== ======
</TABLE>
- --------
[* Indicates an amount greater than zero but less than .005% of the aggregate
principal balance of the initial contracts as of the cut-off date.]
S-17
<PAGE>
Years of Origination of Initial Contracts
<TABLE>
<CAPTION>
Number of Aggregate % of Contract Pool by
Contracts Principal Balance Outstanding Principal
as of Outstanding Balance as of
Year of Origination Cut-off Date as of Cut-off Date Cut-off Date
- ------------------- ------------ ------------------ ---------------------
<S> <C> <C> <C>
1990..................... $ %
1991.....................
1992.....................
1993.....................
1994.....................
1995.....................
1996.....................
1997.....................
1998.....................
1999.....................
------ --------------- ------
Total................. $ 100.00%
====== =============== ======
</TABLE>
- --------
[* Indicates an amount greater than zero but less than .005% of the aggregate
principal balance of the initial contracts as of the cut-off date.]
The initial contracts shown in the table above with earlier years of
origination primarily represent contracts Green Tree originated and
subsequently refinanced through Green Tree. Green Tree retains the first
origination dates on its records for these refinanced contracts.
S-18
<PAGE>
Distribution of Original Initial Contract Amounts
<TABLE>
<CAPTION>
Number of Aggregate % of Contract Pool by
Contracts Principal Balance Outstanding Principal
Oiginal Contractr as of Outstanding Balance as of
Amunt (in Dollars)o Cut-off Date as of Cut-off Date Cut-off Date
- ------------------- ------------ ------------------ ---------------------
<S> <C> <C> <C>
Less than $10,000........ $ %
Between $10,000 and
$19,999.................
Between $20,000 and
$29,999.................
Between $30,000 and
$39,999.................
Between $40,000 and
$49,999.................
Between $50,000 and
$59,999.................
Between $60,000 and
$69,999.................
Between $70,000 and
$79,999.................
Between $80,000 and
$89,999.................
Between $90,000 and
$99,999.................
Between $100,000 and
$109,999................
Between $110,000 and
$119,999................
Between $120,000 and
$129,999................
Between $130,000 and
$139,999................
Between $140,000 and
$149,999................
Between $150,000 and
$159,999................
Between $160,000 and
$169,999................
Between $170,000 and
$179,999................
Between $180,000 and
$189,999................
Between $190,000 and
$199,999................
Between $200,000 and
$249,999................
Over $250,000............
------ --------------- ------
Total................. $ 100.00%
====== =============== ======
</TABLE>
The largest original initial contract amount is $ , which represents
% of the aggregate principal balance of the initial contracts as of the cut-
off date.
Distribution of Original Loan-to-Value Ratios of Initial Contracts
The loan-to-value ratio in the table below is rounded to the nearest 1%.
The method of calculating loan-to-value ratios is described in the prospectus.
<TABLE>
<CAPTION>
Aggregate Principal % of Contract Pool by
Number of Contracts Balance Outstanding Outstanding Principal
Loan-to-Value Ratio as of Cut-off Date as of Cut-off Date Balance as of Cut-off Date
- ------------------- ------------------- ------------------- --------------------------
<S> <C> <C> <C>
Less than 61%........... $ %
61% to 65%..............
66% to 70%..............
71% to 75%..............
76% to 80%..............
81% to 85%..............
86% to 90%..............
91% to 95%..............
96% to 100%.............
------ --------------- ------
Total................ $ 100.00%
====== =============== ======
</TABLE>
S-19
<PAGE>
Initial Contract Rates
<TABLE>
<CAPTION>
Aggregate Principal % of Contract Pool by
Range of Contracts by Number of Contracts Balance Outstanding Outstanding Principal
Contract Rate as of Cut-off Date as of Cut-off Date Balance as of Cut-off Date
- --------------------- ------------------- ------------------- --------------------------
<S> <C> <C> <C>
0.00000% to 5.00000%.... $ %
5.00001% to 6.00000%....
6.00001% to 7.00000%....
7.00001% to 8.00000%....
8.00001% to 9.00000%....
9.00001% to 10.00000%...
10.00001% to 11.00000%..
11.00001% to 12.00000%..
12.00001% to 13.00000%..
13.00001% to 14.00000%..
14.00001% to 15.00000%..
15.00001% to 16.00000%..
16.00001% to 17.00000%..
Over 17.00000%..........
------ --------------- ------
Total................ $ 100.00%
====== =============== ======
</TABLE>
- --------
[* Indicates an amount greater than zero but less than .005% of the aggregate
principal balance of the initial contracts as of the cut-off date.]
Remaining Months to Maturity of Initial Contracts
<TABLE>
<CAPTION>
Aggregate Principal % of Contract Pool by
Months Remaining Number of Contracts Balance Outstanding Outstanding Principal
As of Cut-off Date as of Cut-off Date as of Cut-off Date Balance as of Cut-off Date
- ------------------ ------------------- ------------------- --------------------------
<S> <C> <C> <C>
Less than 31............ $ %
31 to 60................
61 to 90................
91 to 120...............
121 to 150..............
151 to 180..............
181 to 210..............
211 to 240..............
241 to 270..............
271 to 300..............
301 to 330..............
331 to 360..............
------ --------------- ------
Total................ $ 100.00%
====== =============== ======
</TABLE>
S-20
<PAGE>
GREEN TREE FINANCIAL CORPORATION
The following information supplements, and if inconsistent supersedes,
the information in the prospectus under the heading "Green Tree Financial
Corporation."
Delinquency, Loan Loss and Repossession Experience
The following table shows the delinquency experience for the periods
indicated of the portfolio of conventional manufactured housing contracts
serviced by Green Tree, other than contracts already in repossession. Green
Tree has from time to time subserviced manufactured housing contracts
originated by other lenders. These subserviced contracts are not reflected in
the following table. The information for December 31, 1996 and later does not
include as delinquent those manufactured housing contracts whose obligors have
entered bankruptcy proceedings and had their scheduled payment changed under a
bankruptcy payment plan, provided that these obligors are current under their
bankruptcy payment plan.
Delinquency Experience
<TABLE>
<CAPTION>
At
At December 31, [ ],
------------------------------------------- ------
1994 1995 1996 1997 1998 1999
------- ------- ------- ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Number of Contracts
Outstanding(1)........... 322,495 416,436 503,076 584,814 650,867
Number of Contracts
Delinquent(2):
30-59 Days.............. 2,809 4,404 6,475 6,567 8,103
60-89 Days.............. 903 1,571 2,121 2,382 3,151
90 Days or More......... 1,440 2,426 3,668 4,016 5,146
Total Contracts
Delinquent............... 5,152 8,401 12,264 12,965 16,400
Delinquencies as a Percent
of Contracts
Outstanding(3)........... 1.60% 2.02% 2.44% 2.22% 2.52% %
</TABLE>
- --------
(1) Excludes contracts already in repossession.
(2) The period of delinquency for the number of contracts delinquent is based
on the number of days payments are contractually past due, assuming 30-day
months. Consequently, a contract due on the first day of a month is not 30
days delinquent until the first day of the next month.
(3) By number of contracts.
The following table shows information regarding the loan loss and
repossession experience for the periods indicated of the portfolio of
conventional manufactured housing contracts Green Tree serviced. Green Tree has
from time to time subserviced manufactured housing contracts originated by
other lenders. These subserviced contracts are not reflected in the following
table.
S-21
<PAGE>
Loan Loss/Repossession Experience
(Dollars in thousands)
<TABLE>
<CAPTION>
At
At December 31, [ ],
-------------------------------------------------------------- -----------
1994 1995 1996 1997 1998 1999
---------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Number of Contracts
Serviced (1)........... 324,141 419,090 507,539 590,327 656,774
Principal Balance of
Contracts
Serviced (1)........... $7,033,882 $10,182,676 $13,553,080 $17,038,136 $20,330,064 $
Contract
Liquidations (2)....... 1.44% 1.45% 2.01% 2.72% 2.58% %
Net Losses:
Dollars (3)........... $ 42,402 $ 55,162 $ 98,632 $ 180,699 $ 216,108 $
Percentage (4)........ .60% .54% .73% 1.06% 1.06% %
</TABLE>
- --------
(1) As of period end. Includes contracts already in repossession.
(2) As a percentage of the total number of contracts being serviced as of
period end.
(3) The calculation of net loss includes unpaid interest to the date of
repossession and all expenses of repossession and liquidation.
(4) As a percentage of the principal balance of contracts being serviced as of
period end.
The data presented in the tables above are for illustrative purposes only
and there is no assurance that the delinquency, loan loss or repossession
experience of the contracts owned by the trust will be similar to that shown
above. The delinquency, loan loss and repossession experience of manufactured
housing contracts historically has been sharply affected by a downturn in
regional or local economic conditions. These regional or local economic
conditions are often volatile, and we cannot predict future economic conditions
in any particular area. These downturns have tended to increase the severity of
loss on repossession because of the increased supply of used units, which in
turn may affect the supply in other regions. In order to achieve geographic
diversity and to limit the effect of regional and local economic conditions on
the contract pool, contracts with obligors located in any one state generally
will not exceed 10% of the cut-off date pool principal balance. [However, the
obligors on % of the initial contracts are located in [state], and is
possible that [state] or one or more other states will exceed this threshold
after the transfer of all the additional and subsequent contracts.]
S-22
<PAGE>
Ratio of Earnings to Fixed Charges for Green Tree
The table below shows our ratios of earnings (losses) to fixed charges
for the past five years and the six months ended [June 30], 1999. For the
purposes of compiling these ratios, earnings (losses) consist of earnings
(losses) before income taxes plus fixed charges. Fixed charges consist of
interest expense and the interest portion of rent expense.
<TABLE>
<CAPTION>
Six Months
Ended
Year Ended December 31, [June 30,]
------------------------ ----------
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----------
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings (Losses) to Fixed
Charges.................................. 7.98 7.90 5.44 3.94 .62*
</TABLE>
- --------
* For 1998, adjusted earnings were $83.4 million less than fixed charges.
Adjusted earnings for 1998 included an impairment charge of $549.4 million
and nonrecurring charges of $108.0 million related to our merger with
Conseco, Inc.
Recent Developments
Effective November 1, 1999, Green Tree will change its name to Conseco
Finance Corp.
Green Tree has been served with various lawsuits in the United States
District Court for the District of Minnesota. These lawsuits were filed by a
few of our stockholders as purported class actions on behalf of persons or
entities who purchased common stock or traded in options of Green Tree during
the alleged class periods. These alleged class periods run from February 1995
to January 1998. One of these lawsuits did not include class action claims. In
addition to Green Tree, some of Green Tree's current and former officers and
directors are named as defendants in one or more of the lawsuits. The lawsuits
have been consolidated into two complaints, one relating to an alleged class of
purchasers of our common stock and the other relating to an alleged class of
traders in options for our common stock. In addition to these two complaints, a
separate non-class action lawsuit containing similar allegations was also
filed. Plaintiffs in the lawsuits assert claims under Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934. In each case, plaintiffs allege that
Green Tree and the other defendants violated federal securities laws by making
false and misleading statements about the current state and future prospects of
Green Tree, particularly about prepayment assumptions and performance of some
of Green Tree's loan portfolios, which allegedly rendered our financial
statements false and misleading. Green Tree believes that the lawsuits are
without merit and intends to defend the lawsuits vigorously. However, the
ultimate outcome of these lawsuits cannot be predicted with certainty. Green
Tree filed motions to dismiss these lawsuits. On August 24, 1999, Green Tree's
motions to dismiss were granted with prejudice. On September 21, 22 and 23, the
plaintiffs filed notices of appeal of these dismissals.
S-23
<PAGE>
YIELD AND PREPAYMENT CONSIDERATIONS
The following information supplements, and if inconsistent supersedes,
the information in the prospectus under the heading "Yield Considerations."
The contracts will have original terms to scheduled maturity ranging from
approximately 12 months to 360 months, but may be prepaid in full or in part at
any time. The prepayment experience of the contracts, including prepayments due
to liquidations of defaulted contracts, will affect the average life of the
certificates. Based on our experience with the portfolio of manufactured
housing contracts we service, we anticipate that a number of the contracts will
be prepaid before their maturity. A number of factors, including homeowner
mobility, general and regional economic conditions and prevailing interest
rates, may influence prepayments. Natural disasters may also influence
prepayments. In addition, repurchases of contracts due to breaches of
representations and warranties, including repurchases of staged-funding
contracts that have not been fully disbursed within 90 days, have the effect of
prepaying such contracts and therefore would affect the average life of the
certificates. Approximately 7.45% of the initial contracts by aggregate
principal balance as of the cut-off date were staged-funding contracts. The
prepayment experience on manufactured housing contracts varies greatly. Most of
the contracts contain a due-on-sale clause that would permit the servicer to
accelerate the maturity of a contract upon the sale of the related manufactured
home. In the case of those contracts that do contain due-on-sale clauses, we
will permit assumptions of those contracts if the purchaser of the related
manufactured home satisfies our then-current underwriting standards. See
"Maturity and Prepayment Considerations" in the prospectus.
The allocation of distributions to the Class A certificateholders on each
remittance date on which the Class M-1 distribution test is not satisfied, on
each remittance date on which the Class M-2 distribution test is not satisfied,
or on each remittance date on which the Class B distribution test is not
satisfied, will have the effect of accelerating the amortization of the Class A
certificates from the amortization that would be applicable if the principal
were distributed pro rata according to the Class A principal balance, the Class
M-1 principal balance, the Class M-2 principal balance and the Class B
principal balance. If you purchase a Class A certificate at a discount and you
calculated your anticipated yield to maturity based on an assumed rate of
payment of principal on the Class A certificates that is faster than the rate
actually realized, your actual yield to maturity will be lower than the yield
you calculated. See "Description of the Certificates--Class A Principal."
On any remittance date on which the Class M-1 distribution test, the
Class M-2 distribution test and the Class B distribution test are not
satisfied, the Class A certificateholders will receive 100% of the Formula
Principal Distribution Amount, as described under "Description of the
Certificates--Class A Principal," subject to the limit of the amount available
for distribution. The rate of principal payments on the Class M certificates
and Class B certificates and the aggregate amount of distributions on the Class
M certificates and Class B certificates will be affected by the rate of obligor
defaults resulting in delinquencies on the contracts and losses on liquidated
contracts, by the severity of those losses and by the timing of those
delinquencies and
S-24
<PAGE>
losses. See "Description of the Certificates--Subordination of Class M
Certificates, Class B Certificates, Class B-3I Certificates and Class C
Certificates" for a description of the manner in which such losses are borne by
the Class M certificates and each class of the Class B certificates. If you
purchase a class of Class B certificates or Class M certificates at a discount
and you calculate your anticipated yield to maturity based on an assumed rate
of payment of principal on the Class B certificates or Class M certificates
that is faster than the rate actually realized, your actual yield to maturity
will be lower than the yield you calculated. See "Description of the
Certificates--Class B-1 Principal."
Obligors who have entered bankruptcy proceedings and have had their
monthly scheduled payment reduced as a result of an extension of the term of
the related contract may not be pursued by us as delinquent, and accordingly we
use the reduced monthly payment in calculating the Formula Principal
Distribution Amount for each remittance date after that. If, however, the
principal amount of the contract were reduced in the bankruptcy proceedings,
the reduction would be recognized as a loss immediately and added to the
Formula Principal Distribution Amount.
Green Tree cannot assure you that the delinquency or repossession
experience described under "Green Tree Financial Corporation--Delinquency, Loan
Loss and Repossession Experience" will be representative of the results that
may be experienced on the contracts.
The holder of the Class C certificates will have the right to repurchase
from the trust all remaining contracts, and effect early retirement of the
certificates, on any remittance date when the pool scheduled principal balance
is less than 20% of the cut-off date pool principal balance. See "Description
of the Certificates--Purchase Option; Auction Sale; Additional Principal
Distribution Amount."
If the aggregate principal balance of the initial and additional
contracts transferred to the trust on the closing date is less than the
aggregate original principal balance of the certificates, the trustee will
establish and Conseco Securitizations will fund a pre-funding account on the
closing date to provide the trust with sufficient funds to purchase subsequent
contracts. Any amounts remaining in the pre-funding account which have not been
used to purchase subsequent contracts will be paid to the Class A-1 and Class
A-9 certificateholders, allocated % to the Class A-1 certificateholders and
% to the Class A-9 certificateholders, no later than , 1999. Conseco
Securitizations believes that if a pre-funding account is established,
substantially all of the amounts in the account will be used to acquire
subsequent contracts. It is unlikely, however, that the aggregate principal
amount of subsequent contracts purchased by the trust will be identical to the
amount in the pre-funding account, and consequently, Class A-1 and Class A-9
certificateholders will receive some prepayment of principal. See "Description
of Certificates--Conveyance of Subsequent Contracts and Pre-Funding Account."
Although partial prepayments of principal on contracts are applied on
scheduled payment dates for the contracts, obligors are not required to pay
interest on contracts after the date of a full prepayment of principal. As a
result, full prepayments on contracts in advance of the scheduled payment dates
for these contracts in any due
S-25
<PAGE>
period will reduce the amount of interest received from obligors during the due
period. Subject to the availability of the subordination provided by the Class
M, Class B, Class B-3I and Class C certificates, the subordination would apply
to the net shortfall of interest received on account of prepayments in full in
any due period so that the amount of interest paid on the Class A certificates
on the following remittance date would not be affected by the shortfall.
The expected final scheduled payment date on the initial contract with
the latest maturity is in January 2030. The expected final maturity of each
class of certificates, based on the assumptions that there are no defaults,
prepayments or delinquencies on payments due under the contracts and that the
repurchase option has not been exercised, are as follows:
<TABLE>
<CAPTION>
Expected
Final
Class Maturity
----- --------
<S> <C>
Class A-2
Class A-3
Class A-4
Class A-5
Class A-6
Class A-7
Class A-8
Class A-9
Class M-1
Class M-2
Class B-1
Class B-2
</TABLE>
The table below shows statistical information about the prepayment
behavior of pools of manufactured housing contracts we sold and serviced. The
table relates to the 40 sold pools for which prepayment information is
available covering a period of at least 36 months and which had an aggregate
principal balance as of the first day of the month of sale of at least
$100,000,000. In evaluating the information in the table and its relationship
to the expected prepayment behavior of the contracts, you should consider that
we have performed no statistical analysis to determine whether the contracts to
which the table relates constitute a statistically significant sample of
manufactured housing contracts for purposes of determining expected prepayment
behavior. Also, the contracts owned by the trust may have an average age as of
the cut-off date substantially different from the average ages, as of the first
day of the month of sale, of the contracts in the sold pools to which the table
relates and may have other characteristics substantially different from the
contracts in any sold pool. For these reasons, and because of the unpredictable
nature of the factors described under "Weighted Average Life of the Class A,
Class M and Class B Certificates" which may influence the amount of prepayments
of manufactured housing contracts, we cannot assure you that the prepayment
experience of the contracts will exhibit prepayment behavior similar to the
behavior summarized in the table for the periods covered. In addition,
prospective Class A, Class M and Class B certificateholders should consider
that the table is limited to those periods covered and cannot reflect any
effects of aging on the prepayment behavior of manufactured housing contracts
beyond those periods.
S-26
<PAGE>
The table below shows for each sold pool:
. the initial aggregate principal balance, calculated as of the first
day of the month of the sale,
. the weighted average contract rate ("WAC") of the contracts in each
pool as of the first day of the month of the sale of each pool,
. the original weighted average maturity ("WAM") of the contracts in
each pool,
. the estimated average age of the pool as of the first day of the
month of the sale of each pool,
. the aggregate principal balance of each pool as of , 1999,
. the WAC of the contracts in each pool as of , 1999, and
. the percentage of the MHP, as described in "Weighted Average Life of
the Class A, Class M and Class B Certificates" below, for the life of
each sold pool through , 1999, calculated as the annual rate of
the decline in the outstanding aggregate principal balance exhibited
over the life of the pool.
S-27
<PAGE>
<TABLE>
<CAPTION>
Aggregate Current
Principal Original Average Aggregate
Month and Balance WAC WAM Age at Sale Principal Current Percentage
Year of Sale at Sale at Sale (months) (months) Balance WAC of MHP
- ------------ ------------ ------- -------- ----------- ------------ ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
September 1988.......... $132,287,851 13.64% 176 1 $ % %
December 1988........... 105,566,962 13.76 172 1
June 1989............... 121,205,258 14.39 178 0
September 1989.......... 153,845,599 13.93 179 4
December 1989........... 127,799,125 13.74 182 1
June 1990............... 118,256,826 14.23 178 1
September 1990.......... 133,311,855 14.21 182 1
March 1991.............. 103,147,656 14.09 181 14
June 1991............... 137,954,723 14.25 179 18
September 1991.......... 169,226,610 13.49 188 8
December 1991........... 163,375,476 13.07 185 8
March 1992.............. 671,900,943 13.55 176 53
June 1992............... 220,603,657 12.22 190 2
September 1992.......... 254,409,783 11.89 197 1
December 1992........... 288,323,475 11.28 201 2
March 1993.............. 250,400,638 11.36 206 1
June 1993............... 450,602,539 10.65 204 1
September 1993.......... 663,353,326 10.23 203 1
December 1993........... 725,268,946 9.73 203 1
March 1994.............. 561,614,157 9.81 211 1
May 1994................ 387,789,118 10.29 205 1
June 1994............... 197,004,761 10.67 211 1
July 1994............... 307,948,034 11.03 214 1
August 1994............. 384,942,940 11.14 224 1
September 1994.......... 463,885,067 11.45 217 1
November 1994........... 353,492,359 11.42 223 1
December 1994........... 523,188,855 11.53 225 1
February 1995........... 378,339,823 11.85 239 1
March 1995.............. 328,256,612 12.04 246 1
May 1995................ 502,186,400 11.61 250 1
June 1995............... 319,783,607 11.13 255 1
July 1995............... 451,233,973 10.65 268 1
August 1995............. 396,694,720 10.27 269 1
September 1995.......... 347,754,066 10.12 271 1
October 1995............ 479,886,809 10.11 274 1
November 1995........... 398,796,644 10.15 276 1
December 1995........... 405,121,766 10.05 281 1
January 1996............ 398,766,754 9.77 289 1
March 1996.............. 465,268,332 9.84 271 1
April 1996.............. 371,878,810 9.93 273 1
</TABLE>
Weighted Average Life of the Class A, Class M and Class B Certificates
The following information is intended to illustrate the effect of
prepayments of the initial contracts on the weighted average life of the Class
A certificates, Class M certificates and Class B certificates under the stated
assumptions and is not a prediction of the prepayment rate that the contracts
might actually experience.
Weighted average life refers to the average amount of time from the date
of issuance of a security until each dollar of principal of such security will
be repaid to the
S-28
<PAGE>
investor. The weighted average life of the Class A, Class M and Class B
certificates will be influenced by the rate at which principal on the contracts
is paid. Principal payments on contracts may be in the form of scheduled
amortization or prepayments. For this purpose, the term prepayment includes
repayments and liquidations due to default or other dispositions of contracts.
Prepayments on contracts may be measured by a prepayment standard or model. The
model we use in this prospectus supplement, the manufactured housing prepayment
model ("MHP"), is based on an assumed rate of prepayment each month of the then
unpaid principal balance of a pool of new contracts. A prepayment assumption of
100% MHP assumes constant prepayment rates of 3.7% per year of the then unpaid
principal balance of the contracts in the first month of the life of the
contracts and an additional 0.1% per year in each month thereafter until the
24th month. Beginning in the 24th month and in each month thereafter during the
life of all of the contracts, 100% MHP assumes a constant prepayment rate of
6.0% per year each month.
As used in the following tables, 75% MHP assumes the contracts will
prepay at rates of 75% of the MHP assumed prepayment rates; 150% assumes the
contracts will prepay at rates of 150% of the MHP assumed prepayment rates, and
so forth.
Green Tree cannot assure you, however, that prepayment of the contracts
owned by the trust will conform to any level of the MHP, and Green Tree makes
no representation that the contracts will prepay at the prepayment rates shown
or any other prepayment rate. The rate of principal payments on pools of
manufactured housing contracts is influenced by a variety of economic,
geographic, social and other factors, including the level of interest rates and
the rate at which homeowners sell their manufactured homes or default on their
contracts. Increased competition among manufactured housing lenders and
recently declining interest rates have had the effect of increasing the
prepayment rates of our contracts. Other factors affecting prepayment of
contracts include changes in obligors' housing needs, job transfers,
unemployment and obligors' net equity in the manufactured homes. Green Tree has
not yet assessed the probable impact on prepayments of the contracts due to
damage caused by the recent hurricanes and storms on the eastern seaboard of
the United States. In the case of mortgage loans secured by site-built homes,
in general, if prevailing interest rates fall significantly below the interest
rates on these mortgage loans, the mortgage loans are likely to be subject to
higher prepayment rates than if prevailing interest rates remained at or above
the rates borne by these mortgage loans. Conversely, if prevailing interest
rates rise above the interest rates on the mortgage loans, the rate of
prepayment would be expected to decrease. In the case of manufactured housing
contracts, however, because the outstanding principal balances are, in general,
much smaller than mortgage loan balances and the original term to maturity of
the contracts is generally shorter, the reduction or increase in the size of
the monthly payment on a contract arising from a change in its interest rate is
generally much smaller. Consequently, changes in prevailing interest rates may
not have a similar effect, or may have a similar effect but to a smaller
degree, on the prepayment rates on manufactured housing contracts.
As described under "Description of the Certificates--Class M-1
Principal," payments of principal on the Class M-1 certificates will not
commence until the
S-29
<PAGE>
remittance date on which (1) the Class A principal balance has been reduced to
zero or (2) the Class M-1 distribution test is satisfied. This will have the
effect of accelerating the amortization of the Class A certificates while
increasing the respective interest in the trust of the Class M and Class B
certificates. As described under "Description of the Certificates--Class M-2
Principal," payments of principal on the Class M-2 certificates will not
commence until the remittance date on which (a) the Class A principal balance
and Class M-1 principal balance have been reduced to zero or (b) the Class M-2
distribution test is satisfied. This will have the effect of accelerating the
amortization of the Class A certificates and Class M-1 certificates while
increasing the respective interest in the trust of the Class M-2 certificates
and Class B certificates. As described under "Description of the Certificates--
Class B-1 Principal," payments of principal on the Class B certificates will
not commence until the remittance date on which (1) the Class A principal
balance, the Class M-1 principal balance and the Class M-2 principal balance
have been reduced to zero or (2) the Class B distribution test is satisfied.
This will have the effect of accelerating the amortization of the Class A
certificates and Class M certificates while increasing the respective interest
in the trust of the Class B certificates.
The percentages and weighted average lives in the following tables were
determined assuming that:
(1) scheduled interest and principal payments on the contracts are
received in a timely manner and prepayments are made at the
indicated percentages of the MHP listed in the table;
(2) the holder of the Class C certificates exercises its right to
repurchase the contracts, as described under "Description of the
Certificates--Purchase Option; Auction Sale; Additional Principal
Distributions;"
(3) the aggregate principal balance of the initial contracts as of the
cut-off date is $ and the initial contracts have the
characteristics described under "The Contract Pool" and have their
first scheduled payment due in , 1999;
(4) the additional contracts and subsequent contracts will have the
characteristics listed in the table following this paragraph and
will have their first scheduled payment due in and 1999;
(5) each class of certificates has the approximate principal amount and
the remittance rate shown for that class under "Summary of the Terms
of the Offered Certificates;"
(6) no interest shortfalls will arise because of prepayment in full of
the contracts;
(7) no delinquencies or losses are experienced on the contracts;
(8) distributions are made on the certificates on the first day of each
month, commencing in 1999; and
(9) the certificates are issued on , 1999.
S-30
<PAGE>
Green Tree cannot assure you that the holder of the Class C certificates will
exercise its purchase option. If the purchase option is not exercised, we
cannot assure you that any auction of the trust property will be successful.
We make no representation that the contracts will not experience delinquencies
or losses.
Assumed Characteristics of Additional Contracts as of the Cut-off Date
The following are the assumed characteristics of the Additional Contracts
as of the Cut-off Date:
<TABLE>
<CAPTION>
Weighted Average Weighted Average
Remaining Months Aggregate Principal Original Term Remaining Term Weighted Average
to Maturity Balance Outstanding (months) (months) Contract Rate
- ---------------- ------------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
0 to
120 $ %
121 to
180
181 to
240
241 to
300
301 to
360
--------------- --- --- ---
Total $ %
=============== === === ===
</TABLE>
Assumed Characteristics of Subsequent Contracts as of the Cut-off Date
The following are the assumed characteristics of the Subsequent Contracts
as of the Cut-off Date:
<TABLE>
<CAPTION>
Weighted Average Weighted Average
Remaining Months Aggregate Principal Original Term Remaining Term Weighted Average
to Maturity Balance Outstanding (months) (months) Contract Rate
- ---------------- ------------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
0 to $
120 %
121 to
180
181 to
240
241 to
300
301 to
360
--------------- --- --- -----
Total $ %
=============== === === =====
</TABLE>
It is not likely that contracts will prepay at any constant percentage of
the MHP to maturity or that all contracts will prepay at the same rate.
Investors are urged to make their investment decisions on a basis that
includes their determination as to anticipated prepayment rates under a variety
of the assumptions discussed herein.
Based on the foregoing assumptions, the following tables indicate the
projected weighted average life of each class of certificates and show the
percentages of the original principal balance of each class that would be
outstanding after each of the dates shown at the indicated percentages of the
MHP.
S-31
<PAGE>
The weighted average life of each class of certificates listed in the
tables below is determined by (1) multiplying the amount of cash distributions
in reduction of the principal balance of the certificate by the number of years
from the date of issuance of certificate to the stated remittance date, (2)
adding the results, and (3) dividing the sum by the initial principal balance
of the certificate.
Percentage of the Original Principal Balance of the Class A-1
Certificates at the Respective Percentages of the
MHP Listed Below:
<TABLE>
<CAPTION>
Date 75% 100% 125% 150% 175% 200% 250% 300% 350%
- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Initial Percentage....... 100% 100% 100% 100% 100% 100% 100% 100% 100%
[Month] 1, 2000..........
Weighted Average Life
(Years).................
</TABLE>
Percentage of the Original Principal Balance of the Class A-2
Certificates at the Respective Percentages of the
MHP Listed Below:
<TABLE>
<CAPTION>
Date 75% 100% 125% 150% 175% 200% 250% 300% 350%
- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Initial Percentage....... 100% 100% 100% 100% 100% 100% 100% 100% 100%
[Month] 1, 2000..........
[Month] 1, 2001..........
[Month] 1, 2002..........
Weighted Average Life
(Years).................
</TABLE>
Percentage of the Original Principal Balance of the Class A-3
Certificates at the Respective Percentages of the
MHP Listed Below:
<TABLE>
<CAPTION>
Date 75% 100% 125% 150% 175% 200% 250% 300% 350%
- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Initial Percentage....... 100% 100% 100% 100% 100% 100% 100% 100% 100%
[Month] 1, 2000..........
[Month] 1, 2001..........
[Month] 1, 2002..........
[Month] 1, 2003..........
[Month] 1, 2004..........
Weighted Average Life
(Years).................
</TABLE>
S-32
<PAGE>
Percentage of the Original Principal Balance of the Class A-4
Certificates at the Respective Percentages of the
MHP Listed Below:
<TABLE>
<CAPTION>
Date 75% 100% 125% 150% 175% 200% 250% 300% 350%
- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Initial Percentage....... 100% 100% 100% 100% 100% 100% 100% 100% 100%
[Month] 1, 2000..........
[Month] 1, 2001..........
[Month] 1, 2002..........
[Month] 1, 2003..........
[Month] 1, 2004..........
[Month] 1, 2005..........
[Month] 1, 2006..........
Weighted Average Life
(Years).................
</TABLE>
Percentage of the Original Principal Balance of the Class A-5
Certificates at the Respective Percentages of the
MHP Listed Below:
<TABLE>
<CAPTION>
Date 75% 100% 125% 150% 175% 200% 250% 300% 350%
- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Initial Percentage....... 100% 100% 100% 100% 100% 100% 100% 100% 100%
[Month] 1, 2000..........
[Month] 1, 2001..........
[Month] 1, 2002..........
[Month] 1, 2003..........
[Month] 1, 2004..........
[Month] 1, 2005..........
[Month] 1, 2006..........
[Month] 1, 2007..........
[Month] 1, 2008..........
[Month] 1, 2009..........
[Month] 1, 2010..........
[Month] 1, 2011..........
[Month] 1, 2012..........
Weighted Average Life
(Years)................. .32
</TABLE>
S-33
<PAGE>
Percentage of the Original Principal Balance of the Class A-6
Certificates at the Respective Percentages of the
MHP Listed Below:
<TABLE>
<CAPTION>
Date 75% 100% 125% 150% 175% 200% 250% 300% 350%
- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Initial Percentage....... 100% 100% 100% 100% 100% 100% 100% 100% 100%
[Month] 1, 2000..........
[Month] 1, 2001..........
[Month] 1, 2002..........
[Month] 1, 2003..........
[Month] 1, 2004..........
[Month] 1, 2005..........
[Month] 1, 2006..........
[Month] 1, 2007..........
[Month] 1, 2008..........
[Month] 1, 2009..........
[Month] 1, 2010..........
[Month] 1, 2011..........
[Month] 1, 2012..........
[Month] 1, 2013..........
[Month] 1, 2014..........
Weighted Average Life
(Years).................
</TABLE>
S-34
<PAGE>
Percentage of the Original Principal Balance of the Class A-7
Certificates at the Respective Percentages of the
MHP Listed Below:
<TABLE>
<CAPTION>
Date 75% 100% 125% 150% 175% 200% 250% 300% 350%
- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Initial Percentage....... 100% 100% 100% 100% 100% 100% 100% 100% 100%
[Month] 1, 2000..........
[Month] 1, 2001..........
[Month] 1, 2002..........
[Month] 1, 2003..........
[Month] 1, 2004..........
[Month] 1, 2005..........
[Month] 1, 2006..........
[Month] 1, 2007..........
[Month] 1, 2008..........
[Month] 1, 2009..........
[Month] 1, 2010..........
[Month] 1, 2011..........
[Month] 1, 2012..........
[Month] 1, 2013..........
[Month] 1, 2014..........
[Month] 1, 2015..........
[Month] 1, 2016..........
[Month] 1, 2017..........
[Month] 1, 2018..........
[Month] 1, 2019..........
Weighted Average Life
(Years).................
</TABLE>
S-35
<PAGE>
Percentage of the Original Principal Balance of the Class A-8
Certificates at the Respective Percentages of the
MHP Listed Below:
<TABLE>
<CAPTION>
Date 75% 100% 125% 150% 175% 200% 250% 300% 350%
- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Initial Percentage....... 100% 100% 100% 100% 100% 100% 100% 100% 100%
[Month] 1, 2000..........
[Month] 1, 2001..........
[Month] 1, 2002..........
[Month] 1, 2003..........
[Month] 1, 2004..........
[Month] 1, 2005..........
[Month] 1, 2006..........
[Month] 1, 2007..........
[Month] 1, 2008..........
[Month] 1, 2009..........
[Month] 1, 2010..........
[Month] 1, 2011..........
[Month] 1, 2012..........
[Month] 1, 2013..........
[Month] 1, 2014..........
[Month] 1, 2015..........
[Month] 1, 2016..........
[Month] 1, 2017..........
[Month] 1, 2018..........
[Month] 1, 2019..........
[Month] 1, 2020..........
[Month] 1, 2021..........
[Month] 1, 2022..........
[Month] 1, 2023..........
[Month] 1, 2024..........
Weighted Average Life
(Years).................
</TABLE>
S-36
<PAGE>
Percentage of the Original Principal Balance of the Class A-9
Certificates at the Respective Percentages of the
MHP Listed Below:
<TABLE>
<CAPTION>
Date 75% 100% 125% 150% 175% 200% 250% 300% 350%
- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Initial Percentage....... 100% 100% 100% 100% 100% 100% 100% 100% 100%
[Month] 1, 2000..........
[Month] 1, 2001..........
[Month] 1, 2002..........
[Month] 1, 2003..........
[Month] 1, 2004..........
[Month] 1, 2005..........
[Month] 1, 2006..........
[Month] 1, 2007..........
[Month] 1, 2008..........
[Month] 1, 2009..........
[Month] 1, 2010..........
[Month] 1, 2011..........
[Month] 1, 2012..........
[Month] 1, 2013..........
[Month] 1, 2014..........
[Month] 1, 2015..........
[Month] 1, 2016..........
[Month] 1, 2017..........
[Month] 1, 2018..........
[Month] 1, 2019..........
[Month] 1, 2020..........
[Month] 1, 2021..........
[Month] 1, 2022..........
[Month] 1, 2023..........
[Month] 1, 2024..........
Weighted Average Life
(Years).................
</TABLE>
S-37
<PAGE>
Percentage of the Original Principal Balance of the Class M-1
Certificates at the Respective Percentages of the
MHP Listed Below:
<TABLE>
<CAPTION>
Date 75% 100% 125% 150% 175% 200% 250% 300% 350%
- ---- --- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Initial Percentage........ 100% 100% 100% 100% 100% 100% 100% 100% 100%
[Month] 1, 2000...........
[Month] 1, 2001...........
[Month] 1, 2002...........
[Month] 1, 2003...........
[Month] 1, 2004...........
[Month] 1, 2005...........
[Month] 1, 2006...........
[Month] 1, 2007...........
[Month] 1, 2008...........
[Month] 1, 2009...........
[Month] 1, 2010...........
[Month] 1, 2011...........
[Month] 1, 2012...........
[Month] 1, 2013...........
[Month] 1, 2014...........
[Month] 1, 2015...........
[Month] 1, 2016...........
[Month] 1, 2017...........
[Month] 1, 2018...........
[Month] 1, 2019...........
[Month] 1, 2020...........
[Month] 1, 2021...........
[Month] 1, 2022...........
[Month] 1, 2023...........
[Month] 1, 2024...........
Weighted Average Life
(Years)..................
</TABLE>
S-38
<PAGE>
Percentage of the Original Principal Balance of the Class M-2
Certificates at the Respective Percentages of the
MHP Listed Below:
<TABLE>
<CAPTION>
Date 75% 100% 125% 150% 175% 200% 250% 300% 350%
- ---- --- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Initial Percentage........ 100% 100% 100% 100% 100% 100% 100% 100% 100%
[Month] 1, 2000...........
[Month] 1, 2001...........
[Month] 1, 2002...........
[Month] 1, 2003...........
[Month] 1, 2004...........
[Month] 1, 2005...........
[Month] 1, 2006...........
[Month] 1, 2007...........
[Month] 1, 2008...........
[Month] 1, 2009...........
[Month] 1, 2010...........
[Month] 1, 2011...........
[Month] 1, 2012...........
[Month] 1, 2013...........
[Month] 1, 2014...........
[Month] 1, 2015...........
[Month] 1, 2016...........
[Month] 1, 2017...........
[Month] 1, 2018...........
[Month] 1, 2019...........
[Month] 1, 2020...........
[Month] 1, 2021...........
[Month] 1, 2022...........
[Month] 1, 2023...........
[Month] 1, 2024...........
Weighted Average Life
(Years)..................
</TABLE>
S-39
<PAGE>
Percentage of the Original Principal Balance of the Class B-1
Certificates at the Respective Percentages of the
MHP Listed Below:
<TABLE>
<CAPTION>
Date 75% 100% 125% 150% 175% 200% 250% 300% 350%
- ---- --- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Initial Percentage........ 100% 100% 100% 100% 100% 100% 100% 100% 100%
[Month] 1, 2000...........
[Month] 1, 2001...........
[Month] 1, 2002...........
[Month] 1, 2003...........
[Month] 1, 2004...........
[Month] 1, 2005...........
[Month] 1, 2006...........
[Month] 1, 2007...........
[Month] 1, 2008...........
[Month] 1, 2009...........
[Month] 1, 2010...........
[Month] 1, 2011...........
[Month] 1, 2012...........
Weighted Average Life
(Years)..................
</TABLE>
S-40
<PAGE>
Percentage of the Original Principal Balance of the Class B-2
Certificates at the Respective Percentages of the
MHP Listed Below:
<TABLE>
<CAPTION>
Date 75% 100% 125% 150% 175% 200% 250% 300% 350%
- ---- --- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Initial Percentage........ 100% 100% 100% 100% 100% 100% 100% 100% 100%
[Month] 1, 2000...........
[Month] 1, 2001...........
[Month] 1, 2002...........
[Month] 1, 2003...........
[Month] 1, 2004...........
[Month] 1, 2005...........
[Month] 1, 2006...........
[Month] 1, 2007...........
[Month] 1, 2008...........
[Month] 1, 2009...........
[Month] 1, 2010...........
[Month] 1, 2011...........
[Month] 1, 2012...........
[Month] 1, 2013...........
[Month] 1, 2014...........
[Month] 1, 2015...........
[Month] 1, 2016...........
[Month] 1, 2017...........
[Month] 1, 2018...........
[Month] 1, 2019...........
[Month] 1, 2020...........
[Month] 1, 2021...........
[Month] 1, 2022...........
[Month] 1, 2023...........
[Month] 1, 2024...........
Weighted Average Life
(Years)..................
</TABLE>
S-41
<PAGE>
DESCRIPTION OF THE CERTIFICATES
The following information supplements, and if inconsistent supersedes,
the information in the prospectus under "Description of the Certificates."
The certificates will be issued under the pooling and servicing
agreement. A copy of the execution form of the agreement will be filed in a
current report on Form 8-K with the SEC after the initial issuance of the
certificates. The following summary describes certain terms of the pooling and
servicing agreement, does not purport to be complete and is qualified in its
entirety by the pooling and servicing agreement, which is incorporated by
reference in this prospectus supplement.
General
The certificates will be issued in fully registered form only in
denominations of $1,000 or an integral multiple of $1,000. The percentage
interest of a Class A certificate will be equal to the percentage obtained from
dividing its denomination by the original principal balance of that class. The
Class A certificates in the aggregate will represent approximately an initial
% undivided interest in the trust. The percentage interest of a Class M-1
certificate will be equal to the percentage obtained by dividing its
denomination by the original Class M-1 principal balance. The Class M-1
certificates in the aggregate will represent approximately an initial %
undivided interest in the trust. The percentage interest of a Class M-2
certificate will be equal to the percentage obtained by dividing its
denomination by the original Class M-2 principal balance. The Class M-2
certificates in the aggregate will represent approximately an initial %
undivided interest in the trust. The percentage interest of a Class B
certificate will be equal to the percentage obtained from dividing its
denomination by the original Class B-1 principal balance or the original Class
B-2 principal balance, as appropriate. The Class B-1 certificates in the
aggregate will represent approximately an initial % undivided interest in the
trust, and the Class B-2 certificates in the aggregate will represent
approximately an initial % undivided interest in the trust.
The paying agent will make distributions on the certificates each
remittance date to persons in whose names the certificates are registered as of
the preceding record date. The remittance date for the certificates will be the
first day of each month or, if the first day is not a business day, the next
succeeding business day, commencing in 1999. Payments will be made by check
mailed on the remittance date to the Certificateholder at the address appearing
on the certificate register; provided that a certificateholder who holds an
aggregate percentage interest of at least 5% of a class of certificates may
request payment by wire transfer of immediately available funds pursuant to
written instructions delivered to the trustee at least 10 days before the
remittance date. Final payments will be made only when the certificates are
tendered to the paying agent for cancellation.
Conveyance of Contracts
On the closing date, Green Tree will transfer to Conseco Securitizations
the initial and additional contracts, including all principal and interest
received on the contracts other than receipts of principal and interest due on
the contracts before the cut-off date. Conseco Securitizations will then
establish the trust and transfer to the trust
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all of its right, title and interest in the initial and additional contracts.
The pooling and servicing agreement permits the trust to purchase subsequent
contracts on one or more subsequent transfer dates through , 1999. If Green
Tree transfers subsequent contracts to Conseco Securitizations, Conseco
Securitizations will transfer them to the trust. See "Conveyance of Subsequent
Contracts and Pre-Funding Account."
In addition to the representations and warranties described in the
prospectus under "Description of Certificates--Conveyance of Contracts," we
will make warranties about the initial contracts, including that:
(1) the aggregate principal amount payable by the obligors on the
initial contracts as of the cut-off date equals $ ;
(2) as of the cut-off date, the obligors on no more than 10% of the
initial contracts by remaining principal balance are located in any
one state except for North Carolina, the obligors on no more than 5%
of the initial contracts by remaining principal balance are located
in an area with the same zip code and the obligors on not more than
1% of the initial contracts by remaining principal balance are
located in California in an area with the same zip code;
(3) approximately % of the aggregate principal amount of initial
contracts as of the cut-off date is attributable to loans to
purchase new manufactured homes and approximately % is
attributable to loans to purchase used manufactured homes;
(4) no initial contract has a remaining maturity of more than months;
(5) the date of origination of each initial contract is on or after ,
1990; and
(6) no adverse selection procedures were employed in selecting the
initial contracts.
We will make additional representations and warranties about the additional
contracts and subsequent contracts.
Conveyance of Subsequent Contracts and Pre-Funding Account
If the aggregate principal balance of the initial and additional
contracts transferred to the trust on the closing date is less than the
aggregate original principal balance of the certificates, the trustee will
establish and Conseco Securitizations will fund a pre-funding account on the
closing date to provide the trust with sufficient funds to purchase subsequent
contracts. The amount deposited in the pre-funding account will initially equal
the difference between $1,000,000,000 and the aggregate principal balance as of
the cut-off date of the initial contracts and additional contracts. The pre-
funding account will be used to purchase subsequent contracts during the pre-
funding period from the closing date until the earliest of (1) the date on
which the amount in the pre-funding account is less than $10,000, (2) ,
1999, or (3) the date on which an event of termination occurs under the pooling
and servicing agreement. Any reinvestment income earned on amounts on deposit
in the pre-funding account will be taxable to us.
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Under the pooling and servicing agreement, following the initial issuance
of the certificates, the trust will be obligated to purchase subsequent
contracts from Conseco Securitizations during the pre-funding period, subject
to their availability. Each subsequent contract will have been underwritten in
accordance with our standard underwriting criteria. Subsequent contracts will
be transferred to the trust under subsequent transfer instruments among Green
Tree, Conseco Securitizations and the trust. In connection with the purchase of
subsequent contracts on the subsequent transfer dates, the trust will be
required to pay to Conseco Securitizations from amounts on deposit in the pre-
funding account a cash purchase price of 100% of the contract's principal
balance as of the cut-off date. The amount paid from the pre-funding account on
each subsequent transfer date will not include accrued interest on the related
subsequent contracts. Following each subsequent transfer date, the aggregate
principal balance of the contracts in the trust will increase by an amount
equal to the aggregate principal balance of the contracts purchased and the
amount in the pre-funding account will decrease by the same amount. Any amounts
remaining in the pre-funding account after the purchase of subsequent contracts
will be applied on the first remittance date on or after the last day of the
pre-funding period to prepay principal on the Class A-1 and Class A-9
certificates, allocated % to the Class A-1 certificates and % to the Class
A-9 certificates.
Any conveyance of subsequent contracts on a subsequent transfer date is
subject to conditions including:
(1) each subsequent contract must satisfy the representation and
warranties specified in the related subsequent transfer instrument
and the pooling and servicing agreement;
(2) Green Tree must not select subsequent contracts in a manner that it
believes is adverse to the interests of the certificateholders;
(3) as of its respective cut-off date, each subsequent contract must
satisfy the following criteria:
. no subsequent contract may be more than 30 days contractually
delinquent;
. the remaining stated term to maturity of each subsequent
contract may not exceed 360 months;
. each subsequent contract must be underwritten in accordance
with Green Tree's standard underwriting criteria; and
. no subsequent contract may have a loan-to-value ratio greater
than 100%;
(4) the contract pool following the addition of the subsequent contracts
must satisfy the following criteria:
. the weighted average contract rate must not be less than %;
. the weighted average loan-to-value ratio must not be greater
than %;
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. not less than % of the cut-off date pool principal balance
must be attributable to loans to purchase new manufactured
homes;
. not more than % of the cut-off date pool principal balance
must be secured by single-wide manufactured homes and not less
than % of the cut-off date pool principal balance must be
secured by double-wide manufactured homes; and
. at least % of the cut-off date pool principal balance must
consist of land-and-home contracts;
(5) due to the purchase of the subsequent contracts, the certificates
will not receive from [S&P or Fitch] a lower credit rating than the
rating assigned at the initial issuance of the class of
certificates; and
(6) an independent accountant will provide a letter stating whether or
not the characteristics of the subsequent contracts conform to the
characteristics described in this prospectus supplement.
Payments on Contracts; Distributions on Certificates
The trustee, on behalf of the trust, will establish and maintain the
certificate account in an eligible account. An eligible account is any account
which is
(1) an account maintained with an eligible institution; or
(2) a segregated trust account maintained with the corporate trust
department of a federal or state chartered depository institution or
trust company with trust powers and acting in its fiduciary capacity
for the benefit of the trustee, which depository institution or
trust company has capital and surplus or, if the 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 the depository
institution or trust company (or, if the depository institution or
trust company is a subsidiary of a bank holding company system and
the depository institution's or trust company's securities are not
rated, the securities of the bank holding company) has a credit
rating from Moody's, if rated by Moody's, S&P, if rated by S&P and
Fitch, if rated by Fitch, in one of its generic credit rating
categories which signifies investment grade; or
(3) an account that will not cause S&P or Fitch to downgrade or withdraw
its then-current rating assigned to the certificates, as confirmed
in writing by S&P and Fitch.
An eligible institution is any depository institution organized under the laws
of the United States or any state, the deposits of which are insured to the
full extent permitted by law by the Bank Insurance Fund, currently administered
by the Federal Deposit Insurance Corporation, whose short-term deposits have
been rated P-1 by Moody's, if rated by Moody's, A-1+ by S&P, if rated by S&P
and F-1 by Fitch, or in one of the two highest rating categories by Moody's, if
rated by Moody's, S&P, if rated by S&P, and Fitch in the case of unsecured
long-term debt, and which is subject to supervision and examination by federal
or state authorities. The servicer may authorize the trustee
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to invest the funds in the certificate account in eligible investments that
will mature not later than the business day before the applicable monthly
remittance date. Eligible investments include:
. direct obligations of, and obligations fully guaranteed by, the
United States or of any agency backed by the full faith and credit of
the United States and which are noncallable;
. federal funds, certificates of deposit, time deposits and bankers'
acceptances sold by eligible financial institutions;
. repurchase agreements with eligible institutions;
. securities bearing interest or sold at a discount issued by a
corporation which has a credit rating of at least Aa2 from Moody's,
at least AAA by S&P and in one of the two highest rating categories
from Fitch, not in excess of 10% of amounts in the certificate
account at the time of the investment;
. commercial paper assigned at least a P-1 rating by Moody's and at
least an A-1+ rating by S&P, if rated by S&P, at the time of the
investment; and
. shares of registered investment companies whose shares are registered
under the Securities Act of 1933 and have the highest credit rating
then available from Moody's and Fitch, if rated by Fitch, and are
rated AAAm or AAAm-G by S&P.
All payments from obligors on the contracts which the servicer receives,
including principal prepayments and advance payments by obligors not
constituting principal prepayments, must be paid into the certificate account
no later than one business day after receipt of the payment, except amounts
received as late payment fees, extension fees, assumption fees or similar
fees. These fees are included as part of the servicer's servicing fees. See
"Servicing Compensation and Payment of Expenses" in the prospectus. In
addition, amounts we paid for contracts repurchased as a result of breach of
warranties under the pooling and service agreement, and amounts required to be
deposited upon substitution of a contract because of breach of warranties,
must be paid into the certificate account. See "Conveyance of Contracts" in
the prospectus. The servicer will not make any advances in respect of
delinquent payments on the contracts.
On the third business day before each remittance date, the servicer will
determine the amount available and the amounts to be distributed on the
certificates for that remittance date. The amount available on each remittance
date generally includes:
(1) payments on the contracts due and received during the related due
period, as defined in the next paragraph,
(2) prepayments and other unscheduled collections received during the
related due period,
(3) all collections of principal on the contracts received during the
due period in which the remittance date occurs up to and including
the third business day before the remittance date, but in no event
later than the 25th day of the month before the remittance date,
minus
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(4) for all remittance dates other than the remittance date in 1999,
all collections in respect of principal on the contracts received
during the related due period up to and including the third business
day before the preceding remittance date, but in no event later than
the 25th day of the prior month.
The amount available will be reduced by the following amounts:
.advance payments in respect of the related due period;
. amounts payable to the servicer to reimburse it for any REMIC
prohibited transaction tax imposed on the trust and paid by the
servicer;
. liquidation expenses incurred and taxes and insurance on repossessed
manufactured homes, advanced by the servicer for manufactured homes
that are reimbursable to the servicer under the pooling and
servicing agreement; and
. any amounts incorrectly deposited in the certificate account.
Liquidation expenses are out-of-pocket expenses incurred by the servicer in
connection with the liquidation of a defaulted contract, including, without
limitation, legal fees and disbursements.
The due period for all remittance dates, other than the remittance date
in 1999, is the period from and including the 16th day of the second month
preceding that remittance date, to and including the 15th day of the month
immediately preceding that remittance date. For the remittance date in
1999, the due period will be the period from and including , 1999 to and
including July 15, 1999.
The trustee will withdraw funds from the certificate account to make
payments to certificateholders. From time to time, as provided in the pooling
and servicing agreement, the trustee will also withdraw funds from the
certificate account to make payments to the servicer.
Distributions
On each remittance date, the trustee will apply the amount available to
make distributions in the following order of priority:
(1) If Green Tree is not the servicer, the monthly servicing fee to the
successor servicer
(2)Class A interest
(3)Class M-1 interest
(4)Class M-2 interest
(5)Class B-1 interest
(6)Class A principal
(7)Class M-1 principal
(8)Class M-2 principal
(9)Class B-1 principal
(10)Class B-2 interest
(11)Class B-2 principal
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(12) If Green Tree is the servicer, the monthly servicing fee to Green
Tree
(13) Class B-3I distribution amount
(14) Class C distribution amount
Each distribution on a book-entry certificate will be paid to DTC, which
will credit the amount of the distribution to the accounts of its participants
in accordance with its normal procedures. Each participant will be responsible
for disbursing the distribution to the certificate owners that it represents
and to each indirect participating brokerage firm for which it acts as agent.
Each brokerage firm will be responsible for disbursing funds to the certificate
owners that it represents. All credits and disbursements on a book-entry
certificate are to be made by DTC and the participants in accordance with DTC's
rules.
The servicer will furnish to the trustee, and the trustee will send with
each distribution on a remittance date to each holder of the certificates, a
statement or statements describing the amount of the distribution allocable to
principal and the amount of the distribution allocable to interest. These
amounts will be expressed as a dollar amount per Class A, Class M or Class B
certificate with a 1% percentage interest or per $1,000 denomination of Class
A, Class M or Class B certificate.
Class A Interest
One month's interest, computed
. for the Class A-1 certificates on the basis of the actual number of
days elapsed from and including the most recent remittance date to
but excluding the current remittance date and a 360-day year, and
. for all other Class A certificates, on the basis of a 360-day year
of twelve 30-day months,
will be paid to the holders of the Class A certificates on each remittance
date, to the extent of the amount available in the certificate account on that
date, at the Class A remittance rate on the then outstanding principal balance
of the Class A certificates. Interest on the Class A certificates will accrue
from June 30, 1999, or from the most recent remittance date on which interest
has been paid, to but excluding the following remittance date.
The remittance rates for the Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5, Class A-6, Class A-7, Class A-8 and Class A-9 certificates are
listed on the cover of this prospectus supplement.
The principal balance of any class of Class A certificates as of any
remittance date is the original principal balance of that class less all
amounts previously distributed to holders of that class on account of
principal. The Class A principal balance as of any remittance date is 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, the Class A-7 principal balance, the
Class A-8 principal balance and the Class A-9 principal balance.
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If on a particular remittance date, the amount available in the
certificate account is not sufficient to make a full distribution of interest
to the holders of the Class A certificates, the amount available will be
distributed among the outstanding Class A certificates pro rata based on the
aggregate amount of interest due on each class, and the amount of the shortfall
will be carried forward and added to the amount these holders will be entitled
to receive on the next remittance date. A shortfall could occur, for example,
if delinquencies or losses realized on the contracts were exceptionally high
and were concentrated in a particular due period. Any amount carried forward
will bear interest at the remittance rate for each class of Class A
certificates, to the extent permitted by law.
The Class A-8 remittance rate on each remittance date will be % per
year, subject to a maximum rate equal to the weighted average of the contract
rates on the contracts in the contract pool, computed on the basis of a 360-day
year of twelve 30-day months. In all but the most unusual prepayment scenarios,
we anticipate that the Class A-8 remittance rate will be %. In the unlikely
event that a large number of contracts having contract rates higher than %
were to prepay or mature while the contracts having contract rates equal to or
lower than % did not prepay or mature, with the result that the interest
collections on the remaining contracts were not sufficient to support a Class
A-8 remittance rate of %, then the Class A-8 remittance rate would be equal
to the weighted average of the contract rates on the contracts remaining in the
contract pool. Of the initial contracts, % by aggregate principal balance as
of the cut-off date had contract rates higher than %. The weighted average of
the contract rates on the initial contracts as of the cut-off date was
approximately %.
The Class A-9 remittance rate on each remittance date will be % per
year, subject to a maximum rate equal to the weighted average of the contract
rates on the contracts in the contract pool, computed on the basis of a 360-day
year of twelve 30-day months. In all but the most unusual prepayment scenarios,
we anticipate that the Class A-9 remittance rate will be %. In the unlikely
event that a large number of contracts having contract rates higher than %
were to prepay or mature while the contracts having contract rates equal to or
lower than % did not prepay or mature, with the result that the interest
collections on the remaining contracts were not sufficient to support a Class
A-9 remittance rate of %, then the Class A-9 remittance rate would be equal
to the weighted average of the contract rates on the contracts remaining in the
contract pool. Of the initial contracts, % by aggregate principal balance as
of the cut-off date had contract rates higher than %. The weighted average of
the contract rates on the initial contracts as of the cut-off date was
approximately %.
Class M-1 Interest
Interest will be paid to the Class M-1 certificateholders on each
remittance date, up to the amount available in the certificate account after
payment of interest on the Class A certificates. Interest on the outstanding
Class M-1 adjusted principal balance will accrue from , 1999, or from the
most recent remittance date on which interest has been paid, to but excluding
the following remittance date. The Class M-1 principal balance is the original
Class M-1 principal balance less the sum of all amounts previously distributed
to Class M-1 certificateholders on account of principal. The Class
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M-1 adjusted principal balance as of any remittance date is the Class M-1
principal balance less any Class M-1 liquidation loss amount. If, on a
particular remittance date, the remaining amount available in the certificate
account is not sufficient to make a full distribution of interest to the Class
M-1 certificateholders, other funds in the certificate account representing
collections received before that remittance date, up to a limited amount, will
be applied to the deficiency, and any remaining deficiency will be carried
forward and added to the amount the holders will be entitled to receive on the
next remittance date. Any amount carried forward will bear interest at the
Class M-1 remittance rate, to the extent permitted by law.
The Class M-1 remittance rate on each remittance date will be % per
year, subject to a maximum rate equal to the weighted average of the contract
rates on the contracts in the contract pool, computed on the basis of a 360-day
year of twelve 30-day months. In all but the most unusual prepayment scenarios,
we anticipate that the Class M-1 remittance rate will be %. In the unlikely
event that a large number of contracts having contract rates higher than %
were to prepay or mature while the contracts having contract rates equal to or
lower than % did not prepay or mature, with the result that the interest
collections on the remaining contracts were not sufficient to support a Class
M-1 remittance rate of %, then the Class M-1 remittance rate would be equal
to the weighted average of the contract rates on the contracts remaining in the
contract pool. Of the initial contracts, % by aggregate principal balance as
of the cut-off date had contract rates higher than %. The weighted average of
the contract rates on the initial contracts as of the cut-off date was
approximately %.
Class M-2 Interest
Interest will be paid to the Class M-2 certificateholders on each
remittance date, up to the amount available in the certificate account after
payment of interest on the Class A certificates and the Class M-1 certificates.
Interest on the outstanding Class M-2 adjusted principal balance will accrue
from 30, 1999, or from the most recent remittance date on which interest
has been paid, to but excluding the following remittance date. The Class M-2
principal balance is the original Class M-2 principal balance less the sum of
all amounts previously distributed to Class M-2 certificateholders on account
of principal. The Class M-2 adjusted principal balance as of any remittance
date is the Class M-2 principal balance less any Class M-2 liquidation loss
amount. If, on a particular remittance date, the remaining amount available in
the certificate account is not sufficient to make a full distribution of
interest to the Class M-2 certificateholders, other funds in the certificate
account representing collections received before that remittance date, up to a
limited amount, will be applied to the deficiency, and any remaining deficiency
will be carried forward and added to the amount the holders will be entitled to
receive on the next remittance date. Any amount carried forward will bear
interest at the Class M-2 remittance rate, to the extent permitted by law.
The Class M-2 remittance rate on each remittance date will be % per
year, subject to a maximum rate equal to the weighted average of the contract
rates on the contracts in the contract pool, computed on the basis of a 360-day
year of twelve 30-day months. In all but the most unusual prepayment scenarios,
we anticipate that the
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Class M-2 remittance rate will be %. In the unlikely event that a large
number of contracts having contract rates higher than % were to prepay or
mature while the contracts having contract rates equal to or lower than % did
not prepay or mature, with the result that the interest collections on the
remaining contracts were not sufficient to support a Class M-2 remittance rate
of %, then the Class M-2 remittance rate would be equal to the weighted
average of the contract rates on the contracts remaining in the contract pool.
Of the initial contracts, % by aggregate principal balance as of the cut-off
date had contract rates higher than %. The weighted average of the contract
rates on the initial contracts as of the cut-off date was approximately %.
Class B-1 Interest
Interest will be paid to the Class B-1 certificateholders on each
remittance date, up to the amount available in the certificate account after
payment of interest on the Class A certificates and Class M certificates.
Interest on the outstanding Class B-1 adjusted principal balance will accrue
from 30, 1999 or from the most recent remittance date on which interest has
been paid, to but excluding the following remittance date. The Class B-1
principal balance is the original Class B-1 principal balance less the sum of
all amounts previously distributed to Class B-1 certificateholders on account
of principal. The Class B-1 adjusted principal balance as of any remittance
date is the Class B-1 principal balance less any Class B-1 liquidation loss
amount. If, on a particular remittance date, the remaining amount available in
the certificate account is not sufficient to make a full distribution of
interest to the Class B-1 certificateholders, other funds in the certificate
account representing collections received before that remittance date, up to a
limited amount, will be applied to the deficiency, and any remaining deficiency
will be carried forward and added to the amount the holders will be entitled to
receive on the next remittance date. Any amount carried forward will bear
interest at the Class B-1 remittance rate, to the extent permitted by law.
The Class B-1 remittance rate on each remittance date will be % per
year, subject to a maximum rate equal to the weighted average of the contract
rates on the contracts in the contract pool, computed on the basis of a 360-day
year of twelve 30-day months. In all but the most unusual prepayment scenarios,
we anticipate that the Class B-1 remittance rate will be %. In the unlikely
event that a large number of contracts having contract rates higher than %
were to prepay or mature while the contracts having contract rates equal to or
lower than % did not prepay or mature, with the result that the interest
collections on the remaining contracts were not sufficient to support a Class
B-1 remittance rate of %, then the Class B-1 remittance rate would be equal
to the weighted average of the contract rates on the Contracts remaining in the
contract pool. Of the initial contracts, % by aggregate principal balance as
of the cut-off date had contract rates higher than %. The weighted average of
the contract rates on the initial contracts was approximately %.
Class A Principal
Holders of the Class A certificates will be entitled to receive a payment
of principal on each remittance date, to the extent of the amount available in
the certificate
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account on the date after payment of interest on the Class A principal balance,
the Class M-1 adjusted principal balance, the Class M-2 adjusted principal
balance and the Class B-1 adjusted principal balance, in an amount equal to the
Class A Percentage of the "Formula Principal Distribution Amount," which equals
the sum of:
(1) all scheduled payments of principal due on each outstanding contract
during the related due period, after adjustments for previous
partial principal prepayments and after any adjustments to a
contract's amortization schedule as a result of a bankruptcy or a
similar proceeding involving the related obligor,
(2) the Scheduled Principal Balance of each contract which, during the
month preceding the related due period, we purchased under the
pooling and servicing agreement on account of breaches of our
representations and warranties,
(3) all partial principal prepayments applied and all principal
prepayments in full received during the related due period,
(4) the Scheduled Principal Balance of each contract that became a
liquidated contract during the related due period, plus the amount
of any reduction in the outstanding principal balance of a contract
during the related due period ordered as the result of a bankruptcy
or similar proceeding involving the related obligor,
(5) without repeating the above, all collections in respect of principal
on the contracts received during the due period in which the
remittance date occurs up to and including the third business day
prior to such remittance date, but in no event later than the 25th
day of the month before the remittance date, minus
(6) for all remittance dates other than the remittance date in 1999,
the amount included in the formula principal distribution amount for
the preceding remittance date by virtue of clause (5) above, plus
(7) for the remittance date in 2000, any amount, by which the Class
A-1 principal balance as of the remittance date exceeds the sum on
the remittance date of the amounts described in clause (1) through
(6) above; minus
(8) for the remittance date in 2000, any amount, distributed in
respect of principal on the Class A-1 certificates on the remittance
date in 2000 under clause (7) above.
The "Class A Percentage" for any remittance date will equal a fraction,
expressed as a percentage, the numerator of which is the Class A principal
balance, and the denominator of which is the sum of:
. the Class A principal balance,
. if the Class M-1 distribution test is satisfied on that remittance
date, the Class M-1 principal balance, otherwise zero,
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. if the Class M-2 distribution test is satisfied on that remittance
date, the Class M-2 principal balance, otherwise zero, and
. if the Class B distribution test is satisfied on that remittance
date, the Class B principal balance, otherwise zero.
The "Scheduled Principal Balance" of a contract as of any remittance date
is the unpaid principal balance of the contract as specified in the
amortization schedule at the time relating to the contract as of the due date
in the related due period, after giving effect to any previous partial
prepayments and to the payment of principal due on the due date and
irrespective of any delinquency in payment on the contract. The "Pool Scheduled
Principal Balance" as of any remittance date is the aggregate of the Scheduled
Principal Balances of contracts outstanding at the end of the related due
period. A liquidated contract is a defaulted contract as to which all amounts
that the servicer expects to recover through the date of disposition of the
manufactured home have been received.
The Class A Percentage of the Formula Principal Distribution Amount will
be distributed, up to the amount available after payment of interest accrued on
the Class A principal balance, Class M-1 adjusted principal balance, Class M-2
adjusted principal balance and Class B-1 adjusted principal balance, as
follows:
(a) % of that amount to the Class A-9 certificate holders until the
Class A-9 principal balance has been reduced to zero, and
(b) % of that amount to the other classes as follows:
. to the Class A-1 certificateholders until the Class A-1 principal
balance has been reduced to zero,
. then to the Class A-2 certificateholders until the Class A-2
principal balance has been reduced to zero,
. then to the Class A-3 certificateholders until the Class A-3
principal balance has been reduced to zero,
. then to the Class A-4 certificateholders until the Class A-4
principal balance has been reduced to zero,
. then to the Class A-5 certificateholders until the Class A-5
principal balance has been reduced to zero,
. then to the Class A-6 certificateholders until the Class A-6
principal balance has been reduced to zero,
. then to the Class A-7 certificateholders until the Class A-7
principal balance has been reduced to zero, and
. then to the Class A-8 certificateholders until the Class A-8
principal balance has been reduced to zero.
The Class A-1 certificates will have a final maturity date of , 2000.
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Mandatory Prepayments on the Class A-1 and Class A-9 Certificates
If the aggregate principal balance of the initial and additional
contracts transferred to the trust on the closing date is less than the
aggregate original principal balance of the certificates, the trustee will
establish and we will fund a pre-funding account on the closing date. The Class
A-1 and Class A-9 certificates will be prepaid in part on the first remittance
date after the end of the funding period if any funds remain in the pre-funding
account. That amount will be distributed % to the Class A-1 certificates and
% to the Class A-9 certificates. We believe that, if any pre-funding account
is established, substantially all of the funds will be used to purchase
contracts by , 1999. But it is likely that a small amount of funds will
remain in the pre-funding account, and that the Class A-1 and Class A-9
certificateholders will receive a prepayment of principal equal to this amount.
See "Yield and Prepayment Considerations" and "Description of the
Certificates--Conveyance of Subsequent Contracts and Pre-Funding Account."
Class M-1 Principal
Holders of the Class M-1 certificates will be entitled to receive a
payment of principal on each remittance date on which the Class A principal
balance has been reduced to zero or the Class M-1 distribution test is
satisfied. The amount of principal paid on the Class M-1 certificates on any
remittance date will be the Class M-1 Percentage of the Formula Principal
Distribution Amount, subject to the limit of the amount available in the
certificate account on the date remaining after payment of interest on the
Class A principal balance, the Class M-1 adjusted principal balance, the Class
M-2 adjusted principal balance and the Class B-1 adjusted principal balance and
the payment of principal due on the Class A certificates.
The "Class M-1 Percentage" for any remittance date will equal
(1) zero, if the Class A principal balance has not yet been reduced to
zero and the Class M-1 distribution test is not satisfied, or
(2) a fraction, expressed as a percentage, the numerator of which is the
Class M-1 principal balance as of the remittance date, and the
denominator of which is, as of the remittance date, the sum of:
(a) any Class A principal balance
(b) the Class M-1 principal balance,
(c) if the Class M-2 distribution test is satisfied on that
remittance date, the Class M-2 principal balance, otherwise
zero and
(d) if the Class B distribution test is satisfied on that
remittance date, the Class B principal balance, otherwise
zero.
The Class M-1 distribution test will be satisfied if each of the
following tests is satisfied:
(1) the remittance date occurs in or after 2003;
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(2) the average sixty-day delinquency ratio test, as defined in the
pooling and servicing agreement as of the remittance date must not
exceed [4.50]%;
(3) cumulative realized losses, as defined in the pooling and servicing
agreement, as of the remittance date must not exceed a certain
specified percentage of the cut-off date pool principal balance,
depending on the year in which the remittance date occurs;
(4) the current realized loss ratio, as defined in the agreement, as of
the remittance date must not exceed [2.75]%; and
(5) the sum of the Class M-1 principal balance, the Class M-2 principal
balance and the Class B principal balance divided by the pool
scheduled principal balance as of the immediately preceding
remittance date must be equal to or greater than [26.25]%.
After payment of all principal then distributable on the Class M-1
certificates, any Class M-1 liquidation loss interest amount that has accrued
and has not previously been paid will be distributed, together with interest on
that amount at the Class M-1 remittance rate to the extent legally permissible,
to the extent of the remaining amount available.
Class M-2 Principal
Holders of the Class M-2 Certificates will be entitled to receive a
payment of principal on each remittance date on which the Class A principal
balance and the Class M-1 principal balance have been reduced to zero or the
Class M-2 distribution test is satisfied. The amount of principal paid on the
Class M-2 certificates on any remittance date will be the Class M-2 Percentage
of the Formula Principal Distribution Amount, subject to the limit of the
amount available in the certificate account on the date remaining after payment
of interest on the Class A principal balance, the Class M-1 adjusted principal
balance, the Class M-2 adjusted principal balance and the Class B-1 adjusted
principal balance and the payment of principal due on the Class A and Class M-1
certificates.
The "Class M-2 Percentage" for any remittance date will equal:
(1) zero, if the Class A principal balance and the Class M-1 principal
balance have not yet been reduced to zero and the Class M-2
distribution test is not satisfied, or
(2) a fraction, expressed as a percentage, the numerator of which is the
Class M-2 principal balance as of the remittance date, and the
denominator of which is, as of the remittance date, the sum of:
(a) any Class A principal balance,
(b) any Class M-1 principal balance,
(c) the Class M-2 principal balance, and
(d) if the Class B distribution test is satisfied on that
remittance date, the Class B principal balance, otherwise
zero.
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The Class M-2 distribution test will be satisfied if each of the
following tests is satisfied:
(1) the remittance date occurs in or after 2003;
(2) the average sixty-day delinquency ratio test as defined in the
pooling and servicing agreement as of the remittance date must not
exceed [4.50]%;
(3) cumulative realized losses as defined in the pooling and servicing
agreement as of the remittance date must not exceed a specified
percentage of the cut-off date pool principal balance, depending on
the year in which the remittance date occurs;
(4) the current realized loss ratio as defined in the pooling and
servicing agreement as of the remittance date must not exceed
[2.75]%; and
(5) the sum of the Class M-2 principal balance and the Class B principal
balance divided by the pool scheduled principal balance as of the
immediately preceding remittance date must be equal to or greater
than [18.375]%.
After payment of all principal then distributable on the Class M-2
certificates, any Class M-2 liquidation loss interest amount that has accrued
and has not previously been paid will be distributed, together with interest on
that amount at the Class M-2 remittance rate to the extent legally permissible,
up to the remaining amount available.
Class B-1 Principal
Holders of the Class B-1 certificates will be entitled to receive a
payment of principal on each remittance date on which the Class A principal
balance, the Class M-1 principal balance and the Class M-2 principal balance
have been reduced to zero or the Class B distribution test is satisfied. The
amount of principal paid on the Class B-1 certificates on any remittance date
will be the Class B Percentage of the Formula Principal Distribution Amount,
subject to the limit of the amount available in the certificate account on the
date remaining after payment of interest on the Class A principal balance, the
Class M-1 adjusted principal balance, the Class M-2 adjusted principal balance
and the Class B-1 adjusted principal balance and the payment of principal due
on the Class A and Class M certificates.
The "Class B Percentage" for any remittance date will equal:
(1) zero, if the Class A principal balance, the Class M-1 principal
balance and the Class M-2 principal balance have not yet been
reduced to zero and the Class B distribution test is not satisfied
or
(2) a fraction, expressed as a percentage, the numerator of which is the
Class B principal balance as of the remittance date, and the
denominator of which is, as of the remittance date, the sum of:
(a) any Class A principal balance,
(b) any Class M-1 principal balance,
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(c) any Class M-2 principal balance, and
(d) the Class B principal balance.
The Class B distribution test will be satisfied if each of the following
tests is satisfied:
(1) the remittance date occurs in or after 2003;
(2) the average sixty-day delinquency ratio test as defined in the
pooling and servicing agreement as of the remittance date must not
exceed [4.50]%;
(3) the cumulative realized losses as defined in the pooling and
servicing agreement as of the remittance date must not exceed a
specified percentage of the cut-off date pool principal balance,
depending on the year in which the remittance date occurs:
(4) the current realized loss ratio as defined in the pooling and
servicing agreement as of the remittance date must not exceed
[2.75]%;
(5) the class B principal balance divided by the pool scheduled
principal balance as of the immediately preceding remittance date
must be equal to or greater than [13.125]%; and
(6) the Class B principal balance must not be less than $ .
After payment of all principal then distributable on the Class B-1
certificates, any Class B-1 liquidation loss interest amount that has accrued
and has not previously been paid will be distributed, together with interest on
that amount at the Class B-1 remittance rate to the extent legally permissible,
up to the remaining amount available.
Class B-2 Interest
Interest will be paid to the Class B-2 certificateholders on each
remittance date, up to any remaining amount available after payment of all
interest and principal due on the Class A, Class M and Class B-1 certificates,
and any amount paid under the limited guarantee. Interest on the outstanding
Class B-2 principal balance will accrue from , 1999, or from the most recent
remittance date on which interest has been paid, to but excluding the following
remittance date. The Class B-2 principal balance is the original Class B-2
principal balance less the sum of all amounts previously distributed to Class
B-2 certificateholders on account of principal. If, on a particular remittance
date, the remaining amount available in the certificate account is not
sufficient to make a full distribution of interest to the Class B-2
certificateholders and we fail to pay the amount under the limited guarantee,
the amount of the deficiency will be carried forward and added to the amount
the holders will be entitled to receive on the next remittance date. Any amount
carried forward will bear interest at the Class B-2 remittance rate, as
permitted by law.
The Class B-2 remittance rate on each remittance date will be % per
year, subject to a maximum rate equal to the weighted average of the contract
rates on the contracts in the contract pool, computed on the basis of a 360-day
year of twelve 30-day months. In the event that a large number of contracts
having contract rates higher
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than % were to prepay or mature while the contracts having contract rates
equal to or lower than % did not prepay or mature, with the result that the
interest collections on the remaining contracts were not sufficient to support
a Class B-2 remittance rate of %, then the Class B-2 remittance rate would be
equal to the weighted average of the contract rates on the contracts remaining
in the contract pool. Of the initial contracts, % by aggregate principal
balance as of the cut-off date had contract rates higher than %. The weighted
average of the contract rates on the initial contracts as of the cut-off date
was approximately %.
Class B-2 Principal
Except for payments of the Class B-2 liquidation loss amount, as
described below under "--Losses on Liquidated Contracts", the Class B-2
certificateholders will be entitled to receive principal only on remittance
dates on which:
. the Class B-1 principal balance has been reduced to zero, which we
refer to as the "Class B-1 Cross-Over Date" and
. the Class B distribution test is satisfied; provided, however, that
if the Class A principal balance, the Class M-1 principal balance,
the Class M-2 principal balance and the Class B-1 principal balance
have been reduced to zero, the Class B-2 certificateholders will
still be entitled to receive principal.
On each remittance date on or after the Class B-1 Cross-Over Date on
which each Class B distribution test is satisfied, the Class B Percentage of
the Formula Principal Distribution Amount will be distributed, to the extent of
the remaining amount available after payment of interest on the Class B-2
certificates, to the Class B-2 certificateholders until the Class B-2 principal
balance has been reduced to zero.
Subordination of Class M Certificates, Class B Certificates, Class B-3I
Certificates and Class C Certificates
The rights of the holders of the Class M-1 certificates, the Class M-2
certificates, the Class B certificates, the Class B-3I certificates and the
Class C certificates to receive distributions on the contracts in the trust
will be subordinated to the rights of the Class A certificateholders, as
described in this section. This subordination is intended to enhance the
likelihood of regular receipt by the holders of the Class A certificates of the
full amount of their scheduled monthly payments of principal and interest and
to afford these holders protection against losses on liquidated contracts. The
protection afforded to the Class A certificateholders by means of the
subordination feature will be accomplished by the preferential right of the
Class A certificateholders to receive on any remittance date the amount of
interest due on the Class A certificates, including any interest due on a prior
remittance date but not received, prior to any distribution being made on a
remittance date in respect of interest on the Class M certificates, the Class B
certificates and the Class B-3I certificates. Thereafter, any remaining amount
available in the certificate account will be applied to the payment of interest
due on the Class M-1 certificates, then to the Class M-2 certificates, and then
to the payment of interest due on the Class B-1 certificates.
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After payment of all interest due on the Class A principal balance, the
Class M-1 adjusted principal balance, the Class M-2 adjusted principal balance
and the Class B-1 adjusted principal balance, any remaining amount available
will be distributed in the following order of priority:
(1) first, the Class A Percentage of the Formula Principal Distribution
Amount will be distributed to the Class A certificateholders;
(2) then, if the remaining amount available is sufficient, the Class M-1
Percentage of the Formula Principal Distribution Amount plus any
unpaid Class M-1 liquidation loss interest amount will be
distributed to the Class M-1 certificateholders;
(3) then, if the remaining amount available is sufficient, the Class M-2
Percentage of the Formula Principal Distribution Amount plus any
unpaid Class M-2 liquidation loss interest amount will be
distributed to the Class M-2 certificateholders;
(4) then, the remaining amount available is sufficient, the Class B
Percentage of the Formula Principal Distribution Amount plus any
unpaid Class B-1 liquidation loss interest amount will be
distributed to the Class B-1 certificateholders.
After distribution of all interest and principal then payable on the Class A,
Class M and Class B-1 certificates, the Class B-2 certificateholders will be
entitled to distribution of all interest and principal then payable on the
Class B-2 certificates.
In addition, the rights of the holders of the Class B-2 certificates, the
Class B-3I certificates and the Class C certificates to receive distributions
will be subordinate to the rights of the Class B-1 certificateholders. This
subordination is intended to enhance the likelihood of regular receipt by the
holders of the Class B-1 certificates of the full amount of their scheduled
monthly payments of principal and interest and to afford the holders protection
against losses on liquidated contracts. The protection afforded to the Class B-
1 certificateholders by means of the subordination feature will be accomplished
by the preferential right of the Class B-1 certificateholders to receive, prior
to any distribution being made on a remittance date on the Class B-2
certificates, the Class B-3I certificates and the Class C certificates, the
amount of principal and interest due them on each remittance date out of the
remaining amount available on deposit on that date in the certificate account
and by the right of the Class B-1 certificateholders to receive future
distributions on the contracts that would otherwise be payable to the holders
of Class B-2 certificates.
The rights of the Class B-3I and Class C certificateholders to receive
distributions will be subordinated to the rights of the Class B-2
certificateholders. On each remittance date the Class B-3I certificateholders
will receive any remaining amount available, after payment of the amount
distributed to the Class A, Class M, Class B-1 and Class B-2 certificateholders
as described above, less the monthly servicing fee and amounts retained by the
servicer to reimburse itself for taxes paid for prohibited transactions, but in
no event greater than the excess interest, as defined in the pooling and
servicing agreement. On each remittance date, the Class C subsidiary
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certificateholders will be entitled to receive any portion of the remaining
amount available, after payment of all amounts described above, attributable to
aggregate repossession profits, as defined in the pooling and servicing
agreement.
As described above, before the Class A principal balance is reduced to
zero, the distribution of principal to the Class A certificateholders on any
remittance date is intended to include the Class A percentage of the scheduled
principal balance of each contract that became a liquidated contract during the
related due period. If the liquidation proceeds, net of related liquidation
expenses, from the liquidated contract are less than its scheduled principal
balance plus accrued interest, the deficiency will, in effect, be absorbed by
the Class M, Class B, Class B-3I and Class C certificateholders and Green Tree,
since a portion of the amount available equal to that deficiency and otherwise
distributable to them will be paid to the Class A certificateholders. If the
amount available is not sufficient to cover the entire amount distributable to
the Class A certificateholders, the Class M-1 certificateholders or the Class
M-2 certificateholders on a particular remittance date, then the amount
distributable to the Class A certificateholders, the Class M-1
certificateholders or the Class M-2 certificateholders, as applicable, will be
increased on future remittance dates by the amount of that deficiency plus the
applicable interest on that amount. To the extent such deficiency is not
covered by future collections or is not absorbed by the Class B-3I
certificateholders or the monthly servicing fee, so long as we are the
servicer, the Class B certificateholders will absorb these deficiencies. If the
amount available is sufficient to cover the amounts distributable on principal
to the Class A certificateholders, the Class M-1 certificateholders or Class M-
2 certificateholders but is not sufficient to cover any amounts distributable
on principal to the Class B-1 certificateholders on a particular remittance
date, the amount of the deficiency will be carried forward as an amount that
the Class B-1 certificateholders are entitled to receive on the next remittance
date. Consequently, but for the effect of the relative subordination of the
monthly servicing fee payable to the servicer so long as we are the servicer
and amounts otherwise distributable to the Class B-2, Class B-3I and Class C
certificateholders, the Class B-1 certificateholders will absorb:
. all losses on each liquidated contract in the amount by which its
liquidation proceeds, net of the related liquidation expenses, are
less than its unpaid principal balance plus accrued and unpaid
interest less the monthly servicing fee; and
. all delinquent payments on the contracts.
But for the effect of the relative subordination of the monthly servicing fee
payable to the servicer so long as we are the servicer and amounts otherwise
distributable to the Class B-3I and the Class C certificateholders on each
remittance date, and amounts paid under the limited guarantee, the Class B-2
certificateholders will absorb:
. all losses on each liquidated contract in the amount by which its
liquidation proceeds, net of the related liquidation expenses, are
less than its unpaid principal balance plus accrued and unpaid
interest less the monthly servicing fee; and
. all delinquent payments on the contracts.
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Class B-2 certificateholders, however, will be entitled to receive guarantee
payments and amounts otherwise distributable on remittance dates as:
. the Class B-3I distribution amount; and
. the monthly servicing fee payable to the servicer, so long as we are
the servicer, and would be entitled to receive any amounts, not
received by the Class B-2 certificateholders on a prior remittance
date.
If we fail to make a payment required under the limited guarantee, the Class B-
2 certificateholders will incur a loss on their investment in the Class B-2
certificates.
Losses on Liquidated Contracts
If the amount available in the certificate account for any remittance
date is insufficient to distribute the full formula principal distribution
amount for that remittance date to the certificateholders, the aggregate
outstanding principal balance of the certificates will be greater than the pool
scheduled principal balance for that remittance date. If this occurs, the
amount of the deficiency, which we refer to as the "liquidation loss amount,"
would be allocated first to the Class B-2 certificates, and we would be
obligated to pay the amount of the Class B-2 liquidation loss amount to the
Class B-2 certificateholders under the limited guarantee. If on any remittance
date the sum of the Class A principal balance, the Class M-1 principal balance,
the Class M-2 principal balance and the Class B-1 principal balance equal the
pool scheduled principal balance, no further liquidation loss amounts could be
allocated to the Class B-2 certificates and any further liquidation loss
amounts realized would be allocated to reduce the Class B-1 adjusted principal
balance. If the Class B-1 adjusted principal balance were reduced to zero, any
further liquidation loss amounts realized would be allocated to reduce the
Class M-2 adjusted principal balance. If the Class M-2 adjusted principal
balance were reduced to zero, any further liquidation loss amounts realized
would be allocated to the Class M-1 adjusted principal balance. Any liquidation
loss amounts would be reduced on subsequent remittance dates to the extent that
the amount available in the certificate account on the remittance dates is
sufficient to permit the distribution of principal due on the certificates on
prior remittance dates but not paid. If the adjusted principal balance of a
class of certificates were reduced by a liquidation loss amount, interest
accruing on that class other than the Class B-2 certificates would be
calculated on the adjusted principal balance of that class. The interest
accruing on that class's liquidation loss amount each month, plus interest at
the applicable certificate rate on any liquidation loss interest amount due on
a prior remittance date but not paid, would be paid to the certificateholders
of that class from the amount available after distribution of principal on that
class but prior to any distribution of principal on a subordinate class.
Capitalized Interest Account
Because payments received with respect to interest on the contracts may
be insufficient to cover payments of interest on the certificates on the
remittance dates in and 1999, a capitalized interest account will be
established on the closing date with a deposit of an amount approved by the
rating agencies. Funds on
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deposit in the capitalized interest account will be invested in eligible
investments, as described under "--Payments on Contracts; Distributions on
Certificates". If the amount available is insufficient to make a full
distribution of interest on the certificates, other than the Class B-2
certificates, on the remittance dates in and 1999, the trustee will
withdraw the amount of any shortfall from the capitalized interest account and
deposit that amount in the certificate account. We will be obligated under the
limited guarantee to make a guarantee payment equal to any shortfall in the
amount distributable on the Class B-2 certificates, as described below under
"--Limited Guarantee of Green Tree." The capitalized interest account will be
part of the trust but not part of the Master REMIC or the Subsidiary REMIC. Any
funds remaining on deposit in the capitalized interest account after the
distribution to certificateholders in 1999 will be released to one of our a
subsidiaries.
Limited Guarantee of Green Tree
To mitigate the effect of the subordination of the Class B-2 certificates
and liquidation losses and delinquencies on the contracts, we will provide a
limited guarantee against losses that would otherwise be absorbed by the Class
B-2 certificates. Before the Class B-1 Cross-Over Date, or on any remittance
date on or after the Class B-1 Cross-Over Date on which the Class B
distribution test is not satisfied unless the Class A principal balance, the
Class M-1 principal balance and the Class M-2 principal balance have been
reduced to zero, the guarantee payment will equal any amount, by which:
(1) the Class B-2 Formula Distribution Amount for that remittance date
which will be equal to accrued and unpaid interest on the Class B-2
certificates for that remittance date plus any Class B-2 liquidation
loss amount for that remittance date, exceeds
(2) the Class B-2 distribution amount for that remittance date.
The Class B-2 liquidation loss amount for any remittance date equals any
amount, by which the sum of the Class A principal balance, the Class M-1
principal balance, the Class M-2 principal balance, the Class B-1 principal
balance and the Class B-2 principal balance for that remittance date exceeds
the pool scheduled principal balance for that remittance date. On each
remittance date on or after the Class B-1 Cross-Over Date, if the Class B
distribution test is satisfied on that remittance date, or if the Class A
principal balance, the Class M-1 principal balance and the Class M-2 principal
balance have been reduced to zero, the guarantee payment will equal any amount,
by which:
(1) the Class B-2 Formula Distribution Amount for that remittance date,
which will include both interest and principal and any Class B-2
liquidation loss amount exceeds:
(2) the remaining amount available for that remittance date.
The limited guarantee will be an unsecured general obligation of Green
Tree and will not be supported by any letter of credit or other credit
enhancement arrangement. The limited guarantee will not benefit in any way, or
result in any payment to, the Class
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A, Class M-1, Class M-2, Class B-1, Class B-3I or Class C certificateholders.
The ratings assigned to the Class B-2 certificates may be affected by the
ratings of our debt securities. See "Summary of the Terms of the Offered
Certificates--Rating."
Reports to Certificateholders
The servicer will furnish to the trustee, and the trustee will include
with each distribution to a Class A certificateholder, a statement with the
following information for the related remittance date.
(a) the amount of the distribution to holders of the Class A
certificates allocable to interest, separately identifying any prior
Class A interest shortfall included in the distribution and any
remaining Class A interest shortfall after giving effect to the
distribution;
(b) the amount of the distribution to holders of the Class A
certificates allocable to principal, separately identifying the
aggregate amount of any principal prepayments included in the
distribution and any remaining Class A principal shortfall after
giving effect to the distribution;
(c) the principal balance of the Class A certificates after giving
effect to the distribution of principal on the remittance date;
(d) the pool scheduled principal balance of the contracts for the
remittance date;
(e) the Class A Percentage for the remittance date and the following
remittance date;
(f) the pool factor, which is a percentage derived from a fraction the
numerator of which is the sum of the Class A principal balance, the
Class M-1 principal balance, the Class M-2 principal balance and the
Class B principal balance and the denominator of which is the cut-
off date pool principal balance;
(g) the number and aggregate principal balance of contracts delinquent
(1) 30-59 days and (2) 60 or more days;
(h) the number of manufactured homes that were repossessed during the
related due period;
(i) the number of manufactured homes that were repossessed but remain in
inventory as of the last day of the related due period;
(j) the Class M-1 distribution test;
(k) the Class M-2 distribution test;
(l) the Class B distribution test;
(m) the weighted average contract rate of all outstanding contracts;
(n) any deficiency in the amount available to pay the Class M-1 interest
for the remittance date;
(o) any deficiency in the amount available to pay the Class M-2 interest
for the remittance date; and
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(p) any deficiency in the amount available to pay the Class B-1 interest
for the remittance date.
Information furnished for clauses (a) and (b) will be expressed as dollar
amounts for a Class A certificate with a 1% percentage interest or per $1,000
denomination of Class A certificate.
In addition, within a reasonable period of time after the end of each
calendar year, the servicer will furnish a report to each Class A
certificateholder of record at any time during such calendar year as to the
aggregate of amounts reported for (a) and (b) above for that calendar year.
The servicer will furnish to the trustee, and the trustee will include
with each distribution to a Class M-1 certificateholder, a statement with the
following information for the related remittance date:
(a) the amount of the distribution to holders of the Class M-1
certificates allocable to interest, separately identifying any prior
Class M-1 interest shortfall included in the distribution and any
remaining Class M-1 interest shortfall after giving effect to the
distribution, and any Class M-1 liquidation loss interest amount;
(b) the amount of the distribution to holders of the Class M-1
certificates allocable to principal, separately identifying the
aggregate amount of any principal prepayments included in the
distribution and any remaining Class M-1 principal shortfall after
giving effect to the distribution;
(c) the principal balance and adjusted principal balance, if different,
of the Class M-1 certificates after giving effect to the
distribution of principal on the remittance date;
(d) the Class M-1 Percentage for the remittance date and the following
remittance date;
(e) the pool scheduled principal balance of the contracts for the
remittance date;
(f) the pool factor, as described in clause (f) above;
(g) the number and aggregate principal balance of contracts delinquent
(1) 30-59 days and (2) 60 or more days;
(h) the number of manufactured homes that were repossessed during the
related due period
(i) the number of manufactured homes that were repossessed but remain in
inventory as of the last day of the related due period;
(j) the Class M-1 distribution test;
(k) the Class M-2 distribution test;
(l) the Class B distribution test; and
(m) the weighted average contract rate of all outstanding contracts.
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Information furnished for clauses (a) and (b) will be expressed as dollar
amounts for a Class M-1 certificate with a 1% percentage interest or per $1,000
denomination of Class M-1 certificate.
In addition, within a reasonable period of time after the end of each
calendar year, the servicer will furnish a report to each Class M-1
certificateholder of record at any time during that calendar year as to the
aggregate of amounts reported for (a) and (b) above for that calendar year.
The servicer will furnish to the trustee, and the trustee will include
with each distribution to a Class M-2 certificateholder, a statement with the
following information for the related remittance date:
(a) the amount of the distribution to holders of the Class M-2
certificates allocable to interest, separately identifying any prior
Class M-2 interest shortfall included in the distribution and any
remaining Class M-2 interest shortfall after giving effect to the
distribution, and any Class M-2 liquidation loss interest amount;
(b) the amount of the distribution to holders of the Class M-2
certificates allocable to principal separately identifying the
aggregate amount of any principal prepayments included in the
distribution and any remaining Class M-2 principal shortfall after
giving effect to the distribution;
(c) the principal balance and adjusted principal balance, if different,
of the Class M-2 certificates after giving effect to the
distribution of principal on the remittance date;
(d) the Class M-2 percentage for the remittance date and the following
remittance date;
(e) the pool scheduled principal balance of the contracts for the
remittance date;
(f) the pool factor, as described in clause (f) above;
(g) the number and aggregate principal balance of contracts delinquent
(1) 30-59 days and (2) 60 or more days;
(h) the number of manufactured homes that were repossessed during the
related due period;
(i) the number of manufactured homes that were repossessed but remain in
inventory as of the last day of the related due period;
(j) the Class M-1 distribution test;
(k) the Class M-2 distribution test;
(l) the Class B distribution test; and
(m) the weighted average contract rate of all outstanding contracts.
Information furnished for clauses (a) and (b) will be expressed as dollar
amounts for a Class M-2 certificate with a 1% percentage interest or per $1,000
denomination of Class M-2 certificate.
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In addition, within a reasonable period of time after the end of each
calendar year, the servicer will furnish a report to each Class M-2
certificateholder of record at any time during such calendar year as to the
aggregate of amounts reported pursuant to (a) and (b) above for such calendar
year.
The servicer will furnish to the trustee, and the trustee will include
with each distribution to a Class B-1 certificateholder, a statement with the
following information for the related remittance date.
(a) the amount of the distribution to holders of the Class B-1
certificates allocable to interest, separately identifying any prior
Class B-1 interest shortfall included in the distribution and any
remaining Class B-1 interest shortfall after giving effect to the
distribution, and any Class B-1 liquidation loss amount;
(b) the amount of the distribution to holders of the Class B-1
certificates allocable to principal, separately identifying the
aggregate amount of any principal prepayments included in the
distribution and any remaining Class B-1 principal shortfall after
giving effect to such distribution;
(c) the principal balance and adjusted principal balance, if different,
of the Class B-1 certificates after giving effect to the
distribution of principal on the remittance date;
(d) the Class B percentage for the remittance date and the following
remittance date;
(e) the pool scheduled principal balance of the contracts for the
remittance date;
(f) the pool factor, as described in clause (f) above;
(g) the number and aggregate principal balance of contracts delinquent
(1) 30-59 days and (2) 60 or more days;
(h) the number of manufactured homes that were repossessed during the
related due period;
(i) the number of manufactured homes that were repossessed but remain in
inventory as of the last day of the related due period;
(j) the Class M-1 distribution test;
(k) the Class M-2 distribution test;
(l) the Class B distribution test; and
(m) the weighted average contract rate of all outstanding contracts.
Information furnished for clauses (a) and (b) will be expressed as dollar
amounts for a Class B-1 certificate with a 1% percentage interest or per $1,000
denomination of Class B-1 certificate.
In addition, within a reasonable period of time after the end of each
calendar year, the servicer will furnish a report to each Class B-1
certificateholder of record at
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any time during that calendar year as to the aggregate of amounts reported for
(a) and (b) above for that calendar year.
The servicer will furnish to the trustee, and the trustee will include
with each distribution to a Class B-2 certificateholder, a statement with the
following information for the related remittance date.
(a) the amount of the distribution to holders of Class B-2 certificates
allocable to interest, separately identifying any prior Class B-2
interest shortfall included in the distribution and any remaining
Class B-2 interest shortfall after giving effect to such
distribution;
(b) the amount of the distribution to holders of Class B-2 certificates
allocable to principal, separately identifying the aggregate amount
of any principal prepayments included in the distribution and any
remaining Class B-2 principal shortfall after giving effect to the
distribution;
(c) the amount, if any, by which the Class B-2 formula distribution
amount exceeds the Class B-2 remaining amount available for the
remittance date;
(d) the Class B-2 principal balance after giving effect to the
distribution of principal on the remittance date;
(e) the Class B Percentage for the remittance date and the following
remittance date;
(f) the pool scheduled principal balance of the contracts for the
remittance date and the following remittance date;
(g) the pool factor as described in clause (f) above;
(h) any Class B-2 liquidation loss amount, for the remittance date;
(i) any guarantee payment, for the remittance date;
(j) the number and aggregate principal balance of contracts delinquent
(1) 30-59 days and (2) 60 or more days;
(k) the number of manufactured homes that were repossessed during the
related due period;
(l) the number of manufactured homes that were repossessed but remain in
inventory as of the last day of the related due period;
(m) the Class M-1 distribution test;
(n) the Class M-2 distribution test;
(o) the Class B distribution test; and
(p) the weighted average contract rate of all outstanding contracts.
Information furnished for clauses (a) through (c) will be expressed as
dollar amounts for a Class B-2 certificate with a 1% percentage interest or per
$1,000 denomination of Class B-2 certificate.
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In addition, within a reasonable period of time after the end of each
calendar year, the servicer will furnish a report to each Class B-2
certificateholder of record at any time during that calendar year as to the
aggregate amounts reported for (a) and (b) above for that calendar year.
Purchase Option; Auction Sale; Additional Principal Distributions
Beginning on the payment date when the pool scheduled principal balance
is less than 20% of the cut-off date pool principal balance, the holder of the
Class C certificates will have the right to repurchase or arrange for the
repurchase of all outstanding contracts at a price equal to the greater of:
(1) the sum of:
(a) 100% of the scheduled principal balance of each contract,
other than any contract as to which the related manufactured
home has been repossessed and whose fair market value is
included to clause below as of the final remittance date, and
(b) the fair market value of any acquired property, as determined
by Green Tree; and
(2) the aggregate fair market value, as determined by Green Tree of all
of the assets of the trust, plus, in each case, any unpaid interest
at the applicable Class A remittance rate on each class of Class A
certificates, any unpaid interest at the Class M-1 remittance rate
on the Class M-1 certificates, any unpaid interest at the Class M-2
remittance rate on the Class M-2 certificates, and any unpaid
interest at the related remittance rates on each class of Class B
certificates, as well as 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 manufactured home has
been repossessed.
This amount will be distributed on the remittance date occurring in the
month following the date of repurchase.
If the holder of the Class C certificates does not exercise this purchase
option on or before the following remittance date, then on the next remittance
date the trustee will begin an auction process to sell the contracts and the
other trust assets at the highest possible price, but the trustee cannot sell
the trust assets and liquidate the trust unless at least two bids are received
and the highest bid would be sufficient to pay the aggregate unpaid principal
balance of the certificates plus all accrued and unpaid interest. If the first
auction of the trust property is not successful because the highest bid
received was too low, then the trustee will conduct an auction of the contracts
every third month after that, until an acceptable bid is received for the trust
property. We cannot assure you that the first auction or any subsequent auction
will be successful. The holder of the Class C certificates may exercise its
purchase option on any remittance date after the first remittance date
described above, unless the trustee has accepted a qualifying bid for the trust
property.
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If the first auction of the trust property is not successful because the
highest bid received was too low, then on each remittance date after that the
Class M-1, Class M-2, Class B-1 and Class B-2 certificates will be entitled to
receive, pro rata based on the principal balance of those classes of
certificates, the "Additional Principal Distribution Amount" for that
remittance date, which will be equal to the remaining amount available after
paying all interest and principal then due on the certificates and payment of
the monthly servicing fee.
Termination of the Pooling and Servicing Agreement
The pooling and servicing agreement will terminate upon the last action
required to be taken by the trustee on the remittance date following the later
of:
(1) the purchase by the holder of the Class C certificates as described
above under "--Purchase Option; Auction Sale; Additional Principal
Distributions," or:
(2) the final payment or other liquidation of the last contract
remaining in the trust or the disposition of all property acquired
upon repossession of any manufactured home.
Upon presentation and surrender of the certificates, the trustee shall
cause to be distributed, in the following order of priority, to
certificateholders on the final remittance date in proportion to their
respective percentage interests an amount equal to:
(1)any unpaid interest on any class of Class A certificates,
(2)any unpaid interest on the Class M-1 certificates,
(3)any unpaid interest on the Class M-2 certificates,
(4)any unpaid interest on the Class B-1 certificates,
(5)the principal balance of each class of Class A certificates,
(6)the Class M-1 principal balance,
(7)the Class M-2 principal balance,
(8)the Class B-1 principal balance,
(9)any unpaid interest on the Class B-2 certificates,
(10)the Class B-2 principal balance,
(11)any unpaid interest on the Class B-3I certificates and,
(12) as to the Class C certificates, the amount which remains on deposit
in the certificate account, other than amounts retained to meet
claims, after application under clauses (1)-(11) above.
Amendment
The pooling and servicing agreement may be amended by agreement of the
trustee, the servicer, Green Tree and Conseco Securitizations at any time,
without the consent of the certificateholders, to correct manifest error, to
cure any ambiguity, to
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correct or supplement any provision which may be inconsistent with any other
provision, to add or amend any provision as required by S&P, Fitch or any other
nationally recognized statistical rating organization in order to improve or
maintain the rating of any class of Class A certificates, Class M certificates
or Class B certificates or to add other provisions not inconsistent with the
agreement upon receipt of an opinion of counsel to the servicer that the
amendment will not adversely affect in any material respect the interests of
any certificateholder. Neither we nor the servicer is obligated to take any
action to maintain or improve the rating given any class of Class A
certificates, Class M certificates or Class B certificates.
The pooling and servicing agreement may also be amended from time to time
by the trustee, the servicer, Green Tree and Conseco Securitizations, with the
consent of the holders of certificates of each class affected evidencing, as to
each class, percentage interests aggregating at least 51%, provided that no
amendment shall:
. reduce in any manner the amount of, or delay the timing of,
collections of payments on contracts or distributions which are
required to be made on any certificate without the consent of the
holder of each certificate affected,
. reduce these percentages of certificateholders required for any
amendment of the agreement, without the unanimous consent of the
certificateholders,
. adversely affect the status of either the Subsidiary REMIC or the
Master REMIC as a REMIC or the status of the certificates as regular
interests in the REMIC, or cause any tax to be imposed on the trust,
or
. modify in any manner the rights of the Class C certificateholders,
without the unanimous consent of the Class C certificateholders.
The pooling and servicing agreement may also be amended from time to
time, without the consent of any certificateholders, by Green Tree, the
trustee, the servicer and Conseco Securitizations to modify, eliminate or add
to the provisions of the agreement:
(1) to maintain the qualification of each of the Subsidiary REMIC and
the Master REMIC as a REMIC under the Internal Revenue Code or
avoid, or reduce the risk of, the imposition of any tax on the trust
under the Internal Revenue Code that would be a claim against the
trust assets, provided that:
(a) an opinion of counsel is delivered to trustee to the effect
that the action is necessary to maintain the qualification or
avoid a tax or reduce the risk of its imposition and:
(b) the amendment shall not materially adversely affect the
interests of any certificateholder or:
(2) to prevent the trust from entering into any prohibited transaction
as defined in Section 860F of the Internal Revenue Code.
The trustee is required under the agreement to furnish certificateholders
affected with notice promptly upon execution of any amendment to the agreement.
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The Trustee
[Trustee] is a national banking association, the corporate trust offices
of which are located at [address], Minnesota 55101.
The pooling and servicing agreement requires the trustee to maintain, at
its own expense, an office or agency in [St. Paul], Minnesota, where
certificates may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the trustee and the certificate registrar
and transfer agent for the certificates under the agreement may be served. On
the date of this prospectus supplement, the address of the trustee for these
purposes is [address], Minnesota 55101. The trustee will promptly give written
notice to Green Tree, the servicer, Conseco Securitizations and the
certificateholders of any change in address.
Registration of the Certificates
The certificates will initially be registered in the name of Cede & Co.,
the nominee of The Depository Trust Company. DTC is a limited-purpose trust
company organized under the laws of the State of New York, a member of the
Federal Reserve System, a clearing corporation within the meaning of the New
York Uniform Commercial Code and a clearing agency registered under the
provisions of Section 17A of the 1934 Act. DTC accepts securities for deposit
from its participating organizations and facilitates the clearance and
settlement of securities transactions between participants in the securities
through electronic book-entry changes in accounts of participants, eliminating
the need for physical movement of certificates. Participants include securities
brokers and dealers, banks and trust companies and clearing corporations and
may include other organizations. Indirect access to the DTC system is also
available to others such as banks, brokers, dealers and trust companies that
clear through or maintain a custodial relationship with a participant, either
directly or indirectly.
Certificate owners who are not participants but desire to purchase, sell
or otherwise transfer ownership of the offered certificates may do so only
through participants, unless and until definitive Class A, Class M and Class B
certificates, as defined in the paragraph below, are issued. In addition,
certificate owners will receive all distributions of principal of, and interest
on, the certificates from the trustee through DTC and participants. Certificate
owners will not receive or be entitled to receive certificates representing
their respective interests in the Class A, Class M and Class B certificates,
except under the limited circumstances described below.
Unless and until definitive Class A, Class M and Class B certificates are
issued, it is anticipated that the only certificateholder of the Class A, Class
M and Class B certificates will be Cede & Co., as nominee of DTC. Certificate
owners will not be certificateholders as that term is used in the pooling and
servicing agreement. Certificate owners are only permitted to exercise the
rights of certificateholders indirectly through participants and DTC.
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While the Class A, Class M and Class B certificates are outstanding,
except under the circumstances described in the paragraph below, under the
rules, regulations and procedures creating and affecting DTC and its
operations, DTC is required to make book-entry transfers among participants on
whose behalf it acts with respect to the Class A, Class M and Class B
certificates and is required to receive and transmit distributions of principal
of, and interest on, the Class A, Class M and Class B certificates.
Participants with whom certificate owners have accounts for the Class A, Class
M-1, Class M-2 and Class B certificates are similarly required to make book-
entry transfers and receive and transmit distributions on behalf of their
respective certificate owners. Accordingly, although certificate owners will
not possess certificates, the DTC rules provide a mechanism by which
certificate owners will receive distributions and will be able to transfer
their interests.
Class A, Class M and Class B certificates will be issued in registered
form to certificate owners, or their nominees, rather than to DTC. We refer to
these certificates as definitive Class A, Class M and Class B certificates only
if:
(1) DTC or Green Tree advises the trustee in writing that DTC is no
longer willing or able to discharge properly its responsibilities as
nominee and depository for the Class A, Class M and Class B
certificates and Green Tree or the trustee is unable to locate a
qualified successor, or
(2) We at our sole option advise the trustee in writing that we elect to
terminate the book-entry system through DTC.
Upon issuance of definitive Class A, Class M and Class B certificates to
certificate owners, these certificates will be transferable directly, and not
exclusively on a book-entry basis, and registered holders will deal directly
with the trustee for transfers, notices and distributions.
DTC has advised us and the trustee that, unless and until definitive
Class A, Class M and Class B certificates are issued, DTC will take any action
permitted to be taken by a certificateholder under the pooling and servicing
agreement only at the direction of one or more participants to whose DTC
accounts the Class A, Class M and Class B certificates are credited. DTC has
advised us that DTC will take action on any percentage interests of the Class
A, Class M and Class B certificates only at the direction of and on behalf of
the participants for these percentage interests of the Class A, Class M and
Class B certificates. DTC may take actions, at the direction of the related
participants, for some Class A, Class M and Class B certificates which conflict
with actions taken on other Class A, Class M and Class B certificates.
Issuance of the Class A, Class M and Class B certificates in book-entry
form rather than as physical certificates may adversely affect the liquidity of
the Class A, Class M and Class B certificates in the secondary market and the
ability of certificate owners to pledge them. In addition, since distributions
on the Class A, Class M and Class B certificates will be made by the trustee to
DTC and DTC will credit these distributions to the accounts of its
participants, which will further credit them to the accounts of indirect
participants or certificate owners, certificate owners may experience delays in
the receipt of these distributions.
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DTC management is aware that some computer applications, systems, and the
like for processing data that are dependent upon calendar dates, including
dates before, on, and after January 1, 2000, may encounter Year 2000 problems.
DTC has informed its participants and other members of the financial community
that it has developed and is implementing a program so that its systems, as
they relate to the timely payment of distributions, including principal and
income payments to securityholders, book-entry deliveries, and settlement of
trades within DTC continue to function appropriately. This program includes a
technical assessment and a remediation plan, each of which is complete.
Additionally, DTC's plan includes a testing phase, which is expected to be
completed within appropriate time frames.
However, DTC's ability to perform properly its services is also dependent
upon other parties, including issuers and their agents, as well as third party
vendors from whom DTC licenses software and hardware, and third party vendors
on whom DTC relies for information or the provision of services, including
telecommunication and electrical utility service providers. DTC has informed
its participants and the financial community that it is contacting, and will
continue to contact, third party vendors from whom DTC acquires services to:
. impress upon them the importance of their services being Year 2000
compliant; and
. determine the extent of their efforts for Year 2000 remediation and,
as appropriate, testing of their services.
In addition, DTC is in the process of developing contingency plans as it deems
appropriate.
According to DTC, this information about DTC has been provided to its
participants and the financial community for informational purposes only and is
not intended to serve as a representation, warranty, or contract modification
of any kind.
USE OF PROCEEDS
Conseco Securitizations will pay the net proceeds received from the sale
of the certificates, after paying its expenses, to Green Tree. Green Tree will
then use those proceeds for working capital and general corporate purposes,
including the purchase of the contracts, the costs of carrying the contracts
until the sale of the certificates and to pay other expenses for pooling the
contracts and issuing the certificates.
ERISA CONSIDERATIONS
The following information supplements, and if inconsistent supersedes,
the information in the prospectus under "ERISA Considerations."
The Employee Retirement Income Security Act of 1974, and section 4975 of
the Internal Revenue Code impose certain restrictions on employee benefit and
other plans that are subject to ERISA or to section 4975 of the Internal
Revenue Code ("Plans")
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and on persons who are fiduciaries with respect to those Plans. Employee
benefit plans that are governmental plans, as defined in section 3(32) of
ERISA, and some church plans, as defined in section 3(33) of ERISA, are not
subject to ERISA requirements. Accordingly, assets of those plans may be
invested in the Class A certificates without regard to the ERISA restrictions
described in this section and in the prospectus, subject to applicable
provisions of other federal and state laws. However, any such governmental or
church plan which is qualified under section 401(a) of the Internal Revenue
Code and exempt from taxation under section 501(a) of the Internal Revenue Code
is subject to the prohibited transaction rules provided in section 503 of the
Internal Revenue Code.
The U.S. Department of Labor has granted substantially identical
administrative exemptions to the underwriters as follows:
. [Underwriter] (Prohibited Transaction Exemption ; Exemption
Application No. , Fed. Reg. ( )), and
. [Underwriter] (Prohibited Transaction Exemption ; Exemption
Application No. , Fed. Reg. ( )).
We refer to all of the exemptions listed above collectively as the "Exemption."
They provide an exemption from certain of the prohibited transaction rules of
ERISA and the Internal Revenue Code with respect to the initial purchase, the
holding and the subsequent resale by Plans of certificates representing
interests in asset-backed pass-through trusts that consist of certain
receivables, loans and other obligations that meet the conditions and
requirements of the Exemption. The receivables covered by the Exemption include
manufactured housing installment sale contracts and installment loan agreements
such as the manufactured housing contracts. We believe that the Exemption will
apply to the acquisition, holding, and resale of the Class A certificates by a
Plan, provided that specified conditions are met, including those described in
the paragraph below.
Among the conditions which must be satisfied for the Exemption to apply
to the Class A certificates are the following:
(1) The acquisition of the Class A certificates by a Plan is on terms,
including the price for the Class A certificates, that are at least
as favorable to the Plan as they would be in an arm's-length
transaction with an unrelated party;
(2) The rights and interests evidenced by the Class A certificates
acquired by the Plan are not subordinated to the rights and
interests evidenced by other certificates of the trust;
(3) The Class A certificates acquired by the Plan have received a rating
at the time of the acquisition that is in one of the three highest
generic rating categories from any of Moody's, S&P, Fitch or Duff &
Phelps Credit Rating Co. (the "Exemption Rating Agencies");
(4) The trustee of the Plan is not an affiliate of Green Tree, the
underwriters, the trustee, the servicer, any obligor on the
contracts included in the trust constituting more than 5% of the
aggregate unamortized principal balance of
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the assets in the trust or any affiliate of these parties (the
"Restricted Group");
(5) The sum of all payments made to the underwriters in connection with
the distribution of the Class A certificates represents not more
than reasonable compensation for underwriting the Class A
certificates. The sum of all payments made to and retained by Green
Tree in the sale of the manufactured housing contracts to the trust
represents not more than the fair market value of those contracts.
The sum of all payments made to and retained by the servicer
represents not more than reasonable compensation for the servicer's
services under the pooling and servicing agreement and reimbursement
of the servicer's reasonable expenses; and
(6) The Plan investing in the Class A certificates is an accredited
investor as defined in Rule 501(a)(1) of Regulation D of the
Securities and Exchange Commission under the Securities Act of 1933.
On July 21, 1997, the DOL published in the Federal Register an amendment
to the Exemption, which extends exemptive relief to mortgage-backed and asset-
backed securities transactions using pre-funding accounts for trusts issuing
pass-through certificates. The amendment generally allows mortgage loans or
other secured receivables (the "Obligations") supporting payments to
certificateholders, and having a value equal to no more than 25% of the total
principal amount of the certificates being offered by the trust, to be
transferred to the trust within a 90-day or three-month pre-funding period
following the closing date, instead of requiring that all such Obligations be
either identified or transferred on or before the closing date. The relief is
available when the following conditions are met:
(1) The ratio of the amount allocated to the pre-funding account to the
total principal amount of the certificates being offered (the "Pre-
Funding Limit") must not exceed 25%.
(2) All Obligations transferred after the closing date (the "Additional
Obligations") must meet the same terms and conditions for
eligibility as the original Obligations used to create the trust,
which terms and conditions have been approved by an Exemption Rating
Agency.
(3) The transfer of the Additional Obligations to the trust during the
pre-funding period must not result in the certificates to be covered
by the Exemption receiving a lower credit rating from an Exemption
Rating Agency upon termination of the pre-funding period than the
rating that was obtained at the time of the initial issuance of the
certificates by the trust.
(4) Solely as a result of the use of the pre-funding period, the
weighted average annual percentage interest rate for all of the
Obligations in the trust at the end of the pre-funding period must
not be more than 100 basis points lower than the average interest
rate for the Obligations transferred to the trust on the closing
date.
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(5) In order to insure that the characteristics of the Additional
Obligations are substantially similar to the original Obligations
which were transferred to the trust:
. the characteristics of the Additional Obligations must be
monitored by an insurer or other credit support provider that is
independent of the depositor; or
. an independent accountant retained by the depositor must provide
the depositor with a letter (with copies provided to each
Exemption Rating Agency rating the certificates, the underwriters
and the trustee) stating whether or not the characteristics of
the Additional Obligations conform to the characteristics
described in the related prospectus or prospectus supplement
and/or pooling and servicing agreement. In preparing this letter,
the independent accountant must use the same type of procedures
as were applicable to the Obligations transferred to the trust as
of the closing date.
(6) The period of pre-funding must end no later than three months or 90
days after the closing date or earlier in certain circumstances if
the pre-funding account falls below the minimum level specified in
the pooling and servicing agreement or an event of default occurs.
(7) Amounts transferred to any pre-funding account and/or capitalized
interest account used in connection with the pre-funding may be
invested only in cash or in investments which are permitted by
Exemption Rating Agencies rating the certificates and must be
either:
. direct obligations of, or obligations fully guaranteed as to
timely payment of principal and interest by, the United States or
any agency or instrumentality, provided that these obligations
are backed by the full faith and credit of the United States, or
. have been rated, or the obligor has been rated, in one of the
three highest generic rating categories by one of the Exemption
Rating Agencies.
(8) The related prospectus or prospectus supplement must describe:
. any pre-funding account and/or capitalized interest account used
in connection with a pre-funding account;
. the duration of the period of pre-funding;
. the percentage and/or dollar amount of the Pre-Funding Limit for
the trust; and
. that the amounts remaining in the pre-funding account at the end
of the pre-funding period will be remitted to certificateholders
as repayments of principal.
(9) The related pooling and servicing agreement must describe these
permitted investments for the pre-funding account and/or capitalized
interest account
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and, if not disclosed in the related prospectus or prospectus
supplement, the terms and conditions for eligibility of Additional
Obligations.
(10) The trustee, or any agent with which the trustee contracts to
provide trust services, must be a substantial financial institution
or trust company experienced in trust activities and familiar with
its duties, responsibilities and liabilities as a fiduciary under
ERISA. The trustee, as legal owner of the trust, must enforce all
the rights created in favor of certificateholders of the trust,
including the employee benefit plans subject to ERISA.
Moreover, the Exemption would provide relief from certain self-
dealing/conflict of interest prohibited transactions only if, among other
requirements:
. in the case of the acquisition of Class A certificates in connection
with the initial issuance, at least 50% of the Class A certificates
are acquired by persons independent of the Restricted Group, as
defined in the paragraph below;
. the Plan's investment in Class A certificates does not exceed 25% of
all of the Class A certificates outstanding at the time of the
acquisition; and
. immediately after the acquisition, no more than 25% of the assets of
the Plan are invested in certificates representing an interest in one
or more trusts containing assets sold or serviced by the same entity.
The Exemption does not apply to Plans sponsored by any member of the
Restricted Group.
We believe that the Exemption will apply to the acquisition and holding
of Class A certificates sold by the underwriters and by Plans and that all
conditions of the Exemption other than those within the control of the
investors have been met. In addition, as of the date of this prospectus
supplement, no obligor on the contracts included in the trust constitutes more
than 5% of the aggregate unamortized principal balance of the assets of the
trust. Any Plan fiduciary who proposes to cause a Plan to purchase Class A
certificates should consult with its own counsel about the potential
consequences under ERISA and the Internal Revenue Code of the Plan's
acquisition and ownership of the Class A certificates. Assets of a Plan or
individual retirement account should not be invested in the Class A
certificates unless it is clear that the assets of the trust will not be Plan
assets or unless it is clear that the Exemption or a prohibited transaction
class exemption will apply and exempt all potential prohibited transactions.
See "ERISA Considerations" in the prospectus.
Insurance companies contemplating the investment of general account
assets in the certificates should consult with their legal advisors regarding
the applicability of PTCE 95-60 and Section 401(c) of ERISA, as described
under "ERISA Considerations" in the prospectus.
No transfer of Class M or Class B certificates will be permitted to be
made to a Plan or to any person acquiring the certificates on behalf of or
with assets of a Plan, unless the transferee, at its expense, delivers to the
trustee and Green Tree an opinion of counsel (in form satisfactory to the
trustee and Green Tree) to the effect that the
S-77
<PAGE>
purchase or holding of a Class M or Class B certificate by the Plan will not
result in the assets of the trust being deemed to be Plan assets and subject to
the prohibited transaction provisions of ERISA and the Internal Revenue Code
and will not subject the trustee, Green Tree or the servicer to any obligation
or liability in addition to those undertaken in the pooling and servicing
agreement. Alternatively, an insurance company general account may, at its
expense, deliver to the trustee and Green Tree a representation that the
transfer and holding of such a certificate are exempt under Section I and
Section III of PTCE 95-60. Unless such opinion or representation is delivered,
each person acquiring a Class M or Class B certificate will be deemed to
represent to the trustee, Green Tree and the servicer that that person is not a
Plan, is not acting on behalf of a Plan, a qualified retirement Plan or a tax-
favored Plan, and is not investing assets of the Plan subject to ERISA or to
Section 4975 of the Internal Revenue Code.
LEGAL INVESTMENT CONSIDERATIONS
After the pre-funding period has ended, the Class A certificates and the
Class M-1 certificates will constitute mortgage related securities under SMMEA
and will be legal investments for some types of institutional investors as
provided in SMMEA. Because the Class M-2 certificates and the Class B
certificates will not be rated in one of the two highest rating categories by
[S&P or Fitch], the Class M-2 certificates and the Class B certificates will
not constitute mortgage related securities for purposes of SMMEA. Accordingly,
many institutions with legal authority to invest in more highly rated
securities based on first mortgage loans may not be legally authorized to
invest in the Class M-2 certificates and the Class B certificates.
We make no representation as to the proper characterization of the Class
M-2 certificates and the Class B certificates for legal investment or financial
institution regulatory purposes, or as to the ability of particular investors
to purchase Class M-2 certificates or Class B certificates under applicable
legal investment restrictions. The uncertainties described in the paragraph
above, and any unfavorable future determinations concerning legal investment or
financial institution regulatory characteristics of the Class M-2 certificates
and the Class B certificates, may adversely affect the liquidity of the Class
M-2 certificates and the Class B certificates.
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<PAGE>
UNDERWRITING
The underwriters named below have severally agreed, subject to the terms
and conditions of the underwriting agreement, to purchase from Conseco
Securitizations the respective principal amounts of the certificates listed
opposite their names below.
<TABLE>
<CAPTION>
Principal Principal Principal Principal
Amount of Amount of Amount of Amount of
Class A-1 Class A-2 Class A-3 Class A-4
Underwriter Certificates Certificates Certificates Certificates
----------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
[Underwriter]........... $ $ $ $
[Underwriter]...........
[Underwriter]...........
------------ ------------ ------------ ------------
Totals............... $ $ $ $
============ ============ ============ ============
Principal Principal Principal Principal Principal
Amount of Amount of Amount of Amount of Amount of
Class A-5 Class A-6 Class A-7 Class A-8 Class A-9
Underwriter Certificates Certificates Certificates Certificates Certificates
----------- ------------ ------------ ------------ ------------ ------------
[Underwriter]........... $ $ $ $ $
[Underwriter]...........
[Underwriter]...........
------------ ------------ ------------ ------------ ------------
Totals............... $ $ $ $ $
============ ============ ============ ============ ============
<CAPTION>
Principal Principal Principal
Amount of Amount of Amount of
Class M-1 Class M-2 Class B-1
Underwriter Certificates Certificates Certificates
----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
[Underwriter]........... $ $ $
[Underwriter]...........
[Underwriter]...........
------------ ------------ ------------
Totals............... $ $ $
============ ============ ============
</TABLE>
In the underwriting agreement, the underwriters have agreed, subject to
the terms and conditions in the agreement, to purchase all of the certificates
if any certificates are purchased. If an underwriter defaults, the underwriting
agreement provides that, in some circumstances, the underwriting agreement may
be terminated.
Conseco Securitizations has been advised by the underwriters that they
propose initially to offer the certificates to the public at the offering
prices listed on the cover page of this prospectus supplement and to dealers at
the price less a concession not in excess of the amounts listed in the table
below, expressed as a percentage of the related certificate principal balance.
The certificates are offered subject to prior sale, when, as and if issued by
the trust and accepted by the underwriters and subject to their right to reject
orders in whole or in part. The underwriters will purchase the certificates at
the discount specified below. The underwriters may allow and dealers may
reallow a discount not more than the amounts listed in the table below to other
dealers. We estimate that we will incur expenses of $515,000 in connection with
this offering.
S-79
<PAGE>
<TABLE>
<CAPTION>
Underwriting Selling Reallowance
Class Discount Concession Discount
----- ------------ ---------- -----------
<S> <C> <C> <C>
A-1.................................... % % %
A-2.................................... % % %
A-3.................................... % % %
A-4.................................... % % %
A-5.................................... % % %
A-6.................................... % % %
A-7.................................... % % %
A-8.................................... % % %
A-9.................................... % % %
M-1.................................... % % %
M-2.................................... % % %
B-1.................................... % % %
</TABLE>
Until the distribution of the certificates is completed, rules of the SEC
may limit the ability of the underwriters and selling group members to bid for
and purchase the certificates. As an exception to these rules, the underwriters
are permitted to engage in transactions that stabilize the price of the
certificates. These transactions consist of bids or purchases for the purpose
of pegging, fixing or maintaining the price of the certificates.
In general, purchases of a security for the purpose of stabilization or
to reduce a short position could cause the price of the security to be higher
than it might be without these purchases.
Neither Green Tree, Conseco Securitizations nor any of the underwriters
makes any representation or prediction as to the direction or magnitude of any
effect that the transactions described above may have on the prices of the
certificates. In addition, neither Green Tree, Conseco Securitizations nor any
of the underwriters makes any representation that the underwriters will engage
in these transactions or that these transactions, once commenced, will not be
discontinued without notice.
The underwriting agreement provides that Green Tree and Conseco
Securitizations will indemnify the underwriters against liabilities, including
liabilities under the Securities Act of 1933, or contribute to payments the
underwriters may be required to make.
Upon receipt of a request by an investor who has received an electronic
prospectus supplement and prospectus from an underwriter or a request by the
investor's representative within the period during which there is an obligation
to deliver a prospectus supplement and prospectus, we or the underwriters will
promptly deliver, or cause to be delivered, without charge, a paper copy of the
prospectus supplement and prospectus.
Immediately prior to their sale to the trust, the contracts were subject
to financing provided by affiliates of some of the underwriters. Green Tree
will apply a portion of the proceeds it receives from the sale of the contracts
to the trust to repay that financing.
S-80
<PAGE>
LEGAL MATTERS
The validity of the certificates will be passed upon for Green Tree by
[Counsel to Green Tree], Minnesota, and for the underwriters by Brown & Wood
LLP, New York, New York. The material federal income tax consequences of the
certificates will be passed upon for Green Tree and Conseco Securitizations by
[Counsel to Green Tree].
S-81
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information contained in this prospectus is not complete and may be +
+changed. We may not sell these securities until the registration statement +
+filed with the Securities and Exchange Commission is effective. This +
+prospectus is not an offer to sell these securities, and it is not soliciting +
+an offer to buy these securities in any state where the offer or sale is not +
+permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS
Green Tree Financial Corporation, Servicer
Conseco Finance Securitizations Corp., Seller
Manufactured Housing Contract Pass-Through Certificates
We are offering certificates for manufactured housing contracts under this
prospectus and a prospectus supplement. Conseco Finance Securitizations Corp.
will form a trust for each series, and the trust will issue the certificates of
that series. The certificates of any series may comprise several different
classes. A trust may also issue one or more other interests in the trust that
will not be offered under this prospectus.
The right of each class of certificates within a series to receive payments
may be senior or subordinate to the rights of one or more of the other classes
of certificates. In addition, a series of certificates may include one or more
classes which on the one hand are subordinated to one or more classes of
certificates, while on the other hand are senior to one or more classes of
certificates. The rate of principal and interest payment on the certificates of
any class will depend on the priority of payment of that class and the rate and
timing of payments of the related manufactured housing contracts.
-----------
The certificates will represent obligations of the related trust and will not
represent any interest in or obligation of Green Tree Financial Corporation,
Conseco Finance Securitizations Corp. or any of their affiliates, except as
specified in the prospectus supplement.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.
-----------
This prospectus may not be used to consummate sales of any certificates
unless accompanied by a prospectus supplement for that series.
Prospectus dated , 1999
<PAGE>
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS
PROSPECTUS AND THE ACCOMPANYING PROSPECTUS SUPPLEMENT
We tell you about the certificates in two separate documents that
progressively provide more detail: (1) this prospectus, which provides general
information, some of which may not apply to a particular series of
certificates, including your series; and (2) the prospectus supplement for the
particular terms of your series of certificates.
If the terms of your certificate vary between this prospectus and the
prospectus supplement, you should rely on the information in your prospectus
supplement.
You should rely only on the information contained in this document or
information to which we have referred you. We have not authorized anyone to
provide you with information that is different. This document may only be used
where it is legal to sell these securities.
2
<PAGE>
To understand all of the terms of the certificates, read this entire
prospectus and the accompanying prospectus supplement. We have also defined
terms in the "Glossary" section at the back of this prospectus.
THE TRUST
General
Certificates evidencing interests in pools of manufactured housing
contracts may be issued from time to time in series under a separate pooling
and servicing agreement among Conseco Securitizations, as seller, Green Tree,
as servicer, and the trustee.
The certificates of each series may be issued in one or more classes or
subclasses as and on the terms specified in the related prospectus supplement,
each of which will evidence the interest specified in the related prospectus
supplement in the contract pool and other property held in a trust for the
benefit of the certificateholders. Each trust will include:
. a contract pool,
. the amounts held from time to time in a trust certificate account
maintained by the trustee under the pooling and servicing agreement,
. proceeds from hazard insurance on individual manufactured homes and
manufactured homes, or the related real estate in the case of land-and-
home contracts, acquired by repossession,
. any letter of credit, guarantee, surety bond, insurance policy, cash
reserve fund or other credit enhancement securing payment of all or
part of a series of certificates, and
. other property as specified in the related prospectus supplement.
Each certificate will evidence the interest specified in the related
prospectus supplement in one trust, containing one contract pool comprised of
contracts having the aggregate principal balance as of the close of business on
the cut-off date specified in the related prospectus supplement. Holders of
certificates of a series will have interests only in that contract pool and
will have no interest in the contract pool created for any other series of
certificates. If specified in the related prospectus supplement, the trust may
include a pre-funding account which would be used to purchase subsequent
contracts from Conseco Securitizations during the pre-funding period specified
in the related prospectus supplement. The related prospectus supplement will
specify the conditions that must be satisfied before any transfer of subsequent
contracts, including the requisite characteristics of the subsequent contracts.
Except as otherwise specified in the related prospectus supplement, we will
have originated all of the contracts in the ordinary course of our business.
From time to time, we purchase portfolios of manufactured housing contracts
originated by other lenders. We will specify in the related prospectus
supplement when the contract pool contains contracts
3
<PAGE>
originated by other lenders. The following is a brief description of the
contracts expected to be included in the trust. Specific information respecting
the contracts will be provided in the prospectus supplement and, if not
contained in the related prospectus supplement, in a report on Form 8-K to be
filed with the SEC within fifteen days after the initial issuance of the
certificates. A copy of the pooling and servicing agreement for each series of
certificates will be attached to the Form 8-K and will be available for
inspection at the corporate trust office of the trustee specified in the
related prospectus supplement. A schedule of the contracts relating to that
series will be attached to the pooling and servicing agreement delivered to the
trustee upon delivery of the certificates.
When we use terms in this prospectus such as contract pool, trust, pooling
and servicing agreement or remittance rate, those terms respectively apply,
unless the context otherwise indicates, to one specific contract pool, trust,
each pooling and servicing agreement and the remittance rate applicable to the
related series of certificates.
The Contract Pools
Except as otherwise specified in the related prospectus supplement, each
contract pool for a series of certificates will consist of manufactured housing
installment sales contracts and installment loan agreements we originated on an
individual basis in the ordinary course of business. The contracts may be
conventional manufactured housing contracts or contracts insured by the Federal
Housing Administration or partially guaranteed by the Veterans Administration.
Each contract will be secured by a manufactured home, as defined in the next
paragraph below, or by a mortgage or deed of trust relating to the real estate
to which the manufactured home is deemed permanently affixed, which we refer to
as a land-and-home contract. Except as otherwise specified in the related
prospectus supplement, the contracts will be fully amortizing and will bear
interest at a fixed or variable annual percentage contract rate or at a
contract rate which steps up on a particular date or dates.
We will represent that the manufactured homes securing the contracts
consist of manufactured homes within the meaning of 42 United States Code,
Section 5402(6), which defines a "manufactured home" as "a structure,
transportable in one or more sections, which in the traveling mode, is eight
body feet or more in width or forty body feet or more in length, or, when
erected on site, is three hundred twenty or more square feet, and which is
built on a permanent chassis designed to be used as a dwelling with or without
a permanent foundation when connected to the required utilities, and includes
the plumbing, heating, air-conditioning, and electrical systems contained
therein; except that such term shall include any structure which meets all the
requirements of this paragraph except the size requirements and with respect to
which the manufacturer voluntarily files a certification required by the
Secretary [of Housing and Urban Development] and complies with the standards
established under this chapter."
For each series of certificates, Green Tree will transfer to Conseco
Securitizations, and Conseco Securitizations will then assign the contracts
constituting the contract pool to the trustee named in the related prospectus
supplement. We, as servicer, will service the contracts under the pooling and
servicing agreement. See "Description of the Certificates-- Servicing." Unless
otherwise specified in the related prospectus supplement, the contract
4
<PAGE>
documents, other than the documents for land-and-home contracts, will be held
by the servicer as custodian for the trustee. The documents relating to any
land-and-home contracts will be held for the benefit of the trustee by a
custodian appointed under a custodial agreement between the trustee and the
custodian.
Each contract pool will be composed of contracts with the annual fixed or
variable weighted average contractual rates of interest or step-up rates
specified in the prospectus supplement. Unless we specify otherwise in the
related prospectus supplement, the monthly payments for contracts bearing
interest at a step-up rate will increase on the dates on which the contract
rates are stepped up. Unless we specify otherwise in the related prospectus
supplement, each registered holder of a certificate will be entitled to receive
periodic distributions, which will be monthly unless we specify otherwise in
the related prospectus supplement, of all or a portion of principal on the
underlying contracts or interest on the principal balance of the certificate at
the remittance rate, or both.
A contract pool may include staged-funding contracts, under which we make
multiple disbursements to enable the obligor to finance both the purchase of a
manufactured home and the acquisition or improvement of the related real
estate. For example, we might make disbursements to enable the obligor to
purchase the real estate on which the manufactured home is to be located, then
to make improvements on the real estate, such as a driveway, well and septic
system, then to purchase and deliver the manufactured home, and then to make
final site improvements. Before the final disbursement, the obligor pays only
interest on the disbursed amount of the loan; following the final disbursement,
the obligor begins making fully amortizing payments of principal and interest.
We will represent and warrant in the related pooling and servicing agreement
that all staged-funding contracts included in a contract pool will have been
fully disbursed within 90 days after the related closing date, and we will be
obligated to repurchase on the next remittance date any staged-funding contract
that has not been fully disbursed by that date.
The related prospectus supplement will specify for the contracts contained
in the related contract pool, the range of the dates of origination of the
contracts; the range of the contract rates and the weighted average contract
rate; the loan-to-value ratios; the minimum and maximum outstanding principal
balances as of the cut-off date and the average outstanding principal balance
as of the cut-off date; the aggregate principal balances of the contracts
included in the contract pool as of the cut-off date; the weighted average and
range of scheduled terms to maturity as of origination and as of the cut-off
date; the original maturities of the contracts and the last maturity date of
any contract; and the locations of the obligors on the contracts. If the trust
includes a pre-funding account, the related prospectus supplement will specify
the conditions that must be satisfied before any transfer of subsequent
contracts, including the requisite characteristics of the subsequent contracts.
Conveyance of Contracts
Green Tree will transfer to Conseco Securitizations, and Conseco
Securitizations will then transfer to the trustee all our right, title and
interest in the contracts, including all security interests and any related
mortgages or deeds of trust, all principal and interest
5
<PAGE>
received on the contracts, except receipts of principal and interest due on the
contracts before the cut-off date, all rights under hazard insurance policies
on the related manufactured homes, all documents contained in the contract
files and all proceeds derived from any of the foregoing. On behalf of the
trust, as the issuer of the related series of certificates, the trustee,
concurrently with the conveyance, will execute and deliver the certificates to
the order of Conseco Securitizations. The contracts will be as described on a
list attached to the pooling and servicing agreement. This list will include
the amount of monthly payments due on each contract as of the date of issuance
of the certificates, the contract rate on each contract and the maturity date
of each contract. This list will be available for inspection by any
certificateholder at the principal executive office of the servicer. Before the
conveyance of the contracts to the trust, Green Tree's internal audit
department will complete a review of all of the contract files, including the
certificates of title to, or other evidence of a perfected security interest
in, the manufactured homes, confirming the accuracy of the list of contracts
delivered to the trustee. We will repurchase or replace any contract discovered
not to agree with that list in a manner that is materially adverse to the
interests of the certificateholders, or, if the discrepancy relates to the
unpaid principal balance of a contract, we may deposit cash in the separate
certificate account maintained at an eligible institution in the name of the
trustee in an amount sufficient to offset the discrepancy. If the trust
includes a pre-funding account, the related prospectus supplement will specify
the conditions that must be satisfied before any transfer of subsequent
contracts, including the requisite characteristics of the subsequent contracts.
The pooling and servicing agreement will designate us as custodian to
maintain possession, as the trustee's agent, of the contracts and any other
documents related to the manufactured homes, except the land-and-home contracts
and related documents. To facilitate servicing and to save administrative
costs, the documents will not be physically segregated from other similar
documents that are in our possession. Uniform Commercial Code financing
statements will be filed in Minnesota reflecting the sale and assignment of the
contracts by Green Tree to Conseco Securitizations, and by Conseco
Securitizations to the trustee, and our accounting records and computer systems
will also reflect the sale and assignment. In addition, the contracts will be
stamped to reflect their assignment to the trustee. However, if through fraud,
negligence or otherwise, a subsequent purchaser were able to take physical
possession of the contracts without knowledge of the assignment, the trustee's
interest in the contracts could be defeated. See "Risk Factors--Some contracts
may be unenforceable" in the prospectus supplement. The pooling and servicing
agreement will designate the trustee or another independent custodian, as the
trustee's agent, to maintain possession of the documents relating to all land-
and-home contracts.
Except as otherwise specified in the related prospectus supplement, we will
make warranties in the pooling and servicing agreement for each contract as of
closing date, including that:
. as of the cut-off date, or the date of origination, if later, the most
recent scheduled payment was made or was not delinquent more than 59
days;
6
<PAGE>
. no provision of a contract has been waived, altered or modified in any
respect, except by instruments or documents contained in the contract
file or the land-and-home contract file;
. each contract is a legal, valid and binding obligation of the obligor
and is enforceable in accordance with its terms, except as may be
limited by laws affecting creditors' rights generally;
. no contract is subject to any right of rescission, set-off,
counterclaim or defense;
. each contract is covered by hazard insurance described under "--
Servicing--Hazard Insurance;"
. each contract has been originated by a manufactured housing dealer or
Green Tree in the ordinary course of the dealer's or Green Tree's
business and, if originated by a manufactured housing dealer, was
purchased by Green Tree in the ordinary course of business;
. no contract was originated in or is subject to the laws of any
jurisdiction whose laws would make the transfer of the contract or an
interest in the contract to the trustee under the pooling and servicing
agreement or under the certificates unlawful;
. each contract complies with all requirements of law;
. no contract has been satisfied, subordinated in whole or in part or
rescinded and the manufactured home securing the contract has not been
released from the lien of the contract in whole or in part;
. each contract creates a valid and enforceable first priority security
interest in favor of Green Tree in the manufactured home covered by the
contract and, each land-and-home contract, the lien created has been
recorded or will be recorded within six months, and the security
interest or lien has been assigned by Green Tree to the trustee;
. all parties to each contract had capacity to execute the contract;
. no contract has been sold, assigned or pledged to any other person and
before the transfer of the contracts by Green Tree to Conseco
Securitizations, Green Tree had good and marketable title to each
contract free and clear of any encumbrance, equity, loan, pledge,
charge, claim or security interest, and was the sole owner and had full
right to transfer the contract to Conseco Securitizations;
. as of the cut-off date, or the date of origination, if later, there was
no default, breach, violation or event permitting acceleration under
any contract except for payment delinquencies permitted by the first
clause above, no event which with notice and the expiration of any
grace or cure period would constitute a default, breach, violation or
event permitting acceleration under the contract, and we have not
waived any of the foregoing;
. as of the closing date there were, to the best of our knowledge, no
liens or claims which have been filed for work, labor or materials
affecting a manufactured home or any related mortgaged property
securing a contract, which are or may be liens prior or equal to the
lien of the contract;
7
<PAGE>
. each contract other than a step-up rate contract is a fully-amortizing
loan with a fixed contract rate and provides for level payments over
the term of the contract;
. each contract contains customary and enforceable provisions which
render the rights and remedies of the holder adequate for realization
against the collateral of the benefits of the security;
. the description of each contract appearing in the list delivered to the
trustee is true and correct;
. there is only one original of each contract;
. except as specified in the related prospectus supplement, none of the
contracts had a loan-to-value ratio at origination greater than 95%
and, if the related manufactured home was new at the time the contract
was originated, the original principal balance of the contract did not
exceed 130% of the manufacturer's invoice price plus 100% of taxes and
license fees, 130% of freight charges, 100% of the dealer's cost of
dealer-installed equipment (not to exceed 25% of the amount financed in
all states except California; not to exceed 70% of the manufacturer's
invoice price in California if required to meet park requirements) and
up to $1,500 of set-up costs per module;
. at the time of origination of each contract the obligor was the primary
resident of the related manufactured home;
. other than the land-and-home contracts, the related manufactured home
is not considered or classified as part of the real estate on which it
is located under the laws of the jurisdiction in which it is located,
and as of the closing date the manufactured home was, to the best of
our knowledge, free of damage and in good repair;
. the related manufactured home is a manufactured home within the meaning
of 42 United States Code, Section 5402(6) and each manufactured housing
dealer from whom we purchased a contract was approved by us in
accordance with the requirements of the Secretary of Housing and Urban
Development;
. each contract is a qualified mortgage under Section 860G(a)(3) of the
Internal Revenue Code and each manufactured home is manufactured
housing within the meaning of Section 25(e)(10) of the Internal Revenue
Code; and
. if a contract is an FHA/VA contract, the contract has been serviced in
accordance with FHA/VA regulations, the insurance or guarantee of the
contract under the FHA/VA regulations and related laws is in full force
and effect, and no event has occurred which, with or without notice or
lapse of time or both, would impair the insurance or guarantee.
Under the terms of the pooling and servicing agreement, and subject to the
conditions specified in the preceding paragraph and to our option to effect a
substitution as described in the next paragraph, we will be obligated to
repurchase for the Repurchase Price (as defined below in this paragraph) any
contract on the first business day after the first Determination
8
<PAGE>
Date (as defined below under "--Distributions on Certificates") which is more
than 90 days after we become aware, or should have become aware, or our receipt
of written notice from the trustee or the servicer, of a breach of any of our
representations or warranties in the pooling and servicing agreement that
materially adversely affects the trust's interest in any contract if the breach
has not been cured. (Section 3.05.) The Repurchase Price for any contract will
be the remaining principal amount outstanding on the contract on the date of
repurchase plus accrued and unpaid interest at its contract rate to the date of
the repurchase. This repurchase obligation constitutes the sole remedy
available to the trust and the certificateholders for a breach of a warranty
under the pooling and servicing agreement regarding contracts, but not for any
other breach by us of our obligations under the pooling and servicing
agreement. If a prohibited transaction tax under the REMIC provisions of the
Internal Revenue Code is incurred for the repurchase, distributions otherwise
payable to residual certificateholders will be applied to pay the tax. We will
be required to pay the amount of the tax that is not funded out of the
distributions.
In lieu of purchasing a contract as specified in the preceding paragraph,
during the two-year period following the closing date, we may, at our option,
substitute, for the contract that it is otherwise obligated to repurchase, a
substitute contract that satisfies, as of the date of its substitution, the
representations and warranties specified in Article III of the pooling and
servicing agreement, has a scheduled principal balance that is not greater than
the scheduled principal balance of the replaced contract, has a contract rate
that is at least equal to the contract rate of the replaced contract and has a
remaining term to scheduled maturity that is not greater than the remaining
term to scheduled maturity of the replaced contract. We will be required to
deposit in the certificate account cash in the amount by which the scheduled
principal balance of the replaced contract exceeds the scheduled principal
balance of the contract being substituted. This deposit will be deemed to be a
partial principal prepayment.
Payments on Contracts
Each certificate account will be a trust account established by the
servicer as to each series of certificates in the name of the trustee:
(1) with a depository institution, the long-term unsecured debt
obligations of which at the time of any deposit are rated within the
two highest rating categories or the other rating category as will not
adversely affect the ratings assigned to the certificates by each
rating agency rating the certificates of that series; or
(2) with the trust department of a national bank; or
(3) in an account or accounts the deposits in which are fully insured by
the FDIC; or
(4) in an account or accounts the deposits in which are insured by the
FDIC to the limits established by the FDIC, the uninsured deposits in
which are otherwise secured so that, as evidenced by an opinion of
counsel, the certificateholders have a claim for the funds in the
certificate account or a perfected first priority security
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<PAGE>
interest against any collateral securing the funds that is superior to
the claims of any other depositors or general creditors of the
depository institution with which the certificate account is
maintained; or
(5) otherwise acceptable to the rating agency without reduction or
withdrawal of the rating assigned to the relevant certificates.
The collateral eligible to secure amounts in the certificate account is
limited to United States government securities and other high-quality
investments specified in the applicable pooling and servicing agreement
("Eligible Investments"). A certificate account may be maintained as an
interest bearing account, or the funds held in the account may be invested
pending each succeeding remittance date in Eligible Investments.
Unless we specify otherwise in the related prospectus supplement, the
servicer will deposit in the certificate account on a daily basis the
following payments and collections received or made by it subsequent to the
cut-off date, including scheduled payments of principal and interest due after
the cut-off date but received by the servicer on or before the cut-off date:
. all obligor payments on account of principal, including principal
prepayments, on the contracts;
. all obligor payments on account of interest on the contracts;
. all amounts received and retained for the liquidation of defaulted
contracts, net of liquidation expenses ("Net Liquidation Proceeds");
. all proceeds received under any hazard or other insurance policy
covering any contract, other than proceeds to be applied to the
restoration or repair of the manufactured home or released to the
obligor;
. any Advances made as described under "Advances" and other amounts
required under the pooling and servicing agreement to be deposited in
the certificate account;
. all amounts received from any credit enhancement provided on a series
of certificates; and
. all proceeds of any contract or property acquired, that we or the
servicer repurchase, as described above or under "--Termination of the
Agreement" below.
USE OF PROCEEDS
Unless we specify otherwise in the applicable prospectus supplement,
substantially all of the net proceeds to be received from the sale of each
series of certificates will be paid by Conseco Securitizations to Green Tree
as payment for the contracts, and those proceeds will be used by Green Tree
for general corporate purposes, including the purchase of the contracts, costs
of carrying the contracts until sale of the related certificates and to pay
other expenses connected with pooling the contracts and issuing the
certificates.
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GREEN TREE FINANCIAL CORPORATION
General
Green Tree is a Delaware corporation which, as of December 31, 1998, had
stockholders' equity of approximately $2.2 billion. We purchase, pool, sell and
service conditional sales contracts for manufactured housing throughout the
nation. We are the largest servicer of manufactured housing government insured
or guaranteed contracts and of conventional manufactured housing contracts in
the United States. We act as servicer of the contracts. Servicing functions are
performed through Green Tree Financial Servicing Corporation, our wholly owned
subsidiary. Through our principal offices in Saint Paul, Minnesota and service
centers throughout the United States, we serve all 50 states. Our principal
executive offices are located at 1100 Landmark Towers, 345 St. Peter Street,
St. Paul, Minnesota 55102-1639 (telephone (651) 293-3400). Our annual report on
Form 10-K for the year ended December 31, 1998, and, when available, subsequent
quarterly and annual reports are available from us upon written request.
Effective November 1, 1999, Green Tree will change its name to Conseco Finance
Corp.
The SEC allows us to incorporate by reference some of the information we
file with it, which means that we can disclose important information to you by
referring you to those documents. The information that we incorporate by
reference is considered to be part of this prospectus, and later information
that we file with the SEC will automatically update and supersede this
information. We are incorporating by reference the following documents into
this prospectus and the prospectus supplement:
. Green Tree Financial Corporation's annual report on Form 10-K for
the year ended December 31, 1998.
. Green Tree Financial Corporation's quarterly report on Form 10-Q
for the period ended [June 30], 1999.
All documents that we file under Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 after the date of this prospectus and before
the termination of the offering of the certificates issued by that trust will
be incorporated by reference into this prospectus.
We will provide you, upon your written or oral request, a copy of any or
all of the documents incorporated by reference in this prospectus and exhibits
to those documents. Please direct your requests for copies to John Dolphin,
Director of Investor Relations, 11825 Pennsylvania Street, Carmel, Indiana
46032, telephone number (317) 817-6100.
Federal securities law requires the filing of information with the SEC,
including annual, quarterly and special reports (including those referred to
above as being incorporated by reference) and other information. You can read
and copy these documents at the public reference facility maintained by the SEC
at Judiciary Plaza, 450 Fifth Street, N.W., Room
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1024, Washington, D.C. 20549. You can also read and copy these reports and
other information at the following regional offices of the SEC:
New York Regional Office Chicago Regional Office
Seven World Trade Center Citicorp Center
Suite 1300 500 West Madison Street, Suite 1400
New York, NY 10048 Chicago, IL 60661
Please call the SEC at 1-800-SEC-0330 for more information about the public
reference rooms or visit the SEC's web site at http://www.sec.gov to access
available filings.
Contract Origination
Through our regional service centers, we arrange to purchase manufactured
housing contracts from manufactured housing dealers located throughout the
United States. Our regional service center personnel contact dealers located in
their region and explain our available financing plans, terms, prevailing rates
and credit and financing policies. If the dealer wishes to use our available
customer financing, the dealer must make an application for dealer approval.
Upon satisfactory results of our investigation of the dealer's creditworthiness
and general business reputation, we and the dealer execute a dealer agreement.
We also originate manufactured housing installment loan agreements directly
with customers, particularly in instances where a homeowner wants to refinance
an existing manufactured housing contract, which may or may not be with us.
All contracts that we originate are written on forms we provide and are
originated on an individually approved basis in accordance with our guidelines.
The dealer or the customer submits the customer's credit application and
purchase order to a regional service center where our personnel make an
analysis of the creditworthiness of the proposed buyer. The analysis includes a
review of the applicant's paying habits, length and likelihood of continued
employment, and certain other factors. We use a proprietary automated credit
scoring system, which is a statistically based scoring system that quantifies
information using variables obtained from customers' credit applications and
credit reports. We believe the use of this proprietary credit scoring system
has contributed to the reduction in the number of repossessions incurred as a
percentage of our servicing portfolio. Manufactured housing contracts are
assumable by any individual who meets our then-current underwriting criteria.
If the application meets our guidelines and the credit is approved, we purchase
the contract after the manufactured home is delivered and set up and the
customer has moved in.
We compute the loan-to-value ratio for each contract by first computing the
percentage relationship that the down payment bears to the total loan amount
plus any cash down payment, plus, in certain cases, fees and insurance premiums
financed, but not buydown points, then subtracting the result from one. The
down payment on some contracts, including land-and-home contracts, may include
the borrower's equity in land (based on the appraised
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value, discounted up to 20%, less encumbrances), for which a lien has been
granted to us. For contracts in which a lien on land has been granted to us in
lieu of or as a supplement to a cash down payment, the loan-to-value ratio is
computed by dividing the appraised value of the land, discounted up to 20%, by
the total loan amount and subtracting the result from one. If the customer is
refinancing an existing loan, we may in some situations rely on an appraisal
made at the time the prior loan was originated. Manufactured homes, unlike
site-built homes, generally depreciate in value. Consequently, at any time
after origination it is possible, especially in the case of contracts with high
loan-to-value ratios at origination, that the market value of a manufactured
home may be lower than the principal amount outstanding under the related
contract.
The volume of manufactured housing contracts we purchased or originated for
the past five years and other information at the end of those years were as
follows:
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------------------
1994 1995 1996 1997 1998
---------- ---------- ---------- ---------- ----------
(Dollars in thousands except for average size)
<S> <C> <C> <C> <C> <C>
Principal balance of
contracts purchased:
FHA/VA................ $ 67,260 $ 18,842 $ 14,333 $ 13,398 $ 9,903
Conventional.......... 3,134,231 4,140,994 4,867,685 5,541,120 6,120,552
---------- ---------- ---------- ---------- ----------
Total............. $3,201,491 $4,159,836 $4,882,018 $5,554,518 $6,130,455
========== ========== ========== ========== ==========
Number of contracts pur-
chased................. 117,742 133,398 143,145 152,839 152,176
Average contract size... $ 27,191 $ 31,184 $ 34,105 $ 36,342 $ 40,285
Average interest rate... 11.0% 10.7% 10.2% 10.3% 9.8%
Weighted average remain-
ing term at purchase
(months)............... 218 266 291 298 310
</TABLE>
Pooling and Disposition of Contracts
We generally pool contracts for sale to investors within 15 to 120 days of
purchase. In the case of FHA-insured and VA-guaranteed manufactured housing
contracts, we generally issue modified pass-through certificates secured by the
contracts and guaranteed by the Government National Mortgage Association. The
GNMA certificates provide for the payment by us to registered holders of GNMA
certificates of monthly payments of principal and interest and the pass-through
of any prepayments of the contracts.
In the case of conventional manufactured housing contracts, we sell pools
of contracts through asset securitization vehicles such as the trust described
under "The Trust." We establish a specified level of recourse, which may take
the form of a subordinated right to interest payments on the contracts, payable
after the payment of scheduled principal and interest on the related investor
interests, or a cash reserve fund for losses on the contracts comprising the
pools. Upon a default under a contract and a liquidation of the underlying
collateral, any net losses are charged against the established recourse amount
or the reserve fund.
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Servicing
Green Tree services all of the manufactured housing contracts it originates
or purchases from other originators, collecting loan payments, taxes and
insurance payments where applicable and other payments from borrowers and
remitting principal and interest payments to the holders of the conventional
contracts or of the GNMA certificates backed by FHA-insured and VA-guaranteed
contracts.
The following table shows the composition of Green Tree's portfolio of
contracts that it originated, together with subserviced contracts Green Tree
did not originate, including manufactured housing contracts, recreational
vehicle contracts, motorcycle contracts, special product contracts and home
improvement contracts, on the dates indicated:
<TABLE>
<CAPTION>
December 31,
-------------------------------------------
1994 1995 1996 1997 1998
------- ------- ------- --------- ---------
(dollars in millions)
<S> <C> <C> <C> <C> <C>
Fixed term contracts............... $ 9,653 $13,314 $18,965 $ 26,036 $ 33,992
Revolving credit .................. 168 574 1,108 1,921 3,208
------- ------- ------- --------- ---------
Total............................ $ 9,821 $13,888 $20,073 $ 27,957 $ 37,200
======= ======= ======= ========= =========
Number of contracts serviced....... 511,519 656,845 826,863 1,076,000 1,262,643
</TABLE>
CONSECO FINANCE SECURITIZATIONS CORP.
Conseco Securitizations is a wholly owned subsidiary of Green Tree. It was
formed on September 10, 1999. Conseco Securitizations may only engage in the
business of acquiring pools of contracts from Green Tree and transferring those
contracts to trusts such as the trusts described in this prospectus, and
activities incidental or related thereto. The principal executive offices of
Conseco Securitizations are located at 300 Landmark Towers, St. Paul, Minnesota
55102-1639 and its telephone number is (651) 293-3400.
Conseco Securitizations has taken and will take steps in conducting its
business that are intended to make it unlikely that a bankruptcy of Green Tree
would result in the consolidation of the assets and liabilities of Green Tree
and Conseco Securitizations. These steps include the creation of Conseco
Securitizations as a separate, limited-purpose corporation pursuant to a
certification of incorporation containing restrictions on the permissible
business activities of Conseco Securitizations, requiring that Conseco
Securitizations have on its board of directors at least two directors who are
independent of Green Tree, and requiring that all business transactions or
corporate actions outside of the ordinary course of business be approved by the
independent directors.
YIELD CONSIDERATIONS
The remittance rates and the weighted average contract rate of the
contracts for each series of certificates are listed in the related prospectus
supplement.
Unless we specify otherwise in the related prospectus supplement, each
monthly accrual of interest on a contract is calculated at one-twelfth of the
product of the contract rate and the principal balance outstanding on the
scheduled payment date for that contract in the
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<PAGE>
preceding month. Unless we specify otherwise in the related prospectus
supplement, the remittance rate for each certificate will be calculated
similarly.
The prospectus supplement for each series will indicate that a lower rate
of principal prepayments than anticipated would negatively affect the total
return to investors of any class of certificates that is offered at a discount
to its principal amount, and a higher rate of principal prepayments than
anticipated would negatively affect the total return to investors of any class
of certificates that is offered at a premium to its principal amount or without
any principal amount.
The yield on some types of certificates which we may offer, such as
interest only certificates, principal only certificates, and fast pay/slow pay
certificates, each as further described under "Description of Certificates--
General," may be particularly sensitive to prepayment rates, and to changes in
prepayment rates, on the underlying contracts. If so stated in the related
prospectus supplement, the yield on some types of certificates which we may
offer could change and may be negative under some prepayment rate scenarios.
Accordingly, some types of certificates may not be legal or appropriate
investments for some financial institutions, pension funds or others. See
"ERISA Considerations" and "Legal Investment Considerations" in this prospectus
and in the prospectus supplement. In addition, the timing of changes in the
rate of prepayment on the contracts included in a contract pool may
significantly affect an investor's actual yield to maturity, even if the
average prepayment rate over time is consistent with the investor's
expectations. In general, the earlier that prepayments on contracts occur, the
greater the effect on the investor's yield to maturity.
If a series of certificates contains classes of certificates entitled to
receive distributions of principal or interest or both, in a specified order
other than as a specified percentage of each distribution of principal or
interest or both, the prospectus supplement will show that information,
measured relative to a prepayment standard or model specified in that
prospectus supplement, for the projected weighted average life of each class
and the percentage of the original principal of each class that would be
outstanding on specified remittance dates for that series based on the
assumptions stated in that prospectus supplement, including assumptions that
prepayments on the contracts in the related trust fund are made at rates
corresponding to the various percentages of the prepayment standard or model.
MATURITY AND PREPAYMENT CONSIDERATIONS
Maturity
Unless otherwise described in an applicable prospectus supplement, all of
the contracts will have maturities at origination of not more than 30 years.
Prepayment Considerations
Contracts generally may be prepaid in full or in part without penalty. FHA
contracts and VA contracts may be prepaid at any time without penalty. Based on
our experience with the portfolio of manufactured housing contracts we service,
we anticipate that a number of the contracts will be prepaid prior to their
maturity. A number of factors, including homeowner mobility, general and
regional economic conditions and prevailing interest rates,
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<PAGE>
may influence prepayments. In addition, repurchases of contracts on account of
breaches of representations and warranties have the effect of prepaying the
contracts and therefore would affect the average life of the certificates. Most
of the contracts contain a due-on-sale clause that would permit the servicer to
accelerate the maturity of a contract upon the sale of the related manufactured
home. In the case of those contracts that do contain due-on-sale clauses, the
servicer will permit assumptions of the contracts if the purchaser of the
related manufactured home satisfies our then-current underwriting standards.
Information regarding the prepayment model or any other rate of assumed
prepayment, as applicable, will be described in the prospectus supplement for a
series of certificates.
See "Description of the Certificates--Termination of the Agreement" for a
description of Green Tree's or the servicer's option to repurchase the
contracts comprising part of a trust when the aggregate outstanding principal
balance of the contracts is less than a specified percentage of the initial
aggregate outstanding principal balance of the contracts as of the related cut-
off date. See also "The Trust--The Contract Pools."
DESCRIPTION OF THE CERTIFICATES
Each series of certificates will be issued under a separate pooling and
servicing agreement to be entered into among Conseco Securitizations, as
seller, Green Tree, as servicer, and the trustee named in the related
prospectus supplement, and other parties, as are described in the applicable
prospectus supplement. The following summaries describe provisions expected to
be common to each agreement and the related certificates, but do not purport to
be complete and are subject to, and are qualified in their entirety by
reference to, the provisions of the related agreement and its description in
the related prospectus supplement. Section references refer to sections of the
form of agreement filed as an exhibit to the registration statement of which
this prospectus is a part. The portions of these sections we describe in the
prospectus may be contained in different numbered sections in the actual
agreement. The provisions of the form of agreement filed as an exhibit to the
registration statement that are not described in this prospectus may differ
from the provisions of any actual agreement. The material differences will be
described in the related prospectus supplement. Capitalized terms not otherwise
defined in this prospectus have the meanings assigned to them in the form of
agreement filed as an exhibit to the registration statement containing this
prospectus.
Each series of certificates will have been rated in the rating category by
the rating agency or agencies specified in the related prospectus supplement.
General
The certificates may be issued in one or more classes. If the certificates
of a series are issued in more than one class, the certificates of all or less
than all of the classes may be sold under this prospectus, and there may be
separate prospectus supplements relating to one or more of the classes sold.
When we refer to the prospectus supplement relating to a series comprised of
more than one class it should be understood as a reference to each of the
prospectus supplements relating to the classes sold under this prospectus. When
we refer to
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<PAGE>
the certificates of a class it should be understood to refer to the
certificates of a class within a series or all of the certificates of a single-
class series, as the context may require. For convenience of description, any
reference in this prospectus to a class of certificates includes a reference to
any subclass of that class.
The certificates of each series will be issued in fully registered form
only and will represent the interests specified in the related prospectus
supplement in a separate trust created under the related pooling and servicing
agreement. The trust will be held by the trustee for the benefit of the
certificateholders. Except as we otherwise specify in the related prospectus
supplement, the certificates will be freely transferable and exchangeable at
the corporate trust office of the trustee at the address listed in the related
prospectus supplement. No service charge will be made for any registration of
exchange or transfer of certificates, but the trustee may require payment of a
sum sufficient to cover any tax or other governmental charge.
Ownership of each contract pool may be evidenced by one or more classes of
certificates, each representing the interest in the contract pool specified in
the related prospectus supplement. Each series of certificates may include one
or more classes which are subordinated in right of distribution to one or more
other classes, as provided in the related prospectus supplement. A series of
senior/ subordinated certificates may include one or more classes of mezzanine
certificates which are subordinated to one or more classes of certificates and
are senior to one or more classes of certificates. The prospectus supplement
for a series of senior/subordinated certificates will describe the extent to
which the subordinated certificates are subordinated, which may include a
formula for determining the subordinated amount or for determining the
allocation of the amount available for distribution among senior certificates
and subordinated certificates, the allocation of losses among the classes of
subordinated certificates, the period or periods of subordination, any minimum
subordinated amount and any distributions or payments which will not be
affected by the subordination. The protection afforded to the senior
certificateholders from the subordination feature described above will be
effected by the preferential right of the certificateholders to receive current
distributions from the contract pool. If a series of certificates contains more
than one class of subordinated certificates, losses will be allocated among the
classes in the manner described in the prospectus supplement. If so specified
in the applicable prospectus supplement, mezzanine certificates or other
classes of subordinated certificates may be entitled to the benefits of other
forms of credit enhancement and may, if rated in one of the four highest rating
categories by a nationally recognized statistical rating organization, be
offered under this prospectus and the prospectus supplement.
If specified in a prospectus supplement, a series of certificates may
include one or more classes which:
(1) are entitled to receive distributions only in respect of principal,
interest or any combination of the two, or in specified proportions of
the payments, and/or
(2) are entitled to receive distributions of principal before or after
specified principal distributions have been made on one or more other
classes within a series, or on a planned amortization schedule or
targeted amortization schedule or upon the occurrence of other
specified events.
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<PAGE>
The prospectus supplement will list the rate at which interest will be paid to
certificateholders of each class of a given series. The interest rate may be
fixed, variable or adjustable, as specified in the related prospectus
supplement.
The related prospectus supplement will specify the minimum denomination or
initial principal amount of contracts evidenced by a single certificate of each
class of certificates of a series.
Distributions of principal and interest on the certificates will be made on
the remittance dates listed in the related prospectus supplement to the persons
in whose names the certificates are registered at the close of business on the
related record date specified in the related prospectus supplement.
Distributions will be made by check mailed to the address of the person
entitled to the distribution as it appears on the certificate register, or, as
described in the related pooling and servicing agreement, by wire transfer,
except that the final distribution in retirement of certificates will be made
only upon presentation and surrender of the certificates at the office or
agency of the trustee specified in the final distribution notice to
certificateholders.
Global Certificates
The certificates of a class may be issued in whole or in part in the form
of one or more global certificates that will be deposited with, or on behalf
of, and registered in the name of a nominee for, a depositary identified in the
related prospectus supplement. The description of the certificates contained in
this prospectus assumes that the certificates will be issued in definitive
form. If the certificates of a class are issued in the form of one or more
global certificates, the term certificateholder should be understood to refer
to the beneficial owners of the global certificates, and the rights of the
certificateholders will be limited as described under this subheading.
Global certificates will be issued in registered form. Unless and until it
is exchanged in whole or in part for certificates in definitive form, a global
certificate may not be transferred except as a whole by the depositary for the
global certificate to a nominee of the depositary or by a nominee of the
depositary to the depositary or another nominee of the depositary or by the
depositary or any nominee to a successor of the depositary or a nominee of the
successor.
The specific terms of the depositary arrangement for any certificates of a
class will be described in the related prospectus supplement. It is anticipated
that the following provisions described in this subsection will apply to all
depositary arrangements.
Upon the issuance of a global certificate, the depositary for the global
certificate will credit, on its book-entry registration and transfer system,
the respective denominations of the certificates represented by the global
certificate to the accounts of institutions that have accounts with the
depositary ("Participants"). Ownership of beneficial interests in a global
certificate will be limited to Participants or persons that may hold interests
through Participants. Ownership of beneficial interests in the global
certificate will be shown on, and
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<PAGE>
the transfer of that ownership will be effected only through, records
maintained by the depositary for the global certificate or by Participants or
persons that hold through Participants. The laws of some states require that
purchasers of securities take physical delivery of the securities in definitive
form. These limits and laws may impair the ability to transfer beneficial
interests in a global certificate.
So long as the depositary for a global certificate, or its nominee, is the
owner of the global certificate, the depositary or the nominee, as the case may
be, will be considered the sole owner or holder of the certificates represented
by the global certificate for all purposes under the pooling and servicing
agreement relating to those certificates. Except as described in the paragraph
below, owners of beneficial interests in a global certificate will not be
entitled to have certificates of the series represented by a global certificate
registered in their names, will not receive or be entitled to receive physical
delivery of certificates of that series in definitive form and will not be
considered the owners or holders under the pooling and servicing agreement
governing those certificates.
Distributions or payments on certificates registered in the name of or held
by a depositary or its nominee will be made to the depositary or its nominee,
as the case may be, as the registered owner for the holder of the global
certificate representing the certificates. In addition, all reports required
under the applicable pooling and servicing agreement to be made to
certificateholders, as described below under "Reports to Certificateholders,"
will be delivered to the depositary or its nominee, as the case may be. Green
Tree, the servicer, the seller, the trustee, or any agent, including any
applicable certificate registrar or paying agent, will not have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a global
certificate or for maintaining, supervising or reviewing any records relating
to the beneficial ownership interests or for providing reports to the related
beneficial owners.
We expect that the depositary for certificates of a class, upon receipt of
any distribution or payment on a global certificate, will credit immediately
Participants' accounts with payments in amounts proportionate to their
respective beneficial interest in the global certificate as shown on the
records of the depositary. We also expect that payments by Participants to
owners of beneficial interests in the global certificate held through
Participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers
registered in street name, and will be the responsibility of the Participants.
If a depositary for certificates of a class is at any time unwilling or
unable to continue as depositary and a successor depositary is not appointed by
or on behalf of Green Tree within the time period specified in the pooling and
servicing agreement, we will cause to be issued certificates of that class in
definitive form in exchange for the related global certificate or certificates.
In addition, we may at any time and in our sole discretion determine not to
have any certificates of a class represented by one or more global certificates
and, if this occurs, will cause to be issued certificates of that class in
definitive form in exchange for the related global certificate or certificates.
Further, if we so specify that the certificates of a
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<PAGE>
class, an owner of a beneficial interest in a global certificate representing
certificates of that class may, on terms acceptable to us and the depositary
for the global certificate, receive certificates of that class in definitive
form. In any such instance, an owner of a beneficial interest in a global
certificate will be entitled to physical delivery in definitive form of
certificates of the class represented by the global certificate equal in
denominations to the beneficial interest and to have the certificates
registered in its name.
Distributions on Certificates
Except as otherwise provided in the related prospectus supplement, on each
remittance date, the trustee will withdraw from the applicable certificate
account and distribute to the certificateholders of each class, other than a
series having a class of subordinated certificates, as described below, either
the specified interest of the class in the contract pool times the aggregate of
all amounts on deposit in the certificate account as of the third business day
preceding the remittance date or another date as may be specified in the
related prospectus supplement (the "Determination Date"), or, in the case of a
series of certificates comprised of classes which have been assigned a
principal balance, payments of interest and payments in reduction of the
principal balance from all amounts on deposit in the certificate account on the
Determination Date, in the priority and calculated in the manner described in
the related prospectus supplement, except, in each case:
(1) all payments on the contracts that were due on or before the cut-off
date;
(2) all payments or collections received after the due period preceding
the month in which the remittance date occurs;
(3) all scheduled payments of principal and interest due on a date or
dates subsequent to the due period preceding the Determination Date;
(4) amounts representing reimbursement for Advances, these reimbursement
being limited, if specified in the related prospectus supplement, to
amounts received on particular contracts as late collections of
principal or interest as to which the servicer has made an
unreimbursed Advance; and
(5) amounts representing reimbursement for any unpaid servicing fee and
expenses from Liquidation Proceeds, condemnation proceeds and proceeds
of insurance policies with respect to the related contracts. The
amount of principal and interest specified in the related prospectus
supplement to be distributed to certificateholders is referred to in
this prospectus as the "Certificate Distribution Amount."
The amount available to make distriubtions on certificates will be the moneys
on deposit in the certificate account on a Determination Date, less the amounts
specified in (1) through (5) above.
Unless we otherwise specify in the related prospectus supplement, for a
series of certificates having a class of subordinated certificates, on each
remittance date, the trustee will withdraw from the applicable certificate
account and distribute to the holders of senior
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<PAGE>
certificates, in the aggregate, the lesser of (1) the Senior Distribution
Amount plus the Outstanding Senior Shortfall (each defined below in this
section), or (2) the percentage interest which may vary as specified in the
related prospectus supplement of the classes of senior certificates times the
amount available plus (a) the percentage interest which may vary as specified
in the related prospectus supplement of the classes of subordinated
certificates times the amount available, not to exceed the available
subordination amount, if any, as described in the related prospectus
supplement, and (b) Advances, if any, made by the servicer. The distribution
made to the certificateholders of each class of senior certificates shall be
calculated as described in the related prospectus supplement and may vary as to
the allocation of principal or interest or both. Unless otherwise specified in
the related prospectus supplement, the Senior Distribution Amount is an amount
equal to the percentage interest of the classes of senior certificates times:
(1) all regularly scheduled payments of principal of and interest which
were due on contracts during the related due period, whether or not
received, with the interest portions adjusted to the remittance rate;
(2) all principal prepayments made by the obligor during the prior due
period;
(3) for each contract not described in (4) below, all insurance proceeds,
all condemnation awards and any other cash proceeds from a source
other than the obligor, as required to be deposited in the
certificate account, which were received during the prior due period,
net of related unreimbursed Advances and net of any portion thereof
which, as to any contract, constitutes late collections;
(4) for each contract as to which a receipt of Liquidation Proceeds has
been received during the prior due period or other event of
termination of the contract has occurred during the prior due period,
an amount equal to the principal amount of the contract outstanding
immediately before the date of receipt of the Liquidation Proceeds or
other event of termination, reduced by the principal portion of any
unpaid payments due on or before that date to the extent previously
advanced against or otherwise received by the certificateholder, plus
interest from the most recent due date at the remittance rate; and
(5) for each contract we repurchase for which the repurchase price was not
distributed previously, an amount equal to the principal amount of the
contract outstanding on the date of the repurchase reduced by the
principal portion of any unpaid payments due on or before that date,
but only to the extent advanced against or otherwise received by the
certificateholders, plus interest to the most recent due date.
The Outstanding Senior Shortfall for any class of senior certificates means
as of any date, to the extent not previously paid, the aggregate of the amounts
by which the Senior Distribution Amount for that class for any remittance date
exceeded the amount actually paid on that remittance date plus interest at the
remittance rate.
Unless we otherwise specify in the related prospectus supplement, on each
remittance date, the servicer shall distribute to the classes of subordinated
certificateholders, in the order
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listed in the related prospectus supplement, the balance of the amount
available for distribution, if any, after the payment to the senior
certificateholders, as described above.
Unless otherwise specified in the prospectus supplement relating to a
series of certificates, one or more classes of which have been assigned a
principal balance, distributions in reduction of the principal balance of the
certificates will be made on each remittance date to the certificateholders of
the class then entitled to receive the certificate distributions until the
aggregate amount of the distributions have reduced the principal balance of the
certificates of that class to zero or a specified percentage. Allocation of
distributions in reduction of principal balance will be made to each class of
certificates in the order specified in the related prospectus supplement,
which, if so specified in the prospectus supplement, may be concurrently.
Unless otherwise specified in the related prospectus supplement, distributions
in reduction of the principal balance of each certificate of a class then
entitled to receive distributions will be made pro rata among the certificates
of that class.
Unless otherwise specified in the related prospectus supplement, the
maximum amount which will be distributed in reduction of principal balance to
holders of certificates of a class then entitled to a distribution on any
remittance date will equal, to the extent funds are available, the sum of:
(1) the amount of the interest, if any, that has accrued but is not yet
payable on the Compound Interest Certificates of that series, if any,
from the prior remittance date or since the date specified in the
related prospectus supplement in the case of first remittance date
(the "Accrual Remittance Amount"); and
(2) the certificate remittance amount; and
(3) the applicable percentage of the excess cash flow, if any, specified
in the prospectus supplement.
Unless otherwise specified in the related prospectus supplement, the
certificate remittance amount for a remittance date will equal the amount, if
any, by which the then outstanding principal balance of the certificates of the
related classes of series (before taking into account the amount of interest
accrued on any class of Compound Interest Certificates of that series to be
added to the principal balance on the remittance date) exceeds the asset value,
as defined in the related prospectus supplement, of the contracts in the
contract pool underlying the series as of the end of the applicable Due Period
specified in the related prospectus supplement. For purposes of determining the
certificate remittance amount for a remittance date, the asset value of the
contracts will be reduced to take into account the interest evidenced by the
classes of certificates in the principal distributions for those contracts
received by the trustee during the preceding due period.
Unless otherwise specified in the prospectus supplement relating to a
series of certificates, one or more classes of which have been assigned a
principal balance, excess cash flow represents the excess of (1) the interest
evidenced by the classes of certificates in the distributions received on the
contracts underlying the series in the due period preceding a
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remittance date for that series and, in the case of the first due period, the
amount deposited in the certificate account on the closing date for the sale of
the certificates, together with income from the reinvestment of the interest,
(2) the sum of all interest accrued, whether or not then payable, on the
certificates of the classes since the preceding remittance date or since the
date specified in the related prospectus supplement in the case of the first
remittance date, the certificate remittance amount for the then current
remittance date and, if applicable, any payments made on any certificates of
the class under any special distributions in reduction of principal balance
during the due period.
Within the time specified in the pooling and servicing agreement and
described in the related prospectus supplement, the servicer will furnish a
statement to the trustee listing the amount to be distributed on the related
remittance date on account of principal and interest, stated separately, and a
statement providing information on the contracts.
If there are not sufficient funds in the certificate account to make the
full distribution to certificateholders described above on any remittance date,
the servicer will distribute the funds available for distribution to the
certificateholders of each class in accordance with their respective interests,
except that any subordinated certificateholders, will not, subject to the
limitations described in the related prospectus supplement, receive any
distributions until senior certificateholders receive the Senior Distribution
Amount plus the Outstanding Senior Shortfall. The difference between the amount
which the certificateholders would have received if there had been sufficient
eligible funds in the certificate account and the amount actually distributed,
plus interest at the remittance rates of the respective contracts to which such
shortfall is attributable, will be added to the amount which the
certificateholders are entitled to receive on the next remittance date.
Special Distributions. To the extent specified in the prospectus supplement
relating to a series of certificates, one or more classes of which have been
assigned a principal balance and having less frequent than monthly remittance
dates, these classes may receive special distributions in reduction of
principal balance in any month, other than a month in which a remittance date
occurs, if, as a result of principal prepayments on the contracts in the
related contract pool or low reinvestment yields, the trustee determines, based
on assumptions specified in the related agreement, that the amount of cash
anticipated to be on deposit in the certificate account on the next remittance
date for that series and available to be distributed to the holders of the
certificates of these classes may be less than the sum of:
(1) the interest scheduled to be distributed to holders of the
certificates of those classes; and
(2) the amount to be distributed in reduction of principal balance of
those certificates on the remittance date.
Any special distributions will be made in the same priority and manner as
distributions in reduction of principal balance would be made on the next
remittance date.
Subordinated Certificates. The rights of a class of certificateholders of a
series to receive any or a specified portion of distributions of principal or
interest or both on the
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contracts, to the extent specified in the related pooling and servicing
agreement and described in the related prospectus supplement, may be
subordinated to the rights of other certificateholders. The prospectus
supplement for a series of certificates having a class of subordinated
certificates will describe the extent to which the class is subordinated (which
may include a formula for determining the subordinated amount or for
determining the allocation of the amount available among senior certificates
and subordinated certificates), the allocation of losses among the classes of
subordinated certificates, the period or periods of subordination, and minimum
subordinated amount and any distributions or payments which will not be
affected by the subordination. The protection afforded to the senior
certificateholders from this subordination feature will be effected by the
preferential right of the certificateholders to receive current distributions
from the contract pool.
Example of Distributions
The following is an example of the flow of funds as it would relate to a
hypothetical series of certificates issued, and with a cut-off date occurring,
on January 15, 2000. All days are assumed to be business days. The initial
principal balance of the contract pool will be the aggregate principal balance
of the contracts at the close of business on the cut-off date, after deducting
principal payments due on or before that date, which, together with
corresponding interest payments, are not part of the contract pool and will not
be passed through to certificateholders. Scheduled payments and principal
prepayments may be received at any time during the due period and will be
deposited in the certificate account by the servicer for distribution to
certificateholders. When a contract is prepaid in full, interest on the amount
prepaid is collected from the obligor only to the date of payment.
Distributions on March 1 will be made to certificateholders of record at the
close of business on the business day immediately preceding the related
remittance date. On February 25 (the third business day before the remittance
date), the servicer will determine the amounts of principal and interest which
will be passed through on March 1. In addition, the servicer may advance funds
to cover any delinquencies, in which event the distribution to
certificateholders on March 1 will include the full amounts of principal and
interest due during the related due period. The servicer will also calculate
any changes in the relative interests evidenced by the senior certificates and
the subordinated certificates in the trust. On March 1, the amounts determined
on February 25 will be distributed to certificateholders.
<TABLE>
<S> <C>
January 15.................... Cut-off date.
January 15-February 14........ Due period. Servicer receives scheduled payments
on the contracts and any principal prepayments
made by obligors and applicable interest
thereon.
February 27................... Record date.
February 25................... Determination Date. Distribution amount
determined.
March 1....................... Remittance date.
</TABLE>
Succeeding months follow the pattern of the due period through the
remittance date. The flow of funds for any series of certificates may differ
from the above example, as specified in the related prospectus supplement.
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Reports to Certificateholders
The trustee will forward to each certificateholder on each remittance date,
or as soon thereafter as is practicable, as specified in the related prospectus
supplement, a statement listing the following information:
(1) the amount of distribution allocable to principal on the contracts;
(2) the amount of the distribution allocable to interest on the
contracts;
(3) if the distribution to the certificateholders is less than the full
amount that would be distributable to the certificateholders if there
were sufficient eligible funds in the certificate account, the
difference between the aggregate amounts of principal and interest
which certificateholders would have received if there were sufficient
eligible funds in the certificate account and the amounts actually
distributed;
(4) the aggregate amount of any Advance by the servicer included in the
amounts actually distributed to the certificateholders;
(5) the outstanding principal balance of the contracts; and
(6) the approximate weighted average remittance rate of the contracts
during the due period immediately preceding the remittance date.
In addition, not more than 90 days after the end of each calendar year, the
servicer will furnish a report to each certificateholder of record at any time
during that calendar year (a) as to the aggregate of amounts reported pursuant
to (1) through (5) above for that calendar year or, if the person was a
certificateholder of record during a portion of that calendar year, for the
applicable portion of that year, (b) other information as the servicer deems
necessary or desirable for certificateholders to prepare their tax returns and
(c) if so specified in the related prospectus supplement, a listing of the
principal balances of the contracts outstanding at the end of the calendar
year. Information in the monthly and annual reports provided to the
certificateholders will not have been examined and reported upon by an
independent public accountant. However, the servicer will provide to the
trustee annually a report by independent public accountants regarding the
servicing of the contracts as described under "Evidence as to Compliance"
above.
In addition, to the extent applicable, the report shall include:
(1) in the case of certificates which are assigned a principal balance,
the amount of the distribution being made in reduction of principal
balance specified in the related prospectus supplement, and the
principal balance of each class of certificates and a single
certificate of the holder's class after giving effect to the
distribution in reduction of principal balance made on such remittance
date and after giving effect to all special distributions since the
preceding remittance date or since the closing date in the case of the
first remittance date; and
(2) for Compound Interest Certificates, but only if the holders of those
certificates shall not have received on the remittance date a
distribution of interest equal to the entire
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amount of interest accrued on the certificate during the related due
period remittance date:
. the interest accrued on the class of Compound Interest Certificates
and on a single certificate of that class during the due period, or
specified interest accrual period, for that remittance date and
added to the principal of that Compound Interest Certificate; and
. the principal balance of the class of Compound Interest
Certificates and of a single certificate of that class after giving
effect to the addition of all interest accrued during the due
period, or specified interest accrual period for that remittance
date.
Advances
To the extent provided in the related prospectus supplement, the servicer
is obligated to make periodic advances of cash from its own funds or, if
specified in the related prospectus supplement, from excess funds in the
certificate account not then required to be distributed to certificateholders
(each, an "Advance"), for distribution to the certificateholders in an amount
equal to the difference between the amount due to them and the amount in the
certificate account, eligible for distribution to them under the pooling and
servicing agreement, but only to the extent the difference is due to delinquent
payments of principal and interest for the preceding due period and only to the
extent the servicer determines the advances are recoverable from future
payments and collections on the delinquent contracts. The servicer's obligation
to make any Advances, may, as specified in the related prospectus supplement,
be limited in amount. If specified in the related prospectus supplement, the
servicer will not be obligated to make Advances until all or a specified
portion of any reserve fund is depleted. Advances are intended to maintain a
regular flow of scheduled interest and principal payments to the senior
certificateholders, not to guarantee or insure against losses. Accordingly, any
funds advanced are recoverable by the servicer out of amounts received on
particular contracts which represent late recoveries of principal or interest
for which any Advance was made.
Indemnification
The pooling and servicing agreement requires us to defend and indemnify the
trust, the trustee, including any agent of the trustee and the
certificateholders (which indemnification will survive any removal of the
servicer as servicer of the contracts) against any and all costs, expenses,
losses, damages, claims and liabilities, including reasonable fees and expenses
of counsel and expenses of litigation (1) arising out of or resulting from the
use or ownership by Green Tree or the servicer or any of its affiliates of any
manufactured home and (2) for any taxes which may at any time be asserted for,
and as of the date of, the conveyance of the contracts to the trust but not
including any federal, state or other tax arising out of the creation of the
trust and the issuance of the certificates. (Article X).
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<PAGE>
The pooling and servicing agreement also requires the servicer, in its
duties as servicer of the contracts, to defend and indemnify the trust, the
trustee and the certificateholders (which indemnification will survive any
removal of the servicer as servicer of the contracts) against any and all
costs, expenses, losses, damages, claims and liabilities, including reasonable
fees and expenses of counsel and expenses of litigation, for any action taken
by the servicer on any contract while it was the servicer. (Section 10.04.)
Amendment
Unless we specify otherwise in the related prospectus supplement, the
pooling and servicing agreement may be amended by Green Tree, Conseco
Securitizations, the servicer and the trustee without the consent of the
certificateholders:
. to cure any ambiguity; or
. to correct or supplement any provision in the agreement that may be
inconsistent with another provision; or
. if an election has been made for a particular series of certificates to
treat the trust as a REMIC within the meaning of Section 860D(a) of the
Internal Revenue Code, to maintain the REMIC status of the trust and to
avoid the imposition of certain taxes on the REMIC; or
. to make any other provisions on matters or questions arising under the
agreement that are not inconsistent with its provisions, provided that
the action will not adversely affect in any material respect the
interests of the certificateholders of the related series.
Unless we specify otherwise in the related prospectus supplement, the pooling
and servicing agreement may also be amended by Conseco Securitizations, the
servicer and the trustee with the consent of the certificateholders, other than
holders of residual certificates in the related REMIC, if any, evidencing
interests aggregating not less than 51% of the trust for the purpose of adding
any provisions to or changing in any manner or eliminating any of the
provisions of the pooling and servicing agreement or of modifying in any manner
the rights of the certificateholders; provided, however, that no amendment that
reduces in any manner the amount of, or delay the timing of, any payment
received on contracts which are required to be distributed on any certificate
may be effective without the consent of the holders of each certificate.
Termination of the Agreement
The obligations created by each pooling and servicing agreement will
terminate upon the date calculated as specified in the pooling and servicing
agreement, generally upon:
(1) the later of the final payment or other liquidation of the last
contracts subject to the agreement and the disposition of all property
acquired upon foreclosure of any land-and-home contract or
repossession of any manufactured home; and
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(2) the date on which the holder of the "residual interest" in the trust
exercises its right to order a qualified liquidation of the trust, as
described below under "--Repurchase Option";
(3) the payment to the certificateholders of all amounts held by the
servicer or the trustee and required to be paid to it under to the
agreement.
Repurchase Option
Unless otherwise specified in the related prospectus supplement, Green Tree
or the servicer may at its option regarding any series of certificates,
repurchase all certificates or contracts remaining outstanding at that time as
the aggregate unpaid principal balance of contracts is less than the percentage
of the aggregate unpaid principal balance of the contracts on the cut-off date
specified for that series in the related prospectus supplement. Unless
otherwise provided in the related prospectus supplement, the repurchase price
will equal the principal amount of the contracts plus accrued interest from the
first day of the month of repurchase to the first day of the next succeeding
month at the contract rates borne by the contracts.
The Trustee
The prospectus supplement for a series of certificates will specify the
trustee under the related pooling and servicing agreement. The trustee may have
normal banking relationships with Green Tree or its affiliates and the servicer
or its affiliates.
The trustee may resign at any time, in which event Conseco Securitizations
will be obligated to appoint a successor trustee. Conseco Securitizations may
also remove the trustee if the trustee ceases to be eligible to continue as
trustee under the pooling and servicing agreement or if the trustee becomes
insolvent. Unless we specify otherwise in the related prospectus supplement,
the trustee may also be removed at any time by the holders of certificates
evidencing interests aggregating over 50% of the related trust as specified in
the pooling and servicing agreement. Any resignation or removal of the trustee
and appointment of a successor trustee will not become effective until
acceptance of the appointment by the successor trustee.
The trustee will make no representation as to the validity or sufficiency
of the pooling and servicing agreement, the certificates, any contract,
contract file or related documents, and will not be accountable for the use or
application by Conseco Securitizations of any funds paid to Conseco
Securitizations, as seller, in consideration of the conveyance of the
contracts, or deposited into or withdrawn from the certificate account by the
servicer. (Section 11.03.) If no event of termination has occurred, the trustee
will be required to perform only those duties specifically required of it under
the pooling and servicing agreement. However, upon receipt of the various
certificates, reports or other instruments required to be furnished to it, the
trustee will be required to examine them to determine whether they conform as
to form to the requirements of the pooling and servicing agreement.
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(Section 11.01.) Whether or not an event of termination has occurred, the
trustee is not required to expend or risk its own funds or otherwise incur any
financial liability in the
performance of its duties or the exercise of its powers if it has reasonable
grounds to believe
that repayment of the funds or adequate indemnity against the risk or liability
is not reasonably assured to it. (Section 11.01.)
Under the pooling and servicing agreement, the servicer agrees to pay to
the trustee on each remittance date:
. reasonable compensation for all services rendered by it under the
agreement, which compensation shall not be limited by any provision of
law regarding the compensation of a trustee of an express trust; and
. reimbursement for all reasonable expenses, disbursements and advances
incurred or made by the trustee in accordance with any provision of the
agreement, including the reasonable compensation and the expenses and
disbursements of its agents and counsel, except any expense,
disbursement or advance attributable to the trustee's negligence or bad
faith.
We have agreed to indemnify the trustee for, and to hold it harmless against,
any loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration of
the trust and the trustee's duties under the trust, including the costs and
expenses of defending itself against any claim or liability in the exercise or
performance of any of the trustee's powers or duties.
SERVICING
Under the pooling and servicing agreement, the servicer will service and
administer the contracts assigned to the trustee as more fully described below
in this section. The servicer will perform diligently all services and duties
specified in each pooling and servicing agreement, in the same manner as
prudent lending institutions of manufactured housing contracts of the same type
as the contracts in those jurisdictions where the related manufactured homes
are located or as otherwise specified in the pooling and servicing agreement.
The duties to be performed by the servicer will include collection and
remittance of principal and interest payments, collection of insurance claims
and, if necessary, repossession.
The servicer will make reasonable efforts to collect all payments called
for under the contracts and, consistent with the pooling and servicing
agreement and any FHA insurance and VA guaranty, will follow the collection
procedures as it follows for mortgage loans or contracts serviced by it that
are comparable to the contracts.
Hazard Insurance. Except as otherwise specified in the related prospectus
supplement, the terms of the pooling and servicing agreement will require the
servicer to cause to be maintained for each contract one or more hazard
insurance policies which provide, at a minimum, the same coverage as a standard
form fire and extended coverage insurance policy
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<PAGE>
that is customary for manufactured housing, issued by a company authorized to
issue policies in the state in which the manufactured home is located, and in
an amount which is not less than the maximum insurable value of the
manufactured home or the principal balance due from the obligor on the related
contract, whichever is less; provided, however, that the amount of coverage
provided by each hazard insurance policy shall be sufficient to avoid the
application of any co-insurance clause contained in the policy. Each hazard
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 hazard
insurance policy or policies, the servicer shall pay the premiums out of its
own funds, and may add separately the premium to the obligor's obligation as
provided by the contract, but may not add the premium to the remaining
principal balance of the contract.
The servicer may maintain, in lieu of causing individual hazard insurance
policies to be maintained for each manufactured home, and shall maintain, to
the extent that the related contract does not require the obligor to maintain a
hazard insurance policy for the related manufactured home, one or more blanket
insurance policies covering losses on the obligor's interest in the contracts
resulting from the absence or insufficiency of individual hazard insurance
policies. Any blanket policy shall be substantially in the form and in the
amount carried by the servicer as of the date of the agreement. The servicer
shall pay the premium for the policy on the basis described in the policy and
shall pay any deductible amount for claims under the policy relating to the
contracts. If the insurer thereunder 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 the policy.
If the servicer shall have repossessed a manufactured home on behalf of the
trustee, the servicer shall either:
(1) maintain at its expense hazard insurance for the manufactured home, or
(2) indemnify the trustee against any damage to the manufactured home
before resale or other disposition.
Evidence as to Compliance. Unless we specify otherwise in the related
prospectus supplement, each pooling and servicing agreement will require the
servicer to deliver to the trustee a monthly report before each remittance
date, describing information about the contract pool and the certificates of
the series as is specified in the related prospectus supplement. Each report to
the trustee will be accompanied by a statement from an appropriate officer of
the servicer certifying the accuracy of the report and stating that the
servicer has not defaulted in the performance of its obligations under the
pooling and servicing agreement. On or before May 1 of each year, the servicer
will deliver to the trustee a report of a firm of independent public
accountants which is a member of the American Institute of Certified Public
Accountants stating that the firm has examined documents, records and
managements' assertions relating to loans serviced by the servicer and stating
that, on the basis of those procedures, the servicing has been conducted in
compliance with the minimum servicing standards identified in the Mortgage
Bankers Association of
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America's Uniform Single Attestation Program for Mortgage Bankers, or any
successor program, except for any significant exceptions or errors in records
that, in the opinion of the firm, generally accepted attestation standards
require it to report.
About the Servicer. The servicer may not resign from its obligations and
duties under a pooling and servicing agreement except upon a determination that
its duties under the pooling and servicing agreement are no longer permissible
under applicable law. No resignation will become effective until the trustee or
a successor servicer has assumed the servicer's obligations and duties under
the pooling and servicing agreement. The servicer can only be removed as
servicer under to an event of termination as discussed below under "--Events of
Termination". Any person with which the servicer is merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the servicer is a party, or any person succeeding to the business of the
servicer, will be the successor to the servicer under the pooling and servicing
agreement so long as such successor services at least $100 million of
manufactured housing contracts.
Unless we specify otherwise in the related prospectus supplement, each
pooling and servicing agreement will also provide that neither the servicer,
nor any director, officer, employee or agent of the servicer, will be under any
liability to the trust or the certificateholders for any action taken or for
restraining from the taking of any action in good faith under the pooling and
servicing agreement, or for errors in judgment; provided, however, that neither
the servicer nor any such person will be protected against any liability which
would otherwise be imposed by reason of the failure to perform its obligations
in strict compliance with the standards of care described in the pooling and
servicing agreement. The servicer may, in its discretion, undertake any action
which it may deem necessary or desirable with respect to the pooling and
servicing agreement and the rights and duties of the parties to the agreement
and the interests of the certificateholders. In such event, the legal expenses
and costs of the action and any liability resulting from the action will be
expenses, costs and liabilities of the trust and the servicer will be entitled
to be reimbursed out of the certificate account.
The servicer shall keep in force throughout the term of the pooling and
servicing agreement:
. policy or policies of insurance covering errors and omissions for
failure to maintain insurance as required by the pooling and servicing
agreement, and
. a fidelity bond.
The policy or policies and the fidelity bond shall be in the form and amount as
is generally customary among persons which service a portfolio of manufactured
housing contracts having an aggregate principal amount of $100 million or more
and which are generally regarded as servicers acceptable to institutional
investors.
The servicer, to the extent practicable, shall cause the obligors to pay
all taxes and similar governmental charges when and as due. To the extent that
nonpayment of any taxes
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<PAGE>
or charges would result in the creation of a lien upon any manufactured home
having a priority equal or senior to the lien of the related contract, the
servicer shall advance any delinquent tax or charge.
Servicing Compensation and Payment of Expenses. For its servicing of the
contracts, the servicer will receive servicing fees which include a monthly
servicing fee, which we may assign, for each due period, paid on the next
succeeding remittance date, equal to 1/12th of the product of 0.50% and the
Pool Scheduled Principal Balance for the immediately preceding remittance date.
As long as we are the servicer the trustee will pay us its monthly servicing
fee from any monies remaining after the certificateholders have received all
payments of principal and interest for the remittance date.
The monthly servicing fee provides compensation for customary manufactured
housing contract third-party servicing activities to be performed by the
servicer for the trust and for additional administrative services performed by
the servicer on behalf of the trust. Customary servicing activities include
collecting and recording payments, communicating with obligors, investigating
payment delinquencies, providing billing and tax records to obligors and
maintaining internal records on each contract. Administrative services
performed by the servicer on behalf of the trust include calculating
distributions to certificateholders and providing related data processing and
reporting services for certificateholders and on behalf of the trustee.
Expenses incurred in servicing the contracts and paid by the servicer from its
servicing fees include, payment of fees and expenses of accountants, payments
of all fees and expenses incurred in the enforcement of contracts except
liquidation expenses and payment of expenses incurred in distributions and
reports to certificateholders. The servicer will be reimbursed out of the
Liquidation Proceeds of a liquidated contract for all ordinary and necessary
liquidation expenses incurred by it in realization upon the related
manufactured home.
As part of its servicing fees the servicer will also be entitled to retain,
as compensation for the additional services provided, any fees for late
payments made by obligors, extension fees paid by obligors for the extension of
scheduled payments and assumption fees for permitted assumptions of contracts
by purchasers of the related manufactured homes.
Events of Termination. Except as otherwise specified in the related
prospectus supplement, events of termination under each agreement will include:
. any failure by the servicer to distribute to the certificateholders any
required payment which continues unremedied for 5 days, or another
period specified in the related prospectus supplement after the giving
of written notice;
. any failure by the servicer duly to observe or perform in any material
respect any other of its covenants or agreements in the agreement that
materially and adversely affects the interests of certificateholders,
which, in either case, continues unremedied for 30 days after the
giving of written notice of the failure of breach;
. any assignment or delegation by the servicer of its duties or rights
under the agreement, except as specifically permitted under the
agreement, or any attempt to make an assignment or delegation;
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. events of insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings regarding the servicer; and
. the servicer is no longer an eligible servicer as defined in the
applicable agreement.
Notice as used in the pooling and servicing agreement shall mean notice to the
servicer by the trustee or Green Tree, or to Green Tree, the servicer, if any,
and the trustee by the holders of certificates representing interests
aggregating not less than 25% of the trust.
Rights Upon Event of Termination. Except as otherwise specified in the
related prospectus supplement, so long as an event of termination remains
unremedied, the trustee may, and at the written direction of the
certificateholders of a series evidencing interests aggregating 25% or more of
the related trust, shall, terminate all of the rights and obligations of the
servicer under the related pooling and servicing agreement and in and to the
contracts, and the proceeds of the contracts, at which time subject to
applicable law regarding the trustee's ability to make advances the trustee or
a successor servicer under the agreement will succeed to all the
responsibilities, duties and liabilities of the servicer under the agreement
and will be entitled to similar compensation arrangements; provided, however,
that neither the trustee nor any successor servicer will assume any obligation
of Green Tree to repurchase contracts for breaches of representations or
warranties, and the trustee and the successor servicer will not be liable for
any acts or omissions of the prior servicer occurring before a transfer of the
servicer's servicing and related functions or for any breach by the servicer of
any of its obligations contained in the pooling and servicing agreement.
Notwithstanding the termination, the servicer shall be entitled to payment of
amounts payable to it before termination, for services rendered before
termination. No termination will affect in any manner our obligation to
repurchase contracts for breaches of representations or warranties under the
agreement. If the trustee is obligated to succeed the servicer but is unwilling
or unable, it may appoint, or petition to a court of competent jurisdiction for
the appointment of a servicer. Pending the appointment, the trustee is
obligated to act in that capacity. The trustee and the successor may agree upon
the servicing compensation to be paid, which in no event may be greater than
the compensation to the servicer under the agreement.
No certificateholder will have any right under a pooling and servicing
agreement to institute any proceeding regarding the pooling and servicing
agreement unless the holder previously has given to the trustee written notice
of default and unless the holders of certificates evidencing interests
aggregating not less than 25% of the related trust requested the trustee in
writing to institute the proceeding in its own name as trustee and have offered
to the trustee reasonable indemnity and the trustee for 60 days has neglected
or refused to institute any proceeding. The trustee will be under no obligation
to take any action or institute, conduct or defend any litigation under the
pooling and servicing agreement at the request, order or direction of any of
the holders of certificates, unless the certificateholders have offered to the
trustee reasonable security or indemnity against the costs, expenses and
liabilities which the trustee may incur.
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DESCRIPTION OF FHA INSURANCE AND VA GUARANTEES
Certain of the contracts may be FHA-insured or VA-guaranteed, the payments
upon which, subject to the following discussion, are insured by the FHA under
Title I of the National Housing Act or partially guaranteed by the VA.
The regulations governing FHA manufactured home insurance provide that
insurance benefits are payable upon the repossession and resale of the
collateral and assignment of the contract to HUD. For a defaulted FHA contract,
the servicer must follow applicable regulations before initiating repossession
procedures. These regulations include requirements that the lender arrange a
face-to-face meeting with the borrower, initiate a modification or repayment
plan, if feasible, and give the borrower 30 days' notice of default before any
repossession. The insurance claim is paid in cash by HUD. For manufactured
housing contracts, the amount of insurance benefits generally paid by FHA is
equal to 90% of the sum of:
(1) the unpaid principal amount of the contract at the date of default and
uncollected interest earned to the date of default computed at the
contract rate, after deducting the best price obtainable for the
collateral, based in part on a HUD-approved appraisal, and all amounts
retained or collected by the lender from other sources regarding the
contract; and
(2) accrued and unpaid interest on the unpaid amount of the contract from
the date of default to the date of submission of the claim plus 15
calendar days, but in no event more than nine months, computed at a
rate of 7% per year; and
(3) costs paid to a dealer or other third party to repossess and preserve
the manufactured home; and
(4) the amount of any sales commission paid to a dealer or other third
party for the resale of the property; and
(5) for a land-and-home contract, property taxes, special assessments and
other similar charges and hazard insurance premiums, prorated to the
date of disposition of the property; and
(6) uncollected court costs; and
(7) legal fees, not to exceed $500; and
(8) expenses for recording the assignment of the lien on the collateral to
the United States.
The insurance available to a lender under FHA Title I insurance is subject
to the limit of a reserve amount equal to ten percent of the original principal
balance of all Title I insured loans originated by the lender, which amount is
reduced by all claims paid to the lender and which is increased by an amount
equal to ten percent of the original principal balance of insured loans
subsequently originated by the lender. As of December 31, 1998, the Company's
Title I reserve amount was approximately $85,534,000, which amount was
available to pay claims in respect of approximately $848,571,000 of FHA-insured
home
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improvement loans and manufactured housing contracts serviced by Green Tree. If
we were replaced as servicer of the contracts under the pooling and servicing
agreement, it is not clear from the FHA regulations what portion of this
reserve amount would be available for claims for the FHA-insured contracts. The
obligation to pay insurance premiums to FHA is our obligation, as servicer of
the FHA-insured contracts.
The maximum guarantee that may be issued by the VA for a VA-guaranteed
contract is the lesser of (1) the lesser of $20,000 and 40% of the principal
amount of the contract and (2) the maximum amount of guaranty entitlement
available to the obligor veteran, which may range from $20,000 to zero. The
amount payable under the guarantee will be the percentage of the VA contract
originally guaranteed applied to indebtedness outstanding as of the applicable
date of computation specified in the VA regulations, interest accrued on the
unpaid balance of the loan to the appropriate date of computation and limited
expenses of the contract holder, but in each case only to the extent that the
amounts have not been recovered through resale of the manufactured home. The
amount payable under the guarantee may in no event exceed the amount of the
original guarantee.
LEGAL ASPECTS OF THE CONTRACTS
The following discussion contains summaries of certain legal aspects of
manufactured housing contracts, including land-and-home contracts, which are
general in nature. Because these legal aspects are governed by applicable state
law, and these laws may differ substantially, the summaries do not purport to
be complete nor to reflect the laws of any particular state, nor to encompass
the laws of all states in which the security for the contracts or land-and-home
contracts is situated. The summaries are qualified in their entirety by
reference to the applicable federal and state laws governing the contracts or
land-and-home contracts.
The Contracts (Other than Land-and-Home Contracts)
General. As a result of the assignment of the contracts to Conseco
Securitizations, and Conseco Securitizations' conveyance and assignment of that
pool to the trustee, the trust will succeed collectively to all of the rights,
including the right to receive payment on the contracts, and will assume the
obligations of the obligee under the contracts. Each contract evidences both
(1) the obligation of the obligor to repay the loan evidenced by the contract,
and (2) the grant of a security interest in the manufactured home to secure
repayment of the loan. Aspects of both features of the contracts are described
more fully in this section below.
The contracts generally are "chattel paper" as defined in the UCC in effect
in the states in which the manufactured homes initially were registered. Under
the UCC, the sale of chattel paper is treated in a manner similar to perfection
of a security interest in chattel paper. Under the pooling and servicing
agreement, we will retain possession of the contracts as custodian for the
trustee, and will make an appropriate filing of a UCC-1 financing statement in
Minnesota to give notice of the trustee's ownership of the contracts. The
contracts will be stamped to reflect their assignment from Green Tree to the
trustee. However, if through negligence, fraud or otherwise, a subsequent
purchaser were able to
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take physical possession of the contracts without notice of the assignment, the
trustee's interest in the contracts could be defeated.
Security Interests in the Manufactured Homes. The manufactured homes
securing the contracts may be located in all 50 states and the District of
Columbia. Security interests in manufactured homes may be perfected either by
notation of the secured party's lien on the certificate of title or by delivery
of the required documents and payment of a fee to the state motor vehicle
authority, depending on state law. In some nontitle states, perfection pursuant
to the provisions of the UCC is required. We effect the notation or delivery of
the required documents and fees, and obtains possession of the certificate of
title, as appropriate, under the laws of the state in which a manufactured home
is registered. If we fail, due to clerical errors, to effect this notation or
delivery, or file the security interest under the wrong law (for example, under
a motor vehicle title statute rather than under the UCC, in a few states), the
certificateholders may not have a first priority security interest in the
manufactured home securing a contract. As manufactured homes have become larger
and often have been attached to their sites without any apparent intention to
move them, courts in many states have held that manufactured homes, under
certain circumstances, may become subject to real estate title and recording
laws. As a result, a security interest in a manufactured home could be rendered
subordinate to the interests of other parties claiming an interest in the home
under applicable state real estate law. In order to perfect a security interest
in a manufactured home under real estate laws, the holder of the security
interest must file either a fixture filing under the provisions of the UCC or a
real estate mortgage under the real estate laws of the state where the home is
located. See "Land-and-Home Contracts" below. These filings must be made in the
real estate records office of the county where the home is located.
Substantially all of the contracts contain provisions prohibiting the borrower
from permanently attaching the manufactured home to its site. So long as the
borrower does not violate this agreement, a security interest in the
manufactured home will be governed by the certificate of title laws or the UCC,
and the notation of the security interest on the certificate of title or the
filing of a UCC financing statement will be effective to maintain the priority
of the security interest in the manufactured home. If, however, a manufactured
home becomes permanently attached to its site, other parties could obtain an
interest in the manufactured home which is prior to the security interest
originally retained by the seller and transferred to Green Tree. We will
represent that at the date of the initial issuance of the related certificates
we have obtained a perfected first priority security interest by proper
notation or delivery of the required documents and fees on substantially all of
the manufactured homes securing the contracts.
We will assign the security interest in the manufactured homes to the
trustee on behalf of the certificateholders. Unless we specify otherwise in the
related prospectus supplement, neither Green Tree nor the trustee will amend
the certificates of title to identify the trustee as the new secured party, and
neither Green Tree nor the servicer will deliver the certificates of title to
the trustee or note the interest of the trustee. Accordingly, we will continue
to be named as the secured party on the certificates of title relating to the
manufactured homes. In some states, the assignment is an effective conveyance
of the security interest without amendment of any lien noted on the related
certificate of title and the new secured party
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succeeds to the servicer's rights as the secured party. However, in some states
in the absence of an amendment to the certificate of title, the assignment of
the security interest in the manufactured home may not be held effective or the
security interests may not be perfected and in the absence of the notation or
delivery to the trustee, the assignment of the security interest in the
manufactured home may not be effective against creditors of Green Tree or a
trustee in bankruptcy of Green Tree.
In the absence of fraud, forgery or permanent affixation of the
manufactured home to its site by the manufactured home owner, or administrative
error by state recording officials, the notation of the lien of Green Tree on
the certificate of title or delivery of the required documents and fees will be
sufficient to protect the certificateholders against the rights of subsequent
purchasers of a manufactured home or subsequent lenders who take a security
interest in the manufactured home. If there are any manufactured homes as to
which Green Tree's security interest is not perfected, the security interest
would be subordinate to, among others, subsequent purchasers for value of the
manufactured homes and holders of perfected security interests. There also
exists a risk in not identifying the trustee as the new secured party on the
certificate of title that, through fraud or negligence, the security interest
of the trustee could be released.
If the owner of a manufactured home moves it to a state other than the
state in which the manufactured home initially is registered, under the laws of
most states the perfected security interest in the manufactured home would
continue for four months after the relocation and thereafter only if and after
the owner re-registers the manufactured home in that state. If the owner were
to relocate a manufactured home to another state and not re-register the
manufactured home in that state, and if steps were not taken to re-perfect the
trustee's security interest in that state, the security interest in the
manufactured home would cease to be perfected. A majority of states generally
require surrender of a certificate of title to re-register a manufactured home;
accordingly, we must surrender possession if it holds the certificate of title
to the manufactured home or, in the case of manufactured homes registered in
states which provide for notation of lien, we would receive notice of surrender
if the security interest in the manufactured home is noted on the certificate
of title. Accordingly, we would have the opportunity to re-perfect our security
interest in the manufactured home in the state of relocation. In states which
do not require a certificate of title for registration of a manufactured home,
re-registration could defeat perfection. In the ordinary course of servicing
the manufactured housing conditional sales contracts, we take steps to effect
the re-perfection upon receipt of notice of re-registration or information from
the obligor as to relocation. Similarly, when an obligor under a contract sells
a manufactured home, we must surrender possession of the certificate of title
or we will receive notice as a result of our lien noted on the title and
accordingly we will have an opportunity to require satisfaction of the related
manufactured housing conditional sales contract before release of the lien.
Under the pooling and servicing agreement, the servicer is obligated to take
steps, at the servicer's expense, necessary to maintain perfection of security
interests in the manufactured homes.
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Under the laws of most states, liens for repairs performed on a
manufactured home and liens for personal property taxes take priority over a
perfected security interest. We will represent in the pooling and servicing
agreement that we have no knowledge of any liens on any manufactured home
securing payment on any contract. However, liens could arise at any time during
the term of a contract. No notice will be given to the trustee or
certificateholders if a lien arises.
Enforcement of Security Interests in Manufactured Homes. The servicer on
behalf of the trustee, as required by the related pooling and servicing
agreement, may take action to enforce the trustee's security interest on
contracts in default by repossession and resale of the manufactured homes
securing the defaulted contracts. So long as the manufactured home has not
become subject to real estate laws, a creditor can repossess a manufactured
home securing a contract by voluntary surrender, by self-help repossession that
is peaceful (i.e., without breach of the peace) or, in the absence of voluntary
surrender and the ability to repossess without breach of the peace, by judicial
process. The holder of a contract must give the debtor a number of days'
notice, which varies from 10 to 30 days depending on the state, before
commencement of any repossession. The UCC and consumer protection laws in most
states place restrictions on repossession sales, including requiring prior
notice to the debtor and commercial reasonableness in effecting such a sale.
The law in most states also requires that the debtor be given notice of any
sale before resale of the unit so that the debtor may redeem at or before the
resale. In the event of such repossession and resale of a manufactured home,
the trustee would be entitled to be paid out of the sale proceeds before the
proceeds could be applied to the payment of the claims of unsecured creditors
or the holders of subsequently perfected security interests or, thereafter, to
the debtor.
Under the laws applicable in most states, a creditor is entitled to obtain
a deficiency judgment from a debtor for any deficiency on repossession and
resale of the manufactured home securing the debtor's loan. However, some
states impose prohibitions or limitations on deficiency judgments, and in many
cases the defaulting borrower would have no assets with which to pay a
judgment.
Certain other statutory provisions, including federal and state bankruptcy
and insolvency laws and general equitable principles, may limit or delay the
ability of a lender to repossess and resell collateral or enforce a deficiency
judgment.
Under the terms of the federal Soldiers' and Sailors' Civil Relief Act of
1940, an obligor who enters military service after the origination of the
obligor's contract, including an obligor who is a member of the National Guard
or is in reserve status at the time of the origination of the contract and is
later called to active duty, may not be charged interest above an annual rate
of 6% during the period of the obligor's active duty status, unless a court
orders otherwise upon application of the lender. It is possible that the action
could have an effect, for an indeterminate period of time, on the ability of
the servicer to collect full amounts of interest on some of the contracts. Any
shortfall in interest collections resulting from the application of the Relief
Act, to the extent not covered by the subordination of a class of subordinated
certificates, could result in losses to the holders of a
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series of certificates. In addition, the Relief Act imposes limitations which
would impair the ability of the servicer to foreclose on an affected contract
during the obligor's period of active duty status. Thus, if a contract goes
into default, there may be delays and losses occasioned by the inability to
realize upon the manufactured home in a timely fashion.
Land-and-Home Contracts
General. The land-and-home contracts will be secured by either first
mortgages or deeds of trust, depending upon the prevailing practice in the
state where the underlying property is located. A mortgage creates a lien upon
the real property described in the mortgage. There are two parties to a
mortgage: the mortgagor, who is the borrower, and the mortgagee, who is the
lender. In a mortgage state, the mortgagor delivers to the mortgagee a note or
bond evidencing the loan and the mortgage. Although a deed of trust is similar
to a mortgage, a deed of trust has three parties: the borrower, a lender as
beneficiary, and a third-party grantee called the trustee. Under a deed of
trust, the borrower grants the property, irrevocably until the debt is paid, in
trust, generally with a power of sale, to the trustee to secure payment of the
loan. The trustee's authority under a deed of trust and the mortgagee's
authority under a mortgage are governed by the express provisions of the deed
of trust or mortgage, applicable law, and, in some cases, with respect to the
deed of trust, the directions of the beneficiary.
Foreclosure. Foreclosure of a mortgage is generally accomplished by
judicial action. Generally, the action is initiated by the service of legal
pleadings upon all parties having an interest of record in the real property.
Delays in completion of the foreclosure occasionally may result from
difficulties in locating necessary parties defendant. When the mortgagee's
right to foreclosure is contested, the legal proceedings necessary to resolve
the issue can be time-consuming and expensive. After the completion of a
judicial foreclosure proceeding, the court may issue a judgment of foreclosure
and appoint a receiver or other officer to conduct the sale of the property. In
some states, mortgages may also be foreclosed by advertisement, under a power
of sale provided in the mortgage. Foreclosure of a mortgage by advertisement is
essentially similar to foreclosure of a deed of trust by non-judicial power of
sale.
Foreclosure of a deed of trust is generally accomplished by a non-judicial
trustee's sale under a specific provision in the deed of trust that authorizes
the trustee to sell the property to a third party upon any default by the
borrower under the terms of the note or deed of trust. In some states, the
foreclosure also may be accomplished by judicial action in the manner provided
for foreclosure of mortgages. In some states the trustee must record a notice
of default and send a copy to the borrower-trustor and to any person who has
recorded a request for a copy of a notice of default and the notice of sale. In
addition, the trustee must provide notice in some states to any other
individual having an interest of record in the real property, including any
junior lienholders. If the deed of trust is not reinstated within any
applicable cure period, a notice of sale must be posted in a public place and,
in most states, published for a specified period of time in one or more
newspapers. In
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addition, some state laws require that a copy of the notice of sale be posted
on the property and sent to all parties having an interest of record in the
property.
In some states, the borrower-trustor has the right to reinstate the loan at
any time following default until shortly before the trustee's sale. In general,
the borrower, or any other person having a junior encumbrance on the real
estate, may, during a reinstatement period, cure the default by paying the
entire amount in arrears plus the costs and expenses incurred in enforcing the
obligation. Some state laws control the amount of foreclosure expenses and
costs, including attorneys' fees, that may be recovered by a lender.
In the case of foreclosure under either a mortgage or a deed of trust, the
sale by the receiver or other designated officer, or by the trustee, is a
public sale. However, because of the difficulty a potential buyer at the sale
would have in determining the exact status of title and because the physical
condition of the property may have deteriorated during the foreclosure
proceedings, it is not common for a third party to purchase the property at the
foreclosure sale. Rather, the lender generally purchases the property from the
trustee or receiver for an amount equal to the unpaid principal amount of the
note, accrued and unpaid interest and the expenses of foreclosure. Thereafter,
subject to the right of the borrower in some states to remain in possession
during the redemption period, the lender will assume the burdens of ownership,
including obtaining hazard insurance and making such repairs at its own expense
as are necessary to render the property suitable for sale. The lender commonly
will obtain the services of a real estate broker and pay the broker a
commission in connection with the sale of the property. Depending upon market
conditions, the ultimate proceeds of the sale of the property may not equal the
lender's investment in the property.
Rights of Redemption. In some states, after sale under a deed of trust or
foreclosure of a mortgage, the borrower and foreclosed junior lienors are given
a statutory period in which to redeem the property from the foreclosure sale.
In other states, this right of redemption applies only to sale following
judicial foreclosure, and not sale pursuant to a non-judicial power of sale. In
most states where the right of redemption is available, statutory redemption
may occur upon payment of the foreclosure purchase price, accrued interest and
taxes. In some states the right to redeem is an equitable right. The effect of
a right of redemption is to diminish the ability of the lender to sell the
foreclosed property. The exercise of a right of redemption would defeat the
title of any purchaser at a foreclosure sale, or of any purchaser from the
lender subsequent to judicial foreclosure or sale under a deed of trust.
Consequently, the practical effect of the redemption right is to force the
lender to maintain the property and pay the expenses of ownership until the
redemption period has run.
Anti-Deficiency Legislation and Other Limitations on Lenders. Some states
have imposed statutory restrictions that limit the remedies of a beneficiary
under a deed of trust or a mortgagee under a mortgage relating to a single
family residence. In some states, statutes limit the right of the beneficiary
or mortgagee to obtain a deficiency judgment against the borrower following
foreclosure or sale under a deed of trust. A deficiency judgment is a personal
judgment against the borrower equal in most cases to the difference between the
amount due to the lender and the net amount realized upon the foreclosure sale.
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Some state statutes may require the beneficiary or mortgagee to exhaust the
security afforded under a deed of trust or mortgage by foreclosure in an
attempt to satisfy the full debt before bringing a personal action against the
borrower. In other states, the lender has the option of bringing a personal
action against the borrower on the debt without first exhausting the security;
however, in some of these states, the lender, following judgment on the
personal action, may be deemed to have elected a remedy and may be precluded
from exercising remedies on the security. Consequently, the practical effect of
the election requirement, when applicable, is that lenders will usually proceed
first against the security rather than bringing a personal action against the
borrower.
Other statutory provisions may limit any deficiency judgment against the
former borrower following a foreclosure sale to the excess of the outstanding
debt over the fair market value of the property at the time of the sale. The
purpose of these statutes is to prevent a beneficiary or a mortgagee from
obtaining a large deficiency judgment against the former borrower as a result
of low or no bids at the foreclosure sale.
In some states, exceptions to the anti-deficiency statutes are provided for
in certain instances where the value of the lender's security has been impaired
by acts or omissions of the borrower, for example, in the event of waste of the
property.
In addition to anti-deficiency and related legislation, numerous other
federal and state statutory provisions, including the federal bankruptcy laws,
the federal Soldiers' and Sailors' Civil Relief Act of 1940 and state laws
affording relief to debtors, may interfere with or affect the ability of a
secured mortgage lender to realize upon its security. For example, with respect
to a land-and-home contract, in a Chapter 13 proceeding under the federal
Bankruptcy Code, when a court determines that the value of a home is less than
the principal balance of the loan, the court may prevent a lender from
foreclosing on the home, and, as part of the rehabilitation plan, reduce the
amount of the secured indebtedness to the value of the home as it exists at the
time of the proceeding, leaving the lender as a general unsecured creditor for
the difference between that value and the amount of outstanding indebtedness. A
bankruptcy court may grant the debtor a reasonable time to cure a payment
default, and in the case of a mortgage loan not secured by the debtor's
principal residence, also may reduce the monthly payments due under the
mortgage loan, change the rate of interest and alter the mortgage loan
repayment schedule. Some court decisions have applied such relief to claims
secured by the debtor's principal residence.
The Internal Revenue Code provides priority to certain tax liens over the
lien of the mortgage or deed of trust. The laws of some states provide priority
to certain tax liens over the lien of the mortgage or deed of trust. Numerous
federal and some state consumer protection laws impose substantive requirements
upon mortgage lenders in connection with the origination, servicing and the
enforcement of mortgage loans. These laws include the federal Truth in Lending
Act, Real Estate Settlement Procedures Act, Equal Credit Opportunity Act, Fair
Credit Billing Act, Fair Credit Reporting Act, and related statutes and
regulations. These federal laws and state laws impose specific statutory
liabilities upon
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lenders who originate or service mortgage loans and who fail to comply with the
provisions of the law. In some cases, this liability may affect assignees of
the contracts.
Consumer Protection Laws
The holder-in-due-course rule of the Federal Trade Commission is intended
to defeat the ability of the transferor of a consumer credit contract which is
the seller of goods which gave rise to the transaction and related lenders and
assignees, to transfer the contract free of notice of claims by the debtor. The
effect of this rule is to subject the assignee of the contract, such as the
trust, to all claims and defenses which the obligor could assert against the
seller of the manufactured home. Liability under this rule is limited to
amounts paid under a contract; however, the obligor also may be able to assert
the rule to set off remaining amounts due as a defense against a claim brought
by the trust against the obligor. Numerous other federal and state consumer
protection laws impose requirements applicable to the origination and lending
under the contracts, including the Truth in Lending Act, the Federal Trade
Commission Act, the Fair Credit Billing Act, the Fair Credit Reporting Act, the
Equal Credit Opportunity Act, the Fair Debt Collection Practices Act and the
Uniform Consumer Credit Code. In the case of some of these laws, the failure to
comply with their provisions may affect the enforceability of the related
contract.
Transfers of Manufactured Homes; Enforceability of Due-on-Sale Clauses
The contracts, in general, prohibit the sale or transfer of the related
manufactured homes without the consent of the servicer and permit the
acceleration of the maturity of the contracts by the servicer upon any sale or
transfer that is not consented to. We expect that we will permit most transfers
of manufactured homes and not accelerate the maturity of the related contracts.
In some cases, the transfer may be made by a delinquent Obligor in order to
avoid a repossession proceeding on a manufactured home.
In the case of a transfer of a manufactured home after which the servicer
desires to accelerate the maturity of the related contract, the servicer's
ability to do so will depend on the enforceability under state law of the due-
on-sale clause. The Garn-St. Germain Depositary Institutions Act of 1982
preempts, subject to exceptions and conditions, state laws prohibiting
enforcement of due-on-sale clauses applicable to the manufactured homes.
Consequently, in some states the servicer may be prohibited from enforcing a
"due-on-sale" clause on some manufactured homes.
Applicability of Usury Laws
Title V of the Depository Institutions Deregulation and Monetary Control
Act of 1980, provides that, subject to the following conditions, state usury
limitations shall not apply to any loan which is secured by a first lien on
certain kinds of manufactured housing. The contracts would be covered if they
satisfy certain conditions governing the terms of any prepayments, late charges
and deferral fees and requiring a 30-day notice period before instituting any
action leading to repossession of or foreclosure on to the related unit.
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Title V authorized any state to reimpose limitations on interest rates and
finance charges by adopting before April 1, 1983 a law or constitutional
provision which expressly rejects application of the federal law. Fifteen
states adopted such a law prior to the April 1, 1983 deadline. In addition,
even where Title V was not rejected, any state is authorized by the law to
adopt a provision limiting discount points or other charges on loans covered by
Title V. Green Tree will represent in the applicable Agreement that all of the
contracts comply with applicable usury law.
ERISA CONSIDERATIONS
The Employee Retirement Income Security Act of 1974 imposes requirements on
employee benefit plans subject to ERISA ("Plans") and on persons who are
fiduciaries with respect to such Plans. Generally, ERISA applies to investments
made by such Plans. Among other requirements, ERISA mandates that the assets of
Plans be held in trust and that the trustee, or other duly authorized
fiduciary, have exclusive authority and discretion to manage and control the
assets of those Plans. ERISA also imposes duties on persons who are fiduciaries
of the Plans. Under ERISA, and subject to exemptions not relevant to this
offering, any person who exercises any authority or control over the management
or disposition of the assets of a Plan is considered to be a fiduciary of the
Plan, subject to the standards of fiduciary conduct under ERISA. These
standards include the requirements that the assets of Plans be invested and
managed for the exclusive benefit of Plan participants and beneficiaries, a
determination by the Plan fiduciary that any such investment is permitted under
the governing Plan instruments and is prudent and appropriate for the Plan in
view of its overall investment policy and the composition and diversification
of its portfolio. Some employee benefit plans, such as governmental plans (as
defined in ERISA Section 3(32)) and some church plans (as defined in ERISA
Section 3(33)), are not subject to ERISA. Accordingly, assets of these plans
may be invested in certificates without regard to the ERISA considerations
described above and in the paragraphs below, subject to the provisions of
applicable state law. Any plan which is qualified and exempt from taxation
under Sections 401(a) and 501(a) of the Internal Revenue Code, however, is
subject to the prohibited transaction rules provided in Section 503 of the
Internal Revenue Code.
In addition to the imposition of general fiduciary standards of investment
prudence and diversification, ERISA, and the corresponding provisions of the
Internal Revenue Code, prohibit a broad range of transactions involving Plan
assets and persons having specified relationships to a Plan ("parties in
interest" within the meaning of ERISA, and "disqualified persons" within the
meaning of ERISA). These transactions are treated as "prohibited transactions"
under Sections 406 and 407 of ERISA and excise taxes are imposed upon such
persons by Section 4975 of the Internal Revenue Code. An investment in the
certificates by a Plan might constitute prohibited transactions under the
foregoing provisions unless an administrative exemption applies. In addition,
if an investing Plan's assets were deemed to include an interest in the assets
of the contract pool and not merely an interest in the certificates,
transactions occurring in the operation of the contract pool might constitute
prohibited transactions unless an administrative exemption applies. Exemptions
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which may be applicable to the acquisition and holding of the certificates or
to the servicing and operation of the contract pool are noted in the paragraphs
below.
The Department of Labor has issued a regulation (29 C.F.R. Section 2510.3-
101) concerning the definition of what constitutes the assets of a Plan. This
regulation provides that, as a general rule, the underlying assets and
properties of corporations, partnerships, trusts and certain other entities in
which a Plan makes an equity investment will be deemed for purposes of ERISA to
be assets of the investing plan unless certain exceptions apply. However, the
regulation provides that, generally, the assets of a corporation or partnership
in which a Plan invests will not be deemed for purposes of ERISA to be assets
of such Plan if the equity interest acquired by the investing Plan is a
publicly-offered security. A publicly-offered security, as defined under the
regulation, is a security that is widely held, freely transferable, and
registered under the Securities Exchange Act of 1934. The certificates are not
expected to be publicly-offered securities under the terms of this regulation.
Relief from the prohibited transaction rules of Section 406 and 407 of
ERISA (and from the prohibited transaction excise tax provisions of Section
4975 of the Internal Revenue Code) may be found under the provisions of
specific statutory or administrative exemptive relief authorized under Section
408 of ERISA. In Prohibited Transaction Exemption 83-1 ("PTE 83-1"), which
amended Prohibited Transaction Exemption 81-7, the DOL exempted from ERISA's
prohibited transaction rules transactions relating to the operation of
residential mortgage pool investment trusts and the purchase, sale and holding
of "mortgage pool pass-through certificates" in the initial issuance of such
certificates. PTE 83-1 permits, subject to certain conditions, transactions
which might otherwise be prohibited between Plans and parties in interest with
respect to those Plans related to the origination, maintenance and termination
of mortgage pools consisting of mortgage loans secured by first or second
mortgages or deeds of trust on single-family residential property, and the
acquisition and holding of certain mortgage pool pass-through certificates
representing an interest in such mortgage pools by Plans. If the general
conditions of PTE 83-1 are satisfied, investments by a Plan in certificates
that represent interests in a mortgage pool consisting of single family loans
will be exempt from the prohibitions of Sections 406(a) and 407 of ERISA
(relating generally to transactions with parties in interest who are not
fiduciaries) if the Plan purchases such certificates at no more than fair
market value, and will be exempt from the prohibitions of Section 406(b)(1) and
(2) of ERISA (relating generally to transactions with fiduciaries) if, in
addition, the purchase is approved by an independent fiduciary, no sales
commission is paid to the pool sponsor, the Plan does not purchase more than 25
percent of such certificates, and at least 50 percent of all such certificates
are purchased by persons independent of the pool sponsor or pool trustee.
However, PTE 83-1 does not provide an exemption for transactions involving
subordinate certificates or for certificates representing an interest in
conditional sales contracts and installment sales or loan agreements secured by
manufactured housing like the contracts.
We cannot assure you that any of the exceptions provided in the regulation
described in the paragraph above, PTE 83-1 or any other administrative
exemption under ERISA, will apply to the purchase of certificates offered under
this prospectus, and, as a result, an
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investing Plan's assets could be considered to include an undivided interest in
the manufactured housing contracts and any other assets held in the contract
pool. If the assets of a contract pool are considered assets of an investing
Plan, Green Tree, the servicer, the trustee and other persons, in providing
services on the contracts, may be considered fiduciaries to the Plan and
subject to the fiduciary responsibility provisions of Title I of ERISA and the
prohibited transaction provisions of Section 4975 of the Internal Revenue Code
for transactions involving those assets unless a statutory or administrative
exemption applies.
Any Plan fiduciary considering the purchase of a certificate should consult
with its counsel about the potential applicability of ERISA and the Internal
Revenue Code to the investment. Moreover, each Plan fiduciary should determine
whether, under the general fiduciary standards of investment prudence and
diversification, an investment in the certificates is appropriate for the Plan,
taking into account the overall investment policy of the Plan and the
composition of the Plan's investment portfolio.
PTE 95-60 exempts from ERISA's prohibited transaction rules transactions
engaged in by insurance company general accounts in which an employee benefit
plan has an interest if specified conditions are met. Additional exemptive
relief is provided for plans to engage in transactions with persons who provide
services to insurance company general accounts. PTE 95-60 also permits
transactions relating to the origination and operation of asset pool investment
trusts in which an insurance company general account has an interest as the
result of the acquisition of certificates issued by the trust.
PTE 95-60 will provide an exemption for transactions involving certificates
representing interests in asset-backed pass-through trusts that consist of
certain receivables, loans and other obligations that meet the conditions and
requirements of PTE 95-60. The receivables covered by PTE 95-60 include
manufactured housing installment sale contracts and installment loan agreements
such as the manufactured housing contracts. The exemption offered by PTE 95-60
is conditioned upon compliance with the requirements of one of several
"underwriter exemptions," other than compliance with the requirements that the
certificates acquired by the general account not be subordinated and receive a
rating that is in one of the three highest generic rating categories from
either S&P, Moody's, Duff & Phelps Credit Rating Co. or Fitch.
In addition to any exemption that may be available under PTCE 95-60 for the
purchase and holding of the certificates by an insurance company general
account, the Small Business Job Protection Act of 1996 added a new Section
401(c) to ERISA, which provides exemptive relief from the provisions of Part 4
of Title I of ERISA and Section 4975 of the Internal Revenue Code, including
the prohibited transaction restrictions imposed by ERISA and the related excise
taxes imposed by the Internal Revenue Code, for transactions involving an
insurance company general account. Under Section 401(c) of ERISA, the DOL
published proposed regulations ("Proposed 401(c) Regulations") on December 22,
1997 to provide guidance for the purpose of determining, in cases where
insurance policies supported by an insurer's general account are issued to or
for the benefit of a Plan on or before
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December 31, 1998, which general account assets constitute Plan assets. Section
401(c) of ERISA generally provides that, until the date which is 18 months
after the Proposed 401(c) Regulations become final, no person will be subject
to liability under Part 4 of Title I of ERISA and Section 4975 of the Internal
Revenue Code on the basis of a claim that the assets of an insurance company
general account constitute Plan assets, unless
(1) as otherwise provided by the Secretary of Labor in the Proposed
401(c) Regulations to prevent avoidance of the regulations; or
(2) an action is brought by the Secretary of Labor for breaches of
fiduciary duty which would also constitute a violation of federal or
state criminal law.
Any assets of an insurance company general account which support insurance
policies issued to a Plan after December 31, 1998 or issued to Plans on or
before December 31, 1998 for which the insurance company does not comply with
the Proposed 401(c) Regulations may be treated as Plan assets. In addition,
because Section 401(c) does not relate to insurance company separate accounts,
separate account assets are still treated as Plan assets of any Plan invested
in the separate account. Insurance companies contemplating the investment of
general account assets in the certificates should consult with their legal
counsel about the applicability of PTCE 95-60 and Section 401(c) of ERISA,
including the general account's ability to continue to hold the securities
after the date which is 18 months after the date the Proposed 401(c)
Regulations become final.
FEDERAL INCOME TAX CONSEQUENCES
General
The following is a general discussion of certain federal income tax
consequences relating to the purchase, ownership, and disposition of the
certificates. The discussion is based upon laws, regulations, rulings, and
decisions now in effect, including Treasury Regulations issued on December 23,
1992, and generally effective for REMICs with startup days on or after November
12, 1991, all of which are subject to change or possibly differing
interpretations. The discussion does not purport to deal with federal income
tax consequences applicable to all categories of investors, some of which may
be subject to special rules. Investors should consult their own tax advisors to
determine the federal, state, local, and any other tax consequences of the
purchase, ownership, and disposition of the certificates.
Many aspects of the federal tax treatment of the purchase, ownership, and
disposition of the certificates will depend upon whether an election is made to
treat the trust or a segregated portion of the trust evidenced by a particular
series or sub-series of certificates as a REMIC within the meaning of Section
860D(a) of the Internal Revenue Code. The prospectus supplement for each series
will indicate whether or not an election to be treated as a REMIC has been or
will be made with respect thereto. The following discussion deals
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first with series for which a REMIC election is made and then with series for
which a REMIC election is not made.
REMIC Series
For each series of certificates for which a REMIC election is made, counsel
to Green Tree identified in the applicable prospectus supplement will have
advised Green Tree that in its opinion, assuming (1) the making of that
election in accordance with the requirements of the Internal Revenue Code and
(2) ongoing compliance with the applicable pooling and servicing agreement, at
the initial issuance of the certificates in the series the trust will qualify
as a REMIC and the certificates in that series ("REMIC Certificates") will be
treated either as regular interests in the REMIC within the meaning of Section
860G(a)(1) of the Internal Revenue Code ("Regular Certificates") or as residual
interests in the REMIC within the meaning of Section 860G(a)(2) of the Internal
Revenue Code ("Residual Certificates").
Qualification as a REMIC. Qualification as a REMIC involves ongoing
compliance with requirements and the following discussion assumes that these
requirements will be satisfied by the trust so long as there are any REMIC
certificates outstanding. Substantially all of the assets of the REMIC must
consist of qualified mortgages and permitted investments as of the close of the
third month beginning after the day on which the REMIC issues all of its
regular and residual interests (the "startup day") and at all times thereafter.
The term "qualified mortgage" means any obligation, including a participation
or certificate of beneficial ownership in that obligation, which is principally
secured by an interest in real property that is transferred to the REMIC on the
startup day in exchange for regular or residual interests in the REMIC or is
purchased by the REMIC within the three-month period beginning on the startup
day if the purchase is under a fixed price contract in effect on the startup
day. The REMIC regulations provide that a contract is principally secured by an
interest in real property if the fair market value of the real property
securing the contract is at least equal to either (1) 80% of the issue price
(generally, the principal balance) of the contract at the time it was
originated or (2) 80% of the adjusted issue price (the then-outstanding
principal balance, with adjustments) of the contract at the time it is
contributed to a REMIC. The fair market value of the underlying real property
is to be determined after taking into account other liens encumbering that real
property. Alternatively, a contract is principally secured by an interest in
real property if substantially all of the proceeds of the contract were used to
acquire or to improve or protect an interest in real property that, at the
origination date, is the only security for the contract (other than the
personal liability of the obligor). The REMIC regulations provide that
obligations secured by manufactured housing or mobile homes (not including
recreational vehicles, campers or similar vehicles) which are single family
residences under Section 25(e)(10) of the Internal Revenue Code will qualify as
obligations secured by real property without regard to state law
classifications. See the discussion below under "REMIC Series--Status of
Manufactured Housing Contracts." A qualified mortgage also includes a qualified
replacement mortgage that is used to replace any qualified mortgage within
three months of the startup day or to replace a defective mortgage within two
years of the startup day.
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"Permitted investments" consist of:
. temporary investments of cash received under qualified mortgages before
distribution to holders of interests in the REMIC ("cash-flow
investments"),
. amounts, such as a reserve rund, if any, reasonably required to provide
for full payment of expenses of the REMIC, the principal and interest
due on regular or residual interests in the event of defaults on
qualified mortgages, lower than expected returns on cash-flow
investments, prepayment interest shortfalls or other contingencies
("qualified reserve assets"), and
. property acquired as a result of foreclosure of defaulted qualified
mortgages ("foreclosure property").
A reserve fund will not be qualified if more than 30% of the gross income from
the assets in the reserve fund is derived from the sale or other disposition of
property held for three months or less, unless the sale is necessary to prevent
a default in payment of principal or interest on Regular Certificates. In
accordance with Section 860G(a)(7) of the Internal Revenue Code, a reserve fund
must be "promptly and appropriately" reduced as payments on contracts are
received. Foreclosure property will be a permitted investment only to the
extent that the property is not held for more than two years.
The Internal Revenue Code requires that in order to qualify as a REMIC an
entity must make reasonable arrangements designed to ensure that specified
entities, generally including governmental entities or other entities that are
exempt from United States tax, including the tax on unrelated business income
("disqualified organizations"), not hold residual interests in the REMIC.
Consequently, it is expected that in the case of any trust for which a REMIC
election is made the transfer, sale, or other disposition of a Residual
Certificate to a disqualified organization will be prohibited and the ability
of a Residual Certificate to be transferred will be conditioned on the
trustee's receipt of a certificate or other document representing that the
proposed transferee is not a disqualified organization. The transferor of a
Residual Certificate must not, as of the time of the transfer, have actual
knowledge that the representation is false. The Internal Revenue Code further
requires that reasonable arrangements must be made to enable a REMIC to provide
the IRS and certain other parties, including transferors of residual interests
in a REMIC, with the information needed to compute the tax imposed by Section
860E(e)(1) of the Internal Revenue Code if, in spite of the steps taken to
prevent disqualified organizations from holding residual interests, such an
organization does, in fact, acquire a residual interest. See "REMIC Series--
Restrictions on Transfer of Residual Certificates" below.
If the trust fails to comply with one or more of the ongoing requirements
for qualification as a REMIC, the trust will not be treated as a REMIC for the
year during which the failure occurs and thereafter unless the IRS determines,
in its discretion, that the failure was inadvertent (in which case, the IRS may
require any adjustments which it deems appropriate). If the ownership interests
in the assets of the trust consist of multiple classes, failure to treat the
trust fund as a REMIC may cause the trust to be treated as an association
taxable as a corporation. This treatment could result in income of the trust
being subject to
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corporate tax in the hands of the trust and in a reduced amount being available
for distribution to certificateholders as a result of the payment of the taxes.
Status of Manufactured Housing Contracts. The REMIC regulations as well as
a notice issued by the IRS provide that obligations secured by interests in
manufactured housing, which qualify as "single family residences" within the
meaning of Section 25(e)(10) of the Internal Revenue Code, are to be treated as
"qualified mortgages" for a REMIC. Under Section 25(e)(10) of the Internal
Revenue Code, the term "single family residence" includes any manufactured home
which has a minimum of 400 square feet of living space and a minimum width in
excess of 102 inches and which is of a kind customarily used at a fixed
location. Green Tree will represent and warrant that each of the manufactured
homes securing the contracts which are a part of a trust meets this definition
of a "single family residence." See the discussion above under "REMIC Series--
Qualification as a REMIC."
Two-Tier REMIC Structures. For certain series of certificates, two separate
elections may be made to treat segregated portions of the assets of a single
trust as REMICs for federal income tax purposes (respectively, the "Subsidiary
REMIC" and the "Master REMIC"). Upon the issuance of any such series of
certificates, counsel will have advised Green Tree, as described above, that at
the initial issuance of the certificates, the Subsidiary REMIC and the Master
REMIC will each qualify as a REMIC for federal income tax purposes, and that
the certificates in that a series will be treated either as Regular
Certificates or Residual Certificates of the appropriate REMIC. Only REMIC
Certificates issued by the Master REMIC will be offered under this prospectus.
Solely for the purpose of determining whether the regular certificates will
constitute qualifying real estate or real property assets for certain
categories of financial institutions or real estate investment trusts as
described below, both REMICs in a two-tier REMIC structure will be treated as
one. See the discussion below under "REMIC Series--Taxation of Regular
Interests."
Taxation of Regular Interests. Regular Certificates will be treated as new
debt instruments issued by the REMIC on the startup day. If a Regular
Certificate represents an interest in a REMIC that consists of a specified
portion of the interest payments on the REMIC's qualified mortgages, the stated
principal amount for that Regular Certificate may be zero. Such a specified
portion may consist of a fixed number of basis points, a fixed percentage of
interest or a qualified variable rate on some or all of the qualified
mortgages. Stated interest on a Regular Certificate will be taxable as ordinary
income. Holders of Regular Certificates that would otherwise report income
under a cash method of accounting will be required to report income on these
Regular Certificates under the accrual method. Under temporary treasury
regulations, if a trust, with respect to which a REMIC election is made, is
considered to be a single-class REMIC, a portion of the REMIC's servicing fees,
administrative and other non-interest expenses, including assumption fees and
late payment charges retained by Green Tree, will be allocated as a separate
item to those Regular Certificateholders that are pass-through interest
holders. Generally, a single-class REMIC is defined as a REMIC that would be
treated as a fixed investment trust under applicable law but for its
qualification as a REMIC, or a REMIC that is substantially similar to an
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investment trust but is structured with the principal purpose of avoiding this
allocation requirement imposed by the temporary treasury regulations.
Generally, a pass-through interest holder refers to individuals, entities taxed
as individuals, such as certain trusts and estates, and regulated investment
companies. An individual, an estate, or a trust that holds a Regular
Certificate in the REMIC will be allowed to deduct the foregoing expenses under
Section 212 of the Internal Revenue Code only to the extent that, in the
aggregate and combined with certain other itemized deductions, they exceed 2%
of the adjusted gross income of the holder. In addition, Section 68 of the
Internal Revenue Code provides that the amount of itemized deductions
(including those provided for in Section 212 of the Internal Revenue Code)
otherwise allowable for the taxable year for an individual whose adjusted gross
income exceeds a threshold amount specified in the Internal Revenue Code
($124,500 in 1998 in the case of a joint return) will be reduced by the lesser
of (1) 3% of the excess of adjusted gross income over the specified threshold
amount or (2) 80% of the amount of itemized deductions otherwise allowable for
such taxable year. As a result of these limitations, certain holders of Regular
Certificates in single-class REMICs may not be entitled to deduct all or any
part of these expenses.
Tax Status of REMIC Certificates. In general, (1) Regular Certificates held
by a thrift institution taxed as a "domestic building and loan association"
within the meaning of Section 7701(a)(19) of the Internal Revenue Code will
constitute "a regular ... interest in a REMIC" within the meaning of Section
7701(a)(19)(C)(xi) of the Internal Revenue Code; and (2) Regular Certificates
held by a real estate investment trust will constitute "real estate assets"
within the meaning of Section 856(c)(4)(A) of the Internal Revenue Code and
interest thereon will be considered "interest on obligations secured by
mortgages on real property" within the meaning of Section 856(c)(3)(B) of the
Internal Revenue Code. If less than 95% of the average adjusted basis of the
assets comprising the REMIC are assets qualifying under any of the foregoing
Sections of the Internal Revenue Code (including assets described in Section
7701(a)(19)(C) of the Internal Revenue Code), then the Regular Certificates
will be qualifying assets only to the extent that the assets comprising the
REMIC are qualifying assets. Section 7701(a)(19)(C)(v) of the Internal Revenue
Code provides that "loans secured by an interest in real property" includes
loans secured by mobile homes not used on a transient basis. Treasury
regulations promulgated under Section 856 of the Internal Revenue Code state
that local law definitions are not controlling in determining the meaning of
the term "real property" for purposes of that section, and the IRS has ruled
that obligations secured by permanently installed mobile home units qualify as
"real estate assets" under this provision. Furthermore, interest paid with
respect to certificates held by a real estate investment trust will be
considered "interest on obligations secured by mortgages on real property or on
interests in real property" within the meaning of Section 856(c)(3)(B) of the
Internal Revenue Code to the same extent that the certificates themselves are
treated as real estate assets. Regular Certificates held by a regulated
investment company or a real estate investment trust will not constitute
"Government securities" within the meaning of Sections 851(b)(4)(A)(i) and
856(c)(5)(A) of the Internal Revenue Code, respectively. In addition, the REMIC
regulations provide that payments on contracts held and reinvested pending
distribution to certificateholders will be considered to be "real estate
assets" within
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the meaning of Section 856(c)(4)(A) of the Internal Revenue Code. The Small
Business Job Protection Act of 1996 repealed the application of Section 593(d)
of the Internal Revenue Code to any taxable year beginning after December 31,
1995. Entities affected by the foregoing provisions of the Internal Revenue
Code that are considering the purchase of certificates should consult their own
tax advisors regarding these provisions.
Original Issue Discount. Regular Certificates may be issued with "original
issue discount." Rules governing original issue discount are set forth in
Sections 1271-1273 and 1275 of the Internal Revenue Code and the Treasury
regulations issued thereunder in January 1994, as amended in June 1996 (the
"OID Regulations"). The discussion herein is based in part on the OID
Regulations, which generally apply to debt instruments issued on or after April
4, 1994, but which generally may be relied upon for debt instruments issued
after December 21, 1992. Moreover, although the rules relating to original
issue discount contained in the Internal Revenue Code were modified by the Tax
Reform Act of 1986 specifically to address the tax treatment of securities,
such as the Regular Certificates, on which principal is required to be prepaid
based on prepayments of the underlying assets, regulations under that
legislation have not yet been finalized. Certificateholders also should be
aware that the OID Regulations do not address certain issues relevant to
prepayable securities such as the Regular Certificates.
In general, in the hands of the original holder of a Regular Certificate,
original issue discount, if any, is the difference between the "stated
redemption price at maturity" of the Regular Certificate and its "issue price."
The original issue discount with respect to a Regular Certificate will be
considered to be zero if it is less than .25% of the Regular Certificate's
stated redemption price at maturity multiplied by the number of complete years
from the date of issue of the Regular Certificate to its maturity date. The OID
Regulations, however, provide a special de minimis rule to apply to obligations
such as the Regular Certificates that have more than one principal payment or
that have interest payments that are not qualified stated interest as defined
in the OID Regulations, payable before maturity ("installment obligations").
Under the special rule, original issue discount on an installment obligation is
generally considered to be zero if it is less than .25% of the principal amount
of the obligation multiplied by the weighted average maturity of the obligation
as defined in the OID Regulations. Because of the possibility of prepayments,
it is not clear whether or how the de minimis rules will apply to the Regular
Certificates. It is possible that the anticipated rate of prepayments assumed
in pricing the debt instrument (the "Prepayment Assumption") will be required
to be used in determining the weighted average maturity of the Regular
Certificates. In the absence of authority to the contrary, we expect to apply
the de minimis rule applicable to installment obligations by using the
Prepayment Assumption. The OID Regulations provide a further special de minimis
rule applicable to any Regular Certificates that are self-amortizing
installment obligations, i.e., Regular Certificates that provide for equal
payments composed of principal and qualified stated interest payable
unconditionally at least annually during its entire term, with no significant
additional payment required at maturity. Under this special rule, original
issue discount on a self-amortizing installment obligation is generally
considered to be zero if it is less than .167% of the principal amount
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of the obligation multiplied by the number of complete years from the date of
issue of such a Regular Certificate to its maturity date.
Generally, the original holder of a Regular Certificate that includes a de
minimis amount of original issue discount includes that original issue discount
in income as principal payments are made. The amount includable in income with
respect to each principal payment equals a pro rata portion of the entire
amount of de minimis original issue discount with respect to that Regular
Certificate. Any de minimis amount of original issue discount includable in
income by a holder of a Regular Certificate is generally treated as a capital
gain if the Regular Certificate is a capital asset in the hands of the holder
of the certificate. Pursuant to the OID Regulations, a holder of a Regular
Certificate that uses the accrual method of tax accounting or that acquired the
Regular Certificate on or after April 4, 1994, may, however, elect to include
in gross income all interest that accrues on a Regular Certificate, including
any de minimis original issue discount and market discount, by using the
constant yield method described below with respect to original issue discount.
The stated redemption price at maturity of a Regular Certificate generally
will be equal to the sum of all payments, whether denominated as principal or
interest, to be made with respect thereto other than qualified stated interest.
Pursuant to the OID Regulations, qualified stated interest is stated interest
that is unconditionally payable at least annually at a single fixed rate of
interest (or, under certain circumstances, a variable rate tied to an objective
index) during the entire term of the Regular Certificate, including short
periods. Under the OID Regulations, interest is considered unconditionally
payable only if reasonable legal remedies exist to compel timely payment or the
debt instrument otherwise provides terms and conditions that make the
likelihood of late payment or nonpayment a remote contingency. It is possible
that interest payable on Regular Certificates may be considered not to be
unconditionally payable under the OID Regulations. Until further guidance is
issued, however, the REMIC will treat the interest on Regular Certificates as
unconditionally payable under the OID Regulations. In addition, under the OID
Regulations, certain variable interest rates payable on Regular Certificates,
including rates based upon the weighted average interest rate of a pool of
contracts, might not be treated as qualified stated interest. In this case, the
OID Regulations would treat interest under these rates as contingent interest
which generally must be included in income by the Regular Certificateholder
when the interest becomes fixed, as opposed to when it accrues. Until further
guidance is issued concerning the treatment of the interest payable on Regular
Certificates, the REMIC will treat the interest as being payable at a variable
rate tied to a single objective index of market rates. Prospective investors
should consult their tax advisors regarding the treatment of the interest under
the OID Regulations. In the absence of authority to the contrary and if
otherwise appropriate, Green Tree expects to determine the stated redemption
price at maturity of a Regular Certificate by assuming that the anticipated
rate of prepayment for all contracts will occur in such a manner that the
initial remittance rate for a certificate will not change. Accordingly,
interest at the initial remittance rate will constitute qualified stated
interest payments for purposes of applying the original issue discount
provisions of the Internal Revenue Code. In general, the issue price of a
Regular Certificate is the first price at which a substantial amount of the
Regular Certificates of the class are sold for money to the
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public, excluding bond houses, brokers or similar persons or organizations
acting in the capacity of underwriters, placement agents or wholesalers. If a
portion of the initial offering price of a Regular Certificate is allocable to
interest that has accrued prior to its date of issue, the issue price of such a
Regular Certificate includes that pre-issuance accrued interest.
If the Regular Certificates are determined to be issued with original issue
discount, a holder of a Regular Certificate must generally include the original
issue discount in ordinary gross income for federal income tax purposes as it
accrues in advance of the receipt of any cash attributable to such income. The
amount of original issue discount, if any, required to be included in a Regular
Certificateholder's ordinary gross income for federal income tax purposes in
any taxable year will be computed in accordance with Section 1272(a) of the
Internal Revenue Code and the OID Regulations. Under this section and the OID
Regulations, original issue discount accrues on a daily basis under a constant
yield method that takes into account the compounding of interest. The amount of
original issue discount to be included in income by a holder of a debt
instrument, such as a Regular Certificate, under which principal payments may
be subject to acceleration because of prepayments of other debt obligations
securing such instruments, is computed by taking into account the Prepayment
Assumption.
The amount of original issue discount includable in income by a holder of a
Regular Certificate is the sum of the daily portions of the original issue
discount for each day during the taxable year on which the holder held the
Regular Certificate. The daily portions of original issue discount are
determined by allocating to each day in any accrual period a pro rata portion
of the excess, if any, of the sum of (1) the present value of all remaining
payments to be made on the Regular Certificate as of the close of the accrual
period and (2) the payments during the accrual period of amounts included in
the stated redemption price of the Regular Certificate over the adjusted issue
price of the Regular Certificate at the beginning of the accrual period.
Generally, the accrual period for the Regular Certificates corresponds to the
intervals at which amounts are paid or compounded with respect to such Regular
Certificate, beginning with their date of issuance and ending with the maturity
date. The adjusted issue price of a Regular Certificate at the beginning of any
accrual period is the sum of the issue price and accrued original issue
discount for each prior accrual period reduced by the amount of payments other
than payments of qualified stated interest made during each prior accrual
period. The Internal Revenue Code requires the present value of the remaining
payments to be determined on the bases of:
. the original yield to maturity, determined on the basis of compounding
at the close of each accrual period and properly adjusted for the
length of the accrual period;
. events, including actual prepayments, which have occurred before the
close of the accrual period; and
. the assumption that the remaining payments will be made in accordance
with the original Prepayment Assumption.
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The effect of this method is to increase the portions of original issue
discount that a Regular Certificateholder must include in income to take into
account prepayments with respect to the contracts held by the trust that occur
at a rate that exceeds the Prepayment Assumption and to decrease, but not below
zero for any period, the portions of original issue discount that a Regular
Certificateholder must include in income to take into account prepayments on to
the contracts that occur at a rate that is slower than the Prepayment
Assumption. Although original issue discount will be reported to Regular
Certificateholders based on the Prepayment Assumption, no representation is
made to Regular Certificateholders that the Contracts will be prepaid at that
rate or at any other rate.
A subsequent purchaser of a Regular Certificate will also be required to
include in the purchaser's ordinary gross income for federal income tax
purposes the original issue discount, if any, accruing with respect to the
Regular Certificate, unless the price paid equals or exceeds the Regular
Certificate's outstanding principal amount. If the price paid exceeds the sum
of the Regular Certificate's issue price plus the aggregate amount of original
issue discount accrued on the Regular Certificate, but does not equal or exceed
the outstanding principal amount of the Regular Certificate, the amount of
original issue discount to be accrued will be reduced in accordance with a
formula listed in Section 1272(a)(7)(B) of the Internal Revenue Code.
Green Tree believes that the holder of a Regular Certificate determined to
be issued with non-de minimis original issue discount will be required to
include the original issue discount in ordinary gross income for federal income
tax purposes computed in the manner described above. However, the OID
Regulations either do not address or are subject to varying interpretations
regarding several issues concerning the computation of original issue discount
for obligations such as the Regular Certificates.
Variable Rate Regular Certificates. Regular Certificates may bear interest
at a variable rate. Under the OID Regulations, if a variable rate Regular
Certificate provides for qualified stated interest payments computed on the
basis of certain qualified floating rates or objective rates, then any original
issue discount on a Regular Certificate is computed and accrued under the same
methodology that applies to Regular Certificates paying qualified stated
interest at a fixed rate. See the discussion above under "REMIC Series--
Original Issue Discount." Accordingly, if the issue price of such a Regular
Certificate is equal to its stated redemption price at maturity, the Regular
Certificate will not have any original issue discount.
For purposes of applying the original issue discount provisions of the
Internal Revenue Code, all or a portion of the interest payable on a variable
rate Regular Certificate may not be treated as qualified stated interest in
certain circumstances, including the following:
. if the variable rate of interest is subject to one or more minimum or
maximum rate floors or ceilings which are not fixed throughout the term
of the Regular Certificate and which are reasonably expected as of the
issue date to cause the rate in certain
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accrual periods to be significantly higher or lower than the overall
expected return on the Regular Certificate determined without the floor
or ceiling;
. if it is reasonably expected that the average value of the variable
rate during the first half of the term of the Regular Certificate will
be either significantly less than or significantly greater than the
average value of the rate during the final half of the term of the
Regular Certificate; or
. if interest is not payable in all circumstances.
In these situations, as well as others, it is unclear under the OID
Regulations whether these interest payments constitute qualified stated
interest payments, or must be treated either as part of a Regular
Certificate's stated redemption price at maturity resulting in original issue
discount, or represent contingent payments which are recognized as ordinary
gross income for federal income tax purposes only as the interest payments
become fixed in each accrual period.
If a variable rate Regular Certificate is deemed to have been issued with
original issue discount, as described above, the amount of original issue
discount accrues on a daily basis under a constant yield method that takes
into account the compounding of interest; provided, however, that the interest
associated with the Regular Certificate generally is assumed to remain
constant throughout the term of the Regular Certificate at a rate that, in the
case of a qualified floating rate, equals the value of such qualified floating
rate as of the issue date of the Regular Certificate, or, in the case of an
objective rate, at a fixed rate that reflects the yield that is reasonably
expected for the Regular Certificate. A holder of such a Regular Certificate
would then recognize original issue discount during each accrual period which
is calculated based upon such Regular Certificate's assumed yield to maturity,
adjusted to reflect the difference between the assumed and actual interest
rate.
The OID Regulations either do not address or are subject to varying
interpretations on several issues concerning the computation of original issue
discount of the Regular Certificates, including variable rate Regular
Certificates. Additional information regarding the manner of reporting
original issue discount to the Internal Revenue Code and to holders of
variable rate Regular Certificates will be provided in the prospectus
supplement relating to the issuance of the Regular Certificates.
Market Discount. Regular Certificates, whether or not issued with original
issue discount, will be subject to the market discount rules of the Internal
Revenue Code. A purchaser of a Regular Certificate who purchases the Regular
Certificate at a market discount (i.e., a discount from its original issue
price plus any accrued original issue discount, if any, as described above)
will be required to recognize accrued market discount as ordinary income as
payments of principal are received on such Regular Certificate or upon the
sale or exchange of the Regular Certificate. In general, the holder of a
Regular Certificate may elect to treat market discount as accruing either (1)
under a constant yield method that is similar to the method for the accrual of
original issue discount or (2) in proportion to accruals of
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original issue discount (or, if there is no original issue discount, in
proportion to accruals of stated interest), in each case computed taking into
account the Prepayment Assumption.
The Internal Revenue Code provides that the market discount on a Regular
Certificate will be considered to be zero if the amount allocable to the
Regular Certificate is less than 0.25% of the Regular Certificate's stated
redemption price at maturity multiplied by the number of complete years
remaining to its maturity after the holder acquired the obligation. If market
discount is treated as de minimis under this rule, the actual discount would be
allocated among a portion of each scheduled distribution representing the
stated redemption price of the Regular Certificate and that portion of the
discount allocable to such distribution would be reported as income when the
distribution occurs or is due.
The Internal Revenue Code further provides that any principal payment on a
Regular Certificate acquired with market discount or any gain on disposition of
a Regular Certificate shall be treated as ordinary income to the extent it does
not exceed the accrued market discount at the time of such payment. The amount
of accrued market discount for purposes of determining the amount of ordinary
income to be recognized with respect to subsequent payments on such a Regular
Certificate is to be reduced by the amount previously treated as ordinary
income.
The Internal Revenue Code grants authority to the Treasury Department to
issue regulations providing for the computation of accrued market discount on
debt instruments such as the Regular Certificates. Until those regulations are
issued, rules described in the legislative history for these provisions of the
Internal Revenue Code will apply. Under those rules, as described above, the
holder of a Regular Certificate with market discount may elect to accrue market
discount either on the basis of a constant interest rate or according to
certain other methods. Certificateholders who acquire a Regular Certificate at
a market discount should consult their tax advisors concerning various methods
which are available for accruing that market discount.
In general, limitations imposed by the Internal Revenue Code that are
intended to match deductions with the taxation of income may require a holder
of a Regular Certificate having market discount to defer a portion of the
interest deductions attributable to any indebtedness incurred or continued to
purchase or carry such Regular Certificate. Alternatively, a holder of a
Regular Certificate may elect to include market discount in gross income as it
accrues and, if he or she makes such an election, is exempt from this rule. Any
election made on a Regular Certificate issued with market discount will apply
to all Regular Certificates acquired by the holder on or after the first day of
the first taxable year to which such election applies and may be revoked only
with the consent of the Internal Revenue Code. The adjusted basis of a Regular
Certificate subject to such election will be increased to reflect market
discount included in gross income, thereby reducing any gain or increasing any
loss on a sale or taxable disposition.
Amortizable Premium. A holder of a Regular Certificate who holds the
Regular Certificate as a capital asset and who purchased the Regular
Certificate at a cost greater than
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its outstanding principal amount will be considered to have purchased the
Regular Certificate at a premium. In general, the Regular Certificateholder may
elect to deduct the amortizable bond premium as it accrues under a constant
yield method. A Regular Certificateholder's tax basis in the Regular
Certificate will be reduced by the amount of the amortizable bond premium
deducted. In addition, it appears that the same methods which apply to the
accrual of market discount on installment obligations are intended to apply in
computing the amortizable bond premium deduction with respect to a Regular
Certificate. It is not clear, however, (1) whether the alternatives to the
constant-yield method which may be available for the accrual of market discount
are available for amortizing premium on Regular Certificates and (2) whether
the Prepayment Assumption should be taken into account in determining the term
of a Regular Certificate for this purpose. Certificateholders who pay a premium
for a Regular Certificate should consult their tax advisors concerning such an
election and rules for determining the method for amortizing bond premium.
Gain or Loss on Disposition. If a Regular Certificate is sold, the seller
will recognize gain or loss equal to the difference between the amount realized
from the sale and the seller's adjusted basis in such Regular Certificate. The
adjusted basis generally will equal the cost of such Regular Certificate to the
seller, increased by any original issue discount included in the seller's
ordinary gross income with respect to such Regular Certificate and reduced, but
not below zero, by any payments on the Regular Certificate previously received
or accrued by the seller, other than qualified stated interest payments, and
any amortizable premium. Similarly, a Regular Certificateholder who receives a
principal payment with respect to a Regular Certificate will recognize gain or
loss equal to the difference between the amount of the payment and the holder's
allocable portion of his or her adjusted basis in the Regular Certificate.
Except as discussed below or with respect to market discount, any gain or loss
recognized upon a sale, exchange, retirement, or other disposition of a Regular
Certificate will be capital gain if the Regular Certificate is held as a
capital asset.
Any capital gain recognized upon a sale, exchange or other disposition of a
Regular Certificate will be long-term capital gain if the seller's holding
period is more than one year and will be short-term capital gain if the
seller's holding period is one year or less. The deductibility of capital
losses is subject to certain limitations.
Gain from the disposition of a Regular Certificate that might otherwise be
capital gain, including any gain attributable to de minimis original issue
discount, will be treated as ordinary income to the extent of the excess, if
any, of (1) the amount that would have been includable in the holder's income
if the yield on the Regular Certificate had equaled 110% of the applicable
federal rate determined as of the beginning of the holder's holding period,
over (2) the amount of ordinary income actually recognized by the holder with
respect to the Regular Certificate.
Certain Other Taxes on the REMIC. The REMIC provisions of the Internal
Revenue Code impose a 100% tax on any net income derived by a REMIC from
certain prohibited transactions. These transactions are:
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. any disposition of a qualified mortgage, other than pursuant to the
substitution of a qualified replacement mortgage for a qualified
mortgage (or the repurchase in lieu of substitution of a defective
obligation), a disposition incident to the foreclosure, default, or
imminent default of a mortgage, the bankruptcy or insolvency of the
REMIC, or a qualified liquidation of the REMIC;
. the receipt of income from assets other than qualified mortgages and
permitted investments;
. the receipt of compensation for services; and
. the receipt of gain from the dispositions of cash flow investments.
The REMIC regulations provide that the modification of the terms of a contract
occasioned by default or a reasonably foreseeable default of the contract, the
assumption of the contract, the waiver of a due-on-sale clause or the
conversion of an interest rate by an obligor pursuant to the terms of a
convertible adjustable-rate contract will not be treated as a disposition of
the contract. In the event that a REMIC holds adjustable rate contracts which
are convertible at the option of the obligor into fixed-rate, fully amortizing,
level payment contracts, a sale of the contracts by the REMIC pursuant to a
purchase agreement or other contract with Green Tree or other party, if and
when the obligor elects to so convert the terms of the contract, is not
expected to result in a prohibited transaction for the REMIC. The Internal
Revenue Code also imposes a 100% tax on contributions to a REMIC made after the
startup day, unless such contributions are payments made to facilitate a
cleanup call or a qualified liquidation of the REMIC, payments in the nature of
a guaranty, contributions during the three-month period beginning on the
startup day or contributions to a qualified reserve fund of the REMIC by a
holder of a residual interest in the REMIC. The Internal Revenue Code also
imposes a tax on a REMIC at the highest corporate rate on certain net income
from foreclosure property that the REMIC derives from the management, sale, or
disposition of any real property, or any personal property incident thereto,
acquired by the REMIC in connection with the default or imminent default of a
loan. Generally, it is not anticipated that a REMIC will generate a significant
amount of such income.
Liquidation of the REMIC. A REMIC may liquidate without the imposition of
entity-level tax only in a "qualified liquidation." A liquidation is considered
qualified if a REMIC adopts a plan of complete liquidation, which may be
accomplished by designating in the REMIC's final tax return a date on which
such adoption is deemed to occur and sells all of its assets (other than cash)
within the ninety-day period beginning on the date of the adoption of the plan
of liquidation, provided that it distributes to holders of Regular or Residual
Certificates, on or before the last day of the ninety-day liquidation period,
all the proceeds of the liquidation (including all cash), less amounts retained
to meet claims.
Taxation of Certain Foreign Investors. For purposes of this discussion, a
"Foreign Holder" is a certificateholder who holds a Regular Certificate and who
is not:
(1) a citizen or resident of the United States;
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(2) a corporation, partnership, (including an entity treated as a
corporation or partnership for United States federal income tax
purposes) organized in or under the laws of the United States or any
state or the District of Columbia (except, in the case of a
partnership, to the extent provided in regulations);
(3) an estate the income of which is includible in gross income for United
States tax purposes regardless of its source; or
(4) a trust if:
. a court within the United States is able to exercise primary
supervision over administration of the trust; and
. one or more United States persons have authority to control all
substantial decisions of the trust.
To the extent prescribed in regulations by the Secretary of the Treasury, which
regulations have not yet been issued, a trust which was in existence on August
20, 1996 (other than a trust treated as owned by the grantor under Subpart E of
Part I of Subchapter J of Chapter 1 of the Internal Revenue Code), and which
was treated as a United States person on August 19, 1996, may elect to continue
to be treated as a United States person notwithstanding the previous sentence.
Unless the interest on a Regular Certificate is effectively connected with the
conduct by the Foreign Holder of a trade or business within the United States,
the Foreign Holder is not subject to federal income or withholding tax on
interest (or original issue discount, if any) on a Regular Certificate (subject
to possible backup withholding of tax, discussed below), provided the Foreign
Holder is not a controlled foreign corporation related to Green Tree and does
not own actually or constructively 10% or more of the voting stock of Green
Tree. To qualify for this tax exemption, the Foreign Holder will be required to
provide periodically a statement signed under penalties of perjury certifying
that the Foreign Holder meets the requirements for treatment as a Foreign
Holder and providing the Foreign Holder's name and address. The statement,
which may be made on a Form W-8 or substantially similar substitute form,
generally must be provided in the year a payment occurs or in either of the two
preceding years. The statement must be provided, either directly or through
clearing organization or financial institution intermediaries, to the person
that otherwise would withhold tax. This exemption may not apply to a Foreign
Holder that owns both Regular Certificates and Residual Certificates. If the
interest on a Regular Certificate is effectively connected with the conduct by
a Foreign Holder of a trade or business within the United States, then the
Foreign Holder will be subject to tax at regular graduated rates. Foreign
Holders should consult their own tax advisors regarding the specific tax
consequences of their owning a Regular Certificate.
Any gain recognized by a Foreign Holder upon a sale, retirement or other
taxable disposition of a Regular Certificate generally will not be subject to
United States federal income tax unless either:
(1) the Foreign Holder is a nonresident alien individual who holds the
Regular Certificate as a capital asset and who is present in the
United States for 183 days or
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more in the taxable year of the disposition and either the gain is
attributable to an office or other fixed place of business maintained
in the U.S. by the individual or the individual has a tax home in the
United States; or
(2) the gain is effectively connected with the conduct by the Foreign
Holder of a trade or business within the United States.
A Regular Certificate will not be includible in the estate of a Foreign
Holder who does not own actually or constructively 10% or more of the voting
stock of Green Tree.
Backup Withholding. Under certain circumstances, a REMIC certificateholder
may be subject to backup withholding at a 31% rate. Backup withholding may
apply to a REMIC certificateholder who is a United States person if the
holder, among other circumstances, fails to furnish his social security number
or other taxpayer identification number to the trustee. Backup withholding may
apply, under certain circumstances, to a REMIC certificateholder who is a
foreign person if the REMIC certificateholder fails to provide the trustee or
the REMIC certificateholder's securities broker with the statement necessary
to establish the exemption from federal income and withholding tax on interest
on the REMIC certificate. Backup withholding, however, does not apply to
payments on a certificate made to certain exempt recipients, such as
corporations and tax-exempt organizations, and to certain foreign persons.
REMIC certificateholders should consult their tax advisors for additional
information concerning the potential application of backup withholding to
payments received by them with respect to a certificate.
On October 6, 1997, the Treasury Department issued new regulations which
make certain modifications to the withholding, backup withholding and
information reporting rules described above. The new regulations attempt to
unify certification requirements and modify reliance standards, and will
generally be effective for payments made after December 31, 2000, subject to
certain transition rules. You are urged to consult your own tax advisors
regarding the new regulations.
Reporting Requirements and Tax Administration. We will report annually to
the IRS, holders of record of the Regular Certificates that are not excepted
from the reporting requirements and, to the extent required by the Internal
Revenue Code, other interested parties, information with respect to the
interest paid or accrued on the Regular Certificates, original issue discount,
if any, accruing on the Regular Certificates and information necessary to
compute the accrual of any market discount or the amortization of any premium
on the Regular Certificates.
The Treasury Department has issued final regulations concerning certain
aspects of REMIC tax administration. Under those regulations, a Residual
Certificateholder must be designated as the REMICs "tax matters person." The
tax matters person, generally, has responsibility for overseeing and providing
notice to the other Residual Certificateholders of certain administrative and
judicial proceedings regarding the REMIC's tax affairs. Unless we indicate
otherwise in the related prospectus supplement, we will be designated as tax
matters
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person for each REMIC, and in conjunction with the trustee will act as the
agent of the Residual Certificateholders in the preparation and filing of the
REMIC's federal and state income tax and other information returns.
Non-REMIC Series
Tax Status of the Trust. In the case of a trust evidenced by a series or
sub-series of certificates, or a segregated portion of the trust, for which a
REMIC election is not made ("Non-REMIC certificates"), counsel will have
advised us that, in their opinion, each contract pool and the arrangement to be
administered by us under which the trustee will hold and we will be obligated
to service the contracts and under which Non-REMIC certificates will be issued
to Non-REMIC certificateholders will not be classified as an association
taxable as a corporation or a taxable mortgage pool, within the meaning of
Internal Revenue Code Section 7701(i), but rather will be classified as a
grantor trust under Subpart E, Part I of Subchapter J of Chapter 1 of the
Internal Revenue Code. Each Non-REMIC certificateholder will be treated as the
owner of a pro rata undivided interest in the ordinary income and corpus
portions of the trust attributable to the contract pool in which its
certificate evidences an ownership interest and will be considered the
equitable owner of a pro rata undivided interest in each of the contracts
included therein.
Tax Status of Non-REMIC Certificates. In general:
. certificates held by a "domestic building and loan association" within
the meaning of Section 7701(a)(19) of the Internal Revenue Code may be
considered to represent "qualifying real property loans" within the
meaning of Section 7701(a)(19)(C)(v) of the Internal Revenue Code; and
. certificates held by a real estate investment trust may constitute
"real estate assets" within the meaning of Section 856(c)(4)(A) of the
Internal Revenue Code and interest thereon may be considered "interest
on obligations secured by mortgages on real property" within the
meaning of Section 856(c)(3)(B) of the Internal Revenue Code.
See the discussions of the Internal Revenue Code provisions above under "REMIC
Series Tax Status of REMIC Certificates." Investors should review the related
prospectus supplement for a discussion of the treatment of Non-REMIC
certificates and contracts under these Internal Revenue Code sections and
should, in addition, consult with their own tax advisors with respect to these
matters.
Tax Treatment of Non-REMIC Certificates. Non-REMIC certificateholders will
be required to report on their federal income tax returns, and in a manner
consistent with their respective methods of accounting, their pro rata share of
the entire income arising from the contracts comprising such contract pool,
including interest, original issue discount, if any, prepayment fees,
assumption fees, and late payment charges we receive, and any gain upon
disposition of such contracts. For purposes of this discussion, the term
"disposition," when used with respect to the contracts, includes scheduled or
prepaid collections with respect to
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the contracts, as well as the sale or exchange of a Non-REMIC certificate. Non-
REMIC certificateholders will be entitled under Section 162 or 212 of the
Internal Revenue Code to deduct their pro rata share of related servicing fees,
administrative and other non-interest expenses, including assumption fees and
late payment charges we retain. An individual, an estate, or a trust that holds
a Non-REMIC certificate either directly or through a pass-through entity will
be allowed to deduct such expenses under Section 212 of the Internal Revenue
Code only to the extent that, in the aggregate and combined with other itemized
deductions, they exceed 2% of the adjusted gross income of the holder. In
addition, Section 68 of the Internal Revenue Code provides that the amount of
itemized deductions (including those provided for in Section 212 of the
Internal Revenue Code) otherwise allowable for the taxable year for an
individual whose adjusted gross income exceeds a threshold amount specified in
the Internal Revenue Code ($126,600 in 1999 in the case of a joint return) will
be reduced by the lesser of (1) 3% of the excess of adjusted gross income over
the specified threshold amount or (2) 80% of the amount of itemized deductions
otherwise allowable for such taxable year. To the extent that a Non-REMIC
certificateholder is not permitted to deduct servicing fees allocable to a Non-
REMIC certificate, the taxable income of the Non-REMIC certificateholder
attributable to that Non-REMIC certificate will exceed the net cash
distributions related to such income. Non-REMIC certificateholders may deduct
any loss on disposition of the contracts to the extent permitted under the
Internal Revenue Code.
Under current IRS interpretations of applicable treasury regulations we
would be able to sell or otherwise dispose of any subordinated Non-REMIC
certificates. Accordingly, we expect to offer subordinated Non-REMIC
certificates for sale to investors. In general, such subordination should not
affect the federal income tax treatment of either the subordinated or senior
certificates. Holders of subordinated classes of certificates should be able to
recognize any losses allocated to such class when and if losses are realized.
To the extent that any of the contracts comprising a contract pool were
originated on or after March 2, 1984 and under circumstances giving rise to
original issue discount, certificateholders will be required to report annually
an amount of additional interest income attributable to the discount in those
contracts prior to receipt of cash related to the discount. To the extent that
the Non-REMIC certificates represent an interest in any pool of debt
instruments the yield on which may be affected by reason of prepayments, for
taxable years beginning after August 5, 1997, a prepayment assumption must be
used with respect to the contracts comprising the contract pool in computing
the accrual of any original issue discount, market discount or amortizable
premiums. See the discussion above under "REMIC Series--Original Issue
Discount." Similarly, Internal Revenue Code provisions concerning market
discount and amortizable premium will apply to the contracts comprising a
contract pool to the extent that the loans were originated after July 18, 1984
and September 27, 1985, respectively. See the discussions above under "REMIC
Series--Market Discount" and "REMIC Series--Amortizable Premium." It is unclear
whether a prepayment assumption would be applicable in accruing or amortizing
any such original issue or market discount or premium with respect to Non-REMIC
certificates that do not represent an interest in any pool of debt instruments
the yield on which may be affected by reason of prepayments, or for taxable
years beginning prior to August 5, 1997.
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Stripped Non-REMIC Certificates. Certain classes of Non-REMIC certificates
may be subject to the stripped bond rules of Section 1286 of the Internal
Revenue Code and for purposes of this discussion will be referred to as
"Stripped Certificates." In general, a Stripped Certificate will be subject to
the stripped bond rules where there has been a separation of ownership of the
right to receive some or all of the principal payments on a contract from
ownership of the right to receive some or all of the related interest payments.
Non-REMIC certificates will constitute Stripped Certificates and will be
subject to these rules under various circumstances, including the following:
. if any servicing compensation is deemed to exceed a reasonable amount;
. if we or any other party retain a Retained Yield with respect to the
contracts comprising a contract pool;
. if two or more classes of Non-REMIC certificates are issued
representing the right to non-pro rata percentages of the interest or
principal payments on the contracts; or
. if Non-REMIC certificates are issued which represent the right to
interest only payments or principal only payments.
Although not entirely clear, each Stripped Certificate should be considered
to be a single debt instrument issued on the day it is purchased for purposes
of calculating any original issue discount. Original issue discount with
respect to a Stripped Certificate, if any, must be included in ordinary gross
income for federal income tax purposes as it accrues in accordance with the
constant-yield method that takes into account the compounding of interest and
such accrual of income may be in advance of the receipt of any cash
attributable to such income. See "REMIC Series--Original Issue Discount" above.
For purposes of applying the original issue discount provisions of the Internal
Revenue Code, the issue price of a Stripped Certificate will be the purchase
price paid by each holder and the stated redemption price at maturity may
include the aggregate amount of all payments to be made with respect to the
Stripped Certificate whether or not denominated as interest. The amount of
original issue discount with respect to a Stripped Certificate may be treated
as zero under the original issue discount de minimis rules described above. A
purchaser of a Stripped Certificate will be required to account for any
discount on the certificate as market discount rather than original issue
discount if either (1) the amount of original issue discount with respect to
the certificate was treated as zero under the original issue discount de
minimis rule when the certificate was stripped or (2) no more than 100 basis
points (including any amount of servicing in excess of reasonable servicing) is
stripped off of the contracts. See "REMIC Series--Market Discount" above.
To the extent the Stripped Certificates represent an interest in any pool
of debt instrument the yield on which may by affected by reason of prepayments,
for taxable years beginning after August 5, 1997, a prepayment assumption must
be used in computing yield on the underlying assets of a trust with respect to
which a REMIC election is not made. It is unclear whether a prepayment
assumption would be applicable to the Stripped Certificates
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that do not represent an interest in any such pool or for taxable years
beginning prior to August 5, 1997. The Internal Revenue Code appears to require
that such a prepayment assumption be used in computing yield with respect to
Stripped Certificates that do not represent an interest in a pool of debt
instruments the yield on which may be affected by reason of prepayments or for
taxable years beginning prior to August 5, 1997. In the absence of authority to
the contrary, Green Tree intends to base information reports and returns to the
IRS and the holders of Stripped Certificates taking into account an appropriate
prepayment assumption. Holders of Stripped Certificates should refer to the
related prospectus supplement to determine whether and in what manner the
original issue discount rules will apply.
When an investor purchases more than one class of Stripped Certificates it
is currently unclear whether for federal income tax purposes such classes of
Stripped Certificates should be treated separately or aggregated for purposes
of applying the original issue discount rules described above.
It is possible that the IRS may take a contrary position with respect to
some or all of the foregoing tax consequences. For example, a holder of a
Stripped Certificate may be treated as the owner of:
(1) as many stripped bonds or stripped coupons as there are scheduled
payments of principal and/or interest on each contract; or
(2) a separate installment obligation for each contract representing the
Stripped Certificate's pro rata share of principal and/or interest
payments to be made with respect thereto.
As a result of these possible alternative characterizations, investors should
consult their own tax advisors regarding the proper treatment of Stripped
Certificates for federal income tax purposes.
Gain or Loss on Disposition. Upon sale or exchange of a Non-REMIC
certificate, a Non-REMIC certificateholder will recognize gain or loss equal to
the difference between the amount realized in the sale and its aggregate
adjusted basis in the contracts represented by the Non-REMIC certificate.
Generally, the aggregate adjusted basis will equal the Non-REMIC
certificateholder's cost for the Non-REMIC certificate increased by the amount
of any previously reported gain with respect to the Non-REMIC certificate and
decreased by the amount of any losses previously reported with respect to the
Non-REMIC certificate and the amount of any distributions received thereon.
Except as provided above with respect to the original issue discount and market
discount rules, any such gain or loss would be capital gain or loss if the Non-
REMIC certificate was held as a capital asset.
Recharacterization of Servicing Fees. The servicing compensation to be
received by Green Tree may be questioned by the IRS with respect to certain
certificates or contracts as exceeding a reasonable fee for the services being
performed in exchange therefor, and a
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portion of such servicing compensation could be recharacterized as an ownership
interest retained by us or other party in a portion of the interest payments to
be made pursuant to the contracts. In this event, a certificate might be
treated as a Stripped Certificate subject to the stripped bond rules of Section
1286 of the Internal Revenue Code and the original issue discount provisions
rather than to the market discount and premium rules. See the discussion above
under "Non-REMIC Series--Stripped Non-REMIC Certificates."
Tax Treatment of Certain Foreign Investors. Generally, interest or original
issue discount paid to or accruing for the benefit of a Non-REMIC
certificateholder who is a Foreign Holder (as defined in "REMIC Series--
Taxation of Certain Foreign Investors") will be treated as "portfolio interest"
and therefore will be exempt from the 30% withholding tax. Such Non-REMIC
certificateholder will be entitled to receive interest payments and original
issue discount on the Non-REMIC certificates free of United States federal
income tax, but only to the extent the contracts were originated after July 18,
1984 and provided that such Non-REMIC certificateholder periodically provides
the Trustee (or other person who would otherwise be required to withhold tax)
with a statement certifying under penalty of perjury that such Non-REMIC
certificateholder is not a United States person and providing the name and
address of such Non-REMIC certificateholder. For additional information
concerning interest or original issue discount paid by Green Tree to a Foreign
Holder and the treatment of a sale or exchange of a Non-REMIC certificate by a
Foreign Holder, which will generally have the same tax consequences as the sale
of a Regular certificate, see the discussion above under "REMIC Series--
Taxation of Certain Foreign Investors".
Tax Administration and Reporting. We will furnish to each Non-REMIC
certificateholder with each distribution a statement listing the amount of such
distribution allocable to principal and to interest. In addition, we will
furnish, within a reasonable time after the end of each calendar year, to each
Non-REMIC certificateholder who was a certificateholder at any time during such
year, information regarding the amount of servicing compensation we received
and any sub-servicer and other customary factual information as we deem
necessary or desirable to enable certificateholders to prepare their tax
returns. Reports will be made annually to the IRS and to holders of record that
are not excepted from the reporting requirements regarding information as may
be required with respect to interest and original issue discount, if any, with
respect to the Non-REMIC certificates.
Other Tax Consequences
No advice has been received as to local income, franchise, personal
property, or other taxation in any state or locality, or as to the tax effect
of ownership of certificates in any state or locality. You are advised to
consult your own tax advisors about any state or local income, franchise,
personal property, or other tax consequences arising out of your ownership of
certificates.
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LEGAL INVESTMENT CONSIDERATIONS
Unless we indicate otherwise in the applicable prospectus supplement, any
certificates that we offer under this prospectus that are rated in one of the
two highest rating categories by at least one nationally recognized statistical
rating organization will constitute mortgage related securities for purposes of
the Secondary Mortgage Market Enhancement Act of 1984 and will be legal
investments for persons, trusts, corporations, partnerships, associations,
business trusts and business entities, including depository institutions, life
insurance companies and pension funds, created under or existing under the laws
of the United States or of any state whose authorized investments are subject
to state regulation to the same extent as, under applicable law, obligations
issued by or guaranteed as to principal and interest by the United States or
any such entities. Under SMMEA, some states have created legislation
specifically limiting the legal investment authority of any entities regarding
mortgage related securities, in which case the certificates will constitute
legal investments for entities subject to, and as provided in, this
legislation. SMMEA provides, however, that in no event will the enactment of
any legislation affect the validity of any contractual commitment to purchase,
hold or invest in certificates, or require the sale or other disposition of
certificates, so long as such contractual commitment was made or the
certificates were acquired before the enactment of the legislation.
SMMEA also amended the legal investment authority of federally-chartered
depository institutions as follows: federal savings and loan associations and
federal savings banks may invest in, sell or otherwise deal in certificates
without limitation as to the percentage of their assets represented; federal
credit unions may invest in certificates; and national banks may purchase
certificates for their own account without regard to the limitations generally
applicable to investment securities set forth in 12 U.S.C. (S)24 (Seventh),
subject in each case to the regulations as the applicable federal regulatory
authority may prescribe.
Some classes of certificates offered in this prospectus may not be rated in
one of the two highest rating categories and thus would not constitute mortgage
related securities for purposes of SMMEA.
The Federal Financial Institutions Examination Council, The Federal Deposit
Insurance Corporation, the Office of Thrift Supervision, the Office of the
Comptroller of the Currency and the National Credit Union Administration have
proposed or adopted guidelines regarding investment in various types of
mortgage-backed securities. In addition, certain state regulators have taken
positions that may prohibit regulated institutions subject to their
jurisdiction from holding securities representing residual interests, including
securities previously purchased. There may be other restrictions on the ability
of certain investors, including depository institutions, either to purchase
certificates or to purchase certificates representing more than a specified
percentage of the investor's assets. Investors should consult their own legal
advisors in determining whether and to what extent the certificates constitute
legal investments for such investors.
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RATINGS
It is a condition precedent to the issuance of any class of certificates
sold under this prospectus that they be rated by at least one nationally
recognized statistical rating organization in one of its four highest rating
categories within which there may be sub-categories or gradations indicating
relative standing. A security rating is not a recommendation to buy, sell or
hold securities and may be subject to revision or withdrawal at any time by the
assigning rating agency. The security rating of any series of certificates
should be evaluated independently of similar security ratings assigned to other
kinds of securities.
UNDERWRITING
Conseco Securitizations may sell certificates of each series to or through
underwriters by a negotiated firm commitment underwriting and public reoffering
by the underwriters, and also may sell and place certificates directly to other
purchasers or through agents. Conseco Securitizations intends that certificates
will be offered through various methods from time to time and that offerings
may be made concurrently through more than one of these methods or that an
offering of a particular series of certificates may be made through a
combination of these methods.
The distribution of the certificates may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, or
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
If we so specify in the prospectus supplement relating to a series of
certificates, we or any of our affiliates may purchase some or all of one or
more classes of certificates of that series from the underwriter or
underwriters at a price specified in the prospectus supplement. The purchaser
may then from time to time offer and sell, under this prospectus, some or all
of the certificates so purchased directly, through one or more underwriters to
be designated at the time of the offering of the certificates or through
broker-dealers acting as agent and/or principal. The offering may be restricted
in the manner specified in the prospectus supplement. These transactions may be
effected at market prices prevailing at the time of sale, at negotiated prices
or at fixed prices.
In connection with the sale of the certificates, underwriters may receive
compensation from Conseco Securitizations or from purchasers of certificates
for whom they may act as agents in the form of discounts, concessions or
commissions. Underwriters may sell the certificates of a series to or through
dealers and such dealers may receive compensation in the form of discounts,
concessions or commissions from the underwriters and/or commissions from the
purchasers for whom they may act as agents. Underwriters, dealers and agents
that participate in the distribution of the certificates of a series may be
deemed to be underwriters, and any discounts or commissions received by them
from Conseco Securitizations and any profit on the resale of the certificates
by them may be deemed to be underwriting discounts and commissions, under the
Securities Act. These underwriters or agents will be identified, and any
compensation received from Conseco Securitizations will be described, in the
prospectus supplement.
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Under agreements which may be entered into by Conseco Securitizations,
underwriters and agents who participate in the distribution of the certificates
may be entitled to indemnification by Green Tree and Conseco Securitizations
against certain liabilities, including liabilities under the Securities Act.
If so indicated in the prospectus supplement, Conseco Securitizations will
authorize underwriters or other persons acting as Conseco Securitizations'
agents to solicit offers by certain institutions to purchase the certificates
from Conseco Securitizations under contracts providing for payment and delivery
on a future date. Institutions with which the contracts may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational charitable institutions and others, but in all cases
such institutions must be approved by Conseco Securitizations. The obligation
of any purchaser under any contract will be subject to the condition that the
purchaser of the offered certificates shall not at the time of delivery be
prohibited under the laws of the jurisdiction to which the purchaser is subject
from purchasing the certificates. The underwriters and other agents will not
have responsibility in respect of the validity or performance of the contracts.
The underwriters may, from time to time, buy and sell certificates, but
there can be no assurance that an active secondary market will develop and
there is no assurance that any market, if established, will continue.
Some persons participating in this offering may engage in transactions that
stabilize, maintain or in some way affect the price of the certificates. These
types of transactions may include stabilizing, the purchase of certificates to
cover syndicate short positions and the imposition of penalty bids. See
"Underwriting" in the related prospectus supplement.
Some of the underwriters and their associates may engage in transactions
with and perform services for us in the ordinary course of business.
LEGAL MATTERS
The legality and material federal income tax consequences of the
certificates will be passed upon for Green Tree by our counsel identified in
the applicable prospectus supplement.
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EXPERTS
The consolidated financial statements of Green Tree as of December 31, 1998
and for the year ended December 31 1998 are incorporated by reference in this
prospectus in reliance on the report of PricewaterhouseCoopers LLP independent
accountants given upon their authority as experts in accounting and auditing.
The consolidated financial statements of Green Tree as of December 31, 1997
and for each of the years in the two-year period ended December 31, 1997 are
incorporated by reference in this prospectus and in the registration statement
in reliance upon the report of KPMG LLP, independent certified public
accountants, incorporated by reference in this prospectus, and upon the
authority of KPMG LLP as experts in accounting and auditing.
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GLOSSARY
Below are abbreviated definitions of capitalized terms used in this
prospectus and the prospectus supplement. The pooling and servicing agreement
may contain a more complete definition of some of the terms defined here and
reference should be made to the pooling and servicing agreement for a more
complete definition of all such terms.
"Accrual Remittance Amount" means, with respect to the Compound Interest
Certificates of a series of certificates providing for sequential distributions
in reduction of the principal balance of the classes of that series, as of any
remittance date, the amount of interest which has accrued on the Compound
Interest Certificates from the prior remittance date.
"Adjustable Rate Certificates" means certificates which evidence the right
to receive distributions of income at a variable remittance rate.
"Advances" means the advances made by a servicer (including from advances
made by a sub-servicer) on any remittance date pursuant to a pooling and
servicing agreement.
"Amount Available" means, for each series of certificates, amounts on
deposit in the certificate account on a Determination Date.
"Certificate Distribution Amount" means the amount of principal and
interest specified in the related prospectus supplement to be distributed to
certificateholders.
"Class A Percentage" means for any remittance date will equal a fraction,
expressed as a percentage, the numerator of which is the Class A principal
balance, and the denominator of which is the sum of:
. the Class A principal balance,
. if the Class M-1 distribution test is satisfied on that remittance
date, the Class M-1 principal balance, otherwise zero,
. if the Class M-2 distribution test is satisfied on that remittance
date, the Class M-2 principal balance, otherwise zero, and
. if the Class B distribution test is satisfied on that remittance date,
the Class B principal balance, otherwise zero.
"Class B Percentage" for any remittance date will equal:
(1) zero, if the Class A principal balance, the Class M-1 principal
balance and the Class M-2 principal balance have not yet been reduced
to zero and the Class B distribution test is not satisfied or
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(2) a fraction, expressed as a percentage, the numerator of which is the
Class B principal balance as of the remittance date, and the
denominator of which is, as of the remittance date, the sum of:
(a) any Class A principal balance,
(b) any Class M-1 principal balance,
(c) any Class M-2 principal balance, and
(d) the Class B principal balance.
"Class B-1 Cross-Over Date" means the remittance date on which the Class B-
1 principal balance is reduced to zero.
"Class M-1 Percentage" for any remittance date will equal:
(1) zero, if the Class A principal balance has not yet been reduced to
zero and the Class M-1 distribution test is not satisfied, or
(2) a fraction, expressed as a percentage, the numerator of which is the
Class M-1 principal balance as of the remittance date, and the
denominator of which is, as of the remittance date, the sum of:
(a) any Class A principal balance
(b) the Class M-1 principal balance,
(c) if the Class M-2 distribution test is satisfied on that
remittance date, the Class M-2 principal balance, otherwise
zero and
(d) if the Class B distribution test is satisfied on that
remittance date, the Class B principal balance, otherwise zero.
"Class M-2 Percentage" means, for any remittance date:
(1) zero, if the Class A principal balance and the Class M-1 principal
balance have not yet been reduced to zero and the Class M-2
distribution test is not satisfied or
(2) a fraction, expressed as a percentage, the numerator of which is the
Class M-2 principal balance as of the remittance date, and the
denominator of which is, as of the remittance date, the sum of:
(a) any Class A principal balance,
(b) any Class M-1 principal balance,
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(c) the Class M-2 principal balance, and
(d) if the Class B distribution test is satisfied on that
remittance date, the Class B principal balance, otherwise
zero.
"Compound Interest Certificates" means certificates on which interest may
accrue but not be paid for the period described in the related prospectus
supplement.
"Cut-off Date" means the date specified in the related prospectus
supplement as the date from which principal and interest payments on the
related contracts are included in the trust.
"Determination Date" means, unless otherwise specified in the related
prospectus supplement, the third business day immediately preceding the related
remittance date.
"Due Period" means, unless otherwise provided in a related prospectus
supplement, with respect to any remittance date, the period from and including
the 15th day of the second month preceding the remittance date, to and
including the 14th day of the month immediately preceding the remittance date.
"Eligible Investments" means one or more of the investments specified in
the pooling and servicing agreement in which moneys in the certificate account
and certain other accounts are permitted to be invested.
"Eligible Substitute Contract" means a manufactured housing contract that
satisfies, as of the date of its substitution, the representations and
warranties specified in Article III of the pooling and servicing agreement, has
a scheduled principal balance that is not greater than the Scheduled Principal
Balance of the Replaced Contract and has a contract rate that is at least equal
to the contract rate of the Replaced Contract and has a remaining term to
scheduled maturity that is not greater than the remaining term to scheduled
maturity of the Replaced Contract.
"Formula Principal Distribution Amount" means the sum of:
(1) all scheduled payments of principal due on each outstanding contract
during the related due period, after adjustments for previous partial
principal prepayments and after any adjustments to a contract's
amortization schedule as a result of a bankruptcy or a similar
proceeding involving the related obligor,
(2) the Scheduled Principal Balance of each contract which, during the
month preceding the related due period, was purchased by Green Tree
under the pooling and servicing agreement on account of breaches of
its representations and warranties,
(3) all partial principal prepayments applied and all principal
prepayments in full received during the related due period,
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(4) the Scheduled Principal Balance of each contract that became a
liquidated contract during the related due period, plus the amount of
any reduction in the outstanding principal balance of a contract
during the related due period ordered as the result of a bankruptcy or
similar proceeding involving the related obligor,
(5) without repeating the above, all collections in respect of principal
on the contracts received during the due period in which the
remittance date occurs up to and including the third business day
prior to such remittance date, but in no event later than the 25th day
of the month before the remittance rate, minus
(6) with respect to all remittance dates other than the remittance date in
August 1999, the amount included in the formula principal distribution
amount for the preceding remittance date by virtue of clause (5)
above, plus
(7) with respect to the remittance date in July 2000, any amount by which
the Class A-1 principal balance as of the remittance date exceeds the
sum on the remittance date of the amounts described in clause (1)
through (6) above; minus
(8) with respect to the remittance date in August 2000, any amount,
distributed in respect of principal on the Class A-1 certificates on
the remittance date in July 2000 under clause (7) above.
"Liquidation Proceeds" means cash including insurance proceeds received in
connection with the repossession of a manufactured home.
"MHP" means the manufactured housing prepayment model, which is based on an
assumed rate of prepayment each month of the then unpaid principal balance of a
pool of new contracts.
"Monthly Payment" means the scheduled monthly payment of principal and
interest on a contract.
"Net Liquidated Proceeds" means all amounts received and retained for the
liquidation of defaulted contracts, net of liquidation expenses.
"Outstanding Senior Shortfall" means, as of any date, to the extent not
previously paid, the aggregate of the amounts by which the Senior Distribution
Amount for that class for any remittance date exceeded the amount actually paid
on that remittance date plus interest at the remittance rate.
"Participants means institutions that have accounts with the depositary.
"Pool Scheduled Principal Balance" means, as of any remittance date, the
aggregate of the Scheduled Principal Balances of contracts outstanding at the
end of the related due period.
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"Replaced Contract" means an Eligible Substitute Contract substituted for a
manufactured housing contract which Green Tree is otherwise obligated to
repurchase under the pooling and servicing agreement.
"Repurchase Price" means the remaining principal amount outstanding on a
manufactured housing contract on the date of repurchase plus accrued and unpaid
interest at its contract rate to the date of the repurchase.
"Scheduled Principal Balance" means, as of any remittance date, the
"Scheduled Principal Balance" of a contract as of any remittance date is the
unpaid principal balance of the contract as specified in the amortization
schedule at the time relating to the contract as of the due date in the related
due period, after giving effect to any previous partial prepayments and to the
payment of principal due on the due date and irrespective of any delinquency in
payment on the contract.
"Senior Distribution Amount" means, for a series of certificates having
Subordinated Certificates, as of each remittance date and for each class of
Senior Certificates, the amount due the holders of that class of Senior
Certificates.
"Senior Percentage" means, for a series of certificates having Subordinated
Certificates, the percentage specified in the related prospectus supplement.
"Subordinated Percentage" means, for a series of certificates having
Subordinated Certificates, the percentage specified in the related prospectus
supplement.
"WAC" means the weighted average contract rate.
"WAM" means the weighted average maturity of a contract.
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For 90 days after the date of this prospectus supplement, all dealers
that effect transactions in these securities, whether or not participating in
this offering, may be required to deliver a prospectus. This is in addition to
the dealers' obligation to deliver a copy of this prospectus supplement and the
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
[GreenTree Logo]
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
<TABLE>
<S> <C>
SEC registration fee........................................ $1,390,000.00
Blue Sky fees and expenses.................................. 5,000.00
Accountant's fee and expenses............................... 20,000.00
Attorney's fees and expenses................................ 168,000.00
Trustee's fees and expenses................................. 22,000.00
Printing and engraving expenses............................. 100,000.00
Rating Agency fee........................................... 180,000.00
Miscellaneous............................................... 22,500.00
-------------
Total................................................... $1,907,500.00
=============
</TABLE>
Item 15. Indemnification of Directors and Officers
Green Tree Financial Corporation is incorporated under the laws of
Delaware. Section 145 of the Delaware General Corporation Law provides that a
Delaware corporation may indemnify any persons, including officers and
directors, who are, or are threatened to be made, parties to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
such corporation, by reason of the fact that such person was an officer,
director, employee or agent of such corporation, or is or was serving at the
request of such corporation as a director, employee or agent of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation or enterprise). The
indemnity may include expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by such person
in connection with such action, suit or proceeding, provided such person acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the corporation's best interests and, for criminal proceedings, had no
reasonable cause to believe that his conduct was illegal. A Delaware
corporation may indemnify officers and directors in an action by or in the
right of the corporation under the same conditions, except that no
indemnification is permitted without judicial approval if the officer or
director is adjudged to be liable to the corporation. Where and officer or
director is successful on the merits or otherwise in the defense of any action
referred to above, the corporation must indemnify him against the expenses
which such officer or director actually and reasonably incurred.
The Certificate of Incorporation and Bylaws of Green Tree Financial
Corporation provide, in effect, that, subject to certain limited exceptions,
such corporation will indemnify its officers and directors to the extent
permitted by the Delaware General Corporation Law.
Green Tree maintains a directors' and officers' insurance policy.
Pursuant to the form of Underwriting Agreement, the Underwriters will
agree, subject to certain conditions, to indemnify the Company, its directors,
certain of their officers and any persons who control the Company, within the
meaning of the Securities Act of 1933, as amended (the "Securities Act"),
against certain liabilities.
Conseco Finance Securitizations Corp. is incorporated under the laws of
Minnesota. Section 302A.521 of the Minnesota Statutes provides that a
corporation shall indemnify any person made or threatened to be made a party to
a proceeding by reason of the former or present official capacity of such
person against judgments, penalties, fines (including, without limitation,
excise taxes assessed against such person with respect to any employee benefit
plan), settlements and reasonable expenses, including attorneys' fees and
disbursements, incurred by such person in connection with the proceeding, if,
with respect to the acts or omissions of such person complained of in the
proceeding, such person (1) has not been indemnified therefor by another
organization or employee benefit plan for the same judgments, penalties or
fines; (2) acted in good faith; (3) received no improper personal benefit and
Section 302A.255 (with respect to director conflicts of interest), if
applicable, has been satisfied; (4) in
II-1
<PAGE>
the case of a criminal proceeding, had no reasonable cause to believe the
conduct was unlawful; and (5) in the case of acts or omissions in such person's
official capacity for the corporation, reasonably believed that the conduct was
in the best interests of the corporation, or in the case of acts or omissions
in such person's official capacity for other affiliated organizations,
reasonably believed that the conduct was not opposed to the best interests of
the corporation. Section 302A.521 also requires payment by a corporation, upon
written request, of reasonable expenses in advance of final disposition of the
proceeding in certain instances. A decision as to required indemnification is
made by a disinterested majority of the Board of Directors present at a meeting
at which a disinterested quorum is present, or by a designated committee of the
Board, by special legal counsel, by the shareholders or by a court.
Provisions regarding indemnification of officers and directors of Conseco
Securitizations to the extent permitted by Section 302A.521 are contained in
its articles of incorporation and bylaws.
Item 16. Exhibits
<TABLE>
<CAPTION>
<C> <S> <C>
1.1 Proposed form of Underwriting Agreement (incorporated by
reference to similarly numbered exhibit on Green Tree's
Registration Statement No. 333-36969)
1.2 Proposed form of alternate Underwriting Agreement
(incorporated by reference to similarly numbered exhibit
on Green Tree's Registration Statement No. 333-36969)
3.1 Certificate of Incorporation of Green Tree (incorporated
by reference to Exhibit 1.2 to Green Tree's Registration
Statement No. 33-60869)
**3.2 Restated Certificate of Incorporation of Conseco Finance
Corp. (effective as of November 1, 1999)
3.3 Restated By-Laws of Green Tree (incorporated by reference
to Exhibit 3.2 to Green Tree's Registration Statement No.
333-52233)
**3.4 Restated By-Laws of Conseco Finance Corp. (effective as of
November 1, 1999)
3.5 Articles of Incorporation of Conseco Finance
Securitizations Corp. (incorporated by reference to
Exhibit 3.3 to Amendment No. 1 to the Registrants'
Registration Statement on Form S-3 No. 333-85119; 333-
85119-01)
3.6 By-Laws of Conseco Securitizations Corp. (incorporated by
reference to Exhibit 3.4 to Amendment No. 1 to the
Registrants' Registration Statement on Form S-3 No. 333-
85119; 333-85119-01)
**4.1 Form of Pooling and Servicing Agreement
**4.2 Form of Transfer Agreement
*5.1 Opinion and consent of Dorsey & Whitney LLP as to legality
*8.1 Opinion of Dorsey & Whitney LLP as to tax matters
12.1 Computation of Ratio of Earnings to Fixed Charges
(incorporated by reference to Exhibit 12.1 to Green Tree's
Quarterly Report on Form 10-Q for the period ended June
30, 1999)
**23.1 Consent of PricewaterhouseCoopers LLC
**23.2 Consent of KPMG LLP
*23.3 Consent of Dorsey & Whitney LLP (included as part of
Exhibit 5.1)
*24.1 Power of attorney from officers and directors of Green
Tree signed by an attorney-in-fact
**24.2 Power of attorney from officers and directors of Conseco
Securitizations (included on Part II, page 6)
</TABLE>
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*Previously filed.
** Filed herewith.
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Item 17. Undertakings
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrants have been advised that, in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrants of expenses incurred or paid by a director, officer or controlling
person of the registrants in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrants will, unless
in the opinion of their counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
The undersigned registrants hereby undertake that:
(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed
as a part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed
to be part of this registration statement as of the time it was declared
effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of a
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change to the information
set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in the
form of prospectus filed with the Commission pursuant to Rule
424(b) under the Securities Act of 1933 if, in the aggregate, the
changes in volume and price represent no more than a 20% change in
the maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective registration statement;
and
II-3
<PAGE>
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply
if the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by a
registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remains unsold at
the termination of the offering.
The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of a
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
The undersigned registrants hereby undertake to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Amendment No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Saint Paul, State of
Minnesota, on the 21st day of October, 1999.
Green Tree Financial Corporation
/s/ Rollin M. Dick
By____________________________________
Rollin M. Dick
Executive Vice President and
Chief Financial Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act, this Amendment No.
1 to the Registration Statement has been signed by the following persons in the
capacities indicated.
Signature Title Date
Director and Chief
* Executive Officer
- ------------------------------------ (Principal
Stephen C. Hilbert Executive Officer)
Director and
* President
- ------------------------------------
Thomas J. Kilian
/s/ Rollin M. Dick Director/Executive
- ------------------------------------ Vice President and October 21,
Rollin M. Dick Chief Financial 1999
Officer (Principal
Financial Officer)
Senior Vice
* President and
- ------------------------------------ Chief Accounting
James S. Adams Officer (Principal
Accounting
Officer)
/s/ Joel H. Gottesman October 21,
1999
*By____________________________
Joel H. Gottesman
Attorney-in-fact
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this Amendment No. 1 to the Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in
the City of Saint Paul, State of Minnesota, on the 21st day of October, 1999.
Conseco Finance Securitizations Corp.
/s/ Brian F. Corey
By: ______________________________________
Brian F. Corey
Secretary
POWER OF ATTORNEY
Each person whose signature to this Amendment No. 1 to the Registration
Statement appears below hereby constitutes and appoints Brian F. Corey and
Phyllis A. Knight, and each of them, as his or her true and lawful Attorney-in-
fact and Agent, with full power of substitution, to sign on his or her behalf
individually and in the capacity stated below, and to perform any acts
necessary to be done in order to file all Amendments and Post-Effective
Amendments to this Registration Statement, and any and all instruments or
documents filed as part of or in connection with this Registration Statement or
the Amendments thereto, and each of the undersigned does hereby ratify and
confirm all that said Attorney-in-fact and Agent, or his or her substitutes,
shall do or cause to be done by virtue hereof.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Bruce A. Crittenden President and Director October 21, 1999
______________________________________ (Principal Executive
Bruce A. Crittenden Officer)
/s/ Phyllis A. Knight Senior Vice President and October 21, 1999
______________________________________ Treasurer (Principal
Phyllis A. Knight Financial Officer and
Principal Accounting
Officer)
/s/ Joel H. Gottesman Director October 21, 1999
______________________________________
Joel H. Gottesman
/s/ Paul A. Boyum Director October 21, 1999
______________________________________
Paul A. Boyum
Director
______________________________________
Gary P. Mills
</TABLE>
II-6
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
<C> <S> <C>
1.1 Proposed form of Underwriting Agreement (incorporated by
reference to similarly numbered exhibit on Green Tree's
Registration Statement No. 333-36969)
1.2 Proposed form of alternate Underwriting Agreement
(incorporated by reference to similarly numbered exhibit
on Green Tree's Registration Statement No. 333-36969)
3.1 Certificate of Incorporation of Green Tree (incorporated
by reference to Exhibit 1.2 to Green Tree's Registration
Statement No. 33-60869)
**3.2 Restated Certificate of Incorporation of Conseco Finance
Corp. (effective as of November 1, 1999)
3.3 Restated By-Laws of Green Tree (incorporated by reference
to Exhibit 3.2 to Green Tree's Registration Statement No.
333-52233)
**3.4 Restated By-Laws of Conseco Finance Corp. (effective as of
November 1, 1999)
3.5 Articles of Incorporation of Conseco Finance
Securitizations Corp. (incorporated by reference to
Exhibit 3.3 to Amendment No. 1 to the Registrants'
Registration Statement on Form S-3 No. 333-85119; 333-
85119-01)
3.6 By-Laws of Conseco Securitizations Corp. (incorporated by
reference to Exhibit 3.4 to Amendment No. 1 to the
Registrants' Registration Statement on Form S-3
No. 333-85119; 333-85119-01)
**4.1 Form of Pooling and Servicing Agreement
**4.2 Form of Transfer Agreement
*5.1 Opinion and consent of Dorsey & Whitney LLP as to legality
*8.1 Opinion of Dorsey & Whitney LLP as to tax matters
12.1 Computation of Ratio of Earnings to Fixed Charges
(incorporated by reference to Exhibit 12.1 to Green Tree's
Quarterly Report on Form 10-Q for the period ended
June 30, 1999)
**23.1 Consent of PricewaterhouseCoopers LLC
**23.2 Consent of KPMG LLP
*23.3 Consent of Dorsey & Whitney LLP (included as part of
Exhibit 5.1)
*24.1 Power of attorney from officers and directors of Green
Tree signed by an attorney-in-fact
**24.2 Power of attorney from officers and directors of Conseco
Securitizations (included on Part II, page 6)
</TABLE>
- --------
*Previously filed.
** Filed herewith.
<PAGE>
Exhibit 3.2
RESTATED CERTIFICATE OF INCORPORATION
OF
GREEN TREE FINANCIAL CORPORATION
The undersigned, for the purposes of amending and restating in its
entirety the Certificate of Incorporation of Green Tree Financial Corporation, a
corporation existing under the General Corporation Law of the State of Delaware,
does execute this Amended and Restated Certificate of Incorporation and does
hereby certify as follows:
1. The name of the corporation is Green Tree Financial Corporation and
the name under which the corporation was originally incorporated is Green Tree
Financial Corporation
The date of filing of its original Certificate of Incorporation with
the Secretary of State was March 24, 1995.
2. This Restated Certificate of Incorporation restates and integrates
and further amends the Certificate of Incorporation of this corporation by
restating the Certificate of Incorporation in its entirety.
3. The text of the Certificate of Incorporation as amended or
supplemented heretofore is hereby restated without further amendments or changes
to read as herein set forth in full:
FIRST. The name of the corporation is Conseco Finance Corp.
SECOND. The address of the corporation's registered office in the State
of Delaware is 1209 Orange Street, in the City of Wilmington, County of New
Castle, 19801. The name of its registered agent at such address is The
Corporation Trust Company.
THIRD. The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware.
FOURTH. The total number of shares of stock which the corporation shall
have authority to issue is 100. All such shares are to be Common Stock, par
value of $.01 per share, and are to be of one class.
FIFTH. Unless and except to the extent that the bylaws of the
corporation shall so require, the election of directors of the corporation need
not be by written ballot.
1
<PAGE>
SIXTH. In furtherance and not in limitation of the powers conferred by
the laws of the State of Delaware, the Board of Directors of the corporation is
expressly authorized to make, alter and repeal the bylaws of the corporation,
subject to the power of the stockholders of the corporation to alter or repeal
any bylaw whether adopted by them or otherwise.
SEVENTH. A director of the corporation shall not be liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except to the extent such exemption from liability or
limitation thereof is not permitted under the General Corporation Law of the
State of Delaware as the same exists or may hereafter be amended. Any amendment,
modification or repeal of the foregoing sentence shall not adversely affect any
right or protection of a director of the corporation hereunder in respect of any
act or omission occurring prior to the time of such amendment, modification or
repeal.
EIGHTH. The corporation reserves the right at any time, and from time
to time, to amend, alter, change or repeal any provision contained in this
Certificate of Incorporation, and other provisions authorized by the laws of the
State of Delaware at the time in force may be added or inserted, in the manner
now or hereafter prescribed by law; and all rights, preferences and privileges
of whatsoever nature conferred upon stockholders, directors or any other persons
whomsoever by and pursuant to this Certificate of Incorporation in its present
form or as hereafter amended are granted subject to the rights reserved in this
article.
4. This Restated Certificate of Incorporation was duly adopted by vote
of the stockholders in accordance with Sections 242 and 245 of the General
Corporation Law of the State of Delaware.
4. The Restated Certificate of Incorporation shall be effective on
November 1, 1999.
IN WITNESS WHEREOF, the corporation has caused this Amended and
Restated Certificate of Incorporation to be executed by the undersigned duly
authorized officer of the corporation as of this 30th day of September, 1999.
GREEN TREE FINANCIAL CORPORATION
By: /s/ Brian F. Corey
----------------------------------
Name: Brian F. Corey
Title: Senior Vice President, General Counsel
and Secretary
2
<PAGE>
Exhibit 3.4
RESTATED BYLAWS
OF
CONSECO FINANCE CORP.
------------------------------------------------------------
ARTICLE I
Meetings of Stockholders
------------------------
Section 1.1. Annual Meetings. An annual meeting of stockholders shall
be held for the election of directors at such date, time and place, either
within or without the State of Delaware, as may be designated by resolution of
the Board of Directors from time to time. Any other proper business may be
transacted at the annual meeting.
Section 1.2. Special Meetings. Special meetings of stockholders for any
purpose or purposes may be called at any time by the Board of Directors, but
such special meetings may not be called by any other person or persons. Business
transacted at any special meeting of stockholders shall be limited to the
purposes stated in the notice. Any business transacted at a special meeting that
is not included in the purposes stated in the notice of meeting is voidable by
or on behalf of the corporation, unless all stockholders have waived notice of
the meeting.
Section 1.3. Notice of Meetings. Whenever stockholders are required or
permitted to take any action at a meeting, a written notice of the meeting shall
be given that shall state the place, date and hour of the meeting and, in the
case of a special meeting, the purpose or purposes for which the meeting is
called. Unless otherwise provided by law, the certificate of incorporation or
these bylaws, the written notice of any meeting shall be given not less than ten
(10) nor more than sixty (60) days before the date of the meeting to each
stockholder entitled to vote at such meeting. If mailed, such notice shall be
deemed to be given when deposited in the United States mail, postage prepaid,
directed to the stockholder at his address as it appears on the records of the
corporation.
Section 1.4. Adjournments. Any meeting of stockholders, annual or
special, may adjourn from time to time to reconvene at the same or some other
place, and notice need not be given of any such adjourned meeting if the time
and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the corporation may transact any business which
might have been transacted at the original meeting. If the adjournment is for
more than thirty (30) days, or if after the adjournment a new record date is
fixed for the adjourned meeting, notice of the adjourned meeting shall be given
to each stockholder of record entitled to vote at the meeting.
<PAGE>
Section 1.5. Quorum. Except as otherwise provided by law, the
certificate of incorporation or these bylaws, at each meeting of stockholders
the presence in person or by proxy of the holders of a majority in voting power
of the outstanding shares of stock entitled to vote at the meeting shall be
necessary and sufficient to constitute a quorum. In the absence of a quorum, the
stockholders so present may, by a majority in voting power thereof, adjourn the
meeting from time to time in the manner provided in Section 1.4 of these bylaws
until a quorum shall attend. Shares of its own stock belonging to the
corporation or to another corporation, if a majority of the shares entitled to
vote in the election of directors of such other corporation is held, directly or
indirectly, by the corporation, shall neither be entitled to vote nor be counted
for quorum purposes; provided, however, that the foregoing shall not limit the
right of the corporation or any subsidiary of the corporation to vote stock,
including but not limited to its own stock, held by it in a fiduciary capacity.
Section 1.6. Organization. Meetings of stockholders shall be presided
over by the Chairman of the Board, if any, or in his or her absence by the Vice
Chairman of the Board, if any, or in his or her absence by the President, or in
his or her absence by a Vice President, or in the absence of the foregoing
persons by a chairman designated by the Board of Directors, or in the absence of
such designation by a chairman chosen at the meeting. The Secretary shall act as
secretary of the meeting, but in his or her absence the chairman of the meeting
may appoint any person to act as secretary of the meeting.
Section 1.7. Voting; Proxies. Except as otherwise provided by or
pursuant to the provisions of the certificate of incorporation, each stockholder
entitled to vote at any meeting of stockholders shall be entitled to one vote
for each share of stock held by such stockholder which has voting power upon the
matter in question. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for such
stockholder by proxy, but no such proxy shall be voted or acted upon after three
years from its date, unless the proxy provides for a longer period. A proxy
shall be irrevocable if it states that it is irrevocable and if, and only as
long as, it is coupled with an interest sufficient in law to support an
irrevocable power. A stockholder may revoke any proxy which is not irrevocable
by attending the meeting and voting in person or by filing an instrument in
writing revoking the proxy or by delivering a proxy in accordance with
applicable law bearing a later date to the Secretary of the corporation. Voting
at meetings of stockholders need not be by written ballot. At all meetings of
stockholders for the election of directors a plurality of the votes cast shall
be sufficient to elect. All other elections and questions shall, unless
otherwise provided by the certificate of incorporation, these bylaws, the rules
or regulations of any stock exchange applicable to the corporation, as otherwise
provided by law or pursuant to any regulation applicable to the corporation, be
decided by the affirmative vote of the holders of a majority in voting power of
the shares of stock of the corporation which are present in person or by proxy
and entitled to vote thereon.
2
<PAGE>
Section 1.8. Fixing Date for Determination of Stockholders of Record.
In order that the corporation may determine the stockholders entitled to notice
of or to vote at any meeting of stockholders or any adjournment thereof, or to
express consent to corporate action in writing without a meeting, or entitled to
receive payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect of any change, conversion
or exchange of stock or for the purpose of any other lawful action, the Board of
Directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the Board of
Directors, and which record date: (1) in the case of determination of
stockholders entitled to vote at any meeting of stockholders or adjournment
thereof, shall, unless otherwise required by law, not be more than sixty (60)
nor less than ten (10) days before the date of such meeting; (2) in the case of
determination of stockholders entitled to express consent to corporate action in
writing without a meeting, shall not be more than ten (10) days from the date
upon which the resolution fixing the record date is adopted by the Board of
Directors; and (3) in the case of any other action, shall not be more than sixty
(60) days prior to such other action. If no record date is fixed: (1) the record
date for determining stockholders entitled to notice of or to vote at a meeting
of stockholders shall be at the close of business on the day next preceding the
day on which notice is given, or, if notice is waived, at the close of business
on the day next preceding the day on which the meeting is held; (2) the record
date for determining stockholders entitled to express consent to corporate
action in writing without a meeting, when no prior action of the Board of
Directors is required by law, shall be the first date on which a signed written
consent setting forth the action taken or proposed to be taken is delivered to
the corporation in accordance with applicable law, or, if prior action by the
Board of Directors is required by law, shall be at the close of business on the
day on which the Board of Directors adopts the resolution taking such prior
action; and (3) the record date for determining stockholders for any other
purpose shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the adjourned meeting.
Section 1.9. List of Stockholders Entitled to Vote. The Secretary shall
prepare and make, at least ten (10) days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior to
the meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof and may be inspected by any stockholder who is present. Upon the willful
neglect or refusal of the directors to produce such a list at any meeting for
the election of directors, they shall be ineligible for election to any office
at such meeting. Except as otherwise provided by law, the stock ledger shall be
3
<PAGE>
the only evidence as to who are the stockholders entitled to examine the stock
ledger, the list of stockholders or the books of the corporation, or to vote in
person or by proxy at any meeting of stockholders.
Section 1.10. Action By Written Consent of Stockholders. Unless
otherwise restricted by the certificate of incorporation, any action required or
permitted to be taken at any annual or special meeting of the stockholders may
be taken without a meeting, without prior notice and without a vote, if a
consent or consents in writing, setting forth the action so taken, shall be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted and
shall be delivered to the corporation by delivery to its registered office in
the State of Delaware, its principal place of business, or an officer or agent
of the corporation having custody of the book in which minutes of proceedings of
stockholders are recorded. Delivery made to the corporation's registered office
shall be by hand or by certified or registered mail, return receipt requested.
Prompt notice of the taking of the corporate action without a meeting by less
than unanimous written consent shall, to the extent required by law, be given to
those stockholders who have not consented in writing and who, if the action had
been taken at a meeting, would have been entitled to notice of the meeting if
the record date for such meeting had been the date that written consents signed
by a sufficient number of holders to take the action were delivered to the
corporation.
Section 1.11. Inspectors of Election. The corporation may, and shall if
required by law, in advance of any meeting of stockholders, appoint one or more
inspectors of election, who may be employees of the corporation, to act at the
meeting or any adjournment thereof and to make a written report thereof. The
corporation may designate one or more persons as alternate inspectors to replace
any inspector who fails to act. In the event that no inspector so appointed or
designated is able to act at a meeting of stockholders, the person presiding at
the meeting shall appoint one or more inspectors to act at the meeting. Each
inspector, before entering upon the discharge of his or her duties, shall take
and sign an oath to execute faithfully the duties of inspector with strict
impartiality and according to the best of his or her ability. The inspector or
inspectors so appointed or designated shall (i) ascertain the number of shares
of capital stock of the corporation outstanding and the voting power of each
such share, (ii) determine the shares of capital stock of the corporation
represented at the meeting and the validity of proxies and ballots, (iii) count
all votes and ballots, (iv) determine and retain for a reasonable period a
record of the disposition of any challenges made to any determination by the
inspectors, and (v) certify their determination of the number of shares of
capital stock of the corporation represented at the meeting and such inspectors'
count of all votes and ballots. Such certification and report shall specify such
other information as may be required by law. In determining the validity and
counting of proxies and ballots cast at any meeting of stockholders of the
corporation, the inspectors may consider such information as is permitted by
applicable law. No person who is a candidate for an office at an election may
serve as an inspector at such election.
4
<PAGE>
Section 1.12. Conduct of Meetings. The date and time of the opening
and the closing of the polls for each matter upon which the stockholders will
vote at a meeting shall be announced at the meeting by the person presiding over
the meeting. The Board of Directors may adopt by resolution such rules and
regulations for the conduct of the meeting of stockholders as it shall deem
appropriate. Except to the extent inconsistent with such rules and regulations
as adopted by the Board of Directors, the chairman of any meeting of
stockholders shall have the right and authority to prescribe such rules,
regulations and procedures and to do all such acts as, in the judgment of such
chairman, are appropriate for the proper conduct of the meeting. Such rules,
regulations or procedures, whether adopted by the Board of Directors or
prescribed by the chairman of the meeting, may include, without limitation, the
following: (i) the establishment of an agenda or order of business for the
meeting; (ii) rules and procedures for maintaining order at the meeting and the
safety of those present; (iii) limitations on attendance at or participation in
the meeting to stockholders of record of the corporation, their duly authorized
and constituted proxies or such other persons as the chairman of the meeting
shall determine; (iv) restrictions on entry to the meeting after the time fixed
for the commencement thereof; and (v) limitations on the time allotted to
questions or comments by participants. Unless and to the extent determined by
the Board of Directors or the chairman of the meeting, meetings of stockholders
shall not be required to be held in accordance with the rules of parliamentary
procedure.
ARTICLE II
Board of Directors
------------------
Section 2.1. Number; Qualifications. The Board of Directors shall
consist of one or more members, the number thereof to be determined from time to
time by resolution of the Board of Directors. Directors need not be
stockholders.
Section 2.2. Election; Resignation; Vacancies. At each annual meeting
of stockholders, the stockholders shall elect directors each of whom shall hold
office for a term of one year or until his or her successor is duly elected and
qualified, subject to such director's earlier death, resignation,
disqualification or removal. Any director may resign at any time upon written
notice to the corporation. Unless otherwise provided by law or the certificate
of incorporation, any newly created directorship or any vacancy occurring in the
Board of Directors for any cause may be filled by a majority of the remaining
members of the Board of Directors, although such majority is less than a quorum,
or by a plurality of the votes cast at a meeting of stockholders, and each
director so elected shall hold office until the expiration of the term of office
of the director whom he or she has replaced or until his or her successor is
elected and qualified.
5
<PAGE>
Section 2.3. Regular Meetings. Regular meetings of the Board of
Directors may be held at such places within or without the State of Delaware and
at such times as the Board of Directors may from time to time determine.
Section 2.4. Special Meetings. Special meetings of the Board of
Directors may be held at any time or place within or without the State of
Delaware whenever called by the President, any Vice President, the Secretary, or
by any member of the Board of Directors. Notice of a special meeting of the
Board of Directors shall be given by the person or persons calling the meeting
at least twenty-four hours before the special meeting.
Section 2.5. Telephonic Meetings Permitted. Members of the Board of
Directors, or any committee designated by the Board of Directors, may
participate in a meeting thereof by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
bylaw shall constitute presence in person at such meeting.
Section 2.6. Quorum; Vote Required for Action. At all meetings of the
Board of Directors a majority of the whole Board of Directors shall constitute a
quorum for the transaction of business. Except in cases in which the certificate
of incorporation, these bylaws or applicable law otherwise provides, the vote of
a majority of the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors.
Section 2.7. Organization. Meetings of the Board of Directors shall be
presided over by the Chairman of the Board, if any, or in his or her absence by
the Vice Chairman of the Board, if any, or in his or her absence by the
President, or in their absence by a chairman chosen at the meeting. The
Secretary shall act as secretary of the meeting, but in his or her absence the
chairman of the meeting may appoint any person to act as secretary of the
meeting.
Section 2.8. Action by Written Consent of Directors. Unless otherwise
restricted by the certificate of incorporation or these bylaws, any action
required or permitted to be taken at any meeting of the Board of Directors, or
of any committee thereof, may be taken without a meeting if all members of the
Board of Directors or such committee, as the case may be, consent thereto in
writing, and the writing or writings are filed with the minutes of proceedings
of the Board of Directors or such committee.
ARTICLE III
Committees
----------
Section 3.1. Committees. The Board of Directors may designate one or
more committees, each committee to consist of one or more of the directors of
the corporation. The Board of Directors may designate one or more directors as
alternate members of any
6
<PAGE>
committee, who may replace any absent or disqualified member at any meeting of
the committee. In the absence or disqualification of a member of the committee,
the member or members thereof present at any meeting and not disqualified from
voting, whether or not such member or members constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in place of any such absent or disqualified member. Any such committee,
to the extent permitted by law and to the extent provided in the resolution of
the Board of Directors, shall have and may exercise all the powers and authority
of the Board of Directors in the management of the business and affairs of the
corporation, and may authorize the seal of the corporation to be affixed to all
papers which may require it.
Section 3.2. Committee Rules. Unless the Board of Directors otherwise
provides, each committee designated by the Board of Directors may make, alter
and repeal rules for the conduct of its business. In the absence of such rules
each committee shall conduct its business in the same manner as the Board of
Directors conducts its business pursuant to Article II of these bylaws.
ARTICLE IV
Officers
--------
Section 4.1. Number and Designation. The officers of the corporation
shall be a Chairman of the Board, President, one or more Vice Presidents, a
Secretary and a Treasurer. The corporation also may have, at the discretion of
the Board of Directors, such Assistant Secretaries, Assistant Treasurers or
other officers or agents as may be elected or appointed by the Board of
Directors. Any two or more offices may be held by the same person unless the
certificate of incorporation or these bylaws provide otherwise.
Section 4.2. Election and Term of Office. The officers of the
corporation shall be elected annually by the Board of Directors at the first
meeting of the Board of Directors held after the election of directors. If the
election of officers shall not be held at such meeting, such election shall be
held as soon thereafter as may be convenient. Vacancies may be filled or new
offices created and filled at any meeting of the Board of Directors. Each
officer shall hold office until his or her successor shall have been duly
elected and shall have qualified or until his or her earlier death, resignation
or removal.
Section 4.3. Removal and Resignation. Any officer or agent elected or
appointed by the Board of Directors may be removed by the Board of Directors
whenever in its judgment the best interests of the corporation would be served
thereby, but such removal shall be without prejudice to the contract rights, if
any, of the person so removed. Any officer or agent may resign at any time by
giving written notice to the Board of Directors, the President or the Secretary.
Any such resignation shall take effect at the time of receipt
7
<PAGE>
of such notice or at any later time specified therein; and, unless otherwise
specified therein, acceptance of such resignation shall not be necessary to make
it effective.
Section 4.4. Vacancies. A vacancy in any office because of death,
retirement, resignation, disqualification, removal or otherwise may be filled by
the Board of Directors for the unexpired portion of the term.
Section 4.5. Chairman of the Board. The Chairman of the Board shall be
the Chief Executive Officer of the corporation and shall have general charge of,
and supervision and authority over, all of the affairs and business of the
corporation. The Chairman of the Board shall have general supervision of and
direct all officers, agents and employees of the corporation; shall see that all
orders and resolutions of the Board are carried into effect; and in general,
shall exercise all powers and perform all duties incident to such office and
such other powers and duties as may from time to time be assigned to him or her
by the Board.
Section 4.6. President. The President shall have the authority to sign,
with the Secretary or an Assistant Secretary, any and all certificates for
shares of the capital stock of the corporation, and shall have the authority to
sign singly deeds, bonds, mortgages, contracts, or other instruments to which
the corporation is a party (except in cases where the signing and execution
thereof shall be expressly delegated by the Board or by these bylaws, or by law
to some other officer or agent of the corporation); and, in the absence,
disability or refusal to act as the Chairman of the Board, shall preside at
meetings of the stockholders and of the Board of Directors and shall possess all
of the powers and perform all of the duties of the Chairman of the Board. The
President shall also serve the corporation in such other capacities and perform
such other duties and have such additional authority and powers as are incident
to his or her office or as may be defined in these bylaws or delegated to him or
her from time to time by the Board or by the Chairman of the Board.
Section 4.7. The Vice Presidents. In the absence of the President or in
the event of his or her inability or refusal to act, the Vice President (or in
the event there shall be more than one Vice President, the Vice Presidents in
the order determined by the Board of Directors or, if there shall have been no
such determination, then in the order of their election) shall perform the
duties of the President and, when so acting, shall have all the powers of and be
subject to all the restrictions upon the President. The Board of Directors may
also designate certain Vice Presidents as being in charge of designated
divisions, plants or functions of the corporation's business and add appropriate
descriptions to their titles. In addition, any Vice President shall perform such
duties as from time to time may be assigned to him or her by the President or
the Board of Directors.
Section 4.8. The Secretary. The Secretary shall (a) keep the minutes of
proceedings of the stockholders, the Board of Directors and any committee of the
Board of Directors in one or more books provided for that purpose; (b) see that
all notices are duly
8
<PAGE>
given in accordance with the provisions of these bylaws or as required by law;
(c) be custodian of the corporate records and of the seal of the corporation;
(d) affix the seal of the corporation or facsimile thereof, or cause it to be
affixed, and, when so affixed, attest the seal by his or her signature, to all
certificates for shares of capital stock of the corporation prior to the issue
thereof and to all other documents the execution of which on behalf of the
corporation under its seal is duly authorized by the Board of Directors or
otherwise in accordance with the provisions of these bylaws; (e) keep a register
of the post office address of each stockholder, director or committee member,
which shall be furnished to the Secretary by such stockholder, director or
member; (f) have general charge of the stock transfer books of the corporation;
and (g) in general perform all duties incident to the office of Secretary and
such other duties as from time to time may be assigned to him or her by the
President or the Board of Directors.
Section 4.9. The Treasurer. The Treasurer shall have charge and custody
of and be responsible for all funds and securities of the corporation, receive
and give receipts for moneys due and payable to the corporation from any source
whatsoever, deposit all such moneys in the name of the corporation in such
banks, trust companies or other depositories as shall be selected from time to
time, disburse the funds of the corporation as ordered by the Board of
Directors, the Chairman of the Board or the President or as otherwise required
in the conduct of the business of the corporation and render to the President or
the Board of Directors, upon request, an accounting of all his or her
transactions as Treasurer and a report on the financial condition of the
corporation. The Treasurer shall in general peform all the duties incident to
the office of Treasurer and such other duties as from time to time may be
assigned to him or her by the President or the Board of Directors. If required
by the Board of Directors, the Treasurer shall give a bond (which shall be
renewed regularly), in such sum and with such surety or sureties as the Board of
Directors shall determine, for the faithful discharge of his or her duties and
for the restoration to the corporation, in case of his or her death,
resignation, retirement or removal from office, of all books, papers, vouchers,
money and other property of whatever kind in his or her possession or under his
or her control belonging to the corporation.
Section 4.10. Assistant Treasurers and Secretaries. In the absence of
the Secretary or the Treasurer, as the case may be, or in the event of his or
her inability or refusal to act, the Assistant Secretaries and the Assistant
Treasurers, respectively, in the order determined by the Board of Directors (or
if there shall have been no such determination, then in the order of their
election), shall perform the duties and exercise the powers of the Secretary or
the Treasurer, as the case may be. In addition, the Assistant Secretaries and
the Assistant Treasurers shall, in general, perform such duties as may be
assigned to them by the President, the Secretary, the Treasurer or the Board of
Directors. Each Assistant Treasurer shall, if required by the Board of
Directors, give a bond (which shall be renewed regularly), in such sum and with
such surety or sureties as the Board of Directors shall determine, for the
faithful discharge of his or her duties.
9
<PAGE>
ARTICLE V
Stock
-----
Section 5.1. Certificates. Every holder of stock shall be entitled to
have a certificate signed by or in the name of the corporation by the Chairman
or Vice Chairman of the Board of Directors, if any, or the President or a Vice
President, and by the Treasurer or an Assistant Treasurer, or the Secretary or
an Assistant Secretary, of the corporation certifying the number of shares owned
by him in the corporation. Any of or all the signatures on the certificate may
be a facsimile. In case any officer, transfer agent or registrar who has signed
or whose facsimile signature has been placed upon a certificate shall have
ceased to be such officer, transfer agent, or registrar before such certificate
is issued, it may be issued by the corporation with the same effect as if he
were such officer, transfer agent, or registrar at the date of issue.
Section 5.2. Lost, Stolen or Destroyed Stock Certificates; Issuance of
New Certificates. The corporation may issue a new certificate of stock in the
place of any certificate theretofore issued by it, alleged to have been lost,
stolen or destroyed, and the corporation may require the owner of the lost,
stolen or destroyed certificate, or the legal representative of such owner, to
give the corporation a bond sufficient to indemnify it against any claim that
may be made against it on account of the alleged loss, theft or destruction of
any such certificate or the issuance of such new certificate.
ARTICLE VI
Indemnification
---------------
Section 6.1. Right to Indemnification. The corporation shall indemnify
and hold harmless, to the fullest extent permitted by applicable law as it
presently exists or may hereafter be amended, any person (an "Indemnitee") who
was or is made or is threatened to be made a party or is otherwise involved in
any action, suit or proceeding, whether civil, criminal, administrative or
investigative (a "proceeding"), by reason of the fact that he or she, or a
person for whom he or she is the legal representative, is or was a director or
officer of the corporation or, while a director or officer of the corporation,
is or was serving at the written request of the corporation as a director,
officer, employee or agent of another corporation or of a partnership, joint
venture, trust, enterprise or nonprofit entity, including service with respect
to employee benefit plans, against all liability and loss suffered and expenses
(including attorneys' fees) reasonably incurred by such Indemnitee.
Notwithstanding the preceding sentence, except as otherwise provided in Section
6.3, the corporation shall be required to indemnify an Indemnitee in connection
with a proceeding (or part thereof) commenced by such Indemnitee only if the
commencement of such proceeding (or part thereof) by the Indemnitee was
authorized by the Board of Directors.
10
<PAGE>
Section 6.2. Prepayment of Expenses. The corporation shall pay the
expenses (including attorneys' fees) incurred by an Indemnitee in defending any
proceeding in advance of its final disposition, provided, however, that, to the
extent required by law, such payment of expenses in advance of the final
disposition of the proceeding shall be made only upon receipt of an undertaking
by the Indemnitee to repay all amounts advanced if it should be ultimately
determined that the Indemnitee is not entitled to be indemnified under this
Article VI or otherwise.
Section 6.3. Claims. If a claim for indemnification or advancement of
expenses under this Article VI is not paid in full within sixty (60) days after
a written claim therefor by the Indemnitee has been received by the corporation,
the Indemnitee may file suit to recover the unpaid amount of such claim and, if
successful in whole or in part, shall be entitled to be paid the expense of
prosecuting such claim. In any such action the corporation shall have the burden
of proving that the Indemnitee is not entitled to the requested indemnification
or advancement of expenses under applicable law.
Section 6.4. Nonexclusivity of Rights. The rights conferred on any
Indemnitee by this Article VI shall not be exclusive of any other rights which
such Indemnitee may have or hereafter acquire under any statute, provision of
the certificate of incorporation, these bylaws, agreement, vote of stockholders
or disinterested directors or otherwise.
Section 6.5. Other Sources. The corporation's obligation, if any, to
indemnify or to advance expenses to any Indemnitee who was or is serving at its
request as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust, enterprise or nonprofit entity shall be
reduced by any amount such Indemnitee may collect as indemnification or
advancement of expenses from such other corporation, partnership, joint venture,
trust, enterprise or non-profit enterprise.
Section 6.6. Amendment or Repeal. Any repeal or modification of the
foregoing provisions of this Article VI shall not adversely affect any right or
protection hereunder of any Indemnitee in respect of any act or omission
occurring prior to the time of such repeal or modification.
Section 6.7. Other Indemnification and Prepayment of Expenses. This
Article VI shall not limit the right of the corporation, to the extent and in
the manner permitted by law, to indemnify and to advance expenses to persons
other than Indemnitees when and as authorized by appropriate corporate action.
ARTICLE VII
Miscellaneous
-------------
11
<PAGE>
Section 7.1. Fiscal Year. The fiscal year of the corporation shall
begin on the first day of January of each year and end on the 31st day of
December, unless otherwise determined by resolution of the Board of Directors.
Section 7.2. Seal. The corporate seal shall have the name of the
corporation inscribed thereon and shall be in such form as may be approved from
time to time by the Board of Directors.
Section 7.3. Manner of Notice. Except as otherwise provided herein,
notices to directors and stockholders shall be in writing and delivered
personally or mailed to the directors or stockholders at their addresses
appearing on the books of the corporation. Notice to directors may be given by
telegram, telecopier, telephone or other means of electronic transmission.
Section 7.4. Waiver of Notice of Meetings of Stockholders, Directors
and Committees. Any written waiver of notice, signed by the person entitled to
notice, whether before or after the time stated therein, shall be deemed
equivalent to notice. Attendance of a person at a meeting shall constitute a
waiver of notice of such meeting, except when the person attends a meeting for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at nor the purpose of any
regular or special meeting of the stockholders, directors, or members of a
committee of directors need be specified in any written waiver of notice.
Section 7.5. Form of Records. Any records maintained by the corporation
in the regular course of its business, including its stock ledger, books of
account, and minute books, may be kept on, or be in the form of, punch cards,
magnetic tape, photographs, microphotographs, or any other information storage
device, provided that the records so kept can be converted into clearly legible
form within a reasonable time.
Section 7.6. Amendment of Bylaws. These bylaws may be altered, amended
or repealed, and new bylaws made, by the Board of Directors, but the
stockholders may make additional bylaws and may alter and repeal any bylaws
whether adopted by them or otherwise.
Adopted: September 24, 1999
Effective: November 1, 1999
12
<PAGE>
EXHIBIT 4.1
[FORM OF]
Manufactured Housing Contract Senior/Subordinate Pass-Through
Certificates, Series _______
POOLING AND SERVICING AGREEMENT
among
CONSECO FINANCE SECURITIZATIONS CORP.
as Seller
GREEN TREE FINANCIAL CORPORATION
as Originator, Servicer and Guarantor
and
U.S. BANK NATIONAL ASSOCIATION
not in its individual capacity but solely as Trustee
Dated as of _____________
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
-----------
SECTION 1.01. General..................................................... 1-1
SECTION 1.02. Specific Terms.............................................. 1-1
SECTION 1.03. Calculations................................................ 1-36
ARTICLE II
ESTABLISHMENT OF TRUST; TRANSFER OF CONTRACTS
---------------------------------------------
SECTION 2.01. Closing..................................................... 2-1
SECTION 2.02. Conditions to the Closing................................... 2-2
SECTION 2.03. Conveyance of the Subsequent Contracts...................... 2-4
SECTION 2.04. Acceptance by Trustee....................................... 2-6
SECTION 2.05. REMIC Provisions............................................ 2-6
ARTICLE III
REPRESENTATIONS AND WARRANTIES
------------------------------
SECTION 3.01. Representations and Warranties Regarding the
Seller...................................................... 3-1
SECTION 3.02. Representations and Warranties Regarding Each
Contract.................................................... 3-2
SECTION 3.03. Additional Representations and Warranties................... 3-6
SECTION 3.04. Representations and Warranties Regarding the
Contracts in the Aggregate.................................. 3-7
SECTION 3.05. Representations and Warranties Regarding the
Contract Files.............................................. 3-9
SECTION 3.06. Repurchase of Contracts or Substitution of Contracts
for Breach of Representations and Warranties................ 3-9
SECTION 3.07. No Repurchase or Substitution Under Certain
Circumstances............................................... 3-13
SECTION 3.08. Staged-Funding Contract Reserve Account..................... 3-14
ARTICLE IV
PERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS
-----------------------------------------------------------
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.......................................... 4-3
-i-
<PAGE>
ARTICLE V
SERVICING OF CONTRACTS
----------------------
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. Certificate Account......................................... 5-2
SECTION 5.06. Enforcement................................................. 5-4
SECTION 5.07. Trustee to Cooperate........................................ 5-5
SECTION 5.08. Costs and Expenses.......................................... 5-6
SECTION 5.09. Maintenance of Insurance.................................... 5-6
SECTION 5.10. Repossession................................................ 5-7
SECTION 5.11. Commingling of Funds........................................ 5-8
SECTION 5.12. Retitling; Security Interests............................... 5-8
ARTICLE VI
REPORTS AND TAX MATTERS
-----------------------
SECTION 6.01. Monthly Reports............................................. 6-1
SECTION 6.02. Certificate of Servicing Officer............................ 6-1
SECTION 6.03. Other Data.................................................. 6-1
SECTION 6.04. Annual Report of Accountants................................ 6-1
SECTION 6.05. Statements to Certificateholders............................ 6-2
SECTION 6.06. Payment of Taxes............................................ 6-8
ARTICLE VII
SERVICE TRANSFER
----------------
SECTION 7.01. Event of Termination........................................ 7-1
SECTION 7.02. Transfer.................................................... 7-1
SECTION 7.03. Trustee to Act; Appointment of Successor.................... 7-2
SECTION 7.04. Notification to Certificateholders.......................... 7-3
SECTION 7.05. Effect of Transfer.......................................... 7-3
SECTION 7.06. Transfer of Certificate Account............................. 7-3
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<PAGE>
ARTICLE VIII
PAYMENTS
--------
SECTION 8.01. Monthly Payments............................................ 8-1
SECTION 8.02. Permitted Withdrawals from the Certificate Account.......... 8-2
SECTION 8.03. Payments.................................................... 8-2
SECTION 8.04. Limited Guarantee........................................... 8-9
SECTION 8.05. Class C Certificateholder's Purchase Option; Auction Sale;
Additional Principal Distribution Amount.................... 8-10
SECTION 8.06. Capitalized Interest Account................................ 8-12
SECTION 8.07. Pre-Funding Account......................................... 8-13
ARTICLE IX
THE CERTIFICATES AND UNCERTIFICATED SUBSIDIARY INTERESTS
--------------------------------------------------------
SECTION 9.01. The Certificates............................................ 9-1
SECTION 9.02. Registration of Transfer and Exchange of Certificates....... 9-2
SECTION 9.03. No Charge; Disposition of Void Certificates................. 9-5
SECTION 9.04. Mutilated, Destroyed, Lost or Stolen Certificates........... 9-5
SECTION 9.05. Persons Deemed Owners....................................... 9-6
SECTION 9.06. Access to List of Certificateholders' Names
and Addresses............................................... 9-6
SECTION 9.07. Authenticating Agents....................................... 9-6
ARTICLE X
INDEMNITIES
-----------
SECTION 10.01. Seller's Indemnities........................................ 10-1
SECTION 10.02. Liabilities to Obligors..................................... 10-1
SECTION 10.03. Tax Indemnification......................................... 10-1
SECTION 10.04. Servicer's Indemnities...................................... 10-1
SECTION 10.05. Operation of Indemnities.................................... 10-2
SECTION 10.06. REMIC Tax Matters........................................... 10-2
ARTICLE XI
THE TRUSTEE
-----------
SECTION 11.01. Duties of Trustee........................................... 11-1
SECTION 11.02. Certain Matters Affecting the Trustee....................... 11-2
SECTION 11.03. Trustee Not Liable for Certificates or Contracts............ 11-3
SECTION 11.04. Rights of Certificateholders to Direct Trustee and to
Waive Event of Termination.................................. 11-3
SECTION 11.05. The Servicer to Pay Trustee's Fees and Expenses............. 11-4
SECTION 11.06. Eligibility Requirements for Trustee........................ 11-4
SECTION 11.07. Resignation or Removal of Trustee........................... 11-5
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<PAGE>
SECTION 11.08. Successor Trustee........................................... 11-5
SECTION 11.09. Merger or Consolidation of Trustee.......................... 11-6
SECTION 11.10. Tax Returns................................................. 11-6
SECTION 11.11. Obligor Claims.............................................. 11-6
SECTION 11.12. Appointment of Co-Trustee or Separate Trustee............... 11-7
SECTION 11.13. Agents of Trustee........................................... 11-8
ARTICLE XII
MISCELLANEOUS
-------------
SECTION 12.01. Servicer Not to Assign Duties or Resign;
Delegation of Servicing Functions........................... 12-1
SECTION 12.02. Maintenance of Office or Agency............................. 12-1
SECTION 12.03. Termination................................................. 12-2
SECTION 12.04. Acts of Certificateholders.................................. 12-3
SECTION 12.05. Calculations................................................ 12-4
SECTION 12.06. Assignment or Delegation by Originator...................... 12-4
SECTION 12.07. Amendment................................................... 12-5
SECTION 12.08. Notices..................................................... 12-6
SECTION 12.09. Merger and Integration...................................... 12-8
SECTION 12.10. Headings.................................................... 12-8
SECTION 12.11. Governing Law............................................... 12-8
Testimonium................................................. 12-9
Exhibit A. Form of Class A Certificate................................. A-1
Exhibit B. Form of Class M-1 or Class M-2 Certificate.................. B-1
Exhibit C-1. Form of Class B-1 or Class B-2 Certificate..................C-1-1
Exhibit C-2. Form of Class B-3I Certificate..............................C-2-1
Exhibit D. Form of Assignment.......................................... D-1
Exhibit E. Form of Certificate of Officer.............................. E-1
Exhibit F. Form of Opinion of Counsel for the Originator............... F-1
Exhibit G. Form of Trustee's Acknowledgement........................... G-1
Exhibit H. Form of Custodian's Acknowledgement......................... H-1
Exhibit I. Form of Certificate of Servicing Officer.................... I-1
Exhibit J. Form of Class C Subsidiary Certificate...................... J-1
Exhibit K. Form of Class C Master Certificate.......................... K-1
Exhibit L-1. Form of Certificate Regarding Repurchased Contracts.........L-1-1
Exhibit L-2. Form of Certificate Regarding Substituted Contracts.........L-2-1
Exhibit M. Form of Representation Letter............................... M-1
Exhibit N. Form of Monthly Report...................................... N-1
Exhibit O. Form of Addition Notice..................................... O-1
Exhibit P. Form of Subsequent Transfer Instrument...................... P-1
Exhibit Q. Form of Officer's Certificate (Subsequent Transfer)......... Q-1
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<PAGE>
AGREEMENT, dated as of ________________, among Conseco Finance
Securitizations Corp., a corporation organized and existing under the laws of
the State of Minnesota, as Seller (the "Seller"), Green Tree Financial
Corporation, a corporation organized and existing under the laws of the State of
Delaware, as originator of the manufactured housing installment sales contracts
and installment loan agreements described herein (the "Originator"), as servicer
(the "Servicer") and as Limited Guarantor of the Class B-2 Certificates (the
"Guarantor"), and U.S. Bank National Association, a national banking
association, not in its individual capacity but solely as Trustee (the
"Trustee").
WHEREAS, in the regular course of its business, Green Tree Financial
Corporation originates, purchases and services manufactured housing installment
sales contracts and installment loan agreements, which contracts provide for
installment payments by or on behalf of the owner of the manufactured home and
grant security interests in the related manufactured home (or, in certain cases,
mortgages or deeds of trust on the real estate to which such manufactured home
is deemed permanently affixed);
WHEREAS, the Seller, the Originator, the Servicer, the Guarantor and
the Trustee wish to set forth the terms and conditions pursuant to which the
"Trust," as hereinafter defined, will acquire the "Contracts," as hereinafter
defined, and the Seller will manage and service the Contracts;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, the parties hereto agree as provided herein:
<PAGE>
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 the Agreement.
SECTION 1.02. Specific Terms.
"Addition Notice" means, with respect to each transfer of Subsequent
Contracts to the Trust pursuant to Section 2.03 of this Agreement, a notice,
substantially in the form of Exhibit O, which shall be given not less than five
Business Days prior to the related Subsequent Transfer Date, of the Seller's
designation of Subsequent Contracts to be sold to the Trust and the aggregate
Cut-off Date Principal Balances of such Subsequent Contracts.
"Additional Contract" means a Contract identified in the List of
Contracts delivered pursuant to Section 2.02(a) that is not an Initial Contract.
"Adjusted Amount Available" means, as to any Remittance Date, the sum
of the Amount Available and any amount withdrawn from the Capitalized Interest
Account or Pre-Funding Account and deposited in the Certificate Account on such
Remittance Date.
"Adjusted Certificate Principal Balance" means, as of any Remittance
Date, the sum of the Class A Principal Balance, the Class M-1 Adjusted Principal
Balance, the Class M-2 Adjusted Principal Balance, the Class B-1 Adjusted
Principal Balance and the Class B-2 Principal Balance as of that Distribution
Date.
"Advance Payment" means any payment by an Obligor in advance of the
related Due Period in which it would be due under such Contract 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 Pooling and Servicing Agreement, as the same may
be amended or supplemented from time to time.
1-1
<PAGE>
"Amount Available" means, as to any Remittance Date, an amount equal to
(a) the sum of
(i) the amount on deposit in the Certificate Account as
of the close of business on the last day of the
related Due Period,
(ii) any amounts required to be deposited in the
Certificate Account on the Business Day immediately
preceding such Remittance Date pursuant to Section
5.09, and
(iii) all collections in respect of principal on the
Contracts received after the last day of the related
Due Period up to and including the third Business Day
prior to such Remittance Date (but in no event later
than the 25th day of the month prior to such
Remittance Date), minus
(b) the sum as of the close of business on the Business Day
preceding such Remittance Date of
(i) the Amount Held for Future Distribution,
(ii) amounts permitted to be withdrawn by the Trustee from
the Certificate Account pursuant to clauses (b) -
(e), inclusive, of Section 8.02, and
(iii) with respect to all Remittance Dates other than the
Remittance Date in ________________, all collections
in respect of principal on the Contracts received on
or after the first day of the related Due Period up
to and including the third Business Day prior to the
preceding Remittance Date (but in no event later than
the 25th day of the prior month).
"Amount Held for Future Distribution" means, as to any Remittance Date,
the total of the amounts held in the Certificate Account on the last day of the
related Due Period on account of Advance Payments in respect of such related Due
Period (not including any portion of Advance Payments received during such
related Due Period that was distributed on the prior Remittance Date pursuant to
clause (vi) of the definition of "Formula Principal Distribution Amount").
"Applicants" has the meaning assigned in Section 9.06.
"Appraised Value" means, with respect to any Manufactured Home, the
value of such Manufactured Home as determined by a professional appraiser (who
may be an employee of the Company).
"Assumption Fee" means any assumption or other similar fee paid by the
Obligor on a Contract.
1-2
<PAGE>
"Authenticating Agent" means any authenticating agent appointed
pursuant to Section 9.07.
"Average Sixty-Day Delinquency Ratio" means the arithmetic average of
the Sixty-Day Delinquency Ratios for such Remittance Date and for the two
immediately preceding Remittance Dates.
"Book-Entry Certificate" means any Certificate 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) a Saturday or a Sunday, or
(b) another day on which banking institutions in the city in which a Person is
taking action hereunder are authorized or obligated by law, executive order or
governmental decree to be closed.
"Capitalized Interest Account" means the account established and
maintained pursuant to Section 8.06.
"Certificates" means the Class A, Class M, Class B, Class B-3I, and
Class C Certificates, collectively.
"Certificate Account" means the account established and maintained
pursuant to Section 5.05.
"Certificate Owner" means the person who is the beneficial owner of a
Book-Entry Certificate.
"Certificate Register" means the register maintained pursuant to
Section 9.02.
"Certificate Registrar" or "Registrar" means the registrar appointed
pursuant to Section 9.02.
"Certificateholder" or "Holder" means the person in whose name a
Certificate is registered on the Certificate Register, except that, solely for
the purposes of giving any consent, waiver, request or demand pursuant to this
Agreement, any Regular Certificate registered in the name of the Originator or
the Seller or any of their Affiliates shall be deemed not to be outstanding and
the Percentage Interest evidenced thereby shall not be taken into account in
determining whether the requisite Percentage Interest necessary to effect any
such consent, request, waiver or demand has been obtained; provided, however,
that, solely for the purpose of determining whether the Trustee is entitled to
rely upon any such consent, waiver, request or demand, only Regular Certificates
which the Trustee knows to be so owned shall be so disregarded.
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<PAGE>
"Class," "Class A," "Class M," "Class B," "Class B-3I" or "Class C"
means pertaining to each Class of Class A Certificates, Class M Certificates,
Class B Certificates, Class B-3I Certificates and/or Class C Certificates, as
the case may be.
"Class A Certificate" means any one of the Class A-1, Class A-2, Class
A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8 and Class A-9
Certificates executed and delivered by the Trustee substantially in the form set
forth in Exhibit A and evidencing an interest designated as a "regular interest"
in the Master REMIC for purposes of the REMIC Provisions.
"Class A Distribution Amount" means, as to any Remittance Date, the
lesser of (a) the Adjusted Amount Available for such Remittance Date (less any
amounts paid to the Servicer pursuant to Section 8.03(a)(1)) and (b) the Class A
Formula Distribution Amount for such Remittance Date; provided that after the
later of the Class A-8 Cross-Over Date and the Class A-9 Cross-Over Date the
Class A Distribution Amount shall be zero.
"Class A-1 Cross-Over Date" means the Remittance Date on which the
Class A-1 Principal Balance (after giving effect to the distributions of
principal on the Class A-1 Certificates on such Remittance Date) is reduced to
zero.
"Class A-2 Cross-Over Date" means the Remittance Date on which the
Class A-2 Principal Balance (after giving effect to the distributions of
principal on the Class A-2 Certificates on such Remittance Date) is reduced to
zero.
"Class A-3 Cross-Over Date" means the Remittance Date on which the
Class A-3 Principal Balance (after giving effect to the distributions of
principal on the Class A-3 Certificates on such Remittance Date) is reduced to
zero.
"Class A-4 Cross-Over Date" means the Remittance Date on which the
Class A-4 Principal Balance (after giving effect to the distributions of
principal on the Class A-4 Certificates on such Remittance Date) is reduced to
zero.
"Class A-5 Cross-Over Date" means the Remittance Date on which the
Class A-5 Principal Balance (after giving effect to the distributions of
principal on the Class A-5 Certificates on such Remittance Date) is reduced to
zero.
"Class A-6 Cross-Over Date" means the Remittance Date on which the
Class A-6 Principal Balance (after giving effect to the distributions of
principal on the Class A-6 Certificates on such Remittance Date) is reduced to
zero.
"Class A-7 Cross-Over Date" means the Remittance Date on which the
Class A-7 Principal Balance (after giving effect to the distributions of
principal on the Class A-7 Certificates on such Remittance Date) is reduced to
zero.
"Class A-8 Cross-Over Date" means the Remittance Date on which the
Class A-8 Principal Balance (after giving effect to the distributions of
principal on the Class A-8 Certificates on such Remittance Date) is reduced to
zero.
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<PAGE>
"Class A-9 Cross-Over Date" means the Remittance Date on which the
Class A-9 Principal Balance (after giving effect to the distributions of
principal on the Class A-9 Certificates on such Remittance Date) is reduced to
zero.
"Class A Formula Distribution Amount" means, as to any Remittance Date,
an amount equal to the sum of (a) interest (calculated in the manner specified
in Section 1.03) at (i) the Class A-1 Remittance Rate on the Class A-1 Principal
Balance, (ii) the Class A-2 Remittance Rate on the Class A-2 Principal Balance,
(iii) the Class A-3 Remittance Rate on the Class A-3 Principal Balance, (iv) the
Class A-4 Remittance Rate on the Class A-4 Principal Balance, (v) the Class A-5
Remittance Rate on the Class A-5 Principal Balance, (vi) the Class A-6
Remittance Rate on the Class A-6 Principal Balance, (vii) the Class A-7
Remittance Rate on the Class A-7 Principal Balance, (viii) the Class A-8
Remittance Rate on the Class A-8 Principal Balance, and (ix) the Class A-9
Remittance Rate on the Class A-9 Principal Balance, in each case calculated
immediately prior to such Remittance Date, (b) the aggregate Unpaid Class A
Interest Shortfall, if any, (c) the Class A Percentage of the Formula Principal
Distribution Amount and (d) any Unpaid Class A Principal Shortfall; provided,
however, that the aggregate of all amounts distributed for all Remittance Dates
pursuant to clauses (c) and (d) shall not exceed the sum of the Original Class
A-l 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 A-8 Principal
Balance and the Original Class A-9 Principal Balance.
"Class A Interest Distribution Amount" means, as to each Class of Class
A Certificates and any Remittance Date, the sum of the amounts specified in
clause (a)(i), (a)(ii), (a)(iii), (a)(iv), (a)(v), (a)(vi), (a)(vii), (a)(viii)
and (a)(ix) as appropriate, of the definition of the term "Class A Formula
Distribution Amount" and the Unpaid Class A Interest Shortfall, if any, with
respect to such Class.
"Class A Interest Shortfall" means, as to any Remittance Date and with
respect to each Class of Class A Certificates, the amount, if any, by which the
amount distributed to Holders of such Class of Class A Certificates on such
Remittance Date pursuant to Section 8.03(a)(2) is less than the Class A Interest
Distribution Amount for such Class.
"Class A Percentage" means:
(i) as to any Remittance Date on or prior to the later of the
Class A-8 Cross-Over Date and the Class A-9 Cross-Over Date,
and on which the Class M-1 Distribution Test is not satisfied,
100%,
(ii) as to any Remittance Date on which the Class M-1 Distribution
Test is satisfied but the Class M-2 Distribution Test and the
Class B Distribution Test are not satisfied, a fraction,
expressed as a percentage, the numerator of which is the Class
A Principal Balance as of such Remittance Date, and the
denominator of which is the sum of the Class A Principal
Balance and the Class M-1 Principal
1-5
<PAGE>
Balance (minus the Unpaid Class M-1 Principal Shortfall, if
any) as of such Remittance Date,
(iii) as to any Remittance Date on which both the Class M-1
Distribution Test and the Class M-2 Distribution Test are
satisfied but the Class B Distribution Test is not satisfied,
a fraction, expressed as a percentage, the numerator of which
is the Class A Principal Balance as of such Remittance Date,
and the denominator of which is the sum of the Class A
Principal Balance, the Class M-1 Principal Balance (minus the
Unpaid Class M-1 Principal Shortfall, if any), and the Class
M-2 Principal Balance (minus the Unpaid Class M-2 Principal
Shortfall, if any) as of such Remittance Date,
(iv) as to any Remittance Date on which the Class M-1 Distribution
Test, the Class M-2 Distribution Test and the Class B
Distribution Test are satisfied, a fraction, expressed as a
percentage, the numerator of which is the Class A Principal
Balance as of such Remittance Date, and the denominator of
which is the Pool Scheduled Principal Balance as of the
immediately preceding Remittance Date and
(v) as to any Remittance Date after the later of the Class A-8
Cross-Over Date and the Class A-9 Cross-Over Date, 0%.
"Class A Principal Balance" means, as to any Remittance Date, the sum
of the Class Principal Balances of the Class A Certificates.
"Class A Principal Deficiency Amount" means, as to any Remittance Date,
the amount, if any, by which the Pool Scheduled Principal Balance plus any
Pre-Funded Amount is less than the Class A Principal Balance.
"Class A Principal Shortfall" means, as to any Remittance Date, the
amount, if any, by which the amount distributed to Holders of Class A
Certificates on such Remittance Date pursuant to Section 8.03(a)(6)(iii) is less
than the Class A Percentage of the Formula Principal Distribution Amount for
such Remittance Date.
"Class A-1 Remittance Rate" means _____% per annum.
"Class A-2 Remittance Rate" means _____% per annum.
"Class A-3 Remittance Rate" means _____% per annum.
"Class A-4 Remittance Rate" means _____% per annum.
"Class A-5 Remittance Rate" means _____% per annum.
"Class A-6 Remittance Rate" means _____% per annum.
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<PAGE>
"Class A-7 Remittance Rate" means _____% per annum.
"Class A-8 Remittance Rate" means a floating rate (determined each Due
Period on each Remittance Date) equal to the Weighted Average Contract Rate, but
in no event greater than ___% per annum.
"Class A-9 Remittance Rate" means a floating rate (determined each Due
Period on each Remittance Date) equal to the Weighted Average Contract Rate, but
in no event greater than ___% per annum.
"Class A-S1 Interest" means a regular interest in the Subsidiary REMIC
which is held as an asset of the Master REMIC and is entitled to monthly
distributions as provided in Section 8.03(b).
"Class A-S2 Interest" means a regular interest in the Subsidiary REMIC
which is held as an asset of the Master REMIC and is entitled to monthly
distributions as provided in Section 8.03(b).
"Class A-S3 Interest" means a regular interest in the Subsidiary REMIC
which is held as an asset of the Master REMIC and is entitled to monthly
distributions as provided in Section 8.03(b).
"Class A-S4 Interest" means a regular interest in the Subsidiary REMIC
which is held as an asset of the Master REMIC and is entitled to monthly
distributions as provided in Section 8.03(b).
"Class A-S5 Interest" means a regular interest in the Subsidiary REMIC
which is held as an asset of the Master REMIC and is entitled to monthly
distributions as provided in Section 8.03(b).
"Class A-S6 Interest" means a regular interest in the Subsidiary REMIC
which is held as an asset of the Master REMIC and is entitled to monthly
distributions as provided in Section 8.03(b).
"Class A-S7 Interest" means a regular interest in the Subsidiary REMIC
which is held as an asset of the Master REMIC and is entitled to monthly
distributions as provided in Section 8.03(b).
"Class A-S8 Interest" means a regular interest in the Subsidiary REMIC
which is held as an asset of the Master REMIC and is entitled to monthly
distributions as provided in Section 8.03(b).
"Class A-S9 Interest" means a regular interest in the Subsidiary REMIC
which is held as an asset of the Master REMIC and is entitled to monthly
distributions as provided in Section 8.03(b).
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<PAGE>
"Class B-1 Adjusted Principal Balance" means, as of any Remittance
Date, the Class B-1 Principal Balance as of that Remittance Date minus the Class
B-1 Liquidation Loss Amount (if any) as of the prior Remittance Date.
"Class B Certificate" means any one of the Class B-1 or Class B-2
Certificates.
"Class B-1 Certificate" means any one of the Class B-1 Certificates
executed and delivered by the Trustee substantially in the form set forth in
Exhibit C-1 hereto and evidencing an interest designated as a "regular interest"
in the Master REMIC for purposes of the REMIC Provisions.
"Class B-2 Certificate" means any one of the Class B-2 Certificates
executed and delivered by the Trustee substantially in the form set forth in
Exhibit C-1 hereto and evidencing an interest designated as a "regular interest"
in the Master REMIC for purposes of the REMIC Provisions.
"Class B-1 Cross-Over Date" means the Remittance Date on which the
Class B-1 Principal Balance (after giving effect to the distributions of
principal on the Class B-1 Certificates on such Remittance Date) is reduced to
zero.
"Class B-1 Distribution Amount" means, as to any Remittance Date, the
lesser of (a) the Adjusted Amount Available less the sum of (i) any amounts paid
to the Servicer pursuant to Section 8.03(a)(1), (ii) the Class A Distribution
Amount, (iii) the Class M-1 Distribution Amount, and (iv) the Class M-2
Distribution Amount and (b) the Class B-1 Formula Distribution Amount for such
Remittance Date; provided that after the Class B-1 Cross-Over Date the Class B-1
Distribution Amount shall be zero.
"Class B-2 Distribution Amount" means, as to any Remittance Date, the
lesser of (a) the Remaining Amount Available and (b) the Class B-2 Formula
Distribution Amount for such Remittance Date.
"Class B Distribution Test" means, to be considered "satisfied" for any
Remittance Date, that (i) such Remittance Date occurs in or after
________________; (ii) the Average Sixty-Day Delinquency Ratio for such
Remittance Date is less than or equal to 4.50%; (iii) the Cumulative Realized
Losses Test for such Remittance Date is satisfied; (iv) the Current Realized
Loss Ratio for such Remittance Date is less than or equal to 2.75%; (v) the
fraction, expressed as a percentage, the numerator of which is the Class B
Principal Balance as of such Remittance Date and the denominator of which is the
Pool Scheduled Principal Balance as of the immediately preceding Remittance
Date, is equal to or greater than _______%; and (vi) the Class B Principal
Balance as of such Remittance Date is greater than or equal to $______________.
"Class B-1 Formula Distribution Amount" means, as to any Remittance
Date, an amount equal to the sum of (a) interest (calculated in the manner
specified in Section 1.03) at the Class B-1 Remittance Rate on the Class B-1
Adjusted Principal Balance as of such Remittance Date, (b) any Unpaid Class B-1
Interest Shortfall, (c) the Class B Percentage of the Formula Principal
Distribution Amount, (d) any Unpaid Class B-1 Principal Shortfall, (e) any Class
B-1
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<PAGE>
Liquidation Loss Interest Amount, and (f) any Unpaid Class B-1 Liquidation Loss
Interest Shortfall; provided, however, that on the Class M-2 Cross-Over Date,
the balance of any amounts that would have been distributable on such date
pursuant to clauses (c) and (d) of the term "Class M-2 Formula Distribution
Amount" (assuming a sufficient Amount Available) but for the operation of the
second proviso to such term shall instead be included in clause (c) of this
definition; provided, further, that the aggregate of all amounts distributed
pursuant to clauses (c) and (d) of this definition shall not exceed the Original
Class B-1 Principal Balance.
"Class B-2 Formula Distribution Amount" means, as to any Remittance
Date, an amount equal to the sum of (a) interest (calculated in the manner
specified in Section 1.03) at the Class B-2 Remittance Rate on the Class B-2
Principal Balance as calculated immediately prior to such Remittance Date, (b)
any Unpaid Class B-2 Interest Shortfall, (c) (i) if such Remittance Date is
prior to or on the Class B-1 Cross-Over Date, zero or (ii) if such Remittance
Date is after the Class B-1 Cross-Over Date, the Class B Percentage of the
Formula Principal Distribution Amount, (d) the Class B-2 Liquidation Loss Amount
and (e) any Unpaid Class B-2 Principal Shortfall; provided, however, that on the
Class B-1 Cross-Over Date, the balance of any amounts that would have been
distributable on such date pursuant to clauses (c) and (d) of the term "Class
B-1 Formula Distribution Amount" (assuming a sufficient Remaining Amount
Available) but for the operation of the second proviso to such term shall
instead be included in clause (c) of this definition; provided, further, that
the aggregate of all amounts distributed pursuant to clauses (c), (d) and (e) of
this definition shall not exceed the Original Class B-2 Principal Balance.
"Class B-1 Interest Deficiency Amount" means, as to the Class B-1
Certificates and any Remittance Date, the difference, if any, between (i) the
sum of the amounts described in clauses (a), (b), (e) and (f) of the definition
of the term "Class B-1 Formula Distribution Amount" and (ii) the amount
available for distribution to the Class B-1 Certificateholders pursuant to
Section 8.03(a)(5)(i) and (ii) and Section 8.03(a)(9)(iii) and (iv) on such
Remittance Date.
"Class B-1 Interest Distribution Amount" means, as to any Remittance
Date, the amount specified in clause (a) of the definition of "Class B-1 Formula
Principal Distribution Amount" plus the Unpaid Class B-1 Interest Shortfall, if
any.
"Class B-1 Interest Shortfall" means, as to any Remittance Date, the
difference, if any, between (A) the sum of (i) the amount distributed to Holders
of the Class B-1 Certificates on such Remittance Date pursuant to Sections
8.03(a)(5)(i) and (ii), and (ii) any amount distributed to the Holders of the
Class B-1 Certificates pursuant to Section 8.03(c) on such Remittance Date, and
(B) the amounts specified in clauses (a) and (b) of the definition of the term
"Class B-1 Formula Distribution Amount" for such Remittance Date.
"Class B-2 Interest Shortfall" means, as to any Remittance Date, the
amount, if any, by which the amount distributed to Holders of Class B-2
Certificates on such Remittance Date pursuant to Sections 8.03(a)(10)(i) and
(ii), together with any Guarantee Payment, is less than the sum of the amounts
specified in clauses (a) and (b) of the definition of the term "Class B-2
Formula Distribution Amount."
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<PAGE>
"Class B-1 Liquidation Loss Amount" means, as of any Remittance Date,
the lesser of (x) the amount, if any, by which the sum of the Class A Principal
Balance, the Class M-1 Principal Balance, the Class M-2 Principal Balance and
the Class B-1 Principal Balance for such Remittance Date exceeds the sum of the
Pre-Funded Amount plus the Pool Scheduled Principal Balance for such Remittance
Date (after giving effect to all distributions of principal on the Class A,
Class M-1, Class M-2 and Class B-1 Certificates on such Remittance Date) and (y)
the Class B-1 Principal Balance (after giving effect to all distributions of
principal on the Class B-1 Certificates on such Remittance Date).
"Class B-2 Liquidation Loss Amount" means, as to any Remittance Date,
the lesser of (x) the amount, if any, by which the sum of the Class A Principal
Balance, the Class M-1 Principal Balance, the Class M-2 Principal Balance, the
Class B-1 Principal Balance and the Class B-2 Principal Balance for such
Remittance Date exceeds the sum of the Pre-Funded Amount plus the Pool Scheduled
Principal Balance for such Remittance Date (after giving effect to all
distributions of principal on the Class A, Class M-1, Class M-2 and Class B-1
Certificates on such Remittance Date, and all other distributions of principal
on the Class B-2 Certificates on such Remittance Date) and (y) the Class B-2
Principal Balance.
"Class B-1 Liquidation Loss Interest Amount" means, as to any
Remittance Date, an amount equal to interest (calculated in the manner specified
in Section 1.03) at the Class B-1 Remittance Rate on the Class B-1 Liquidation
Loss Amount (if any) for the immediately preceding Remittance Date.
"Class B-1 Liquidation Loss Interest Shortfall" means, as to any
Remittance Date, the amount, if any, by which the amount distributed to Holders
of the Class B-1 Certificates on such Remittance Date pursuant to Section
8.03(a)(9)(iii) is less than the Class B-1 Liquidation Loss Interest Amount for
such Remittance Date.
"Class B Percentage" means:
(i) as to any Remittance Date on which the Class B Distribution
Test is not satisfied, and the Class A Principal Balance, the
Class M-1 Principal Balance and the Class M-2 Principal
Balance have not been reduced to zero, 0%,
(ii) as to any Remittance Date on which the Class B Distribution
Test, the Class M-2 Distribution Test and the Class M-1
Distribution Test are satisfied, 100% minus the sum of the
Class A Percentage, the Class M-1 Percentage and the Class M-2
Percentage, and
(iii) as to any Remittance Date after the Class M-2 Cross-Over Date,
100%.
"Class B Principal Balance" means, as to any Remittance Date, the sum
of the Class B-1 Principal Balance and the Class B-2 Principal Balance.
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<PAGE>
"Class B-1 Principal Balance" means, as to any Remittance Date, the
Original Class B-1 Principal Balance less all amounts previously distributed to
Holders of Class B-1 Certificates on account of principal.
"Class B-2 Principal Balance" means, as to any Remittance Date, the
Original Class B-2 Principal Balance less all amounts previously distributed to
Holders of Class B-2 Certificates on account of principal (including any
Guarantee Payments).
"Class B-1 Principal Shortfall" means, as to any Remittance Date, the
amount, if any, by which the amount distributed to Holders of Class B-1
Certificates on such Remittance Date pursuant to Section 8.03(a)(9)(ii) is less
than the amount described in clause (c) of the definition of the term "Class B-1
Formula Distribution Amount."
"Class B-2 Principal Shortfall" means, as to any Remittance Date, the
amount, if any, by which the amount distributed to Holders of Class B-2
Certificates on such Remittance Date pursuant to Section 8.03(a)(10)(iv),
together with any Guarantee Payment, is less than the sum of the amounts
described in clauses (c) and (d) of the definition of the term "Class B-2
Formula Distribution Amount."
"Class B-1 Remittance Rate" means a floating rate (determined each Due
Period as of each Remittance Date) equal to the Weighted Average Contract Rate,
but in no event greater than ____% per annum.
"Class B-2 Remittance Rate" means a floating rate (determined each Due
Period as of each Remittance Date) equal to the Weighted Average Contract Rate,
but in no event greater than ____% per annum.
"Class B-3I Certificate" means any one of the Class B-3I Certificates
executed and delivered by the Trustee substantially in the form set forth in
Exhibit C-2 hereto and evidencing an interest designated as a "regular interest"
in the Master REMIC for purposes of the REMIC Provisions.
"Class B-3I Distribution Amount" means, as to any Remittance Date, the
lesser of (a) the Remaining Amount Available less the sum of (i) the Class B-2
Distribution Amount, plus (ii) any amounts paid to the Servicer pursuant to
Section 8.03(a)(11), and (b) the Class B-3I Formula Distribution Amount for such
Remittance Date.
"Class B-3I Formula Distribution Amount" means, as to any Remittance
Date, an amount equal to the sum of (a) the Excess Interest for such Remittance
Date, and (b) any Unpaid Class B-3I Shortfall as of such Remittance Date.
"Class B-3I Shortfall" means, as to any Remittance Date, the amount, if
any, by which (a) the Class B-3I Formula Distribution Amount for such Remittance
Date exceeds (b) the Class B-3I Distribution Amount for such Remittance Date.
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<PAGE>
"Class B-S1 Interest" means a regular interest in the Subsidiary REMIC
which is held as an asset of the Master REMIC and is entitled to monthly
distributions as provided in Section 8.03(b).
"Class B-S2 Interest" means a regular interest in the Subsidiary REMIC
which is held as an asset of the Master REMIC and is entitled to monthly
distributions as provided in Section 8.03(b).
"Class C Certificate" means any one of the Class C Subsidiary
Certificates or Class C Master Certificates.
"Class C Certificateholder" means the person in whose name a Class C
Certificate is registered on the Certificate Register.
"Class C Master Certificate" means a Class C Master Certificate
executed and delivered by the Trustee substantially in the form of Exhibit K,
and evidencing an interest designated as the "residual interest" in the Master
REMIC for purposes of the REMIC Provisions.
"Class C Master Distribution Amount" means, as to any Remittance Date,
the amount, if any, distributable pursuant to Section 8.03(a)(14).
"Class C Subsidiary Certificate" means a Class C Subsidiary Certificate
executed and delivered by the Trustee substantially in the form of Exhibit J,
and evidencing an interest designated as the "residual interest" in the
Subsidiary REMIC for purposes of the REMIC Provisions.
"Class C Subsidiary Distribution Amount" means, as to any Remittance
Date, the amounts, if any, distributable pursuant to Section 8.03(b)(6).
"Class M Certificate" means any one of the Class M-1 or M-2
Certificates executed and delivered by the Trustee.
"Class M-1 Adjusted Principal Balance" means, as to any Remittance
Date, the Class M-1 Principal Balance as of that Remittance Date minus the Class
M-1 Liquidation Loss Amount (if any) as of the prior Remittance Date.
"Class M-2 Adjusted Principal Balance" means, as to any Remittance
Date, the Class M-2 Principal Balance as of that Remittance Date minus the Class
M-2 Liquidation Loss Amount (if any) as of the prior Remittance Date.
"Class M-1 Certificate" means any one of the Class M-1 Certificates
executed and delivered by the Trustee substantially in the form set forth in
Exhibit B and evidencing an interest designated as a "regular interest" in the
Trust for the purposes of the REMIC Provisions.
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<PAGE>
"Class M-2 Certificate" means any one of the Class M-2 Certificates
executed and delivered by the Trustee substantially in the form set forth in
Exhibit B and evidencing an interest designated as a "regular interest" in the
Trust for the purposes of the REMIC Provisions.
"Class M-1 Cross-Over Date" means the Remittance Date on which the
Class M-1 Principal Balance (after giving effect to the distributions of
principal on the Class M-1 Certificates on such Remittance Date) is reduced to
zero.
"Class M-2 Cross-Over Date" means the Remittance Date on which the
Class M-2 Principal Balance (after giving effect to the distributions of
principal on the Class M-2 Certificates on such Remittance Date) is reduced to
zero.
"Class M-1 Distribution Amount" means, as to any Remittance Date, the
lesser of (a) the Adjusted Amount Available less the sum of (i) any amounts paid
to the Servicer pursuant to Section 8.03(a)(1) and (ii) the Class A Distribution
Amount and (b) the Class M-1 Formula Distribution Amount for such Remittance
Date; provided that after the Class M-1 Cross-Over Date the Class M-1
Distribution Amount shall be zero.
"Class M-2 Distribution Amount" means, as to any Remittance Date, the
lesser of (a) the Adjusted Amount Available less the sum of (i) any amounts paid
to the Servicer pursuant to Section 8.03(a)(1), (ii) the Class A Distribution
Amount, and (iii) the Class M-1 Distribution Amount and (b) the Class M-2
Formula Distribution Amount for such Remittance Date; provided that after the
Class M-2 Cross-Over Date the Class M-2 Distribution Amount shall be zero.
"Class M-1 Distribution Test" means, to be considered "satisfied" for
any Remittance Date, that (i) such Remittance Date occurs in or after
______________; (ii) the Average Sixty-Day Delinquency Ratio for such Remittance
Date is less than or equal to 4.50%; (iii) the Cumulative Realized Losses Test
for such Remittance Date is satisfied; (iv) the Current Realized Loss Ratio for
such Remittance Date is less than or equal to 2.75%; and (v) the fraction,
expressed as a percentage, the numerator of which is the sum of the Class M-1
Principal Balance, the Class M-2 Principal Balance and the Class B Principal
Balance as of such Remittance Date and the denominator of which is the Pool
Scheduled Principal Balance as of the immediately preceding Remittance Date, is
equal to or greater than ____%.
"Class M-2 Distribution Test" means, to be considered "satisfied" for
any Remittance Date, that (i) such Remittance Date occurs in or after
______________; (ii) the Average Sixty-Day Delinquency Ratio for such Remittance
Date is less than or equal to 4.50%; (iii) the Cumulative Realized Losses Test
for such Remittance Date is satisfied; (iv) the Current Realized Loss Ratio for
such Remittance Date is less than or equal to 2.75%; and (v) the fraction,
expressed as a percentage, the numerator of which is the sum of the Class M-2
Principal Balance and the Class B Principal Balance as of such Remittance Date
and the denominator of which is the Pool Scheduled Principal Balance as of the
immediately preceding Remittance Date, is equal to or greater than ____%.
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"Class M-1 Formula Distribution Amount" means, as to any Remittance
Date, an amount equal to the sum of (a) interest (calculated in the manner
specified in Section 1.03) at the Class M-1 Remittance Rate on the Class M-1
Adjusted Principal Balance as of such Remittance Date, (b) the aggregate Unpaid
Class M-1 Interest Shortfall, if any, (c) the Class M-1 Percentage of the
Formula Principal Distribution Amount, (d) any Unpaid Class M-1 Principal
Shortfall, (e) any Class M-1 Liquidation Loss Interest Amount, and (f) any
Unpaid Class M-1 Liquidation Loss Interest Shortfall; provided, however, that on
the later of the Class A-8 Cross-Over Date and the Class A-9 Cross-Over Date,
the balance of any amounts that would have been distributable on such date
pursuant to clauses (c) and (d) of the term "Class A Formula Distribution
Amount" (assuming a sufficient Amount Available) but for the operation of the
proviso to such term shall instead be included in clause (c) of this definition;
provided, further, that the aggregate of all amounts distributed for all
Remittance Dates pursuant to clauses (c) and (d) shall not exceed the Original
Class M-1 Principal Balance.
"Class M-2 Formula Distribution Amount" means, as to any Remittance
Date, an amount equal to the sum of (a) interest (calculated in the manner
specified in Section 1.03) at the Class M-2 Remittance Rate on the Class M-2
Adjusted Principal Balance as of such Remittance Date, (b) the aggregate Unpaid
Class M-2 Interest Shortfall, if any, (c) the Class M-2 Percentage of the
Formula Principal Distribution Amount, (d) any Unpaid Class M-2 Principal
Shortfall, (e) any Class M-2 Liquidation Loss Interest Amount, and (f) any
Unpaid Class M-2 Liquidation Loss Interest Shortfall; provided, however, that on
the Class M-1 Cross-Over Date, the balance of any amounts that would have been
distributable on such date pursuant to clauses (c) and (d) of the term "Class
M-1 Formula Distribution Amount" (assuming a sufficient Amount Available) but
for the operation of the proviso to such term shall instead be included in
clause (c) of this definition; provided, further, that the aggregate of all
amounts distributed for all Remittance Dates pursuant to clauses (c) and (d)
shall not exceed the Original Class M-2 Principal Balance.
"Class M-1 Interest Deficiency Amount" means, as to the Class M-1
Certificates and any Remittance Date, the difference, if any, between (i) the
sum of the amounts described in clauses (a), (b), (e) and (f) of the definition
of the term "Class M-1 Formula Distribution Amount" and (ii) the amount
available for distribution to the Class M-1 Certificateholders pursuant to
Section 8.03(a)(3)(i) and (ii) and Section 8.03(a)(7)(iii) and (iv) on such
Remittance Date.
"Class M-2 Interest Deficiency Amount" means, as to the Class M-2
Certificates and any Remittance Date, the difference, if any, between (i) the
sum of the amounts described in clauses (a), (b), (e) and (f) of the definition
of the term "Class M-2 Formula Distribution Amount" and (ii) the amount
available for distribution to the Class M-2 Certificateholders pursuant to
Section 8.03(a)(4)(i) and (ii) and Section 8.03(a)(8)(iii) and (iv) on such
Remittance Date.
"Class M-1 Interest Distribution Amount" means, as to any Remittance
Date, the amount specified in clause (a) of the definition of the term "Class
M-1 Formula Distribution Amount" plus the Unpaid Class M-1 Interest Shortfall,
if any.
"Class M-2 Interest Distribution Amount" means, as to any Remittance
Date, the amount specified in clause (a) of the definition of the term "Class
M-2 Formula Distribution Amount" plus the Unpaid Class M-2 Interest Shortfall,
if any.
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"Class M-1 Interest Shortfall" means, as to any Remittance Date, the
difference, if any, between (A) the sum of (i) the amount distributed to Holders
of the Class M-1 Certificates on such Remittance Date pursuant to Section
8.03(a)(3)(i) and (ii), and (ii) any amount distributed to the Holders of the
Class M-1 Certificates pursuant to Section 8.03(c) on such Remittance Date, and
(B) the Class M-1 Interest Distribution Amount for such Remittance Date.
"Class M-2 Interest Shortfall" means, as to any Remittance Date, the
difference, if any, between (A) the sum of (i) the amount distributed to Holders
of the Class M-2 Certificates on such Remittance Date pursuant to Section
8.03(a)(4)(i) and (ii), and (ii) any amount distributed to the Holders of the
Class M-2 Certificates pursuant to Section 8.03(c) on such Remittance Date, and
(B) the Class M-2 Interest Distribution Amount for such Remittance Date.
"Class M-1 Liquidation Loss Amount" means, as to any Remittance Date,
the lesser of (x) the amount, if any, by which the sum of the Class A Principal
Balance and the Class M-1 Principal Balance for such Remittance Date exceeds the
sum of the Pre-Funded Amount plus the Pool Scheduled Principal Balance for such
Remittance Date (after giving effect to all distributions of principal on the
Class A and Class M-1 Certificates on such Remittance Date) and (y) the Class
M-1 Principal Balance (after giving effect to all distributions of principal on
the Class M-1 Certificates on such Remittance Date).
"Class M-2 Liquidation Loss Amount" means, as to any Remittance Date,
the lesser of (x) the amount, if any, by which the sum of the Class A Principal
Balance, the Class M-1 Principal Balance and the Class M-2 Principal Balance for
such Remittance Date exceeds the sum of the Pre-Funded Amount plus the Pool
Scheduled Principal Balance for such Remittance Date (after giving effect to all
distributions of principal on the Class A, Class M-1 and Class M-2 Certificates
on such Remittance Date) and (y) the Class M-2 Principal Balance (after giving
effect to all distributions of principal on the Class M-2 Certificates on such
Remittance Date).
"Class M-1 Liquidation Loss Interest Amount" means, as to any
Remittance Date, an amount equal to interest (calculated in the manner specified
in Section 1.03) at the Class M-1 Remittance Rate on the Class M-1 Liquidation
Loss Amount (if any) for the immediately preceding Remittance Date.
"Class M-2 Liquidation Loss Interest Amount" means, as to any
Remittance Date, an amount equal to interest (calculated in the manner specified
in Section 1.03) at the Class M-2 Remittance Rate on the Class M-2 Liquidation
Loss Amount (if any) for the immediately preceding Remittance Date.
"Class M-1 Liquidation Loss Interest Shortfall" means, as to any
Remittance Date, the amount, if any, by which the amount distributed to Holders
of the Class M-1 Certificates on such Remittance Date pursuant to Section
8.03(a)(7)(iii) is less than the Class M-1 Liquidation Loss Interest Amount for
such Remittance Date.
"Class M-2 Liquidation Loss Interest Shortfall" means, as to any
Remittance Date, the amount, if any, by which the amount distributed to Holders
of the Class M-2 Certificates on such
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Remittance Date pursuant to Section 8.03(a)(8)(iii) is less than the Class M-2
Liquidation Loss Interest Amount for such Remittance Date.
"Class M-1 Percentage" means:
(i) as to any Remittance Date prior to the later of the Class A-8
Cross-Over Date and the Class A-9 Cross-Over Date and on which
the Class M-1 Distribution Test is not satisfied, 0%,
(ii) as to any Remittance Date on which the Class M-1 Distribution
Test is satisfied but the Class M-2 Distribution Test is not
satisfied, 100% minus the Class A Percentage,
(iii) as to any Remittance Date on which both the Class M-1
Distribution Test and the Class M-2 Distribution Test are
satisfied but the Class B Distribution Test is not satisfied,
a fraction, expressed as a percentage, the numerator of which
is the Class M-1 Principal Balance (minus the Unpaid Class M-1
Principal Shortfall, if any) as of such Remittance Date, and
the denominator of which is the sum of the Class A Principal
Balance, the Class M-1 Principal Balance (minus the Unpaid
Class M-1 Principal Shortfall, if any) and the Class M-2
Principal Balance (minus the Unpaid Class M-2 Principal
Shortfall, if any) as of the immediately preceding Remittance
Date,
(iv) as to any Remittance Date on which the Class M-1 Distribution
Test, the Class M-2 Distribution Test and the Class B
Distribution Test are satisfied, a fraction, expressed as a
percentage, the numerator of which is the Class M-1 Principal
Balance (minus the Unpaid Class M-1 Principal Shortfall, if
any) as of such Remittance Date, and the denominator of which
is the Pool Scheduled Principal Balance as of the immediately
preceding Remittance Date, and
(v) as to any Remittance Date after the later of the Class A-8
Cross-Over Date and the Class A-9 Cross-Over Date and on which
the Class M-2 Distribution Test and the Class B Distribution
Test are not satisfied, 100%.
"Class M-2 Percentage" means:
(i) as to any Remittance Date prior to the Class M-1 Cross-Over
Date and on which the Class M-2 Distribution Test is not
satisfied, 0%,
(ii) as to any Remittance Date on which the Class M-2 Distribution
Test is satisfied but the Class B Distribution Test is not
satisfied, 100% minus the sum of the Class A Percentage and
the Class M-1 Percentage,
(iii) as to any Remittance Date on which both the Class M-2
Distribution Test and the Class B Distribution Test are
satisfied, a fraction, expressed as a percentage, the
numerator of which is the Class M-2 Principal Balance (minus
the Unpaid Class
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M-2 Principal Shortfall, if any) as of such Remittance Date,
and the denominator of which is the Pool Scheduled Principal
Balance as of the immediately preceding Remittance Date, and
(iv) as to any Remittance Date after the Class M-2 Cross-Over Date
and on which the Class B Distribution Test is not satisfied,
100%.
"Class M-1 Principal Balance" means, as to any Remittance Date, the
Original Class M-1 Principal Balance less all amounts previously distributed to
Holders of Class M-1 Certificates on account of principal.
"Class M-2 Principal Balance" means, as to any Remittance Date, the
Original Class M-2 Principal Balance less all amounts previously distributed to
Holders of Class M-2 Certificates on account of principal.
"Class M-1 Principal Shortfall" means, as to any Remittance Date, the
amount, if any, by which the amount distributed to Holders of Class M-1
Certificates on such Remittance Date pursuant to Sections 8.03(a)(7)(ii) is less
than the Class M-1 Percentage of the Formula Principal Distribution Amount for
such Remittance Date.
"Class M-2 Principal Shortfall" means, as to any Remittance Date, the
amount, if any, by which the amount distributed to Holders of Class M-2
Certificates on such Remittance Date pursuant to Sections 8.03(a)(8)(ii) is less
than the Class M-2 Percentage of the Formula Principal Distribution Amount for
such Remittance Date.
"Class M-1 Remittance Rate" means a floating rate (determined each Due
Period as of each Remittance Date) equal to the Weighted Average Contract Rate,
but in no event greater than ____% per annum.
"Class M-2 Remittance Rate" means a floating rate (determined each Due
Period as of each Remittance Date) equal to the Weighted Average Contract Rate,
but in no event greater than ____% per annum.
"Class M-S1 Interest" means a regular interest in the Subsidiary REMIC
which is held as an asset of the Master REMIC and is entitled to monthly
distributions as provided in Section 8.03(b).
"Class M-S2 Interest" means a regular interest in the Subsidiary REMIC
which is held as an asset of the Master REMIC and is entitled to monthly
distributions as provided in Section 8.03(b).
"Class Principal Balance" means, as to any Remittance Date and each
Class of Certificates, the Original Principal Balance of such Class less all
amounts previously distributed to Holders of such Class of Certificates on
account of principal.
"Closing Date" means _______________.
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<PAGE>
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral Security" means, with respect to any Contract, (i) the
security interests granted by or on behalf of the related Obligor with respect
thereto, including a first priority perfected security interest in the related
Manufactured Home, (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 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.
"Computer Tape" means the computer tape generated by the Originator
which provides information relating to the Contracts and which was used by the
Originator in selecting the Contracts, and includes the master file and the
history file.
"Contracts" means the manufactured housing installment sales contracts
and installment loan agreements, including any Land-and-Home Contracts,
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 Seller 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 applicable Cut-off Date, but excluding any rights to receive payments which
are due pursuant thereto prior to the applicable Cut-off Date.
"Contract File" means, as to each Contract, other than a Land-and-Home
Contract, (a) the original copy of the Contract, (b) either (i) the original
title document for the related Manufactured Home 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 Manufactured Home is located do not provide for the issuance
of title documents for manufactured housing, other evidence of ownership of the
related Manufactured Home which is customarily relied upon in such jurisdiction
as evidence of title to a manufactured housing unit, (c) evidence of one or more
of the following types of perfection of the security interest in the related
Manufactured Home 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 thereon, or (iii)
such other evidence of perfection of a security interest in a manufactured
housing unit as is customarily relied upon in the jurisdiction in which the
related Manufactured Home is located, (d) the assignment of the Contract from
the Originator to the Seller, (e) evidence of any other Collateral Security,
including with respect to a Land-in-Lieu Contract, the mortgage or deed of
trust, and (f) any extension, modification or waiver agreement(s).
"Contract Rate" means, with respect to any particular Contract, the
rate of interest specified in that Contract and computed on a precomputed basis
with an actuarial rebate of unearned interest upon prepayment, provided that the
rebate upon prepayment of Contracts originated in California or Oklahoma may be
computed on the simple interest method if so required by applicable law or
regulations.
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"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office at the date of the execution of this Agreement is
located at the address set forth in Section 12.08.
"Corresponding Certificate Class" means, with respect to each Class of
Uncertificated Subsidiary Interests, as follows:
Uncertificated Subsidiary Interest Corresponding Certificate Class
------------------------------------ ---------------------------------
Class A-S1 Class A-1
Class A-S2 Class A-2
Class A-S3 Class A-3
Class A-S4 Class A-4
Class A-S5 Class A-5
Class A-S6 Class A-6
Class A-S7 Class A-7
Class A-S8 Class A-8
Class A-S9 Class A-9
Class M-S1 Class M-1
Class M-S2 Class M-2
Class B-S1 Class B-1
Class B-S2 Class B-2
"Counsel for the Originator" means Dorsey & Whitney LLP, or other legal
counsel for the Originator.
"Cumulative Realized Losses" means, as to any Remittance Date, the sum
of the Realized Losses for that Remittance Date and each preceding Remittance
Date since the Cut-off Date.
"Cumulative Realized Losses Test" means, to be considered "satisfied"
for any Remittance Date:
(i) if such Remittance Date occurs between ________________ and
________________ (inclusive), that the Cumulative Realized
Losses as of such Remittance Date are less than or equal to
5.5% of the Cut-off Date Pool Principal Balance;
(ii) if such Remittance Date occurs between ________________ and
________________ (inclusive), that the Cumulative Realized
Losses as of such Remittance Date are less than or equal to
7.0% of the Cut-off Date Pool Principal Balance;
(iii) if such Remittance Date occurs between ________________ and
________________ (inclusive), that the Cumulative Realized
Losses as of such Remittance Date are less than or equal to
9.0% of the Cut-off Date Pool Principal Balance; and
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(iv) if such Remittance Date occurs on or after August 1, 2006,
that the Cumulative Realized Losses as of such Remittance Date
are less than or equal to 10.5% of the Cut-off Date Pool
Principal Balance.
"Current Realized Loss Ratio" means, as to any Remittance Date, a
fraction, expressed as a percentage, the numerator of which is the aggregate
Realized Losses for such Remittance Date and each of the two immediately
preceding Remittance Dates, multiplied by four, and the denominator of which is
the arithmetic average of the Pool Scheduled Principal Balance as of the third
preceding Remittance Date and the Pool Scheduled Principal Balance as of such
Remittance Date.
"Custodian" means at any time the Trustee or a financial institution
organized under the laws of the United States or any State, which is subject to
supervision and examination by Federal or State authorities and which is not the
Originator or an Affiliate of the Originator, that is acting at such time as
Custodian of the Land-and-Home Contract Files pursuant to Section 4.01.
"Cut-off Date" means with respect to a portion of the Initial
Contracts, ________________ (or the date of origination of the Contract, if
later), and for the remainder of the Initial Contracts, ________________ (or the
date of origination of the Contract, if later), and for the Additional
Contracts, ________________.
"Cut-off Date Pool Principal Balance" means the aggregate of the
Cut-off Date Principal Balances of the Contracts. With respect to any
Staged-Funding Contract, the Cut-off Date Principal Balance means the principal
amount stated on such Contract.
"Cut-off Date Principal Balance" means, as to any Contract, the unpaid
principal balance thereof at the Cut-off Date, or Subsequent Cut-off Date if a
Subsequent Contract, 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 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).
"Depository" means the initial Depository, The Depository Trust
Company, the nominee of which is CEDE & CO., as the registered Holder of:
(i) one Certificate evidencing $__________ in initial aggregate
principal balance of the Class A-1 Certificates,
(ii) one Certificate evidencing $__________ in initial aggregate
principal balance of the Class A-2 Certificates,
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(iii) one Certificate evidencing $__________ in initial aggregate
principal balance of the Class A-3 Certificates,
(iv) one Certificate evidencing $__________ in initial aggregate
principal balance of Class A-4 Certificates,
(v) one Certificate evidencing $__________ in initial aggregate
principal balance of Class A-5 Certificates,
(vi) one Certificate evidencing $__________ in initial aggregate
principal balance of Class A-6 Certificates,
(vii) one Certificate evidencing $__________ in initial aggregate
principal balance of Class A-7 Certificates,
(viii) one Certificate evidencing $__________ in initial aggregate
principal balance of Class A-8 Certificates,
(ix) two Certificates evidencing $__________ aggregating an initial
principal balance of Class A-9 Certificates,
(x) one Certificate evidencing $__________ in initial aggregate
principal balance of the Class M-1 Certificates,
(xi) one Certificate evidencing $__________ in initial aggregate
principal balance of the Class M-2 Certificates, and
(xii) one Certificate evidencing $__________ in initial aggregate
principal balance of the Class B-1 Certificates,
(xiii) one Certificate evidencing $__________ in initial aggregate
principal balance of the Class B-2 Certificates,
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 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.
"Determination Date" means the third Business Day preceding each
Remittance Date during the term of this Agreement.
"Disqualified Organization" has the meaning assigned in Section
9.02(b)(3).
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"Due Date" means, as to any Contract, the date of the month on which
the scheduled monthly payment for such Contract is due.
"Due Period" means with respect to any Remittance Date other than the
Remittance Date in ____________, the period from and including the 16th day of
the second month preceding such Remittance Date, to and including the 15th day
of the month immediately preceding such Remittance Date, and with respect to the
Remittance Date in ____________, the period from and including the Cut-off Date
for the related Contract to and including
____________.
"Electronic Ledger" means the electronic master record of installment
sale contracts of the Originator.
"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 Trustee hereunder, 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 bank holding company shall have capital and surplus) of not less than
$50,000,000 and the securities of such depository institution or trust company
(or, if such depository institution or trust company is a subsidiary of a bank
holding company system and such depository institution's or trust company's
securities are not rated, the securities of the bank holding company) shall have
a credit rating from each of Moody's (if rated by Moody's), 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 Certificates, as confirmed in writing
by Standard & Poor's and Fitch.
"Eligible Institution" means any depository institution (which may be
the Trustee or an Affiliate of the Trustee) 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 P-1 by Moody's (if rated by Moody's), A-1+ by Standard & Poor's (if
rated 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 Moody's, Standard & Poor's (not lower than AA) and Fitch (if rated
by Fitch) in the case of unsecured long-term debt.
"Eligible Investments" has the meaning assigned in Section 5.05(b).
"Eligible Servicer" means the Originator 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 manufactured housing conditional sales contracts
and installment loan agreements and, so long as any FHA/VA Contract is
outstanding, which Person is qualified under FHA/VA Regulations to act as a
servicer of all such FHA/VA Contracts.
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"Eligible Substitute Contract" means, as to any Replaced Contract for
which such Eligible Substitute Contract is being substituted pursuant to Section
3.06(b), a Contract that (a) as of the date of its substitution, satisfies all
of the representations and warranties (which, except when expressly stated to be
as of origination, shall be deemed to be determined as of the date of its
substitution rather than as of the Cut-off Date or the Closing Date) in Section
3.02 and does not cause any of the representations and warranties in Section
3.04, after giving effect to such substitution, to be incorrect, (b) after
giving effect to the scheduled payment due in the month of such substitution,
has a Scheduled Principal Balance that is not greater than the Scheduled
Principal Balance of such Replaced Contract, (c) has a Contract Rate that is at
least equal to the Contract Rate of such Replaced Contract, (d) has a remaining
term to scheduled maturity that is not greater than the remaining term to
scheduled maturity of the Replaced Contract, and (e) is a Land-and-Home Contract
if the Replaced Contract is a Land-and-Home Contract and is otherwise secured by
a Manufactured Home that is similar in type and value to the collateral serving
the Replaced Contract. If more than one Contract is being substituted pursuant
to Section 3.06(b) for more than one Replaced Contract on a particular date,
then the conditions specified above shall be applied to the Contracts being
substituted, in the aggregate, and the Replaced Contracts, in the aggregate.
"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 Interest" means, as to any Remittance Date, the sum of (a)
interest accrued on the Class A-S1 Subsidiary Interest Principal Balance as of
such Remittance Date at a rate per annum equal to the difference between the
Weighted Average Contract Rate as of such Remittance Date and the Class A-1
Remittance Rate, (b) interest accrued on the Class A-S2 Subsidiary Interest
Principal Balance at a rate per annum equal to the difference between the
Weighted Average Contract Rate as of such Remittance Date and the Class A-2
Remittance Rate, (c) interest accrued on the Class A-S3 Subsidiary Interest
Principal Balance at a rate per annum equal to the difference between the
Weighted Average Contract Rate as of such Remittance Date and the Class A-3
Remittance Rate, (d) interest accrued on the Class A-S4 Subsidiary Interest
Principal Balance at a rate per annum equal to the difference between the
Weighted Average Contract Rate as of such Remittance Date and the Class A-4
Remittance Rate, (e) interest accrued on the Class A-S5 Subsidiary Interest
Principal Balance at a rate per annum equal to the difference between the
Weighted Average Contract Rate as of such Remittance Date and the Class A-5
Remittance Rate, (f) interest accrued on the Class A-S6 Subsidiary Interest
Principal Balance at a rate per annum equal to the difference between the
Weighted Average Contract Rate as of such Remittance Date and the Class A-6
Remittance Rate, (g) interest accrued on the Class A-S7 Subsidiary Interest
Principal Balance at a rate per annum equal to the difference between the
Weighted Average Contract Rate as of such Remittance Date and the Class A-7
Remittance Rate, (h) interest accrued on the Class A-S8 Subsidiary Interest
Principal Balance at a rate per
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annum equal to the difference between the Weighted Average Contract Rate as of
such Remittance Date and the Class A-8 Remittance Rate, (i) interest accrued on
the Class A-S9 Subsidiary Interest Principal Balance at a rate per annum equal
to the difference between the Weighted Average Contract Rate as of such
Remittance Date and the Class A-9 Remittance Rate, (j) interest accrued on the
Class M-S1 Subsidiary Interest Principal Balance at a rate per annum equal to
the difference between the Weighted Average Contract Rate as of such Remittance
Date and the Class M-1 Remittance Rate, (k) interest accrued on the Class M-S2
Subsidiary Interest Principal Balance at a rate per annum equal to the
difference between the Weighted Average Contract Rate as of such Remittance Date
and the Class M-2 Remittance Rate, (l) interest accrued on the Class B-S1
Subsidiary Interest Principal Balance at a rate per annum equal to the
difference between the Weighted Average Contract Rate as of such Remittance Date
and the Class B-1 Remittance Rate, and (m) interest accrued on the Class B-S2
Subsidiary Interest Principal Balance at a rate per annum equal to the
difference between the Weighted Average Contract Rate as of such Remittance Date
and the Class B-2 Remittance Rate.
"FHA/VA Contract" means a Contract that, at its origination, was
insured by the Federal Housing Administration or partially guaranteed by the
Veterans Administration.
"FHA/VA Regulations" means, as to any FHA/VA Contract, the contractual
agreements and regulations of the Federal Housing Administration or the Veterans
Administration, as the case may be, providing or governing the terms of the
insurance for such Contract by the Federal Housing Administration or the partial
guarantee for such Contract by the Veterans Administration, as the case may be.
"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 Remittance Date" means the Remittance Date on which the final
distribution in respect of the Certificates will be made pursuant to Section
12.03.
"Fitch" means Fitch IBCA, Inc., or any successor thereto; provided that
if Fitch does not then have a rating outstanding on any of the Class A, Class
M-1, Class M-2 or Class B Certificates, then references herein to "Fitch" shall
be deemed to refer to the NRSRO then rating any Class of the Certificates (or,
if more than one such NRSRO is then rating any Class of the Certificates, to
such NRSRO as may be designated by the Servicer), and references herein to
ratings by or requirements of Fitch 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 Remittance
Date, the sum of:
(i) all scheduled payments of principal due on each outstanding
Contract during the related Due Period as specified in the
amortization schedule at the time applicable thereto (after
adjustments for previous Partial Principal Prepayments and any
adjustment to such amortization schedule by reason of any
bankruptcy of an
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Obligor or similar proceeding or any moratorium or similar
waiver or grace period, or by reason of any other waiver
modification or extension granted by the Servicer in
accordance with Section 5.06); plus
(ii) all Partial Principal Prepayments applied and all Principal
Prepayments in Full received during the related Due Period;
plus
(iii) the aggregate Scheduled Principal Balance of all Contracts
that became Liquidated Contracts during the related Due Period
plus the amount of any reduction in principal balance of any
Contract during the related Due Period pursuant to bankruptcy
proceedings involving the related Obligor; plus
(iv) the aggregate Scheduled Principal Balance of all Contracts
repurchased during the month preceding the related Due Period
pursuant to Section 3.06; plus
(v) with respect to the Remittance Date in ______________, the
Unfunded Contract Shortfall, if any; plus
(vi) without duplication of the foregoing, all collections in
respect of principal on the Contracts received after the last
day of the related Due Period up to and including the third
Business Day prior to such Remittance Date (but in no event
later than the 25th day of the month in which such Remittance
Date occurs); minus
(vii) with respect to all Remittance Dates other than the Remittance
Date in ______________, the amount, if any, included in the
Formula Principal Distribution Amount for the preceding
Remittance Date by virtue of clause (vi) of the definition of
Formula Principal Distribution Amount; plus
(viii) with respect to the Remittance Date in ______________, the
amount, if any, by which the Class A-1 Principal Balance as of
such Remittance Date exceeds the sum of the amounts described
above in clauses (i) through (vii); minus
(ix) with respect to the Remittance Date in ______________, the
amount, if any, distributed in respect of principal on the
Class A-1 Certificates on the Remittance Date in
______________ pursuant to clause (viii) above; plus
(x) on the Post Funding Remittance Date, the Pre-Funded Amount;
minus
(xi) any amount paid by Green Tree on the previous Remittance Date
pursuant to Section 8.04 in respect of a Class B-2 Liquidation
Loss Amount.
"Funding Termination Date" means the Business Day immediately preceding
the Remittance Date occurring in the calendar month that is the third calendar
month following the calendar month of the Closing Date, or
______________.
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"Guarantee Payment" means, the amount, if any, by which (A) the Class
B-2 Formula Distribution Amount for such Remittance Date exceeds (B) the
Remaining Amount Available.
"Hazard Insurance Policy" means, with respect to each Contract, the
policy of fire and extended coverage insurance (and federal flood insurance, if
the Manufactured Home is secured by an FHA/VA Contract and such Manufactured
Home is located in a federally designated special flood area) required to be
maintained for the related Manufactured Home, as provided in Section 5.09, and
which, as provided in said Section 5.09, may be a blanket mortgage impairment
policy maintained by the Servicer in accordance with the terms and conditions of
said Section 5.09.
"Independent" means, when used with respect to any specified Person,
Dorsey & Whitney LLP or any Person who (i) is in fact independent of the
Originator and the Servicer, (ii) does not have any direct financial interest or
any material indirect financial interest in the Originator or the Servicer or in
an Affiliate of either and (iii) is not connected with the Originator 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 certain Contracts identified in the List of
Contracts delivered pursuant to Section 2.02(a), all of which were originated on
or before ______________, and which have an aggregate principal balance as of
the Cut-off Date of approximately $______________.
"Insurance Proceeds" means proceeds paid by any insurer pursuant to any
insurance policy or contract or any FHA/VA Contract.
"Land-and-Home Contract" means a Contract that is secured by a Mortgage
on real estate on which the related Manufactured Home is situated, and which
Manufactured Home is considered or classified as part of the real estate under
the laws of the jurisdiction in which it is located.
"Land-and-Home Contract File" means, as to each Land-and-Home Contract,
(a) the original executed copy of the Land-and-Home Contract; (b) the original
related Mortgage with evidence of recording thereon (or, if the original
Mortgage has not yet been returned by the applicable recording office, a copy
thereof, certified by such recording office, which will be replaced by the
original Mortgage when it is so returned) and any title document for the related
Manufactured Home; (c) the assignment of the Land-and-Home Contract and the
related Mortgage from the Originator to the Seller; (d) an endorsement of such
Land-and-Home Contract by the Seller to the Trustee or in blank; (e) an
assignment of the related Mortgage to the Trustee or in blank; and (f) any
extension, modification or waiver agreement(s).
"Land-in-Lieu Contract" means a Contract that is secured by (i) a
security interest in a Manufactured Home and (ii) a mortgage or deed of trust on
real estate on which such
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Manufactured Home is situated, but such Manufactured Home is not considered or
classified as part of the real estate under the laws of the jurisdiction in
which it is located.
"Limited Guarantee" means the obligation of the Guarantor to make
Guarantee Payments pursuant to Section 8.04.
"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 have been recovered; provided that any defaulted
Contract in respect of which the related Manufactured Home and, in the case of
Land-and-Home Contracts, Mortgaged Property, have 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 or prior to the date on which the
related Manufactured Home and, in the case of Land-and-Home Contracts, Mortgaged
Property, are 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)
received in connection with the liquidation of defaulted Contracts, whether
through repossession, foreclosure sale or otherwise, including any rental income
realized from the repossessed Manufactured Home.
"List of Contracts" means the lists identifying each Contract
constituting part of the corpus of the Trust, and which lists are either
delivered pursuant to Section 2.02(a) of this Agreement or attached to a
Subsequent Transfer Instrument as Exhibit A, as such lists may be amended from
time to time pursuant to Section 3.06(b) to add Eligible Substitute Contracts
and delete Replaced Contracts. Each List of Contracts shall set forth as to each
Contract identified on it (i) the Cut-off Date Principal Balance, (ii) the
amount of monthly payments due from the Obligor, (iii) the Contract Rate and
(iv) the maturity date.
"Loan-to-Value Ratio" means, (a) with respect to any Contract other
than a Land-in-Lieu Contract, one minus a fraction, the numerator of which is
the total amount down (which may include both cash (plus, in certain cases, fees
and insurance premiums financed, but not buydown points) and, for certain
Contracts, the amount of any equity in land on which a lien has been granted)
and the denominator of which is the sum of the original principal amount and
such amount down, and (b) with respect to Land-in-Lieu Contracts, one minus a
fraction, the numerator of which is the appraised value of land and the
denominator of which is the original principal amount.
"Manufactured Home" means a unit of manufactured housing, including all
accessions thereto, securing the indebtedness of the Obligor under the related
Contract.
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"Master Certificates" means all of the Certificates other than the
Class C Subsidiary Certificates.
"Master REMIC" means one of the two separate REMICs comprising the
corpus of the Trust created by this Agreement, the assets of which shall consist
of the Uncertificated Subsidiary Interests and the Limited Guarantee.
"Maturity Date" means, as to any Certificate, other than a Class C
Certificate, and as to any Uncertificated Subsidiary Interest, the latest
possible maturity date for purposes of complying with the REMIC Provisions
governing "regular interests." The Maturity Dates for such Certificates and
Uncertificated Subsidiary Interests are set forth in Sections 2.05 (b) and (c).
"Monthly Report" has the meaning assigned in Section 6.01.
"Monthly Servicing Fee" means, as of any Remittance Date, one-twelfth
of the product of 0.50% and the Pool Scheduled Principal Balance for the
immediately preceding Remittance Date (or, with respect to the first Remittance
Date, the Cut-off Date Pool Principal Balance as of the Closing Date).
"Moody's" means Moody's Investors Service, Inc., or any successor
thereto; provided that, if Moody's provided a rating on any of the Certificates,
as required by Section 2.02, and does not as of any subsequent date have a
rating outstanding on any of the Class A, Class M-1, Class M-2 or Class B
Certificates, then references herein to "Moody's" shall be deemed to refer to
the NRSRO then rating any Class of the Certificates (or, if more than one such
NRSRO is then rating any Class of the Certificates, to such NRSRO as may be
designated by the Servicer), and references herein to ratings by or requirements
of Moody's shall be deemed to have the equivalent meanings with respect to
ratings by or requirements of such NRSRO.
"Mortgage" means the mortgage, deed of trust, security deed or similar
evidence of lien, creating a first lien on an estate in fee simple in the real
property securing a Land-and-Home Contract.
"Mortgaged Property" means the property subject to the lien of a
Mortgage.
"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 month in which
such Contract became a Liquidated Contract, net of Liquidation Expenses.
"NRSRO" means any nationally recognized statistical rating
organization.
"Obligor" means each Person who is indebted under a Contract.
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"Officer's Certificate" means a certificate signed by the Chairman of
the Board, President or any Vice President of the Originator or the Seller and
delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may,
except as expressly provided herein, be salaried counsel for the Originator or
the Seller, acceptable to the Trustee and the Originator or the Seller, provided
that any opinion of counsel relating to the qualification of the Subsidiary
REMIC or the Master REMIC as a REMIC or compliance with the REMIC Provisions
must be an opinion of Independent counsel.
"Original Class A Principal Balance" means the sum of the Original
Principal Balances of the Class A Certificates.
"Original Principal Balance" means as to each Class of Master
Certificates, the amount set forth with respect to such Class in Section
2.05(b).
"Partial Principal Prepayment" means (a) any Principal Prepayment other
than a Principal Prepayment in Full and (b) any cash amount deposited in the
Certificate Account pursuant to the provision in Section 3.05(a) or pursuant to
Section 3.06(b).
"Paying Agent" has the meaning assigned in Section 8.01(c).
"Percentage Interest" means, as to any Certificate, the percentage
interest evidenced thereby in distributions made on the related Class, such
percentage interest being equal to, in the case of the Class A, Class M-1, Class
M-2, and Class B Certificates, the percentage (carried to eight places) obtained
from dividing the denomination of such Certificate by the Original Principal
Balance of the related Class; and in the case of the Class B-3I, Class C
Subsidiary Certificate and Class C Certificates, the percentage specified on the
face of such Certificate. The aggregate Percentage Interests for each Class of
Certificates shall equal 100%, respectively.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or political subdivision
thereof.
"Plan" has the meaning assigned in Section 9.02(b)(2).
"Pool Factor" means, at any time, the percentage derived from a
fraction, the numerator of which is the aggregate Principal Balance of each
Class of Certificates at such time and the denominator of which is the Cut-off
Date Pool Principal Balance.
"Pool Scheduled Principal Balance" means, as of any Remittance Date,
the aggregate Scheduled Principal Balance of all Contracts that were outstanding
during the related Due Period.
"Post-Funding Remittance Date" means the Remittance Date on, or the
first Remittance Date after, the last day of the Pre-Funding Period.
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"Pre-Funded Amount" means with respect to any date of determination,
the amount then on deposit in the Pre-Funding Account, after giving effect to
any sale of Subsequent Contracts to the Trust on such date, excluding any
investment earnings.
"Pre-Funding Account" means the account so designated, established and
maintained pursuant to Section 8.07.
"Pre-Funding Period" means the period beginning on the Closing Date and
ending on the earliest of (a) the date on which the amount on deposit in the
Pre-Funding Account is less than $10,000, (b) the Funding Termination Date or
(c) the date on which an Event of Termination occurs.
"Pre-Funding Subaccount" means the subaccount, if any, so designated,
established and maintained pursuant to Section 8.07.
"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.
"Ratings Adjustment Date" has the meaning assigned in Section 3.08.
"Realized Losses" means, as to any Remittance Date, the aggregate Net
Liquidation Losses of all Contracts that became Liquidated Contracts during the
immediately preceding month.
"Record Date" means the Business Day immediately preceding the related
Remittance Date.
"Regular Certificate" means a Class A, Class M, Class B or Class B-3I
Certificate.
"Remaining Amount Available" means, as to any Remittance Date, the
Amount Available less the sum of (i) any amounts paid to the Servicer pursuant
to Section 8.03(a)(1), (ii) the Class A Distribution Amount, (iii) the Class M-1
Distribution Amount, (iv) the Class M-2 Distribution Amount and (v) the Class
B-1 Distribution Amount.
"REMIC" means a "real estate mortgage investment conduit" as defined in
Section 860D of the Code.
"REMIC Provisions" means the provisions of the federal income tax law
relating to REMICs, which appear at Sections 860A through 860G of the Code, and
related provisions and
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any temporary, proposed or final regulations promulgated thereunder, as the
foregoing may be in effect from time to time.
"Remittance Date" means the first day of each month during the term of
this Agreement, or if such day is not a Business Day, the next succeeding
Business Day, commencing on _______________.
"Remittance Rate" means with respect to each Class of Certificates, the
rate set forth for such Class in Section 2.05(b).
"Replaced Contract" has the meaning assigned in Section 3.06(b).
"Repurchase Price" means, with respect to a Contract to be repurchased
pursuant to Section 3.06, an amount equal to (a) the remaining principal amount
outstanding on such Contract (or, with respect to an Unfunded Contract being
repurchased pursuant to Section 3.06(c), the Cut-off Date Principal Balance of
such Unfunded Contract), plus (b) interest at the Contract Rate on such Contract
from the end of the Due Period with respect to which the Obligor last made a
payment through the end of the immediately preceding Due Period.
"Responsible Officer" means, with respect to the 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
Remittance Date, or the Cut-off Date or the Subsequent Cut-off Date, as
applicable, the principal balance of such Contract as of the Due Date in the
related Due Period or as of the Due Date immediately preceding the Cut-off Date
or the Subsequent Cut-off Date, as applicable, as the case may be, as specified
in the amortization schedule at the time relating thereto (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) 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.
"Servicer" means the Originator until any Service Transfer hereunder
and thereafter means the new servicer appointed pursuant to Article VII.
"Service Transfer" has the meaning assigned in Section 7.02.
"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
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appearing in an Officer's Certificate furnished to the Trustee by the
Originator, as the same may be amended from time to time.
"Sixty-Day Delinquency Ratio" means, as to any Remittance Date, a
fraction, expressed as a percentage, the numerator of which is the aggregate of
the outstanding balances of all Contracts that were delinquent 60 days or more
as of the end of the related Due Period (including Contracts in respect of which
the related Manufactured Homes have been repossessed but are still in
inventory), and the denominator of which is the Pool Scheduled Principal Balance
as of such Remittance Date.
"Staged-Funding Contract" means an Initial Contract with respect to
which the Company has agreed to make multiple disbursements (up to the related
Cut-off Date Principal Balance) with respect to the purchase of the related
Manufactured Home and improvement of the related real estate, but not all such
disbursements have been made as of the Closing Date.
"Staged-Funding Contract Reserve Account" means the account established
and maintained pursuant to Section 3.08.
"Standard & Poor's" means Standard & Poor's Rating Services, a division
of The McGraw-Hill Companies, Inc., or any successor thereto; provided that if
Standard & Poor's does not then have a rating outstanding on any of the Class A,
Class M, or Class B Certificates, then references herein to "Standard & Poor's"
shall be deemed to refer to the NRSRO then rating any Class of the Certificates
(or, if more than one such NRSRO is then rating any Class of the 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.
"Step-up Rate Contract" means any Contract bearing interest during an
initial period or periods at a fixed rate or fixed rates that are lower than the
fixed rate borne thereafter.
"Subsequent Contract" means a Contract sold by the Company to the Trust
pursuant to Section 2.03, such Contract being identified on Exhibit A attached
to a Subsequent Transfer Instrument.
"Subsequent Cut-off Date" means, with respect to a Subsequent Contract,
the first day of the calendar month immediately following the related Subsequent
Transfer Date.
"Subsequent Transfer Date" means, with respect to each Subsequent
Transfer Instrument, the date on which the related Subsequent Contracts are sold
to the Trust.
"Subsequent Transfer Instrument" means each Subsequent Transfer
Instrument dated as of a Subsequent Transfer Date executed by the Trustee, the
Originator and the Seller substantially in the form of Exhibit P, by which the
Seller sells Subsequent Contracts to the Trust.
"Subsidiary Interest Principal Balance" means, with respect to each
Class of Uncertificated Subsidiary Interests, the Principal Balance of the
Corresponding Certificate Class.
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"Subsidiary Interest Shortfall" means, with respect to each Class of
Uncertificated Subsidiary Interests and any Remittance Date, the amount, if any,
by which the amount distributed on such Class on such Remittance Date pursuant
to Section 8.03(b)(5) is less than the amount specified in Section 8.03(b)(5).
"Subsidiary REMIC" means one of the two separate REMICs comprising the
corpus of the Trust created by this Agreement, the assets of which shall consist
of (a) all the rights, benefits, and obligations arising from and in connection
with each Contract and any related Mortgage, (b) all rights under any Hazard
Insurance Policy relating to a Manufactured Home securing a Contract for the
benefit of the creditor of such Contract and proceeds from the Errors and
Omissions Protection Policy and any blanket hazard policy to the extent such
proceeds relate to any Manufactured Home, (c) all rights under any FHA/VA
Regulation pertaining to any FHA/VA Contract, (d) all remittances, deposits and
payments made into the Certificate Account and amounts in the Certificate
Account (other than payments on the Subsidiary Interests and any Guarantee
Payments), (e) all proceeds in any way derived from any of the foregoing items,
and (f) all documents contained in the Contract Files or the Land-and-Home
Contract Files.
"Transfer Agreement" means that certain Transfer Agreement between
Conseco Finance Securitizations Corp., as Purchaser, and Green Tree Financial
Corporation, as Seller, dated as of ________________.
"Trust" means the trust created by this Agreement, the corpus of which
consists of (a) all the rights, benefits, and obligations arising from and in
connection with each Contract and any related Mortgage, (b) all rights under any
Hazard Insurance Policy relating to a Manufactured Home securing a Contract for
the benefit of the creditor of such Contract and proceeds from the Errors and
Omissions Protection Policy and any blanket hazard policy to the extent such
proceeds relate to any Manufactured Home, (c) all rights under any FHA/VA
Regulation pertaining to any FHA/VA Contract, (d) all remittances, deposits and
payments made into the Certificate Account and amounts in the Certificate
Account, (e) all proceeds in any way derived from any of the foregoing items,
(f) all documents contained in the Contract Files or the Land-and-Home Contract
Files, together with the assignments of mortgage described in Section 2.02(i),
(g) the Limited Guarantee for the benefit of the Class B-2 Certificateholders,
if any, (h) the obligations and related demand note of the Company delivered
pursuant to Section 3.06(c) and the related Staged-Funding Contract Reserve
Account, if any, (i) the Capitalized Interest Account and (j) the Pre-Funding
Account.
"Uncertificated Subsidiary Interests" means the Class A-S1, A-S2, A-S3,
A-S4, A-S5, A-S6, A-S7, A-S8, A-S9, M-S1, M-S2, B-S1 and B-S2 Interests,
collectively.
"Undelivered Contract" means as of any date of determination an Initial
Contract identified, on the exception report attached to the Acknowledgement
delivered by the Trustee under Section 2.04, as a Land-and-Home Contract as to
which the Trustee did not receive the related Land-and-Home Contract File as of
the Closing Date and has not received the related Land-and-Home Contract File
and remitted payment to the Seller pursuant to Section 8.07(d).
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"Undelivered Contract Subaccount" means the subaccount so designated
and established and maintained pursuant to Section 8.07.
"Underwriters" means ___________________ and ____________________.
"Unfunded Contract" has the meaning specified in Section 3.06(c).
"Unfunded Contract Shortfall" has the meaning specified in Section
3.06(c).
"Unpaid Class A Interest Shortfall" means, as to each Class of Class A
Certificates and any Remittance Date, the amount, if any, of the Class A
Interest Shortfall for the prior Remittance Date, plus accrued interest (to the
extent payment thereof is legally permissible) at the related Remittance Rate on
the amount thereof from such prior Remittance Date to such current Remittance
Date (calculated in the manner specified in Section 1.03).
"Unpaid Class A Principal Shortfall" means, as to any Remittance Date,
the amount, if any, by which the aggregate of the Class A Principal Shortfalls
for prior Remittance Dates is in excess of the amounts distributed on prior
Remittance Dates to Holders of Class A Certificates pursuant to Section
8.03(a)(6)(ii).
"Unpaid Class B-1 Interest Shortfall" means, as to any Remittance Date,
the amount, if any, of the Class B-1 Interest Shortfall for the prior Remittance
Date, plus accrued interest (to the extent payment thereof is legally
permissible) at the Class B-1 Remittance Rate on the amount thereof from such
prior Remittance Date to such current Remittance Date (calculated in the manner
specified in Section 1.03).
"Unpaid Class B-2 Interest Shortfall" means, as to any Remittance Date,
the amount, if any, of the Class B-2 Interest Shortfall for the prior Remittance
Date, plus accrued interest (to the extent payment thereof is legally
permissible) at the Class B-2 Remittance Rate on the amount thereof from such
prior Remittance Date to such current Remittance Date (calculated in the manner
specified in Section 1.03).
"Unpaid Class B-1 Liquidation Loss Interest Shortfall" means, as to any
Remittance Date, the sum of (i) the amount, if any, of the remainder of (x) the
Class B-1 Liquidation Loss Interest Amount, if any, for the immediately prior
Remittance Date, plus (y) the Unpaid Class B-1 Liquidation Loss Interest
Shortfall determined as of such immediately prior Remittance Date, minus (z) all
amounts distributed to the Holders of the Class B-1 Certificates on account of
any Unpaid Class B-1 Liquidation Loss Interest Shortfall pursuant to Section
8.03(a)(9)(iv) on such immediately prior Remittance Date, plus (ii) accrued
interest (to the extent payment thereof is legally permissible) at the Class B-1
Remittance Rate on the amount specified in clause (i) from such prior Remittance
Date to such current Remittance Date (calculated in the manner specified in
Section 1.03).
"Unpaid Class B-1 Principal Shortfall" means, as to any Remittance
Date, the amount, if any, by which the aggregate of the Class B-1 Principal
Shortfalls for prior Remittance Dates is in
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excess of the amounts distributed on prior Remittance Dates to Holders of Class
B-1 Certificates pursuant to Section 8.03(a)(9)(i).
"Unpaid Class B-2 Principal Shortfall" means, as to any Remittance
Date, the amount, if any, by which the aggregate of the Class B-2 Principal
Shortfalls for prior Remittance Dates is in excess of the amounts distributed on
prior Remittance Dates to Holders of Class B-2 Certificates pursuant to Section
8.03(a)(10)(iii), together with any Guarantee Payments allocable to principal.
"Unpaid Class B-3I Shortfall" means, as to any Remittance Date, the
amount, if any, by which the aggregate of the Class B-3I Shortfalls for prior
Remittance Dates is in excess of the amounts distributed on prior Remittance
Dates to Holders of Class B-3I Certificates pursuant to Section 8.03(a)(12) in
respect of any Unpaid Class B-3I Shortfall.
"Unpaid Class M-1 Interest Shortfall" means, as to any Remittance Date,
the amount, if any, of the Class M-1 Interest Shortfall for the prior Remittance
Date, plus accrued interest (to the extent payment thereof is legally
permissible) at the Class M-1 Remittance Rate on the amount thereof from such
prior Remittance Date to such current Remittance Date (calculated in the manner
specified in Section 1.03).
"Unpaid Class M-2 Interest Shortfall" means, as to any Remittance Date,
the amount, if any, of the Class M-2 Interest Shortfall for the prior Remittance
Date, plus accrued interest (to the extent payment thereof is legally
permissible) at the Class M-2 Remittance Rate on the amount thereof from such
prior Remittance Date to such current Remittance Date (calculated in the manner
specified in Section 1.03).
"Unpaid Class M-1 Liquidation Loss Interest Shortfall" means, as to any
Remittance Date, the sum of (i) the amount, if any, of the remainder of (x) the
Class M-1 Liquidation Loss Interest Amount, if any, for the immediately prior
Remittance Date, plus (y) the Unpaid Class M-1 Liquidation Loss Interest
Shortfall determined as of such immediately prior Remittance Date, minus (z) all
amounts distributed to the Holders of the Class M-1 Certificates on account of
any Unpaid Class M-1 Liquidation Loss Interest Shortfall pursuant to Section
8.03(a)(7)(iv) on such immediately prior Remittance Date, plus (ii) accrued
interest (to the extent payment thereof is legally permissible) at the Class M-1
Remittance Rate on the amount specified in clause (i) from such prior Remittance
Date to such current Remittance Date (calculated in the manner specified in
Section 1.03).
"Unpaid Class M-2 Liquidation Loss Interest Shortfall" means, as to any
Remittance Date, the sum of (i) the amount, if any, of the remainder of (x) the
Class M-2 Liquidation Loss Interest Amount, if any, for the immediately prior
Remittance Date, plus (y) the Unpaid Class M-2 Liquidation Loss Interest
Shortfall determined as of such immediately prior Remittance Date, minus (z) all
amounts distributed to the Holders of the Class M-2 Certificates on account of
any Unpaid Class M-2 Liquidation Loss Interest Shortfall pursuant to Section
8.03(a)(8)(iv) on such immediately prior Remittance Date, plus (ii) accrued
interest (to the extent payment thereof is legally permissible) at the Class M-2
Remittance Rate on the amount specified in clause (i) from such prior Remittance
Date to such current Remittance Date (calculated in the manner specified in
Section 1.03).
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"Unpaid Class M-1 Principal Shortfall" means, as to any Remittance
Date, the amount, if any, by which the aggregate of the Class M-1 Principal
Shortfalls for prior Remittance Dates is in excess of the amounts distributed on
prior Remittance Dates to Holders of Class M-1 Certificates pursuant to Section
8.03(a)(7)(i).
"Unpaid Class M-2 Principal Shortfall" means, as to any Remittance
Date, the amount, if any, by which the aggregate of the Class M-2 Principal
Shortfalls for prior Remittance Dates is in excess of the amounts distributed on
prior Remittance Dates to Holders of Class M-2 Certificates pursuant to Section
8.03(a)(8)(i).
"Unpaid Subsidiary Interest Shortfall" means, as to any Remittance Date
and any Class of Uncertificated Subsidiary Interests, the amount, if any, of the
Subsidiary Interest Shortfall for the prior Remittance Date with respect to such
Class, plus accrued interest (to the extent payment thereof is legally
permissible) at 1/12th of the Weighted Average Contract Rate on the amount
thereof from such prior Remittance Date to such current Remittance Date.
"Weighted Average Contract Rate" means, as to any Remittance Date, the
weighted average (determined by Scheduled Principal Balance) of the Contract
Rates of all Contracts that were outstanding during the prior related Due
Period.
SECTION 1.03. Calculations.
All calculations of the amount of interest accrued on the Certificates
with respect to any Remittance Date shall be determined as follows:
a. with respect to the Class A-1 Certificates and the
Remittance Date in ____________, interest shall accrue from and
including the Closing Date to but excluding ____________, and shall be
calculated on the basis of actual days elapsed in a 360-day year;
b. with respect to the Class A-1 Certificates and any
subsequent Remittance Date, interest shall accrue from and including
the prior Remittance Date to but excluding the current Remittance Date,
and shall be calculated on the basis of actual days elapsed in a
360-day year;
c. with respect to the Class A-2, Class A-3, Class A-4, Class
A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class M, Class B and
Class B-3I Certificates and the Remittance Date in ____________,
interest shall accrue from and including the Closing Date to but
excluding ____________, and shall be calculated on the basis of a
360-day year of twelve 30-day months; and
d. with respect to the Class A-2, Class A-3, Class A-4, Class
A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class M, Class B and
Class B-3I Certificates and any subsequent Remittance Date, one month's
interest shall accrue, calculated on the basis of a 360-day year of
twelve 30-day months.
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ARTICLE II
ESTABLISHMENT OF TRUST; TRANSFER OF CONTRACTS
---------------------------------------------
SECTION 2.01. Closing.
a. There is hereby created, by the Seller as settlor, a separate trust
which shall be known as Manufactured Housing Contract Senior/Subordinate
Pass-Through Certificate Trust 1999-4. By the execution and delivery of this
Agreement, the Seller has agreed that it will elect or will cause an election to
be made to treat the pool of assets comprising each of the Subsidiary REMIC and
the Master REMIC, excluding the Staged-Funding Contract Reserve Account, the
obligation and related demand note of the Company pursuant to Section 3.06(c),
the Capitalized Interest Account and the Pre-Funding Account, as a REMIC. The
Trust shall be administered pursuant to the provisions of this Agreement for the
benefit of the Certificateholders.
b. The Seller hereby transfers, assigns, delivers, sells, sets over and
otherwise conveys to the Trustee on behalf of the Trust, by execution of an
assignment substantially in the form of Exhibit D hereto, (1) all the right,
title and interest of the Seller in and to the Initial and Additional Contracts,
including, without limitation, all right, title and interest in and to the
Collateral Security, all rights to receive payments on or with respect to the
Initial and Additional Contracts (other than the principal and interest due on
the Contracts before the applicable Cut-off Date) and all rights of the Seller
under the Transfer Agreement, (2) all rights under every Hazard Insurance Policy
relating to a Manufactured Home securing an Initial or Additional Contract for
the benefit of the creditor of such Contract, (3) all rights under all FHA/VA
Regulations pertaining to any Initial and Additional Contract that is an FHA/VA
Contract, (4) the proceeds from the Errors and Omissions Protection Policy and
all rights under any blanket hazard insurance policy to the extent they relate
to the Manufactured Homes, (5) all documents contained in the Contract Files and
the Land-and-Home Contract Files relating to the Initial and Additional
Contracts, (6) $_____________ paid by the underwriters of the Certificates to
the Trustee by order of the Seller out of the proceeds of the sale of the
Certificates (which such underwriters shall, by order of the Trust, remit
directly to the Seller pursuant to Section 2.01(c)), (7) amounts on deposit in
the Capitalized Interest Account, (8) amounts on deposit in the Pre-Funding
Account and (9) all proceeds and products in any way derived from any of the
foregoing.
c. The Seller hereby acknowledges receipt from the Trust of
$_____________ paid to the Seller by the underwriters of the Certificates by
order of the Trust, equal to the difference between the aggregate Cut-off Date
Principal Balances of the Staged-Funding Contracts and the principal balance of
the Staged-Funding Contracts as of the Closing Date. The Seller agrees, in
consideration for such funds, that it will use its best efforts (consistent with
prudent lending practices) to cause each Staged-Funding Contract to be fully
disbursed on or before the Funding Termination Date. The additional payment
obligations of any Obligor attributable to any further disbursements on any
Staged-Funding Contract made on or before the Funding Termination Date shall
automatically become the property of the Trust, without further action by the
Seller or the Trust. The payment to the Seller by the Trust and the transfer of
additional obligations to the
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Trust pursuant to this Section 2.01(c) shall be a purchase by the Trust of
qualified mortgages pursuant to a fixed price contract within the meaning of
Section 860G(a)(3) of the Code.
d. Although the parties intend that the conveyance of the Seller's
right, title and interest in and to the Contracts and the Collateral Security
pursuant to this Agreement and each Subsequent Transfer Instrument shall
constitute a purchase and sale and not a pledge of security for loans from the
Certificateholders, it is the intent of this Agreement that if such conveyances
are deemed to be a pledge of security for loans from the Certificateholders 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 Originator and the Seller shall be deemed to have granted to the
Trustee, and the Originator and the Seller do hereby grant to the Trustee, a
perfected first-priority security interest in the items designated in Section
2.01(b)(1) through 2.01(b)(9) above and in each Subsequent Transfer Instrument,
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 or the Secured Obligations, the
security interest created hereby shall continue in full force and effect and the
Trustee shall be deemed to be the collateral agent for the benefit of such
Person.
SECTION 2.02. Conditions to the Closing.
On or before the Closing Date, the Seller shall deliver or cause to be
delivered the following documents to the Trustee:
a. The List of Contracts identifying all Initial and
Additional Contracts, certified by the Chairman of the Board, President
or any Vice President of the Seller.
b. A certificate of an officer of the Seller substantially in
the form of Exhibit E hereto.
c. An Opinion of Counsel for the Seller substantially in the
form of Exhibit F hereto.
d. The Trustee's acknowledgement in the form of Exhibit G
hereto.
e. A letter acceptable to the Underwriters from
PricewaterhouseCoopers LLP or another nationally recognized accounting
firm, stating that such firm has reviewed the Initial Contracts on a
statistical sampling basis and setting forth the results of such
review.
f. Copies of resolutions of the board of directors of the
Seller or of the executive committee of the board of directors of the
Seller approving the execution, delivery and performance of this
Agreement, the creation of the Trust and the transactions contemplated
hereunder, certified in each case by the secretary or an assistant
secretary of the Seller.
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g. Officially certified recent evidence of due incorporation
and good standing of the Seller under the laws of the State of
Minnesota.
h. Evidence of filing with the Secretary of State of Minnesota
of a UCC-1 financing statement, executed by the Company as debtor,
naming the Trustee as secured party and listing the Contracts as
Collateral.
i. The Land-and-Home Contract File for each Initial and
Additional Contract that is a Land-and-Home Contract.
j. An executed copy of the Assignment substantially in the
form of Exhibit D hereto.
k. An Officer's Certificate listing the Servicer's Servicing
Officers.
l. Evidence of continued coverage of the Servicer under the
Errors and Omissions Protection Policy.
m. Evidence of deposit in the Certificate Account of all funds
received with respect to the Initial and Additional Contracts from the
Cut-off Date to the Closing Date, other than amounts due before the
Cut-off Date, together with an Officer's Certificate to the effect that
such amount is correct.
n. An Officer's Certificate confirming that the Originator's
internal audit department has reviewed the original or a copy of each
Initial and Additional Contract and each related Contract File or
Land-and-Home Contract File, as applicable, that each Initial and
Additional Contract and related Contract File or Land-and-Home Contract
File, as applicable, conforms in all material respects with the List of
Contracts and that each such Contract File or Land-and-Home Contract
File, as applicable, is complete in all material respects and that each
Manufactured Home securing a Contract is covered by a Hazard Insurance
Policy as required by Section 3.02(f).
o. A letter from Fitch confirming that the Class A-1
Certificates have been assigned a rating of F-1+ and the Class A-2
through A-9 Certificates have been assigned a rating of "AAA" by Fitch
and a letter from Standard & Poor's confirming that Class A-1
Certificates have been assigned a rating of A-1+ and the Class A
Certificates have been assigned a rating of "AAA" by Standard & Poor's.
p. A letter from Fitch confirming that the Class M-1
Certificates have been assigned a rating of "AA" by Fitch and the Class
M-2 Certificates have been assigned a rating of "A" by Fitch and a
letter from Standard & Poor's confirming that the Class M-1
Certificates have been assigned a rating of "AA" by Standard & Poor's
and the Class M-2 Certificates have been assigned a rating of "A" by
Standard & Poor's.
q. A letter from Fitch confirming that the Class B-1
Certificates have been assigned a rating of "BBB" by Fitch and the
Class B-2 Certificates have been assigned a
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rating of "BBB+" by Fitch and a letter from Standard & Poor's
confirming that the Class B-1 Certificates have been assigned a rating
of "BBB" by Standard & Poor's and the Class B-2 Certificates have been
assigned a rating of "BBB-" by Standard & Poor's.
r. The demand note described in Section 3.06(c)(v).
s. Evidence of the deposit of $_____________ in the
Capitalized Interest Account.
t. Evidence of the deposit of $_____________ in the
Pre-Funding Account.
u. Evidence of the deposit in the Undelivered Contract
Subaccount of an amount equal to the difference between the aggregate
Cut-off Date Principal Balances of the Initial Contracts and the
aggregate Cut-off Date Principal Balances of the Undelivered Contracts.
v. Any other documents or certificates that the Trustee may
reasonably request.
SECTION 2.03. Conveyance of the Subsequent Contracts.
a. Subject to the conditions set forth in paragraph (b) below, in
consideration of the Trustee's delivery on the related Subsequent Transfer Dates
to or upon the order of the Seller of all or a portion of the balance of funds
in the Pre-Funding Account, the Seller shall on any Subsequent Transfer Date
sell, transfer, assign, set over and convey to the Trust by execution and
delivery of a Subsequent Transfer Instrument, all the right, title and interest
of the Seller in and to the Subsequent Contracts identified on the List of
Contracts attached to the Subsequent Transfer Instrument, including all rights
to receive payments on or with respect to the Subsequent Contracts due after the
related Subsequent Cut-off Date, and all items with respect to such Subsequent
Contracts in the related Contract Files. The transfer to the Trustee by the
Seller of the Subsequent Contracts shall be absolute and is intended by the
Seller, the Trustee and the Certificateholders to constitute and to be treated
as a sale of the Subsequent Contracts by the Seller or the Originator to the
Trust.
The purchase price paid by the Trustee shall be one hundred percent
(100%) of the aggregate Cut-off Date Principal Balances of such Subsequent
Contracts. The purchase price of Subsequent Contracts shall be paid solely with
amounts in the Pre-Funding Account. This Agreement shall constitute a fixed
price contract in accordance with Section 860G(a)(3)(A)(ii) of the Code.
b. The Seller shall transfer to the Trustee the Subsequent Contracts,
and the Trustee shall release funds from the Pre-Funding Account, only upon the
satisfaction of each of the following conditions on or prior to the related
Subsequent Transfer Date:
(i) the Seller shall have provided the Trustee with an
Addition Notice at least five Business Days prior to the Subsequent
Transfer Date and shall have provided any
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<PAGE>
information reasonably requested by the Trustee with respect to the
Subsequent Contracts;
(ii) the Seller shall have delivered the related Land-and-Home
Contract File for each Subsequent Land-and-Home Contract to the
Custodian at least two Business Days prior to the Subsequent Transfer
Date;
(iii) the Seller shall have delivered to the Trustee a duly
executed Subsequent Transfer Instrument substantially in the form of
Exhibit P, which shall include a List of Contracts identifying the
related Subsequent Contracts;
(iv) as of each Subsequent Transfer Date, as evidenced by
delivery of the Subsequent Transfer Instrument, the Seller shall not be
insolvent nor shall it have been made insolvent by such transfer nor
shall it be aware of any pending insolvency;
(v) such sale and transfer shall not result in a material
adverse tax consequence to the Trust (including the Master REMIC and
the Subsidiary REMIC) or the Certificateholders;
(vi) the Pre-Funding Period shall not have ended;
(vii) the Seller shall have delivered to the Trustee an
Officer's Certificate, substantially in the form attached hereto as
Exhibit Q, confirming the satisfaction of each condition precedent and
the representations specified in this Section 2.03 and in Sections
3.01, 3.02, 3.03, 3.04 and 3.05; and
(viii) the Seller and the Originator shall have delivered to
the Trustee Opinions of Counsel addressed to Standard & Poor's, Fitch
and the Trustee with respect to the transfer of the Subsequent
Contracts substantially in the form of the Opinions of Counsel
delivered to the Trustee on the Closing Date regarding certain
bankruptcy, corporate and tax matters.
c. Before the last day of the Pre-Funding Period, the Seller shall
deliver to the Trustee:
(i) A letter from PricewaterhouseCoopers LLP or another
nationally recognized accounting firm retained by the Seller (with
copies provided to Standard & Poor's, Fitch, the Underwriters and the
Trustee) that is in form, substance and methodology the same as that
delivered under Section 2.02(e) of this Agreement, except that it shall
address the Subsequent Contracts and their conformity in all material
respects to the characteristics described in Section 3.03(b) of this
Agreement.
(ii) Evidence that as a result of the purchase by the Trust of
the Subsequent Contracts, the Class A Certificates shall not receive
from Standard & Poor's or Fitch a lower credit rating than the rating
assigned to such Certificates as of the Closing Date.
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<PAGE>
(iii) Evidence that the aggregate Cut-off Date Principal
Balance of the Subsequent Contracts, not specifically identified as
Subsequent Contracts as of the Closing Date, does not exceed 25% of the
Original Principal Balance.
SECTION 2.04. Acceptance by Trustee.
a. On the Closing Date and each Subsequent Transfer Date, if the
conditions set forth in Section 2.02 and 2.03, respectively, have been
satisfied, the Trustee shall deliver a certificate to the Seller substantially
in the form of Exhibit G hereto acknowledging conveyance of the Contracts,
identified on the applicable List of Contracts and the related Contract Files
and Land-and-Home Contract Files to the Trustee and declaring that the Trustee,
directly or through a custodian, will hold all Contracts that have been
delivered in trust, upon the terms herein set forth, for the use and benefit of
all Certificateholders and on the Closing Date the Trustee shall issue to or
upon the order of the Seller Certificates representing ownership of a beneficial
interest in 100% of the Trust.
b. If, in its review of the Land-and-Home Contract Files as described
in Exhibit G, the Trustee or its Custodian discovers a breach of the
representations or warranties set forth in Sections 2.02(n), 3.02, 3.03, 3.04 or
3.05, the Seller and the Originator shall cure such breach or repurchase or
replace such Contract pursuant to Section 3.06.
SECTION 2.05. REMIC Provisions.
a. The Originator, as Servicer, and the Class C Subsidiary
Certificateholder and the Class C Master Certificateholder, by acceptance
thereof, each agrees that, in accordance with the requirements of Section
860D(b)(1) of the Code, the federal tax return of each of the Subsidiary REMIC
and the Master REMIC for its first taxable year shall provide that the
Subsidiary REMIC or the Master REMIC, as the case may be (excluding the
Capitalized Interest Account, the obligation and related demand note of the
Originator pursuant to Section 3.06(c), the Staged-Funding Contract Reserve
Account and the Pre-Funding Account) elects to be treated as a REMIC for such
taxable year and all subsequent taxable years. In furtherance of the foregoing,
the Trustee (at the direction of the Originator, the Seller or the Servicer) and
the Originator, the Seller and the Servicer shall take, or refrain from taking,
all such action as is necessary to maintain the status of each of the Subsidiary
REMIC or the Master REMIC as a REMIC under the REMIC provisions of the Code,
including, but not limited to, the taking of such action as is necessary to cure
any inadvertent termination of REMIC status.
b. The Regular Certificates are being issued in 14 classes and are
hereby designated by the Originator as constituting the "regular interests" in
the Master REMIC for the purposes of Section 860G(a)(1) of the Code. The
following terms of the Regular Certificates are irrevocably established as of
the Closing Date:
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<PAGE>
Pass-Through Rate Original Class
Class Per Annum Principal Balance Maturity Date
- ----------------- -------------------- -------------------- ----------------
Class A-1 _____% $ __________ __________
Class A-2 _____% $ __________ __________
Class A-3 _____% $ __________ __________
Class A-4 _____% $ __________ __________
Class A-5 _____% $ __________ __________
Class A-6 _____% $ __________ __________
Class A-7 _____% $ __________ __________
Class A-8 _____% $ __________ __________
Class A-9 _____% $ __________ __________
Class M-1 _____% $ __________ __________
Class M-2 _____% $ __________ __________
Class B-1 _____% $ __________ __________
Class B-2 _____% $ __________ __________
Class B-3I **
- ----------
* A floating rate (determined monthly on each Remittance Date) equal to the
Weighted Average Contract Rate, but in no event greater than the related
Remittance Rate specified above.
** The Class B-3I Certificates are interest-only Certificates entitled to the
payment of Excess Interest.
The Seller does not represent that any Class of Regular Certificates will, in
fact, mature on any given date. The Class C Master Certificates are being issued
in a single class and are hereby designated by the Seller as constituting the
sole class of "residual interests" in the Master REMIC for purposes of Section
860G(a)(2) of the Code.
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<PAGE>
c. The Uncertificated Subsidiary Interests are being issued in 13
classes and are hereby designated by the Seller as constituting the "regular
interests" in the Subsidiary REMIC for the purposes of Section 860G(a)(1) of the
Code. The following terms of the Uncertificated Subsidiary Interests are
irrevocably established as of the Closing Date:
Original Subsidiary
Interest Principal
Class Pass-Through Rate Per Annum Balance Maturity Date
- ----------- ------------------------------ ------------------- -------------
Class A-S1 Weighted Average Contract Rate $ __________ __________
Class A-S2 Weighted Average Contract Rate $ __________ __________
Class A-S3 Weighted Average Contract Rate $ __________ __________
Class A-S4 Weighted Average Contract Rate $ __________ __________
Class A-S5 Weighted Average Contract Rate $ __________ __________
Class A-S6 Weighted Average Contract Rate $ __________ __________
Class A-S7 Weighted Average Contract Rate $ __________ __________
Class A-S8 Weighted Average Contract Rate $ __________ __________
Class A-S9 Weighted Average Contract Rate $ __________ __________
Class M-S1 Weighted Average Contract Rate $ __________ __________
Class M-S2 Weighted Average Contract Rate $ __________ __________
Class B-S1 Weighted Average Contract Rate $ __________ __________
Class B-S2 Weighted Average Contract Rate $ __________ __________
The Seller does not represent that any Class of Uncertificated Subsidiary
Interests will, in fact, mature on any given date. The Class C Subsidiary
Certificates are being issued in a single class and are hereby designated by the
Seller as constituting the sole class of "residual interests" in the Subsidiary
REMIC for purposes of Section 860G(a)(2) of the Code.
d. The Closing Date, which is the day on which each of the Subsidiary
REMIC and the Master REMIC will issue all of its regular and residual interests,
is hereby designated as the "startup day" of both the Subsidiary REMIC and the
Master REMIC within the meaning of Section 860G(a)(9) of the Code.
e. After the Closing Date, neither the Trustee, the Originator, the
Seller nor any Servicer shall (i) accept any contribution of assets to the
Subsidiary REMIC or the Master REMIC, (ii) dispose of any portion of the
Subsidiary REMIC or the Master REMIC, other than as provided in Sections 3.06,
3.07 and 8.05, (iii) engage in any "prohibited transaction," as defined in
Sections 860F(a)(2) and (5) of the Code, except as may be contemplated by
Section 3.06(c), (iv) accept any contribution after the Closing Date that is
subject to the tax imposed by Section 860G(d) of the Code or (v) engage in any
activity or enter into any agreement that would result in the receipt by the
Subsidiary REMIC or the Master REMIC of any "net income from foreclosure
property" as defined in Section 860G(c)(2) of the Code, unless, prior to any
such action set forth in clauses (i), (ii), (iii), (iv) or (v) the Trustee shall
have received an unqualified Opinion of Counsel, which opinion shall not be an
expense of the Trust, stating that such action will not, directly or indirectly,
(A) adversely affect the status of the Subsidiary REMIC or the Master REMIC as a
REMIC or the status of the Uncertificated Subsidiary Interests as "regular
interests" in the Subsidiary REMIC, the status of the Class C Subsidiary
Certificates as the sole class of "residual interests" in the Subsidiary REMIC,
the status of the Regular Certificates as
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<PAGE>
"regular interests" in the Master REMIC, or the status of the Class C Master
Certificates as the sole class of "residual interests" in the Master REMIC, (B)
affect the distributions payable hereunder to the Certificateholders or (C)
result in the imposition of any lien, charge or encumbrance upon the Subsidiary
REMIC or the Master REMIC.
f. Upon the acquisition of any real property (including interests in
real property), or any personal property incident thereto, in connection with
the default of a Contract, the Servicer and the Trustee (at the direction of the
Servicer) shall take, or cause to be taken, such action as is necessary to sell
or otherwise dispose of such property within such period as is then required by
the Code in order for such property to qualify as "foreclosure property" within
the meaning of Section 860G(a)(8) of the Code, unless the Servicer and the
Trustee receive an Opinion of Counsel to the effect that the holding by the
Subsidiary REMIC or the Master REMIC of such property subsequent to the period
then permitted by the Code will not result in the imposition of any taxes on
"prohibited transactions" of the Subsidiary REMIC or the Master REMIC, as
defined in Section 860F of the Code, or cause the Subsidiary REMIC or the Master
REMIC to fail to qualify as a REMIC at any time that the Uncertificated
Subsidiary Interests, Class C Subsidiary Certificates, Regular Certificates or
Class C Master Certificates are outstanding. The Servicer shall manage,
conserve, protect and operate such real property, or any personal property
incident thereto, so that such property will not fail to qualify as "foreclosure
property," as defined in Section 860G(a)(8) of the Code, and that the
management, conservation, protection and operation of such property will not
result in the receipt by the Subsidiary REMIC or the Master REMIC of any "income
from nonpermitted assets," within the meaning of Section 860F(a)(2)(B) of the
Code.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
------------------------------
The Seller and the Originator make the following representations and
warranties on which the Trustee will rely in accepting the Contracts in trust
and issuing the Certificates on behalf of the Trust. The repurchase or
substitution obligation of the Originator set forth in Section 3.06 constitutes
the sole remedy available to the Trust or the Certificateholders for a breach of
a representation or warranty of the Originator set forth in Section 2.02(n),
3.02, 3.03, 3.04 or 3.05 of this Agreement.
SECTION 3.01. Representations and Warranties Regarding the Seller.
The Seller represents and warrants to the Trustee and the
Certificateholders, effective on the Closing Date and each Subsequent Transfer
Date, that:
a. Organization and Good Standing. The Seller 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 Seller 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 Seller.
b. Authorization; Binding Obligations. The Seller has the
power and authority to make, execute, deliver and perform this
Agreement and all of the transactions contemplated under this
Agreement, and to create the Trust and cause it to make, execute,
deliver and perform its obligations under this Agreement and has taken
all necessary corporate action to authorize the execution, delivery and
performance of this Agreement and to cause the Trust to be created.
When executed and delivered, this Agreement will constitute the legal,
valid and binding obligation of the Seller enforceable in accordance
with its 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 Consent Required. The Seller is not required to obtain
the consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any
governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity or enforceability of this
Agreement.
d. No Violations. The execution, delivery and performance of
this Agreement by the Seller 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 Seller, or constitute a
material breach of any mortgage, indenture, contract or other agreement
to which the Seller is a party or by which the Seller may be bound.
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e. Litigation. No litigation or administrative proceeding of
or before any court, tribunal or governmental body is currently
pending, or to the knowledge of the Seller threatened, against the
Seller or any of its properties or with respect to this Agreement or
the Certificates which, if adversely determined, would in the opinion
of the Seller have a material adverse effect on the transactions
contemplated by this Agreement.
f. Licensing. The Seller 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.
SECTION 3.02. Representations and Warranties Regarding Each Contract.
The Originator has made the following representations and warranties to
the Seller in the Transfer Agreement, which representations and warranties the
Seller has assigned to the Trustee for the benefit of the Certificateholders, as
of the Closing Date with respect to each Initial or Additional Contract, and as
of the applicable Subsequent Transfer Date with respect to each Subsequent
Contract identified on the List of Contracts attached to the related Subsequent
Transfer Agreement:
a. List of Contracts. The information set forth in the
applicable List of Contracts is true and correct as of its date.
b. Payments. As of the Cut-off Date, the most recent scheduled
payment was made by or on behalf of the Obligor (without any advance
from the Originator or any Person acting at the request of the
Originator) or was not past due for more than 59 days (in the case of
an Initial or Additional Contract) or 30 days (in the case of a
Subsequent Contract).
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 or Land-and-Home Contract File, as
applicable.
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 Manufactured Home securing the
Contract is covered by a Hazard Insurance Policy in the amount required
by Section 5.09. Each
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Manufactured Home secured by an FHA/VA Contract which was, at the time
of origination of the related Contract, located within a federally
designated special flood hazard area is covered by insurance coverage
at least equal to that required by Section 5.09 or such lesser coverage
as may be available under the federal flood insurance program. With
respect to any other Contract that is not an FHA/VA Contract, the
Company has obtained: (a) a statement from the Obligor's insurance
agent that the Manufactured Home was, at the time of origination of the
Contract, not in a federally designated special flood hazard area; or
(b) evidence that, at the time of origination, flood insurance was in
effect, which coverage is at least equal to that required by Section
5.09 or such lesser coverage as may be available under the federal
flood insurance program. All premiums due as of the Closing Date on
such insurance have been paid in full.
g. [Reserved]
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 Certificates, or the ownership of the Contract by the
Trust, unlawful or render the Contract unenforceable.
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 Originator shall for at least the period of this
Agreement, maintain in its possession, available for the Trustee's
inspection, and shall deliver to the 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 Manufactured
Home securing the Contract has not been released from the lien of the
Contract in whole or in part.
k. Valid Security Interest. Each Contract (other than the
Land-and-Home Contracts) creates a valid and enforceable perfected
first priority security interest in favor of the Seller in the
Manufactured Home covered thereby as security for payment of the
Cut-off Date Principal Balance of such Contract. The Seller has
assigned all of its right, title and interest in such Contract,
including the security interest in the Manufactured Home covered
thereby, to the Trustee. The Trustee has and will have a valid and
perfected and enforceable first priority security interest in such
Contract and Manufactured Home.
Each Mortgage is a valid first lien in favor of the Seller on
real property securing the amount owed by the Obligor under the related
Land-and-Home Contract subject only to (a) the lien of current real
property taxes and assessments, (b) covenants, conditions and
restrictions, rights of way, easements and other matters of public
record as of the date of recording of such Mortgage, such exceptions
appearing of record being acceptable to mortgage lending institutions
generally in the area wherein the property subject to the
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Mortgage is located or specifically reflected in the appraisal obtained
in connection with the origination of the related Land-and-Home
Contract obtained by the Seller and (c) other matters to which like
properties are commonly subject which do not materially interfere with
the benefits of the security intended to be provided by such Mortgage.
The Seller has assigned all of its right, title and interest in such
Land-and-Home Contract and related Mortgage, including the security
interest in the Manufactured Home covered thereby, to the Trustee. The
Trustee has and will have a valid and perfected and enforceable first
priority security interest in such Land-and-Home Contract.
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
manufactured housing dealer, the Originator 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 Originator has not sold, assigned or pledged the Contract
to any person and prior to the transfer of the Contract by the
Originator to the Seller under the terms of the Transfer Agreement, the
Originator 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 Seller. With respect to any Contract bearing a stamp indicating
that such Contract has been sold to another party, such other party's
interest in such Contract has been released.
n. No Defaults. As of the Cut-off Date or Subsequent Cut-off
Date, as applicable, 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 or the Subsequent Transfer Date, as applicable, the related
Manufactured Home is, to the best of the Company's knowledge, free of
damage and in good repair. To the best of the Originator's knowledge,
no Manufactured Home has suffered damage that is not covered by a
Hazard Insurance Policy, including, but not limited to, hurricanes,
earthquakes, floods, tornadoes, straight-line winds, sinkholes,
mudslides, volcanic eruptions and other natural disasters.
o. No Liens. As of the Closing Date or the Subsequent Transfer
Date, as applicable, there are, to the best of the Originator's
knowledge, no liens or claims which have been filed for work, labor or
materials affecting the Manufactured Home or any related Mortgaged
Property securing the Contract which are or may be liens prior to, or
equal or coordinate with, the lien of the Contract.
p. Equal Installments. Except for ______ Step-up Rate
Contracts included among the Initial Contracts and ______ Step-up Rate
Contracts included among the
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Additional Contracts, each Contract has a fixed Contract Rate and
provides for level monthly payments which fully amortize the loan over
its term. Of the Step-up Rate Contracts which are still bearing
interest at their initial Contract Rates, ______ provide for two rate
increases and the remainder provide for a single rate increase.
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 the original executed copy retained by the Obligor), which
Contract has been delivered to the Trustee or its custodian on or
before the Closing Date or the Subsequent Transfer Date, as applicable.
Each Contract (other than the Land-and-Home Contracts) has been stamped
to reflect the assignment of such Contract to the Trustee.
s. Loan-to-Value Ratio. At the time of their origination all
of the Contracts had Loan-to-Value Ratios not greater than 100%; if the
related Manufactured Home was new at the time such Contract was
originated, the original principal balance of such Contract did not
exceed 130% of the manufacturer's invoice price, plus 100% of the taxes
and license fees, 130% of the freight charges, 100% of the dealer's
cost of additional dealer-installed equipment (not to exceed 25% of the
original principal balance of such Contract in all states except
California; not to exceed 70% of the manufacturer's invoice price in
California if required to meet park requirements) and up to $1,500 of
set-up costs per module.
t. Primary Resident. At the time of origination of the
Contract the Obligor was the primary resident of the related
Manufactured Home.
u. Not Real Estate. With respect to each Contract other than a
Land-and-Home Contract, the related Manufactured Home is not considered
or classified as part of the real estate on which it is located under
the laws of the jurisdiction in which it is located.
v. Notation of Security Interest. With respect to each
Contract other than a Land-and-Home Contract, if the related
Manufactured Home 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 Manufactured Home is being applied
for such title document will be issued within 180 days and will show,
the Seller as the holder of a first priority security interest in such
Manufactured Home; if the related Manufactured Home is located in a
state in which the filing of a financing statement under the UCC is
required to perfect a security interest in manufactured housing, such
filings or recordings have been duly made and show the Seller as
secured party. If the related Manufactured Home secures a Land-and-Home
Contract, such Manufactured Home is subject to a Mortgage properly
filed in the appropriate public recording office or such Mortgage will
be properly filed in the appropriate public recording office within 180
days, naming the Seller as mortgagee. In
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either case, the Trustee 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 Seller and the Originator
and any trustee in bankruptcy of the Seller or the Originator) claiming
an interest in such Manufactured Home.
w. Secondary Mortgage Market Enhancement Act. The related
Manufactured Home is a "manufactured home" within the meaning of 42
United States Code, Section 5402(6). Each manufactured housing dealer
from whom the Originator purchased such Contract, if any, was then
approved by the Originator in accordance with the requirements of the
Secretary of Housing and Urban Development set forth in 24 CFR ss.
201.27. At the origination of each Contract, the Originator was
approved for insurance by the Secretary of Housing and Urban
Development pursuant to Section 2 of the National Housing Act.
x. Qualified Mortgage. The Contract represents a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code. The
Originator represents and warrants that, either as of the date of
origination or the Closing Date, the fair market value of the property
securing each Contract was not less than 80% of the "adjusted issue
price" (within the meaning of the REMIC Provisions) of such Contract.
SECTION 3.03. Additional Representations and Warranties. The Seller
hereby represents and warrants to the Trustee for the benefit of the
Certificateholders and the Class C Certificateholders, as of the Closing Date
with respect to each Contract identified on the list of Contracts and as of each
Subsequent Transfer Date with respect to each Subsequent Contract identified on
the List of Contracts attached to the related Subsequent Transfer Instrument:
a. 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 under this Agreement or pursuant to
transfers of the Certificates or Class C Certificates unlawful or
render the Contract unenforceable. The Seller has duly executed a valid
blanket assignment of the Contracts transferred to the Trust, and has
transferred all its right, title and interest in such Contracts. The
blanket assignment, any and all documents executed and delivered by the
Seller pursuant to Sections 2.01(b) and 2.03(b), and this Agreement
each constitutes the legal, valid and binding obligation of the Seller
enforceable in accordance with its respective terms.
b. Good Title. The Seller is the sole owner of the Contract
and has the authority to sell, transfer and assign such Contract to the
Trust under the terms of this Agreement. There has been no assignment,
sale or hypothecation of the Contract by the Seller, which
hypothecation terminates upon sale of the Contract to the Trust. The
Seller has good and marketable title to the Contract, free and clear of
any encumbrance, equity, loan, pledge, charge, claim, lien or
encumbrance of any type and has full right to transfer the Contract to
the Trust.
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SECTION 3.04. Representations and Warranties Regarding the Contracts in
the Aggregate.
The Originator has represented and warranted to the Seller in the
Transfer Agreement, which representations and warranties the Seller has assigned
to the Trustee for the benefit of the Certificateholders and the Class C
Certificateholders, as of the Closing Date with respect to the Initial and
Additional Contracts, and as of each Subsequent Transfer Date with respect to
the related Subsequent Contracts, that:
a. Amounts. The aggregate principal amounts payable by
Obligors under the Contracts (assuming all Staged-Funding Contracts
were fully disbursed) as of the Cut-off Date equal the Cut-off Date
Pool Principal Balance. The aggregate principal amounts payable by
Obligors under the Initial Contracts (assuming all Staged-Funding
Contracts included among the Initial Contracts were fully disbursed) as
of the Cut-off Date equal $________. The aggregate principal amounts
payable by Obligors under the Additional Contracts (assuming all
Staged-Funding Contracts included among the Additional Contracts were
fully disbursed) as of the Cut-off Date equal $_________.
b. Characteristics of Initial and Additional Contracts. The
Initial and Additional Contracts have the following characteristics as
of the Cut-off Date:
(i) the Obligors on not more than 10% of the Initial
and Additional Contracts by Cut-off Date Pool Principal
Balance are located in any one state, the Obligors on not more
than 5% of the Contracts by Cut-off Date Pool Principal
Balance are located in an area with the same zip code and the
Obligors on not more than 1% of the Contracts by Cut-off Date
Pool Principal Balance are located in California in an area
with the same zip code;
(ii) no Initial or Additional Contract has a
remaining maturity of fewer than 4 months or more than 360
months;
(iii) the final scheduled payment date on the Initial
or Additional Contract with the latest maturity is in ______;
(iv) approximately ___% of the Initial and Additional
Contracts by Cut-off Date Pool Principal Balance is
attributable to loans for purchases of new Manufactured Homes
and approximately ___% is attributable to loans for purchases
of used Manufactured Homes;
(v) no less than ___% of the Initial and Additional
Contracts by Cut-off Date Pool Principal Balance is
attributable to Land-and-Home Contracts;
(vi) the Weighted Average Contract Rate of the
Initial and Additional Contracts as of the Cut-off Date is at
least ___% per annum;
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(vii) at least ___% of the Initial and Additional
Contracts by Cut-off Date Pool Principal Balance is
attributable to loans for the purchase of multi-section
Manufactured Homes;
(viii) the weighted average (by Cut-off Date Pool
Principal Balance) loan to value ratio of the Initial and
Additional Contracts is not more than ___%;
(ix) no Initial or Additional Contract was originated
before _________; and
(x) not more than ___% of the Initial and Additional
Contracts by Cut-off Date Pool Principal Balance are secured
by Manufactured Homes located in a mobile home park.
c. Characteristics of All Contracts. The Contracts have the
following characteristics as of the end of the Pre-Funding Period:
(i) the Weighted Average Contract Rate is not less
than ___%, and not more than .02% of the Cut-off Date Pool
Principal Balance is attributable to Contracts with a Contract
Rate of less than 4.0%;
(ii) the weighted average (by Cut-off Date Pool
Principal Balance) Loan-to-Value Ratio of the Contracts is not
more than ___%;
(iii) not less than ___% of the Cut-off Date Pool
Principal Balance is attributable to loans for purchases of
new Manufactured Homes;
(iv) not more than ___% of the Cut-off Date Pool
Principal Balance is attributable to loans for the purchase of
single-section Manufactured Homes, and not less than ___% of
the Cut-off Date Pool Principal Balance is attributable to
loans for the purchase of double-section Manufactured Homes;
(v) not less than ___% of the Cut-off Date Pool
Principal Balance is attributable to Land-and-Home Contracts;
and
(vi) not more than ___% of the Cut-off Date Pool
Principal Balance is attributable to loans secured by
Manufactured Homes located in parks.
d. Staged-Funding Contracts. Approximately $_________ of the
Initial and Additional Contracts, by Cut-off Date Principal Balance,
are Staged-Funding Contracts that had not been fully disbursed by the
Cut-off Date. Approximately $_________ of such amount has been
disbursed by the Closing Date, and approximately $_________ remains to
be disbursed on or before the Funding Termination Date.
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e. Computer Tape. The Computer Tape made available by the
Originator was complete and accurate as of its date and includes a
description of the same Contracts that are described in the List of
Contracts.
f. Marking Records. By the Closing Date or Subsequent Transfer
Date, as applicable, the Originator 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.
g. 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 3.05. Representations and Warranties Regarding the Contract
Files.
The Originator has represented and warranted to the Seller in the
Transfer Agreement, which representations and warranties the Seller has assigned
to the Trustee for the benefit of the Certificateholders and the Class C
Certificateholders, as of the Closing Date with respect to the Initial and
Additional Contracts, and as of each Subsequent Transfer Date with respect to
the related Subsequent Contracts, that:
a. Possession. Immediately prior to the Closing Date or the
Subsequent Transfer Date, as applicable, the Originator will have
possession of each original Contract and the related Contract File or
Land-and-Home Contract File and there are and there will be no
custodial agreements in effect materially and adversely affecting the
rights of the Originator 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 and Land-and-Home Contract
Files by the Originator pursuant to the Transfer Agreement is not
subject to the bulk transfer or any similar statutory provisions in
effect in any applicable jurisdiction.
SECTION 3.06. Repurchase of Contracts or Substitution of Contracts for
Breach of Representations and Warranties.
a. The Originator shall repurchase a Contract, at its
Repurchase Price, not later than the last day of the month prior to the
month that is 90 days after the day on which the Originator, the
Servicer, the Seller or the Trustee first discovers or should have
discovered a breach of a representation or warranty of the Originator
set forth in Sections 2.02(n), 3.02, 3.03 or 3.05 of this Agreement
that materially adversely affects the Trust's or the
Certificateholders' interest in such Contract and which breach has not
been cured; provided, however, that (i) in the event that a party other
than the Originator first becomes aware of such breach, such
discovering party shall notify the Originator 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,
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which the Originator would otherwise be required to repurchase pursuant
to this Section, the Originator may, in lieu of repurchasing such
Contract, deliver to the Seller for deposit in the Certificate 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
distributed to Certificateholders on the immediately following
Remittance Date 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 Seller under this Section shall not terminate upon a Service
Transfer pursuant to Article VII. Notwithstanding the foregoing, the
Originator shall repurchase any Land-and-Home Contract, at such
Contract's Repurchase Price, or substitute for it an Eligible
Substitute Contract as described in Section 3.06(b), if the Seller has
failed to deliver the related Land-and-Home Contract File to the
Trustee within 30 days of the Closing Date.
b. On or prior to the date that is the second anniversary of
the Closing Date, the Originator, at its election, may substitute one
or more Eligible Substitute Contracts for any Contracts that it is
obligated to repurchase pursuant to Section 3.06(a) (such Contracts
being referred to as the "Replaced Contracts") upon satisfaction of the
following conditions:
(i) the Originator shall have conveyed to the Seller
the Contracts to be substituted for the Replaced Contracts and
the Contract Files related to such Contracts and the
Originator shall have marked the Electronic Ledger indicating
that such Contracts constitute part of the Trust;
(ii) the Contracts to be substituted for the Replaced
Contracts are Eligible Substitute Contracts and the Originator
delivers an Officers' Certificate, substantially in the form
of Exhibit L-2 hereto, to the Trustee certifying that such
Contracts are Eligible Substitute Contracts;
(iii) the Originator shall have delivered to the
Seller evidence of filing of a UCC-1 financing statement
executed by the Originator as debtor, naming the Seller as
secured party and filed in Minnesota, listing such Contracts
as collateral, or shall have delivered to the Seller an
amended List of Contracts;
(iv) in respect of Eligible Substitute Contracts that
are Land-and-Home Contracts:
(x) the Originator shall have delivered to the
Seller, or its Custodian, the related
Land-and-Home Contract Files; and
(y) if the sum of the aggregate principal
balances of all Land-and-Home Contracts then
held by the Trustee (but excluding those
Land-and-Home Contracts, if any, that are to
become Replaced Contracts as a consequence
of the substitution) and the aggregate
principal balances of all Land-and-Home
Contracts that are
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included in the Eligible Substitute
Contracts equals or exceeds 10% of the Pool
Scheduled Principal Balance as of the
Remittance Date immediately preceding the
substitution, the Originator shall have
delivered to the Trustee an opinion of
counsel satisfactory to the Trustee to the
effect that the Seller holds a perfected
first priority lien in the real estate
securing such Eligible Substitute Contracts,
or evidence of recordation of the assignment
to the Trustee on behalf of the Trust of (A)
each Mortgage securing such Eligible
Contracts or, if less (B) of the number of
Mortgages securing such Eligible Substitute
Contracts needed to reduce the aggregate
principal balances of all Land-and-Home
Contracts with respect to which such
assignments are not so recorded to less than
10% of the Pool Scheduled Principal Balance
as of the Remittance Date immediately
preceding the substitution;
(v) the Originator shall have delivered to the
Trustee an Opinion of Counsel (a) to the effect that the
substitution of such Contracts for such Replaced Contracts
will not cause the Trust to fail to qualify as a REMIC at any
time under then applicable REMIC Provisions or cause any
"prohibited transaction" that will result in the imposition of
a tax under such REMIC Provisions and (b) to the effect of
paragraph 9 of Exhibit F hereto; and
(vi) if the aggregate Scheduled Principal Balance of
such Replaced Contracts is greater than the aggregate
Scheduled Principal Balance of the Contracts being
substituted, the Originator shall have delivered to the Seller
for deposit in the Certificate Account the amount of such
excess and shall have included in the Officers' Certificate
required by clause (ii) above a certification that such
deposit has been made.
Upon satisfaction of such conditions, the Trustee shall add such
Contracts to, and delete such Replaced Contracts from, the List of Contracts.
Such substitution shall be effected prior to the first Determination Date that
occurs more than 90 days after the Originator becomes aware, or should have
become aware, or receives written notice from the Trustee, of the breach
referred to in Section 3.06(a). Promptly after any substitution of a Contract,
the Originator shall give written notice of such substitution to Standard &
Poor's and Fitch.
c. (i) On or before the Funding Termination Date, the
Originator or the Seller shall deliver an Officer's
Certificate to the Trustee, stating that each Staged-Funding
Contract was fully disbursed in accordance with the terms of
such Contract on or before the Funding Termination Date, or
specifying any Staged-Funding Contracts which were not fully
disbursed by the Funding Termination Date (each Staged-Funding
Contract that was not so fully disbursed being hereinafter
referred to as an "Unfunded Contract"), and the Cut-off Date
Principal Balance of each Unfunded Contract.
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(ii) On or before the Funding Termination Date, the
Originator shall either repurchase any Unfunded Contract in
accordance with Section 3.06(a) (or the unfunded portion
thereof, by depositing in the Certificate Account any
undisbursed amount with respect to such Unfunded Contract), or
shall substitute an Eligible Substitute Contract for such
Unfunded Contract in accordance with Section 3.06(b). With
respect to the repurchase of an Unfunded Contract pursuant to
this Section 3.06(c), an amount of the Repurchase Price equal
to the Unfunded Contract Shortfall attributable to such
Unfunded Contract shall be treated as a refund to the Trust of
the purchase price paid by the Trust for additional
obligations of the Obligor on such Contract under Section
2.01(c), and the remainder of the Repurchase Price shall be
treated as paid to the Trust for such Unfunded Contract.
(iii) If the Originator shall have failed to
repurchase an Unfunded Contract (or the unfunded portion
thereof, by depositing in the Certificate Account any
undisbursed amount with respect to such Unfunded Contract) or
to substitute an Eligible Substitute Contract therefor in
accordance with subsection (ii) above, then the disbursed
principal balance of such Unfunded Contract as owned by the
Trust shall not be increased after the Funding Termination
Date, notwithstanding any further disbursements that may be
made to the related Obligor by the Originator after the
Funding Termination Date. The Servicer shall thereafter
allocate principal and interest collected on the Contract
between the Trust and the Company on a pro rata basis in
accordance with the disbursed principal balance as of the
Funding Termination Date, with the result that payments of
interest and principal collected with respect to such
disbursed principal balance as of the Funding Termination Date
shall be deemed collected by the Trust. The aggregate
differential between the Cut-off Date Principal Balance of all
such Unfunded Contracts as specified in the List of Contracts
and the disbursed principal balance of such Unfunded Contracts
as of the Funding Termination Date (the "Unfunded Contract
Shortfall") shall be added to the Formula Principal
Distribution Amount with respect to the Remittance Date in
_________.
(iv) On the Business Day prior to each Remittance
Date until and including the Remittance Date in _________, the
Originator shall pay any Class A Interest Shortfall, Class M-1
Interest Shortfall, Class M-2 Interest Shortfall or Class B-1
Interest Shortfall occurring on such Remittance Date, if and
to the extent such shortfall is caused by the difference
between (A) the interest that would have been payable on all
Staged-Funding Contracts in the related month had such
Contracts been fully disbursed on the Closing Date and (B) the
interest actually payable on such Contracts in the related
month according to the terms of such Contracts.
(v) To further evidence its obligation to repurchase
Unfunded Contracts pursuant to subsection (ii) above and to
deposit any Class A Interest Shortfall, Class M-1 Interest
Shortfall, Class M-2 Interest Shortfall and Class
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B-1 Interest Shortfall pursuant to subsection (iv) above, the
Originator shall deliver to the Trustee, on the Closing Date,
a demand note in an amount no less than the aggregate Cut-off
Date Principal Balances of the Staged-Funding Contracts. After
the Funding Termination Date or such earlier date on which the
Originator either has fully disbursed or repurchased each
Staged-Funding Contract as required herein, the Trustee shall
return such demand note to the Originator for cancellation
and/or destruction.
d. Upon receipt by the Trust by deposit in the Certificate
Account of the Repurchase Price under subsection (a) or (c) above, or
the delivery of an Eligible Substitute Contract pursuant to subsection
(b) or (c) above, and upon receipt of a certificate of a Servicing
Officer in the form attached hereto as Exhibit L-1 or L-2, the Trustee
shall convey and assign to the Originator all of the Trust's right,
title and interest in the repurchased Contract or Replaced 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 Trustee.
e. The Originator shall defend and indemnify the Trustee and
the Certificateholders 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 such representation and warranty.
SECTION 3.07. No Repurchase or Substitution Under Certain
Circumstances.
Notwithstanding any provision of this Agreement to the contrary, no
repurchase or substitution pursuant to Section 3.06 (other than a repurchase or
substitution pursuant to Section 3.06(c)) shall be made unless the Originator
obtains for the Trustee an Opinion of Counsel addressed to the Trustee that any
such repurchase or substitution would not, under the REMIC Provisions, (i) cause
the Subsidiary REMIC or the Master REMIC to fail to qualify as a REMIC while any
regular interest in the Subsidiary REMIC or the Master REMIC, respectively, is
outstanding, (ii) result in a tax on prohibited transactions within the meaning
of Section 860F(a)(2) of the Code or (iii) constitute a contribution after the
startup day subject to tax under Section 860G(d) of the Code. The Servicer shall
attempt to obtain such Opinion of Counsel. In the case of a repurchase or
deposit pursuant to Section 3.06(a) or 3.06(c), the Originator shall,
notwithstanding the absence of such opinion as to the imposition of any tax as
the result of such purchase or deposit, repurchase such Contract or make such
deposit and shall guarantee the payment of such tax by paying to the Trustee the
amount of such tax not later than five Business Days before such tax shall be
due and payable to the extent that amounts previously paid over to and then held
by the Trustee pursuant to Section 6.06 hereof are insufficient to pay such tax
and all other taxes chargeable under Section 6.06. Pursuant to Section 6.06, the
Servicer is hereby directed to withhold, and shall withhold and pay over to the
Trustee, an amount sufficient to pay such tax and any other taxes imposed on
"prohibited transactions" under Section 860F(a)(1) of the Code or imposed on
"contributions after start up date" under Section 860G(d) of the Code from
amounts otherwise distributable to Class C Subsidiary Certificateholders. The
Servicer shall give notice to the Trustee at the time of such
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repurchase of the amounts due from the Originator pursuant to the guarantee of
the Originator described above and notice as to who should receive such payment.
The Trustee shall have no obligation to pay any such amounts pursuant
to this Section other than from moneys provided to it by the Originator or from
moneys held in the funds and accounts created under this Agreement. The Trustee
shall be deemed conclusively to have complied with this Section if it follows
the directions of the Originator.
In the event any tax that is guaranteed by the Originator pursuant to
this Section 3.07 is refunded to the Trust or otherwise is determined not to be
payable, the Originator shall be repaid the amount of such refund or that
portion of any guarantee payment made by the Originator that is not applied to
the payment of such tax.
SECTION 3.08. Staged-Funding Contract Reserve Account.
a. Within one Business Day after any date prior to the Funding
Termination Date on which the Originator's long-term debt securities are rated
BB+ or lower by Standard & Poor's and BB+ or lower by Fitch (the "Ratings
Adjustment Date"), the Originator shall give written and telephonic notice
thereof to the Trustee and shall deposit with the Trustee an amount equal to the
unfunded portion of the Contracts that were Unfunded Contracts on the Ratings
Adjustment Date. Upon receipt of such notice the Trustee shall establish the
Staged-Funding Contract Reserve Account on behalf of the Trust, which must be an
Eligible Account, and shall deposit therein the amount received from the
Originator pursuant to the previous sentence. The Account shall be entitled
"U.S. Bank National Association, as Trustee for the benefit of holders of
Manufactured Housing Contract Senior/Subordinate Pass-Through Certificates,
Series 1999-4."
b. If the Originator fails to satisfy its obligations under Section
3.06(c)(ii) hereof the Trustee shall withdraw from the Staged-Funding Contract
Reserve Account that amount necessary to satisfy the Originator's obligations
under Section 3.06(c)(ii), and shall apply said funds in the fashion provided in
the second sentence in Section 3.06(c)(ii). Any amount so applied shall be
treated for all purposes under this Agreement as an amount paid by the
Originator to repurchase Contracts under Section 3.06(c).
c. The Staged-Funding Contract Reserve Account shall be part of the
Trust but not part of the Subsidiary REMIC or Master REMIC. The Trustee on
behalf of the Trust shall be the legal owner of the Staged-Funding Contract
Reserve Account. The Originator shall be the beneficial owner of the
Staged-Funding Contract Reserve Account, subject to the foregoing power of the
Trustee to apply amounts in the Staged-Funding Contract Reserve Account to
satisfy the obligations of the Originator under Section 3.06(c)(ii). Funds in
the Staged-Funding Contract Reserve Account shall, at the direction of the
Originator, be invested in Eligible Investments that mature no later than the
Funding Termination Date. All net income and gain from such investments shall be
distributed to the Originator on the Funding Termination Date. Any losses on
such investments shall be deposited in the Staged-Funding Contract Reserve
Account by the Originator out of its own funds immediately as realized. All
amounts earned on amounts on deposit in the Staged-Funding Contract Reserve
Account shall be taxable to the Originator.
d. Any funds remaining in the Staged-Funding Contract Reserve Account
after the Funding Termination Date shall be distributed to the Originator.
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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 Trustee
appoints the Servicer to maintain custody of the Contract Files for the benefit
of the Certificateholders and the Trustee. The Custodian shall maintain custody
of the Land-and-Home Contract Files. In the event that the Trustee is no longer
acting as Custodian of the Land-and-Home Contract Files, upon execution and
delivery of an agreement between the Trustee and the Person assuming the duties
of the Trustee hereunder as Custodian with respect to the Land-and-Home Contract
Files, the replacement Custodian shall concurrently execute an acknowledgement
of receipt of the Land-and-Home Contract Files substantially in the form of
Exhibit H hereto.
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 Trustee 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
Certificateholders and the Trustee, 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 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 Certificateholders and
the Trustee.
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 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 Certificateholders
and the Trustee for any and all
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liabilities, obligations, losses, damages, payments, costs or expenses of any
kind whatsoever which may be imposed on, incurred or asserted against the
Certificateholders and the Trustee 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
Certificateholder or the Trustee.
SECTION 4.02. Filings.
On or prior to the Closing Date, the Originator shall cause the UCC-1
financing statement referred to in Section 2.02(h) to be filed. The Trustee
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 Certificateholders' interest in the Contracts and their proceeds and
the Manufactured Homes 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 Trustee's first priority perfected security interest in each
Manufactured Home and a first lien on each Mortgaged Property 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 Originator shall not change
its name, identity or structure or relocate its chief executive office without
first giving notice thereof to the Seller, Trustee and the Servicer. In
addition, following any such change in the name, identity, structure or location
of the chief executive office of the Originator, the Originator shall given
written notice of any such change to Standard & Poor's and Fitch.
b. If any change in the Originator'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 any such financing or continuation statement or notice of
lien to become unperfected (whether immediately or with lapse of time), the
Originator, 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 Certificateholders' interest in
the Contracts and proceeds thereof and in the Manufactured Homes.
SECTION 4.04. Chief Executive Office.
During the term of this Agreement, the Originator will maintain its
chief executive office in one of the States of the United States, except
Tennessee.
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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 Certificateholders' right, title and interest in and to
the Contracts (including, without limitation, the security interests in the
Manufactured Homes granted thereby).
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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. Green Tree Financial Corporation, if it is the
Servicer, may delegate some or all of its servicing duties to a wholly owned
subsidiary of Green Tree Financial Corporation, for so long as such subsidiary
remains, directly or indirectly, a wholly owned subsidiary of Green Tree
Financial Corporation. Notwithstanding any such delegation Green Tree Financial
Corporation shall retain all of the rights and obligations of the Servicer
hereunder. The Trustee, 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. Green Tree Financial Corporation 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 (i) such degree of skill and care shall be at least as
favorable as the degree of skill and care generally applied by servicers of
manufactured housing installment sales contracts for institutional investors and
(ii) notwithstanding the foregoing, the Servicer shall not release or waive the
right to collect the unpaid balance on any Contract. The Servicer shall comply
with FHA/VA Regulations in servicing any FHA/VA Contracts (and will pay any
required premiums) so that the related insurance of the Federal Housing
Administration or partial guarantee of the Veterans Administration remains in
full force and effect, except for good faith disputes relating to FHA/VA
Regulations that will not cause the termination or reduction of such insurance
or guarantee.
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 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
Trustee and its authorized agents reasonable access during normal business hours
to the Servicer's records, which have not previously been provided to the Trust,
relating to the Contracts and will cause its personnel to assist in any
examination of such records by the Trustee or its authorized agents. The
examination referred to in this Section will be conducted in a manner which does
not
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unreasonably interfere with the Servicer's normal operations or customer or
employee relations. Without otherwise limiting the scope of the examination the
Trustee may make, the 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 to Article
VI and compliance with the standards represented to exist as to each Contract in
this Agreement.
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 Certificateholders.
c. On or before the ninth Business Day of each related Due Period, the
Servicer will provide to the 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 related Due Period.
SECTION 5.05. Certificate Account.
a. On or before the Closing Date, the Servicer shall establish the
Certificate Account on behalf of the Trust, which must be an Eligible Account.
The Certificate Account shall be entitled "U.S. Bank National Association as
Trustee for the benefit of holders of Manufactured Housing Contract Pass-Through
Certificates, Series (Green Tree Financial Corporation, Servicer)." The Servicer
shall pay into the Certificate Account 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. All amounts paid into the Certificate
Account under this Agreement shall be held in trust for the Trustee and the
Certificateholders until payment of any such amounts is authorized under this
Agreement. Only the Trustee may withdraw funds from the Certificate Account.
b. If the Servicer so directs, the institution maintaining the
Certificate Account shall, in the name of the Trustee in its capacity as such,
invest the amounts in the Certificate Account in Eligible Investments that
mature not later than one Business Day prior to the next succeeding Remittance
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 Certificate Account and distributed on such Remittance Date
pursuant to Section 8.03(a). An amount equal to any net loss on such investments
shall be deposited in the Certificate Account by the Class C Subsidiary
Certificateholder out of its own funds immediately as realized. The Servicer and
the Trustee shall in no way be liable for losses on amounts invested in
accordance with the provisions hereof. Funds in the Certificate Account not so
invested must be insured to the extent permitted by law by the Federal Deposit
Insurance Corporation. "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
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the obligations of which are backed by the full faith and credit of the
United States of America and which are noncallable;
(ii) (A) 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 Trustee or any
Affiliate of the 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 P-1 by Moody's, at least A-1 by Standard & Poor's and at least
F-1 by Fitch (if rated by Fitch) and (B) any other demand or time
deposit or certificate of deposit which is fully insured by the Federal
Deposit Insurance Corporation;
(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 Moody's and Fitch (if rated by Fitch) and are rated AAAm
or AAAm-G by Standard & Poor's and whose only investments are in
securities described in clauses (i), (ii) above and (iv) below;
(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)(A) 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 Aa2
from Moody's, 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 Certificate
Account;
(vi) commercial paper having a rating of at least A-1+ from
Standard & Poor's and at least P-1 from Moody's (if rated by Moody's)
at the time of such investment or pledge as a security; and
(vii) other obligations or securities that are acceptable to
both Fitch and Standard & Poor's as an Eligible Investment hereunder
and will not reduce the rating assigned to any Class of Certificates by
either Fitch or Standard & Poor's below the lower
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of the then-current rating or the rating assigned to such Certificates
as of the Closing Date by either Fitch or Standard & Poor's, as
evidenced in writing;
provided that any such investment must constitute a "cash flow investment"
within the meaning of the REMIC Provisions.
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.
The Trustee may trade with itself or an Affiliate in the purchase or sale of
such Eligible Investments.
c. If at any time the Trustee receives notice (from Standard & Poor's,
Fitch or the Servicer or otherwise) that the Certificate Account has ceased to
be an Eligible Account, the Trustee must, as soon as practicable but in no event
later than 5 Business Days of the Trustee's receipt of such notice, transfer the
Certificate Account and all funds and Eligible Investments therein to an
Eligible Account. Following any such transfer, the Trustee must notify each of
Standard & Poor's, Fitch and the Servicer of the location of the Certificate
Account.
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 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 Certificateholders.
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. In exercising recourse rights, the Servicer is
authorized on the Trustee's behalf to reassign the Contract or to resell the
related Manufactured Home to the person against whom recourse exists at the
price set forth in the document creating the recourse.
d. So long as Green Tree Financial Corporation is the Servicer, the
Servicer may grant to the Obligor on any Contract any rebate, refund or
adjustment out of the Certificate 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.
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e. So long as Green Tree Financial Corporation 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, no such extension may extend beyond _________, and no more than one
extension of payments under a Contract may be granted in any twelve-month
period.
f. The Servicer may 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 Manufactured Home, the Servicer shall use its
best efforts to obtain an assumption agreement in connection therewith and add
such assumption agreement to the related Contract File or Land-and-Home Contract
File.
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 would be treated as a taxable exchange
under the REMIC Provisions.
SECTION 5.07. Trustee to Cooperate.
a. Upon payment in full on any Contract, the Servicer will notify the
Trustee and Green Tree Financial Corporation (if Green Tree Financial
Corporation is not the Servicer) on the next succeeding Remittance 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 Certificate 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 real estate. 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.
b. From time to time as appropriate for servicing and foreclosure in
connection with any Land-and-Home Contract, the Trustee shall, upon written
request of a Servicing Officer and delivery to the Trustee of a receipt signed
by such Servicing Officer, cause the original Land-and-Home Contract and the
related Land-and-Home Contract File to be released to the Servicer and shall
execute such documents as the Servicer shall deem necessary to the prosecution
of any such proceedings. The Trustee shall stamp the face of each such
Land-and-Home Contract to be released to the Servicer with a notation that the
Land-and-Home Contract has been assigned to the Trustee. Upon request of a
Servicing Officer, the Trustee shall perform such other acts as reasonably
requested by the Servicer and otherwise cooperate with the Servicer in
enforcement of the Certificateholders' and Class C Certificateholders' rights
and remedies with respect to Contracts.
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c. The Servicer's receipt of a Land-and-Home Contract and/or
Land-and-Home Contract File shall obligate the Servicer to return the original
Land-and-Home Contract and the related Land-and-Home Contract File to the
Trustee when its need by the Servicer has ceased unless the Contract shall be
liquidated or repurchased or replaced as described in Section 3.06.
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 Manufactured Homes 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 with respect to each Contract one or
more Hazard Insurance Policies which provide, at a minimum, the same coverage as
a standard form fire and extended coverage insurance policy that is customary
for manufactured housing, issued by a company authorized to issue such policies
in the state in which the related Manufactured Home is located and in an amount
which is not less than the maximum insurable value of such Manufactured Home or
the principal balance due from the Obligor on the related Contract, whichever is
less; provided, however, that the amount of coverage provided by each Hazard
Insurance Policy shall be sufficient to avoid the application of any
co-insurance clause contained therein; and provided, further, that such Hazard
Insurance Policies may provide for customary deductible amounts. With respect
to: (a) a Manufactured Home securing an FHA/VA Contract, if such Manufactured
Home's location was, at the time of origination of the related FHA/VA Contract,
within a federally designated special flood hazard area, the Servicer shall also
cause such flood insurance to be maintained, which coverage shall be at least
equal to the minimum amount specified in the preceding sentence or such lesser
amount as may be available under the federal flood insurance program; and (b)
any Contract that is not an FHA/VA Contract, the Originator shall obtain (i) a
statement from the Obligor's insurance agent that the Manufactured Home was, at
the time of origination of the Contract, not in a federally designated special
flood hazard area, or (ii) evidence that, at the time of origination, flood
insurance was in effect, which coverage was at least equal to the minimum amount
specified in the preceding sentence or such lesser amount as may be available
under the federal flood insurance program. Each Hazard 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 Hazard 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.
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b. The Servicer may, in lieu of causing individual Hazard Insurance
Policies to be maintained with respect to each Manufactured Home pursuant to
subsection (a) of this Section 5.09, and shall, to the extent that the related
Contract does not require the Obligor to maintain a Hazard Insurance Policy with
respect to the related Manufactured Home, maintain one or more blanket insurance
policies covering losses on the Obligor's interest in the Contracts resulting
from the absence or insufficiency of individual Hazard Insurance Policies. 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 Certificate 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 Hazard 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 Manufactured Home that has been repossessed in
connection with a defaulted Contract, the Servicer shall either (i) maintain one
or more Hazard Insurance Policies thereon or (ii) self-insure such Manufactured
Homes and deposit into the Certificate Account from its own funds any losses
caused by damage to such Manufactured Home that would have been covered by a
Hazard 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 manufactured housing installment sales contracts and installment
loan 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 Manufactured Home
or the foreclosure upon any Mortgaged Property 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 Manufactured Home or Mortgaged Property (which may include retitling or
filing a recorded assignment of the Mortgage) 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; provided that if the
Servicer has actual knowledge that a Mortgaged Property is affected by hazardous
waste, then the Servicer shall not cause the Company to acquire title to such
Mortgaged Property in a foreclosure or similar proceeding. For purposes of the
proviso in the preceding sentence, the Servicer shall not be deemed to have
actual knowledge that a Mortgaged Property is affected by hazardous waste unless
it shall have received written notice that hazardous waste is present on such
property and such written notice has been made a part of the Land-and-Home
Contract File with respect to the related Contract. In
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connection with such foreclosure 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 Mortgaged
Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed
or certificate of sale shall be issued to the Trustee, as Trustee, or, at its
election, to its nominee on behalf of the Trustee, as Trustee.
SECTION 5.11. Commingling of Funds.
So long as Green Tree Financial Corporation is Servicer, any
collections in respect of Contracts collected by Green Tree Financial
Corporation shall, prior to the deposit thereof in the Certificate Account, be
held in bank accounts entitled substantially as follows: "[name of depository],
as agent for U.S. Bank National Association as Trustee, 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 Green Tree
Financial Corporation is no longer the Servicer and the new Servicer is unable
to foreclose upon a Manufactured Home because the title document for such
Manufactured Home does not show such Servicer or the Trustee as the holder of
the first priority security interest in the Manufactured Home, such Servicer
shall take all necessary steps to apply for a replacement title document showing
it or the Trustee as the secured party.
b. In order to facilitate the Servicer's actions, as described in
subsection (a) of this section, Green Tree Financial Corporation will provide
the Servicer with any necessary power of attorney permitting it to retitle the
Manufactured Home.
c. If the Servicer is still unable to retitle the Manufactured Home,
Green Tree Financial Corporation will take all actions necessary to act with the
Servicer to foreclose upon the Manufactured Home, including, as appropriate, the
filing of any UCC-1 or UCC-2 financing statements necessary to perfect the
security interest in any Manufactured Home that constitutes a fixture under the
laws of the jurisdiction in which it is located and all actions necessary to
perfect the security interest in any Manufactured Home that is considered or
classified as part of the real estate on which it is located under the laws of
the jurisdiction in which it is located.
d. If the aggregate Cut-off Date Principal Balances of all
Land-and-Home Contracts equals or exceeds 10% of the Cut-off Date Pool Principal
Balance, the Originator shall (i) within 60 days of the Post-Funding Remittance
Date (or the Closing Date if the Pre-Funded Amount on the Closing Date is less
than $10,000) submit to the appropriate recording offices the assignments to the
Trustee on behalf of the Trust of the number of Mortgages securing Land-and-Home
Contracts needed to reduce the aggregate Cut-off Date Principal Balances of all
Land-and-Home Contracts with respect to which such assignments are not so
recorded to less than 10% of the Cut-off Date Pool Principal Balance or (ii) on
the Post-Funding Remittance Date (or the Closing Date if the Pre-Funded Amount
on the Closing Date is less than $10,000), deliver an Opinion of Counsel
satisfactory to the Trustee to the effect that the Trustee holds a perfected
first priority lien in the real estate securing the Land-and-Home Contracts,
with the exception of real
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estate located in such states as may be identified in such Opinion of Counsel,
provided that the Land-and-Home Contracts secured by real estate located in such
identified states does not exceed 10% of the Cut-off Date Pool Principal Balance
as of the Post-Funding Remittance Date, or Closing Date, as applicable.
If at any time during the term of this Agreement, the Trustee receives
written notice from the Originator or the Servicer that the Originator does not
have a long-term senior debt rating from Moody's of Baa3 or higher, from
Standard & Poor's of BBB- or higher and from Fitch of BBB or higher, or if the
Trustee otherwise becomes aware of the same, the Trustee, at the Originator's
expense, shall file promptly in the appropriate recording offices the
assignments to the Trustee on behalf of the Trust of each Mortgage securing a
Land-and-Home Contract, unless the Originator obtains confirmation from both
Standard & Poor's and Fitch that failure to file such assignments will not
result in Standard & Poor's or Fitch (as applicable) lowering, withdrawing or
qualifying its rating of any Class of Certificates.
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ARTICLE VI
REPORTS AND TAX MATTERS
-----------------------
SECTION 6.01. Monthly Reports.
a. No later than 1:00 p.m. on each Determination Date, the Servicer
shall deliver to the 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 N hereto.
b. If the applicable Monthly Report indicates that there is a Class M-1
Interest Deficiency Amount, a Class M-2 Interest Deficiency Amount and/or a
Class B-1 Interest Deficiency Amount, the Servicer shall promptly notify the
Trustee, by telephone, of the aggregate amount of such Class M-1 Interest
Deficiency Amount, Class M-2 Interest Deficiency Amount and Class B-1 Interest
Deficiency Amount. On the day one Business Day prior to the related Remittance
Date, the Trustee shall determine the total amount of funds in the Certificate
Account available to pay such deficiency in accordance with Section 8.03(b) and
shall promptly notify the Servicer of such amount. If the total amount of funds
in the Certificate Account is not sufficient to pay the deficiency, the Trustee
shall promptly notify the Servicer, and shall reflect such deficiency in the
reports delivered to Certificateholders pursuant to Section 6.05.
SECTION 6.02. Certificate of Servicing Officer.
Each Monthly Report pursuant to Section 6.01 shall be accompanied by a
certificate of a Servicing Officer substantially in the form of Exhibit I,
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.
SECTION 6.03. Other Data.
In addition, the Originator and (if different from the Originator) the
Servicer shall, on request of the Trustee, Standard & Poor's, Fitch or a
Certificateholder, furnish the Trustee and/or Standard & Poor's, Fitch or a
Certificateholder such underlying data as may be reasonably requested.
SECTION 6.04. Annual Report of Accountants.
On or before May 1 of each year, commencing May 1, 2000, 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 issue to the
Servicer a report that such firm has examined selected documents, records and
management's assertions relating to loans serviced by the Servicer and stating
that, on the basis of such examination, such servicing has been conducted in
compliance with the minimum servicing standards identified in the Mortgage
Bankers Association of America's Uniform Single Attestation Program for Mortgage
Bankers, or any
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successor uniform program, except for such significant exceptions or errors in
records that, in the opinion of such firm, generally accepted attestation
standards requires it to report.
SECTION 6.05. Statements to Certificateholders.
a. The Servicer shall prepare and furnish to the Trustee the statements
specified below relating to the Class A Certificates, Class M-1 Certificates,
Class M-2 Certificates, Class B-1 Certificates, Class B-2 Certificates and Class
B-3I Certificates on or before the third Business Day next preceding each
Remittance Date. The Trustee and the Servicer shall inform any
Certificateholder, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Lehman
Brothers Inc. and Banc of America Securities LLC inquiring by telephone of the
information contained in the most recent Monthly Report.
b. Concurrently with each distribution charged to the Certificate
Account the Trustee, so long as it has received the Monthly Report from the
Servicer, shall forward or cause to be forwarded by mail to each Holder of a
Class A Certificate and (if the Originator is not the Servicer) the Originator a
statement setting forth the following:
(i) the amount of such distribution to Holders of each Class of
Class A Certificates allocable to interest, separately
identifying any Unpaid Class A Interest Shortfall included in
such distribution and any remaining Unpaid Class A Interest
Shortfall after giving effect to such distribution;
(ii) the amount of such distribution to Holders of each Class of
Class A Certificates allocable to principal, separately
identifying the aggregate amount of any Principal Prepayments
included therein, and any remaining Unpaid Class A Principal
Shortfall after giving effect to such distribution;
(iii) the amount, if any, by which the Class A Formula Distribution
Amount for such Remittance Date exceeds the Class A
Distribution Amount for such Remittance Date;
(iv) the Class Principal Balance for each Class of Class A
Certificates, after giving effect to the distribution of
principal on such Remittance Date;
(v) the Class A Percentage for such Remittance Date and the
following Remittance Date;
(vi) the Pool Scheduled Principal Balance of the Contracts for such
Remittance Date;
(vii) the Pool Factor;
(viii) the number and aggregate principal balances of Contracts
delinquent (a) 30-59 days and (b) 60 or more days;
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(ix) the number of Manufactured Homes that were repossessed during
the month ending immediately prior to such Remittance Date;
(x) the number of Manufactured Homes that were repossessed but
remain in inventory as of the last day of the related Due
Period ending immediately prior to such Remittance Date;
(xi) the Class M-1 Distribution Test (as set forth in Exhibit N
hereto);
(xii) the Class M-2 Distribution Test (as set forth in Exhibit N
hereto);
(xiii) the Class B Distribution Test (as set forth in Exhibit N
hereto);
(xiv) the Weighted Average Contract Rate of all outstanding
Contracts;
(xv) the Class M-1 Interest Deficiency Amount, if any, for such
Remittance Date;
(xvi) the Class M-2 Interest Deficiency Amount, if any, for such
Remittance Date; and
(xvii) the Class B-1 Interest Deficiency Amount, if any, for such
Remittance Date.
In the case of information furnished pursuant to clauses (i) through
(iv) above, the amounts shall be expressed as a dollar amount per Class A
Certificate with a 1% Percentage Interest or per $1,000 denomination of Class A
Certificate.
Within a reasonable period of time after the end of each calendar year,
the Trustee shall furnish or cause to be furnished to each Person who at any
time during the calendar year was the Holder of a Class A Certificate a
statement containing the information with respect to interest accrued and
principal paid on its Certificates during such calendar year. Such obligation of
the Trustee shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Trustee pursuant
to any requirements of the Code as from time to time in force.
c. On each Remittance Date, the Trustee shall forward or cause to be
forwarded by mail to each Holder of a Class M-1 Certificate a copy of the
Monthly Report forwarded to the Holders of Class A Certificates on such
Remittance Date. The Servicer shall also furnish to the Trustee, which shall
forward such report to the Class M-1 Certificateholders as part of the Monthly
Report, the following information:
(i) the amount of such distribution to Holders of Class M-1
Certificates allocable to interest, separately identifying any
Unpaid Class M-1 Interest Shortfall included in such
distribution, any remaining Unpaid Class M-1 Interest
Shortfall after giving effect to such distribution, any Class
M-1 Liquidation Loss Interest Amount included in such
distribution and any remaining unpaid Class M-1 Liquidation
Loss Interest Shortfall after giving effect to such
distribution;
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(ii) the amount of such distribution to Holders of Class M-1
Certificates allocable to principal, separately identifying
the aggregate amount of any Principal Prepayments included
therein and any remaining Unpaid Class M-1 Principal Shortfall
after giving effect to such distribution;
(iii) the amount, if any, by which the Class M-1 Formula
Distribution Amount for such Remittance Date exceeds the Class
M-1 Distribution Amount for such Remittance Date;
(iv) the Class M-1 Principal Balance and the Class M-1 Adjusted
Principal Balance (if different) after giving effect to the
distribution of principal on such Remittance Date;
(v) the Class M-1 Percentage for such Remittance Date and the
following Remittance Date; and
(vi) the information described above in Section 6.05(b)(vi) through
(xvii).
In the case of the information in clauses (i) through (iv) above, the
amounts shall be expressed as a dollar amount per Class M-1 Certificate with a
1% Percentage Interest or per $1,000 denomination of Class M-1 Certificate.
Within a reasonable period of time after the end of each calendar year,
the Trustee shall furnish or cause to be furnished to each Person who at any
time during the calendar year was the Holder of a Class M-1 Certificate a
statement containing the applicable distribution information provided pursuant
to this Section aggregated for such calendar year or applicable portion thereof
during which such Person was the Holder of a Class M-1 Certificate. Such
obligation of the Trustee shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Trustee
pursuant to any requirements of the Code as from time to time enforced.
d. On each Remittance Date, the Trustee shall forward or cause to be
forwarded by mail to each Holder of a Class M-2 Certificate a copy of the
Monthly Report forwarded to the Holders of Class A Certificates and Class M-1
Certificates on such Remittance Date. The Servicer shall also furnish to the
Trustee, which shall forward such report to the Class M-2 Certificateholders as
part of the Monthly Report, the following information:
(i) the amount of such distribution to Holders of Class M-2
Certificates allocable to interest, separately identifying any
Unpaid Class M-2 Interest Shortfall included in such
distribution, any remaining Unpaid Class M-2 Interest
Shortfall after giving effect to such distribution, any Class
M-2 Liquidation Loss Interest Amount included in such
distribution and any remaining unpaid Class M-2 Liquidation
Loss Interest Shortfall after giving effect to such
distribution;
(ii) the amount of such distribution to Holders of Class M-2
Certificates allocable to principal, separately identifying
the aggregate amount of any Principal
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Prepayments included therein and any remaining Unpaid Class
M-2 Principal Shortfall after giving effect to such
distribution;
(iii) the amount, if any, by which the Class M-2 Formula
Distribution Amount for such Remittance Date exceeds the Class
M-2 Distribution Amount for such Remittance Date;
(iv) the Class M-2 Principal Balance and the Class M-2 Adjusted
Principal Balance (if different) after giving effect to the
distribution of principal on such Remittance Date;
(v) the Class M-2 Percentage for such Remittance Date and the
following Remittance Date; and
(vi) the information described above in Section 6.05(b)(vi) through
(xvii).
In the case of the information in clauses (i) through (iv) above, the
amounts shall be expressed as a dollar amount per Class M-2 Certificate with a
1% Percentage Interest or per $1,000 denomination of Class M-2 Certificate.
Within a reasonable period of time after the end of each calendar year,
the Trustee shall furnish or cause to be furnished to each Person who at any
time during the calendar year was the Holder of a Class M-2 Certificate a
statement containing the applicable distribution information provided pursuant
to this Section aggregated for such calendar year or applicable portion thereof
during which such Person was the Holder of a Class M-2 Certificate. Such
obligation of the Trustee shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Trustee
pursuant to any requirements of the Code as from time to time enforced.
e. On each Remittance Date, the Trustee shall forward or cause to be
forwarded by mail to each Holder of a Class B-1 Certificate a copy of the
Monthly Report forwarded to the Holders of Class A, Class M-1 and Class M-2
Certificates on such Remittance Date. The Servicer shall also furnish to the
Trustee, which shall forward such report to the Class B-1 Certificateholders as
part of the Monthly Report, the following information:
(i) the amount of such distribution to Holders of Class B-1
Certificates allocable to interest, separately identifying any
Unpaid Class B-1 Interest Shortfall included in such
distribution, any remaining Unpaid Class B-1 Interest
Shortfall after giving effect to such distribution, any Class
B-1 Liquidation Loss Interest Amount included in such
distribution and any remaining Unpaid Class B-1 Liquidation
Loss Interest Shortfall after giving effect to such
distribution;
(ii) the amount of such distribution to Holders of Class B-1
Certificates allocable to principal, separately identifying
the aggregate amount of any Principal Prepayments included
therein, and any remaining Unpaid Class B-1 Principal
Shortfall after giving effect to such distribution;
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(iii) the amount, if any, by which the Class B-1 Formula
Distribution Amount for such Remittance Date exceeds the Class
B-1 Distribution Amount for such Remittance Date;
(iv) the Class B-1 Principal Balance and the Class B-1 Adjusted
Principal Balance (if different) after giving effect to the
distribution of principal on such Remittance Date;
(v) the Class B Percentage for such Remittance Date and the
following Remittance Date; and
(vi) the information described above in Section 6.05(b)(vi) through
(xvii).
In the case of the information in clauses (i) through (iv) above, the
amounts shall be expressed as a dollar amount per Class B-1 Certificate with a
1% Percentage Interest or per $1,000 denomination of Class B-1 Certificate.
Within a reasonable period of time after the end of each calendar year,
the Trustee shall furnish or cause to be furnished to each Person who at any
time during the calendar year was the Holder of a Class B-1 Certificate a
statement containing the applicable distribution information provided pursuant
to this Section aggregated for such calendar year or applicable portion thereof
during which such Person was the Holder of a Class B-1 Certificate. Such
obligation of the Trustee shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Trustee
pursuant to any requirements of the Code as from time to time enforced.
f. On each Remittance Date, the Trustee shall forward or cause to be
forwarded by mail to each Holder of a Class B-2 Certificate a copy of the
Monthly Report forwarded to the Holders of Class A, Class M-1, Class M-2 and
Class B-1 Certificates on such Remittance Date. The Servicer shall also furnish
to the Trustee, which shall forward such report to the Class B-2
Certificateholders as part of the Monthly Report, the following information:
(i) the amount of such distribution to Holders of Class B-2
Certificates allocable to interest, separately identifying any
Unpaid Class B-2 Interest Shortfall included in such
distribution and any remaining Unpaid Class B-2 Interest
Shortfall after giving effect to such distribution;
(ii) the amount of such distribution to Holders of Class B-2
Certificates allocable to principal, separately identifying
the aggregate amount of any Principal Prepayments included
therein, and any Unpaid Class B-2 Principal Shortfall after
giving effect to such distribution;
(iii) the amount, if any, by which the Class B-2 Formula
Distribution Amount for such Remittance Date exceeds the
Remaining Amount Available for such Remittance Date;
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(iv) the Class B-2 Principal Balance after giving effect to the
distribution of principal on such Remittance Date;
(v) the Class B Percentage for such Remittance Date and the
following Remittance Date;
(vi) the information described above in Section 6.05(b)(vi) through
(xvii);
(vii) the Class B-2 Liquidation Loss Amount, if any, for such
Remittance Date;
(viii) the Guarantee Payment, if any, for such Remittance Date; and
(ix) the Weighted Average Contract Rate of all outstanding
Contracts.
In the case of the information in clauses (i) through (iv) above, the
amounts shall be expressed as a dollar amount per Class B-2 Certificate with a
1% Percentage Interest or per $1,000 denomination of Class B-2 Certificate.
Within a reasonable period of time after the end of each calendar year,
the Trustee shall furnish or cause to be furnished to each Person who at any
time during the calendar year was the Holder of a Class B-2 Certificate a
statement containing the applicable distribution information provided pursuant
to this Section aggregated for such calendar year or applicable portion thereof
during which such Person was the Holder of a Class B-2 Certificate. Such
obligation of the Trustee shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Trustee
pursuant to any requirements of the Code as from time to time enforced.
g. On each Remittance Date, the Trustee shall forward or cause to be
forwarded by mail to each Holder of a Class B-3I Certificate a copy of the
Monthly Report forwarded to the Holders of Class A, Class M-1, Class M-2, Class
B-1 and Class B-2 Certificates on such Remittance Date. The Servicer shall also
furnish to the Trustee, which shall forward such report to the Class B-3I
Certificateholders as part of the Monthly Report, the following information:
(i) the Class B-3I Formula Distribution Amount for such Remittance
Date, including any Unpaid Class B-3I Shortfall immediately
prior to such Remittance Date;
(ii) the Class B-3I Distribution Amount for such Remittance Date;
and
(iii) the Unpaid Class B-3I Shortfall immediately following such
Distribution Date.
h. Copies of all reports provided to the Trustee for the
Certificateholders shall also be provided to Standard & Poor's and Fitch and to
the Class C Certificateholders. In addition, Certificate Owners may receive
copies of any reports provided to the Trustee for the Certificateholders, upon
written request together with a certification that they are Certificate Owners
and payment of reproduction and postage expenses associated with the
distribution of such reports, from the Trustee at the Corporate Trust Office.
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SECTION 6.06. Payment of Taxes.
The Servicer shall be responsible for and agrees to prepare, make and
file all federal, state, local or other tax returns, information statements and
other returns and documents of every kind and nature whatsoever required to be
made or filed by or on behalf of the Subsidiary REMIC or Master REMIC pursuant
to the Code and other applicable tax laws and regulations. Each such return,
statement and document shall, to the extent required by the Code or other
applicable law and at the request of the Servicer, be signed on behalf of the
Subsidiary REMIC or Master REMIC by the Trustee. The Trustee shall have no
responsibility whatsoever for the accuracy or completeness of any such return,
statement or document. The Servicer agrees to indemnify the Trustee and hold it
harmless for, from, against and in respect to any and all liability, loss,
damage and expense which may be incurred by the Trustee based upon or as a
result of the Trustee's execution of any and all such tax returns, statements
and documents. The Servicer, if and for so long as it is a Class C
Certificateholder, shall be designated the "tax matters person" on behalf of the
Subsidiary REMIC and the Master REMIC, respectively, in the same manner as a
partnership may designate a "tax matters partner," as such term is defined in
Section 6231(a)(7) of the Code. To the extent permitted by the REMIC Provisions,
any subsequent holder of a Class C Certificate, by acceptance thereof,
irrevocably designates and appoints the Servicer as its agent to perform the
responsibilities of the "tax matters person" on behalf of the Subsidiary REMIC
and the Master REMIC, respectively, if, and during such time as, the Servicer is
not the holder of a Class C Certificate. The Servicer may, at its expense,
retain such outside assistance as it deems necessary in the performance of its
obligations under this paragraph.
Each of the Holders of the Certificates, by acceptance thereof, agrees
to file tax returns consistent with and in accordance with any elections,
decisions or other reports made or filed with regard to federal, state or local
taxes on behalf of the Subsidiary REMIC or the Master REMIC. The Company, as
agent for the tax matters person, shall represent the Subsidiary REMIC or the
Master REMIC in connection with all examinations of the Subsidiary REMIC's or
the Master REMIC's affairs by tax authorities, including resulting
administrative and judicial proceedings. Each of the holders of the
Certificates, by acceptance thereof, agrees to cooperate with the Company in
such matters and to do or refrain from doing any or all things reasonably
required by the Company to conduct such proceedings, provided that no such
action shall be required by the Company of any Certificateholder that would
entail unnecessary or unreasonable expenses for such Certificateholder in the
performance of such action.
The Class C Subsidiary Certificateholders and the Class C Master
Certificateholders shall pay, on behalf of the Subsidiary REMIC or the Master
REMIC, respectively, any foreign, federal, state or local income, property,
excise, sales, receipts or any other similar or related taxes or charges which
may be imposed upon the Subsidiary REMIC or the Master REMIC as a REMIC or
otherwise and shall, to the extent provided in Section 10.06, be entitled to be
reimbursed out of the Certificate Account or, if such tax or charge results from
a failure by the Trustee, the Originator or any Servicer to comply with the
provisions of Section 2.04 or 3.07, the Trustee, the Originator or such
Servicer, as the case may be, shall indemnify the Class C Certificateholders for
the payment of any such tax or charge. The Trustee shall be entitled to withhold
from
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amounts otherwise distributable to the Class C Certificateholders any taxes or
charges payable by the Class C Certificateholders hereunder.
In the event a Class C Certificate is transferred to a "disqualified
organization," within the meaning of Section 860E(e)(5) of the Code, pursuant to
Section 860D(a)(6)(B) of the Code the Originator shall provide to the Internal
Revenue Service and the persons specified in Sections 860E(e)(3) and (6) of the
Code all information necessary for the application of Section 860E(e) and any
other applicable provision of the Code with respect to the transfer of such
Class C Certificate to such a disqualified organization including, without
limitation, a computation showing the present value of the total anticipated
excess inclusions with respect to such Class C Certificate for periods after the
transfer as defined in the REMIC Provisions. In addition, to the extent required
by the REMIC Provisions, the Originator shall, upon the written request of
persons designated in Section 860E(e)(3) of the Code, furnish to such requesting
party and the Internal Revenue Service information sufficient to compute the
present value of anticipated excess inclusions within 60 days of the receipt of
such written request.
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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
continues 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 Trustee or to the Servicer and the Trustee by Holders of Class A
Certificates, Class M-1 Certificates, Class M-2 Certificates and Class B
Certificates evidencing, as to any such Class, Percentage Interests aggregating
not less than 25%;
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.
SECTION 7.02. Transfer.
If an Event of Termination has occurred and is continuing, either the
Trustee or Certificateholders with aggregate Percentage Interests representing
25% or more of the Trust, by notice in writing to the Servicer (and to the
Trustee if given by the Certificateholders) may
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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 12.01, all authority and power of the Servicer under this
Agreement, whether with respect to the Contracts, the Contract Files, the
Land-and-Home Contract Files or otherwise (except with respect to the
Certificate Account, the transfer of which shall be governed by Section 7.06),
shall pass to and be vested in the Trustee pursuant to and under this Section
7.02; and, without limitation, the 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 Trustee or a successor servicer the sole
lienholder or legal title holder of record of each Manufactured Home) and to do
any and all acts or things necessary or appropriate to effect the purposes of
such notice of termination. Each of the Originator and the Servicer agrees to
cooperate with the Trustee in effecting the termination of the responsibilities
and rights of the Servicer hereunder, including, without limitation, the
transfer to the 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 Certificate 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 Trustee or a successor
servicer the sole lienholder or legal title holder of record in respect of each
Manufactured Home. The Servicer shall be entitled to receive any other amounts
which are payable to the Servicer under the 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, Contract Files and Land-and-Home Contract Files in the Servicer's
possession.
SECTION 7.03. 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 12.01, the 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 Trustee will not assume any obligations of the
Originator pursuant to Section 3.06 and (ii) the 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 Trustee
shall be entitled to receive reasonable compensation out of the Monthly
Servicing Fee. Notwithstanding the above, the 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. Pending
appointment of a successor to the Servicer hereunder, unless the Trustee is
prohibited by law from so acting, the Trustee shall act in such capacity as
hereinabove provided. In connection with such appointment and assumption, the
Trustee may make such arrangements for the
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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 Certificateholders, exceed the
Monthly Servicing Fee. The 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 Certificateholders.
a. Promptly following the occurrence of any Event of Termination, the
Servicer shall give written notice thereof to the Trustee, Standard & Poor's,
Fitch and the Certificateholders at their respective addresses appearing on the
Certificate Register.
b. Within ten days following any termination or appointment of a
successor to the Servicer pursuant to this Article VII, the Trustee shall give
written notice thereof to Standard & Poor's, Fitch and the Certificateholders at
their respective addresses appearing on the Certificate Register.
c. The Trustee 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 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 Originator pursuant to Article X and Sections 3.06, 11.06 and 11.11(f))
other than those relating to the management, administration, servicing or
collection of the Contracts.
SECTION 7.06. Transfer of Certificate Account.
Notwithstanding the provisions of Section 7.02, if the Certificate
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 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 Certificate Account to
such new account, which shall thereafter be deemed the Certificate Account for
the purposes hereof.
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ARTICLE VIII
PAYMENTS
--------
SECTION 8.01. Monthly Payments.
a. Subject to the terms of this Article VIII, each Holder of a
Certificate as of a Record Date shall be paid on the next succeeding Remittance
Date by check mailed on such Remittance Date to such Certificateholder at the
address for such Certificateholder appearing on the Certificate Register (or, if
such Certificateholder holds a Class of Class A Certificates, Class M
Certificates, or Class B Certificates with an aggregate Percentage Interest of
at least 5% or a Class B-3I, Class C Subsidiary or Class C Master
Certificateholder holds Class B-3I, Class C Subsidiary or Class C Master
Certificates with an aggregate Percentage Interest of at least 20% and so
requests, by wire transfer pursuant to instructions delivered to the Trustee at
least ten days prior to such Remittance Date), the sum equal to such
Certificateholder's Percentage Interest of the Class A Distribution Amount, the
Class M-1 Distribution Amount, the Class M-2 Distribution Amount, the Class B-1
Distribution Amount, the Class B-2 Distribution Amount, any Guarantee Payment,
the Class B-3I Distribution Amount, the Class C Subsidiary Distribution Amount
or the Class C Master Distribution Amount, as applicable. Final payment of any
Certificate shall be made only upon presentation of such Certificate at the
office or agency of the Paying Agent.
b. Each distribution with respect to a Book-Entry Certificate shall be
paid to the Depository, which shall credit the amount of such distribution to
the accounts of its Depository Participants in accordance with its normal
procedures. Each Depository Participant shall be responsible for disbursing such
distribution to the Certificate Owners that it represents and to each indirect
participating brokerage firm (a "brokerage firm" or "indirect participating
firm") for which it acts as agent. Each brokerage firm shall be responsible for
disbursing funds to the Certificate Owners that it represents. All such credits
and disbursements with respect to a Book-Entry Certificate are to be made by the
Depository and the Depository Participants in accordance with the provisions of
the Book Entry Certificates. Neither the Trustee, the Certificate Registrar, the
Originator, the Seller nor the Servicer shall have any responsibility therefor
except as otherwise provided by applicable law. To the extent applicable and not
contrary to the rules of the Depository, the Trustee shall comply with the
provisions of the forms of the Class A, Class M, and Class B Certificates as set
forth in Exhibits A, B and C hereto.
c. The Trustee shall either act as the paying agent or shall appoint an
institution meeting the eligibility requirements set forth in Section 11.06 to
be the paying agent (in either case, the "Paying Agent") and cause it to make
the payments to the Certificateholders required hereunder. The Trustee's
Corporate Trust Office at 180 East Fifth Street, St. Paul, Minnesota 55101,
Attention: Laurie A. Howard, shall initially act as Paying Agent. The Trustee
shall require the Paying Agent (if other than the Trustee) to agree in writing
that all amounts held by the Paying Agent for payment hereunder will be held in
trust for the benefit of the Certificateholders and that it will notify the
Trustee of any failure by the Servicer to make funds available to the Paying
Agent for the payment of amounts due on the Certificates.
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SECTION 8.02. Permitted Withdrawals from the Certificate Account.
The Trustee may, from time to time as provided herein, make withdrawals
from the Certificate Account of amounts deposited in said account pursuant to
Section 5.05 that are attributable to the Contracts for the following purposes:
a. to make payments in the amounts and in the manner provided
for in Section 8.03;
b. to pay to the Company with respect to each Contract or
property acquired in respect thereof that has been repurchased or
replaced pursuant to Section 3.06, all amounts received thereon and not
required to be distributed to 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 Certificate 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 clause (b), the
Company's entitlement thereto is limited to collections or other recoveries on
the related Contract, the Servicer shall keep and maintain separate accounting,
on a Contract by Contract basis, for the purpose of justifying any withdrawal
from the Certificate Account pursuant to such clause.
SECTION 8.03. Payments.
a. On each Remittance Date the Trustee shall withdraw from the
Certificate Account the Amount Available (as determined on the immediately
preceding Determination Date), plus on the Post-Funding Remittance Date any
Pre-Funded Amount, and on the Remittance Dates in _____________ and
_______________ any amount withdrawn from the Capitalized Interest Account and
deposited in the Certificate Account, and apply such funds to make payment in
the following order of priority, subject to Section 8.03(d):
1. if neither the Green Tree Financial Corporation nor a
wholly owned subsidiary of the Green Tree Financial Corporation is the
Servicer, to pay the Monthly Servicing Fee and any other compensation
owed to the Servicer pursuant to Section 7.03;
2. after payment of the amount specified in clause (1) above,
to the Class A Certificateholders as follows:
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(i) the amount in clause (a)(i) of the definition of
Class A Formula Distribution Amount to the Class A-1
Certificateholders; the amount in clause (a)(ii) of
the definition of Class A Formula Distribution Amount
to the Class A-2 Certificateholders; the amount in
clause (a)(iii) of the definition of Class A Formula
Distribution Amount to the Class A-3
Certificateholders; the amount in clause (a)(iv) of
the definition of Class A Formula Distribution Amount
to the Class A-4 Certificateholders; the amount in
clause (a)(v) of the definition of Class A Formula
Distribution Amount to the Class A-5
Certificateholders; the amount in clause (a)(vi) of
the definition of Class A Formula Distribution Amount
to the Class A-6 Certificateholders; the amount in
clause (a)(vii) of the definition of Class A Formula
Distribution Amount to the Class A-7
Certificateholders; the amount in clause (a)(viii) of
the definition of Class A Formula Principal
Distribution Amount to the Class A-8
Certificateholders, and the amount in clause (a)(ix)
of the definition of Class A Formula Principal
Distribution Amount to the Class A-9
Certificateholders; or, if the available amount is
less than the sum of the amounts specified in this
clause (i), pro rata to each Class of Class A
Certificates based on the amount of interest payable
pursuant to this clause;
(ii) the aggregate Unpaid Class A Interest Shortfall pro
rata to each Class of Class A Certificates based on
the Unpaid Class A Interest Shortfall of each such
Class;
3. after payment of the amounts specified in clauses (1) - (2)
above, to the Class M-1 Certificateholders as follows:
(i) the amount in clause (a) of the definition of Class
M-1 Formula Distribution Amount;
(ii) any Unpaid Class M-1 Interest Shortfall;
4. after payment of the amounts specified in clauses (1) - (3)
above, to the Class M-2 Certificateholders as follows:
(i) the amount in clause (a) of the definition of Class
M-2 Formula Distribution Amount;
(ii) any Unpaid Class M-2 Interest Shortfall;
5. after payment of the amounts specified in clauses (1) - (4)
above, to the Class B-1 Certificateholders as follows:
(i) the amount in clause (a) of the definition of Class
B-1 Formula Distribution Amount;
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(ii) any Unpaid Class B-1 Interest Shortfall;
6. after payment of the amounts specified in clauses (1) - (5)
above, to the Class A Certificateholders as follows:
(i) if there is a Class A Principal Deficiency Amount as
of such Remittance Date, the remaining Amount
Available, pro rata to each Class of Class A
Certificates based on the related Class Principal
Balance (but in no event shall such amount exceed the
related Class Principal Balance);
(ii) the Unpaid Class A Principal Shortfall, or, if the
remaining Amount Available is less than such amount,
such remaining Amount Available to each Class of
Class A Certificates then entitled to payment
pursuant to clause (iii) below;
(a) if such Remittance Date is on or prior to
the Class A-1 Cross-Over Date, to the Class
A-1 Certificateholders, but in no event more
than the Class A-1 Principal Balance;
(b) if such Remittance Date is on or after the
Class A-1 Cross-Over Date but not after the
Class A-2 Cross-Over Date, to the Class A-2
Certificateholders, but in no event more
than the Class A-2 Principal Balance;
(c) if such Remittance Date is on or after the
Class A-2 Cross-Over Date but not after the
Class A-3 Cross-Over Date, to the Class A-3
Certificateholders, but in no event more
than the Class A-3 Principal Balance;
(d) if such Remittance Date is on or after the
Class A-3 Cross-Over Date but not after the
Class A-4 Cross-Over Date, to the Class A-4
Certificateholders, but in no event more
than the Class A-4 Principal Balance;
(e) if such Remittance Date is on or after the
Class A-4 Cross-Over Date but not after the
Class A-5 Cross-Over Date, to the Class A-5
Certificateholders, but in no event more
than the Class A-5 Principal Balance;
(f) if such Remittance Date is on or after the
Class A-5 Cross-Over Date but not after the
Class A-6 Cross-Over Date, to the Class A-6
Certificateholders, but in no event more
than the Class A-6 Principal Balance;
(g) if such Remittance Date is on or after the
Class A-6 Cross-Over Date but not after the
Class A-7 Cross-Over Date, to the Class A-7
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Certificateholders, but in no event more
than the Class A-7 Principal Balance;
(h) if such Remittance Date is on or after the
Class A-7 Cross-Over Date but not after the
Class A-8 Cross-Over Date, to the Class A-8
Certificateholders, but in no event more
than the Class A-8 Principal Balance;
(i) if such Remittance Date is on or after the
Class A-8 Cross-Over Date but not after the
Class A-9 Cross-Over Date, to the Class A-9
Certificateholders, but in no event more
than the Class A-9 Principal Balance;
(iii) if such Remittance Date is on or prior to the later
of the Class A-8 Cross-Over Date and the Class A-9
Cross-Over Date, the Class A Percentage of the
Formula Principal Distribution Amount of which
amount, % shall be distributed to the Class A-9
Certificateholders, but in no event more than the
Class A-9 Principal Balance, and
% shall be distributed as follows:
(a) if such Remittance Date is on or after the
Class A-1 Cross-Over Date but not after the
Class A-2 Cross-Over Date, to the Class A-2
Certificateholders, but in no event more
than the Class A-2 Principal Balance;
(b) if such Remittance Date is on or after the
Class A-2 Cross-Over Date but not after the
Class A-3 Cross-Over Date, to the Class A-3
Certificateholders, but in no event more
than the Class A-3 Principal Balance;
(c) if such Remittance Date is on or after the
Class A-3 Cross-Over Date but not after the
Class A-4 Cross-Over Date, to the Class A-4
Certificateholders, but in no event more
than the Class A-4 Principal Balance;
(d) if such Remittance Date is on or after the
Class A-4 Cross-Over Date but not after the
Class A-5 Cross-Over Date, to the Class A-5
Certificateholders, but in no event more
than the Class A-5 Principal Balance;
(e) if such Remittance Date is on or after the
Class A-5 Cross-Over Date but not after the
Class A-6 Cross-Over Date, to the Class A-6
Certificateholders, but in no event more
than the Class A-6 Principal Balance;
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(f) if such Remittance Date is on or after the
Class A-6 Cross-Over Date but not after the
Class A-7 Cross-Over Date, to the Class A-7
Certificateholders, but in no event more
than the Class A-7 Principal Balance;
(g) if such Remittance Date is on or after the
Class A-7 Cross-Over Date but not after the
Class A-8 Cross-Over Date, to the Class A-8
Certificateholders, but in no event more
than the Class A-8 Principal Balance;
7. after payment of the amounts specified in clauses (1) - (6)
above, to the Class M-1 Certificateholders as follows:
(i) any Unpaid Class M-1 Principal Shortfall;
(ii) the Class M-1 Percentage of the Formula Principal
Distribution Amount to the Class M-1
Certificateholders (plus, if such Remittance Date is
on the Class A-7 Cross-Over Date, the amount by which
the Class A Percentage of the Formula Principal
Distribution Amount exceeds the Class A Principal
Balance on such date), but in no event more than the
Class M-1 Principal Balance;
(iii) any Class M-1 Liquidation Loss Interest Amount;
(iv) any Unpaid Class M-1 Liquidation Loss Interest
Shortfall;
8. after payment of the amounts specified in clauses (1) - (7)
above, to the Class M-2 Certificateholders as follows:
(i) any Unpaid Class M-2 Principal Shortfall;
(ii) the Class M-2 Percentage of the Formula Principal
Distribution Amount to the Class M-2
Certificateholders (plus, if such Remittance Date is
on the Class M-1 Cross-Over Date, the amount, if any,
by which the sum of the Class A Percentage and the
Class M-1 Percentage of the Formula Principal
Distribution Amount exceeds the sum of the Class A
and Class M-1 Principal Balances on such date), but
in no event more than the Class M-2 Principal
Balance;
(iii) any Class M-2 Liquidation Loss Interest Amount;
(iv) any Unpaid Class M-2 Liquidation Loss Interest
Shortfall;
9. after payment of the amounts specified in clauses (1) - (8)
above, to the Class B-1 Certificateholders as follows:
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(i) any Unpaid Class B-1 Principal Shortfall;
(ii) the Class B Percentage of the Formula Principal
Distribution Amount to the Class B-1
Certificateholders (plus, if such Remittance Date is
on the Class M-2 Cross-Over Date, the amount, if any,
by which the sum of the Class A, Class M-1 and Class
M-2 Percentages of the Formula Principal Distribution
Amount exceeds the sum of the Class A, Class M-1 and
Class M-2 Principal Balances on such date), but in no
event more than the Class B-1 Principal Balance;
(iii) any Class B-1 Liquidation Loss Interest Amount;
(iv) any Unpaid Class B-1 Liquidation Loss Interest
Shortfall;
10. after payment of the amounts specified in clauses (1) -
(9) above, to the Class B-2 Certificateholders as follows:
(i) the amount in clause (a) of the definition of Class
B-2 Formula Distribution Amount;
(ii) any Unpaid Class B-2 Interest Shortfall;
(iii) any Unpaid Class B-2 Principal Shortfall;
(iv) if such Remittance Date is on or after the Class B-1
Cross-Over Date, the Class B Percentage of the
Formula Principal Distribution Amount to the Class
B-2 Certificateholders (minus, if such Remittance
Date is on the Class B-1 Cross-Over Date, the amount
of the Class B Percentage of the Formula Principal
Distribution Amount actually distributed to the Class
B-1 Certificateholders on such date, and plus, if
such Remittance Date is on the Class B-1 Cross-Over
Date, the amount, if any, by which the Formula
Principal Distribution Amount exceeds the sum of the
Class A Principal Balance, the Class M-1 Principal
Balance, the Class M-2 Principal Balance and the
Class B-1 Principal Balance on such date);
11. if the Company or a wholly owned subsidiary of the Company
is the Servicer, after payment of the amounts specified in clauses (1)
- (10) above, to pay the Monthly Servicing Fee and any other
compensation owed to the Servicer pursuant to Section 7.02;
12. after payment of the amounts specified in clauses (1) -
(11) above, to pay the Class B-3I Distribution Amount to the Class B-3I
Certificateholders;
13. after payment of the amounts specified in clauses (1) -
(12) above, to reimburse the Class C Certificateholders for expenses
incurred by and reimbursable to them pursuant to Section 10.06; and
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14. after payment of the amounts specified in clauses (1) -
(13) above, any remaining funds shall be paid to the Class C Master
Certificateholders.
b. On each Remittance Date, the Uncertificated Subsidiary Interests
shall receive distributions, to the extent of the Adjusted Amount Available, in
the following order of priority:
1. Each Class of Class A Uncertificated Subsidiary Interests
shall receive a distribution of principal in an amount equal to the
amount of principal distributed to its respective Corresponding
Certificate Class pursuant to Section 8.03(a)(6);
2. The Class M-S1 Interest shall receive a distribution of
principal in an amount equal to the amount of principal distributed to
the Class M-1 Certificates pursuant to Section 8.03(a)(7);
3. The Class M-S2 Interest shall receive a distribution of
principal in an amount equal to the amount of principal distributed to
the Class M-2 Certificates pursuant to Section 8.03(a)(8);
4. The Class B-S1 and Class B-S2 Interests shall receive
distributions of principal in an amount equal to the amount of
principal distributed to its respective Corresponding Certificate Class
pursuant to Section 8.03(a)(9)-(10);
5. Each Class of Uncertificated Subsidiary Interests shall
receive distributions of interest, pro rata in an amount equal to (i)
1/12th of the Weighted Average Contract Rate times the outstanding
Subsidiary Interest Principal Balance of such Class of Uncertificated
Subsidiary Interests, plus (ii) any Unpaid Subsidiary Interest
Shortfall with respect to such Class; and
6. Any remaining Amount Available shall be distributed to the
Class C Subsidiary Certificateholders.
On each Remittance Date the Trustee shall be deemed to deposit in the
Certificate Account, for distribution to the holders of the Certificates in the
priority set forth in Section 8.03(a), the amount distributed to the Trustee as
holder of the Uncertificated Subsidiary Interests under Section 8.04(b).
c. If the applicable Monthly Report indicates a Class M-1 Interest
Deficiency Amount, a Class M-2 Interest Deficiency Amount and/or a Class B-1
Interest Deficiency Amount for such Remittance Date, the Trustee shall withdraw
from the Certificate Account (to the extent of funds on deposit therein one
Business Day prior to such Remittance Date, after distribution of the Amount
Available pursuant to Section 8.03(a)) an amount equal to the Class M-1 Interest
Deficiency Amount, the Class M-2 Interest Deficiency Amount and the Class B-1
Interest Deficiency Amount (or the amount of such funds in the Certificate
Account, if less) and distribute such amount, first to the Class M-1
Certificateholders up to the amount of the Class M-1 Interest Deficiency Amount
(or pro rata, if such funds are less than the Class M-1 Interest Deficiency
Amount), if any, then to the Class M-2 Certificateholders up to the amount of
the
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Class M-2 Interest Deficiency Amount (or pro rata, if such funds are less than
the Class M-2 Interest Deficiency Amount), if any, and then to the Class B-1
Certificateholders up to the amount of the Class B-1 Interest Deficiency Amount
(or pro rata, if such remaining funds are less than the Class B-1 Interest
Deficiency Amount); provided, however, that (i) no such withdrawal shall be made
with respect to the Class M-1 Interest Deficiency Amount if the Cumulative
Realized Losses as of such Remittance Date are greater than $__________; (ii) no
such withdrawal shall be made with respect to the Class M-2 Interest Deficiency
Amount if the Cumulative Realized Losses as of such Remittance Date are greater
than $__________ (iii) no withdrawal with respect to Class B-1 Interest
Deficiency Amount shall be made if the Cumulative Realized Losses as of such
Remittance Date are greater than $__________; (iv) no withdrawal with respect to
a Class M-1 Interest Deficiency Amount shall be made if the aggregate
withdrawals with respect to all prior Class M-1 Interest Deficiency Amounts
equal $__________; (v) no withdrawal with respect to a Class M-2 Interest
Deficiency Amount shall be made if the aggregate withdrawals with respect to all
prior Class M-2 Interest Deficiency Amounts equal $__________; and (vi) no
withdrawal with respect to a Class B-1 Interest Deficiency Amount shall be made
if the aggregate withdrawals with respect to all prior Class B-1 Interest
Deficiency Amounts equal $__________. If such applicable Monthly Report
indicates that the Class B-2 Formula Distribution Amount for such Remittance
Date exceeds the Remaining Amount Available, the Trustee shall withdraw from the
Certificate Account (to the extent of funds on deposit therein as a consequence
of a deposit made by the Company pursuant to Section 8.04(a)) an amount equal to
the Guarantee Payment and distribute such amount to the Class B-2
Certificateholders.
d. Notwithstanding the priorities set forth above, any Pre-Funded
Amount deposited in the Certificate Account shall be applied solely to pay
principal of the Class A-1 Certificates and the Class A-9 Certificates
(allocated ____% to Class A-1 and ____% to Class A-9) and any amount withdrawn
from the Capitalized Interest Account and deposited in the Certificate Account
shall be applied solely as described in Section 8.06.
e. If the Trustee shall not have received the applicable Monthly Report
by any Remittance Date, the Trustee shall distribute all funds then in the
Certificate Account to Certificateholders in accordance with Section 8.03(a), to
the extent of such funds, on such Remittance Date.
SECTION 8.04. Limited Guarantee.
a. No later than the third Business Day prior to each Remittance Date,
the Servicer (if other than the Guarantor) shall notify the Guarantor of the
amount of the Guarantee Payment (if any) for such Remittance Date. Not later
than the Business Day preceding each Remittance Date, the Guarantor shall
deposit the Guarantee Payment, if any, for such Remittance Date into the
Certificate Account.
b. The obligations of the Guarantor under this Section shall not
terminate upon or otherwise be affected by a Service Transfer pursuant to
Article VII of this Agreement.
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c. The obligation of the Guarantor to provide the Limited Guarantee
under this Agreement shall terminate on the Final Remittance Date.
d. The obligation of the Guarantor to make the Guarantee Payments
described in subsection (a) above shall be unconditional and irrevocable. The
Guarantor acknowledges that its obligation to make the Guarantee Payments
described in subsection (a) above shall be deemed a guarantee by the Guarantor
of indebtedness of the Trust for money borrowed from the Class B-2
Certificateholders.
e. If the Guarantor fails to make a Guarantee Payment in whole or in
part, the Guarantor shall promptly notify the Trustee, and the Trustee shall
promptly notify Standard & Poor's and Fitch.
f. The Class C Subsidiary Certificateholders may at any time, but are
not obligated to, supplement the Guarantor's Limited Guarantee by depositing
assets in a "qualified reserve fund," within the meaning of ss. 860G(a)(7) of
the Code in accordance with ss. 860G(d)(2)(D) of the Code.
SECTION 8.05. Class C Certificateholder's Purchase Option; Auction
Sale; Additional Prinicipal Distribution Amount .
a. Subject to the conditions in subsection (b) below, the Class C
Certificateholder shall have the option to repurchase all of the Contracts and
all property acquired in respect of any Contract remaining in the Trust at a
price (such price being referred to as the "Minimum Purchase Price") equal to
the greater of:
A. the sum of (x) 100% of the principal balance of each Contract
(other than any Contract as to which title to the underlying
property has been acquired and whose fair market value is
included pursuant to clause (y) below), plus (y) the fair
market value of such acquired property (as determined by the
Originator as of the close of business on the third Business
Day next preceding the date upon which notice of any such
termination is furnished to Certificateholders pursuant to
Section 12.04) or
B. the aggregate fair market value (as determined by the
Originator as of the close of business on such third Business
Day) of all of the assets of the Trust,
plus, in either case, any Unpaid Class A Interest Shortfall, any Unpaid Class
M-1 Interest Shortfall, any Unpaid Class M-1 Liquidation Loss Interest
Shortfall, any Unpaid Class M-2 Interest Shortfall, any Unpaid Class M-2
Liquidation Loss Interest Shortfall, any Unpaid Class B-1 Interest Shortfall,
any Unpaid Class B-1 Liquidation Loss Interest Shortfall and any Unpaid Class
B-2 Interest Shortfall as well as 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 Manufactured Home has been repossessed).
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b. The purchase by the Class C Certificateholder of all of the
Contracts pursuant to Section 8.05(a) above shall be at the option of the
Originator, but shall be conditioned upon (1) the Pool Scheduled Principal
Balance, at the time of any such purchase, aggregating not more than 20% of the
Cut-off Date Pool Principal Balance, (2) such purchase being made pursuant to a
plan of complete liquidation of each of the Subsidiary REMIC and the Master
REMIC in accordance with Section 860F of the Code, as provided in Section 12.03,
(3) the Class C. Certificateholder having provided the Trustee and the
Depository (if any) with at least 30 days' written notice and (4) the Originator
or the Servicer (as applicable) shall have delivered to the Trustee an
unqualified Opinion of Counsel stating that payment of the purchase price to the
Certificateholders will not constitute a voidable preference or fraudulent
transfer under the United States Bankruptcy Code. If such option is exercised,
the Class C Certificateholder, as applicable, shall provide to the Trustee the
certification required by Section 12.03, which certificate shall constitute a
plan of complete liquidation of each of the Subsidiary REMIC and the Master
REMIC within the meaning of Section 860F of the Code, and the Trustee shall
promptly sign such certification and release to the Class C Certificateholder or
the Servicer, as applicable, the Contract Files and Land-and-Home Contract Files
pertaining to the Contracts being repurchased.
c. The Class C Certificateholder may assign its rights under this
Section 8.05, separately from its other rights as Holder of the Class C
Certificates, by giving written notice of such assignment to the Trustee.
Following the Trustee's receipt of such notice of assignment, the Trustee shall
recognize only such assignee (or its assignee in turn) as the Person entitled to
exercise the purchase option set forth in Section 8.05(a).
d. The Servicer shall notify the Trustee and the Class C
Certificateholder (whether or not the Class C Certificateholder has then
assigned its rights under this Section 8.05 pursuant to subsection (c)) no later
than two Business Days after the Determination Date relating to the first Due
Period which includes the date on which the Pool Scheduled Principal Balance
first becomes less than 20% of the Cut-off Date Pool Principal Balance, to the
effect that the Pool Scheduled Principal Balance is then less than 20% of the
Cut-off Date Pool Principal Balance.
e. If the Class C Certificateholder (or its assignee) has not delivered
to the Trustee the notice of exercise of its purchase option required by
subsection (b) by the Remittance Date occurring in the month following the
Determination Date specified in subsection (d), then promptly after the
following Remittance Date the Trustee shall begin a process for soliciting bids
in connection with an auction for the Contracts. The Trustee shall provide the
Class C Certificateholder (or its assignee) written notice of such auction at
least 10 Business Days prior to the date bids must be received in such auction
(the "Auction Date").
If at least two bids are received, the Trustee shall solicit and
resolicit new bids from all participating bidders until only one bid remains or
the remaining bidders decline to resubmit bids. The Trustee shall accept the
highest of such remaining bids if it is equal to or in excess of the greater of
(i) the Minimum Purchase Price and (ii) the fair market value of the Contracts
and related property (such amount being referred to as the "Minimum Auction
Price"). If less than two bids are received or the highest bid after the
resolicitation process is completed is not equal to or in excess of the Minimum
Auction Price, the Trustee shall not consummate such sale. If a bid meeting the
Minimum Purchase Price is received, then the Trustee may, and if so requested by
the
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Class C Certificateholder shall, consult with a financial advisor, which may be
an underwriter of the Certificates, to determine if the fair market value of the
Contracts and related property has been offered.
If the first auction conducted by the Trustee does not produce any bid
at least equal to the Minimum Auction Price, then the Trustee shall, beginning
on the Remittance Date occurring approximately three months after the Auction
Date for the failed first auction, commence another auction in accordance with
the requirement of this subsection (e). If such second auction does not produce
any bid at least equal to the Minimum Auction Price, then the Trustee shall,
beginning on the Remittance Date occurring approximately three months after the
Auction Date for the failed second auction, commence another auction in
accordance with the requirements of this subsection (e), and shall continue to
conduct similar auctions approximately every three months thereafter until the
earliest of (i) delivery by the Class C Certificateholder or its assignee of
notice of exercise of its purchase option under subsection (a), (ii) receipt by
the Trustee of a bid meeting the conditions specified in the preceding
paragraph, or (iii) the Remittance Date on which the principal balance of all
the Contracts is reduced to zero.
If the Trustee receives a bid meeting the conditions specified in the
subsection (e), then the Trustee's written acceptance of such bid shall
constitute a plan of complete liquidation with the meaning of Section 860F of
the Code, and the Trustee shall release to the winning bidder, upon payment of
the bid purchase price, the Contract Files pertaining to the Contracts being
purchased.
f. If the Class C Certificateholder (or its assignee) has not delivered
to the Trustee the notice of exercise of its purchase option required by
subsection (b) by the Remittance Date occurring in the month following the
Determination Date specified in subsection (d), then on the following Remittance
Date and each Remittance Date thereafter the Class M-1, Class M-2, Class B-1 and
Class B-2 Certificates shall be entitled to receive the Additional Principal
Distribution Amount, allocated among such classes pro rata based upon the
outstanding Principal Balance of each such Class on each such Remittance Date.
SECTION 8.06. Capitalized Interest Account.
a. On or before the Closing Date, the Trustee shall establish the
Capitalized Interest Account on behalf of the Trust, which must be an Eligible
Account, and shall deposit therein $1,500,000 received from the Seller pursuant
to Section 2.02(s). The Capitalized Interest Account shall be entitled "U.S.
Bank National Association as Trustee for the benefit of holders of Manufactured
Housing Contract Senior/Subordinate Pass-Through Certificates Series _________."
On the Remittance Dates occurring in _________ and _________, if the Monthly
Report for such Remittance Date indicates that the Amount Available (after
payment of the amount specified in clause (1) of Section 8.03(a) and including
in the Amount Available only payments in respect of interest on the Contracts)
is not sufficient to pay the Class A Interest Distribution Amount, plus the
Class M-1 Interest Distribution Amount, plus the Class M-2 Interest Distribution
Amount, plus the Class B-1 Interest Distribution Amount, the Trustee shall
withdraw the amount of such deficiency, or the amount of funds in the
Capitalized Interest Account (net of any investment earnings thereon), if less,
and shall deposit such funds in the Certificate Account for distribution on such
Remittance Date in order first to pay any deficiency in the Amount
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Available to pay the Class A Interest Distribution Amount, second to pay any
deficiency in the Amount Available to pay the Class M-1 Interest Distribution
Amount, third to pay any deficiency in the Amount Available to pay the Class M-2
Interest Distribution Amount, and fourth to pay any deficiency in the Amount
Available to pay the Class B-1 Interest Distribution Amount.
b. The Capitalized Interest Account shall be part of the Trust but not
part of the Subsidiary REMIC or the Master REMIC. The Trustee on behalf of the
Trust shall be the legal owner of the Capitalized Interest Account. Green Tree
Finance Corp.--Two shall be the beneficial owner of the Capitalized Interest
Account, subject to the foregoing power of the Trustee to transfer amounts in
the Capitalized Interest Account to the Certificate Account. Funds in the
Capitalized Interest Account shall, at the direction of Green Tree Finance
Corp.--Two, be invested in Eligible Investments that mature no later than the
Business Day prior to the next succeeding Remittance Date. All net income and
gain from such investments shall be distributed to Green Tree Finance Corp.--Two
on such Remittance Date. All amounts earned on amounts on deposit in the
Capitalized Interest Account shall be taxable to Green Tree Finance Corp.--Two.
c. Any funds remaining in the Capitalized Interest Account after the
Remittance Date in _____________ shall be distributed to Green Tree Finance
Corp.--Two. After such date no further amounts shall be deposited in or
withdrawn from the Capitalized Interest Account. Any losses on such investments
shall be deposited in the Capitalized Interest Account by Green Tree Finance
Corp.--Two out of its own funds immediately as realized.
SECTION 8.07. Pre-Funding Account.
a. On or before the Closing Date, the Trustee shall establish the
Pre-Funding Account on behalf of the Trust, which must be an Eligible Account.
The Pre-Funding Account shall be entitled "Pre-Funding Account, U.S. Bank
National Association as Trustee for the benefit of holders of Certificates,
Series ____." The Trustee shall maintain within the Pre-Funding Account two
subaccounts, the Pre-Funding Subaccount and the Undelivered Contract Subaccount.
The Undelivered Contract Subaccount pertains to those Land-and-Home Contracts
transferred to the Trust on the Closing Date that are Undelivered Contracts.
Funds deposited in the Pre-Funding Account shall be held in trust by the Trustee
for the Holders of the Certificates for the uses and purposes set forth herein.
b. The Trustee shall deposit in the Pre-Funding Subaccount the amount
received from the Seller pursuant to Section 2.02(t). Amounts on deposit in the
Pre-Funding Subaccount shall be withdrawn by the Trustee as follows:
(i) On any Subsequent Transfer Date, the Trustee shall
withdraw an amount equal to 100% of the Cut-off Date Principal Balance
of each Subsequent Contract transferred and assigned to the Trustee on
such Subsequent Transfer Date and pay such amount to or upon the order
of the Seller upon satisfaction of the conditions set forth in Section
2.03(b) with respect to such transfer and assignment.
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(ii) On the Business Day immediately preceding the
Post-Funding Remittance Date, the Trustee shall deposit into the
Certificate Account any amounts remaining in the Pre-Funding
Subaccount, net of investment earnings.
c. The Trustee shall deposit in the Undelivered Contract Subaccount the
amount received from the Seller pursuant to Section 2.02(u). Amounts on deposit
in the Undelivered Contract Subaccount shall be withdrawn by the Trustee as
follows:
(i) If the Seller delivers the related Land-and-Home Contract
File for an Undelivered Contract to the Trustee at least two Business
Days before the last day of the Pre-Funding Period, the Trustee shall
withdraw an amount equal to 100% of the Cut-off Date Principal Balance
of such Contract and pay such amount to or upon the order of the
Seller.
(ii) [Reserved]
(iii) The Seller shall give the Trustee telephonic notice of
its intended delivery of Land-and-Home Contract Files. The Trustee will
use reasonable efforts to process the Land-and-Home Contract Files and
remit any amount payable for them to the Seller in a timely manner.
(iv) On the Business Day immediately preceding the
Post-Funding Remittance Date, the Trustee shall deposit into the
Certificate Account any amounts remaining in the Undelivered Contract
Subaccount, net of investment earnings.
d. The Pre-Funding Account shall be part of the Trust but not part of
the Master REMIC or Subsidiary REMIC. The Trustee on behalf of the Trust shall
be the legal owner of the Pre-Funding Account. The Seller shall be the
beneficial owner of the Pre-Funding Account, subject to the foregoing power of
the Trustee to transfer amounts in the Pre-Funding Account to the Certificate
Account. Funds in the Pre-Funding Account shall, at the direction of the
Servicer, be invested in Eligible Investments of the kind described in clauses
(i) and (ii)(A) of the definition of "Eligible Investment" and that mature no
later than the Business Day prior to the next succeeding Payment Date. All
amounts earned on deposits in the Pre-Funding Account shall be taxable to the
Seller. The Trustee shall release to the Seller all investment earnings in the
Pre-Funding Account on the Post-Funding Remittance Date.
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ARTICLE IX
THE CERTIFICATES AND UNCERTIFICATED SUBSIDIARY INTERESTS
--------------------------------------------------------
SECTION 9.01. The Certificates.
a. The Uncertificated Subsidiary Interests shall be issued as
nontransferable (except to a successor Trustee) uncertificated interests
evidencing, as to each such Class, 100% of the interest in distributions
required to made to such Class, and having the original Subsidiary Interest
Principal Balance specified with respect to such Class of Uncertificated
Subsidiary Interests. The Class C Subsidiary Certificates shall be substantially
in the form set forth in Exhibit J hereto, and shall, on original issue, be
executed by the Trustee on behalf of the Trust upon the order of the Originator.
The Class C Subsidiary Certificates shall be issuable in Percentage Interests,
and shall be evidenced by a single Class C Subsidiary Certificate issued on the
Closing Date to Green Tree Finance Corp.-Two.
b. The Class A, the Class M, the Class B, the Class B-3I and the Class
C Master Certificates shall be substantially in the forms set forth in Exhibits
A, B, C-1, C-2 and K, respectively, and shall, on original issue, be executed by
the Trustee on behalf of the Trust to or upon the order of the Originator. The
Class A, the Class M, and the Class B Certificates shall be evidenced by (i) one
or more Class A-1 Certificates representing $________ initial aggregate
principal balance, (ii) one or more Class A-2 Certificates representing
$________ initial aggregate principal balance, (iii) one or more Class A-3
Certificates representing $________ initial aggregate principal balance, (iv)
one or more Class A-4 Certificates representing $________ initial aggregate
principal balance, (v) one or more Class A-5 Certificates representing $________
initial aggregate principal balance, (vi) one or more Class A-6 Certificates
representing $________ initial aggregate principal balance, (vii) one or more
Class A-7 Certificates representing $________ initial aggregate principal
balance, (viii) one or more Class A-8 Certificates representing $________
initial aggregate principal balance, (ix) one or more Class A-9 Certificates
representing $________ initial aggregate principal balance, (x) one or more
Class M-1 Certificates representing $________ initial aggregate principal
balance, (xi) one or more Class M-2 Certificates representing $________ initial
aggregate principal balance, (xii) one or more Class B-1 Certificates
representing $________ initial aggregate principal balance, (xiii) one or more
Class B-2 Certificates representing $________ initial aggregate principal
balance, beneficial ownership of such Classes of Certificates to be held through
Book-Entry Certificates in minimum dollar denominations of $1,000 and integral
dollar multiples of $1,000 in excess thereof. The Class B-3I, Class C Master,
and Class C Subsidiary Certificates shall be issuable in Percentage Interests
and shall each be evidenced by a single certificate issued on the Closing Date
to Green Tree Finance Corp.--Two.
c. The Certificates shall be executed by manual signature on behalf of
the Trustee by a duly authorized Responsible Officer or authorized signatory.
Certificates bearing the signatures of individuals who were at any time the
proper officers of the Trustee shall bind the Trustee, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
execution and delivery of such Certificate or did not hold such offices at the
date of such Certificates. No Certificate shall be entitled to any benefit under
this Agreement, or be valid for
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any purpose, unless such Certificate has been executed by manual signature in
accordance with this Section, and such signature upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been duly
executed and delivered hereunder. All Certificates shall be dated the date of
their execution, except for those Certificates executed on the Closing Date,
which shall be dated the Closing Date.
SECTION 9.02. Registration of Transfer and Exchange of Certificates.
a. The Trustee shall keep at the office or agency to be maintained in
accordance with Section 12.02 a "Certificate Register" in which the Trustee
shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. The Trustee initially appoints
itself to be the "Certificate Registrar" and transfer agent for the purpose of
registering Certificates and transfers and exchanges of Certificates as provided
herein. The Trustee will give prompt written notice to Certificateholders and
the Servicer of any change in the Certificate Registrar.
b. (1) Subject to clauses (2) and (3) below, no transfer of a Class
B-3I Certificate, Class C Subsidiary Certificate or Class C Master Certificate
shall be made by the Originator or any other Person unless such transfer is
exempt from the registration requirements of the Securities Act of 1933 (the
"Act"), as amended, and any applicable state securities laws or is made in
accordance with the Act and laws. In the event that any such transfer is to be
made, (A) the Originator may require a written Opinion of Counsel acceptable to
and in form and substance satisfactory to the Originator that such transfer may
be made pursuant to an exemption, describing the applicable exemption and the
basis therefor, from the Act and laws or is being made pursuant to the Act and
laws, which Opinion of Counsel shall not be an expense of the Trustee or the
Originator, and (B) the Trustee shall require the transferee to execute an
investment letter substantially in the form of Exhibit M attached hereto, which
investment letter shall not be an expense of the Trustee or the Originator. Any
Class B-3I Certificateholder, Class C Subsidiary Certificateholder or Class C
Master Certificateholder desiring to effect such transfer shall, and does hereby
agree to, indemnify the Trustee, the Originator and the Certificate Registrar
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.
(2) No transfer of a Class M-1 Certificate, a Class M-2
Certificate, a Class B Certificate, a Class B-3I Certificate, a Class C
Subsidiary Certificate or a Class C Master Certificate or any interest therein
shall be made to any employee benefit plan, trust or account that is subject to
ERISA, or that is described in Section 4975(e)(1) of the Code (each, a "Plan"),
unless the prospective transferee of a Certificate or interest therein provides
the Servicer and the Trustee with a certification of facts and, at its own
expense, an Opinion of Counsel which establish to the satisfaction of the
Servicer and the Trustee that such transfer will not result in a violation of
Section 406 of ERISA or Section 4975 of the Code or cause the Servicer, the
Originator or the Trustee to be deemed a fiduciary of such Plan or result in the
imposition of an excise tax under Section 4975 of the Code.
(3) Notwithstanding anything to the contrary contained herein,
(A) neither the Class C Subsidiary Certificate nor the Class C Master
Certificate, nor any interest therein, shall be
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transferred, sold or otherwise disposed of to a "disqualified organization,"
within the meaning of Section 860E(e)(5) of the Code (a "Disqualified
Organization"), including, but not limited to, (i) the United States, a state or
political subdivision thereof, a foreign government, an international
organization or an agency or instrumentality of any of the foregoing, (ii) an
organization (other than a cooperative described in Section 521 of the Code)
which is exempt from the taxes imposed by Chapter 1 of the Code and not subject
to the tax imposed on unrelated business income by Section 511 of the Code, or
(iii) a cooperative described in Section 1381(a)(2)(C) of the Code, and (B)
prior to any registration of any transfer, sale or other disposition of the
Class C Subsidiary Certificate or Class C Master Certificate, the proposed
transferee shall deliver to the Trustee, under penalties of perjury, an
affidavit that such transferee is not a Disqualified Organization, with respect
to which the Trustee shall have no actual knowledge that such affidavit is
false, and the transferor and the proposed transferee shall each deliver for the
Trustee an affidavit with respect to any other information reasonably required
by the Trustee pursuant to the REMIC Provisions, including, without limitation,
information regarding the transfer of noneconomic residual interests and
transfers of any residual interest to or by a foreign person; provided, however,
that, upon the delivery to the Trustee of an Opinion of Counsel, in form and
substance satisfactory to the Trustee and rendered by Independent counsel, to
the effect that the beneficial ownership of the Class C Subsidiary Certificate
or the Class C Master Certificate, as the case may be, by any Disqualified
Organization will not result in the imposition of federal income tax upon the
Subsidiary REMIC or the Master REMIC or any Certificateholder or any other
person or otherwise adversely affect the status of the Subsidiary REMIC or the
Master REMIC as a REMIC, the foregoing prohibition on transfers, sales and other
dispositions, as well as the foregoing requirement to deliver a certificate
prior to any registration thereof, shall, with respect to such Disqualified
Organization, terminate. Notwithstanding any transfer, sale or other disposition
of the Class C Subsidiary Certificate or Class C Master Certificate, or any
interest therein, to a Disqualified Organization or the registration thereof in
the Certificate Register, such transfer, sale or other disposition and any
registration thereof, unless accompanied by the Opinion of Counsel described in
the preceding sentence, shall be deemed to be void and of no legal force or
effect whatsoever and such Disqualified Organization shall be deemed to not be
the Class C Subsidiary or Class C Master Certificateholder, as the case may be,
for any purpose hereunder, including, but not limited to, the receipt of
distributions on the Class C Subsidiary Certificate or Class C Master
Certificate, and shall be deemed to have no interest whatsoever in the Class C
Subsidiary Certificate or Class C Master Certificate. Each Class C Subsidiary or
Class C Master Certificateholder, by his acceptance thereof, shall be deemed for
all purposes to have consented to the provisions of this Section 9.02(b)(3).
(4) Any transfer, sale or other disposition not in compliance
with the provisions of this Section 9.02(b) shall be deemed to be void and of no
legal force or effect whatsoever and such transferee shall be deemed to not be
the Certificateholder for any purpose hereunder, including, but not limited to,
the receipt of distributions on such Certificate, and shall be deemed to have no
interest whatsoever in such Certificate.
(5) The Trustee shall give notice to Standard & Poor's and
Fitch promptly following any transfer, sale or other disposition of a Class
B-3I, Class C Subsidiary or Class C Master Certificate.
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c. At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of authorized denominations of a like aggregate original
denomination, upon surrender of such Certificates to be exchanged at such
office. Whenever any Certificates are so surrendered for exchange, the Trustee
shall execute and deliver the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or surrendered
for transfer or exchange shall be duly endorsed by, or shall be accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder thereof or his or her attorney
duly authorized in writing.
d. Except as provided in paragraph (e) below, the Book-Entry
Certificates shall at all times remain registered in the name of the Depository
or its nominee and at all times: (i) registration of the Class A, Class M-1,
Class M-2 and Class B-1 Certificates may not be transferred by the Trustee
except to another Depository; (ii) the Depository shall maintain book-entry
records with respect to the Certificate Owners and with respect to ownership and
transfers of such Class A, Class M-1, Class M-2 and Class B-1 Certificates;
(iii) ownership and transfers of registration of the Class A, Class M-1, Class
M-2 and Class B-1 Certificates on the books of the Depository shall be governed
by applicable rules established by the Depository; (iv) the Depository may
collect its usual and customary fees, charges and expenses from its Depository
Participants; (v) the Trustee shall deal with the Depository, Depository
Participants and indirect participating firms as representatives of the
Certificate Owners of the Class A, Class M and Class B for purposes of
exercising the rights of Holders under this Agreement, and requests and
directions for and votes of such representatives shall not be deemed to be
inconsistent if they are made with respect to different Certificate Owners; and
(vi) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants and furnished by the Depository Participants with respect to
indirect participating firms and persons shown on the books of such indirect
participating firms as direct or indirect Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository Participant
or brokerage firm representing such Certificate Owner. Each Depository
Participant shall only transfer Book-Entry Certificates of Certificate Owners it
represents or of brokerage firms for which it acts as agent in accordance with
the Depository's normal procedures.
e. If (x) the Seller or the Depository advises the Trustee in writing
that the Depository is no longer willing or able properly to discharge its
responsibilities as Depository and (y) the Trustee or the Originator is unable
to locate a qualified successor or (z) the Originator at its sole option advises
the Trustee in writing that it elects to terminate the book-entry system through
the Depository, the Trustee shall notify all Certificate Owners, through the
Depository, of the occurrence of any such event and of the availability of
definitive, fully registered Class A Certificates, Class M Certificates and
Class B-1 Certificates (the "Definitive Certificates") to Certificate Owners
requesting the same. Upon surrender to the Trustee of the Class A Certificates,
Class M-1 Certificates, Class M-2 Certificates and Class B-1 Certificates by the
Depository, accompanied by registration instructions from the Depository for
registration, the Trustee shall issue the Definitive Certificates. Neither the
Originator nor the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be
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protected in relying on, such instructions. Upon the issuance of Definitive
Certificates all references herein to obligations imposed upon or to be
performed by the Depository shall be deemed to be imposed upon and performed by
the Trustee, to the extent applicable with respect to such Definitive
Certificates and the Trustee shall recognize the Holders of the Definitive
Certificates as Certificateholders hereunder.
f. On or prior to the Closing Date, there shall be delivered to the
Depository one Class A-1 Certificate, one Class A-2 Certificate, one Class A-3
Certificate, one Class A-4 Certificate, one Class A-5 Certificate, one Class A-6
Certificate, one Class A-7 Certificate, one Class A-8 Certificate, two Class A-9
Certificates, one Class M-1 Certificate, one Class M-2 Certificate, one Class
B-1 Certificate and one Class B-2 Certificate, each in registered form
registered in the name of the Depository's nominee, Cede & Co., the total face
amount of which represents 100% of the related Original Principal Balance,
respectively. If, however, the aggregate principal amount of a Class of Class A
Certificates, Class M Certificates or Class B Certificates exceeds $200,000,000,
one such Class A Certificate, Class M Certificate and/or Class B Certificate
will be issued with respect to each $200,000,000 of principal amount and an
additional Certificate of such Class or Classes will be issued with respect to
any remaining principal amount. Each such Class A, Class M and Class B
Certificate registered in the name of the Depository's nominee shall bear the
following legend:
"Unless this Certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC") to Issuer or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
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."
SECTION 9.03. No Charge; Disposition of Void Certificates.
No service charge shall be made to a Certificateholder for any transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates. All
Certificates surrendered for transfer and exchange shall be disposed of in a
manner approved by the Trustee.
SECTION 9.04. 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 Trustee such security or indemnity as may be
required by each to save it harmless, then in the absence of notice to the
Certificate Registrar or the Trustee that such Certificate has been acquired by
a bona fide purchaser, the Trustee shall execute and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like tenor and original denomination. Upon the issuance
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of any new Certificate under this Section 9.04, the 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 connected therewith.
Any duplicate Certificate issued pursuant to this Section 9.04 shall constitute
complete and indefeasible evidence of ownership of the Percentage Interest, as
if originally issued, whether or not the mutilated, destroyed, lost or stolen
Certificate shall be found at any time.
SECTION 9.05. Persons Deemed Owners.
Prior to due presentation of a Certificate for registration of
transfer, the Servicer, the Seller, the Trustee, the Paying Agent and 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
remittances pursuant to Section 8.01 and for all other purposes whatsoever, and
none of the Servicer, the Seller, the Trustee, the Certificate Registrar, the
Paying Agent or any agent of the Servicer, the Seller, the Trustee, the Paying
Agent or the Certificate Registrar shall be affected by notice to the contrary.
SECTION 9.06. Access to List of Certificateholders' Names and
Addresses.
The Certificate Registrar will furnish to the Trustee and the Servicer,
within five days after receipt by the Certificate Registrar of a request
therefor from the Trustee in writing, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Certificateholders as of
the most recent Record Date. If Holders of Certificates evidencing, as to any
Class, Percentage Interests representing 25% or more (hereinafter referred to as
"Applicants") apply in writing to the 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 which such Applicants propose to
transmit, then the Trustee shall, within five Business Days after the receipt of
such application, afford such Applicants access during normal business hours to
the most recent list of Certificateholders held by the Trustee. If such list is
as of a date more than 90 days prior to the date of receipt of such Applicants'
request, the Trustee shall promptly request from the Certificate Registrar a
current list as provided above, and shall afford such Applicants access to such
list promptly upon receipt. Every Certificateholder, by receiving and holding a
Certificate, agrees with the Certificate Registrar and the Trustee that none of
the Originator, the Certificate Registrar or the Trustee shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Certificateholders hereunder, regardless of the source from
which such information was derived.
SECTION 9.07. Authenticating Agents.
The Trustee may appoint one or more Authenticating Agents with power to
act on its behalf and subject to its direction in the execution and delivery of
the Certificates. For all purposes of this Agreement, the execution and delivery
of Certificates by the Authenticating Agent pursuant to this Section shall be
deemed to be the execution and delivery of Certificates "by the Trustee."
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ARTICLE X
INDEMNITIES
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SECTION 10.01. Company's Indemnities.
The Seller and Originator will jointly and severally defend and
indemnify the Trust, the Trustee (including the Custodian, the Paying Agent and
any other agents of the Trustee) and the Certificateholders against any and all
costs, expenses, losses, damages, claims and liabilities, including reasonable
fees and expenses of counsel and expenses of litigation of any third-party
claims (i) arising out of or resulting from 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, claim or liability is not provided for by the
Originator's repurchase of such Contract pursuant to Section 3.06) or (ii)
arising out of or resulting from the use or ownership of any Manufactured Homes
by the Originator or the Servicer or any Affiliate of either. Notwithstanding
any other provision of this Agreement, the obligation of the Originator under
this Section shall not terminate upon a Service Transfer pursuant to Article
VII, except that the obligation of the Originator under this Section shall not
relate to the actions of any subsequent Servicer after a Service Transfer.
SECTION 10.02. Liabilities to Obligors.
No obligation or liability to any Obligor under any of the Contracts is
intended to be assumed by the Trust or the Certificateholders 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
and the Certificateholders expressly disclaim such assumption.
SECTION 10.03. Tax Indemnification.
The Originator agrees to pay, and to indemnify, defend and hold
harmless the Trust, the Trustee (including the Custodian, the Paying Agent and
any other agents of the Trustee) and the Certificateholders from, any taxes
which may at any time be asserted with respect to, and as of the date of, the
transfer of the Contracts to the Trust, including, without limitation, any
sales, gross receipts, general corporation, personal property, privilege or
license taxes (but not including any federal, state or other taxes arising out
of the creation of the Trust and the issuance of the Certificates), any tax
imposed on the Trust as a result of the Originator's repurchase of any Contract
pursuant to Section 3.06(c), and costs, expenses and reasonable counsel fees in
defending against the same, whether arising by reason of the acts to be
performed by the Originator, the Seller, the Servicer or the Trustee under this
Agreement or imposed against the Trust, a Certificateholder or otherwise.
SECTION 10.04. Servicer's Indemnities.
The Servicer shall defend and indemnify the Trust, the Trustee
(including the Custodian, the Paying Agent and any other agents of the Trustee)
and the Certificateholders against any and
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all costs, expenses, losses, damages, 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 10.04 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 Originator of, any such Contract.
SECTION 10.05. Operation of Indemnities.
Indemnification under this Article shall include, without limitation,
reasonable fees and expenses of counsel and expenses of litigation. If the
Originator or the Servicer has made any indemnity payments to the Trustee
pursuant to this Article and the Trustee thereafter collects any of such amounts
from others, the Trust will repay such amounts collected to the Originator or
the Servicer, as the case may be, without interest.
SECTION 10.06. REMIC Tax Matters.
If Class C Subsidiary Certificateholders or Class C Master
Certificateholders, pursuant to Section 6.06, pay any taxes or charges imposed
upon the Subsidiary REMIC or the Master REMIC, as the case may be, as a REMIC or
otherwise, such taxes or charges, except to the extent set forth in the
following proviso, shall be expenses and costs of the Trust and the Class C
Subsidiary Certificateholders or Class C Master Certificateholders shall be
entitled to be reimbursed therefor out of the Certificate Account as provided in
Section 8.03; provided, however, that any such taxes or charges shall not be
expenses or costs of the Trust, nor will the Class C Subsidiary
Certificateholders or Class C Master Certificateholders be entitled to
reimbursement therefor out of the Certificate Account, if and to the extent that
such taxes or charges resulted from a failure by the Originator, the Trustee or
any Servicer to comply with the provisions of Section 2.04.
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ARTICLE XI
THE TRUSTEE
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SECTION 11.01. Duties of Trustee.
The Trustee, prior to the occurrence of an Event of Termination and
after the curing of all Events of Termination which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Agreement. If an Event of Termination has occurred (which has not
been cured), the Trustee shall exercise such of the rights and powers vested in
it by this Agreement, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform as to form to the requirements of this Agreement.
Subject to Section 11.03, no provision of this Agreement shall be
construed to relieve the Trustee from liability for its own negligent action,
its own negligent failure to act or its own misconduct; provided, however, that:
a. Prior to the occurrence of an Event of Termination, and
after the curing of all such Events of Termination which may have
occurred, the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall
not be liable except for the performance of such duties and obligations
as are specifically set forth in this Agreement, no implied covenants
or obligations shall be read into this Agreement against the Trustee
and, in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Agreement;
b. The Trustee shall not be liable for an error of judgment
made in good faith by a Responsible Officer of the Trustee, unless it
shall be proved that the Trustee was negligent in ascertaining the
pertinent facts;
c. The Trustee shall not be personally liable with respect to
any action taken, suffered or omitted to be taken by it in good faith
in accordance with the direction of the Certificateholders with
aggregate Percentage Interests representing 25% or more of the Trust
relating to the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Agreement; and
d. The Trustee shall not be charged with knowledge of any
event referred to in Section 7.01 unless a Responsible Officer of the
Trustee at the Corporate Trust Office obtains actual knowledge of such
event or the Trustee receives written notice of such event
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from the Servicer or the Holders of Certificates evidencing, as to any
Class, Percentage Interests representing 25% or more.
None of the provisions contained in this Agreement shall in any event
require the Trustee to perform, or be responsible for the manner of performance
of, any of the obligations of the Originator, the Seller or the Servicer under
this Agreement, except during such time, if any, as the Trustee shall be the
successor to, and be vested with the rights, duties, powers and privileges of,
the Servicer in accordance with the terms of this Agreement. The Trustee shall
not be required to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if there is reasonable ground for believing that
the repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
SECTION 11.02. Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 11.01:
a. The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officer's Certificate,
certificate of a Servicing Officer, certificate of auditors or any
other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by
the proper party or parties;
b. The Trustee may consult with counsel and any opinion of any
counsel for the Originator, the Seller or the Servicer shall be full
and complete authorization and protection in respect of any action
taken or suffered or omitted by it hereunder in good faith and in
accordance with such Opinion of Counsel;
c. The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement, or to institute,
conduct or defend any litigation hereunder or in relation hereto, at
the request, order or direction of any of the Certificateholders,
pursuant to the provisions of this Agreement, unless such
Certificateholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which
may be incurred therein or thereby; provided, however, that nothing
contained herein shall relieve the Trustee of the obligations, upon the
occurrence of an Event of Termination (which has not been cured), to
exercise such of the rights and powers vested in it by this Agreement,
and to use the same degree of care and skill in their exercise as a
prudent man would exercise or use under the circumstances in the
conduct of his own affairs;
d. Prior to the occurrence of an Event of Termination and
after the curing of all Events of Termination which may have occurred,
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 so to do
by Holders of Certificates evidencing, as to any Class, Percentage
Interests representing 25% or more; provided,
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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 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 Servicer or, if paid by the Trustee, shall be reimbursed by
the Servicer upon demand; and
e. The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian and shall not be liable for
any acts or omissions of such agents, attorneys or custodians if
appointed by it with due care hereunder.
SECTION 11.03. Trustee Not Liable for Certificates or Contracts.
The Trustee assumes no responsibility for the correctness of the
recitals contained herein or in the Certificates (other than the Trustee's
execution thereof). The Trustee makes no representations as to the validity or
sufficiency of this Agreement, of the Certificates (other than its execution
thereof) or of any Contract, Contract File, Land-and-Home Contract File or
related document. The Trustee shall not be accountable for the use or
application by the Servicer, the Originator or the Seller of funds paid to the
Originator or the Seller, as applicable, in consideration of conveyance of the
Contracts to the Trust by the Originator and the Seller or deposited into or
withdrawn from the Certificate Account by the Servicer.
SECTION 11.04. Rights of Certificateholders to Direct Trustee and to
Waive Event of Termination.
Holders of each Class of Class A Certificates, Holders of Class M
Certificates and Holders of Class B Certificates evidencing, as to each such
Class, Percentage Interests representing 25% or more shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on the
Trustee; provided, however, that, subject to Section 11.01, the Trustee shall
have the right to decline to follow any such direction if the Trustee being
advised by counsel determines that the action so directed may not lawfully be
taken, or if the Trustee in good faith shall, by a Responsible Officer or
Officers of the Trustee, determine that the proceedings so directed would be
illegal or involve it in personal liability or be unduly prejudicial to the
rights of Certificateholders not parties to such direction; and provided further
that nothing in this Agreement shall impair the right of the Trustee to take any
action deemed proper by the Trustee and which is not inconsistent with such
direction by the Certificateholders; and provided further that the Trustee shall
instead follow the directions of Holders of each Class of Class A Certificates,
Holders of Class M Certificates and Holders of Class B Certificates evidencing,
as to each such Class, Percentage Interests aggregating 51% or more whenever it
receives conflicting directions from each Class of Class A Certificateholders,
Class M Certificateholders and Class B Certificateholders. Holders of each Class
of Class A Certificates, Holders of Class M Certificates and Holders of Class B
Certificates evidencing, as to each such Class, Percentage Interests
representing 51% or more may on behalf of Certificateholders waive any past
Event of Termination hereunder and its consequences, except a
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default in respect of a covenant or provision hereof which under Section 12.07
cannot be modified or amended without the consent of all Certificateholders, and
upon any such waiver, such Event of Termination shall cease to exist and shall
be deemed to have been cured for every purpose of this Agreement; but no such
waiver shall extend to any subsequent or other Event of Termination or impair
any right consequent thereon. Following the Class M-2 Cross-Over Date, if all
distributions payable to the Class A Certificateholders and the Class M
Certificateholders have either been made or provided for in accordance with this
Agreement, then the Holders of Class B-1 Certificates may exercise the rights
given to the Class A Certificateholders, the Class M Certificateholders and
Class B-1 Certificateholders under this Section. Following the Class B-1
Cross-Over Date, if all distributions payable to the Class A Certificateholders
and the Class M Certificateholders have either been made or provided for in
accordance with this Agreement, then the Holders of Class B-2 Certificates may
exercise the rights given to the Class A Certificateholders, the Class M
Certificateholders and Class B-1 Certificateholders under this Section.
SECTION 11.05. The Servicer to Pay Trustee's Fees and Expenses.
The Servicer agrees:
a. to pay to the Trustee reasonable compensation for all
services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a
trustee of an express trust) including the services provided in
connection with any auctions pursuant to Section 8.05(e);
b. except as otherwise expressly provided herein, to reimburse
the Trustee, to the extent requested by the Trustee, for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Agreement (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel, and reasonable compensation expenses and
disbursements in connection with any auctions pursuant to Section
8.05(e)), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
c. to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of this trust and its duties hereunder,
including the costs and expenses of defending itself against any claim
or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
All such payments by the Servicer shall be made from its own funds. The
covenants in this Section 11.05 shall be for the benefit of the Trustee in its
capacities as Trustee, Paying Agent and Certificate Registrar hereunder, and
shall survive the termination of this Agreement.
SECTION 11.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a financial institution
organized and doing business under the laws of the United States of America or
any State, authorized under such laws
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to exercise corporate trust powers and a Title I approved lender pursuant to FHA
Regulations, shall not be an Affiliate of the Originator, and shall have a
combined capital and surplus of at least $50,000,000 or shall be a member of a
bank holding system the aggregate combined capital and surplus of which is
$50,000,000, provided that the Trustee's separate capital and surplus shall at
all times be at least the amount required by Section 310(a)(2) of the Trust
Indenture Act of 1939, as amended. If such Person publishes reports of condition
at least annually, pursuant to law or to the requirements of a supervising or
examining authority, then for the purposes of this Section 11.06, the combined
capital and surplus of such Person shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published. In
addition, the Trustee shall at all times have a long-term deposit rating (or, if
the Trustee is a wholly owned subsidiary of a bank holding company system and
not rated, the bank holding company shall have a long-term senior unsecured debt
rating) from Standard & Poor's of at least BBB or as shall be otherwise
acceptable to Standard & Poor's and a rating from Fitch (if rated by Fitch) of
at least BBB or as shall be otherwise acceptable to Fitch. In case at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
Section 11.06, the Trustee shall resign immediately in the manner and with the
effect specified in Section 11.07.
SECTION 11.07. Resignation or Removal of Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Servicer and the
Originator. A copy of any such notice shall be sent to Standard & Poor's and
Fitch. Upon receiving such notice of resignation, the Originator shall promptly
appoint a successor Trustee by written instrument, in duplicate, one copy of
which instrument shall be delivered to each of the Servicer and the Originator
and one copy to the successor Trustee. If no successor Trustee shall have been
so appointed and shall have accepted appointment within 30 days after the giving
of such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 11.06 and shall fail to resign after written
request therefor by the Originator, or if at any time the Trustee shall be
legally unable to act, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Originator may remove the Trustee. If the Originator shall have removed the
Trustee under the authority of the immediately preceding sentence, the
Originator shall promptly appoint a successor Trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor Trustee.
Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 11.07 shall
not become effective until acceptance of appointment by the successor Trustee as
provided in Section 11.08.
SECTION 11.08. Successor Trustee.
Any successor Trustee appointed as provided in Section 11.07 shall
execute, acknowledge and deliver to the Servicer, the Originator and to its
predecessor Trustee an instrument accepting
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such appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee shall become effective and such successor Trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with like
effect as if originally named as Trustee. The predecessor Trustee shall deliver
or cause to be delivered to the successor Trustee the Contracts, Contract Files
and Land-and-Home Contract Files and any related documents and statements held
by it hereunder; and, if the Land-and-Home Contract Files are then held by a
custodian pursuant to a custodial agreement, the predecessor Trustee and the
custodian shall amend such custodial agreement to make the successor Trustee the
successor to the predecessor Trustee thereunder; and the Servicer, the
Originator and the predecessor Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for fully and
certainly vesting and confirming in the successor Trustee all such rights,
powers, duties and obligations.
No successor Trustee shall accept appointment as provided in this
Section 11.08 unless at the time of such acceptance such successor Trustee shall
be eligible under the provisions of Section 11.06.
Upon acceptance of appointment by a successor Trustee as provided in
this Section 11.08, the Servicer shall cause notice of the succession of such
Trustee hereunder to be mailed to each Certificateholder at their addresses as
shown in the Certificate Register. If the Servicer fails to mail such notice
within ten days after acceptance of appointment by the successor Trustee, the
successor Trustee shall cause such notice to be mailed at the expense of the
Servicer.
SECTION 11.09. Merger or Consolidation of Trustee.
Any Person into which the Trustee may be merged or converted or with
which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any Person
succeeding to the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided such Person shall be eligible under
the provisions of Section 11.06, 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 Trustee shall promptly notify Standard & Poor's
and Fitch in the event it is a party to any merger, conversion or consolidation.
SECTION 11.10. Tax Returns.
Upon the Servicer's request, the Trustee will furnish the Servicer with
all such information as the Servicer may reasonably require in connection with
preparing all tax returns of the Subsidiary REMIC and the Master REMIC and the
Trustee shall execute such returns.
SECTION 11.11. Obligor Claims.
In connection with any offset defenses, or affirmative claims for
recovery, asserted in legal actions brought by Obligors under one or more
Contracts based upon provisions therein complying with, or upon other rights or
remedies arising from, any legal requirements applicable to the Contracts,
including, without limitation, the Federal Trade Commission's Trade Regulation
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Rule Concerning Preservation of Consumers' Claims and Defenses (16 C.F.R. ss.
433) as amended from time to time:
a. The Trustee is not, and shall not be deemed to be, either
in any individual capacity, as trustee hereunder or otherwise, a
creditor, or a joint venturer with or an Affiliate of, or acting in
concert or cooperation with, any seller of home improvements, in the
arrangement, origination or making of Contracts. The Trustee is the
holder of the Contracts only as trustee on behalf of the
Certificateholders, and not as a principal or in any individual or
personal capacity;
b. The Trustee shall not be personally liable for or obligated
to pay Obligors any affirmative claims asserted thereby, or responsible
to Certificateholders for any offset defense amounts applied against
Contract payments, pursuant to such legal actions;
c. The Trustee will pay, solely from available Trust monies,
affirmative claims for recovery by Obligors only pursuant to final
judicial orders or judgments, or judicially approved settlement
agreements, resulting from such legal actions;
d. The Trustee will comply with judicial orders and judgments
which require its actions or cooperation in connection with Obligors'
legal actions to recover affirmative claims against Certificateholders.
e. The Trustee will cooperate with and assist
Certificateholders in their defense of legal actions by Obligors to
recover affirmative claims if such cooperation and assistance is not
contrary to the interests of the Trustee as a party to such legal
actions and if the Trustee is satisfactorily indemnified for all
liability, costs and expenses arising therefrom; and
f. The Originator hereby agrees to indemnify, hold harmless
and defend the Trustee, Certificateholders from and against any and all
liability, loss, costs and expenses of the Trustee, Certificateholders
resulting from any affirmative claims for recovery asserted or
collected by Obligors under the Contracts. Notwithstanding any other
provision of this Agreement, the obligation of the Originator under
this Section 11.11(f) shall not terminate upon a Service Transfer
pursuant to Article VII.
SECTION 11.12. Appointment of Co-Trustee or Separate Trustee.
The Originator shall have the power from time to time to appoint one or
more persons or corporations to act either as co-trustees jointly with the
Trustee, or as separate trustees, or as custodians, for the purpose of
conforming to any legal requirement, restriction or condition (i) with respect
to the holding of the Contracts, the Contract Files and the Land-and-Home
Contract Files or (ii) with respect to the enforcement of a Contract in any
state in which a Manufactured Home is located or in any state in which any
portion of the Trust is located. The separate trustees, co-trustees, or
custodians so appointed shall be trustees or custodians for the benefit of all
Certificateholders and shall, subject to the provisions of the following
paragraph, have such powers, rights and remedies as shall be specified in the
instrument of appointment;
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provided, however, that no such appointment shall, or shall be deemed to,
constitute the appointee an agent of the Trustee.
Every separate trustee, co-trustee and custodian shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(A) all powers, duties, obligations and rights conferred upon
the Trustee in respect of the receipt, custody and payment of monies
shall be exercised solely by the Trustee;
(B) all other rights, powers, duties and obligations conferred
or imposed upon the Trustee, to the extent also imposed upon such
separate trustees, co-trustees or custodians, shall be conferred or
imposed upon and exercised or performed by the Trustee and such
separate trustee, co-trustee, or custodian jointly, 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 holding of the Trust or any
portion thereof in any such jurisdiction) shall be exercised and
performed by such separate trustee, co-trustee, or custodian;
(C) no separate trustee, co-trustee or custodian hereunder
shall be personally liable by reason of any act or omission of any
other separate trustee, co-trustee or custodian hereunder; and
(D) the Company may at any time accept the resignation of or
remove any separate trustee, co-trustee or custodian, so appointed by
it.
If any separate trustee, co-trustee or custodian 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 or custodian. The reasonable fees and expenses of any such separate
trustee, co-trustee or custodian shall be treated as additional fees and
expenses of the Trustee subject to Section 11.05 and payable by the Servicer if
and only to the extent the Servicer shall have consented in writing to his or
its appointment, which consent shall not be unreasonably withheld.
SECTION 11.13. Agents of Trustee.
To the extent not prohibited by law and not inconsistent with the terms
of this Agreement (including, without limitation, Section 11.12), the Trustee
may, with the prior consent of the Originator, appoint one or more agents to
carry out ministerial matters on behalf of the Trustee under this Agreement.
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ARTICLE XII
MISCELLANEOUS
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SECTION 12.01. Servicer Not to Assign Duties or Resign; Delegation of
Servicing Functions.
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 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 Trustee. No such resignation shall become
effective until the Trustee or a successor servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance with 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 Green Tree Financial Corporation, if it is the
Servicer, may delegate some or all of its servicing duties to a wholly
owned subsidiary of the Green Tree Financial Corporation, for so long
as said subsidiary remains, directly or indirectly, a wholly owned
subsidiary of the Green Tree Financial Corporation. Notwithstanding any
such delegation the Green Tree Financial Corporation shall retain all
of the rights and obligations of the Servicer hereunder.
SECTION 12.02. Maintenance of Office or Agency.
The Trustee will maintain in St. Paul, Minnesota, an office or agency
where Certificates may be surrendered for registration of transfer or exchange
and where notices and demands to or upon the Trustee in respect of the
Certificates and this Agreement may be served. On the date hereof the Trustee's
office for such purposes is located at 180 East Fifth Street, St. Paul,
Minnesota 55101 Attention: Laurie A. Howard. The Trustee will give prompt
written notice to Certificateholders of any change in the location of the
Certificate Register or any such office or agency.
12-1
<PAGE>
SECTION 12.03. Termination.
a. This Agreement shall terminate (after distribution of all amounts
due to Certificateholders pursuant to Sections 8.01 and 8.03) on the earlier of
(a) the Remittance Date on which the Pool Scheduled Principal Balance is reduced
to zero and all amounts payable to Certificateholders on such Remittance Date
have been distributed to Certificateholders or (b) the Remittance Date on which
the Originator or the Servicer repurchases the Contracts pursuant to Section
8.05; provided, that in no event shall the trust created hereby continue beyond
the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late Ambassador of the United States to
the Court of St. James, living on the date hereof; and provided further, that
the Servicer's and the Originator's representations and warranties and
indemnities by the Originator and the Servicer shall survive termination.
b. Notice of any termination, specifying the Final Remittance Date
(which shall be a date that would otherwise be a Remittance Date) upon which all
Certificateholders may surrender their Certificates to the Trustee for payment
of the final distribution and cancellation, shall be given promptly by the
Trustee (upon direction by the Originator ten days prior to the date such notice
is to be mailed) by letter to Standard & Poor's, Fitch and the
Certificateholders mailed no later than the fifth Business Day of the month of
the Final Remittance Date specifying (1) the Final Remittance Date upon which
final payment on the Certificates will be made upon presentation and surrender
of Certificates at the office or agency of the Trustee therein designated; (2)
the amount of any such final payment; and (3) that the Record Date otherwise
applicable to such Remittance Date is not applicable, payments being made only
upon presentation and surrender of the Certificates at the office or agency of
the Trustee therein specified. Any notice of purchase of Contracts by the
Originator or the Servicer pursuant to Section 8.05 shall constitute the
adoption by the Trustee on behalf of the Certificateholders of a plan of
complete liquidation of the Subsidiary REMIC and the Master REMIC within the
meaning of Section 860F of the Code on the date such notice is given when signed
by the Trustee. Each such notice shall, to the extent required by the REMIC
Provisions or other applicable law, be signed on behalf of the Subsidiary REMIC
and the Master REMIC by the Trustee. The Trustee shall give such notice to the
Certificate Registrar at the time such notice is given to the
Certificateholders. In the event such notice is given in connection with the
sale of the Contracts pursuant to Section 8.05, the Class C Certificateholder or
the Trustee, as applicable, shall deposit in the Certificate Account on the
Final Remittance Date in immediately available funds an amount equal to the
above-described purchase price and upon such deposit Certificateholders will be
entitled to the amount of such purchase price but not amounts in excess thereof,
all as provided herein. Upon certification to the Trustee by a Servicing
Officer, following such final deposit the Trustee shall promptly release to the
purchaser of the Contracts pursuant to Section 8.05 the Contract Files for the
remaining Contracts, and the Trustee shall execute all assignments, endorsements
and other instruments necessary to effectuate such transfer.
c. Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed from the Certificate Account, in the following
order of priority, to Certificateholders on the Final Remittance Date in
proportion to their respective Percentage Interests an amount equal to (i) as to
Class A Certificates, 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
12-2
<PAGE>
Principal Balance, the Class A-6 Principal Balance, the Class A-7 Principal
Balance the Class A-8 Principal Balance and the Class A-9 Principal Balance
together with any Unpaid Class A Interest Shortfall and one month's interest at
the related Remittance Rate on the related Class, respectively (calculated in
the manner specified in Section 1.03), (ii) as to Class M-1 Certificates, the
Class M-1 Principal Balance together with any Unpaid Class M-1 Interest
Shortfall, any Unpaid Class M-1 Liquidation Loss Interest Shortfall and one
month's interest at the Class M-1 Remittance Rate on the Class M-1 Principal
Balance, (iii) as to Class M-2 Certificates, the Class M-2 Principal Balance
together with any Unpaid Class M-2 Interest Shortfall, any Unpaid Class M-2
Liquidation Loss Interest Shortfall and one month's interest at the Class M-2
Remittance Rate on the Class M-2 Principal Balance, (iv) as to Class B-1
Certificates, the Class B-1 Principal Balance together with any Unpaid Class B-1
Interest Shortfall, any Unpaid Class B-1 Liquidation Loss Interest Shortfall and
one month's interest at the Class B-1 Remittance Rate on the Class B-1 Principal
Balance, (v) as to Class B-2 Certificates, the Class B-2 Principal Balance
together with any Unpaid Class B-2 Interest Shortfall and one month's interest
at the Class B-2 Remittance Rate on the Class B-2 Principal Balance, (vi) as to
Class B-3I Certificates, any Unpaid Class B-3I Shortfall, and (vii) as to Class
C Master Certificates, the amount which remains on deposit in the Certificate
Account (other than amounts retained to meet claims) after application pursuant
to clauses (i)-(vi) above; provided that any Guarantee Payment deposited in the
Certificate Account shall be distributed only to the Class B-2
Certificateholders. The distribution on the Final Remittance Date shall be in
lieu of the distribution otherwise required to be made on such Remittance Date
in respect of each Class of Certificates.
d. In the event that all of the Certificateholders do not surrender
their Certificates for cancellation within three months after the time specified
in the above-mentioned written notice, the Originator 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 three months after the second notice all the Certificates
shall not have been surrendered for cancellation, the Originator shall transfer
to itself all amounts remaining on deposit in the Certificate Account, to hold
in trust for Certificateholders who have not surrendered their Certificates for
cancellation, together with the final record list of Certificateholders, and the
Originator shall 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 which remain in trust hereunder.
e. Each Certificateholder hereby irrevocably approves and appoints the
Trustee as its attorney-in-fact for the purposes of adoption of the plan of
complete liquidation.
SECTION 12.04. Acts of Certificateholders.
a. Except as otherwise specifically provided herein, whenever
Certificateholder approval, authorization, direction, notice, consent, waiver or
other action is required hereunder, such approval, authorization, direction,
notice, consent, waiver or other action shall be deemed to have been given or
taken on behalf of, and shall be binding upon, all Certificateholders if agreed
to by Holders of Certificates of the specified Class or Classes evidencing, as
to each such Class, Percentage Interests aggregating 51% or more.
12-3
<PAGE>
b. Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by
agent duly appointed in writing; and except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where required, to the Servicer. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Agreement and (subject to Section 11.01)
conclusive in favor of the Trustee, the Servicer and the Originator if made in
the manner provided in this Section.
c. The fact and date of the execution by any Certificateholder of any
such instrument or writing may be proved in any reasonable manner which the
Trustee deems sufficient.
d. The ownership of Certificates shall be proved by the Certificate
Register.
e. Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Certificateholder shall bind every holder of every
Certificate issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done, or omitted to be done
by the Trustee, the Servicer or the Originator in reliance thereon, whether or
not notation of such action is made upon such Security.
f. The Trustee may require such additional proof of any matter referred
to in this Section as it shall deem necessary.
SECTION 12.05. Calculations.
Except as otherwise provided in this Agreement, all interest rate and
basis point calculations under this Agreement will be made on the basis of a
360-day year and twelve 30-day months and will be carried out to at least three
decimal places.
SECTION 12.06. Assignment or Delegation by Originator.
Except as specifically authorized hereunder, and except for its
obligations as Servicer which are dealt with under Article V and Article VII,
the Originator may not convey and assign or delegate any of its rights or
obligations hereunder absent the prior written consent of Holders of
Certificates of each Class evidencing, as to each such Class, Percentage
Interests aggregating 66 2/3% or more, 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 Originator of any right to payment pursuant to
Article VIII.
Notwithstanding the foregoing, any person into which the Originator may
be merged or consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Originator shall be a party, or any
Person succeeding to the business of the Originator, shall be the successor of
the Originator 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.
12-4
<PAGE>
The Originator shall promptly notify Standard & Poor's and Fitch of any such
merger to which it is a party.
SECTION 12.07. Amendment.
a. This Agreement may be amended from time to time by the Originator,
the Servicer and the Trustee, without the consent of any of the
Certificateholders, 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, to make such changes as are necessary to
maintain the status of each of the Subsidiary REMIC and the Master REMIC as a
"real estate mortgage investment conduit" under the REMIC Provisions of the Code
or to otherwise effectuate the benefits of such status to the Subsidiary REMIC,
the Master REMIC and the Certificateholders, including, without limitation, to
implement any provision permitted by law that would enable a REMIC to avoid the
imposition of any tax, 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 Class A
Certificates, Class M Certificates or Class B Certificates, or to make any other
provisions with respect to matters or questions arising under this Agreement
that shall not be inconsistent with the provisions of this Agreement; 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
Certificateholder.
b. This Agreement may also be amended from time to time by the
Servicer, the Originator and the Trustee, with the consent of Holders of
Certificates of each Class affected thereby evidencing, as to each such Class,
Percentage Interests aggregating 51% or more, 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
Certificateholders; provided, however, that no such amendment shall (a) reduce
in any manner the amount of, or delay the timing of, collections of payments on
the Contracts or distributions which are required to be made on any Certificate,
(b) reduce the aforesaid percentage required to consent to any such amendment,
without the consent of the holders of all Certificates then outstanding, (c)
result in the disqualification of the either the Subsidiary REMIC or the Master
REMIC as a REMIC under the Code, (d) adversely affect the status of either the
Subsidiary REMIC or the Master REMIC as a REMIC or the status of the Regular
Certificates as "regular interests" in the Master REMIC or (e) cause any tax
(other than any tax imposed on "net income from foreclosure property" under
Section 860G(c)(1) of the Code that would be imposed without regard to such
amendment) to be imposed on the Trust, including, without limitation, any tax
imposed on "prohibited transactions" under Section 860F(a)(1) of the Code or on
"contributions after the startup date" under Section 860G(d)(1) of the Code.
This Agreement may not be amended without the consent of all Class C
Certificateholders, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement which would
modify in any manner the rights of the Class C Certificateholders.
c. This Agreement shall not be amended under this Section without the
consent of 100% of Certificateholders if such amendment would result in the
disqualification of either Subsidiary REMIC or the Master REMIC as a REMIC under
the Code.
12-5
<PAGE>
d. Concurrently with the solicitation of any consent pursuant to this
Section 12.07, the 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 12.07, the Trustee shall furnish written
notification of the substance of such amendment to Standard & Poor's, Fitch and
each Certificateholder.
e. It shall not be necessary for the consent of Certificateholders
under this Section 12.07 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 Certificateholders shall be subject to
such reasonable requirements as the Trustee may prescribe.
f. The Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Trustee's own rights, duties or immunities under
this Agreement or otherwise.
g. In connection with any amendment pursuant to this Section, the
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.
h. In the absence of the consent described in subsection (c) of this
Section, in connection with any amendment pursuant to this Section, the Trustee
shall have received an unqualified Opinion of Counsel, the expense of which
shall not be an expense of the Trust, stating that any such amendment (i) will
not adversely affect the status of the Subsidiary REMIC or the Master REMIC as a
REMIC or the status of the Regular Certificates as "regular interests" in the
Master REMIC, and (ii) will not cause any tax (other than any tax imposed on
"net income from foreclosure property" under Section 860G(c)(1) of the Code that
would be imposed without regard to such amendment) to be imposed on the Trust,
including, without limitation, any tax imposed on "prohibited transactions"
under Section 860F(a)(1) of the Code or on "contributions after the startup
date" under Section 860G(d)(1) of the Code.
i. Upon the execution of any amendment or consent pursuant to this
Section 12.07, 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 Certificateholder hereunder shall be bound thereby.
SECTION 12.08. Notices.
All communications and notices pursuant hereto to the Servicer, the
Originator and the Trustee shall be in writing and delivered or mailed to it at
the appropriate following address:
12-6
<PAGE>
If to the Seller:
Conseco Finance Securitizations Corp.
300 Landmark Towers
345 St. Peter Street
St. Paul, Minnesota 55102-1639
Attention: Chief Financial Officer
Telecopier Number: (651) 293-5746
If to the Originator, the Guarantor:
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 Trustee:
U.S. Bank National Association
180 East Fifth Street
St. Paul, Minnesota 55101
Attention: Tamara Schultz-Fugh
Telecopier Number: (651) 244-0089
If to Standard & Poor's:
Standard & Poor's Rating Services,
a division of The McGraw-Hill Companies, Inc.
55 Water Street, 40th Floor
New York, New York 10041
Attention: Asset Backed Securities Surveillance Group
Telecopier Number: (212) 208-1582
If to Fitch:
Fitch IBCA, Inc.
One State Street Plaza, 31st Floor
New York, NY 10004
Attention: ABS Surveillance Group
Telecopier Number: (212) 344-1986
or at such other address as the party may designate by notice to the other
parties hereto, which notice shall be effective when received.
12-7
<PAGE>
All communications and notices pursuant hereto to a Certificateholder
shall be in writing and delivered or mailed at the address shown in the
Certificate Register.
SECTION 12.09. 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 12.10. Headings.
The headings herein are for purposes of reference only and shall not
otherwise affect the meaning or interpretation of any provision hereof.
SECTION 12.11. Governing Law.
This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of Minnesota.
12-8
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized this __ day
of __________, ______.
GREEN TREE FINANCIAL CORPORATION
By
-----------------------------------
Phyllis A. Knight
Senior Vice President and Treasurer
CONSECO FINANCE SECURITIZATIONS CORP.
By
-----------------------------------
Phyllis A. Knight
Senior Vice President and Treasurer
U.S. BANK NATIONAL ASSOCIATION
not in its individual capacity but
solely as Trustee
By
-----------------------------------
Laurie A. Howard
Vice President
12-9
<PAGE>
EXHIBIT A
---------
FORM OF CLASS A CERTIFICATE
---------------------------
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS
ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE
CODE.
Class A-[1][2][3][4][5][6][7][8][9] No.
(Senior)
Cut-off Date: as defined in the Remittance Rate: ____%
Pooling and Servicing Agreement [Remittance Rate: Floating Rate
dated as of _________________ equal to the Weighted Average
Contract Rate (subject to a maximum
of __%)]
First Remittance Date:
_________________ Denomination: $___________
Aggregate Denomination of
Servicer: All Class A-[1][2][3][4][5][6][7][8][9]
Green Tree Financial Corporation Certificates: $___________
Maturity Date:_____________
(or if such day is not a
Business Day, then the next
succeeding Business Day)
CUSIP: _____
MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE PASS-THROUGH CERTIFICATES,
SERIES , CLASS A-[1][2][3][4][5][6][7][8][9] (SENIOR)
---------------------------------------------------------
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
GREEN TREE FINANCIAL CORPORATION OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT
SET FORTH IN THE AGREEMENT.
This certifies that Cede & Co. is the registered owner of the undivided
Percentage Interest represented by the original principal amount set forth above
in Manufactured Housing Contract Senior/Subordinate Pass-Through Certificate
Trust ________ (the "Trust"), which includes among its
A-1
<PAGE>
assets a pool of manufactured housing installment sale contracts and installment
loan agreements (including, without limitation, all related security interests
and any and all rights to receive payments which are due pursuant thereto on or
after the applicable Cut-off Date. The Trust has been created pursuant to a
Pooling and Servicing Agreement (the "Agreement"), dated as of _____________,
among Green Tree Financial Corporation, as Originator, Servicer and Guarantor
(the "Originator"), Conseco Finance Securitizations Corp., as Seller (the
"Seller"), and U.S. Bank National Association, as Trustee of the Trust (the
"Trustee"). This Certificate is one of the Certificates described in the
Agreement and is issued pursuant and subject to the Agreement. By acceptance of
this Certificate the holder assents to and becomes bound by the Agreement. To
the extent not defined herein, all capitalized terms have the meanings assigned
to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on the first
day (or if such day is not a Business Day, the next succeeding Business Day)
(the "Remittance Date") of each month commencing in ___________________, so long
as the Agreement has not been terminated, by check (or, if such
Certificateholder holds a Class of Class A Certificates with an aggregate
Percentage Interest of at least 5% and so desires, by wire transfer pursuant to
instructions delivered to the Trustee at least 10 days prior to such Remittance
Date) to the registered Certificateholder at the address appearing on the
Certificate Register as of the Business Day immediately preceding such
Remittance Date, in an amount equal to the Certificateholder's Percentage
Interest of the portion of the Class A Distribution Amount to be distributed to
such Class of Class A Certificates. The Maturity Date of this Certificate is
___________________ or the next succeeding Business Day if such
___________________ is not a Business Day.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds in the Certificate Account to the extent
available for distribution to the Certificateholder as provided in the Agreement
for payment hereunder and that the Trustee in its individual capacity is not
personally liable to the Certificateholder for any amounts payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement. By acceptance of this Certificate,
the Certificateholder agrees to disclosure of his, her or its name and address
to other Certificateholders under the conditions specified in the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Certificateholder free of
charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trustee in
St. Paul, Minnesota, accompanied by a written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar duly executed by the
holder thereof or his or her attorney duly authorized in writing, and thereupon
one or more new Certificates evidencing the same aggregate Percentage Interest
will be issued to the designated transferee or transferees.
A-2
<PAGE>
[Unless this Certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC") to Issuer or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
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 Originator, the Seller, the Servicer, the Trustee, the Paying Agent
and the Certificate Registrar and any agent of the Originator, the Seller, the
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.
A-3
<PAGE>
IN WITNESS WHEREOF, Manufactured Housing Contract Senior/ Subordinate
Pass-Through Certificate Trust _________ has caused this Certificate to be duly
executed by the manual signature of a duly authorized officer of the Trustee.
Dated: MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATE
TRUST
By U.S. BANK NATIONAL ASSOCIATION
By ________________________________
Authorized Signatory
A-4
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ______________________________ the within Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificate and does hereby irrevocably
constitute and appoint ______________________________ Attorney to transfer the
said certificate on the Certificate Register maintained by the Trustee, with
full power of substitution in the premises.
Dated: By_______________________
Signature
A-5
<PAGE>
EXHIBIT B
---------
FORM OF CLASS M-[1][2] CERTIFICATE
----------------------------------
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS
ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE
CODE.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES [AND THE Class M-1 CERTIFICATES] AS DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
Class M-[1][2] No.
(Subordinate)
Cut-off Date: as defined in the Remittance Rate: Floating Rate equal
Pooling and Servicing Agreement to the Weighted Average Contract Rate
dated as of (subject to a maximum of ______%)
Denomination: $_____________
First Remittance Date:
________________ Aggregate Denomination of
All Class M-[1][2] Certificates:
$____________________
Servicer: Maturity Date:
Green Tree Financial Corporation _______________
(or if such day is not a
Business Day, then the next
succeeding Business Day)
CUSIP: _____
MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE PASS-THROUGH CERTIFICATES,
SERIES , CLASS M-[1][2] (SUBORDINATE)
-----------------------------------------
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
GREEN TREE FINANCIAL CORPORATION OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT
SET FORTH IN THE AGREEMENT.
B-1
<PAGE>
This certifies that Cede & Co. is the registered owner of the undivided
Percentage Interest represented by the original principal amount set forth above
in Manufactured Housing Contract Senior/Subordinate Pass-Through Certificate
Trust ______ (the "Trust"), which includes among its assets a pool of
manufactured housing installment sale contracts and installment loan agreements
(including, without limitation, all related security interests and any and all
rights to receive payments which are due pursuant thereto on or after the
applicable Cut-off Date. The Trust has been created pursuant to a Pooling and
Servicing Agreement (the "Agreement"), dated as of ___________ among Green Tree
Financial Corporation, as Originator, Servicer and Guarantor (the "Originator"),
Conseco Finance Securitizations Corp., as Seller (the "Seller"), and U.S. Bank
National Association, as Trustee of the Trust (the "Trustee"). This Certificate
is one of the Certificates described in the Agreement and is issued pursuant and
subject to the Agreement. By acceptance of this Certificate the holder assents
to and becomes bound by the Agreement. To the extent not defined herein, all
capitalized terms have the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on the first
day (or if such day is not a Business Day, the next succeeding Business Day)
(the "Remittance Date") of each month commencing in _____________________, so
long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds a Class M-[1][2] Certificate with an aggregate
Percentage Interest of at least 5% and so desires, by wire transfer pursuant to
instructions delivered to the Trustee at least 10 days prior to such Remittance
Date) to the registered Certificateholder at the address appearing on the
Certificate Register as of the Business Day immediately preceding such
Remittance Date, in an amount equal to the Certificateholder's Percentage
Interest of the portion of the Class [M-1/M-2] Distribution Amount for such
Remittance Date. The Maturity Date of this Certificate is _________________ or
the next succeeding Business Day if such _________________ is not a Business
Day.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds in the Certificate Account to the extent
available for distribution to the Certificateholder as provided in the Agreement
for payment hereunder and that the Trustee in its individual capacity is not
personally liable to the Certificateholder for any amounts payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement. By acceptance of this Certificate,
the Certificateholder agrees to disclosure of his, her or its name and address
to other Certificateholders under the conditions specified in the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Certificateholder free of
charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trustee in
St. Paul, Minnesota, accompanied by a written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar duly executed by the
holder thereof or his or her attorney duly authorized in writing, and thereupon
one or more new Certificates evidencing the same aggregate Percentage Interest
will be issued to the designated transferee or transferees.
B-2
<PAGE>
[Unless this Certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC") to Issuer or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
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 Originator, the Seller, the Servicer, the Trustee, the Paying Agent
and the Certificate Registrar and any agent of the Originator, the Seller, the
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.
B-3
<PAGE>
IN WITNESS WHEREOF, Manufactured Housing Contract Senior/Subordinate
Pass-Through Certificate Trust ________ has caused this Certificate to be duly
executed by the manual signature of a duly authorized officer of the Trustee.
Dated: MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATE
TRUST
By U.S. BANK NATIONAL ASSOCIATION
By __________________________________
Authorized Signatory
B-4
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _____________________________ the within Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificate and does hereby irrevocably
constitute and appoint _____________________________ Attorney to transfer the
said certificate on the Certificate Register maintained by the Trustee, with
full power of substitution in
the premises.
Dated: By_______________________
Signature
B-5
<PAGE>
EXHIBIT C-1
FORM OF CLASS B-[1][2] CERTIFICATE
----------------------------------
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS
ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE
CODE.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES, THE CLASS M-1 CERTIFICATES [,] [AND] THE CLASS M-2 CERTIFICATES
[AND THE CLASS B-1 CERTIFICATES] AS DESCRIBED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
Class B-[1][2] No.
(Subordinate)
Cut-off Date: as defined in the Remittance Rate: Floating Rate equal
Pooling and Servicing Agreement to the Weighted Average Contract Rate
dated as of _____________ (subject to a maximum of ____%)
Denomination: $___________
First Remittance Date:
__________________ Aggregate Denomination of
All Class B-[1][2] Certificates:
$________________________
Servicer:
Green Tree Financial Corporation Maturity Date:
(or if such day is not a
Business Day, then the next
succeeding Business Day)
CUSIP: _____
MANUFACTURED HOUSING CONTRACT SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATES, SERIES , CLASS B-[1][2] (SUBORDINATE)
------------------------------------------------------------------
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
GREEN TREE FINANCIAL CORPORATION OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT
SET FORTH IN THE AGREEMENT.
C-1-1
<PAGE>
This certifies that Cede & Co. is the registered owner of the undivided
Percentage Interest represented by the original principal amount set forth above
in Manufactured Housing Contract Senior/Subordinate Pass-Through Certificate
Trust ___________ (the "Trust"), which includes among its assets a pool of
manufactured housing installment sale contracts and installment loan agreements
(including, without limitation, all related security interests and any and all
rights to receive payments which are due pursuant thereto on or after the
applicable Cut-off Date. The Trust has been created pursuant to a Pooling and
Servicing Agreement (the "Agreement"), dated as of ___________, among Green Tree
Financial Corporation, as Originator, Servicer and Guarantor (the "Originator"),
Conseco Finance Securitizations Corp., as Seller (the "Seller"), and U.S. Bank
National Association, as Trustee of the Trust (the "Trustee"). This Certificate
is one of the Certificates described in the Agreement and is issued pursuant and
subject to the Agreement. By acceptance of this Certificate the holder assents
to and becomes bound by the Agreement. To the extent not defined herein, all
capitalized terms have the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on the first
day (or if such day is not a Business Day, the next succeeding Business Day)
(the "Remittance Date") of each month commencing in ____________________ so long
as the Agreement has not been terminated, by check (or, if such
Certificateholder holds a Class of Class B Certificates with an aggregate
Percentage Interest of at least 5% and so desires, by wire transfer pursuant to
instructions delivered to the Trustee at least 10 days prior to such Remittance
Date) to the registered Certificateholder at the address appearing on the
Certificate Register as of the Business Day immediately preceding such
Remittance Date, in an amount equal to the Certificateholder's Percentage
Interest of the Class [B-1/B-2] Distribution Amount for such Remittance Date.
The Maturity Date of this Certificate is _________, or the next succeeding
Business Day if such _____________ is not a Business Day.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds in the Certificate Account [and the
Limited Guarantee of the Company] to the extent available for distribution to
the Certificateholder as provided in the Agreement for payment hereunder and
that the Trustee in its individual capacity is not personally liable to the
Certificateholder for any amounts payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement. By acceptance of this Certificate, the
Certificateholder agrees to disclosure of his, her or its name and address to
other Certificateholders under the conditions specified in the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Certificateholder free of
charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trustee in
St. Paul, Minnesota, accompanied by a written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar duly executed by the
holder thereof or his or her attorney duly authorized in
C-1-2
<PAGE>
writi ng, and thereupon one or more new Certificates evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
[Unless this Certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC") to Issuer or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
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 Originator, the Seller, the Servicer, the Trustee, the Paying Agent
and the Certificate Registrar and any agent of the Originator, the Seller, the
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.
C-1-3
<PAGE>
IN WITNESS WHEREOF, Manufactured Housing Contract Senior/ Subordinate
Pass-Through Certificate Trust _________ has caused this Certificate to be duly
executed by the manual signature of a duly authorized officer of the Trustee.
Dated: MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATE
TRUST
By U.S. BANK NATIONAL ASSOCIATION
By _______________________________
Authorized Officer
C-1-4
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ______________________________ the within Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificate and does hereby irrevocably
constitute and appoint ______________________________ Attorney to transfer the
said certificate on the Certificate Register maintained by the Trustee, with
full power of substitution in the premises.
Dated: By _______________________
Signature
C-1-5
<PAGE>
EXHIBIT C-2
-----------
FORM OF CLASS B-3I CERTIFICATE
------------------------------
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS
ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE
CODE.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES, THE CLASS M CERTIFICATES AND THE CLASS B CERTIFICATES AS DESCRIBED
IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 9.02 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
Class B-3I No. _____
(Subordinate)
Cut-off Date: as defined in the Percentage Interest: _____%
Pooling and Servicing Agreement
dated as of ______________
Maturity Date:
First Remittance Date: ____________________
_________________ (or if such day is not a
Business Day, then the next
succeeding Business Day)
Servicer:
Green Tree Financial Corporation
MANUFACTURED HOUSING CONTRACT SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATES, SERIES , CLASS B-3I (SUBORDINATE)
C-2-1
<PAGE>
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
GREEN TREE FINANCIAL CORPORATION OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT
SET FORTH IN THE AGREEMENT.
This certifies that Green Tree Finance Corp.--Two is the registered
owner of the undivided Percentage Interest set forth above in Manufactured
Housing Contract Senior/Subordinate Pass-Through Certificate Trust ________ (the
"Trust"), which includes among its assets a pool of manufactured housing
installment sale contracts and installment loan agreements (including, without
limitation, all related security interests and any and all rights to receive
payments which are due pursuant thereto on or after the applicable Cut-off Date.
The Trust has been created pursuant to a Pooling and Servicing Agreement (the
"Agreement"), dated as of ___________________, among Green Tree Financial
Corporation, as Originator, Servicer and Guarantor (the "Originator"), Conseco
Finance Securitizations Corp., as Seller (the "Seller"), and U.S. Bank National
Association, as Trustee of the Trust (the "Trustee"). This Certificate is one of
the Certificates described in the Agreement and is issued pursuant and subject
to the Agreement. By acceptance of this Certificate the holder assents to and
becomes bound by the Agreement. To the extent not defined herein, all
capitalized terms have the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on the first
day (or if such day is not a Business Day, the next succeeding Business Day)
(the "Remittance Date") of each related Due Period commencing in _______________
so long as the Agreement has not been terminated, by check (or, if such
Certificateholder holds Class B-3I Certificates with an aggregate Percentage
Interest of at least 5% and so desires, by wire transfer pursuant to
instructions delivered to the Trustee at least 10 days prior to such Remittance
Date) to the registered Certificateholder at the address appearing on the
Certificate Register as of the Business Day immediately preceding such
Remittance Date, in an amount equal to the Certificateholder's Percentage
Interest of the Class B-3I Distribution Amount for such Remittance Date. The
Maturity Date of this Certificate is ________________ or the next succeeding
Business Day if such _________________ is not a Business Day.
THIS CERTIFICATE IS AN INTEREST ONLY CERTIFICATE. THE HOLDER OF THIS
CERTIFICATE SHALL NOT BE ENTITLED TO ANY DISTRIBUTIONS OF PRINCIPAL WITH RESPECT
TO THE CONTRACTS.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds in the Certificate Account to the extent
available for distribution to the Certificateholder as provided in the Agreement
for payment hereunder and that the Trustee in its individual capacity is not
personally liable to the Certificateholder for any amounts payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement. By acceptance of this Certificate,
the Certificateholder agrees to disclosure of his, her or its name and address
to other Certificateholders under the conditions specified in the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Agreement
and all amendments thereto will be provided to any Certificateholder free of
charge upon a written request to the Trustee.
C-2-2
<PAGE>
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trustee in
St. Paul, Minnesota, accompanied by a written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar duly executed by the
holder thereof or his or her attorney duly authorized in writing, and thereupon
one or more new Certificates evidencing the same aggregate Percentage Interest
will be issued to the designated transferee or transferees.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC") to Issuer or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
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 Originator, the Seller, the Servicer, the Trustee, the Paying Agent
and the Certificate Registrar and any agent of the Originator, the Seller, the
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.
C-2-2
<PAGE>
IN WITNESS WHEREOF, Manufactured Housing Contract Senior/ Subordinate
Pass-Through Certificate Trust _______ has caused this Certificate to be duly
executed by the manual signature of a duly authorized officer of the Trustee.
Dated: MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATE
TRUST
By U.S. BANK NATIONAL ASSOCIATION
By ______________________________
Authorized Officer
C-2-4
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ______________________________ the within Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificate and does hereby irrevocably
constitute and appoint ______________________________ Attorney to transfer the
said certificate on the Certificate Register maintained by the Trustee, with
full power of substitution in the premises.
Dated: By _______________________
Signature
C-2-5
<PAGE>
EXHIBIT D
---------
FORM OF ASSIGNMENT
------------------
In accordance with the Pooling and Servicing Agreement (the
"Agreement") dated as of ____________ among Green Tree Financial Corporation, as
Originator, Servicer and Guarantor (the "Originator"), Conseco Finance
Securitizations Corp., as Seller (the "Seller") and U.S. Bank National
Association, as Trustee (the "Trustee"), the Originator and Seller does hereby
transfer, assign, set over and otherwise convey to the Trustee (i) all the
right, title and interest of the Company in and to the Initial and Additional
Contracts, including, without limitation, all right, title and interest in and
to the Collateral Security and all rights to receive payments on or with respect
to the Initial and Additional Contracts (other than the principal and interest
due on the Initial and Additional Contracts before the applicable Cut-off Date),
(ii) all rights under every Hazard Insurance Policy relating to a Manufactured
Home securing an Initial or Additional Contract for the benefit of the creditor
of such Initial or Additional Contract, (iii) all rights under all FHA/VA
Regulations pertaining to any Initial or Additional Contract that is an FHA/VA
Contract, (iv) all rights of the Seller under the Transfer Agreement, (v) the
proceeds from the Errors and Omissions Protection Policy and all rights under
any blanket hazard insurance policy to the extent they relate to the
Manufactured Homes, (vi) all documents contained in the Contract Files and the
Land-and-Home Contract Files relating to the Initial and Additional Contracts,
(vii) an amount equal to the difference between the aggregate Cut-off Date
Principal Balances of the Staged-Funding Contracts and the principal balance of
the Staged-Funding Contracts as of the Closing Date paid by the underwriters of
the Certificates to the Trust by order of the Company out of the proceeds of the
sale of the Certificates, (viii) amounts on deposit in the Capitalized Interest
Account and in the Pre-Funding Account, and (ix) all proceeds and products 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 ______________.
[GREEN TREE FINANCIAL CORPORATION]
[CONSECO FINANCE SECURITIZATIONS CORP.]
[Seal] By________________________________
[Name]
[Title]
D-1
<PAGE>
EXHIBIT E
---------
FORM OF CERTIFICATE OF OFFICER
------------------------------
[GREEN TREE FINANCIAL CORPORATION]
[CONSECO FINANCE SECURITIZATIONS CORP.]
OFFICER'S CERTIFICATE
We, _________________________ hereby certify that we are the duly
elected _________________________________________________, respectively, of
[Green Tree Financial Corporation ("Green Tree")] [Conseco Finance
Securitizations Corp. ("Conseco Securitizations")], and that as such we are duly
authorized to execute and deliver this Certificate on behalf of Green Tree and
Conseco in connection with the Pooling and Servicing Agreement, dated as of
______________ (the "Pooling and Servicing Agreement") among Green Tree
Financial Corporation, Conseco Finance Securitizations Corp. and U.S. Bank
National Association, as Trustee, and the Underwriting Agreement relating to the
Class A, Class M-1, Class M-2 and Class B Certificates, dated _________________
(the "Underwriting Agreement"), among Green Tree Financial Corporation, Conseco
Finance Securitizations Corp. (the "Underwriters") (all capitalized terms used
herein without definition having the respective meanings specified in the
Pooling and Servicing Agreement and the Underwriting Agreement) and further
certify as follows:
1. Attached hereto as Exhibits I and II, respectively, are
true and correct copies of the [Certificate] [Articles] of
Incorporation and [Restated] Bylaws of [Green Tree] [Conseco
Securitizations], together with all amendments thereto, both of which
are in full force and effect on the date hereof.
2. No proceedings looking toward merger, liquidation,
dissolution or bankruptcy of [Green Tree] [Conseco Securitizations] are
pending or contemplated.
3. There is no litigation pending, or to our knowledge,
threatened, which, if determined adversely to [Green Tree] [Conseco
Securitizations], would affect adversely the sale of the Contracts, the
execution, delivery or enforceability of the Pooling and Servicing
Agreement and the Underwriting Agreement[, or the ability of Green Tree
to service and administer the Contracts in accordance with the terms of
the Pooling and Servicing Agreement].
4. Each person who, as an officer or representative of [Green
Tree] [Conseco Securitizations], signed the Pooling and Servicing
Agreement, the Underwriting Agreement, or any other document delivered
prior hereto or on the date hereof in connection with the sale and
servicing of the Contracts in accordance with the Pooling and Servicing
Agreement or the Underwriting Agreement was at the time of such signing
and is as of the date hereof duly elected or appointed, qualified and
acting as such officer or representative, and the signatures of such
persons appearing on such documents are their genuine signatures.
E-1
<PAGE>
5. Neither the execution and delivery by [Green Tree] [Conseco
Securitizations] of the Pooling and Servicing Agreement or the
Underwriting Agreement, nor its compliance with the terms and
provisions thereof, will conflict with, or result in a breach of, any
of the terms of, or constitute a default under, any judgment, order,
injunction or decree of any domestic court or governmental authority to
which [Green Tree] [Conseco Securitizations] is subject or any
indenture, agreement, contract or commitment to which [Green Tree]
[Conseco Securitizations] is a party or by which it is bound, which
conflict, breach or default presents a reasonable possibility of having
a materially adverse effect on the business or operations of [Green
Tree] [Conseco Securitizations]. No UCC-1 financing statements or
statements of assignment listing [Green Tree] [Conseco Securitizations]
as debtor and describing any of the Contracts as collateral other than
the UCC-1 financing statement in favor of the Trustee, have been signed
on behalf of [Green Tree] [Conseco Securitizations] and filed by any
person after ______________ and prior to the date hereof.
6. Attached hereto as Exhibit IV is a certified true copy of
the resolutions of the Board of Directors of [Green Tree] [Conseco
Securitizations] (the "Resolutions") adopted with respect to the
authorization of [Green Tree] [Conseco Securitizations] to take such
actions and enter into such agreements as are necessary to sell and
service the Contracts in accordance with the Pooling and Servicing
Agreement and the Underwriting Agreement; said resolutions have not
been amended, modified, annulled or revoked and are in full force and
effect on the date hereof.
7. The Registration Statement and the Prospectus, at the time
the Registration Statement became effective did comply, and as of the
date hereof comply, in all material respects with the requirements of
the Securities Act of 1933, as amended (the "1933 Act") and the
Regulations. The Registration Statement, at the time it became
effective did not, and as of the date hereof does not, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading. The Prospectus as of the date thereof did not,
and as of the date hereof does not, contain any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
representations and warranties in this subsection shall not apply to
statements in, or omissions from, the Registration Statement or
Prospectus made in reliance upon and in conformity with information
furnished to [Green Tree] [Conseco Securitizations] in writing by the
Underwriters expressly for use in the Registration Statement or
Prospectus. The conditions to the use by [Green Tree] [Conseco
Securitizations] of registration statement on Form S-3 under the 1933
Act, as set forth in the General Instructions to Form S-3, have been
satisfied with respect to the Registration Statement and the
Prospectus. There are no contracts or documents of [Green Tree]
[Conseco Securitizations] which are required to be filed as exhibits to
the Registration Statement pursuant to the 1933 Act or the Regulations
which have not been so filed.
8. Each of the representations and warranties contained in
Sections 3.01 and 3.05 of the Pooling and Servicing Agreement and
Section 1 of the Underwriting Agreement is true and correct on and as
of the date hereof. To the best of our knowledge, the representations
E-2
<PAGE>
and warranties of [Green Tree] [Conseco Securitizations] contained in
Sections 3.02 and 3.03 of the Pooling and Servicing Agreement are true
and correct on the date hereof.
9. [Green Tree] [Conseco Securitizations] has complied with
all the agreements by which it is bound in connection with the
transactions contemplated by the Pooling and Servicing Agreement and
Underwriting Agreement, and has satisfied all the conditions on its
part to be performed or satisfied prior to the Closing Date in
connection with the transactions contemplated by the Pooling and
Servicing Agreement and the Underwriting Agreement.
10. The Pooling and Servicing Agreement and the Underwriting
Agreement have been duly executed by [Green Tree] [Conseco
Securitizations] pursuant to and in compliance with the Resolutions.
11. No event with respect to [Green Tree] [Conseco
Securitizations] has occurred or is continuing which would constitute
an Event of Termination or an event that with notice or lapse of time
or both would become an Event of Termination under the Pooling and
Servicing Agreement.
IN WITNESS WHEREOF, I have affixed hereunto my signature this ___ day
of ___________.
[GREEN TREE FINANCIAL CORPORATION]
By ________________________________
[Name]
[Title]
[CONSECO FINANCE SECURITIZATIONS CORP.]
By ________________________________
[Name]
[Title]
E-3
<PAGE>
EXHIBIT F
---------
FORM OF OPINION OF COUNSEL FOR THE ORIGINATOR
---------------------------------------------
The opinion of Dorsey & Whitney LLP shall be to the effect that
(capitalized terms have the meanings set forth in the Pooling and Servicing
Agreement):
1. The Originator is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware, with corporate
power to execute, deliver and perform its obligations under the Pooling and
Servicing Agreement (including the Limited Guarantee contained therein). The
Originator is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which the performance of its duties under
the Pooling and Servicing Agreement would require such qualification.
2. The Pooling and Servicing Agreement has been duly authorized by all
requisite corporate action, duly executed and delivered by the Originator, and
constitutes the valid and binding obligations of the Originator enforceable in
accordance with their terms. The Certificates have been duly authorized by all
requisite corporate action and, when duly and validly executed by the Trustee in
accordance with the Pooling and Servicing Agreement, will be validly issued and
outstanding and entitled to the benefits of the Pooling and Servicing Agreement.
3. No consent, approval, authorization or order of any state or federal
court or governmental agency or body is required to be obtained by the
Originator for the consummation of the transactions contemplated by the Pooling
and Servicing Agreement, except such as may be required under blue sky laws
under any jurisdiction in connection with the offering of the Regular
Certificates by the Underwriter pursuant to the Underwriting Agreement.
4. The Pooling and Servicing Agreement is not required to be qualified
under the Trust Indenture Act of 1939, as now in effect, and the Trust is not
required to be registered as an investment company under the Investment Company
Act of 1940.
5. Neither the transfer of the Contracts to the Trustee acting on
behalf of the Trust, nor the assignment of the Originator's security interest in
the related Manufactured Homes, nor the issuance or sale of the Certificates,
nor the execution and delivery of the Pooling and Servicing Agreement (including
the Limited Guarantee contained therein), nor the consummation of any other of
the transactions contemplated in the Pooling and Servicing Agreement, nor the
fulfillment of the terms of the Certificates or the Pooling and Servicing
Agreement by the Originator will conflict with, or result in a breach, violation
or acceleration of, or constitute a default under, any term or provision of the
Certificate of Incorporation or Bylaws of the Originator or of any indenture or
other agreement or instrument known to us to which the Originator is a party or
by which it is bound, or result in a violation of, or contravene the terms of
any statute, order or regulation, applicable to the Originator, of any court,
regulatory body, administrative agency or governmental body having jurisdiction
over it.
F-1
<PAGE>
6. There are no actions or proceedings pending or, to the best of our
knowledge, actions, proceedings or investigations pending or overtly threatened
against the Originator before any court, administrative agency or other tribunal
(A) asserting the invalidity of the Pooling and Servicing Agreement, the
Certificates, the hazard or flood insurance policies applicable to any Contracts
or the Errors and Omissions Protection Policy, (B) seeking to prevent the
issuance of the Certificates or the consummation of any of the transactions
contemplated by the Pooling and Servicing Agreement, (C) which is likely
materially and adversely to affect the performance by the Originator of its
obligations under, or the validity or enforceability of the Pooling and
Servicing Agreement, the Certificates, or (D) seeking adversely to affect the
federal income tax attributes of the Certificates described in the Prospectus
under the heading " Federal Income Tax Consequences."
7. The transfer of the Initial and Additional Contracts to the Trust in
accordance with Section 2.01 of the Pooling and Servicing Agreement would not be
avoidable as a preferential transfer under Section 547 of the United States
Bankruptcy Code (11 U.S.C. ss. 547), as in effect on the date hereof, in the
event that the Originator became a debtor under the United States Bankruptcy
Code.
8. Pursuant to the Pooling and Servicing Agreement the Seller has
transferred to the Trustee acting on behalf of the Trust all of the Originator's
right, title and interest in the Initial and Additional Contracts, free and
clear of any and all other assignments, encumbrances, options, rights, claims,
liens or security interests (except tax or possessory liens) that may affect the
right of the Trustee in and to such Contracts, and has delivered the
Land-and-Home Contract Files relating to the Initial and Additional Contracts to
the Trustee or its custodian. No filing or other action, other than the filing
of a financing statement on Form UCC-1 with the Secretary of State of the State
of Minnesota identifying the Contracts as collateral and naming the Originator
as debtor and the Trust as secured party, and the filing of continuation
statements as required by Section 4.02 of the Pooling and Servicing Agreement,
is necessary to perfect as against third parties the assignment of the Initial
and Additional Contracts by the Originator to the Trust. We have separately
provided you with our opinion concerning whether such assignment could be
recharacterized as a pledge rather than a sale in the event the Originator
became a debtor under the United States Bankruptcy Code. However, in the event
such assignment were characterized as a pledge securing a loan from the
Certificateholders to the Originator, it is our opinion that the Trustee would
be deemed to have a valid and perfected security interest in the Initial and
Additional Contracts and the proceeds thereof, which security interest would be
prior to any other security interest that may be perfected under the Uniform
Commercial Code as in effect in the State of Minnesota and over any "lien
creditor" (as defined in Minn. Stat. ss.336.9-301(3)) who becomes such after the
Closing Date, except that a subsequent purchaser of any Initial and Additional
Contract who gives new value and takes possession thereof in the ordinary course
of his business would have priority over the Trustee's security interest in such
Contract, if such purchaser acts without knowledge that such Contract was
subject to a security interest. We have assumed for the purposes of this opinion
that during the term of the Pooling and Servicing Agreement the Trustee, or its
custodian, shall maintain possession of the Land-and-Home Contract Files for the
purpose of perfecting the assignment to the Trustee of the Land-and-Home
Contracts.
9. In reliance upon certain representations and warranties set forth in
the Pooling and Servicing Agreement and assuming that the Originator and the
Trustee comply with the requirements of the Pooling and Servicing Agreement,
including the filing of a proper election, as of the date hereof
F-2
<PAGE>
each of the Subsidiary REMIC and the Master REMIC created pursuant to the
Pooling and Servicing Agreement will qualify as a REMIC. Further, the Regular
Certificates will evidence ownership of the "regular interests" and the Class C
Certificate will evidence ownership of the single class of "residual interest"
in the Master REMIC. For Minnesota income tax purposes, and subject to the
foregoing assumptions, and the provisions of Minnesota law as of the date
hereof, such Trust will not be subject to tax and the income of such Trust will
be taxable to the holders of interests therein, all in accordance with the
provisions of the Code concerning REMICs as amended through December 31, 1998.
Moreover, ownership of a Certificate will not be a factor in determining whether
such owner is subject to Minnesota income taxes. Therefore, if the owner of a
Certificate is not otherwise subject to Minnesota income or franchise taxes in
the State of Minnesota, such owner will not become subject to such Minnesota
taxes solely by virtue of owning a Certificate.
10. The transfer of the Initial and Additional Contracts and the
proceeds thereof by the Seller to the Trustee on the date hereof pursuant to the
Pooling and Servicing Agreement would not be avoidable as a fraudulent transfer
under the Uniform Fraudulent Transfer Act as in effect in Minnesota on the date
hereof (Minn. Stat. ss.ss. 513.41 through 513.51), nor, should the Seller or the
Originator become a debtor under the United States Bankruptcy Code, as a
fraudulent transfer under Section 548 of the United States Bankruptcy Code (11
U.S.C. ss. 548) as in effect on the date hereof.
F-3
<PAGE>
EXHIBIT G
---------
FORM OF TRUSTEE'S ACKNOWLEDGEMENT
---------------------------------
U.S. Bank National Association, a national banking association, acting
as trustee (the "Trustee") of the trust created pursuant to the Pooling and
Servicing Agreement, dated as of ___________, among Green Tree Financial
Corporation ("Green Tree"), Conseco Finance Securitizations Corp. (the "Seller")
and the Trustee (the "Pooling and Servicing Agreement") (all capitalized terms
used herein without definition having the respective meanings specified in the
Pooling and Servicing Agreement), acknowledges, pursuant to Section 2.03 of the
Pooling and Servicing Agreement, that the Trustee has received and holds in
trust thereunder the following (i) all the right, title and interest in and to
the manufactured housing contracts identified on the list (the "Contracts")
[delivered pursuant to Section 2.02(a) of the Agreement] [delivered with the
Subsequent Transfer Instrument], including, without limitation, all right, title
and interest in and to the Collateral Security and all rights to receive
payments on or with respect to the Contracts (other than the principal and
interest due on the Contracts before the applicable Cut-off Date), (ii) all
rights under every Hazard Insurance Policy relating to a Manufactured Home
securing a Contract for the benefit of the creditor of such Contract, (iii) all
rights under all FHA/VA Regulations pertaining to any FHA/VA Contract, (iv) the
proceeds from the Errors and Omissions Protection Policy and all rights under
any blanket hazard insurance policy to the extent they relate to the
Manufactured Homes, (v) all rights under the Transfer Agreement dated
_____________ between Green Tree and Seller, (vi) all documents contained in the
Contract Files and the Land-and-Home Contract Files, [(vii) $_______________
paid by the underwriters of the Certificates to the Trust by order of the Seller
pursuant to Section 2.01(b) of the Pooling and Servicing Agreement out of the
proceeds of the sale of the Certificates,] (viii) amounts on deposit in the
Capitalized Interest Account and the Pre-Funding Account and (ix) all proceeds
and products in any way derived from any of the foregoing.
The Trustee further acknowledges receipt of the Land-and-Home Contract
Files, and acknowledges that it will, within 90 days of the Closing Date,
conduct a cursory review of the Land-and-Home Contract Files and confirm that
each Land-and-Home Contract File included (a) an original copy of the
Land-and-Home Contract, (b) an original or a copy of a mortgage or deed of trust
or similar evidence of a lien on the real estate on which the related
Manufactured Home is situated, (c) the assignment of the Land-and-Home Contract
and the mortgage or deed of trust from the originator (if other than the Green
Tree) to the Green Tree, (d) if such Land-and-Home Contract was originated by
the Green Tree, an endorsement of such Land-and-Home Contract by the Green Tree,
(e) an assignment of the related Mortgage to the Trustee or in blank, and (f)
any extension, modification or waiver agreement(s), except as noted on the
document exception listing to be attached to such confirmation. The Trustee will
not otherwise review the Contracts and Land-and-Home Contract Files for
compliance with the terms of the Pooling and Servicing Agreement.
The Trustee further acknowledges that the Trustee, directly or through
a custodian, will hold said rights, interests and proceeds in trust for the use
and benefit of all Certificateholders.
G-1
<PAGE>
IN WITNESS WHEREOF, U.S. Bank National Association, as Trustee, has
caused this acknowledgement to be executed by its duly authorized officer and
its corporate seal affixed hereto as of this ___ day of _____________.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By ______________________________
Name: Laurie A. Howard
Title: Vice President
G-2
<PAGE>
EXHIBIT H
---------
FORM OF CUSTODIAN'S ACKNOWLEDGMENT
----------------------------------
U.S. Bank Trust National Association, a national banking association
(the "Custodian") acting as Custodian under a Custodial Agreement dated as of
_____________, between the Custodian and U.S. Bank National Association, as
Trustee (the "Trustee") (the "Custodial Agreement") under the Pooling and
Servicing Agreement dated as of _________________ among Green Tree Financial
Corporation as Originator, Servicer and Guarantor (the "Originator"), Conseco
Finance Securitizations Corp., as Seller (the "Seller") and the Trustee,
pursuant to which the Custodian holds on behalf of the Trustee certain
"Land-and-Home Contract Files," as described in the Pooling and Servicing
Agreement, hereby acknowledges receipt of such Land-and-Home Contract Files. The
Custodian further acknowledges that it will, within 90 days of the date of the
Custodial Agreement, conduct a cursory review of the Land-and-Home Contract
Files and confirm to the Trustee and the Originator that each Land-and-Home
Contract File included (a) an original copy of the Land-and-Home Contract, (b)
an original or a copy of a mortgage or deed of trust or similar evidence of a
lien on the real estate on which the related Manufactured Home is situated, (c)
the assignment of the Land-and-Home Contract and the mortgage or deed of trust
from the originator (if other than the Green Tree Financial Corporation) to
Green Tree Financial Corporation, (d) if such Land and Home Contract was
originated by Green Tree Financial Corporation, an endorsement of such
Land-and-Home Contract by Green Tree Financial Corporation, (e) an assignment of
the related Mortgage to the Trustee or in blank, and (f) any extension,
modification or waiver agreement(s), except as noted on the document exception
listing to be attached to such confirmation. The Custodian will not otherwise
review the Contracts and Land-and-Home Contract Files for compliance with the
terms of the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, U.S. Bank Trust National Association has caused
this acknowledgment to be executed by its duly authorized officer and its
corporate seal affixed hereto as of this ___ day of _____________.
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Custodian
By __________________________________
Its ______________________________
[Seal]
H-1
<PAGE>
EXHIBIT I
---------
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 "Company"), and that as such he is duly
authorized to execute and deliver this certificate on behalf of the Company
pursuant to Section 6.02 of the Pooling and Servicing Agreement (the
"Agreement") dated as of _______________ among the Green Tree Financial
Corporation, Conseco Finance Securitizations Corp. and U.S. Bank National
Association, as Trustee (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 Sections 6.01 and 6.02 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
_____________, ____
GREEN TREE FINANCIAL CORPORATION
By ____________________________
[Name]
[Title]
I-1
<PAGE>
EXHIBIT J
---------
FORM OF CLASS C SUBSIDIARY CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
UNCERTIFICATED SUBSIDIARY INTERESTS AS DESCRIBED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 9.02 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE. THIS CERTIFICATE MAY ONLY BE TRANSFERRED TO A PERMITTED TRANSFEREE
(AS DEFINED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN); ANY SUCH
TRANSFER MUST ALSO SATISFY THE OTHER REQUIREMENTS OF SECTION 9.02 OF SUCH
POOLING AND SERVICING AGREEMENT.
Class C Subsidiary No.
(Subordinate)
Cut-off Date: as defined in the Percentage Interest: _______
Pooling and Servicing Agreement
dated as of ________________
First Remittance Date:
__________________
MANUFACTURED HOUSING CONTRACT SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATES, SERIES , CLASS C SUBSIDIARY
(RESIDUAL INTEREST)
------------------------------------------------------
Cut-off Date Pool Principal Balance: $___________
J-1
<PAGE>
This certifies that Green Tree Finance Corp.--Two is the registered
owner of the Residual Interest represented by this Certificate, and entitled to
certain distributions out of Manufactured Housing Contract Senior/Subordinate
Pass-Through Certificate Trust ________ (the "Trust"), which includes among its
assets a pool of manufactured housing installment sale contracts and installment
loan agreements (including, without limitation, all related security interests
and any and all rights to receive payments which are due pursuant thereto on or
after the Cut-off Date) (the "Contracts"). The Trust has been created pursuant
to a Pooling and Servicing Agreement (the "Agreement"), dated as of _________,
among Green Tree Financial Corporation, as Originator, Servicer and Guarantor
(the "Originator"), Conseco Finance Securitizations Corp., as Seller (the
"Seller"), and U.S. Bank National Association, as Trustee of the Trust (the
"Trustee"). This Class C Subsidiary Certificate is one of the Class C Subsidiary
Certificates described in the Agreement and is issued pursuant and subject to
the Agreement. By acceptance of this Class C Subsidiary Certificate the holder
assents to and becomes bound by the Agreement. To the extent not defined herein,
all capitalized terms have the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on the first
day (or if such day is not a Business Day, the next succeeding Business Day)
(the "Remittance Date") of each month commencing in ____________________, so
long as the Agreement has not been terminated, by check (or, if such Class C
Subsidiary Certificateholder holds Class C Subsidiary Certificates with an
aggregate Percentage Interest of at least 20% and so desires, by wire transfer
pursuant to instructions delivered to the Trustee at least ten days prior to
such Remittance Date) to the registered Class C Subsidiary Certificateholder at
the address appearing on the Certificate Register as of the Business Day
immediately preceding such Remittance Date, in an amount equal to the Class C
Subsidiary Distribution Amount.
The Class C Subsidiary Certificateholder, by its acceptance of this
Certificate, agrees that it will look solely to the funds in the Certificate
Account to the extent available for distribution to the Class C Subsidiary
Certificateholder as provided in the Agreement for payment hereunder and that
the Trustee in its individual capacity is not personally liable to the Class C
Subsidiary Certificateholder for any amounts payable under this Certificate or
the Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement. By acceptance of this Certificate, the
Certificateholder agrees to disclosure of his, her or its name and address to
other Certificateholders under the conditions specified in the Agreement.
This Class C Subsidiary Certificate does not purport to summarize the
Agreement and reference is made to the Agreement for information with respect to
the interests, rights, benefits, obligations, proceeds and duties evidenced
hereby and the rights, duties and immunities of the Trustee. Copies of the
Agreement and all amendments thereto will be provided to any Class C
Certificateholder free of charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Class C Subsidiary Certificate is registrable in
the Certificate Register of the Certificate Registrar upon surrender of this
Class C Subsidiary Certificate for registration of transfer at the office or
agency maintained by the Trustee in St. Paul, Minnesota, accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder thereof or his or her attorney
duly authorized in writing, and thereupon one or more new Class C Subsidiary
J-2
<PAGE>
Certificates evidencing the same aggregate amount of Class C Subsidiary
Certificates will be issued to the designated transferee or transferees.
As provided in the Agreement and subject to certain limitations therein
set forth, this Class C Subsidiary Certificate is exchangeable for new Class C
Subsidiary Certificates of authorized denominations evidencing the same
aggregate Percentage Interest as requested by the holder surrendering the same.
The Originator, the Servicer, the Trustee, the Paying Agent and the
Certificate Registrar and any agent of the Originator, the Servicer, the
Trustee, the Paying Agent or the Certificate Registrar may treat the person in
whose name this Class C Subsidiary Certificate is registered as the owner hereof
for all purposes, and neither the Originator, the Servicer, the Trustee, the
Paying Agent, the Certificate Registrar nor any such agent shall be affected by
any notice to the contrary.
The holder of this Class C Subsidiary Certificate, by acceptance
hereof, agrees that, in accordance with the requirements of Section 860D(b)(1)
of the Code, the federal tax return of the Trust for its first taxable year
shall provide that the Subsidiary REMIC elects to be treated as a "real estate
mortgage investment conduit" (a "REMIC") under the Code for such taxable year
and all subsequent taxable years. The Uncertificated Subsidiary Interests shall
be "regular interests" in the Subsidiary REMIC and the Class C Subsidiary
Certificates shall be the "residual interest" in the Subsidiary REMIC. In
addition, the holder of this Class C Subsidiary Certificate, by acceptance
hereof, (i) agrees to file tax returns consistent with and in accordance with
any elections, decisions or other reports made or filed with regard to federal,
state or local taxes on behalf of the Subsidiary REMIC, and (ii) agrees to
cooperate with the Originator in connection with examinations of the Subsidiary
REMIC's affairs by tax authorities, including administrative and judicial
proceedings, and (iii) makes the additional agreements, designations and
appointments, and undertakes the responsibilities, set forth in Section 6.06 of
the Agreement.
J-3
<PAGE>
IN WITNESS WHEREOF, Manufactured Housing Contract Senior/ Subordinate
Pass-Through Certificate Trust ____________ has caused this Certificate to be
duly executed by the manual signature of a duly authorized officer of the
Trustee.
Dated: MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATE
TRUST ___________
By U.S. BANK NATIONAL ASSOCIATION
By ____________________________
Authorized Officer
J-4
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ___________________ the within Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificate, and does hereby irrevocably
constitute and appoint ____________________ Attorney to transfer the said
certificate on the Certificate Register maintained by the Trustee, with full
power of substitution in the premises.
Dated: By____________________________
Signature
J-5
<PAGE>
EXHIBIT K
---------
FORM OF CLASS C MASTER CERTIFICATE
----------------------------------
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES, THE CLASS M CERTIFICATES, THE CLASS B-1 CERTIFICATES, THE CLASS
B-2 CERTIFICATES AND THE CLASS B-3I CERTIFICATES AS DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 9.02 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE. THIS CERTIFICATE MAY ONLY BE TRANSFERRED TO A PERMITTED TRANSFEREE
(AS DEFINED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN); ANY SUCH
TRANSFER MUST ALSO SATISFY THE OTHER REQUIREMENTS OF SECTION 9.02 OF SUCH
POOLING AND SERVICING AGREEMENT.
Class C Master No.
(Subordinate)
Cut-off Date: as defined in the Percentage Interest:
Pooling and Servicing Agreement
dated as of _______________
First Remittance Date:
_______________
MANUFACTURED HOUSING CONTRACT SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATES, SERIES , CLASS C MASTER
(RESIDUAL INTEREST)
--------------------------------------------------
Cut-off Date Pool Principal Balance: $___________
K-1
<PAGE>
This certifies that Green Tree Finance Corp.--Two is the registered
owner of the Residual Interest represented by this Certificate, and entitled to
certain distributions out of Manufactured Housing Contract Senior/Subordinate
Pass-Through Certificate Trust ____________ (the "Trust"), which includes among
its assets a pool of manufactured housing installment sale contracts and
installment loan agreements (including, without limitation, all related security
interests and any and all rights to receive payments which are due pursuant
thereto on or after the Cut-off Date) (the "Contracts"). The Trust has been
created pursuant to a Pooling and Servicing Agreement (the "Agreement"), dated
as of ___________, among Green Tree Financial Corporation, as Originator,
Servicer and Guarantor (the "Originator"), Conseco Finance Securitizations
Corp., as Seller (the "Seller"), and U.S. Bank National Association, as Trustee
of the Trust (the "Trustee"). This Class C Master Certificate is one of the
Class C Master Certificates described in the Agreement and is issued pursuant
and subject to the Agreement. By acceptance of this Class C Master Certificate
the holder assents to and becomes bound by the Agreement. To the extent not
defined herein, all capitalized terms have the meanings assigned to such terms
in the Agreement.
The Agreement contemplates, subject to its terms, payment on the first
day (or if such day is not a Business Day, the next succeeding Business Day)
(the "Remittance Date") of each month commencing in ________________________, so
long as the Agreement has not been terminated, by check (or, if such Class C
Master Certificateholder holds Class C Master Certificates with an aggregate
Percentage Interest of at least 20% and so desires, by wire transfer pursuant to
instructions delivered to the Trustee at least ten days prior to such Remittance
Date) to the registered Class C Master Certificateholder at the address
appearing on the Certificate Register as of the Business Day immediately
preceding such Remittance Date, in an amount equal to the Class C Master
Distribution Amount.
The Class C Master Certificateholder, by its acceptance of this
Certificate, agrees that it will look solely to the funds in the Certificate
Account to the extent available for distribution to the Class C Master
Certificateholder as provided in the Agreement for payment hereunder and that
the Trustee in its individual capacity is not personally liable to the Class C
Master Certificateholder for any amounts payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement. By acceptance of this Certificate, the
Certificateholder agrees to disclosure of his, her or its name and address to
other Certificateholders under the conditions specified in the Agreement.
This Class C Master Certificate does not purport to summarize the
Agreement and reference is made to the Agreement for information with respect to
the interests, rights, benefits, obligations, proceeds and duties evidenced
hereby and the rights, duties and immunities of the Trustee. Copies of the
Agreement and all amendments thereto will be provided to any Class C Master
Certificateholder free of charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Class C Master Certificate is registrable in the
Certificate Register of the Certificate Registrar upon surrender of this Class C
Master Certificate for registration of transfer at the office or agency
maintained by the Trustee in St. Paul, Minnesota, accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the holder thereof or his or her attorney duly
authorized in writing, and thereupon one or more new Class C Master
K-2
<PAGE>
Certificates evidencing the same aggregate amount of Class C Master Certificates
will be issued to the designated transferee or transferees.
As provided in the Agreement and subject to certain limitations therein
set forth, this Class C Master Certificate is exchangeable for new Class C
Master Certificates of authorized denominations evidencing the same aggregate
Percentage Interest as requested by the holder surrendering the same.
The Originator, the Servicer, the Trustee, the Paying Agent and the
Certificate Registrar and any agent of the Originator, the Servicer, the
Trustee, the Paying Agent or the Certificate Registrar may treat the person in
whose name this Class C Master Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Servicer, the Trustee, the Paying
Agent, the Certificate Registrar nor any such agent shall be affected by any
notice to the contrary.
The holder of this Class C Master Certificate, by acceptance hereof,
agrees that, in accordance with the requirements of Section 860D(b)(1) of the
Code, the federal tax return of the Trust for its first taxable year shall
provide that the Master REMIC elects to be treated as a "real estate mortgage
investment conduit" (a "REMIC") under the Code for such taxable year and all
subsequent taxable years. The Regular Certificates shall be "regular interests"
in the Master REMIC and the Class C Master Certificates shall be the "residual
interest" in the Master REMIC. In addition, the holder of this Class C Master
Certificate, by acceptance hereof, (i) agrees to file tax returns consistent
with and in accordance with any elections, decisions or other reports made or
filed with regard to federal, state or local taxes on behalf of the Master
REMIC, and (ii) agrees to cooperate with the Originator in connection with
examinations of the Master REMIC's affairs by tax authorities, including
administrative and judicial proceedings, and (iii) makes the additional
agreements, designations and appointments, and undertakes the responsibilities,
set forth in Section 6.06 of the Agreement.
K-3
<PAGE>
IN WITNESS WHEREOF, Manufactured Housing Contract Senior/ Subordinate
Pass-Through Certificate Trust _________ has caused this Certificate to be duly
executed by the manual signature of a duly authorized officer of the Trustee.
Dated: MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATE
TRUST ___________
By U.S. BANK NATIONAL ASSOCIATION
By ____________________________
Authorized Officer
K-4
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto __________________ the within Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificate, and does hereby irrevocably
constitute and appoint _____________________ Attorney to transfer the said
certificate on the Certificate Register maintained by the Trustee, with full
power of substitution in the premises.
Dated: By _____________________
Signature
K-5
<PAGE>
EXHIBIT L-1
-----------
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"), and that as such he is duly
authorized to execute and deliver this certificate on behalf of the Company
pursuant to Section 3.06 of the Pooling and Servicing Agreement (the
"Agreement"), dated as of ________________ among the Company, Conseco Finance
Securitizations Corp. and U.S. Bank National Association, as Trustee (all
capitalized terms used herein without definition having the respective meanings
specified in the Agreement), and further certifies that:
1. The Contracts on the attached schedule are to be
repurchased by the Company on the date hereof pursuant to Section 3.06
of the Agreement.
2. Upon deposit of the Repurchase Price for such Contracts,
such Contracts may, pursuant to Section 3.06 of the Agreement, be
assigned by the Trustee to the Company.
IN WITNESS WHEREOF, I have affixed hereunto my signature this ___ day
of _______________, _______.
GREEN TREE FINANCIAL CORPORATION
By ___________________________
[Name]
[Title]
L-1-1
<PAGE>
EXHIBIT L-2
-----------
FORM OF CERTIFICATE REGARDING SUBSTITUTED CONTRACTS
---------------------------------------------------
GREEN TREE FINANCIAL CORPORATION
CERTIFICATE REGARDING SUBSTITUTED CONTRACTS
The undersigned certify that they are [title] and [title], respectively
of Green Tree Financial Corporation, a corporation organized under the laws of
Delaware ("the Company"), and that as such they are duly authorized to execute
and deliver this certificate on behalf of the Company pursuant to Section
3.06(b) of the Pooling and Servicing Agreement (the "Agreement"), dated as of
_______________ among the Company, Conseco Finance Securitizations Corp. and
U.S. Bank National Association, as Trustee (all capitalized terms used herein
without definition having the respective meanings specified in the Agreement),
and further certify that:
1. The Contract and Contract File [or Land-and-Home Contract
File, as applicable] for each such Eligible Substitute Contract [are
being held by the Company, as Servicer] [have been delivered to
_______________, the successor Servicer].
2. The Contracts on the attached schedule are to be
substituted on the date hereof pursuant to Section 3.06(b) of the
Agreement and each such Contract is an Eligible Substitute Contract
[description how the Contracts satisfy the definition of "Eligible
Substitute Contract"].
3. The UCC-1 financing statements in respect of the Contracts
to be substituted, in the form required by Section 3.06 (b)(iii) of the
Agreement, have been filed with the appropriate offices.
4. (x) the Company shall have delivered to the Trustee, or its
Custodian, the related Land-and-Home Contract files; and
(y) if the sum of the aggregate principal balances of all
Land-and-Home Contracts then held by the Trustee (but excluding those
Land-and-Home Contracts, if any, that are to become Replaced Contracts
as a consequence of the substitution) and the aggregate principal
balances of all Land-and-Home Contracts that are included in the
Eligible Substitute Contracts equals or exceeds 10% of the Pool
Scheduled Principal Balance as of the Remittance Date immediately
preceding the substitution, the Company has delivered to the Trustee an
opinion of counsel satisfactory to the Trustee to the effect that the
Trustee holds a perfected first priority lien in the real estate
securing such Eligible Substitute Contracts, or evidence of recordation
of the assignment to the Trustee on behalf of the Trust of (A) each
Mortgage securing such Eligible Contracts or, if less (B) of the number
of Mortgages securing such Eligible Substitute Contracts needed to
reduce the aggregate principal balances of all Land-and-Home Contracts
with respect to which such assignments are not so recorded to less
L-2-1
<PAGE>
than 10% of the Pool Scheduled Principal Balance as of the Remittance
Date immediately preceding the substitution.
5. There has been deposited in the Certificate Account the
amounts listed on the schedule attached hereto as the amount by which
the Scheduled Principal Balance of each Replaced Contract exceeds the
Scheduled Principal Balance of each Contract being substituted
therefor.
IN WITNESS WHEREOF, we have affixed hereunto our signatures
this ______ day of ____________, ________.
GREEN TREE FINANCIAL CORPORATION
By _________________________
[Name]
[Title]
L-2-2
<PAGE>
EXHIBIT M
---------
FORM OF REPRESENTATION LETTER
-----------------------------
U.S. Bank National Association
180 East Fifth Street
St. Paul, Minnesota 55101
Conseco Finance Securitizations Corp.
300 Landmark Towers
345 St. Peter Street
St. Paul, Minnesota 55102-1639
RE: Manufactured Housing Contract Senior/Subordinate Pass-Through
Certificates, Series ___, Class [B-3I/C Subsidiary/C Master]
The undersigned purchaser (the "Purchaser") understands that the
purchase of the above-referenced certificates (the "Certificates") may be made
only by institutions which are "Accredited Investors" under Regulation D, as
promulgated under the Securities Act of 1933, as amended (the "1933 Act"), which
includes banks, savings and loan associations, registered brokers and dealers,
insurance companies, investment companies, and organizations described in
Section 501(c)(3) of the Internal Revenue Code, corporations, business trusts
and partnerships, not formed for the specific purpose of acquiring the
Certificates offered, with total assets in excess of $5,000,000. The undersigned
represents on behalf of the Purchaser that the Purchaser is an "Accredited
Investor" within the meaning of such definition. The Purchaser is urged to
review carefully the responses, representations and warranties it is making
herein.
Representations and Warranties
- ------------------------------
The Purchaser makes the following representations and warranties in
order to permit the Trustee, Conseco Finance Securitizations Corp., and
[underwriter of the Class B-3I/Class C Subsidiary/Class C Master Certificates]
to determine its suitability as a purchaser of Certificates and to determine
that the exemption from registration relied upon by Conseco Finance
Securitizations Corp. under Section 4(2) of the 1933 Act is available to it.
1. The Purchaser understands that the Certificates have not been and
will not be registered under the 1933 Act and may be resold (which resale is not
currently contemplated) only if registered pursuant to the provisions of the
1933 Act or if an exemption from registration is available, that Conseco Finance
Securitizations Corp. is not required to register the Certificates and that any
transfer must comply with Section 9.02 of the Pooling and Servicing Agreement
relating to the Certificates.
2. The Purchaser will comply with all applicable federal and state
securities laws in connection with any subsequent resale of the Certificates.
M-1
<PAGE>
3. The Purchaser is a sophisticated institutional investor and has
knowledge and experience in financial and business matters and is capable of
evaluating the merits and risks of its investment in the Certificates and is
able to bear the economic risk of such investment. The Purchaser has reviewed
the Prospectus dated _____________ and related Prospectus Supplement dated
_____________, with respect to the Certificates, and has been given such
information concerning the Certificates, the underlying installment sale
contracts and Conseco Finance Securitizations Corp. as it has requested.
4. The Purchaser is acquiring the Certificates as principal for its own
account (or for the account of one or more other institutional investors for
which it is acting as duly authorized fiduciary or agent) for the purpose of
investment and not with a view to or for sale in connection with any
distribution thereof, subject nevertheless to any requirement of law that the
disposition of the Purchaser's property shall at all times be and remain within
its control.
5. The Purchaser does not qualify as (i) an employee benefit plan (a
"Plan") as defined in section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), whether or not it is subject to the
provisions of Title I of ERISA, (ii) a plan described in section 4975(e)(1) of
the Internal Revenue Code of 1986 (also a "Plan"), or (iii) an entity whose
underlying assets are deemed to be assets of a Plan by reason of such Plan's
investment in the entity (as determined under Department of Labor Regulations,
29 C.F.R. ss.2510.3-101 (1990)).
6. The Purchaser understands that such Certificate will bear a legend
substantially as set forth in the form of Certificate included in the Pooling
and Servicing Agreement.
7. The Purchaser, as holder of the Class B-3I/C Subsidiary/C Master
Certificate, acknowledges (i) it may incur tax liabilities in excess of any cash
flows generated by the interest and (ii) it intends to pay the taxes associated
with holding the Class B-3I/C Subsidiary/C Master Certificate as they become
due.
8. The Purchaser agrees that it will obtain from any purchaser of the
Certificates from it the same representations, warranties and agreements
contained in the foregoing paragraphs 1 through 7 and in this paragraph 8.
The representations and warranties contained herein shall be binding
upon the heirs, executors, administrators and other successors of the
undersigned. If there is more than one signatory hereto, the obligations,
representations, warranties and agreements of the undersigned are made jointly
and severally.
M-2
<PAGE>
Executed at ________________, _______________, this _______ day of
_________________.
Purchaser's Name (Print)
By ________________________________
Signature
Its
Address of Purchaser ___________________
________________________________________
Purchaser's Taxpayer Identification Number
________________________________________
________________________________________
M-3
<PAGE>
EXHIBIT N
---------
FORM OF MONTHLY REPORT
----------------------
MANUFACTURED HOUSING CONTRACT SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATES, SERIES _____
Distribution Date:_____
Class A Certificates
- --------------------
1 (a) Amount Available (including Monthly
Servicing Fee) _____
(b) Class M-1 Interest Deficiency Amount (if any), Class M-2
Interest Deficiency Amount (if any) and Class B-1 Interest
Deficiency Amount (if any) withdrawn for prior
Remittance Date _____
(c) Amount Available after giving effect to withdrawal of Class
M-1 Interest Deficiency Amount, the Class M-2 Interest
Deficiency Amount and Class B-1 Interest Deficiency Amount for
prior
Remittance Date _____
(d) Amount withdrawn from [Capitalized Interest]
[Pre-Funding] Account _____
Interest
- --------
Class A Certificates
- --------------------
2. Aggregate Class A interest
(a) Class A-1 Remittance Rate (_________%) _____%
(b) Class A-1 Interest _____
(c) Class A-2 Remittance Rate (_________%) _____%
(d) Class A-2 _____
(e) Class A-3 Remittance Rate (_________%) _____%
(f) Class A-3 Interest _____
(g) Class A-4 Remittance Rate (_________%) _____%
(h) Class A-4 Interest _____
(i) Class A-5 Remittance Rate (_________%) _____%
(j) Class A-5 Interest _____
N-1
<PAGE>
(k) Class A-6 Remittance Rate (_________%) _____%
(l) Class A-6 Interest _____
(m) Class A-7 Remittance Rate (_________%) _____%
(n) Class A-7 Interest _____
(o) Class A-8 Remittance Rate (_________%), _____%
unless the Weighted Average
Contract Rate is less than ___%
(p) Class A-8 Interest _____
(q) Class A-9 Remittance Rate (_________%), _____%
unless the Weighted Average
Contract Rate is less than ________%
(r) Class A-9 Interest _____
3. Amount applied to
(a) Unpaid Class A Interest Shortfall _____
4. Remaining
(a) Unpaid Class A Interest Shortfall _____
Class M-1 Certificates
- ----------------------
5. Class M-1 Interest on Class M-1 Adjusted
Principal Balance _____
(a) Class M-1 Adjusted Principal Balance _____
(b) Class M-1 Remittance Rate (_____%,
unless the Weighted Average Contract Rate
is less than ______%) _____
(c) Interest on Class M-1 Adjusted
Principal Balance _____
6. Amount applied to Unpaid Class M-1
Interest Shortfall _____
7. Remaining Unpaid Class M-1
Interest Shortfall _____
Class M-2 Certificates
8. Class M-2 Interest on Class M-2 Adjusted
Principal Balance _____
N-2
<PAGE>
(a) Class M-2 Adjusted Principal Balance _____
(b) Class M-2 Remittance Rate (________%,
unless the Weighted Average Contract Rate
is less than ____%) _____
(c) Interest on Class M-2 Adjusted
Principal Balance _____
9. Amount applied to Unpaid Class M-2
Interest Shortfall _____
10. Remaining Unpaid Class M-2
Interest Shortfall _____
Class B-1 Certificates
11. Class B-1 interest on Class B-1 Adjusted
Principal Balance
(a) Class B-1 Adjusted Principal Balance _____
(b) Class B-1 Remittance Rate (________%,
unless the Weighted Average Contract Rate
is less than ________%) _____
(c) Interest on Class B-1 Adjusted
Principal Balance _____
12. Amount applied to Unpaid
Class B-1 Interest Shortfall _____
13. Remaining Unpaid Class B-1
Interest Shortfall _____
Principal
14. Formula Principal Distribution Amount: _____
(a) Scheduled principal _____
(b) Principal Prepayments _____
(c) Liquidated Contracts _____
(d) Repurchases _____
(e) Plus principal received during the
first 10 days of the next Due Period _____
(f) Minus principal received during the
first 10 days of the prior Due Period _____
N-3
<PAGE>
15. Pool Scheduled Principal Balance _____
16. Unpaid Class A Principal Shortfall
(if any) following prior Remittance Date _____
17. Class A Percentage for such
Remittance Date _____
18. Class A Percentage for the following
Remittance Date _____
19. Class A principal distribution:
(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 A-8 _____
(i) Class A-9 _____
20. (a) Class A-1 Principal Balance _____
(b) Class A-2 Principal Balance _____
(c) Class A-3 Principal Balance _____
(d) Class A-4 Principal Balance _____
(e) Class A-5 Principal Balance _____
(f) Class A-6 Principal Balance _____
(g) Class A-7 Principal Balance _____
(h) Class A-8 Principal Balance _____
(i) Class A-9 Principal Balance _____
21. Unpaid Class A Principal Shortfall
(if any) following current
Remittance Date _____
Class M-1 Distribution Test, Class M-2 Distribution Test
and Class B-1 Distribution Test
- -------------------------------
(applicable on and after the Remittance Date occurring in _________)
23. Average Sixty-Day Delinquency Ratio Test
(a) Sixty-Day Delinquency Ratio for
current Remittance Date _____
N-4
<PAGE>
(b) Average Sixty-Day Delinquency Ratio (arithmetic average of
ratios for this month and two preceding months;
may not exceed 4.0%) _____
24. Cumulative Realized Losses Test
(a) Cumulative Realized Losses
for current Remittance Date (as a
percentage of Cut-off Date Pool
Principal Balance; may not
exceed 5.5% from ________ to _______; 7.0% from
_________ to _________;
9.0% from _____________, to
____________________and 10.5% thereafter) _____
25. Current Realized Losses Test
(a) Current Realized Losses
for current Remittance Date _____
(b) Current Realized Loss Ratio (total Realized Losses for most
recent three months, multiplied by 4, divided by arithmetic
average of Pool Scheduled Principal Balances for third
preceding Remittance Date and for current Remittance
Date; may not exceed 2.75%) _____
26. Class M-1 Principal Balance Test
(a) Sum of Class M-1 Principal Balance, Class M-2 Principal
Balance, Class B Principal Balance before distributions on
current Remittance Date) divided by Pool Scheduled Principal
Balance as of preceding Remittance
Date is equal to or greater than ______%. _____
N-5
<PAGE>
27. Class M-2 Principal Balance Test
(a) Sum of Class M-2 Principal Balance, Class B Principal Balance
(before distributions on current Remittance Date) divided by
Pool Scheduled Principal Balance as of preceding Remittance
Date is equal to or
greater than _______%. _____
28. Class B Principal Balance Test
(a) Sum of Class B Principal Balance
(before any distributions on current
Remittance Date) as of such Remittance
Date is greater than $____________ _____
(b) Sum of Class B Principal Balance (before distributions on
current Remittance Date) divided by Pool Scheduled Principal
Balance as of preceding Remittance Date is equal to or greater
than ______%. _____
29. Class M-1 Percentage for such
Remittance Date _____
30. Class M-1 Percentage for the following
Remittance Date _____
31. Class M-1 principal distribution:
(a) Class M-1 (current) _____
(b) Unpaid Class M-1 Principal Shortfall
(if any) following prior Remittance Date _____
32. Unpaid Class M-1 Principal Shortfall
(if any) following current
Remittance Date _____
33. Class M-1 Liquidation Loss Interest
(a) Class M-1 Liquidation Loss Amount _____
(b) Amount applied to Class M-1
Liquidation Loss Interest Amount _____
N-6
<PAGE>
(c) Remaining Class M-1 Liquidation Loss
Interest Amount _____
(d) Amount applied to Unpaid Class M-1
Loss Interest Shortfall _____
(e) Remaining Unpaid Class M-1
Liquidation Loss Interest Shortfalls _____
34. Class M-2 Percentage for such
Remittance Date _____
35. Class M-2 Percentage for the following
Remittance Date _____
36. Class M-2 principal distribution:
(a) Class M-2 (current) _____
(b) Unpaid Class M-2 Principal Shortfall
(if any) following prior Remittance Date _____
37. Unpaid Class M-2 Principal Shortfall
(if any) following current
Remittance Date _____
38. Class M-2 Liquidation Loss Interest
(a) Class M-2 Liquidation Loss Amount _____
(b) Amount applied to Class M-2
Liquidation Loss Interest Amount _____
(c) Remaining Class M-2 Liquidation Loss
Interest Amount _____
(d) Amount applied to Unpaid Class M-2
Loss Interest Shortfall _____
(e) Remaining Unpaid Class M-2
Liquidation Loss Interest Shortfalls _____
39. (a) Class B Percentage for such
Remittance Date _____
N-7
<PAGE>
(b) Class B Percentage for the following
Remittance Date _____
40. Current Principal (Class B Percentage of
Formula Principal Distribution Amount) _____
41. (a) Class B-1 Principal Shortfall _____
(b) Unpaid Class B-1 Principal Shortfall _____
42. Class B Principal Balance _____
43. Class B-1 Principal Balance _____
44. Class B-1 Liquidation Loss Interest
(a) Class B-1 Liquidation Loss Amount _____
(b) Amount applied to Class B-1
Liquidation Loss Interest Amount _____
(c) Remaining Class B-1 Liquidation Loss
Interest Amount _____
(d) Amount applied to Unpaid Class B-1
Liquidation Loss Interest Shortfall _____
(e) Remaining Unpaid Class B-1 Liquidation
Loss Interest Shortfall _____
Class B-2 Certificates
- ----------------------
45. Remaining Amount Available _____
Interest
46. Class B-2 Remittance Rate (______%,
unless the Weighted Average Contract Rate
is less than _________%) _____%
47. Class B-2 Interest _____
48. Current interest _____
N-8
<PAGE>
49. Amount applied to Unpaid Class
B-2 Interest Shortfall _____
50. Remaining Unpaid Class B-2
Interest Shortfall _____
Principal
51. Unpaid Class B-2 Principal Shortfall
(if any) following prior Remittance Date _____
52. Class B-2 Principal Liquidation Loss
Amount _____
53. Current principal (zero until Class B-1
paid down; thereafter, Class B Percentage
of Formula Principal Distribution Amount) _____
54. Guarantee Payment _____
55. Class B-2 Principal Balance _____
56. Remaining Amount Available (after payment
of Class B-2 Distribution Amount) _____
57. Excess Interest _____
Class A, Class M and Class B Certificates
- -----------------------------------------
Aggregate Scheduled Balances of delinquent Contracts as of Determination Date
58. 30 - 59 days _____
59. 60 days or more _____
60. Manufactured Homes repossessed _____
61. Manufactured Homes repossessed
but remaining in inventory _____
62. Weighted Average Contract Rate
of all outstanding Contracts _____
N-9
<PAGE>
Class M and Class B Certificates
- --------------------------------
63. Class M-1 Interest Deficiency on
such Remittance Date _____
64. Class M-2 Interest Deficiency on
such Remittance Date _____
65. Class B-1 Interest Deficiency on
such Remittance Date _____
66. Class B-2 Interest Deficiency on
such Remittance Date _____
Repossessed Contracts
67. Repossessed Contracts _____
68. Repossessed Contracts Remaining in Inventory _____
Class B-3I Certificates
69. Class B-3I Formula Distribution Amount (all
Excess Interest plus Unpaid Class B-3I Shortfall) _____
70. Class B-3I Distribution Amount (remaining
Amount Available) _____
71. Class B-3I Shortfall (59 - 60) _____
72. Unpaid Class B-3I Shortfall _____
Please contact Bondholder Services Department of U.S. Bank National Association,
1-800-934-6802 with any questions regarding this Statement or your Distribution.
N-10
<PAGE>
EXHIBIT O
---------
FORM OF ADDITION NOTICE
-----------------------
--------------, ----
U.S. Bank National Association
180 East Fifth Street
St. Paul, Minnesota 55101
Re: Pooling and Servicing Agreement (the "Agreement"), dated as of
__________________, among Green Tree Financial Corporation
(the "Company"), Conseco Finance Securitizations Corp. and
U.S. Bank National Association as Trustee (the "Trustee")
relating to Manufactured Housing Contract Senior/Subordinate
Pass-Through Certificates, Series _________
Ladies and Gentlemen:
Capitalized terms not otherwise defined in this Notice have the
meanings given them in the Agreement. The Seller hereby notifies the Trustee of
an assignment to the Trust of Subsequent Contracts on the date and in the
amounts set forth below:
Subsequent Transfer Date: _________________
Cut-off Date Principal Balance of Subsequent Contracts to be assigned
to Trust on Subsequent Transfer Date: $_____________
Please acknowledge your receipt of this notice by countersigning the
enclosed copy in the space indicated below and returning it to the attention of
the undersigned.
Very truly yours,
CONSECO FINANCE SECURITIZATIONS CORP.
By
-------------------------------------
Name:
Title:
ACKNOWLEDGED AND AGREED:
U.S. BANK NATIONAL ASSOCIATION
By
-------------------------------------
Name:
Title:
O-1
<PAGE>
EXHIBIT P
---------
FORM OF SUBSEQUENT TRANSFER INSTRUMENT
--------------------------------------
In accordance with the Pooling and Servicing Agreement (the
"Agreement") dated as of _______________, among the undersigned, Conseco Finance
Securitizations Corp. and U.S. Bank National Association as Trustee (the
"Trustee"), the undersigned does hereby transfer, assign, set over and otherwise
convey, without recourse, to Manufactured Housing Contract Senior/Subordinate
Pass-Through Certificates, Series 1999-4, created by the Agreement, to be held
in trust as provided in the Agreement, (i) all the right, title and interest of
the Originator in and to the Subsequent Contracts identified on the list
attached hereto as Exhibit A (the "Subsequent Contracts"), including, without
limitation, all right, title and interest in and to the Collateral Security and
all rights to receive payments on or with respect to the Subsequent Contracts
(other than the principal and interest due on the Subsequent Contracts before
the applicable Cut-off Date), (ii) all rights under every Hazard Insurance
Policy relating to a Manufactured Home securing a Subsequent Contract for the
benefit of the creditor of such Subsequent Contract, (iii) all rights under all
FHA/VA Regulations pertaining to any Subsequent Contract that is an FHA/VA
Contract, (iv) the proceeds from the Errors and Omissions Protection Policy and
all rights under any blanket hazard insurance policy to the extent they relate
to the Manufactured Homes, (v) all documents contained in the Contract Files and
the Land-and-Home Contract Files relating to the Subsequent Contracts, and (vii)
all proceeds and products of the foregoing and all rights of the Seller under
the Subsequent Transfer Agreement between the Seller and the undersigned.
This Assignment is made pursuant to and upon the representation and
warranties on the part of the undersigned contained in Section 2.03 and Article
III of the Agreement and no others. All undefined capitalized terms used in this
Assignment have the meanings given them in the Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed this __ day of , 1999.
GREEN TREE FINANCIAL CORPORATION
[Seal] By
-------------------------------------
Name:
Title:
P-1
<PAGE>
EXHIBIT Q
---------
FORM OF OFFICER'S CERTIFICATE (SUBSEQUENT TRANSFER)
---------------------------------------------------
The undersigned certifies that he is a [title] of Green Tree Financial
Corporation, a Delaware corporation (the "Company"), and that as such he is duly
authorized to execute and deliver this certificate on behalf of the Company in
connection with the Pooling and Servicing Agreement dated as of
_________________ (the "Agreement") among the Company, Conseco Finance
Securitizations Corp. and U.S. Bank National Association as Trustee. All
capitalized terms used herein without definition have the respective meanings
specified in the Agreement. The undersigned further certifies that:
1. This Certificate is delivered in connection with the sale
to the Trust on __________________ (the "Subsequent Transfer Date") of
Contracts (the "Subsequent Contracts") identified in the List of
Contracts attached to the Subsequent Transfer Instrument of even date
herewith.
2. As of the Subsequent Transfer Date, all representations and
warranties in Section 3.02 of the Agreement are true and correct; all
representations and warranties in Sections 2.03(c), 3.02, 3.04 and 3.05
of the Agreement with respect to the Subsequent Contracts are true to
the best of his knowledge; and all representations in Section 3.05 of
the Agreement with respect to the Subsequent Contracts are true and
correct.
3. All conditions precedent to the sale of the Subsequent
Contracts to the Trust under Section 2.03 of the Agreement have been
satisfied.
IN WITNESS WHEREOF, I have affixed hereunto my signature this ___ day
of ______________, 1999.
By
-------------------------------
Name:
Title:
Q-1
<PAGE>
FORM OF OFFICER'S CERTIFICATE (SUBSEQUENT TRANSFER)
---------------------------------------------------
The undersigned certifies that he is a [title] of Conseco Finance
Securitizations Corp., a Minnesota corporation (the "Company"), and that as such
he is duly authorized to execute and deliver this certificate on behalf of the
Company in connection with the Pooling and Servicing Agreement dated as of
__________________ (the "Agreement") among the Company, Green Tree Financial
Corporation, and U.S. Bank National Association as Trustee. All capitalized
terms used herein without definition have the respective meanings specified in
the Agreement. The undersigned further certifies that:
1. This Certificate is delivered in connection with the sale
to the Trust on __________________ (the "Subsequent Transfer Date") of
Contracts (the "Subsequent Contracts") identified in the List of
Contracts attached to the Subsequent Transfer Instrument of even date
herewith.
2. As of the Subsequent Transfer Date, all representations and
warranties in Section 3.01 of the Agreement are true and correct; all
representations and warranties in Sections 2.03(c), 3.01, and 3.03 of
the Agreement with respect to the Subsequent Contracts are true to the
best of his knowledge; and all representations in Section 3.05 of the
Agreement with respect to the Subsequent Contracts are true and
correct.
3. All conditions precedent to the sale of the Subsequent
Contracts to the Trust under Section 2.03 of the Agreement have been
satisfied.
IN WITNESS WHEREOF, I have affixed hereunto my signature this ___ day
of _________________, 1999.
By
---------------------------
Name:
Title:
Q-2
<PAGE>
EXHIBIT 4.2
TRANSFER AGREEMENT
between
CONSECO FINANCE SECURITIZATIONS CORP.
Purchaser
and
GREEN TREE FINANCIAL CORPORATION
Seller
dated as of
----------------, ------
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS..........................................................1
SECTION 1.1. General ...............................................1
SECTION 1.2. Specific Terms ........................................1
SECTION 1.3. Usage of Terms ........................................3
SECTION 1.4. No Recourse ...........................................3
ARTICLE II
CONVEYANCE OF THE INITIAL CONTRACTS
AND THE INITIAL OTHER CONVEYED PROPERTY .............................3
SECTION 2.1. Conveyance of the Initial Contracts and the Initial
Other Conveyed Property ...............................3
SECTION 2.2. Purchase Price of Initial Contracts ...................4
SECTION 2.3. Conveyance of Subsequent Contracts and Subsequent
Other Conveyed Property ...............................4
ARTICLE III
REPRESENTATIONS AND WARRANTIES ......................................5
SECTION 3.1. Representations and Warranties of GTFC ................5
SECTION 3.2. Representations and Warranties of CFSC ................7
ARTICLE IV
COVENANTS OF GTFC ...................................................9
SECTION 4.1. Transfer of Contracts. ................................9
SECTION 4.2. Costs and Expenses ....................................9
SECTION 4.3. Indemnification .......................................9
ARTICLE V
REPURCHASES ........................................................10
SECTION 5.1. Repurchase of Contracts Upon Breach of Warranty ......10
SECTION 5.2. Reassignment of Purchased Contracts ..................11
SECTION 5.3. Waivers ..............................................11
ARTICLE VI
MISCELLANEOUS ......................................................11
SECTION 6.1. Liability of GTFC ....................................11
SECTION 6.2. Merger or Consolidation of GTFC or CFSC ..............11
SECTION 6.3. Limitation on Liability of GTFC and Others ...........12
SECTION 6.4. Amendment ............................................12
SECTION 6.5. Notices ..............................................13
SECTION 6.6. Merger and Integration ...............................13
SECTION 6.7. Severability of Provisions ...........................13
-i-
<PAGE>
SECTION 6.8. Intention of the Parties .............................13
SECTION 6.9. Governing Law ........................................14
SECTION 6.10. Counterparts .........................................14
SECTION 6.11. Conveyance of the Initial Contracts and the
Initial Other Conveyed Property to the Trust .........14
SECTION 6.12. Nonpetition Covenant .................................14
SCHEDULES
Schedule A -- Schedule of Initial Contracts
EXHIBITS
Exhibit A -- Form of Subsequent Transfer Agreement
-ii-
<PAGE>
TRANSFER AGREEMENT
------------------
THIS TRANSFER AGREEMENT, dated as of __________, 1999, executed between
Conseco Finance Securitizations Corp., a Minnesota corporation, as purchaser
("CFSC"), and Green Tree Financial Corporation, a Delaware corporation, as
seller ("GFTC").
W I T N E S S E T H:
WHEREAS, CFSC has agreed to purchase from GTFC and GTFC, pursuant to
this Agreement, is transferring to CFSC certain manuactured housing contracts
specified in the Schedule of Initial Contracts attached hereto as Schedule A
(the "Initial Contracts"); and
WHEREAS, CFSC has agreed to purchase from GTFC and GTFC has agreed to
transfer to CFSC the Subsequent Contracts and Subsequent Other Conveyed Property
in an amount set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter contained, and for other good and valuable consideration,
the receipt of which is acknowledged, CFSC and GTFC, intending to be legally
bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. General. The specific 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 Article,
Section, Schedule and Exhibit references, unless otherwise specified, refer to
Articles and Sections of and Schedules and Exhibits to this Agreement.
Capitalized terms used herein without definition shall have the respective
meanings assigned to such terms in the Pooling and Servicing Agreement, dated as
of __________, ____, by and among Conseco Finance Securitizations Corp. (as
Seller), Green Tree Financial Corporation (in its individual capacity and as
Servicer), and [Trust] (as Issuer) (the "Trust").
SECTION 1.2. Specific Terms. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
"Agreement" shall mean this Transfer Agreement and all amendments
hereof and supplements hereto.
"Closing Date" means, ___________________, ________.
"Initial Other Conveyed Property" means all monies at any time paid or
payable on the Initial Contracts or in respect thereof after the Initial Cut-off
Date (including amounts due on or before the Initial Cut-off Date but received
by GTFC after the Initial Cut-off Date), the Certificate Account (including all
Eligible Investments therein and all proceeds therefrom), all items contained in
the Contract Files relating to the Initial Contracts, any and all other
documents or electronic records that GTFC keeps on file in accordance with its
customary procedures
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relating to the Initial Contracts, the Obligors (including the right to receive
future Liquidation Proceeds) and that has been acquired by or on behalf of the
Trust pursuant to liquidation of such Initial Contract, and all proceeds of the
foregoing.
"Initial Contracts" means the Contracts listed on the Schedule of
Initial Contracts attached hereto as Schedule A.
"Other Conveyed Property" means the Initial Other Conveyed Property
conveyed by GTFC to CFSC pursuant to this Agreement together with any and all
Subsequent Other Conveyed Property conveyed by GTFC to CFSC pursuant to each
Subsequent Purchase Agreement.
"Related Documents" means the Certificates, the Pooling and Servicing
Agreement, each Subsequent Transfer Agreement and the Underwriting Agreement
among GTFC, CFSC and the underwriters of the Certificates. The Related Documents
to be executed by any party are referred to herein as "such party's Related
Documents," "its Related Documents" or by a similar expression.
"Repurchase Event" means the occurrence of a breach of any of GTFC's
representations and warranties hereunder or under any Subsequent Purchase
Agreement or any other event which requires the repurchase of a Contract by GTFC
under the Pooling and Servicing Agreement.
"Pooling and Servicing Agreement" means the Pooling and Servicing
Agreement, dated as of ___________, _______, executed and delivered by Green
Tree Financial Corporation, as Originator, Servicer and Guarantor; Conseco
Finance Securitizations Corp. as Seller; and the Trustee.
"Schedule of Initial Contracts" means the schedule of all Contracts
sold and transferred pursuant to this Agreement which is attached hereto as
Schedule A.
"Schedule of Contracts" means the Schedule of Initial Contracts
attached hereto as Schedule A as supplemented by each Schedule of Subsequent
Contracts attached to each Subsequent Purchase Agreement as Schedule A.
"Schedule of Subsequent Contracts" means the schedule of all Contracts
sold and transferred pursuant to a Subsequent Purchase Agreement which is
attached to such Subsequent Purchase Agreement as Schedule A, which Schedule of
Subsequent Contracts shall supplement the Schedule of Initial Contracts.
"Subsequent Contracts" means the Contracts specified in the Schedule of
Subsequent Contracts attached as Schedule A to each Subsequent Purchase
Agreement.
"Subsequent Other Conveyed Property" means the Subsequent Other
Conveyed Property conveyed by GTFC to CFSC pursuant to each Subsequent Purchase
Agreement.
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"Trust" means the trust created by the Trust Agreement, the estate of
which consists of the Trust Property.
"Trustee means U.S. Bank Trust National Association, a national banking
association organized and existing under the laws of the United States, not in
its individual capacity but solely as trustee of the Trust, and any successor
trustee appointed and acting pursuant to the Trust Agreement.
"Trust Property" means the property and proceeds of every description
conveyed by CFSC to the Trust pursuant to the Pooling and Servicing Agreement
and pursuant to any Subsequent Transfer Instrument, together with the
Certificate Accounts (including all Eligible Investments therein and all
proceeds therefrom).
SECTION 1.3. 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 gender; 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 or the Pooling and
Servicing Agreement; references to Persons include their permitted successors
and assigns; and the terms "include" or "including" mean "include without
limitation" or "including without limitation."
SECTION 1.4. No Recourse. Without limiting the obligations of GTFC
hereunder, no recourse may be taken, directly or indirectly, under this
Agreement or any certificate or other writing delivered in connection herewith
or therewith, against any stockholder, officer or director, as such, of GTFC, or
of any predecessor or successor of GTFC.
ARTICLE II
CONVEYANCE OF THE INITIAL CONTRACTS
AND THE INITIAL OTHER CONVEYED PROPERTY
SECTION 2.1. Conveyance of the Initial Contracts and the Initial Other
Conveyed Property. Subject to the terms and conditions of this Agreement, GTFC
hereby sells, transfers, assigns, and otherwise conveys to CFSC without recourse
(but without limitation of its obligations in this Agreement or in the Pooling
and Servicing Agreement), and CFSC hereby purchases, all right, title and
interest of GTFC in and to the Initial Contracts and the Initial Other Conveyed
Property. It is the intention of GTFC and CFSC that the transfer and assignment
contemplated by this Agreement shall constitute a sale of the Initial Contracts
and the Initial Other Conveyed Property from GTFC to CFSC, conveying good title
thereto free and clear of any Liens, and the Initial Contracts and the Initial
Other Conveyed Property shall not be part of GTFC's estate in the event of the
filing of a bankruptcy petition by or against GTFC under any bankruptcy or
similar law.
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SECTION 2.2. Purchase Price of Initial Contracts. Simultaneously with
the conveyance of the Initial Contracts and the Initial Other Conveyed Property
to CFSC, CFSC has paid or caused to be paid to or upon the order of GTFC
approximately $__________ by wire transfer of immediately available funds
(representing the proceeds to CFSC from the sale of the Initial Contracts after
(i) deducting expenses of $____________ incurred by CFSC in connection with such
sale and (ii) depositing the Pre-Funded Amount in the Pre-Funding Account.
SECTION 2.3. Conveyance of Subsequent Contracts and Subsequent Other
Conveyed Property.
(a) Subject to the conditions set forth in paragraph (b) below and the
terms and conditions in the related Subsequent Purchase Agreement, in
consideration of CFSC's delivery on the related Subsequent Transfer Date to or
upon the order of GTFC of an amount equal to the purchase price of the
Subsequent Contracts (as set forth in the related Subsequent Purchase
Agreement), GTFC hereby agrees to sell, transfer, assign, and otherwise convey
to CFSC without recourse (but without limitation of its obligations in this
Agreement and the related Subsequent Purchase Agreement), and CFSC hereby agrees
to purchase all right, title and interest of GTFC in and to the Subsequent
Contracts and the Subsequent Other Conveyed Property described in the related
Subsequent Purchase Agreement.
(b) GTFC shall transfer to CFSC, and CFSC shall acquire, the Subsequent
Contracts and the Subsequent Other Conveyed Property to be transferred on any
Subsequent Transfer Date only upon the satisfaction of each of the following
conditions on or prior to such Subsequent Transfer Date:
(i) GTFC shall have provided the Trustee and the relevant
rating agencies with an Addition Notice at least five Business Days
prior to the Subsequent Transfer Date and shall have provided any
information reasonably requested by the Trustee with respect to the
Subsequent Contracts;
(ii) GTFC shall have delivered the related Contract File for
each Subsequent Contract to the Trustee at least two Business Days
prior to the Subsequent Transfer Date;
(iii) CFSC shall have delivered to GTFC a duly executed
Subsequent Transfer Instrument substantially in the form of Exhibit A
hereto (the "Subsequent Transfer Agreement"), which shall include a
List of Contracts identifying the related Subsequent Contracts;
(iv) as of each Subsequent Transfer Date, as evidenced by
delivery of the Subsequent Transfer Instrument, that neither GTFC nor
CFSC shall be insolvent nor shall they have been made insolvent by such
transfer nor shall they be aware of any pending insolvency;
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(v) such transfer shall not result in a material adverse tax
consequence to the Trust (including the Master REMIC and the Subsidiary
REMIC) or the Certificateholders or Class C Certificateholders;
(vi) the Pre-Funding Period shall not have ended;
(vii) GTFC shall have delivered to CFSC an Officer's
Certificate substantially in the form attached to the Pooling and
Servicing Agreement as Exhibit __, confirming the satisfaction of each
condition precedent and the representations specified in this Section
and in Sections _______ of the Pooling and Servicing Agreement;
(viii) RESERVED
(c) GTFC covenants to transfer to CFSC pursuant to paragraph (a) above
Subsequent Contracts with an aggregate Cut-off Date Principal Balance
approximately equal to $__________; provided, however, that the sole remedy of
CFSC with respect to a failure of such covenant shall be to enforce the
provisions of Section ___ of the Pooling and Servicing Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of GTFC. GTFC makes the
following representations and warranties, on which CFSC relies in purchasing the
Initial Contracts and the Initial Other Conveyed Property and in transferring
the Initial Contracts and the Initial Other Conveyed Property to the Trust under
the Pooling and Servicing Agreement. Such representations are made as of the
execution and delivery of this Agreement, but shall survive the sale, transfer
and assignment of the Initial Contracts and the Initial Other Conveyed Property
hereunder and the sale, transfer and assignment thereof by CFSC to the Trust
under the Pooling and Servicing Agreement. GTFC and CFSC agree that CFSC will
assign to the Trust all of CFSC's rights under this Agreement and that the Trust
will thereafter be entitled to enforce this Agreement against GTFC in the
Trust's own name.
(a) Representations Regarding Contracts. The representations
and warranties set forth in Sections 3.02 and 3.03 of the Pooling and
Servicing Agreement are true and correct.
(b) Organization and Good Standing. GTFC 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 such business is currently conducted, and had at
all relevant times, and now has, power, authority and legal right to
acquire, own and sell the Initial Contracts and the Initial Other
Conveyed Property transferred to CFSC.
(c) Due Qualification. GTFC is duly qualified to do business
as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all
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jurisdictions in which the ownership or lease of its property or the
conduct of its business requires such qualification.
(d) Power and Authority. GTFC has the power and authority to
execute and deliver this Agreement and its Related Documents and to
carry out its terms and their terms, respectively; GTFC has full power
and authority to sell and assign the Initial Contracts and the Initial
Other Conveyed Property to be sold and assigned to and deposited with
CFSC hereunder and has duly authorized such sale and assignment to CFSC
by all necessary corporate action; and the execution, delivery and
performance of this Agreement and GTFC's Related Documents have been
duly authorized by GTFC by all necessary corporate action.
(e) Valid Sale; Binding Obligations. This Agreement and GTFC's
Related Documents have been duly executed and delivered, shall effect a
valid sale, transfer and assignment of the Initial Contracts and the
Initial Other Conveyed Property, enforceable against GTFC and creditors
of and purchasers from GTFC; and this Agreement and GTFC's Related
Documents constitute legal, valid and binding obligations of GTFC
enforceable in accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization
or other similar laws affecting the enforcement of creditors' rights
generally and by equitable limitations on the availability of specific
remedies, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(f) No Violation. The consummation of the transactions
contemplated by this Agreement and the Related Documents and the
fulfillment of the terms of this Agreement and the 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, the certificate of incorporation or bylaws of
GTFC, or any indenture, agreement, mortgage, deed of trust or other
instrument to which GTFC 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, other than this Agreement and the Pooling
and Servicing Agreement, or violate any law, order, rule or regulation
applicable to GTFC of any court or of any federal or state regulatory
body, administrative agency or other governmental instrumentality
having jurisdiction over GTFC or any of its properties.
(g) No Proceedings. There are no proceedings or investigations
pending or, to GTFC's knowledge, threatened against GTFC, before any
court, regulatory body, administrative agency or other tribunal or
governmental instrumentality having jurisdiction over GTFC or its
properties (i) asserting the invalidity of this Agreement or any of the
Related Documents, (ii) seeking to prevent the issuance of the
Certificates or the consummation of any of the transactions
contemplated by this Agreement or any of the Related Documents, (iii)
seeking any determination or ruling that might materially and adversely
affect the performance by GTFC of its obligations under, or the
validity or enforceability of, this Agreement or any of the Related
Documents or (iv) seeking to affect adversely the federal income tax or
other federal, state or local tax attributes of, or
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seeking to impose any excise, franchise, transfer or similar tax upon,
the transfer and acquisition of the Initial Contracts and the Initial
Other Conveyed Property hereunder or under the Pooling and Servicing
Agreement.
(h) Chief Executive Office. The chief executive office of GTFC
is located at 1100 Landmark Towers, 345 St. Peter Street, Saint Paul,
MN 55102-1639.
SECTION 3.2. Representations and Warranties of CFSC. CFSC makes the
following representations and warranties, on which GTFC relies in selling,
assigning, transferring and conveying the Initial Contracts and the Initial
Other Conveyed Property to CFSC hereunder. Such representations are made as of
the execution and delivery of this Agreement, but shall survive the sale,
transfer and assignment of the Initial Contracts and the Initial Other Conveyed
Property hereunder and the sale, transfer and assignment thereof by CFSC to the
Trust under the Pooling and Servicing Agreement.
(a) Organization and Good Standing. CFSC has been duly
organized and is validly existing and in good standing as a corporation
under the laws of the State of Minnesota, with the power and authority
to own its properties and to conduct its business as such properties
are currently owned and such business is currently conducted, and had
at all relevant times, and has, full power, authority and legal right
to acquire and own the Initial Contracts and the Initial Other Conveyed
Property and to transfer the Initial Contracts and the Initial Other
Conveyed Property to the Trust pursuant to the Pooling and Servicing
Agreement.
(b) Due Qualification. CFSC is duly qualified to do business
as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals in all jurisdictions where the failure
to do so would materially and adversely affect (i) CFSC's ability to
acquire the Initial Contracts or the Initial Other Conveyed Property,
(ii) the validity or enforceability of the Initial Contracts and the
Initial Other Conveyed Property or (iii) CFSC's ability to perform its
obligations hereunder and under the Related Documents.
(c) Power and Authority. CFSC has the power, authority and
legal right to execute and deliver this Agreement and its Related
Documents and to carry out the terms hereof and thereof and to acquire
the Initial Contracts and the Initial Other Conveyed Property
hereunder; and the execution, delivery and performance of this
Agreement and its Related Documents and all of the documents required
pursuant hereto or thereto have been duly authorized by CFSC by all
necessary action.
(d) No Consent Required. CFSC is not required to obtain the
consent of any other Person, or any consent, license, approval or
authorization or registration or declaration with, any governmental
authority, bureau or agency 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.
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(e) Binding Obligation. This Agreement and each of its Related
Documents constitutes a legal, valid and binding obligation of CFSC,
enforceable against CFSC in accordance with its terms, subject, as to
enforceability, to applicable bankruptcy, insolvency, reorganization,
conservatorship, receivership, liquidation and other similar laws and
to general equitable principles.
(f) No Violation. The execution, delivery and performance by
CFSC of this Agreement, the consummation of the transactions
contemplated by this Agreement and the Related Documents and the
fulfillment of the terms of this Agreement and the Related Documents do
not and will not conflict with, result in any breach of any of the
terms and provisions of or constitute (with or without notice or lapse
of time) a default under the articles of incorporation or bylaws of
CFSC, or conflict with or breach any of the terms or provisions of, or
constitute (with or without notice or lapse of time) a default under,
any indenture, agreement, mortgage, deed of trust or other instrument
to which CFSC is a party or by which CFSC is bound or to which any of
its properties are subject, 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
(other than the Pooling and Servicing Agreement), or violate any law,
order, rule or regulation, applicable to CFSC or its properties, of any
federal or state regulatory body or any court, administrative agency,
or other governmental instrumentality having jurisdiction over CFSC or
any of its properties.
(g) No Proceedings. There are no proceedings or investigations
pending, or, to the knowledge of CFSC, threatened against CFSC, before
any court, regulatory body, administrative agency, or other tribunal or
governmental instrumentality having jurisdiction over CFSC or its
properties: (i) asserting the invalidity of this Agreement or any of
the Related Documents, (ii) seeking to prevent the consummation of any
of the transactions contemplated by this Agreement or any of the
Related Documents, (iii) seeking any determination or ruling that might
materially and adversely affect the performance by CFSC of its
obligations under, or the validity or enforceability of, this Agreement
or any of the Related Documents or (iv) that may adversely affect the
federal or state income tax attributes of, or seeking to impose any
excise, franchise, transfer or similar tax upon, the transfer and
acquisition of the Initial Contracts and the Initial Other Conveyed
Property hereunder or the transfer of the Initial Contracts and the
Initial Other Conveyed Property to the Trust pursuant to the Pooling
and Servicing Agreement.
In the event of any breach of a representation and warranty made by CFSC
hereunder, GTFC covenants and agrees that it will not take any action to pursue
any remedy that it may have hereunder, in law, in equity or otherwise, until a
year and a day have passed since the later of (i) the date on which all
pass-through certificates or other similar securities issued by the Trust, or a
trust or similar vehicle formed by CFSC, have been paid in full, or (ii) all
Certificates or other similar securities issued by the Trust, or a trust or
similar vehicle formed by CFSC, have been paid in full. GTFC and CFSC agree that
damages will not be an adequate remedy for such breach and that this covenant
may be specifically enforced by CFSC or by the Trustee on behalf of the Trust.
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ARTICLE IV
COVENANTS OF GTFC
SECTION 4.1. Transfer of Contracts.
(a) On or prior to the Closing Date, or the Subsequent Transfer Date in
the case of Subsequent Contracts, GTFC shall deliver the Contract Files to CFSC.
GTFC has filed a form UCC-1 financing statement regarding the sale of the
Contracts to CFSC, and shall file continuation statements in respect of such
UCC-1 financing statement as if such financing statement were necessary to
perfect such sale. GTFC shall take any other actions necessary to maintain the
perfection of the sale of the Contracts to CFSC
(b) If at any time during the term of this Agreement GTFC does not have
a long-term senior debt rating of ___ or higher from both S&P and Fitch (if
rated by Fitch), (i) GTFC shall within 30 days execute and deliver to CFSC (if
it has not previously done so) endorsements of each Contract and assignments in
recordable form of each mortgage, deed of trust or security deed securing a
Contract, and (ii) CFSC, at GTFC's expense, shall within 60 days file in the
appropriate recording offices the assignments to CFSC of each mortgage, deed of
trust or security deed securing a Contract; provided, however, that such
execution and filing of the assignments with respect to the Contracts shall not
be required if CFSC receives written confirmation from both S&P and Fitch that
the ratings of the Certificates would not be reduced or withdrawn by the failure
to execute and file such assignments; provided, however, that such execution and
filing shall not be required if GTFC delivers an Opinion of Counsel to the
effect that such assignment and recordation is not necessary to effect the
assignment to CFSC of GTFC's lien on the real property securing each Contract.
SECTION 4.2. Costs and Expenses. GTFC shall pay all reasonable costs
and disbursements in connection with the performance of its obligations
hereunder and under each Subsequent Purchase Agreement and its Related
Documents.
SECTION 4.3. Indemnification.
(a) GTFC will defend and indemnify CFSC against any and all costs,
expenses, losses, damages, claims, and liabilities, including reasonable fees
and expenses of counsel and expenses of litigation, arising out of or resulting
from any breach of any of GTFC's representations and warranties contained herein
or in any Subsequent Purchase Agreement. Notwithstanding any other provision of
this Agreement, the obligation of GTFC under this Section shall not terminate
upon a Service Transfer pursuant to Article 7.02 of the Pooling and Servicing
Agreement, except that the obligation of GTFC under this Section shall not
relate to the actions of any subsequent Servicer after a Service Transfer.
(b) No obligations or liability to any Obligor under any of the
Contracts is intended to be assumed by CFSC 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, CFSC expressly disclaims
such assumption.
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(c) GTFC agrees to pay, and shall defend, indemnify and hold harmless
CFSC from any taxes which may at any time be asserted with respect to, and as of
the date of, the transfer of the Contracts to CFSC including, without
limitation, any sales, gross receipts, general corporation, tangible or
intangible personal property and costs, expenses and reasonable counsel fees in
defending against the same, whether arising by reason of the acts to be
performed by GTFC under this Agreement or imposed against CFSC.
(d) Indemnification under this Section 4.3 shall include, without
limitation, reasonable fees and expenses of counsel and expenses of litigation.
If the Originator has made any indemnity payments to CFSC pursuant to this
Section and CFSC thereafter collects any of such amounts from others, CFSC will
repay such amounts collected to GTFC, as the case may be, without interest.
ARTICLE V
REPURCHASES
SECTION 5.1. Repurchase of Contracts Upon Breach of Warranty.
(a) Upon the occurrence of a Repurchase Event, GTFC shall, unless such
breach shall have been cured in all material respects, repurchase such Contract
from the Trust pursuant to Section 3.05 of the Pooling and Servicing Agreement,
subject to the limitation of Section 3.06 of the Pooling and Servicing
Agreement. It is understood and agreed that the obligation of GTFC to repurchase
any Contract as to which a breach has occurred and is continuing shall, if such
obligation is fulfilled, constitute the sole remedy against GTFC for such breach
available to CFSC, the Certificateholders or the Trustee on behalf of
Certificateholders. The provisions of this Section 5.1 are intended to grant the
Trustee a direct right against GTFC to demand performance hereunder, and in
connection therewith, GTFC waives any requirement of prior demand against CFSC
with respect to such repurchase obligation. Any such purchase shall take place
in the manner specified in Section 305 of the Pooling and Servicing Agreement.
Notwithstanding any other provision of this Agreement, any Subsequent Purchase
Agreement or the Pooling and Servicing Agreement or any Subsequent Transfer
Agreement to the contrary, the obligation of GTFC under this Section shall not
terminate upon a termination of GTFC as Servicer under the Pooling and Servicing
Agreement and shall be performed in accordance with the terms hereof
notwithstanding the failure of the Servicer or CFSC to perform any of their
respective obligations with respect to such Contract under the Pooling and
Servicing Agreement.
(b) In lieu of repurchasing a Contract when required by Section 5.1(a)
of this Agreement and Section 3.05 of the Pooling and Servicing Agreement, GTFC
may deliver an Eligible Substitute Contract pursuant to the provisions of
Section 3.05 of the Pooling and Servicing Agreement.
(c) In addition to the foregoing and notwithstanding whether the
related Contract shall have been purchased by GTFC, GTFC shall indemnify the
Trustee, the Trust and the Certificateholders against all costs, expenses,
losses, damages, claims and liabilities, including reasonable fees and expenses
of counsel, which may be asserted against or incurred by
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any of them as a result of third party claims arising out of the events or facts
giving rise to such Repurchase Events.
SECTION 5.2. Reassignment of Purchased Contracts. Upon deposit of the
purchase amount of any Contract repurchased or replaced by GTFC under Section
5.1, CFSC shall cause the Trustee to take such steps as may be reasonably
requested by GTFC in order to assign to GTFC all of CFSC's and the Trust's
right, title and interest in and to such Contract and all security and documents
and all Other Conveyed Property conveyed to CFSC and the Trust directly relating
thereto, 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 CFSC or the Trustee. Such assignment shall be a sale and assignment outright,
and not for security. If, following the reassignment of a Contract, in any
enforcement suit or legal proceeding, it is held that GTFC may not enforce any
such Contract on the ground that it shall not be a real party in interest or a
holder entitled to enforce the Contract, CFSC and the Trustee shall, at the
expense of GTFC, take such steps as GTFC deems reasonably necessary to enforce
the Contract, including bringing suit in CFSC's or the Trustee's name.
SECTION 5.3. Waivers. No failure or delay on the part of CFSC, or the
Trustee as assignee of CFSC, in exercising any power, right or remedy under this
Agreement or under any Subsequent Purchase Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right or
remedy preclude any other or future exercise thereof or the exercise of any
other power, right or remedy.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1. Liability of GTFC. GTFC shall be liable in accordance
herewith only to the extent of the obligations in this Agreement or in any
Subsequent Purchase Agreement specifically undertaken by GTFC and the
representations and warranties of GTFC.
SECTION 6.2. Merger or Consolidation of GTFC or CFSC. Any corporation
or other entity (i) into which GTFC or CFSC may be merged or consolidated, (ii)
resulting from any merger or consolidation to which GTFC or CFSC is a party or
(iii) succeeding to the business of GTFC or CFSC, in the case of CFSC, which
corporation has articles of incorporation containing provisions relating to
limitations on business and other matters substantively identical to those
contained in CFSC's articles of incorporation, provided that in any of the
foregoing cases such corporation shall execute an agreement of assumption to
perform every obligation of GTFC or CFSC, as the case may be, under this
Agreement and each Subsequent Purchase Agreement and, whether or not such
assumption agreement is executed, shall be the successor to GTFC or CFSC, as the
case may be, hereunder and under each such Subsequent Purchase Agreement
(without relieving GTFC or CFSC of its responsibilities hereunder, if it
survives such merger or consolidation) without the execution or filing of any
document or any further act by any of the parties to this Agreement or each
Subsequent Purchase Agreement. GTFC or CFSC shall promptly inform the other
party, the Trustee of such merger, consolidation or purchase and assumption.
Notwithstanding the foregoing, as a condition to the consummation of the
transactions referred to in clauses (i), (ii) and (iii) above, (x) immediately
after giving effect to
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such transaction, no representation or warranty made pursuant to Sections 3.1
and 3.2 and this Agreement, or similar representation or warranty made in any
Subsequent Purchase Agreement, shall have been breached (for purposes hereof,
such representations and warranties shall speak as of the date of the
consummation of such transaction), (y) GTFC or CFSC, as applicable, shall have
delivered written notice of such consolidation, merger or purchase and
assumption to the relevant rating agencies prior to the consummation of such
transaction and shall have delivered to the Trustee an Officer's Certificate and
an Opinion of Counsel each stating that such consolidation, merger or succession
and such agreement of assumption comply with this Section 6.2 and that all
conditions precedent, if any, provided for in this Agreement, or in each
Subsequent Purchase Agreement, relating to such transaction have been complied
with, and (z) GTFC or CFSC, as applicable, shall have delivered to the Trustee
an Opinion of Counsel, stating that, in the opinion of such counsel, either (A)
all financing statements and continuation statements and amendments thereto have
been executed and filed that are necessary to preserve and protect the interest
of the Trustee in the Trust and reciting the details of the filings or (B) no
such action shall be necessary to preserve and protect such interest.
SECTION 6.3. Limitation on Liability of GTFC and Others. GTFC shall
not be under any obligation to appear in, prosecute or defend any legal action
that is not incidental to its obligations under this Agreement, any Subsequent
Purchase Agreement or its Related Documents and that in its opinion may involve
it in any expense or liability.
SECTION 6.4. Amendment.
(a) This Agreement and any Subsequent Purchase Agreement may be amended
by GTFC and CFSC and without the consent of the Trustee or any of the
Certificateholders (A) to cure any ambiguity or (B) to correct any provisions in
this Agreement or any such Subsequent Purchase Agreement; provided, however,
that such action shall not, as evidenced by an Opinion of Counsel delivered to
the Trustee, adversely affect in any material respect the interests of any
Noteholder.
(b) This Agreement may also be amended from time to time by GTFC and
CFSC, with the prior written consent of the Trustee and the Holders of
Certificates representing, in the aggregate, 66 2/3% or more of the Aggregate
Cut-off Date Principal Balance, 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 Certificateholders; provided,
however, that no such amendment shall (i) increase or reduce in any manner the
amount of, or accelerate or delay the timing of, collections of payments on the
Contracts or, distributions that are required to be made on any Certificate or
(ii) reduce the aforesaid percentage required to consent to any such amendment
or any waiver hereunder, without the consent of the Holders of all Certificates
then outstanding.
(c) This Agreement shall not be amended under this Section without the
consent of 100% of the Certificateholders and the Class C Certificateholders if
such amendment would result in the disqualification of the Trust as a REMIC
under the Code.
-12-
<PAGE>
(d) Concurrently with the solicitation of any consent pursuant to this
Section 6.4, CFSC shall furnish written notification to S&P and Fitch. Promptly
after the execution of any amendment or consent pursuant to this Section 6.4,
CFSC shall furnish written notification of the substance of such amendment to
S&P, Fitch, each Certificateholder and the Class C Certificateholders.
(e) It shall not be necessary for the consent of Certificateholders
pursuant to this Section 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 of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable requirements as the Trustee, as applicable, may
prescribe, including the establishment of record dates. The consent of any
Holder of a Certificate 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 Note and of any 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 Note.
SECTION 6.5. Notices. All demands, notices and communications to GTFC
or CFSC hereunder shall be in writing, personally delivered, or sent by
telecopier (subsequently confirmed in writing), reputable overnight courier or
mailed by certified mail, return receipt requested, and shall be deemed to have
been given upon receipt (a) in the case of GTFC, to Green Tree Financial
Corporation, 1100 Landmark Towers, 345 St. Peter Street, Saint Paul, Minnesota
55102-1639, Attention: Chief Financial Officer, or such other address as shall
be designated by GTFC in a written notice delivered to the other party or to the
Trustee, as applicable, or (b) in case of CFSC, to Conseco Finance
Securitizations Corp., 1100 Landmark Towers, 345 St. Peter Street, Saint Paul,
Minnesota 55102-1639, Attention: Chief Financial Officer.
SECTION 6.6. Merger and Integration. Except as specifically stated
otherwise herein, this Agreement and the Related Documents set 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 and the
Related Documents. This Agreement may not be modified, amended, waived or
supplemented except as provided herein.
SECTION 6.7. Severability of Provisions. If any one or more of the
covenants, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, provisions or terms shall be
deemed severable from the remaining covenants, provisions or terms of this
Agreement and shall in no way affect the validity or enforceability of the other
provisions of this Agreement.
SECTION 6.8. Intention of the Parties. The execution and delivery of
this Agreement and of each Subsequent Purchase Agreement shall constitute an
acknowledgment by GTFC and CFSC that they intend that each assignment and
transfer herein and therein contemplated constitute a sale and assignment
outright, and not for security, of the Initial Contracts and the Initial Other
Conveyed Property and the Subsequent Contracts and Subsequent Other Conveyed
Property, as the case may be, conveying good title thereto free and clear of any
-13-
<PAGE>
Liens, from GTFC to CFSC, and that the Initial Contracts and the Initial Other
Conveyed Property and the Subsequent Contracts and Subsequent Other Conveyed
Property shall not be a part of GTFC's estate in the event of the bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding, or other
proceeding under any federal or state bankruptcy or similar law, or the
occurrence of another similar event, of, or with respect to, GTFC. In the event
that such conveyance is determined to be made as security for a Contract made by
CFSC, the Trust or the Certificateholders to GTFC, the parties intend that GTFC
shall have granted to CFSC a security interest in all of GTFC's right, title and
interest in and to the Initial Contracts and the Initial Other Conveyed Property
and the Subsequent Contracts and Subsequent Other Conveyed Property, as the case
may be, conveyed pursuant to Section 2.1 hereof or pursuant to any Subsequent
Purchase Agreement, and that this Agreement and each Subsequent Purchase
Agreement shall constitute a security agreement under applicable law.
SECTION 6.9. Governing Law. This Agreement shall be construed in
accordance with, the laws of the State of Minnesota 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 6.10. Counterparts. For the purpose of facilitating the
execution of this Agreement 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 6.11. Conveyance of the Initial Contracts and the Initial Other
Conveyed Property to the Trust. GTFC acknowledges that CFSC intends, pursuant
to the Pooling and Servicing Agreement, to convey the Initial Contracts and the
Initial Other Conveyed Property, together with its rights under this Agreement,
to the Trust on the date hereof. GTFC acknowledges and consents to such
conveyance and waives any further notice thereof and covenants and agrees that
the representations and warranties of GTFC contained in this Agreement and the
rights of CFSC hereunder are intended to benefit the Trustee, the Trust, and the
Certificateholders. In furtherance of the foregoing, GTFC covenants and agrees
to perform its duties and obligations hereunder, in accordance with the terms
hereof for the benefit of the Trustee, the Trust, and the Certificateholders and
that, notwithstanding anything to the contrary in this Agreement, GTFC shall be
directly liable to the Trustee and the Trust (notwithstanding any failure by the
Servicer or CFSC to perform its duties and obligations hereunder or under the
Pooling and Servicing Agreement) and that the Trustee may enforce the duties and
obligations of GTFC under this Agreement against GTFC for the benefit of the
Trust and the Certificateholders.
SECTION 6.12. Nonpetition Covenant. Neither CFSC nor GTFC shall
petition or otherwise invoke the process of any court or government authority
for the purpose of commencing or sustaining a case against the Trust (or, in the
case of GTFC, against CFSC) under any federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Trust (or CFSC) or any substantial
part of its property, or ordering the winding up or liquidation of the affairs
of the Trust (or CFSC).
-14-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Transfer Agreement to
be duly executed by their respective officers as of the day and year first above
written.
CONSECO FINANCE SECURITIZATIONS CORP.,
as Purchaser
By _______________________________
Name: Phyllis A. Knight
Title: Senior Vice President and Treasurer
GREEN TREE FINANCIAL CORPORATION,
as Seller
By _______________________________
Name: Phyllis A. Knight
Title: Senior Vice President and Treasurer
-15-
<PAGE>
SCHEDULE A
SCHEDULE OF INITIAL CONTRACTS
A-1
<PAGE>
EXHIBIT A
FORM OF
SUBSEQUENT TRANSFER AGREEMENT
between
CONSECO FINANCE SECURITIZATIONS CORP.
Purchaser
and
GREEN TREE FINANCIAL CORPORATION
Seller
dated as of
--------, -----
<PAGE>
SUBSEQUENT TRANSFER AGREEMENT, dated as of ____________ ____, between
Conseco Finance Securitizations Corp., a Minnesota corporation, as purchaser
("CFSC"), and Green Tree Financial Corporation, a Delaware corporation, as
seller ("GTFC"), pursuant to the Transfer Agreement, dated as of __________,
____, between CFSC and GTFC.
W I T N E S S E T H:
WHEREAS, GTFC and CFSC are parties to a Transfer Agreement, dated as of
__________, _____ (as amended or supplemented, the "Transfer Agreement");
WHEREAS, pursuant to the Transfer Agreement and this Agreement, CFSC
has agreed to purchase from GTFC and GTFC is transferring to CFSC the Subsequent
Contracts and the Subsequent Other Conveyed Property.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter contained, and for other good and valuable consideration,
the receipt of which is acknowledged, CFSC and GTFC, intending to be legally
bound, hereby agree as follows:
1.Defined Terms. Capitalized terms used but not otherwise defined
herein shall have the respective meanings assigned to such terms in the Transfer
Agreement.
"Schedule of Subsequent Contracts" means the schedule of all
manufactured housing contracts sold and transferred pursuant to this Agreement
attached hereto as Schedule A, which Schedule of Subsequent Contracts shall
supplement the Schedule of Initial Contracts attached to the Transfer Agreement.
"Subsequent Cut-off Date" shall mean, with respect to the Subsequent
Contracts conveyed hereby, _________, ____.
"Subsequent Other Conveyed Property" means, for the purposes of this
Agreement, all monies at any time paid or payable on the Subsequent Contracts
conveyed hereby or in respect thereof after the Subsequent Cut-off Date
(including amounts due on or before the Subsequent Cut-off Date but received by
GTFC after the Subsequent Cut-off Date), an assignment of security interests in
the related real estate and any and all other documents or electronic records
that GTFC keeps on file in accordance with its customary procedures relating to
the Subsequent Contracts, the Obligors or the related real estate, property
(including the right to receive future Liquidation Proceeds) that secures a
Subsequent Contract and that has been acquired by or on behalf of the Trust
pursuant to liquidation of such Subsequent Contract, and all proceeds of the
foregoing.
"Subsequent Contracts" means, for purposes of this Agreement, the
Contracts listed in the Schedule of Subsequent Contracts.
2. Conveyance of the Subsequent Contracts and the Subsequent Other
Conveyed Property. Subject to the terms and conditions of this Agreement and
the Transfer Agreement, GTFC hereby sells, transfers, assigns, and otherwise
conveys to CFSC without
Ex.A-1
<PAGE>
recourse (but without limitation of its obligations in this Agreement and the
Transfer Agreement), and CFSC hereby purchases, all right, title and interest of
GTFC in and to the Subsequent Contracts and the Subsequent Other Conveyed
Property. It is the intention of GTFC and CFSC that the transfer and assignment
contemplated by this Agreement shall constitute a sale of the Subsequent
Contracts and the Subsequent Other Conveyed Property from GTFC to CFSC,
conveying good title thereto free and clear of any Liens, and the Subsequent
Contracts and the Subsequent Other Conveyed Property shall not be part of GTFC's
estate in the event of the filing of a bankruptcy petition by or against GTFC
under any bankruptcy or similar law.
3. Purchase Price. Simultaneously with the conveyance of the
Subsequent Contracts and the Subsequent Other Conveyed Property to CFSC, CFSC
has paid or caused to be paid to or upon the order of GTFC, by wire transfer of
immediately available funds (representing certain proceeds to CFSC from the sale
of the Certificates on deposit in the Pre-Funding Account), the amount of funds
as specified below:
(i) Principal Balance of Subsequent Contracts: $_______
(ii) Proceeds to GTFC: $_______
4. Representations and Warranties of GTFC. GTFC makes the following
representations and warranties, on which CFSC relies in purchasing the
Subsequent Contracts and the Subsequent Other Conveyed Property and in
transferring the Subsequent Contracts and the Subsequent Other Conveyed Property
to the Trust under this Agreement. Such representations are made as of the
execution and delivery of this Agreement, but shall survive the sale, transfer
and assignment of the Subsequent Contracts and the Subsequent Other Conveyed
Property hereunder, and the sale, transfer and assignment thereof by CFSC to the
Trust hereunder. GTFC and CFSC agree that CFSC will assign to the Trust all of
CFSC's rights under this Agreement, and that the Trust will thereafter be
entitled to enforce this Agreement against GTFC in the Trust's own name.
(a) Schedule of Representations. The representations and
warranties set forth in Section 3.02 of the Pooling and Servicing
Agreement are true and correct.
(b) Organization and Good Standing. GTFC 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 such business is currently conducted, and had at
all relevant times, and now has, power, authority and legal right to
acquire, own and sell the Subsequent Contracts and the Subsequent Other
Conveyed Property transferred to CFSC.
(c) Due Qualification. GTFC 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 or the conduct of its business
requires such qualification.
Ex.A-2
<PAGE>
(d) Power and Authority. GTFC has the power and authority to
execute and deliver this Agreement Agreement and to carry out its terms
and their terms, respectively; GTFC has full power and authority to
sell and assign the Subsequent Contracts and the Subsequent Other
Conveyed Property to be sold and assigned to and deposited with CFSC
hereunder and has duly authorized such sale and assignment to CFSC by
all necessary corporate action; and the execution, delivery and
performance of this Agreement have been duly authorized by GTFC by all
necessary corporate action.
(e) Valid Sale; Binding Obligations. This Agreement has been
duly executed and delivered, shall effect a valid sale, transfer and
assignment of the Subsequent Contracts and the Subsequent Other
Conveyed Property, enforceable against GTFC and creditors of and
purchasers from GTFC; and this Agreement constitutes the legal, valid
and binding obligations of GTFC enforceable in accordance with its
terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by equitable limitations
on the availability of specific remedies, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
(f) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms of this
Agreement 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, the certificate of incorporation or
bylaws of GTFC, or any indenture, agreement, mortgage, deed of trust or
other instrument to which GTFC 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, other than this Agreement
and the Transfer Agreement, or violate any law, order, rule or
regulation applicable to GTFC of any court or of any federal or state
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over GTFC or any of its properties.
(g) No Proceedings. There are no proceedings or investigations
pending or, to GTFC's knowledge, threatened against GTFC, before any
court, regulatory body, administrative agency or other tribunal or
governmental instrumentality having jurisdiction over GTFC or its
properties (i) asserting the invalidity of this Agreement, (ii) seeking
to prevent or the consummation of any of the transactions contemplated
by this Agreement, (iii) seeking any determination or ruling that might
materially and adversely affect the performance by GTFC of its
obligations under, or the validity or enforceability of, this
Agreement, or (iv) seeking to affect adversely the federal income tax
or other federal, state or local tax attributes of, or seeking to
impose any excise, franchise, transfer or similar tax upon, the
transfer and acquisition of the Subsequent Contracts and the Subsequent
Other Conveyed Property hereunder.
(h) Insolvency. As of the Subsequent Cut-off Date and the
Subsequent Transfer Date, neither GTFC nor CFSC is insolvent nor will
either of them have been made insolvent after giving effect to the
conveyance set forth in Section 2 of this Agreement, nor are any of
them aware of any pending insolvency.
Ex.A-3
<PAGE>
(i) Chief Executive Office. The chief executive office of GTFC
is located at 1100 Landmark Towers, 345 St. Peter Street, Saint Paul,
Minnesota 55102-1639.
5. Representations and Warranties of CFSC. CFSC makes the following
representations and warranties, on which GTFC relies in selling, assigning,
transferring and conveying the Subsequent Contracts and the Subsequent Other
Conveyed Property to CFSC hereunder. Such representations are made as of the
execution and delivery of this Agreement, but shall survive the sale, transfer
and assignment of the Subsequent Contracts and the Subsequent Other Conveyed
Property hereunder.
(a) Organization and Good Standing. CFSC has been duly
organized and is validly existing and in good standing as a corporation
under the laws of the State of Minnesota, with the power and authority
to own its properties and to conduct its business as such properties
are currently owned and such business is currently conducted, and had
at all relevant times, and has, full power, authority and legal right
to acquire and own the Subsequent Contracts and the Subsequent Other
Conveyed Property, and to transfer the Subsequent Contracts and the
Subsequent Other Conveyed Property to the Trust pursuant to this
Agreement.
(b) Due Qualification. CFSC is duly qualified to do business
as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals in all jurisdictions where the failure
to do so would materially and adversely affect CFSC's ability to
acquire the Subsequent Contracts or the Subsequent Other Conveyed
Property or the validity or enforceability of the Subsequent Contracts
and the Subsequent Other Conveyed Property or to perform CFSC's
obligations hereunder.
(c) Power and Authority. CFSC has the power, authority and
legal right to execute and deliver this Agreement and to carry out the
terms hereof and to acquire the Subsequent Contracts and the Subsequent
Other Conveyed Property hereunder; and the execution, delivery and
performance of this Agreement and all of the documents required
pursuant hereto have been duly authorized by CFSC by all necessary
action.
(d) No Consent Required. CFSC is not required to obtain the
consent of any other Person, or any consent, license, approval or
authorization or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution, delivery
or performance of this Agreement, except for such as have been
obtained, effected or made.
(e) Binding Obligation. This Agreement constitutes a legal,
valid and binding obligation of CFSC, enforceable against CFSC in
accordance with its terms, subject, as to enforceability, to applicable
bankruptcy, insolvency, reorganization, conservatorship, receivership,
liquidation and other similar laws and to general equitable principles.
(f) No Violation. The execution, delivery and performance by
CFSC of this Agreement, the consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms of this
Agreement do not and will not conflict with, result in
Ex.A-4
<PAGE>
any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse of time) a default under, the articles of
incorporation or bylaws of CFSC, or conflict with or breach any of the
terms or provisions of, or constitute (with or without notice or lapse
of time) a default under, any indenture, agreement, mortgage, deed of
trust or other instrument to which CFSC is a party or by which CFSC is
bound or to which any of its properties are subject, 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 (other than the Pooling and Servicing Agreement and
the Transfer Agreement), or violate any law, order, rule or regulation,
applicable to CFSC or its properties, of any federal or state
regulatory body, any court, administrative agency, or other
governmental instrumentality having jurisdiction over CFSC or any of
its properties.
(g) No Proceedings. There are no proceedings or investigations
pending, or, to the knowledge of CFSC, threatened against CFSC, before
any court, regulatory body, administrative agency, or other tribunal or
governmental instrumentality having jurisdiction over CFSC or its
properties: (i) asserting the invalidity of this Agreement, (ii)
seeking to prevent the consummation of any of the transactions
contemplated by this Agreement, (iii) seeking any determination or
ruling that might materially and adversely affect the performance by
CFSC of its obligations under, or the validity or enforceability of,
this Agreement, or (iv) that may adversely affect the federal or state
income tax attributes of, or seeking to impose any excise, franchise,
transfer or similar tax upon, the transfer and acquisition of the
Subsequent Contracts and the Subsequent Other Conveyed Property to the
Trust.
In the event of any breach of a representation and warranty made by CFSC
hereunder, GTFC covenants and agrees that it will not take any action to pursue
any remedy that it may have hereunder, in law, in equity or otherwise, until a
year and a day have passed since the date on which all pass-through certificates
or other similar securities issued by the Trust, or a trust or similar vehicle
formed by CFSC, have been paid in full. GTFC and CFSC agree that damages will
not be an adequate remedy for such breach and that this covenant may be
specifically enforced by CFSC or by the Trustee on behalf of the Trust.
6. Conditions Precedent. The obligation of CFSC to acquire the
Subsequent Contracts and the Subsequent Other Conveyed Property hereunder is
subject to the satisfaction, on or prior to the Subsequent Transfer Date, of the
following conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by the GTFC in Section 4 of this
Agreement and in Section 3.1 of the Transfer Agreement shall be true
and correct as of the date of this Agreement and as of the Subsequent
Transfer Date.
(b) Transfer Agreement Conditions. Each of the conditions set
forth in Section 2.3(b) of the Transfer Agreement applicable to the
conveyance of Subsequent Contracts and the Subsequent Other Conveyed
Property shall have been satisfied.
Ex.A-5
<PAGE>
(c) Additional Information. GTFC shall have delivered to CFSC
such information as was reasonably requested by CFSC to satisfy itself
as to (i) the accuracy of the representations and warranties set forth
in Section 4 of this Agreement and in Section 3.1 of the Transfer
Agreement and (ii) the satisfaction of the conditions set forth in this
Section 6.
7. Ratification of Transfer Agreement. As supplemented by this
Agreement, the Transfer Agreement is in all respects ratified and confirmed and
the Transfer Agreement as so supplemented by this Agreement shall be read, taken
and construed as one and the same instrument.
8. Governing Law. This Agreement shall be construed in accordance with
the laws of the State of Minnesota 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.
9. Counterparts. For the purposes of facilitating the execution of this
Agreement 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.
10.Conveyance of the Subsequent Contracts and the Subsequent Other
Conveyed Property to the Trust. GTFC acknowledges that CFSC intends to convey
the Subsequent Contracts and the Subsequent Other Conveyed Property, together
with its rights under this Agreement and under the Transfer Agreement, to the
Trust on the date hereof. GTFC acknowledges and consents to such conveyance and
waives any further notice thereof and covenants and agrees that the
representations and warranties of GTFC contained in this Agreement and the
rights of CFSC hereunder and thereunder are intended to benefit Trustee, the
Trust and the Certificateholders. In furtherance of the foregoing, GTFC
covenants and agrees to perform its duties and obligations hereunder and under
this Agreement and the Transfer Agreement, in accordance with the terms hereof
and thereof for the benefit of the Trustee, the Trust and the Certificateholders
and that, notwithstanding anything to the contrary in this Agreement or in the
Transfer Agreement, GTFC shall be directly liable to the Trustee and the Trust
(notwithstanding any failure by CFSC to perform its duties and obligations
hereunder or under the Pooling and Servicing Agreement or the Transfer
Agreement) and that the Trustee may enforce the duties and obligations of GTFC
under this Agreement and the Transfer Agreement against GTFC for the benefit of
the Trust and the Certificateholders.
Ex.A-6
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers as of the day and year first above
written.
CONSECO FINANCE SECURITIZATIONS CORP.,
as Purchaser
By _______________________________
Name: Phyllis A. Knight
Title: Senior Vice President and Treasurer
GREEN TREE FINANCIAL CORPORATION,
as Seller
By _______________________________
Name: Phyllis A. Knight
Title: Senior Vice President and Treasurer
Ex.A-7
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement of
Green Tree Financial Corporation on Form S-3 (Registration No. 333-85037) of our
report dated March 30, 1999, relating to the consolidated financial statements
of Green Tree Financial Corporation as of December 31, 1998 and for the year
then ended, which report is included in Green Tree Financial Corporation's
Annual Report on Form 10-K for the year ended December 31, 1998. We also consent
to the references to us under the captions "Experts" in such Registration
Statement.
PRICEWATERHOUSECOOPERS LLP
/s/ PricewaterhouseCoopers LLP
Minneapolis, Minnesota
October 22, 1999
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Green Tree Financial Corporation:
We consent to the incorporation by reference in Amendment No. 1 to the
Registration Statement (No. 333-85037) on Form S-3 of Green Tree Financial
Corporation of our report dated January 27, 1998, relating to the consolidated
balance sheet of Green Tree Financial Corporation and subsidiaries as of
December 31, 1997, and the related consolidated statements of operations,
stockholders' equity and cash flows for each of the years in the two-year period
ended December 31, 1997, and to the reference to our firm under the heading
"EXPERTS" in the Registration Statement. Our report refers to the Company's
adoption of the Financial Accounting Standards Board's Statement No. 125
"Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities," in 1997.
/s/ KPMG LLP
Minneapolis, Minnesota
October 22, 1999
