<PAGE>
As filed with the Securities and Exchange Commission on July 23, 1998
Registration No. 333-_______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
Form S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------------------------
GREENPOINT CREDIT CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 13-4002891
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
OF INCORPORATION OR ORGANIZATION)
GREENPOINT FINANCIAL CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 06-1379001
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
OF INCORPORATION OR ORGANIZATION)
90 PARK AVENUE
NEW YORK, NEW YORK 10016
(212) 834-1000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF EACH REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
HOWARD C. BLUVER, ESQ.
GREENPOINT CREDIT CORP.
90 PARK AVENUE
NEW YORK, NEW YORK 10016
(212) 834-1000
(NAME, ADDRESS, INCLUDING ZIP CODE,
AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES TO:
MARK R. LEVIE, ESQ.
MARTIN B. HOWARD, ESQ.
ORRICK, HERRINGTON & SUTCLIFFE LLP
777 SOUTH FIGUEROA STREET, SUITE 3200
LOS ANGELES, CALIFORNIA 90017
(213) 629-2020
<PAGE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO
THE PUBLIC: As soon as practicable after the effective date of this Registration
Statement
If any of the securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, 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 of 1933, please check
the following box and list the 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 of 1933, check the following box and list the
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. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Proposed Proposed
maximum maximum
Title of securities to be Amount to be offering price aggregate Amount of
registered registered per unit* offering price registration fee)
- ------------------------- -------------- --------------- -------------------- --------------------
<S> <C> <C> <C> <C>
GreenPoint $10,000,000.00 100% $10,000,000.00 $2,950.00
Manufactured Housing
Contract Trust Pass-
Through Certificates
Limited Guarantee of $10,000,000.00 100% $10,000,000.00 N/A
GreenPoint Financial
Corp.
</TABLE>
*Estimated solely for the purpose of calculating the registration fee.
---------------------------------------
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 that specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
===============================================================================
<PAGE>
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus supplement and the accompanying prospectus shall not
constitute an offer to sell or the solicitation of an offer to buy nor shall
there by any sale of these securities in any State in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such State.
Subject to Completion, Dated [______], 199[ ]
[FORM OF PROSPECTUS SUPPLEMENT]
PRELIMINARY PROSPECTUS SUPPLEMENT DATED [ ]
(To Prospectus dated [ ], 199[ ])
$[ ] (Approximate)
GreenPoint Credit Corp.
Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificates, Series 199[ ]-[ ]
<TABLE>
<CAPTION>
Balance Pass-Through Final Scheduled
Initial Class Certificate Rate Distribution Date/(2)/
------------------------- ------------------------- ------------------------
<S> <C> <C> <C>
Class A-1............... $[ ]
[Class A-IO............. $[ ] ]
Class M................. $[ ](1)
Class B-1............... $[ ](1)
</TABLE>
/(1)/ [The Pass-Through Rate is subject to a maximum rate equal to the weighted
average of the Net Contract Rates (as defined herein) in the Contract
Pool.]
/(2)/ Determined as described under "Prepayment and Yield Considerations -Final
Distribution Date"; the Final Distribution Date could occur significantly
earlier.
(Distributions payable on the 10th day of each month beginning in [ ], 199[ ])
GreenPoint Credit Corp., Seller and Servicer
The Manufactured Housing Contract Senior/Subordinate Pass-Through
Certificates, Series 199[ ]-[ ] (the "Certificates") will represent interests in
a pool (the "Contract Pool") of [actuarial] manufactured housing installment
sales contracts and installment loan agreements (the "Contracts") and certain
related property (the Contracts and such related property being referred to as
the "Trust Fund"). The Contracts will be conveyed to the Trust Fund by
GreenPoint Credit ("GreenPoint" or the "Seller"). Each Contract was [either
(i)] originated or purchased by GreenPoint [or (ii) purchased by GreenPoint in
bulk from other lenders or finance companies (including from affiliates of the
Seller), from governmental agencies or instrumentalities or from other
entities.] GreenPoint will serve as servicer of the Contracts (together with any
successor servicer, the "Servicer"). The term "approximate," with respect to
the aggregate principal amount of any Certificates or Contracts, means that the
amount is subject to a variance of plus or minus 5%. Terms used and not
otherwise defined herein have the respective meanings ascribed to such terms in
the Prospectus dated [ ], 199[ ] attached hereto (the "Prospectus").
The Certificates will consist of [two] classes of senior certificates
designated as the [Class A-1 Certificates and the Class A-IO Certificates]
(collectively, the "Class A Certificates" or the "Senior Certificates"), [four]
classes of subordinate certificates designated as
<PAGE>
the Class M Certificates, the Class B-1 Certificates, the Class B-2 Certificates
and the Class R Certificates(collectively, the "Subordinate Certificates"). The
Class R Certificates represent the residual interest in the Trust Fund. Only the
Class A Certificates, the Class M Certificates and the Class B-1 Certificates
(collectively, the "Offered Certificates") are being offered hereby. The [Class
B-2 Certificates and the] Class R Certificates have not been registered under
the Securities Act and are not being offered hereby. The Class A Certificates,
the Class M Certificates, Class B-1 Certificates and the Class B-2 Certificates
will evidence in the aggregate approximate initial [ ]%, [ ]%, [ ]% and [ ]%
undivided interests in the Contract Pool, respectively. The rights of the
holders (the "Certificateholders") of the Class B Certificates to receive
distributions of principal and/or interest are subordinated as described herein
to the rights of the Class A and Class M Certificateholders and the rights of
the Class M Certificateholders to receive distributions of principal and/or
interest are subordinated as described here into such rights of the Class A
Certificateholders, and the rights of the Class R Certificateholders to receive
distributions of principal and/or interest are subordinated as described herein
to such rights of the Class A, the Class M and the Class B Certificateholders.
See "Description of the Certificates Subordination" herein and "Credit and
Liquidity Enhancement" in the Prospectus.
Distributions of principal and/or interest on the Certificates will be
made to the holders of the Certificates on the 10th day of each month (or if the
10th day is not a business day, the next business day) (each, a "Distribution
Date"), beginning in [ ], 199[ ]. [The Class A-IO Certificates will not have a
principal balance and will not be entitled to distributions of principal but
will be entitled to distributions of interest as described herein.] The Offered
Certificates will have the respective [fixed] Pass-Through Rates specified
above. See "Description of the Certificates" herein.
[The Class B-2 Certificates will initially have the benefit of a
limited guarantee (the "Limited Guarantee") of GreenPoint Financial Corp.
("GFC") to protect against losses that would otherwise be absorbed by the Class
B-2 Certificateholders. Pursuant to the Limited Guarantee, to the extent that
funds in the Certificate Account are insufficient to distribute to the holders
of the Class B-2 Certificates the Class B-2 Formula Distribution Amount (as
described herein), GFC will be obligated to pay an Enhancement Payment (as
described herein). See "Description of the Certificates--Limited Guarantee of
GFC" herein. [The Limited Guarantee may be replaced by an Alternative Credit
Enhancement (as described herein).]]
The yields to maturity of the Offered Certificates may vary from the
anticipated yields to the extent such Certificates are purchased at a discount
or premium and to the extent the rate and timing of payments thereon are
sensitive to the rate and timing of principal payments (including prepayments)of
the Contracts. [The yield to maturity of the Class A-IO Certificates will be
extremely sensitive to the rate and timing of principal payments (including
prepayments) of the Contracts.] Certificateholders should consider, in the case
of any offered Certificates purchased at a discount, the risk that a lower than
anticipated rate of principal payment could result in an actual yield that is
lower than the anticipated yield and, in the case of any Offered Certificates
purchased at a premium, the risk that a faster than anticipated rate of
principal payments could result in an actual yield that is lower than the
anticipated yield. [Holders of the Class A-IO Certificates should carefully
consider the risk that a rapid rate of principal payments on the contracts will
have a negative effect on the yield thereon and could result in the failure of
such holders to recover their initial investments.] See "Risk Factors" herein.
(ii)
<PAGE>
An election will be made to treat the Trust Fund as a real estate
mortgage investment conduit (a "REMIC") for federal income tax purposes. The
Offered Certificates will represent "regular interests" in the REMIC. See
"Certain Federal Income Tax Consequences" herein and in the Prospectus.
The underwriters named herein (the "Underwriters") intend to make a
secondary market in the Offered Certificates, but have no obligation to do so.
There can be no assurance that a secondary market for the Offered Certificates
will develop, or if it does develop, that it will continue or provide sufficient
liquidity. See "Risk Factors" herein and in the Prospectus.
This Prospectus Supplement does not contain complete information about
the offering of the Offered Certificates. Additional information is contained
in the Prospectus and purchasers are urged to read both this Prospectus
Supplement and the Prospectus in full. Sales of the Offered Certificates may
not be consummated unless the purchaser has received both this Prospectus
Supplement and the Prospectus. Terms used and not otherwise defined herein have
the respective meanings ascribed to such terms in the Prospectus.
Until ninety days after the date of this Prospectus Supplement, all
dealers effecting transactions in the Offered Certificates, whether or not
participating in this distribution, may be required to deliver a Prospectus
Supplement and Prospectus. This is in addition to the obligation of dealers to
deliver a Prospectus Supplement and Prospectus when acting as underwriters and
with respect to their unsold allotments or subscriptions.
No dealer, salesman or person has been authorized to give any
information or to make any representations other than those contained or
incorporated by reference in this Prospectus Supplement or the accompanying
Prospectus and, if given or made, such information or representations must not
be relied upon as having been authorized by any Seller or Underwriter. This
Prospectus Supplement and the accompanying Prospectus do not constitute an offer
to sell or a solicitation of an offer to buy any of the securities offered
hereby and thereby in any state or jurisdiction to any person to whom it is
unlawful to make such offer or solicitation in such state or jurisdiction.
Neither the delivery of this Prospectus Supplement, the accompanying Prospectus
nor any sale made hereunder and thereunder shall, under any circumstances,
create any implication that information herein or therein is correct as of
anytime subsequent to the date hereof or thereof or that there has been no
change in the affairs of the Seller since such dates.
For a discussion of significant matters affecting investments in the
Offered Certificates (defined herein), see "Risk Factors" herein at page 15
and in the Prospectus at page 10.
- --------------------------------------------------------------------------------
THE OFFERED CERTIFICATES WILL NOT REPRESENT INTERESTS IN OR OBLIGATIONS OF
GREENPOINT. NEITHER THE OFFERED CERTIFICATES NOR THE UNDERLYING CONTRACTS OR ANY
COLLECTIONS THEREON WILL BE INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR
INSTRUMENTALITY, THE UNDERWRITERS OR ANY OF THEIR AFFILIATES, GREENPOINT OR ANY
ITS AFFILIATES [EXCEPT WITH RESPECT TO THE LIMITED GUARANTEE OR ALTERNATIVE
CREDIT ENHANCEMENT APPLICABLE TO THE CLASS [ ] CERTIFICATES AS DESCRIBED
HEREIN)]. THE [LIMITED GUARANTEE OR
(iii)
<PAGE>
ALTERNATIVE CREDIT ENHANCEMENT WITH RESPECT TO THE CLASS [ ] CERTIFICATES AND]
COLLECTIONS ON THE CONTRACTS WILL CONSTITUTE THE ONLY SOURCE OF FUNDS FOR
PAYMENT ON THE OFFERED CERTIFICATES.
- ------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
Underwriting Proceeds to
Price to Public(1) Discount Seller(s)/(1)//(2)/
--------------------- -------------------- -------------------------
<S> <C> <C> <C>
Class A-1 Certificates................. % % %
[Class A-IO Certificates............... ___$ % ___]$
Class M Certificates................... % % %
Class B-1 Certificates................. % % %
Total................................. ___$ ___$ ___$
</TABLE>
/(1)/ Plus accrued interest, if any, at the applicable rate from [ ], 199[ ].
Accrued Interest will be calculated on the Class A-IO Certificates on the
basis of a Notional Principal Amount [equal to the Pool Scheduled
Principal Balance.]
/(2)/ Before deducting expenses payable by the Seller, estimated to be
$_________.
-------------------------
The Offered Certificates are offered subject to prior sale, when, as and if
issued by the Trust Fund and accepted by the Underwriters and subject to their
right to reject orders in whole or in part. It is expected that delivery of the
Offered Certificates will be made in book-entry form only through the Same Day
Funds Settlement system of The Depository Trust Company on or about [
], 199[ ].
-------------------------
[UNDERWRITERS]
-------------------------
The date of this Prospectus Supplement is [ ], 199[ ]
(iv)
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Pages
<S> <C>
TERMS OF THE OFFERED CERTIFICATES........................................... 1
RISK FACTORS................................................................ 15
THE CONTRACT POOL........................................................... 17
THE SELLER.................................................................. 24
PREPAYMENT AND YIELD CONSIDERATIONS......................................... 26
Weighted Average Life of the Offered Certificates...................... 30
[Sensitivity Of The Class A-IO Certificates............................ 34
[Pre-Tax Yields on the Class A-IO Certificates......................... 34
DESCRIPTION OF THE CERTIFICATES............................................. 36
General................................................................ 36
Pass-Through Rates..................................................... 37
Conveyance of Contracts................................................ 37
Payments on the Contracts; Certificate Account......................... 42
Distributions.......................................................... 44
[Reserve Account]...................................................... 47
Subordination.......................................................... 48
Losses on Liquidated Contracts......................................... 48
Example of Distributions............................................... 49
Advances............................................................... 49
Reports to Certificateholders.......................................... 51
Optional Termination and Termination Auction........................... 53
Termination of the Agreement........................................... 54
Collection and Other Servicing Procedures.............................. 54
Servicing Compensation; Certain Other Matters Regarding the Servicer... 54
The Trustee............................................................ 55
[Registration of the Offered Certificates.............................. 55
CERTAIN FEDERAL INCOME TAX CONSEQUENCES..................................... 60
ERISA CONSIDERATIONS........................................................ 63
General................................................................ 63
Senior Certificates.................................................... 63
Class M and Class B-1 Certificates..................................... 67
</TABLE>
<PAGE>
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<S> <C>
CERTAIN LEGAL ASPECTS OF THE CONTRACTS...................................... 68
RATINGS..................................................................... 68
LEGAL INVESTMENT............................................................ 68
METHOD OF DISTRIBUTION...................................................... 69
USE OF PROCEEDS............................................................. 70
LEGAL MATTERS............................................................... 70
INDEX OF SIGNIFICANT DEFINITIONS............................................ 71
</TABLE>
<PAGE>
--------------------------
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN
TRANSACTIONS THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF
CERTIFICATES, INCLUDING ENTERING STABILIZING BIDS OR EFFECTING SYNDICATE
COVERING TRANSACTIONS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "METHOD OF
DISTRIBUTION."
TERMS OF THE OFFERED CERTIFICATES
This summary is qualified in its entirety by reference to the detailed
information appearing elsewhere in this Prospectus Supplement and in the
accompanying Prospectus. Capitalized terms used and not otherwise defined
herein have the respective meanings assigned them in the Prospectus or elsewhere
in this Prospectus Supplement. Reference is made to the "Index of Significant
Definitions" herein for the location of the definitions of certain capitalized
terms.
<TABLE>
<S> <C>
Securities Offered......................... Manufactured Housing Contract Senior/Subordinate
Pass-Through Certificates, Series 199[ ]-[ ] (the
"Certificates"), Class A-1 and Class A-IO Certificates
(collectively, the "Class A Certificates" or "Senior
Certificates"), Class M Certificates (the "Class M
Certificates"), Class B-1 Certificates (the Class B-1
Certificates") and Class B-2 Certificates (the "Class B-2
Certificates" and, together with the Class B-1
Certificates, the "Class B Certificates" and the Class B
Certificates and the Class M Certificates, the
"Subordinate Certificates").The residual interest is
evidenced by the Class R Certificates (the "Class R
Certificates"). The Class R Certificates are not being
offered hereby. The Class A Certificates are senior to
the Class M Certificates to the extent described herein,
the Class M Certificates are senior to the Class B
Certificates to the extent described herein, the Class B-1
Certificates are senior to the Class B-2 Certificates to
the extent described herein and the Class B-2 Certificates
are senior to the Class R Certificates to the extent
described herein. The Class A Certificates, the Class M
Certificates and the Class B Certificates are sometimes
referred to herein collectively as the "Series 199[ ]-[ ]
Regular Certificates." The Class R Certificates are
sometimes referred to herein as the "Series 199[ ]-[ ]
Residual Certificates."
The Seller................................. GreenPoint Credit Corp. ("GreenPoint" or the "Seller"), a
Delaware corporation.
Servicer................................... GreenPoint (together with any successor servicer under the
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Agreement (defined below), the "Servicer").
Trustee.................................... [ ] (the "Trustee").
Cut-off Date............................... [ ], 199[ ].
Cut-off Date Pool Principal Balance........ $[ ] (Approximate, subject to a variance of plus or minus 5%).
[Initial Class A-1 Certificate Balance..... $(Approximate, subject to a variance of plus or minus 5%).]
Initial Class A-IO Notional Principal
Amount.................................... $[ ] (Approximate, subject to a variance of plus or minus 5%).
Initial Class M Certificate Balance........ $[ ] (Approximate, subject to a variance of plus or minus 5%).
Initial Class B-1 Certificate Balance...... $[ ] (Approximate, subject to a variance of plus or minus 5%).
Initial Class B-2 Certificate Balance...... $[ ] (Approximate, subject to a variance of plus or minus 5%).
Class A-1 Pass-Through Rate................ [ ]%, calculated on the basis of a 360-day year comprised
of twelve 30-day months.
Class A-IO Pass-Through Rate............... [ ]%, calculated on the basis of a 360-day year comprised
of twelve 30-day months.
Class M Pass-Through Rate.................. [ ]%, [subject to a maximum rate equal to the weighted
average of the Net Contract Rate on the Contracts in the
Contract Pool] calculated on the basis of a 360-day year
comprised of twelve 30-day months.
Class B-1 Pass-Through Rate................ [ ]%, [subject to a maximum rate equal to the weighted
average of the Net Contract Rate on the Contracts in the
Contract Pool] calculated on the basis of a 360-day year
comprised of twelve 30-day months.
Class B-2 Pass-Through Rate................ [ ]%, [subject to a maximum rate equal to the weighted
average of the Net Contract Rate on the Contracts in the
Contract Pool] calculated on the basis of a 360-day year
comprised of twelve 30-day months.
Distribution Date.......................... The 10th day of each month (or if such 10th day is not a
business day, the next succeeding business day),
commencing in [ ], 199[ ]. The first Distribution Date is
[ ], 199[ ] (the "First Distribution Date").
Collection Period.......................... With respect to any Distribution Date, the calendar month
prior to the month in which such Distribution Date occurs
(each, a "Collection Period").
Agreement.................................. The Pooling and Servicing Agreement, dated as of [ ], 199[ ]
(the "Agreement"), between GreenPoint, as Seller and
Servicer, and the Trustee.
The Contract Pool.......................... The Contract Pool is comprised of [fixed] rate [actuarial]
manufactured housing installment sales contracts and
</TABLE>
S-2
<PAGE>
<TABLE>
<S> <C>
installment loan agreements (collectively, the
"Contracts"), in each case secured by a new or used
manufactured home (each manufactured home securing a
Contract being referred to herein as a "Manufactured
Home"). Some of the Contracts are secured by a lien on
real estate. Each Contract was [either (i)] originated or
purchased by GreenPoint on an individual basis in the
ordinary course of its business [or (ii) purchased by
GreenPoint as part of bulk purchases of manufactured
housing contracts from other private lenders or finance
companies, or from governmental agencies or
instrumentalities or from other entities]. Neither the
Contracts nor any collections thereon will be insured or
guaranteed by any governmental agency or instrumentality.
As of the Cut-off Date, the Contract Pool consists of
approximately [ ] Contracts having an aggregate unpaid
principal balance of approximately $[ ]. The Contracts,
as of their origination, were secured by Manufactured
Homes located in [ ] states and the District of Columbia
and have been selected by GreenPoint from the manufactured
housing installment sale contracts and installment loan
portfolios of GreenPoint on the basis of the criteria
specified in the Agreement (as defined herein). Monthly
payments of principal and interest on the Contracts will
be due on various days (each, a "Due Date") throughout
each month. As of the Cut-off Date, the Contract Rates on
the Contracts ranged from [ ]% to [ ]%, with a weighted
average of approximately [ ]%. As of the Cut-off Date,
the Contracts had a weighted average original term to
maturity of approximately [ ] months and a weighted
average remaining term to maturity of approximately [ ]
months. The final scheduled payment date on the Contract
with the latest maturity is in [ ] 20[ ]. The Contracts
were originated from 19[ ] through 19[ ], inclusive. See
"The Contract Pool" and "Prepayment and Yield
Considerations" herein for a detailed description of the
Contracts. [In no event shall any Contract have a
loan-to-value ratio in excess of 100% as of the Cut-off Date.]
[The Agreement provides that additional contracts will be
purchased by the Trust on the Closing Date (the
"Additional Contracts") and that Contracts representing no
more than [ ]% of the aggregate Contract Pool will be
purchased by the Trust no later than [ ] (the
"Subsequent Contracts". No such Subsequent or Additional
Contracts shall have a loan-to-value ratio in excess of 100%
as of its date of inclusion in the Trust.]
In addition to the security interest on the Manufactured
Home, certain of the Contracts(the "Land Home Contracts"
and "Land-in-Lieu Contracts") will be secured by a
mortgage, deed of trust or other instrument securing the
real estate on which the Manufactured Home is located.
Land
</TABLE>
S-3
<PAGE>
<TABLE>
<S> <C>
Home and Land-in-Lieu Contracts in the aggregate
comprise approximately [ ] in dollars of the Contract Pool
as of the Cut-off Date. See "The Contract Pools" in the
Prospectus.
Description of Certificates................ The Certificates evidence undivided interests in the
Contract Pool and certain other property held in trust for
the benefit of the Certificateholders (the Contracts and
such other property being collectively referred to as the
"Trust Fund"). The Class A Certificates are Senior
Certificates and the Class M Certificates and the Class B
Certificates are Subordinate Certificates, all as
described herein. The Class M Certificates are a
"mezzanine" Class of Certificates as described in the
Prospectus. The residual interest is evidenced by the
Class R Certificates. The Offered Certificates will be
offered in denominations of [$1,000] and integral
multiples of [one dollar] in excess thereof. The
undivided percentage interest (the "Percentage Interest")
evidenced by a Certificate of any Class (other than a
[Class A-IO or a] Class R Certificate) in the
distributions to the related Class will be equal to the
percentage obtained by dividing the original denomination
of such Certificate by the initial Certificate Balance of
such Class of Certificates.
Non-Recourse Obligations................... The Offered Certificates will not represent interests in
or obligations of GreenPoint. None of the Offered
Certificates nor the underlying Contracts or any
collections thereon will be insured or guaranteed by any
governmental agency or instrumentality, the Underwriters
or any of their affiliates, GreenPoint or any its
affiliates [(except to the extent of the Limited Guarantee
of GFC)]. [Except with respect to the Limited Guarantee],
collections on the Contracts will constitute the only
source of funds for payment on the Offered Certificates.
Record Date................................ The last business day preceding the Distribution Date.
Distributions.............................. Distributions to the holders of the Series 199[ ]-[ ]
Regular Certificates of interest and/or principal, will be
made first to the holders of the Senior Certificates and
second to the holders of the Subordinate Certificates.
Within each Class of Certificates, such distributions will
be applied first to the payment of interest and then to
the payment of principal. The funds available in the
Certificate Account (as hereinafter defined) for
distribution on a Distribution Date (the "Available
Distribution Amount," as further defined herein under
"Description of the Certificates - Payments on the
Contracts; Certificate Account") will be applied in the
amounts and the order of priority set forth below.
Distributions of interest and principal to holders of each
Class of Certificates[, other than the Class A-IO
</TABLE>
S-4
<PAGE>
<TABLE>
<S> <C>
Certificates,] will be made on each Distribution Date in
an amount equal to their respective Percentage Interests
multiplied by the aggregate amount distributed to such
Class of Certificates on such Distribution Date.
[Interest will be calculated on the Class A-IO
Certificates on the basis of a "Notional Principal
Amount"[equal to the Pool Scheduled Principal Balance, as
defined below]. Reference to the Notional Principal
Amount of the Class A-IO Certificates is only for
convenience in certain calculations and does not represent
the right to receive any distribution allocable to
principal.] Distributions will be made on each
Distribution Date to holders of record on the preceding
Record Date, except that the final distribution in respect
of the Certificates will only be made upon presentation
and surrender of the Certificates at the office or agency
appointed by the Trustee for that purpose in [Chicago]
[or] [New York City].
Priorities. On each Distribution Date, the Available
Distribution Amount will be distributed in the following
amounts and in the following order of priority:
(i) to the Class A Certificateholders, the Class A
Interest Distribution Amount[, payment to be distributed
among the Class A-1 and Class A-IO Certificates pro rata
based on entitlement];
(ii) to the Class A-1 Certificateholders, the Formula
Principal Distribution Amount until the Class A
Certificate Balance is reduced to zero;
(iii) to the Class M Certificateholders, the Class M
Interest Distribution Amount
(iv) to the Class M Certificateholders, any remaining
Formula Principal Distribution Amount after distribution
under clause (ii) above until the Class M Certificate
Balance is reduced to zero
(v) to the Class B-1 Certificateholders, the Class B-1
Interest Distribution Amount;
(vi) to the Class B-1 Certificateholders, any remaining
Formula Principal Distribution Amount until the Class B-1
Certificate Balance is reduced to zero;
(vii) to the Class B-2 Certificateholders, the Class B-2
Interest Distribution Amount;
(viii) to the Class B-2 Certificateholders, any remaining
Formula Principal Distribution Amount until the Class B-2
Certificate Balance is reduced to zero; and
(vii) to the Class R Certificateholders, any remaining
Available Distribution Amount
</TABLE>
S-5
<PAGE>
<TABLE>
<S> <C>
Definitions. As to any Distribution Date, the "Class A
Interest Distribution Amount" is equal to the sum of (i)
one month's interest at the Class A Pass-Through Rate on
the Class A Certificate Balance or Notional Principal
Amount, as the case may be, and (ii) any previously
undistributed shortfalls in interest due to the Class A
Certificateholders in respect of prior Distribution Dates;
the "Class M Interest Distribution Amount" is equal to the
sum of (i) one month's interest at the Class M
Pass-Through Rate on the Class M Certificate Balance and
(ii) any previously undistributed shortfalls in interest
due to the Class M Certificateholders in respect of prior
Distribution Dates; the "Class B Interest Distribution
Amount" is equal to the sum of (i) one month's interest at
the Class B Pass-Through Rate on the Class B Certificate
Balance and (ii) any previously undistributed shortfalls
in interest due to the Class B Certificateholders in
respect of prior Distribution Dates. Any shortfall in
interest due to Certificateholders will, to the extent
legally permissible, bear interest at the related Class A,
Class M or Class B Pass-Through Rate.
The "Formula Principal Distribution Amount" in respect of
a Distribution Date equals the sum of (a) the Total
Regular Principal Amount (as defined below) for such
Distribution Date and (b) any previously undistributed
shortfalls in the distribution of the Total Regular
Principal Amount in respect of prior Distribution Dates
The "Total Regular Principal Amount" on each Distribution
Date is the sum of (i) the Scheduled Principal Reduction
Amount (defined below) for such Distribution Date, (ii)
the Scheduled Principal Balance (defined below) of each
Contract which, during the related Collection Period, was
purchased by GreenPoint on account of certain breaches of
representations and warranties made by it in the
Agreement, (iii) all partial prepayments received during
such related Collection Period,(iv) the Scheduled
Principal Balance of each Contract that was prepaid in
full during such related Collection Period and (v) the
Scheduled Principal Balance of each Contract that became a
Liquidated Contract (defined below) during such related
Collection Period
The "Scheduled Principal Balance" of a Contract for any
Distribution Date is its principal balance as of the Due
Date in the Collection Period immediately preceding such
Distribution Date, after giving effect to all previous
partial prepayments, all previous scheduled principal
payments (whether or not paid) and the scheduled principal
payment due on such Due Date, but without giving effect to
any adjustment due to bankruptcy or similar proceedings.
The "Scheduled Principal Reduction Amount" for any
</TABLE>
S-6
<PAGE>
<TABLE>
<S> <C>
Distribution Date is an approximate calculation (performed
on an aggregate basis rather than on a
Contract-by-Contract basis) of the scheduled payments of
principal due during the related Collection Period. Both
of these terms are more fully described herein under
"Description of the Certificates - Distributions" herein
The "Pool Scheduled Principal Balance" for any
Distribution Date is equal to the Cut-off Date Pool
Principal Balance less the aggregate of the Total Regular
Principal Amounts for all prior Distribution Dates
In general, a "Liquidated Contract" is a defaulted
Contract as to which all amounts that the Servicer expects
to recover relating to such Contract ("Liquidation
Proceeds") have been received. A Liquidated Contract
includes any defaulted Contract in respect of which the
related Manufactured Home has been realized upon and
disposed of and the proceeds of such disposition have been
received.
The "Certificate Balance" for any Class as of any
Distribution Date is the Initial Certificate Balance of
that Class less all amounts previously distributed to
Certificateholders of that Class on account of principal;
The "Senior Certificate Balance" as of any Distribution
Date is the sum of the Certificate Balances of the Senior
Certificates immediately prior to such Distribution Date.
The "Subordinate Certificate Balance" as of any
Distribution Date is the sum of the Class M Certificate
Balance and the Class B Certificate Balance immediately
prior to such Distribution Date. In no event shall the
aggregate distributions of principal to the holders of the
Senior Certificates and Subordinate Certificates exceed
the Initial Senior Certificate Balance and the Initial
Subordinate Certificate Balance, respectively.
[Reserve Account].......................... [On the Closing Date, the Trustee shall establish an
account (the "Reserve Account") for the benefit of the
Certificateholders. The Reserve Account will be funded as
described under "Reserve Account" herein. On each
Distribution Date, the Trustee will withdraw from the
Reserve Account an amount (the "Reserve Account Draw
Amount") equal to the lesser of (a) the amount then on
deposit in the Reserve Account and (b) the amount by which
the aggregate of amounts due to Certificateholders in
clauses (i) to (vi) under "Distributions" above exceeds
the Available Distribution Amount on such Distribution
Date and distribute such amount, together with the
Available Distribution Amount.]
[Pre-Funding Account]....................... On the Closing Date, GreenPoint will deposit an amount (as
reduced from time to time, the "Pre-Funded Amount") in the
Pre-Funding Account to
</TABLE>
S-7
<PAGE>
<TABLE>
<S> <C>
provide the Trust with sufficient funds to purchase the
Subsequent Contracts. The Pre-Funded Amount will initially
equal the difference between [ ] and the aggregate principal
balance as of the Cut-off Date of the Initial and Additional
Contracts. Any income earned on amounts on deposit in the
Pre-Funding Account will be taxable to the GreenPoint. See
"Prepayment and Yield Considerations" and "Description of
the Certificates- Conveyance of Subsequent Contracts and
Pre-Funding Account" herein. In no event, will the
Pre-Funding Account extend beyond 90 days past the Closing
Date.]
The Reserve Account is intended to enhance the likelihood
of regular receipt by the holders of the Series 199[ ]-[ ]
Regular Certificates of the full amount of the
distributions due them and to afford such holders
protection against losses on Liquidated Contracts, but no
assurance can be given that the Reserve Account will be
sufficient for such purpose.
Subordination.............................. The rights of the holders of the Subordinate Certificates
to receive distributions of available amounts in the Trust
Fund will be subordinate, to the extent described herein,
to such rights of the holders of the Senior Certificates.
This subordination is intended to enhance the likelihood
of regular receipt by the holders of the Senior
Certificates of the full amount of interest and principal
distributable thereon and to afford such holders
protection against losses on Liquidated Contracts.
Similarly, the rights of the holders of the Class B
Certificates to receive distributions due them from
available amounts in the Trust Fund will be subordinated,
to the extent described herein, to such rights of the
holders of the Class M Certificates. Subject to the
subordination of the Subordinate Certificates to the
Senior Certificates, this subordination of the Class B
Certificates to the Class M Certificates is intended to
enhance the likelihood of regular receipt by the holders
of the Class M Certificates of the full amount of the
distributions due them and to afford such holders
protection against losses on Liquidated Contracts.
The protection afforded to the holders of Senior
Certificates by means of the subordination of the
Subordinate Certificates, to the holders of the Class M
Certificates by the subordination of the Class B
Certificates and to the holders of the Class B-1
Certificates by the subordination of the Class B-2
Certificates will be accomplished by the application of
the Available Distribution Amount in the order specified
under "Distributions" above. Accordingly,
</TABLE>
S-8
<PAGE>
<TABLE>
<S> <C>
in the event that the Available Distribution Amount on any
Distribution Date is not sufficient to permit the distribution
of the amount of interest and the specified portion of the
Formula Principal Distribution Amount due to the holders
of the Senior Certificates, the subordination of the
Subordinate Certificates will protect the Senior
Certificateholders by the right of such Certificateholders
to receive distributions of the Available Distribution
Amount in respect of interest and the Formula Principal
Distribution Amount that would otherwise have been
distributable to the Certificateholders of any Class
subordinate in priority of distribution to such Class,
until any shortfall in distributions to the holders of the
related senior Class or Classes of Certificates in respect
thereof has been satisfied, to the extent described
herein. See "Description of the Certificates -
Distributions" and "Description of the Certificates -
Subordination" herein.
Losses on Liquidated Contracts............. As described above, the Total Regular Principal Amount
distributable to the holders of the Series 199[ ]-[ ]
Regular Certificates on each Distribution Date includes
the Scheduled Principal Balance of each Contract that
became a Liquidated Contract during the immediately
preceding Collection Period. The Liquidation Proceeds,
net of (i) certain expenses incurred to liquidate such
Liquidated Contract, (ii) all accrued and unpaid interest
thereon and (iii) all Monthly Advances (as defined below)
required to be made in respect of such Liquidated Contract
(the "Net Liquidation Proceeds"), may be less than the
Scheduled Principal Balance of such Liquidated Contract.
Under such circumstances, the loss on the Liquidated
Contract, in the amount of the deficiency between the Net
Liquidation Proceeds and the Scheduled Principal Balance
of such Liquidated Contract, maybe covered to the extent
of the amount (the "Excess Interest"), if any, by which
the interest collected on nondefaulted Contracts during
the same Collection Period exceeds interest distributions
due to the holders of the Series 199[ ]-[ ] Regular
Certificates and [if GreenPoint is not acting as
Servicer,] the Monthly Servicing Fee.
The effect of any losses on Liquidated Contracts during a
Collection Period in excess of the aggregate of Excess
Interest generally will be to reduce the Pool Scheduled
Principal Balance below the aggregate Certificate Balance
(excluding the Class R Certificates) on the related
Distribution Date. In the event the Pool Scheduled
Principal Balance falls below the aggregate Certificate
Balance on any Distribution Date, shortfalls and/or losses
will arise with respect to the Certificates, which
shortfalls and/or losses will be borne by the Class B-2
Certificateholders, the Class B-1 Certificateholders, the
</TABLE>
S-9
<PAGE>
<TABLE>
<S> <C>
Class M Certificateholders and the Senior
Certificateholders, in that order.
[Limited Guarantee of GFC].................. In order to mitigate the effect of the subordination of
the Class [B-2] Certificates and liquidation losses and
delinquencies on the Contracts borne by the Class [B-2]
Certificates, GFC will initially provide a guarantee (the
"Limited Guarantee.") against losses that would otherwise
be absorbed by the Class [B-2] Certificates to the extent
set forth under "Description of the Certificates--Limited
Guarantee" herein. [Such Limited Guarantee may be
replaced by an Alternate Credit Enhancement. See
"Alternate Credit Enhancement" herein.]
The Limited Guarantee will be an unsecured general
obligation of GFC and will not be supported by any letter
of credit or other enhancement arrangement.
The Limited Guarantee is for the benefit of the Class
[B-2] Certificates only and will not result in any
payments on the other Certificates.
GFC will be entitled to reimbursement for payments made
under the Limited Guarantee as described under
"Description of the Certificates--Limited Guarantee"
herein.]
[Alternative Credit Enhancement]............ In the event that, at GFC's option, Alternate Credit
Enhancement (as described below) is provided in the
amount, and upon the terms and conditions, set forth under
"Description of the Certificates--Alternative Credit
Enhancement," the Limited Guarantee shall be released and
shall terminate. The Alternate Credit Enhancement may
consist of cash or securities deposited by GFC or any
other person in a segregated escrow, trust or collateral
account or a letter of credit, certificate insurance
policy or surety bond provided by a third party (an
"Alternate Credit Enhancement.").
See "Description of the Certificates--Alternative Credit
Enhancement" herein.]
Monthly Advances........................... For each Distribution Date, the Servicer will be obligated
to make an advance (a "Monthly Advance") equal to the
lesser of (i) delinquent scheduled payments of principal
and interest on the Contracts that were due in the
preceding Collection Period and (ii) the amount, if any,
by which scheduled distributions of principal and interest
due on the Series 199[ ]-[ ] Regular Certificates exceeds
certain amounts on deposit in the Certificate Account (as
hereinafter defined) as of the last day of the immediately
preceding Collection Period, except to the extent, in the
Servicer's judgment, such advance would not be recoverable
from related late payments, Liquidation
</TABLE>
S-10
<PAGE>
<TABLE>
<S> <C>
Proceeds or otherwise. Advances are reimbursable to the
Servicer as described herein under "Description of the
Certificates - Advances."
Security Interests in the Manufactured
Homes; Transfer of Contracts and Security
Interests; Repurchase or Substitution
Obligations............................... In connection with the issuance of the Certificates, the
Seller will convey to the Trustee all of its interests in
the Contracts. The certificates of title for the
Manufactured Homes will show GreenPoint, or, as described
in the Prospectus under "Risk Factors" and "Certain Legal
Aspects of the Contracts" Bank of America, FSB, as the
lien holder, and the UCC financing statements, where
applicable, will show GreenPoint or, as described in the
Prospectus under "Risk Factors" and "Certain Legal Aspects
of the Contracts" Bank of America, FSB, as secured party.
Because of the expense and administrative inconvenience
involved, neither the certificates of title for the
Manufactured Homes nor the UCC financing statements
evidencing the security interest in such Manufactured
Homes will be notated or amended, as the case may be, to
change the lienholder specified therein to the Trustee.
Similarly, GreenPoint will not record an assignment to the
Trustee of the mortgage, deed of trust or other instrument
securing each Land Home and Land-in-Lieu Contract. In
some states, in the absence of such a notation or
amendment or recordation of assignment, the assignment to
the Trustee of the security interest in the Manufactured
Homes or the mortgage, deed of trust or other instrument
securing a Land Home or Land-in-Lieu Contract may not be
effective against creditors of GreenPoint or Bank of
America, FSB, as applicable. However, the Seller will not
be obligated to repurchase or substitute a Contract solely
on the basis of the failure by it to cause any such
notation or amendment to be made with respect to a
document of title or UCC financing statement relating to a
Manufactured Home, except under certain limited specified
circumstances described herein under "Description of the
Certificates - Conveyance of Contracts." Under the
Agreement, the Seller will agree to repurchase, or at its
option substitute another contract for, a Contract sold by
it if it has failed to perfect a first-priority security
interest in such Manufactured Home or in the event of
certain violations of federal and state consumer
protection laws applicable to creditors or assignees of
the Contracts, unless such failure does not materially and
adversely affect the Trustee's interest in the Contract or
such failure has been cured. Under certain federal and
state laws governing the perfection of security interests
in manufactured homes and enforcement of rights to realize
upon the value of manufactured homes, the Trustee's
security interest in a Manufactured Home could be rendered
subordinate to the interest of other parties if the
Manufactured Home (that does not secure a Land Home or
</TABLE>
S-11
<PAGE>
<TABLE>
<S> <C>
Land-in-Lieu Contract) has been affixed to real estate or
is relocated to another state without reperfection of the
security interest. See "Risk Factors - Security Interest
in the Manufactured Homes; Transfer of Contracts and
Security Interest" and "Certain Legal Aspects of the
Contracts - Security Interests in the Manufactured Homes"
in the Prospectus. The Servicer, will maintain possession
of the Contract documents, and the Seller will stamp or
cause to be stamped each Contract with a legend indicating
that the Contract has been assigned to the Trustee.
Optional Termination and Termination
Auction................................... The Servicer has the option to purchase from the Trust
Fund all Contracts then outstanding and all other property
in the Trust Fund on any Distribution Date after the First
Distribution Date if, among other conditions, the Pool
Scheduled Principal Balance is less than 10% of the
Cut-off Date Pool Principal Balance. See "Description of
the Certificates - Optional Termination and Termination
Auction" herein. During that period, the Servicer also
may direct the Trustee to conduct a Termination Auction
for the sale of all Contracts then outstanding in the
Trust Fund, and, in any event, if the Servicer has not
exercised the option call within 90 days of the first
Distribution Date when the Pool Scheduled Principal
Balance is less than 10% of the Cut-off Date Pool
Principal Balance, the Servicer shall direct the Trustee
to conduct a Termination Auction. See "Description of the
Certificates - Optional Termination and Termination
Auction" herein. Any early termination of the Trust Fund
and early retirement of the Certificates that results from
the Servicer's exercise of the option call or a successful
Termination Auction may have an effect on an investor's
yield on such Certificates. See "Prepayment and Yield
Considerations" herein and in the Prospectus.
Registration of Offered Certificates....... The Offered Certificates initially will be represented by
certificates registered in the name of Cede & Co. ("Cede")
as the nominee of The Depository Trust Company ("DTC"),
and will only be available in the form of book-entries on
the records of DTC and participating members thereof.
Certificates representing the Offered Certificates will be
issued in definitive form only under the limited
circumstances described herein. All references herein to
"holders" or "Certificateholders" shall reflect the rights
of beneficial owners of the Offered Certificates
("Certificate Owners") as they may indirectly exercise
such rights through DTC and participating members thereof,
except as otherwise specified herein. See "Risk Factors"
and "Description of the Certificates - Global Certificates"
in the Prospectus and "Description of the Certificates - General"
and "Description of the Certificates - Distributions" herein.
</TABLE>
S-12
<PAGE>
<TABLE>
<S> <C>
Federal Income Tax Consequences............ For federal income tax purposes, an election will be made
to treat certain assets of the Trust Fund as a real estate
mortgage investment conduit ("REMIC"). The Series 1998-2
Regular Certificates will constitute "regular interests"
in the REMIC and generally will be treated as debt
instruments of the Trust Fund for federal income tax
purposes. The Series 1998-2 Residual Certificates will be
treated as the "residual interest" in the REMIC for
federal income tax purposes. Holders of the Series 1998-2
Regular Certificates that would otherwise report income
under a cash method of accounting will be required to
include in income interest on the Series 1998-2 Regular
Certificates (including original issue discount ("OID"),
if any) in accordance with the accrual method of
accounting. See "Certain Federal Income Tax Consequences"
herein and in the Prospectus.
ERISA Considerations....................... Senior Certificates. Subject to the conditions and
discussion set forth herein, the Senior Certificates may
be purchased by employee benefit or other plans that are
subject to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), and/or Section 4975 of the
Internal Revenue Code of 1986 (the "Code"). See "ERISA
Considerations" herein and in the Prospectus.
Subordinate Certificates. Unless the opinion referred to
under "ERISA Considerations--Class M and Class B-1
Certificates" is delivered to the Trustee, an employee
benefit or other plan subject to ERISA and/or Section 4975
of the Code will not be permitted to purchase or hold the
Class M or the Class B Certificates as such actions may
give rise to a non-exempt prohibited transaction under
ERISA or Section 4975 of the Code. However, an insurance
company investing assets of its general account may
purchase and hold the Class M or the Class B Certificates
if it delivers the required certification to the Trustee.
See "ERISA Considerations" herein and in the Prospectus.
Legal Investment........................... The [Senior and Class M Certificates] offered hereby will
not constitute "mortgage related securities" under the
Secondary Mortgage Market Enhancement Act of 1984, as
amended ("SMMEA") until such time as the balance of the
Pre-Funding Account is reduced to zero. At such time, the
[Senior and Class M Certificates] will constitute legal
investments for certain types of investors to the extent
provided in SMMEA. Such institutions should consult their
own legal advisors in determining whether and to what extent
the [Senior Certificates and the Class M Certificates]
constitute legal investments for such investors.
Because [the Class B Certificates] will not, at the time
of issuance, be rated in one of the two highest rating
categories of [ ], [the Class B Certificates] will not
constitute "mortgage related securities" for purposes of
</TABLE>
S-13
<PAGE>
<TABLE>
<S> <C>
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 B Certificates]. No representation
is made as to any regulatory requirements or
considerations (including without limitation regulatory
capital or permissible investment requirements) applicable
to the purchase of [the Class B Certificates] by banks,
savings and loan associations or other financial
institutions. Such institutions should consult their own
legal advisors in determining whether and to what extent
the Offered Certificates constitute legal investments for
such investors. See "Legal Investment" herein and in the
Prospectus.
Rating..................................... It is a condition to the issuance of the Offered
Certificates that the Senior Certificates be rated "[ ],"
that the Class M Certificates be rated at least "[ ]" and
that the Class B Certificates be rated at least "[ ]" by [
]. The Seller has not requested ratings on the Offered
Certificates by any rating agency other than [ ].
However, there can be no assurance as to whether any other
rating agency will rate any or all of the Offered
Certificates, or if it does, what rating would be assigned
by any such other rating agency. A rating on any or all
of the Offered Certificates by certain other rating
agencies, if assigned at all, may be lower than the rating
assigned to such Certificates by [ ]. See "Ratings"
herein and in the Prospectus.
A security rating is not a recommendation to buy, sell or
hold securities and may be subject to revision or
withdrawal at any time.
</TABLE>
S-14
<PAGE>
RISK FACTORS
The discussion under "Risk Factors" in the Prospectus should be read
carefully in connection with a decision to invest in any of the Offered
Certificates. The following discussion supplements, and does not replace or
supersede the discussion under "Risk Factors" in the Prospectus, unless the
context expressly so provides.
1. Limited Liquidity. Only the Offered Certificates are being
offered hereby. The Underwriters intend to make a secondary market in the
Offered Certificates, but have no obligation to do so. There can be no assurance
that a secondary market will develop for the Offered Certificates or, if it does
develop, that it will provide the holders of either Class of Offered
Certificates with liquidity of investment or that it will remain for the term of
such Class of Offered Certificates.
The Class B Certificates will not constitute "mortgage related
securities" for purposes of SMMEA. Accordingly, many institutions with legal
authority to invest in SMMEA securities will not be able to invest in the Class
B Certificates, limiting the market for such securities.
2. Distributions of Principal. The yield to maturity on the Class M
and the Class B Certificates will be affected by the rate at which Contracts
become Liquidated Contracts and the severity of ensuing losses on such
Liquidated Contracts and the timing thereof. [For any Distribution Date on which
the Senior Certificate Balance has not been reduced to zero, the Senior
Certificateholders(other than the Class A-IO Certificateholders) will receive
all payments of principal that are made on the Contracts.] It is not possible to
predict the timing of the occurrence of the Distribution Date, if any, on which
the Senior Certificate Balance will be reduced to zero, which occurrences will
be affected by the rate of voluntary prepayments in addition to prepayments due
to default and subsequent liquidation. Prepayment on Contracts may be influenced
by a variety of economic, geographic, social and other factors, including
repossessions, aging, seasonality, market interest rates, changes in housing
needs, job transfers and unemployment. See "Prepayment and Yield Considerations"
herein and in the Prospectus.
3. No Recourse. The Offered Certificates will not represent
interests in or obligations of the Seller or the Servicer. None of the Offered
Certificates nor the underlying Contracts or any collections thereon will be
insured or guaranteed by any governmental agency or instrumentality, the
Underwriters or any of their affiliates, GreenPoint or any its affiliates
[(except to the extent of the Limited Guarantee of GFC)]. [Except for the
Limited Guarantee with respect to the Class [ ] Certificates], collections on
the Contracts will constitute the only source of funds for payment on the
Offered Certificates.
4. Subordination of Class M and Class B Certificates. The rights of
the holders of the Class M Certificates to receive distributions of available
amounts in the Trust Fund will be subordinate, to the extent described herein,
to the rights of the holders of the Senior Certificates. Consequently, if
shortfalls and/or losses arise with respect to the Certificates, they will be
borne by the Class M Certificateholders before they are borne by the Senior
Certificateholders. The rights of the holders of the Class B Certificates to
receive distributions of available amounts in the Trust Fund will be
subordinate, to the extent described herein, to the
S-15
<PAGE>
rights of the holders of the Class M certificates. Consequently, if shortfalls
and/or losses arise with respect to the Certificates, they will be borne by the
Class B Certificateholders before they are borne by the Class M
certificateholders.
[5. Prepayments May Affect Pass-Through Rates. The Pass-Through Rate
for some of the Certificates on any Distribution Date may be adjusted so as not
to exceed the weighted average of the Net Contract Rates in the Contract Pool.
The "Net Contract Rate" of a Contract equals the rate of interest borne by such
Contract minus the Annual Servicing Rate. Disproportionate prepayments
(including prepayments due to liquidations and repurchases by the Seller[s] as
required or permitted by the Agreement) of Contracts with Net Contract Rates in
excess of the initial Pass-Through Rates (each an "Initial Pass-Through Rate")
for such Certificates will increase the possibility that the Pass-Through Rate
for such Classes of Certificates will be adjusted to an amount lower than the
related Initial Pass-Through Rate. There is no mechanism to compensate Holders
of such Classes of Certificates for any such reduction. Any difference between
interest at the actual Pass-Through Rate and interest at the Initial Pass-
Through Rate will not constitute a shortfall, and any such difference will be
foregone permanently.]
[6. Interest-only Certificates. Because amounts distributable to the
holders of interest-only Certificates consist entirely of interest, the yield to
maturity of the interest-only Certificates will be extremely sensitive to the
repurchase, prepayment and default experience of the Contracts and prospective
investors should fully consider the associated risks, including the risk that
such investors may not fully recover their initial investment. [In addition,
investors in the interest-only Certificates should be aware that the Servicer
may exercise a right to repurchase all remaining contracts and other property in
the Trust Fund or direct the Trustee to conduct a Termination Auction for the
sale of all Contracts then outstanding in the Trust Fund after the first
Distribution Date when the Pool Scheduled Principal Balance is less than 10% of
the Cut-Off Date Pool Principal Balance and certain other conditions exist.] See
"Prepayment and Yield Considerations" herein.]
7. Limited Operating History of Servicer. GreenPoint was
incorporated on May 8, 1998 for the purpose of acquiring the manufactured
housing contract business from Bank of America, FSB as described under "The
Seller The Acquisition" in the Prospectus. Accordingly, GreenPoint has a limited
operating history, and no relevant delinquency and loss experience is available.
Neither GreenPoint nor any of its affiliates were previously engaged in the
origination or servicing of manufactured housing contracts prior to the
Acquisition. As of ____________, 1998, the Servicer services manufactured
housing installment loans with an aggregate principal balance of $___ million [,
of which $[800] million were acquired from Bank of America, FSB in the
Acquisition]. Because GreenPoint did not originate or service manufactured
housing contracts prior to the Acquisition, it has no prior history or
experience with respect to the origination and servicing of manufactured housing
contracts or statistical information relating to the average percentage of
principal recovered upon liquidation of certain manufactured housing contracts.
Therefore, no statistical information with respect to loss and delinquencies can
be provided. POTENTIAL CERTIFICATEHOLDERS S ARE ENCOURAGED TO EVALUATE THE RISKS
ASSOCIATED WITH RESPECT TO THE LIMITED OPERATING HISTORY OF GREENPOINT.
S-16
<PAGE>
8. Insolvency. The bankruptcy of GreenPoint could have certain
consequences for the Certificateholders. See "Risk Factors" in the Prospectus.
[9. Limited Guarantee of GFC.] The Limited Guarantee will be an
unsecured general obligation of GFC and will not be supported by any letter of
credit or other enhancement arrangement. See "Incorporation of Certain Documents
by Reference" in the Prospectus.]
[10. Alternative Credit Enhancement. If GFC has replaced the Limited
Guarantee with an Alternative Credit Enhancement and such Alternative Credit
Enhancement is exhausted, GFC has no obligation to replace such enhancement.
Consequently, the Limited Guarantee may bear a greater risk of loss on the
Contracts than if the Limited Guarantee was in place and GFC was able to make
payment the Limited Guarantee.]
THE CONTRACT POOL
Each Contract was purchased or originated by GreenPoint on an
individual basis in the ordinary course of its business. A description of the
general practices of GreenPoint with respect to the origination or purchase of
manufactured housing contracts similar to the Contracts is set forth in the
Prospectus under "The Seller - Loan Originations" and "The Seller - Underwriting
Policies."
On the date of initial issuance of the Offered Certificates, the
Seller will convey to the Trust Fund the Contracts owned by it immediately prior
to such conveyance. The Contract Pool in the Trust Fund will consist of such
Contracts. GreenPoint, as Servicer, will obtain and maintain possession of all
Contract documents. [Approximately [ ]% of the Contracts (by outstanding
principal balance as of the Cut-off Date) will be Contracts acquired by
GreenPoint in the Acquisition
[The Agreement provides that the Additional Contracts will be
purchased by the Trust on the Closing Date and that the Subsequent Contracts
will be purchased by the Trust no later than [ ]. Although the Additional
Contracts and Subsequent Contracts sold to the Trust will have characteristics
that differ somewhat from the Initial Contracts described herein, the Company
does not expect that the characteristics of the Additional Contracts and
Subsequent Contracts will vary materially from the Initial Contracts. In
addition, the Additional Contracts and Subsequent Contracts will conform to
certain representations and warranties set forth in the Agreement. See
"Description of the Certificates - Conveyance of Subsequent Contracts and Pre-
Funding Account" herein.]
Subject to several exceptions, the Contracts being sold by the Seller
will have one or both of the following attributes: (i) the amount financed is
more than 90% but not more than 95% of the Value (defined below) of any
Manufactured Home and (ii) the original term to maturity is more than 20 years
but not more than 30 years.
The Contracts are all [fixed rate, actuarial Contracts]. [Some of the
Contracts in the Contract Pool are secured by a lien on real estate. None of
the Contracts was (i) purchased in
S-17
<PAGE>
bulk from an unrelated third party, (ii) is insured in whole or in part or
guaranteed in whole or in part, as applicable, by the Veterans Administration,
the Federal Housing Administration or by any other governmental entity or
instrumentality, (iii) is amortized using the "simple interest" amortization
method or (iv) has a variable Contract Rate or a Contract Rate which steps up on
particular dates.]
Management of GreenPoint estimates that in excess of [ ]% of the
Manufactured Homes are used as primary residences by the Obligors under the
Contracts secured by such Manufactured Homes.
As of the Cut-off Date, the Contract Rates on the Contracts ranged
from[ ]% to [ ]%. The weighted average Contract Rate of the Contracts as of the
Cut-off Date was approximately [ ]%. As of the Cut-off Date, the Contracts had
remaining scheduled maturities of at least [ ] months but not more than [ ]
months, and original scheduled maturities of at least [ ] months but not more
than [ ] months. As of the Cut-off Date, the Contracts had a weighted average
remaining term to maturity of approximately [ ] months, and a weighted average
original term to scheduled maturity of approximately [ ] months. The average
outstanding principal balance of the Contracts as of the Cut-off Date was
approximately $[ ] and the outstanding principal balances of the Contracts as of
the Cut-off Date ranged from approximately $[ ] to $[ ]. The weighted average
loan-to-value ratio for the Contracts at origination was approximately [ ]% and
the loan-to-value ratio of the Contracts at origination ranged from [ ]% to [ ]
%. "Value" is equal to the total buyer's cost of the manufactured home
(including taxes, insurance and any prepaid finance charges or closing costs
that are financed). For Land Home and Land-in-Lieu Contracts, "Value" is equal
to (i) the value of the real property as determined by appraisal or tax
assessment, plus the total buyer's cost of the manufactured home (as indicated
above), plus the cost of the improvements to the land or (ii) in the case of a
manufactured home that is already located on the land, the final appraised value
of the land and manufactured home together. The underwriting practices of
GreenPoint regarding loan-to-value ratios of Contracts it originates or
purchases are set forth in the Prospectus under "The Seller - Loan Originations"
and "The Seller - Underwriting Policies." Manufactured homes, unlike site-built
homes, generally depreciate in value, and GreenPoint believes that, upon
repossession, the market value of a manufactured home securing a manufactured
housing contract is generally lower than the principal balance of the related
manufactured housing contract. However, because GreenPoint did not service
manufactured homes prior to the Acquisition, it has no statistical information
relating to the average percentage of principal recovered upon liquidation of
certain manufactured housing contracts. Therefore, no statistical information
with respect to loss and delinquencies can be provided. In addition, the
percentage recovery of principal on liquidation of manufactured housing
contracts historically has been adversely affected by downturns in regional or
local economic conditions. These regional or local economic conditions are often
volatile, and no predictions can be made regarding future economic loss upon
liquidation.
The Contracts are secured by Manufactured Homes located in [ ] states
and the District of Columbia; approximately [ ]% of the Contracts by outstanding
principal balance as of the Cut-off Date were secured by Manufactured Homes
located in [ ], [ ]% in [ ], [ ]% in [ ], [ ]% in [ ], [ ]% in [ ], [ ]% in [
]and [ ]% in [ ]. No other state represented more than 5% (by outstanding
principal balance as of the Cut-off Date) of the Contracts.
S-18
<PAGE>
Approximately [ ]% of the Contracts by outstanding principal balance
as of the Cut-off Date are secured by Manufactured Homes which were new at the
time the related Contracts were originated, and approximately [ ]% of the
Contracts by outstanding principal balance as of the Cut-off Date are secured by
Manufactured Homes which were used at the time the related Contracts were
originated.
Approximately [ ]% (by principal balance) of the Contracts are Land
Home Contracts or Land-in-Lieu Contracts. The Land Home Contracts or Land-in-
Lieu Contracts will be secured by either first mortgages or deeds of trust on
the real estate on which the Manufactured Home is located, depending upon the
prevailing practice in the state in which the underlying property is located.
See "Certain Legal Aspects of the Contracts - Land Home or Land-in-Lieu
Contracts" in the Prospectus.
Set forth below is a description of certain additional characteristics
of the Contracts:
S-19
<PAGE>
Geographical Distribution of Manufactured Homes as of Origination
<TABLE>
<CAPTION>
Aggregate
Principal
Number of Balance % of Contract Pool By
Contracts Outstanding Outstanding Principal
As of As of Balance As of
State Cut-off Date Cut-off Date Cut-off Date/(1)/
----- ------------ ------------ ---------------
<S> <C> <C> <C>
Alabama..........................
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.....................
South Carolina...................
South Dakota.....................
Tennessee........................
Texas............................
Utah.............................
Vermont..........................
Virginia.........................
Washington.......................
West Virginia....................
Wisconsin........................
Wyoming..........................
Total...........................
</TABLE>
_________
/(1)/ Entries may not add to 100.00% due to rounding.
S-20
<PAGE>
Years of Origination of Contracts
<TABLE>
<CAPTION>
% of Contract Pool By
Aggregate Principal Outstanding Principal
Number of Contracts Balance Outstanding Balance As of Cut-off
Year of Origination As of Cut-off Date As of Cut-off Date Date/(1)/
------------------- ------------------ ------------------ ---------------------
<S> <C> <C> <C>
1998..........................
Total.......................
</TABLE>
_________
/(1)/ Entries may not add to 100.00% due to rounding.
Distribution of Original Principal Balances of Contracts/(1)/
<TABLE>
<CAPTION>
% of Contract Pool By
Aggregate Principal Outstanding Principal
Number of Contracts As Balance Outstanding As Balance As of Cut-off
Original Contract Amount of Cut-off Date of Cut-off Date Date (2)
------------------------ --------------- --------------- ---------------------
<S> <C> <C> <C>
$ 0 - 5,000............
$5,001 - 7,500............
$7,501 - 10,000............
$10,001 - 12,500............
$12,501 - 15,000............
$15,001 - 17,500............
$17,501 - 20,000............
$20,001 - 22,500............
$22,501 - 25,000............
$25,001 - 27,500............
$27,501 - 30,000............
$30,001 - 32,500............
$32,501 - 35,000............
$35,001 - 40,000............
$40,001 - 45,000............
$45,001 - 50,000............
$50,001 - 55,000............
$55,001 - 60,000............
$60,001 - 65,000............
$65,001 - 70,000............
$70,001 - 75,000............
$75,001 - 80,000............
Total..........................
</TABLE>
________
/(1)/ The greatest original Contract principal balance is $[ ], which
represents [ ]% of the outstanding principal balance of the Contracts as
of the Cut-off Date
/(2)/ Entries may not add to 100.00% due to rounding.
S-21
<PAGE>
Distribution of Original Loan-to-Value Ratios
<TABLE>
<CAPTION>
% of Contract Pool By
Aggregate Principal Outstanding Principal
Number of Contracts As Balance Outstanding As Balance As of Cut-off
Loan-to-Value Ratio/(1)/ of Cut-off Date of Cut-off Date Date/(2)/
--------------------- ---------------------- ---------------------- ----------------------
<S> <C> <C> <C>
Less than or equal to 50%........
51-60%..........................
61-70%..........................
71-80%..........................
81-85%..........................
86-90%..........................
91-95%..........................
Total.........................
</TABLE>
_______
/(1)/ Rounded to the nearest 1%. The definition of "Value" is set forth under
"The Contract Pool" above. Manufactured Homes, unlike site-built homes,
generally depreciate in value, and it should generally be expected,
especially with Contracts with high loan-to-value ratios at origination,
that at any time after the origination of a Contract, the market value of
the Manufactured Home securing such Contract may be lower than the
outstanding principal balance of such Contract
/(2)/ Entries may not add to 100.00% due to rounding.
Distribution of Contract Rates
<TABLE>
<CAPTION>
% of Contract Pool By
Aggregate Principal Outstanding Principal
Ranges of Contracts by Number of Contracts As Balance Outstanding As Balance As of Cut-off
Contract Rate of Cut-off Date of Cut-off Date Date/(1)/
---------------------- ---------------------- --------------------- ---------------------
<S> <C> <C> <C>
10.25-10.49%...............
10.50-10.74%...............
10.75-10.99%...............
11.00-11.24%...............
11.25-11.49%...............
11.50-11.74%...............
11.75-11.99%...............
12.00-12.24%...............
12.25-12.49%...............
Total....................
</TABLE>
_________
/(1)/ Entries may not add to 100.00% due to rounding.
S-22
<PAGE>
Remaining Months to Maturity
<TABLE>
<CAPTION>
% of Contract Pool By
Aggregate Principal Outstanding Principal
Number of Contracts As Balance Outstanding As Balance As of Cut-off
Months Remaining as of Cut-off Date of Cut-off Date of Cut-off Date Date/(1)/
----------------------------------- ---------------------- ---------------------- ---------------------
<S> <C> <C> <C>
Greater than 15 and less than or equal to 30..........
Greater than 31 and less than or equal to 60..........
Greater than 61 and less than or equal to 90..........
Greater than 91 and less than or equal to 120.........
Greater than 121 and less than or equal to 150........
Greater than 151 and less than or equal to 180........
Greater than 181 and less than or equal to 210........
Greater than 211 and less than or equal to 240........
Greater than 241 and less than or equal to 300........
Greater than 301 and less than or equal to 360........
Total................................................
</TABLE>
_________
/(1)/ Entries may not add to 100.00% due to rounding.
S-23
<PAGE>
THE SELLER
The following information supplements, and to the extent inconsistent
therewith supersedes, the information in the Prospectus under the heading "The
Seller."
The volume of manufactured housing contracts originated by GreenPoint,
or purchased from dealers on an individual basis by GreenPoint, for the periods
indicated below and certain other information at the end of such periods are as
follows:
Contracts Originated or Purchased on an Individual Basis
(Dollars in Thousands)
[Year Ended December 31,]
-------------------------
<TABLE>
<CAPTION>
[ ] Quarter
ended
[ ], 1998
----------
<S> <C>
Principal Balance of Contracts Purchased/(1)//(2)/............... $ [ .]
Number of Contracts Purchased/(1)/............................. [ .]
Average Contract Size/(2)/..................................... $ [ .]
Weighted Average Contract Rate/(2)/............................ [ .]%
Number of Regional Offices/(3)/................................ [ .]
</TABLE>
_________
/(1)/ Does not include any portfolios acquired in bulk from third parties other
than from Bank of America, FSB in the Acquisition. Includes only contracts
originated by GreenPoint or purchased from dealers.
/(2)/ As of period end.
/(3)/ Includes regional offices in the United States originating or purchasing
manufactured housing contracts as of the end of the time period.
The following table shows the size of the portfolio of manufactured
housing contracts serviced (including contracts already in repossession) by
GreenPoint, through the manufactured housing regional office system, as of the
dates indicated:
Size of Serviced Portfolio
(Dollars in Thousands)
[Year Ended December 31],
-------------------------
<TABLE>
<CAPTION>
[ ] Quarter
ended
[ ], 1998
-----
<S> <C>
Unpaid Principal Balance of Contracts Being Serviced.............. $ ______
Average Contract Unpaid Principal Balance......................... $ ______
Number of Contracts Being Serviced ______
</TABLE>
S-24
<PAGE>
[RATIO OF EARNINGS TO FIXED CHARGES FOR GFC
Set forth below are GFC's ratios of earnings to fixed charges for the
past five years. For the purposes of compiling these ratios, earnings consist
of earnings before income taxes plus fixed charges. Fixed charges consist of
interest expense and the interest portion of rent expense.
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996 1997
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed
Charges..........]
</TABLE>
S-25
<PAGE>
PREPAYMENT AND YIELD CONSIDERATIONS
The general prepayment and yield considerations discussed in the
Prospectus under "Prepayment and Yield Considerations" should be read carefully
in connection with a decision to invest in any of the Offered Certificates. The
following discussion supplements, and does not replace or supersede the
discussion under "Prepayment and Yield Considerations" in the Prospectus, unless
the context expressly so provides.
The Contracts had maturities at origination ranging from [ ] months to
[ ] 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 and the maturity of the
Offered Certificates. GreenPoint does not maintain statistics with respect to
the rate of prepayment of manufactured housing contracts in its servicing
portfolio [, except for contracts in certain pools of securitized manufactured
housing contracts that its is servicing for others for which at least [ ] months
of prepayment information is available, as described in this Prospectus
Supplement]. Any pool of contracts, including the Contract Pool, might include
contracts with contract rates that are generally higher or lower, in absolute
terms or in comparison to prevailing rates, than the contract rates of the
contracts from which are derived certain historical statistical data set herein.
As a result, the prepayment experience of the contracts contained in any
contract pool, including the Contract Pool, might be faster or slower than the
prepayment experience of the contracts reflected in the historical data. In
addition, although management of GreenPoint is aware of limited publicly
available information relating to historical rates of prepayment on manufactured
housing contracts, management of GreenPoint believes that such information is
not necessarily indicative of the rate of prepayment that may be expected to be
exhibited by the Contracts. Nevertheless, management of GreenPoint anticipates
that a number of Contracts will be prepaid in full in each year during which the
Offered Certificates are outstanding. See "Prepayment and Yield Considerations -
Prepayment Considerations," "Description of the Certificates - Optional and
Mandatory Repurchase; Optional Termination" and "Certain Legal Aspects of the
Contracts Transfers of Manufactured Homes; Enforceability of Restrictions on
Transfer" - in the Prospectus [and "Description of the Certificates - Optional
Termination and Termination Auction" herein] for a discussion of certain factors
that may influence prepayments, including homeowner mobility, general and
regional economic conditions, prevailing interest rates, provisions in the
Contracts prohibiting the owner from selling the Manufactured Home without the
prior consent of the holder of the related Contract, the early termination of
the Trust Fund pursuant to a successful Termination Auction and the option of
the Servicer (whether or not GreenPoint remains the Servicer) to purchase the
Contracts and any other property constituting the Trust Fund or to direct the
Trustee to solicit bids for an auction at which to sell the Contracts and any
other property constituting the Trust Fund. In addition, repurchases of
Contracts on account of certain breaches of representations and warranties as
described below under "Description of the Certificates - Conveyance of
Contracts" will have the effect of prepaying such Contracts and therefore will
affect the average life of the Certificates.
[The Class A-1 Certificates will be prepaid in part on the first
Payment date after the Pre-Funding Period (in no event later than [ ]) in the
event that any Pre-Funded Amount remains in the Pre-Funding Account on such
Payment Date. Any amounts remaining which have not been used to purchase
Subsequent Contracts will be paid to the Class A-1
S-26
<PAGE>
Certificateholders. GreenPoint believes that substantially all of the Pre-Funded
Amount will be used to acquire the Subsequent Contracts. It is unlikely,
however, that the aggregate principal amount of Subsequent Contracts purchased
by the Trust will be identical to the Pre-Funded Amount, and that consequently,
Class A-1 Certificateholders will receive some prepayment of principal.]
The allocation of distributions to the Certificateholders in
accordance with the Agreement will have the effect of accelerating the
amortization of certain of the Classes of the Series 199[ ]-[ ] Regular
Certificates and delaying the amortization of certain other Classes of the
Series 199[ ]-[ ] Regular Certificates from the amortization that otherwise
would be applicable if distributions in respect of the Total Regular Principal
Amount were made pro rata according to the outstanding principal balances of the
Series 199[ ]-[ ] Regular Certificates. If a purchaser of Offered Certificates
in a Class of Offered Certificates purchases them at a discount and calculates
its anticipated yield to maturity based on an assumed rate of distributions of
principal on such Class of Offered Certificates that is faster than the rate
actually realized, such purchaser's actual yield to maturity will be lower than
the yield so calculated by such purchaser. See "Description of the
Certificates - Distributions" herein and "Prepayment and Yield Considerations"
in the Prospectus.
The Class A-IO Certificates, which pay interest only, are extremely
sensitive to the repurchase, prepayment and default experience of the Contracts.
If principal distributions on the Contracts occur at a rate faster than
anticipated at the time of purchase, the purchaser's actual yield to maturity
could be significantly lower than that assumed at the time of purchase. A Class
A-IO Certificateholder could, under some prepayment scenarios, fail to recoup
the original investment. See " - Sensitivity of the Class A-IO Certificates."
There can be no assurance that as to what the delinquency or
repossession experience of GreenPoint on a going forward basis will be. See
"Prepayment and Yield Considerations" in the Prospectus for a discussion of the
effect delinquencies and repossessions on the Contracts would have on the
average life of the Certificates.
The expected final scheduled payment date on the Contract with the
latest maturity is in [ ].
The last scheduled Distribution Dates for the Series 199[ ]-[ ]
Regular Certificates are set forth on the cover of this Prospectus Supplement.
However, the actual last Distribution Date for each such Class of Offered
Certificates could occur significantly earlier than such scheduled Distribution
Dates. In particular, when the Pool Scheduled Principal Balance falls below 10%
of the Cut-off Date Pool Principal Balance and certain other conditions are met,
the Trust Fund could be terminated pursuant to the Servicer's exercise of an
option call or pursuant to a successful Termination Auction. See "Description
of the Certificates - Optional Termination and Termination Auction" herein.
Either of these events, if they occur, would result in the early retirement of
the then outstanding Certificates.
As described herein under "Description of the Certificates -
Subordination" and "Description of the Certificates - Losses on Liquidated
Contracts," to the extent that, on any Distribution Date, the Available
Distribution Amount is not sufficient to permit a full distribution
S-27
<PAGE>
of the Total Regular Principal Amount to the holders of any Class of Offered
Certificates (other than the Class A-IO Certificates), the effect will be to
cause the Offered Certificates (other than the Class A-IO Certificates) to be
amortized more slowly than they otherwise would have been amortized, and losses
on Liquidated Contracts and delinquencies on the Contracts (if not covered by
Monthly Advances) will be borne by the holders of such Class of Offered
Certificates in the manner described thereunder and as described below.
In the event there is a sufficiently large number of delinquencies on
the Contracts in any Collection Period that were not covered by Monthly Advances
as described herein, the amounts distributed to the holders of the Offered
Certificates could be less than the amount of principal and/or interest that
otherwise would be payable on such Certificates on the related Distribution
Date. In such event, even if delinquent payments on the Contracts were
eventually recovered upon liquidation, if the amounts received do not include
interest on delinquent interest payments, the effective yield on the Contracts
would be reduced, and under certain circumstances it is possible that sufficient
Available Distribution Amounts might not be available to provide, in the case of
the Offered Certificates other than the Class A-IO Certificates, for aggregate
distributions equal to the sum of their initial outstanding Certificate Balances
plus accrued interest thereon, and in the case of the Class A-IO Certificates,
for aggregate distributions equal to the accrued interest thereon, thereby
reducing the effective yield on such Certificates.
Obligors are not required to pay interest on the Contracts after the
date of full prepayment of principal or the date of a partial prepayment of
principal (to the extent of such partial prepayment). As a result, partial or
full prepayments in advance of the related Due Dates for such Contracts in any
Collection Period will reduce the amount of interest received from the related
Obligors during such Collection Period to less than one month's interest.
However, when a partial prepayment is made on a Contract or a Contract is
prepaid in full during any Collection Period, but after the Due Date for such
Contract in such Collection Period, the effect will be to increase the amount of
interest received from the related Obligor during such Collection Period to more
than one month's interest. If a sufficient amount of partial prepayments are
made or a sufficient number of Contracts are prepaid in full in a given
Collection Period in advance of their respective Due Dates, interest received on
all of the Contracts during that Collection Period, after netting out the
Monthly Servicing Fee [if GreenPoint is not acting as Servicer] (and other
expenses of the Trust Fund), may be less than the interest payable on the Senior
and/or Subordinate Certificates on the related Distribution Date. As a result,
the Available Distribution Amount for the related Distribution Date may not be
sufficient to distribute the interest on the Offered Certificates in the full
amount set forth herein under "Description of the Certificates - Distributions"
and to make a full distribution of the Total Regular Principal Amount to the
Senior (other than the Class A-IO) and/or Subordinate Certificateholders.
Although no assurance can be given in this matter, GreenPoint does not
anticipate that the net shortfall of interest caused by partial prepayments or
prepayments in full in any Collection Period would be great enough, in the
absence of delinquencies or liquidation losses, to reduce the Available
Distribution Amount for a Distribution Date below the amount that would have
been required to be distributed to the holders of the Offered Certificates on
that Distribution Date in the absence of such prepayment interest shortfalls.
S-28
<PAGE>
Because the Contracts are [actuarial] Contracts, the outstanding
principal balances thereof will reduce, for purposes of accrual of interest
thereon, by a precomputed amortization amount on each Due Date whether or not
the Scheduled Payment for such Due Date is received in advance of or subsequent
to such Due Date, except as described above with respect to prepayments. See
"The Contract Pools" in the Prospectus. Thus, the effect of delinquent
Scheduled Payments, even if they are ultimately paid by the Obligor, will be to
reduce the yields on such Contracts below their respective Contract Rates
(because interest will not have accrued on the principal portion of any
Scheduled Payment while it is delinquent). If the Servicer does not make an
advance with respect to such delinquent Contracts as described herein, the
result will be to reduce the effective yield to the Trust Fund derived from such
Contracts to a yield below their Contract Rates. Under certain circumstances,
such yield reductions could cause the aggregate yield to the Trust Fund derived
from the Contract Pool to be insufficient to support the distribution of
interest on the Offered Certificates, after netting out other expenses of the
Trust Fund.
[Certain statistical information relating to the prepayment behavior
of certain but not all pools of manufactured housing contracts sold by entities
other than GreenPoint or its affiliates but serviced by GreenPoint is set forth
below in tabular form. The table relates to [ ] sold pools for which prepayment
information is available covering a period of at least [ ] months and which had
an aggregate principal balance as of the first day of the month of sale of at
least $[ ]. In evaluating whether the data contained in the table contains
useful information with respect to the expected prepayment behavior of any
particular contract pool, prospective Certificateholders should consider that
GreenPoint has not performed statistical analysis to determine whether the
contracts to which the table relates constitutes a statistically significant
sample of manufactured housing contracts for purposes of determining expected
prepayment behavior. Furthermore, no assurance can be given that the Contracts
in the Contract Pool will have characteristics similar to the contracts in any
sold pool to which the following table relates. For these reasons, and because
of the unpredictable nature of the factors described under "Weighted Average
Life of the Offered Certificates" herein, which may influence the amount of
prepayments of manufactured housing contracts, no assurance can be given that
the prepayment experience for the Contract Pool with an average age as of the
Cut-off Date similar to the average ages (as of the first day of the month of
sale) of the pools to which the table relates will exhibit prepayment behavior
similar to the behavior summarized in such table for the periods covered by such
table.
In addition to the foregoing, prospective Certificateholders should
consider that the table set forth below is limited in the periods which are
covered thereby and thus cannot reflect the effects, if any, of aging on the
prepayment behavior of manufactured housing contracts beyond the periods covered
thereby.
The table below sets forth with respect to certain pools of contracts
(a) the initial aggregate principal balance of the contracts in the pool
(calculated as of the first day of the month of the sale), (b) the weighted
average contract rate ("WAC") of the contracts in the pool as of the first day
of the month of the sale of such pool, (c) the weighted average remaining term
to maturity ("WAM") of the contracts in the pool as of the first day of the
month of the sale of such pool, (d) the estimated average age of the pool as of
the first day of the month of the sale of such pool, (e) the aggregate principal
balance of such pool as of [ ], (f) the WAC of the
S-29
<PAGE>
contracts in the pool as of [ ] and (g) the percentage of the Prepayment Model
(as described in "--Weighted Average Life of the Offered Certificates" below)
for the life of each pool through [ ]. The prepayment performance of the
contract pools described in the following table is not indicative of the
prepayment performance of the Contracts in the Trust Fund, and no assurance can
be given that the prepayment performance of the Contracts in the Trust Fund will
correspond with the prepayment performance of any of the pools described below.
<TABLE>
<CAPTION>
Aggregate Estimated Percentage of
Month and Original Average Age Aggregate the
Year of Principal Original WAM at Sale Principal Prepayment
Sale Balance Original WAC (months) (months) Balance WAC/(1)/ Model/(1)/
--------- --------- ------------ ------------ ----------- --------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
(1) As of [ ], 199[ ].]
WEIGHTED AVERAGE LIFE OF THE OFFERED CERTIFICATES
The following information is given solely to illustrate the effect of
prepayments of the Contracts on the weighted average life of the Offered
Certificates under the stated assumptions and is not a prediction of the
prepayment rate that might actually be experienced by the Contracts.
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
is repaid to the investor. The weighted average life of an Offered Certificate,
other than the Class A-IO Certificates, is determined by (i) multiplying the
amount of each cash distribution in reduction of the Certificate Balance of such
Certificate by the number of years from the date of issuance of such Certificate
to the stated Distribution Date, (ii) adding the results, and (iii) dividing the
sum by the Initial Certificate Balance of such Certificate. The weighted
average life of the Offered Certificates, other than the Class A-IO
Certificates, will be affected 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 (other than from scheduled amortization) and liquidations due to
default or other dispositions of Contracts). Prepayments on Contracts may be
measured by a prepayment standard or model. The model used in this Prospectus
Supplement ("Prepayment Model") is based on an assumed rate of prepayment each
month of the then unpaid principal balance of a pool of new contracts. 100% of
the Prepayment Model assumes prepayment rates of [ ]% per annum of the then
unpaid principal balance of such Contracts in the first month of the life of the
Contracts and an additional [ ]% per annum in each month thereafter (for
example, [ ]% per annum in the third month) until the [ ]th month. Beginning in
the [ ]th month and in each month thereafter during the life of the Contracts,
100% of the Prepayment Model assumes a constant prepayment rate of [ ]% per
annum.
As used in the following table, "0% of the Prepayment Model" assumes
no prepayments on the Contracts; "100% of the Prepayment Model" assumes the
Contracts will prepay at rates equal to 100% of the Prepayment Model assumed
prepayment rates; "150% of the
S-30
<PAGE>
Prepayment Model" assumes the Contracts will prepay at rates equal to 150% of
the Prepayment Model assumed prepayment rates; "170% of the Prepayment Model"
assumes the Contracts will prepay at rates equal to 170% of the Prepayment Model
assumed prepayment rates; "200% of the Prepayment Model" assumes the Contracts
will prepay at rates equal to 200% of the Prepayment Model assumed prepayment
rates; "250% of the Prepayment Model" assumes the Contracts will prepay at rates
equal to 250% of the Prepayment Model assumed prepayment rates; and "300% of the
Prepayment Model" assumes the Contracts will prepay at rates equal to 300% of
the Prepayment Model assumed prepayment rates.
There is no assurance, however, that prepayments of the Contracts will
conform to any level of the Prepayment Model, and no representation is made 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 manufactured
homeowners sell their manufactured homes or default on their contracts. Other
factors affecting prepayment of such contracts include changes in obligors'
housing needs, job transfers, unemployment and obligors' net equity in the
manufactured homes. In the case of mortgage loans secured by site-built homes,
in general, if prevailing interest rates fall significantly below the interest
rates on such 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 such mortgage loans. Conversely, if prevailing interest
rates rise above the interest rates on such 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,
smaller than mortgage loan balances and the original term to maturity of each
such contract is generally shorter, the reduction or increase in the size of the
monthly payments on contracts of the same maturity and principal balance arising
from a change in the interest rate thereon is generally 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.
The percentages and weighted average lives in the following tables
were determined using the following assumptions (the "Structuring Assumptions")
(i) scheduled interest and principal payments on the Contracts are received in a
timely manner and prepayments are made at the indicated percentages of the
Prepayment Model set forth in the tables, (ii) the Servicer does not exercise
its right of optional termination described above but the Trust Fund is
terminated pursuant to a Termination Auction as described in "Description of the
Certificates - Optional Termination and Termination Auction" herein, (iii) the
Contracts, as of the Cut-off Date, will be grouped into [four] groups having the
additional characteristics set forth in the table entitled "Assumed Contract
Characteristics" below, (iv) the Class A-1 Certificates initially represent [ ]%
of the entire ownership interest in the Trust Fund and have a Class A Pass-
Through Rate of [ ]% per annum, the Class A-IO Certificates have a Pass-Through
Rate of [ ]% per annum, the Class M Certificates initially represent [ ]% of the
entire ownership interest in the Trust Fund and have a Class M Pass-Through Rate
of [ ]% per annum and the Class B Certificates initially represent [ ]% of the
entire ownership interest in the Trust Fund and have a Class B Pass-Through Rate
of [ ]% per annum, (v) no interest shortfalls will arise in connection with
prepayment in full of the Contracts, (vi) there will be no repurchases of any
Contracts due to a breach in a representation or warranty with respect thereto,
and (vii) a servicing fee of [ ]%
S-31
<PAGE>
per annum will be paid to the Servicer. The tables assume that there are no
losses or delinquencies on the Contracts. No representation is made that losses
or delinquencies on the Contracts will be experienced at the rate assumed in the
preceding sentence or at any other rate.
Assumed Contract Characteristics
<TABLE>
<CAPTION>
Remaining Term
Current Original Term to to Maturity
Pool Principal Balance Contract Rate Maturity (Months) (Months)
---- ----------------- ------------- ---------------- --------
<S> <C> <C> <C> <C>
1...........................
2...........................
3...........................
4...........................
Total or weighted average...
</TABLE>
Since the tables were prepared on the basis of the Structuring
Assumptions in the preceding paragraph, there are discrepancies between the
characteristics of the actual Contracts and the characteristics of the Contracts
assumed in preparing the tables. Any such discrepancy may have an effect upon
the percentages of the Initial Certificate Balance of each Class of Offered
Certificates outstanding and weighted average lives of such Certificates set
forth in the tables. In addition, since the actual Contracts and the Trust Fund
have characteristics which differ from those assumed in preparing the tables set
forth below, the distributions of principal on the Offered Certificates may be
made earlier or later than as indicated in the tables.
It is not likely that Contracts will prepay at any constant percentage
of the Prepayment Model to maturity or that all Contracts will prepay at the
same rate. In addition, the diverse remaining terms to maturity of the
Contracts (which include recently originated Contracts) could produce slower
distributions of principal than indicated in the tables at the various
percentages of the Prepayment Model specified even if the weighted average
remaining term to maturity of the Contracts is [ ] months.
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 Structuring Assumptions, the following tables indicate
the resulting weighted average lives of the Offered Certificates and sets forth
the percentage of the Initial Class A Certificate Balance, the Initial Class M
Certificate Balance and the Initial Class B Certificate Balance that would be
outstanding after each of the dates shown at the indicated percentages of the
Prepayment Model.
S-32
<PAGE>
Percent of the Initial Class A Certificate Balance at the
Respective Percentages of the Prepayment Model
<TABLE>
<CAPTION>
Prepayments (% of Prepayment Model)
----------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Date 0% 100% 150% 170% 200% 250% 300%
- ---- --- --- --- --- --- --- ---
Initial Percentage..................................... 100 100 100 100 100 100 100
--- --- --- --- --- --- ---
[ ], 19[ ] (first distribution date)...................
[ ], 19[ ] (anniversary of first distribution date)....
[ ], 19[ ].............................................
[ ], 19[ ].............................................
[ ], 20[ ].............................................
[ ], 20[ ].............................................
[ ], 20[ ].............................................
[ ], 20[ ].............................................
[ ], 20[ ].............................................
[ ], 20[ ].............................................
[ ], 20[ ].............................................
[ ], 20[ ].............................................
Weighted Average Life (years)..........................
</TABLE>
Percent of the Initial Class M Certificate Balance at the
Respective Percentages of the Prepayment Model
<TABLE>
<CAPTION>
Prepayments (% of Prepayment Model)
----------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Date 0% 100% 150% 170% 200% 250% 300%
- ---- --- --- --- --- --- --- ---
Initial Percentage..................................... 100 100 100 100 100 100 100
--- --- --- --- --- --- ---
[ ], 19[ ] (first distribution date)...................
[ ], 19[ ] (anniversary of first distribution date)....
[ ], 19[ ].............................................
[ ], 19[ ].............................................
[ ], 20[ ].............................................
[ ], 20[ ].............................................
[ ], 20[ ].............................................
[ ], 20[ ].............................................
[ ], 20[ ].............................................
[ ], 20[ ].............................................
[ ], 20[ ].............................................
[ ], 20[ ].............................................
Weighted Average Life (years)..........................
</TABLE>
Percent of the Initial Class B-1 Certificate Balance at the
Respective Percentages of the Prepayment Model
<TABLE>
<CAPTION>
Prepayments (% of Prepayment Model)
----------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Date 0% 100% 150% 170% 200% 250% 300%
- ---- --- --- --- --- --- --- ---
Initial Percentage..................................... 100 100 100 100 100 100 100
--- --- --- --- --- --- ---
[ ], 19[ ] (first distribution date)...................
[ ], 19[ ] (anniversary of first distribution date)....
[ ], 19[ ].............................................
[ ], 19[ ].............................................
[ ], 20[ ].............................................
[ ], 20[ ].............................................
[ ], 20[ ].............................................
[ ], 20[ ].............................................
[ ], 20[ ].............................................
[ ], 20[ ].............................................
[ ], 20[ ].............................................
[ ], 20[ ].............................................
Weighted Average Life (years)..........................
</TABLE>
S-33
<PAGE>
[SENSITIVITY OF THE CLASS A-IO CERTIFICATES
[The yield to maturity of the Class A-IO Certificates will be highly
sensitive to the principal prepayment, repurchase and default experience of the
Contracts. Investors should carefully consider the risk that a rapid rate of
principal prepayments on the Contracts or repurchases of Contracts will have an
adverse effect on the yield to investors in the Class A-IO Certificates and,
under certain scenarios, could result in the failure of such investors to
recover their initial investments. The yield to holders of the Class A-IO
Certificates would also be adversely affected in the event that the Servicer
exercises the right under the Pooling and Servicing Agreement to repurchase all
remaining Contracts in the Trust Fund and thereby effect the early termination
of the Certificates, or if there is a successful Termination Auction, as
described in "Description of the Certificates - Optional Termination and
Termination Auction" herein.
[The following table (the "Yield Table") demonstrates the sensitivity
of the pre-tax yields on the Class A-IO Certificates to various constant rates
of prepayment by projecting the aggregate payments of interest on such
Certificates and the corresponding pre-tax yields on a corporate bond equivalent
("CBE") basis, assuming distributions on the Contracts are made as set forth in
the Pooling and Servicing Agreement. The Yield Table is also based on the
assumption set forth above under "Description of the Certificates - Weighted
Average Life of the Offered Certificates."
[PRE-TAX YIELDS ON THE CLASS A-IO CERTIFICATES
<TABLE>
<CAPTION>
Percentage of Prepayment Assumption
-----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Assumed Purchase Price 0% 50% 75% 100% 150% 200%
$[ ] [ ]% [ ]% [ ]% [ ]% [ ]% [ ]%
$[ ] [ ]% [ ]% [ ]% [ ]% [ ]% [ ]%
$[ ] [ ]% [ ]% [ ]% [ ]% [ ]% [ ]%
$[ ] [ ]% [ ]% [ ]% [ ]% [ ]% [ ]%
</TABLE>
- --------------------
[The pre-tax yields set forth in the preceding table were calculated
by determining the monthly discount rates which, when applied to the assumed
streams of cash flows to be paid on the Class A-IO Certificates, would cause the
discounted present value of such assumed stream of cash flows to the Closing
Date to equal the assumed purchase prices (which include accrued interest), and
converting such monthly rates to CBE rates. Such calculation does not take into
account the interest rates at which funds received by holders of the Class A-IO
Certificates may be reinvested and consequently does not purport to reflect the
return on any investment in the Class A-IO Certificates when such reinvestment
rates are considered.
[It is highly unlikely that the Contracts will prepay at the same rate
until maturity or that all of the Contracts will prepay at the same rate or
time. As a result of these factors, the pre-tax yield on the Class A-IO
Certificates is likely to differ from those shown in such tables, even if all of
the Contracts prepay at the indicated percentages of the prepayment assumption.
No representation is made as to the actual rate of principal payments on the
Contracts (or the Contract Rates thereon) for any period or over the life of the
Class A-IO Certificates or as to the
S-34
<PAGE>
yield on the Class A-IO Certificates. Investors must make their own decisions as
to the appropriate prepayment assumptions to be used in deciding whether to
purchase the Class A-IO Certificates.]
S-35
<PAGE>
DESCRIPTION OF THE CERTIFICATES
The Certificates will be issued pursuant to the Pooling and Servicing
Agreement (the "Agreement"). A form of the Pooling and Servicing Agreement will
be made available to prospective investors upon request (made to the Servicer at
the address specified in the Prospectus under "Incorporation of Certain
Documents by Reference") and will be filed with the Securities and Exchange
Commission after the initial issuance of the Certificates as exhibits to a
Current Report on Form 8-K. Reference is made to the Prospectus for additional
information regarding the terms and conditions of the Agreement. The following
discussion supplements, and does not replace or supersede the discussion under
"Description of the Certificates" in the Prospectus, unless the context
otherwise provides.
Set forth below are summaries of the specific terms and provisions
pursuant to which the Certificates will be issued. The following summaries do
not purport to be complete and are subject to, and are qualified in their
entirety by reference to, the provisions of the Agreement. When particular
provisions or terms used in the Agreement are referred to, the actual provisions
(including definitions of terms) are incorporated by reference.
GENERAL
[All the Offered Certificates initially will be issuable in one or
more Global Certificates registered in the name of Cede as the nominee of DTC.
Ownership in Offered Certificates represented by such Global Certificates will
only be available in the form of book-entries on the records of DTC and
participating members thereof. All references to "holders" or
"Certificateholders," and to authorized denominations, when used with respect to
the Offered Certificates issued as Global Certificates, shall reflect the rights
of beneficial owners of the Offered Certificates ("Certificate Owners"), and
limitations thereof, as they may be indirectly exercised through DTC and its
participating members, except as otherwise specified herein. See "Description
of the Certificates - Global Certificates" in the Prospectus. See the Prospectus
under "Description of the Certificates - Global Certificates" for a description
of the circumstances in which Definitive Certificates in the future may be
issued. Any Offered Certificates issued as Definitive Certificates will be
transferable and exchangeable at the corporate trust office of the Trustee at
its Corporate Trust Department in [ ] or, if it so elects, at the office of an
agent in [New York, New York]. No service charge will be made for any
registration of exchange or transfer, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge. ]
The Offered Certificates will be issued in fully registered form only,
in denominations equal to [$1,000] or any integral multiple of [one dollar] in
excess thereof. The "Percentage Interest" of a Certificate of a Class (other
than a [Class A-IO or ]Class R Certificate) is the percentage obtained from
dividing the original denomination of such Certificate by the Initial
Certificate Balance of the Certificates of that Class.
The Trust Fund includes (i) the Contract Pool, including certain
rights to receive payments on the Contracts on and after the Cut-off Date, (ii)
the amounts held from time to time in the "Certificate Account" (as described
below under " - Payment on Contracts; Certificate Account") maintained by the
Trustee pursuant to the Agreement, (iii) any property which
S-36
<PAGE>
initially secured a Contract and which is acquired in the process of realizing
thereon, (iv) the obligations of the Seller, under certain conditions, to
repurchase Contracts sold by it with respect to which certain representations
and warranties have been breached and not cured and (v) the proceeds of all
insurance policies described herein.
The Seller will convey the Contracts to the Trustee. See "The
Contract Pool" herein and " - Conveyance of Contracts" below. The Servicer will
service the Contracts pursuant to the Agreement. The Contract documents will be
held for the benefit of the Trustee by the Servicer.
Distributions of principal, interest or both to the holders of the
Certificates will be made on the 10th day of each month, or, if such day is not
a business day, the next succeeding business day (each, a "Distribution Date")
beginning in [ ], 199[ ], to the persons in whose names the Certificates are
registered at the close of business on the last business day preceding each
Distribution Date (the "Record Date").
PASS-THROUGH RATES
The Pass-Through Rates for the Class [ ] and Class [ ] Certificates
will be [ ] and [ ] respectively.
[The Pass-Through Rate for each of the Certificates of Class [ ] on
any Distribution Date will be adjusted so as not to exceed the weighted average
of the Net Contract Rates of the Contracts in the Contract Pool at the beginning
of the month preceding the month of such Distribution Date. The "Net Contract
Rate" of a Contract equals the rate of interest borne by such Contract minus the
Annual Servicing Rate. The Annual Servicing Rate" is equal to [ ]%. The
weighted average Net Contract Rate of the Contract Pool as of the Cut-off Date
was approximately [ ]%.]
[The Class [ ] Pass-Through Rate on each Distribution Date will be [
]% per annum, subject to a maximum rate equal to the weighted average of the Net
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, it is anticipated that the Class [ ] Pass-Through Rate will remain at
the initial rate of [ ]%. However, disproportionate prepayments of Contracts
with higher Net Contract Rates will lower the weighted average Net Contract Rate
on the outstanding Contracts remaining in the Contract Pool. If a larger
principal amount of Contracts having Contract Rates equal to or higher than [ ]%
were to prepay while a proportionate principal amount of the Contracts having
Contract Rates lower than [ ]% did not prepay, to such a great extent that the
weighted average Net Contract Rate fell below the initial Class [ ] Pass-Through
Rate of [ ]%, then the Class [ ] Pass-Through Rate would automatically be
reduced to a level equal to the weighted average of the Net 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 equal to
or higher than [ ]%.]
CONVEYANCE OF CONTRACTS
On the date of initial issuance of the Certificates, the Seller will
convey to the Trustee, without recourse, all its right, title and interest in
and to the Contracts, and all
S-37
<PAGE>
rights under the standard hazard insurance policies on the related Manufactured
Homes. The conveyance of the Contracts to the Trustee will include a conveyance
of all rights to receive Scheduled Payments thereon that were due on or after
the Cut-off Date, even if received prior to the Cut-off Date, as well as all
rights to any payments received on or after the Cut-off Date (other than late
receipts of Scheduled Payments that were due prior to the Cut-off Date). The
Contracts will be described on a schedule attached to the Agreement (the
"Contract Schedule"). The Contract Schedule will include the principal balance
of each Contract as of the Cut-off Date, the amount of each Scheduled Payment
due on each Contract as of the Cut-off Date, the Contract Rate on each Contract
(determined as of the Cut-off Date) and the maturity date of each Contract.
Prior to the conveyance of the Contracts to the Trustee, the operations
department of the GreenPoint will be required to complete a review of all of the
originals of the Contracts, the certificates of title to, or other evidence of a
perfected security interest in, the Manufactured Homes, any related mortgages
and any assignments or modifications of the foregoing (collectively, the
"Contract Files") confirming the accuracy of the Contract Schedule delivered to
the Trustee. Any Contract discovered not to agree with such schedule in a manner
that is materially adverse to the interests of the Certificateholders will be
repurchased by the Seller, or replaced with another Contract, except that if the
discrepancy relates to the principal balance of a Contract (determined as
described above), the Seller may, under certain conditions, deposit cash in the
Certificate Account in an amount sufficient to offset such discrepancy. The
Trustee will not review the Contract Files.
The Servicer will hold, as custodian and agent on behalf of the
Trustee, the original Contracts and copies of documents and instruments relating
to each Contract and the security interest in the Manufactured Home, and real
property, if any, relating to each Contract. See "Risk Factors - Security
Interests in the Manufactured Homes; Transfer of Contracts and Security
Interests" and "Certain Legal Aspects of the Contracts - Security Interests in
Manufactured Homes" and "Land Home and Land-in-Lieu Contracts" in the Prospectus
for discussion of the consequences of the Servicer maintaining possession of the
original Contracts and the security interest in the related Manufactured Homes
and real property securing such Contracts, if any. In order to give notice of
the Trustee's right, title and interest in and to the Contracts, a UCC-1
financing statement identifying the Trustee as the secured party and identifying
all the Contracts as collateral will be filed in the appropriate office in the
appropriate states. The Contracts will be stamped or otherwise marked to
reflect their assignment to the Trustee. To the extent that the Contracts do
not constitute "chattel paper" within the meaning of the UCC as in effect in the
applicable jurisdictions or to the extent that the Contracts do constitute
chattel paper and a subsequent purchaser is able to take physical possession of
the Contracts without notice of such assignment, the Trustee's interest in the
Contracts could be defeated. See "Certain Legal Aspects of the Contracts" in
the Prospectus.
The Seller will make certain representations and warranties to the
Trustee with respect to each Contract sold by it, as of the Closing Date (unless
expressly stated otherwise), including the following: (a) as of the Cut-off
Date, no Contract is more than 59 days delinquent; (b) no provision of such
Contract has been waived, altered or modified in any respect, except by
instruments or documents identified in the related Contract File; (c) such
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 or by general equity principles); (d) such
Contract is not subject to any right of rescission, set-off, counterclaim or
S-38
<PAGE>
defense; (e) such Contract is covered by hazard insurance described under
"Description of the Certificates - Servicing Compensation and Payment of
Expenses; Certain Matters Regarding the Servicer - A. Hazard Insurance Policies"
in the Prospectus; (f) such Contract was either (i) originated by a manufactured
housing dealer acting, to the knowledge of the Seller, in the regular course of
its business and purchased on an individual basis by the Seller in the ordinary
course of its business, [or] (ii) originated by the Seller in the ordinary
course of its business [or (iii) purchased by the Seller as part of bulk
purchases of manufactured housing contracts in connection with the Acquisition,
from other private lenders or finance companies, or from governmental agencies
or instrumentalities or from other entities]; (g) such Contract was neither
originated in nor is subject to the laws of any jurisdiction whose laws would
make the transfer of the Contract or an interest therein to the Trustee pursuant
to the Agreement or pursuant to the Certificates unlawful; (h) such Contract
complies with all requirements of law; (i) such Contract has not been satisfied
or subordinated in whole or in part or rescinded and the Manufactured Home
securing such Contract has not been released from the lien of such Contract; (j)
such Contract creates a valid and enforceable first-priority security interest
in favor of GreenPoint in the Manufactured Home and real property securing such
Contract, if any; (k) such security interest has been assigned to the Trustee,
and, after such assignment, the Trustee has a valid and perfected first-priority
security interest in the Manufactured Home and real property securing such
Contract, if any; (l) such Contract has not been sold, assigned or pledged to
any other person, and prior to the transfer of the Contracts to the Trustee, the
Seller had good and marketable title to such Contract sold by it, free and clear
of any encumbrance, equity, loan, pledge, charge, claim or security interest,
and it was the sole owner thereof and had full right to transfer such Contract
to the Trustee; (m) as of the Cut-off Date, there was no default, breach,
violation or event permitting acceleration under such 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
(except payment delinquencies permitted by clause (a) above), the Seller has not
waived any of the foregoing; (n) as of the Closing Date (as defined below),
there were, to the knowledge of the Seller no liens or claims which have been
filed for work, labor or materials affecting a Manufactured Home or real
property securing such Contract, which are or may be liens prior to or equal
with or subordinate to the lien of such Contract; (o) such Contract is a fully-
amortizing loan with a [fixed] Contract Rate and provides for level payments
over the term of such Contract; (p) such Contract contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for realization against the collateral of the benefits of the
security; (q) the information contained in the Contract Schedule with respect to
such Contract is true and correct; (r) there is only one original of such
Contract; (s) such Contract did not have a loan-to-value ratio at origination
greater than 100%; (t) 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 unless it is subject to a Land-in-Lieu
or Land Home Contract and as of the Closing Date such Manufactured Home is, to
the knowledge of the Seller free of damage and in good repair; (u) such Contract
is a "qualified mortgage" under Section 860G(a)(3) of the Code; (v) the related
Manufactured Home is a "manufactured home" within the meaning of Section 5402(6)
of Title 42 of the United States Code and, as to each Contract sold by the
Seller to the Trust Fund, the Seller is an approved mortgagee as of the time of
such Contract's origination as required under Section 3(a)(41)(A)(ii) of the
Exchange Act; (w) such Contract is secured by a "single family residence" within
the meaning of Section 25(e)(10) of the Code; (x) such Contract has been stamped
to indicate its
S-39
<PAGE>
assignment to the Trustee within 60 days of the Closing Date and (y) the
Contract with the lowest Contract Rate has a Contract Rate of [ ]% and the
Contract with the highest Contract Rate has a Contract Rate of [ ]%. Under the
terms of the Agreement, and subject to the relevant Seller's option to effect a
substitution with respect to Contracts sold by it as described in the last
paragraph under this subheading, the Seller will be obligated to repurchase, at
the price described below, any Contract sold by it within 90 days after the
Seller becomes aware, or after the Seller's receipt of written notice from the
Trustee or the Servicer, of a breach of any representation or warranty of the
Seller in the Agreement that materially and adversely affects the Trust Fund's
interest in any Contract it sold thereto unless such breach has been cured.
Notwithstanding the foregoing, the Seller will not be required to
repurchase or substitute any Contract relating to a Manufactured Home and real
property securing such Contract, if any, located in any jurisdiction on account
of a breach of the representation and warranty described in clause (k) above
solely on the basis of the failure by the Seller to cause a notation to be made
on any document of title relating to any such Manufactured Home or to execute
any transfer instrument relating to any such Manufactured Home or real property,
if any (other than a notation or transfer instrument necessary to show the
Seller as lienholder or legal title holder) unless (i) a court of competent
jurisdiction has adjudged that, because of such failure, the Trustee does not
have a perfected first-priority security interest in such related Manufactured
Home or (ii)(A) the Servicer has received written advice of counsel to the
effect that a court of competent jurisdiction has held that, solely because of a
substantially similar failure on the part of a pledgor or assignor of
manufactured housing contracts (who has perfected the assignment or pledge of
such contracts), a perfected first-priority security interest was not created in
favor of the pledgee or assignee in a related manufactured home which is located
in such jurisdiction and which is subject to the same laws regarding the
perfection of security interests therein applicable to the Manufactured Homes
located in such jurisdiction and (B) the Servicer shall not have completed all
appropriate remedial action with respect to such Manufactured Home within 180
days after receipt of such written advice. Any such advice will be from counsel
selected by the Servicer on a non-discriminatory basis from among the counsel
used by the Servicer in its general business in the jurisdiction in question.
The Servicer will have no ongoing obligation to seek advice with respect to the
matters described in clause (ii) above. However, the Servicer is required to
seek advice with respect to such matters whenever information comes to the
attention of its counsel which causes such counsel to determine that a holding
of the type described in clause (ii)(A) might exist. If any counsel selected by
the Servicer informs the Servicer that no holding of the type described in
clause (ii)(A) exists, such advice will be conclusive and binding on the parties
to the Agreement pursuant to which a Trustee has an interest in any Contracts in
the applicable jurisdiction as of the applicable date. If any holding described
above which would give rise to a repurchase obligation on the part of the Seller
were to result from proceedings brought by a receiver or conservator of the
Seller, it is likely that such receiver or conservator would also reject the
resulting repurchase obligation.
The repurchase obligation described above generally constitutes the
sole remedy available to the Trustee and the Certificateholders for a breach of
a representation or warranty under the Agreement with respect to the Contracts.
The repurchase price for any Contract will be equal to the remaining principal
balance of such Contract as of the beginning of the month of repurchase, plus
accrued and unpaid interest from the Due Date with respect to which the
S-40
<PAGE>
Obligor last made a payment to the Due Date occurring in the Collection Period
during which such Contract is repurchased.
In lieu of repurchasing a Contract as specified above, during the two-
year period following the date of the initial issuance of the Certificates (the
"Closing Date"), the Seller may, at its option, substitute an Eligible
Substitute Contract (as defined below) for the Contract that it is otherwise
obligated to repurchase (referred to herein as the "Replaced Contract"). An
"Eligible Substitute Contract" is a Contract that satisfies, as of the date of
its substitution, the representations and warranties specified in the Agreement,
has a Scheduled Principal Balance that is not greater than the Scheduled
Principal Balance of the Replaced Contract as of the beginning of the month in
which such substitution takes place, has a Contract Rate that is at least equal
to the Contract Rate of the Replaced Contract, has a remaining term to scheduled
maturity that is not greater than the remaining term to scheduled maturity of
the Replaced Contract and has not been delinquent for more than 31 days as to
any Scheduled Payment due in the twelve months prior to its substitution. The
Seller will be required to deposit in the Certificate Account cash in the
amount, if any, by which the Scheduled Principal Balance of the Replaced
Contract as of the beginning of the month in which substitution takes place
exceeds the Scheduled Principal Balance of the Contract it sold being
substituted as of the beginning of the month.
[CONVEYANCE OF SUBSEQUENT CONTRACTS AND PRE-FUNDING ACCOUNT
An account (the "Pre-Funding Account") will be established by the
Trustee and funded by GreenPoint on the Closing Date to provide the Trust
with sufficient funds to purchase Subsequent Contracts. The amount deposited in
the Pre-Funding Account (as reduced from time-to-time, the "Pre-Funded Amount")
will initially equal the difference between [$ ] 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 period from the Closing Date until the earliest of (i) the
date on which the amount on deposit in the Pre-Funding Account is less than [$
], (ii) [$ ] or (iii) the date on which an Event of Termination occurs under
the Agreement (the "Pre-Funding Period"). The Pre-Funded Amount will be reduced
during the Pre-Funding Period by the amount used to purchase Subsequent
Contracts in accordance with the Agreement. [The Pre-Funding Account will be
part of the Trust but not part of the REMIC.] Any reimbursement income earned
on amount on deposit in the Pre-Funding Account will be taxable to GreenPoint.
Under the Agreement, following the initial issuance of the
Certificates, the Trust will be obligated to purchase Subsequent Contracts from
GreenPoint during the Pre-Funding Period, subject to the availability thereof.
Each Subsequent Contract will have been underwritten in accordance with the
Company's standard underwriting criteria. Subsequent Contracts will be
transferred to the Trust pursuant to subsequent transfer instruments between
GreenPoint and the Trust. In connection with the purchase of Subsequent
Contracts on such dates of transfer (the "Subsequent Transfer Dates"), the Trust
will be required to pay to GreenPoint from amounts on deposit in the Pre-Funding
Account a cash purchase price of 100% of the principal balance thereof.
GreenPoint will designate the Subsequent Transfer Date as the Cut-off Date with
respect to the related Subsequent Transfer Date will not include accrued
interest on the related Subsequent Contracts in the Trust will increase by an
amount equal to the aggregate principal balance of the Contracts so purchased
and the amount in the Pre-Funding Account will decrease
S-41
<PAGE>
accordingly. Any Pre-Funded Amount remaining after the purchase of Subsequent
Contracts will be applied on the first Payment Date on or after the last day of
the Pre-Funding Period to prepay principal on the [Class A-1 Certificates].
Any conveyance of Subsequent Contracts on a Subsequent Transfer Date
is subject to certain conditions including, but not limited to: (a) each
Subsequent Contract must satisfy the representations and warranties specified in
the related subsequent transfer instrument and the Agreement; (b) GreenPoint
will not select Subsequent Contracts in a manner that it believes is adverse to
the interests of the Certificateholders; [(c) as of its respective Cut-off Date,
each Subsequent Contract must satisfy the following criteria: (i) no Subsequent
Contract may be more than [ ] days contractually delinquent; (ii) the remaining
stated term to maturity of each Subsequent Contract may not exceed [ ] months;
(iii) each Subsequent Contract must be underwritten in accordance with
GreenPoint's standard underwriting criteria; and (iv) no Subsequent Contract may
have a loan-to-value ratio greater than 100%; (d) the Contract Pool following
the addition of the Subsequent Contracts must satisfy the following criteria:
(i) the weighted average Contract Rate must not be less than [ ]%; (ii) the
weighted average loan-to-value ratio must not be greater than [ ]%; (iii) not
less than [ ]% of the Cut-off Date Pool Principal Balance must be attributable
to loans to purchase new Manufactured Homes; and (v) at least [ ]% of the Cut-
off Date Pool Principal Balance must consist of Land-and Home Contracts; (e) as
a result of the purchase of the Subsequent Contracts, the Class A Certificates
will not receive from [Rating Agencies] a lower credit rating than the rating
assigned at the initial issuance of such Class A Certificates; and (f) an
independent accountant will provide a letter stating whether or not the
characteristics of the Subsequent Contracts conform to the Characteristics
described herein].]
PAYMENTS ON THE CONTRACTS; CERTIFICATE ACCOUNT
The Trustee will initially establish and maintain an account (the
"Certificate Account") at a 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 Federal Deposit Insurance Corporation (the
"FDIC") whose commercial paper, long-term deposits or long-term unsecured senior
debt has a rating of [ ] by [ ][and [ ] by [ ] (if rated by [ ])] in the case of
commercial paper or in one of the two highest rating categories by [ ] [and] [ ]
(if rated by [ ])] in the case of long-term deposits or long-term unsecured
senior debt, and which is subject to examination by federal or state authorities
or a depository institution otherwise acceptable to [ ] and [ ] (an "Eligible
Institution"). The funds in the Certificate Account are required to be invested
by the Trustee in common trust funds, collective investment trusts or Eligible
Investments that will mature not later than the business day preceding the
applicable Distribution Date. "Eligible Investments" include, among other
investments, obligations of the United States or of any agency thereof backed by
the full faith and credit of the United States; certificates of deposit, time
deposits and bankers' acceptances sold by eligible financial institutions;
commercial paper rated [ ] by [ ] [and [ ] by [ ] (if rated by [ ])]; money
market funds acceptable to [ ] [and [ ]] (as evidenced by a letter from [ ] [and
[ ]] to such effect); and other obligations acceptable to [ ] [and [ ]].
S-42
<PAGE>
All payments in respect of principal and interest on the Contracts
received [during any Collection Period] by the Servicer (exclusive of Scheduled
Payments due prior to the Cut-off Date), including Liquidation Proceeds (net of
Liquidation Expenses, as defined below), are required to be paid into the
Certificate Account not later than the second business day following receipt
thereof. [Notwithstanding the foregoing, for as long as GreenPoint remains the
Servicer under the Pooling and Servicing Agreement and GreenPoint maintains a
short-term rating of at least [ ] from [the rating agency], which is currently
the case, the Servicer need not deposit collections into the Certificate Account
within two business days of receipt but may use for its own benefit all such
collections until the related Distribution Date without an obligation to pay
interest or any other investment return thereon, it being understood that any
benefit to the Servicer from this arrangement shall be additional servicing
compensation. While such rating is maintained, on or prior to each Distribution
Date, the Servicer will deposit in the Certificate Account amounts which are to
be included in the funds available for the related Distribution Date. [Amounts
deposited in the Certificate Account may be invested in Permitted Investments
(as described in the Pooling and Servicing Agreement) maturing no later than the
related Distribution Date.]]
[At any time that the short-term rating of the Servicer does not
satisfy the rating requirements specified above, the Servicer may continue to
hold collections prior to distribution as described above so long as it causes
to be maintained an irrevocable letter of credit or surety bond or other credit
enhancement instrument in form and substance satisfactory to the rating agency,
issued by a depository institution or insurance company having a rating on its
short-term obligations of at least [ ] and long-term obligations of at least [ ]
by [the rating agency] or other ratings if approved by [the rating agency] and
providing that the Trustee may draw thereon in the event that the Servicer,
fails to make any deposit or payment required under the Pooling and Servicing
Agreement.]
Amounts received as late payment fees, extension fees, assumption fees
or similar fees may be retained by the Servicer as part of its servicing fees.
See " - Servicing Compensation; Certain Other Matters Regarding the Servicer"
below. In addition, the amount paid by the Seller for any Contract repurchased
by it as a result of a breach of a representation or warranty under the
Agreement, and amounts required to be deposited upon substitution of an Eligible
Substitute Contract because of a breach of a representation or warranty (which
amounts will be treated as partial principal prepayments), as described under "
- - Conveyance of Contracts" above, are required to be paid into the Certificate
Account.
On the third business day prior to each Distribution Date (the
"Determination Date"), the Servicer will determine the Available Distribution
Amount and the amounts to be distributed on the Certificates on such
Distribution Date. The "Available Distribution Amount" for any Distribution
Date is the sum of (a) the Monthly Advance for such Distribution Date (as
defined below under " - Advances") and (b) the amount in the Certificate
Account on the close of business on the last day of the immediately preceding
Collection Period, less the sum of (i) any repossession profits (of which there
are expected to be a de minimis amount) on defaulted Contracts, (ii) payments on
Contracts that have been repurchased as a result of a breach of a representation
or warranty that are received during or after the month of repurchase, (iii)
Excess Contract Payments (as defined below) and any other payments not required
to be distributed to Certificateholders on the related Distribution Date, (iv)
reimbursements to the Servicer in the
S-43
<PAGE>
amount of expenses incurred in connection with the liquidation of a Contract
("Liquidation Expenses") and certain taxes and insurance premiums advanced by
the Servicer in respect of Manufactured Homes (as described below under "
Advances"), (v) reimbursements to the Servicer for Nonrecoverable Advances in
respect of Contracts and Monthly Advances to the extent permitted by the
Agreement (as described below under " - Advances") and (vi) [if GreenPoint is
not acting as Servicer,] the Monthly Servicing Fee (as hereinafter defined).
An "Excess Contract Payment" is a payment received on a Contract that
is in excess of the Scheduled Payment (or, generally, an integral multiple
thereof) on such Contract, is not a partial principal prepayment or prepayment
in full and is not part of any Liquidation Proceeds. Excess Contract Payments
will be held by the Trustee in the Certificate Account and may be applied as
described under " - Advances" below.
The Trustee or its paying agent will withdraw funds from the
Certificate Account on each Distribution Date (but only to the extent of the
related Available Distribution Amount) to make payments to Certificateholders as
specified under " - Distributions" below. From time to time, as provided in the
Agreement, the Servicer will also withdraw funds from the Certificate Account to
make payments to it the Seller as permitted by the Agreement and described in
subclauses (i), (ii), (iv), (v) and (vi) of clause (b) in the second preceding
paragraph.
DISTRIBUTIONS
Distributions to the holders of the Series 199[ ]-[ ] Regular
Certificates will be applied first to the holders of the Senior Certificates,
second to the holders of the Class M Certificates and then to the holders of the
Class B Certificates. The Available Distribution Amount for each Distribution
Date will be applied in the amounts and the order of priority set forth below.
Distributions of principal and interest to holders of each Class of
Certificates[, other than the Class A-IO Certificates,] will be made on each
Distribution Date in an amount equal to their respective Percentage Interests
multiplied by the aggregate amount distributed to such Class of Certificates on
such Distribution Date. [Interest will be calculated on the Class A-IO
Certificates on the basis of a "Notional Principal Amount" [equal to the Pool
Scheduled Principal Balance]. Reference to the Notional Principal Amount of the
Class A-IO Certificates is solely for convenience in certain calculations and
does not represent the right to receive any distribution allocable to
principal.] Interest on each Class of the Series 199[ ]-[ ] Regular Certificates
will be calculated on the basis of a 360-day year consisting of twelve 30-day
months.
Each distribution with respect to book-entry certificates will be paid
to DTC, which will credit the amount of such distribution to the accounts of its
participants in accordance with its normal procedures. Each participant will be
responsible for 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 will be responsible for disbursing funds to the Certificate Owners that it
represents. All such credits and disbursements with respect to book-entry
certificates are to be made by DTC and its participants in accordance with DTC's
rules. See "Description of the Certificates - Global Certificates" below.
S-44
<PAGE>
Priorities. On each Distribution Date, the Available Distribution
Amount will be distributed in the following amounts and in the following order
of priority:
(i) to the Class A Certificateholders, the Class A Interest
Distribution Amount, payment to be distributed among the Class A-1 and Class A-
IO Certificates pro rata, based on entitlement;
(ii) to the Class A-1 Certificateholders, the Formula Principal
Distribution Amount until the Class A Certificate Balance is reduced to zero
[and on the [ ] Payment Date any amounts remaining in the Pre-Funded Account].
(iii) to the Class M Certificateholders, the Class M Interest
Distribution Amount;
(iv) to the Class M Certificateholders, any remaining Formula
Principal Distribution Amount after distribution under clause (ii) above until
the Class M Certificate Balance is reduced to zero;
(v) to the Class B-1 Certificateholders, the Class B-1 Interest
Distribution Amount;
(vi) to the Class B-1 Certificateholders, any remaining Formula
Principal Distribution Amount until the Class B-1 Certificate Balance is reduced
to zero;
(vii) to the Class B-2 Certificateholders, the Class B-2 Interest
Distribution Amount;
(viii) to the Class B-2 Certificateholders, any remaining Formula
Principal Distribution Amount until the Class B-2 Certificate Balance is reduced
to zero;
(ix) to GFC an for any Enhancement Payments made under the Limited
Guarantee and not previously reimbursed; and.
(x) to the Class R Certificateholders, any remaining Available
Distribution Amount.
[The Class A-IO Certificates are interest-only and are not entitled to
receive distributions of principal, but the Notional Principal Amount decreases
as the Certificate Balance of all Senior Certificates is reduced.]
Definitions. As to any Distribution Date, the "Class A Interest
Distribution Amount" is equal to the sum of (i) one month's interest at the
Class A Pass-Through Rate on the Class A Certificate Balance or Notional
Principal Amount, as the case any be, and (ii) any previously undistributed
shortfalls in interest due to the Class A Certificateholders in respect of prior
Distribution Dates; the "Class M Interest Distribution Amount" is equal to the
S-45
<PAGE>
sum of (i) one month's interest at the Class M Pass-Through Rate on the Class M
Certificate Balance and (ii) any previously undistributed shortfalls in interest
due to the Class M Certificateholders in respect of prior Distribution Dates;
the "Class B-1 Interest Distribution Amount" is equal to the sum of (i) one
month's interest at the Class B-1 Pass-Through Rate on the Class B-1 Certificate
Balance and (ii) any previously undistributed shortfalls in interest due to the
Class B Certificateholders in respect of prior Distribution Dates; and the
"Class B-2 Interest Distribution Amount" is equal to the sum of (i) one month's
interest at the Class B-2 Pass-Through Rate on the Class B-2 Certificate Balance
and (ii) any previously undistributed shortfalls in interest due to the Class B
Certificateholders in respect of prior Distribution Dates. Any shortfall in
interest due to Certificateholders will, to the extent legally permissible, bear
interest at the related Class A-1, Class A-IO, Class M, Class B-1 Pass-Through
Rate and Class B-2 Pass-Through.
The "Formula Principal Distribution Amount" in respect of a
Distribution Date equals the sum of (a) the Total Regular Principal Amount for
such Distribution Date and (b) any previously undistributed shortfalls in the
distribution of the Total Regular Principal Amount in respect of prior
Distribution Dates.
The "Total Regular Principal Amount" on each Distribution Date is the
sum of (i) the Scheduled Principal Reduction Amount (defined below) for such
Distribution Date, (ii) the Scheduled Principal Balance (defined below) of each
Contract which, during the related Collection Period, was purchased by the
Seller on account of certain breaches of representations and warranties made by
it in the Agreement, (iii) all partial prepayments received during such related
Collection Period, (iv) the Scheduled Principal Balance of each Contract that
was prepaid in full during such related Collection Period and (v) the Scheduled
Principal Balance of each Contract that became a Liquidated Contract (defined
below) during such related Collection Period.
The "Scheduled Principal Balance" of a Contract for any Distribution
Date is its principal balance as of the Due Date in the Collection Period
immediately preceding such Distribution Date, after giving effect to all
previous partial prepayments, all previous scheduled principal payments (whether
or not paid) and the scheduled principal payment due on such Due Date, but
without giving effect to any adjustment due to bankruptcy or similar
proceedings. The "Scheduled Principal Reduction Amount" for any Distribution
Date is an approximate calculation (performed on an aggregate basis rather than
on a Contract-by-Contract basis) of the scheduled payments of principal due
during the related Collection Period. Both of these terms are more fully
described herein under " - Distributions" above.
The "Pool Scheduled Principal Balance" for any Distribution Date is
equal to the Cut-off Date Pool Principal Balance less the aggregate of the Total
Regular Principal Amounts for all prior Distribution Dates.
In general, a "Liquidated Contract" is a defaulted Contract as to
which all amounts that the Servicer expects to recover relating to such Contract
("Liquidation Proceeds") have been received. A Liquidated Contract includes any
defaulted Contract in respect of which the related Manufactured Home has been
realized upon and disposed of and the proceeds of such disposition have been
received.
The "Certificate Balance" for any Class as of any Distribution Date is
the Initial Certificate Balance of that Class less all amounts previously
distributed to Certificateholders of that Class on account of principal. In no
event shall the aggregate distributions of principal to
S-46
<PAGE>
the holders of the Senior and Subordinate Certificates exceed the Initial Senior
Certificate Balance and the Initial Subordinate Certificate Balance,
respectively.
[RESERVE ACCOUNT]
[On the Closing Date, the Trustee shall establish an account (the
"Reserve Account") for the benefit of the Certificateholders. The Reserve
Account shall have an initial balance of [$ ] [zero] on the Closing Date.
Commencing on the Distribution Date which is the earlier of (a) the Distribution
Date in [ ] and (b) the first Distribution Date on which the percentage
equivalent of a fraction, the numerator of which is the Pool Scheduled Principal
Balance (after giving effect to distribution with respect to principal) for such
Distribution Date and the denominator of which is the Cut-off Date Pool
Principal Balance, is less than or equal to [ ]%, the Trustee shall make a
deposit into the Reserve Account up to the Reserve Account Cap. On each
Distribution Date, the Trustee will withdraw from the Reserve Account an amount
(the "Reserve Account Draw Amount") equal to the lesser of (a) the amount then
on deposit in the Reserve Account and (b) the amount by which the aggregate of
amounts due to Certificateholders in clauses (i) through (vi) under
"Distributions" above exceeds the Available Distribution Amount on such
Distribution Date and distribute such amount, together with the Available
Distribution Amount.]
[Funds in the Reserve Account will be invested in Eligible Investments
as directed by the Trustee, and the net investment earnings, if any, will be
paid to the Class R Certificateholders. "Eligible Investments" means one or
more common trust funds, collective investment trusts or money market funds
acceptable to [the rating agency] (as evidenced by a letter from [the rating
agency] to such effect or, if no such trusts or funds are acceptable to [the
rating agency] any other obligations acceptable to [the rating agency].]
On any Distribution Date, any funds on deposit in the Reserve Account
in excess of the Reserve Account Cap (after giving effect to any Reserve Account
Draw Amount paid to the Certificateholders on such date) will be withdrawn from
the Reserve Account and paid to the Class R Certificateholders.]
[Amounts paid to the Class R Certificateholders pursuant to the two
immediately preceding paragraphs will not be available to offset shortfalls in
distributions to holders of other Classes of Certificates.] [The Reserve
Account is intended to enhance the likelihood of regular receipt by the holders
of the Series 199[ ]-[ ] Regular Certificates of the full amount of the
distributions due them and to afford such holders protection against losses on
Liquidated Contracts, but no assurance can be given that the Reserve Account
will be sufficient for such purpose.]
[The "Reserve Account Cap" shall be (i) as to any Distribution Date
(after giving effect to distributions due thereon) after the Closing Date and
until none of the Offered Certificates remain outstanding, $[ ] (which is [ ]%
of the Cut-off Date Pool Principal Balance) and (ii) as to any Distribution Date
(after giving effect to distributions due thereon) after none of the Offered
Certificates remain outstanding, the lesser of the then outstanding Class B-[ ]
Certificate Balance and $[ ] (which is [ ]% of the Cut-off Date Pool Principal
Balance).]
S-47
<PAGE>
SUBORDINATION
The rights of the holders of the Subordinate Certificates to receive
distributions of available amounts in the Trust Fund will be subordinate, to the
extent described herein, to such rights of the holders of the Senior
Certificates. This subordination is intended to enhance the likelihood of
regular receipt by the holders of the Senior Certificates of the full amount of
interest and principal distributable thereon and to afford such holders
protection against losses on Liquidated Contracts.
Similarly, the rights of the holders of the Class B Certificates to
receive distributions due them from available amounts in the Trust Fund will be
subordinated, to the extent described herein, to such rights of the holders of
the Class M Certificates. Subject to the subordination of the Subordinate
Certificates to the Senior Certificates, this subordination of the Class B
Certificates to the Class M Certificates is intended to enhance the likelihood
of regular receipt by the holders of the Class M Certificates of the full amount
of the distributions due them and to afford such holders protection against
losses on Liquidated Contracts.
The protection afforded to the holders of Senior Certificates by means
of the subordination of the Subordinate Certificates and to the Class M
Certificateholders by the subordination of the Class B Certificates (in each
case, to the extent described herein) will be accomplished by the application of
the Available Distribution Amount in the order specified under "Distributions"
above. Accordingly, in the event that the Available Distribution Amount on any
Distribution Date is not sufficient to permit the distribution of the amount of
interest and the specified portion of the Formula Principal Distribution Amount
due to the holders of any Class of Certificates, the subordination is intended
to protect such Certificateholders by the right of such Certificateholders to
receive distributions of the Available Distribution Amount in respect of
interest and the Formula Principal Distribution Amount that would otherwise have
been distributable to the Certificateholders of any Class subordinate in
priority of distribution to such Class, until any shortfall in distributions to
the holders of the related senior Class or Classes of Certificates in respect
thereof has been satisfied, to the extent described herein.
LOSSES ON LIQUIDATED CONTRACTS
As described above, the Total Regular Principal Amount distributable
to the holders of the Series 199[ ]-[ ] Regular Certificates on each
Distribution Date includes the Scheduled Principal Balance of each Contract that
became a Liquidated Contract during the immediately preceding Collection Period.
The Liquidation Proceeds, net of (i) certain expenses incurred to liquidate such
Liquidated Contract, (ii) all accrued and unpaid interest thereon and (iii) all
Monthly Advances required to be made in respect of such Liquidated Contract (the
"Net Liquidation Proceeds"), may be less than the Scheduled Principal Balance of
such Liquidated Contract. Under such circumstances, the loss on the Liquidated
Contract during a Collection Period, in the amount of the deficiency between the
Net Liquidation Proceeds and the Scheduled Principal Balance of such Liquidated
Contract, may be covered to the extent of the amount (the "Excess Interest"), if
any, by which the interest collected on nondefaulted Contracts during the same
Collection Period exceeds interest distributions due to holders of the Series
199[ ]-[ ] Regular Certificates and the Monthly Servicing Fee.
S-48
<PAGE>
The effect of any losses on Liquidated Contracts during a Collection
Period in excess of the aggregate of Excess Interest generally will be to cause
shortfalls, losses or both with respect to the Certificates, which shortfalls or
losses will be borne by the Class B Certificateholders, the Class M
Certificateholders and the Class A Certificateholders, in that order.
EXAMPLE OF DISTRIBUTIONS
The following chart sets forth an example of the flow of funds on the
Certificates for the Distribution Date occurring in [August 1998]:
<TABLE>
<S> <C>
[June 30] (A) Cut-off Date.
[July 1-31]................................................. (B) Servicer receives scheduled payments on the
Contracts and any principal prepayments made by
Obligors and applicable interest thereon.
[August 8].................................................. (C) Record Date.
[August 6].................................................. (D) Determination Date.
[August 11]................................................. (E) (Distribution Date is the 10th day of each
month or, if the 10th day is not a business day,
the next business day.)
</TABLE>
Succeeding months follow the pattern of (B) through (E).....
(A) The Cut-off Date Pool Principal Balance on [June 30, 1997] will be computed
as described under " - Conveyance of Contracts" above.
(B) Scheduled Payments, principal prepayments and Liquidation Proceeds (net of
Liquidation Expenses) and amounts for the repurchase of Contracts may be
received at any time during this period and will be distributed to
Certificateholders on [August 11, 1997]. When a partial prepayment is made
or a Contract is prepaid in full, interest on the amount prepaid is
collected from the Obligor only to the date of payment. The Available
Distribution Amount for the distribution on [June 10, 1996] are described
under " - Payments on Contracts; Certificate Account" above.
(C) Distributions on [August 11, 1998] will be made to Certificateholders of
record at the close of business on [August 8, 1998].
(D) On [August 6, 1998] (three business days prior to the Distribution Date),
the Servicer will determine the amounts of principal and interest which
will be passed through on [August 10, 1998] to Certificateholders.
(E) On [August 10, 1998], the amounts determined on [August 6, 1998] will be
distributed to Certificateholders.
ADVANCES
For each Distribution Date, the Servicer will be obligated to make an
advance (a "Monthly Advance") equal to the lesser of (i) delinquent scheduled
payments of principal and interest on the Contracts that were due in the
preceding Collection Period and (ii) the amount, if any, by which scheduled
distributions of principal and interest due on the Series 199[ ]-[ ] Regular
Certificates exceeds the amount specified in clause (b) of the definition of
Available Distribution Amount (as set forth above under " - Payments on
Contracts; Certificate Account"), except to the extent, in the Servicer's
judgment, such advance would not be recoverable from related late payments,
Liquidation Proceeds or otherwise (a "Nonrecoverable Advance").
The aggregate amount of any additional advances made by the Servicer
that have not been reimbursed to the Servicer as described below is referred to
herein as the "Outstanding Amount Advanced." The Servicer may apply any Excess
Contract Payments in the Certificate
S-49
<PAGE>
Account (rather than its own funds) to make all or a portion of a Monthly
Advance, but must replace such Excess Contract Payments to the extent required
to make scheduled payments on the related Contracts. In addition, upon the
determination that a Nonrecoverable Advance has been made in respect of a
Contract, the Servicer will reimburse itself (but only to the extent of the
Outstanding Amount Advanced) out of funds in the Certificate Account for the
delinquent Scheduled Payments on such Contract or out of any other funds in the
Certificate Account.
In making Monthly Advances, the Servicer will be attempting to
maintain a regular flow of scheduled interest and principal to the Series 199[
]-[ ] Regular Certificateholders rather than to guarantee or insure against
losses.
The Servicer will also be obligated to make advances, to the extent
recoverable out of Liquidation Proceeds or otherwise, in respect of certain
taxes and insurance premiums not paid by an Obligor on a timely basis. Funds so
advanced are reimbursable to the Servicer as provided in the Agreement.
LIMITED GUARANTEE OF GFC
In order to mitigate the effect of the subordination of the Class [B-2]
Certificates and liquidation losses and delinquencies on the Contracts borne by
the Class [B-2] Certificates, GFC will initially provide a guarantee (the
"Limited Guarantee.") against losses that would otherwise be absorbed by the
Class [B-2] Certificates. [Such Limited Guarantee may be replaced by an
Alternate Credit Enhancement. See "Alternate Credit Enhancement" herein.] Each
payment required to be made under the Limited Guarantee is referred to as an
"Enhancement Payment." Prior to the Remittance Date with respect to the Class
[B-2] Certificates (the "Initial Class [B-2] Principal Remittance Date") on
which the Class [B-1] Principal Balance is reduced to zero, the Enhancement
Payment will equal the amount, if any, by which (a) the sum of (i) the Class [B-
2] Formula Distribution Amount (which will be equal to interest accrued during
the related Interest Period on the Class [B-2] Principal Balance and an amount
of principal described in the Agreement) for such Remittance Date and (ii) the
Class [B-2] Principal Balance and an amount of principal described in the
Agreement) for such Remittance Date and (ii) the Class [B-2] Principal
Liquidation Loss Amount, if any, exceeds (b) the amount (other than the
Enhancement Payment) that will otherwise be distributed on the Class [B-2]
Certificates on such Remittance Date (the "Class [B-2] Distribution Amount.").
On each Remittance Date on or after the Initial Class [B-2] Principal Remittance
Date, the Enhancement Payment will equal the amount, if any, by which the Class
[B-2] Formula Distribution Amount (which will include both interest and
principal) exceeds the Class [B-2] Distribution Amount for such Remittance Date.
The "Class [B-2] Principal Liquidation Loss Amount . " for any
Remittance Date will equal the amount, if any, by which (a) the Formula
Principal Distribution Amount (exclusive of the portion thereof specified in
clause (vi) of the definition of Formula Principal Distribution Amount) for such
Remittance Date exceeds (b) the amount distributed on the Certificates on
account of principal on such Remittance Date. The Class [B-2] Principal
Liquidation Loss Amount represents future principal payments on the Contracts
that, because of the subordination of the Class [B-2] Certificates and
liquidation losses on the Contracts, will not be paid to the [Class B-2]
Certificate holders from the assets of the Trust Fund but may be paid in the
form of an Enhancement Payment.
S-50
<PAGE>
In the event, that on a particular Remittance Date, the Class [B-2]
Distribution Amount in the Certificate Account plus any amounts actually paid
under the Limited Guarantee are not sufficient to make a full distribution of
interest to the Class [B-2] Certificateholder, the amount of the deficiency will
be carried forward as an amount that the Class [B-2] Certificateholders are
entitled to receive on the next Remittance Date.
The Limited Guarantee will be an unsecured general obligation of GFC
and will not be supported by any letter of credit or other enhancement
arrangement.
The Limited Guarantee is for the benefit of the Class [B-2]
Certificates only and will not result in any payments on the other Certificates.
As reimbursement to GFC for Enhancement Payments made by GFC pursuant
to the Limited Guarantee, GFC will be entitled to receive on each Remittance
Date an amount equal to the lesser of (a) the Available Distribution Amount,
less the portion of the Available Distribution Amount distributed on the
Certificates (other than the Class R Certificate), and (b) the aggregate amount
of Enhancement Payments outstanding which remain unreimbursed as of such
Remittance Date.]
[ALTERNATE CREDIT ENHANCEMENT
In the event that, at GFC's option, Alternate Credit Enhancement (as
defined herein) is provided and, upon prior written notice to the Rating
Agencies, the Rating Agencies shall have notified GFC, the Servicer and the
Trustee in writing, that substitution of such Alternate Credit Enhancement for
the Limited Guarantee will not result in the downgrade or withdrawal of the then
current rating of any class of the Certificates, and upon the delivery by GFC to
the Trustee of an opinion of counsel, acceptable to the Trustee, that such
action would not cause the Trust to fail to qualify as a REMIC, the Limited
Guarantee shall be released and shall terminate. The Alternate Credit
Enhancement may consist of cash or securities deposited by GFC or any other
person in a segregated escrow, trust or collateral account or a letter of
credit, certificate insurance policy or surety bond provided by a third party
(an "Alternate Credit Enhancement."). On each Remittance Date after delivery of
the Alternate Credit Enhancement, an amount, equal to the lesser of the amount
which would have been payable under the Limited Guarantee and the amount
available under such Alternate Credit Enhancement, shall be transferred from
such account to the applicable Certificate Account to make payments to the Class
[B-2] and Certificateholders, as applicable (the "Enhancement Payment"). GFC
shall have no obligation to replace such enhancement once it has been
exhausted.]
REPORTS TO CERTIFICATEHOLDERS
The Trustee will include with each distribution to a Certificateholder
a statement as of the related Distribution Date setting forth, among other
things:
(a) the aggregate amount distributed on each Class of Certificates on
such Distribution Date;
S-51
<PAGE>
(b) the amount of such distribution on each Class of Certificates
which constitutes principal;
(c) the amount of such distribution on each Class of Certificates
which constitutes interest;
(d) the remaining Certificate Balance;
(e) the Monthly Servicing Fee payable on such Distribution Date and
the amount of any other fees payable out of the Trust Fund;
(f) the number of and aggregate unpaid principal balance of Contracts
with payments delinquent 31 to 59, 60 to 89, and 90 or more days,
respectively;
(g) the number of Contracts that were repurchased or replaced by a
Seller in accordance with the Agreement during the prior Collection Period,
identifying such Contracts and (i) the Repurchase Price of such Contracts
and (ii) the amount, if any, paid by such Seller due to the differences, if
any, between the remaining principal balances of the replaced Contracts and
the Eligible Substitute Contracts;
(h) the aggregate principal balances of all Contracts that are not
Liquidated Contracts and in respect of which the related Manufactured Homes
have been repossessed or foreclosed upon;
(i) the aggregate liquidation losses (less costs of liquidation)
realized by the Trust Fund through the Collection Period immediately
preceding such Distribution Date, expressed in dollars;
(j) the aggregate liquidation losses (less costs of liquidation)
realized by the Trust Fund through the Collection Period immediately
preceding such Distribution Date, expressed as a percentage of the Cut-off
Date Pool Principal Balance;
(k) the amount of any Monthly Advance for such Distribution Date and
the aggregate amount of Monthly Advances that remain outstanding as of such
Distribution Date;
(l) the weighted average Contract Rate for the Contract Pool for the
Collection Period immediately preceding the month of such Distribution
Date; and
(m) the number of Manufactured Homes currently held by the Servicer
due to repossessions and the aggregate principal balance of the related
defaulted Contracts.
In addition, within a reasonable period of time after the end of each
calendar year, the Trustee will furnish a report to each holder of a Series 199[
]-[ ] Regular Certificate of record at any time during such calendar year as to
the aggregate of amounts reported pursuant to clauses (a) and (b) above for such
calendar year.
S-52
<PAGE>
OPTIONAL TERMINATION AND TERMINATION AUCTION
The Agreement provides that on any Distribution Date after the
Distribution Date on which the Pool Scheduled Principal Balance is less than 10%
of the Cut-off Date Pool Principal Balance, the Servicer will have the option to
repurchase, upon giving notice mailed no later than the 10th day of the month
next preceding the month of the exercise of such option, all outstanding
Contracts at a price equal to the greater of (a) the sum of (x) 100% of the
Scheduled Principal Balance of each Contract (other than any Contract as to
which the related Manufactured Home has been acquired and not yet disposed of
and whose fair market value is included pursuant to clause (y) below) as of the
final Distribution Date, and (y) the fair market value of such acquired property
(as determined by the Servicer), and (b) the aggregate fair market value (as
determined by the Servicer) of all of the assets of the Trust Fund, plus, in the
case of both clause (a) and (b), an amount sufficient to reimburse
Certificateholders for any shortfall in interest due thereto in respect of prior
Distribution Dates. Notwithstanding the foregoing, the Servicer's option shall
not be exercisable if there will not be distributed to the Class A
Certificateholders an amount equal to the Class A Certificate Balance together
with any shortfall in interest due to the Class A Certificateholders in respect
of prior Distribution Dates and one month's interest on the Class A Certificate
Balance [or the Notional Principal Amount, as the case may be,] at the Class A
Pass-Through Rate, to the Class M Certificateholders an amount equal to the
Class M Certificate Balance together with any shortfall in interest due to the
Class M Certificateholders in respect of prior Distribution Dates and one
month's interest on the Class M Certificate Balance at the Class M Pass-Through
Rate, to the Class B-1 Certificateholders an amount equal to the Class B-1
Certificate Balance together with any shortfall in interest due to the Class B-1
Certificateholders in respect of prior Distribution Dates and one month's
interest on the Class B-1 Certificate Balance at the Class B-1 Pass-Through Rate
and to the to the Class B-2 Certificateholders an amount equal to the Class B-2
Certificate Balance together with any shortfall in interest due to the Class B-2
Certificateholders in respect of prior Distribution Dates and one (the "Minimum
Termination Amount").
On any Distribution Date after the Distribution Date on which the Pool
Scheduled Principal Balance is less than 10% of the Cut-off Date Pool Principal
Balance, the Servicer may also direct the Trustee to conduct a Termination
Auction for the sale of all Contracts then outstanding in the Trust Fund, and in
any case the Servicer shall be obligated to direct the Trustee to conduct such a
Termination Auction within 90 days of the Distribution Date on which the Pool
Scheduled Principal Balance is less than 10% of the Cut-off Date Pool Principal
Balance, unless the Servicer has exercised the repurchase option described
above. The Servicer shall give notice mailed no later than [ ] days preceding
the date on which the Termination Auction is to occur. The Trustee will solicit
each Certificateholder, the Seller and one or more active participants in the
asset-backed securities or manufactured housing contract market that are not
affiliated with GFC to make a bid to purchase the Contracts at the Termination
Auction. The Trustee will sell all the Contracts to the highest bidder, subject,
among other things, to (i) the requirement that the highest bid equal or exceed
the Minimum Termination Amount, and (ii) the requirement that at least one bid
be tendered by an active participant in the asset-backed securities or
manufactured housing contract market that is not affiliated with BankAmerica
Corporation. If the foregoing requirements are satisfied, the successful bidder
or bidders shall deposit the aggregate purchase price for the Contracts in the
Certificate Account. If the foregoing requirements are not satisfied, the
purchase shall not occur
S-53
<PAGE>
and distributions will continue to be made on the Certificates. Any sale and
consequent termination of the Trust Fund as a result of a Termination Auction
must constitute a "qualified liquidation" of the Trust Fund under Section 860F
of the Code.
TERMINATION OF THE AGREEMENT
The Agreement will terminate upon the last action required to be taken
by the Trustee on the final Distribution Date following the earlier of (i) the
purchase by the Servicer of all Contracts and all property acquired in respect
of any Contract remaining in the Trust Fund as described above under
" - Optional Termination and Termination Auction"[,/or] (ii) the final payment
or other liquidation (or any advance with respect thereto) of the last Contract
remaining in the Trust Fund or the disposition of all property acquired upon
repossession of any Manufactured Home [or (iii) the sale in a Termination
Auction of all Contracts and all other property acquired in respect of any
Contract remaining in the Trust Fund as described above under " - Optional
Termination and Termination Auction"].
Upon presentation and surrender of the Series 199[ ]-[ ] Regular
Certificates, the Trustee shall cause to be distributed, to the extent of funds
available, to such Certificateholders on the final Distribution Date in
proportion to their respective Percentage Interests an amount equal to the
respective unpaid Certificate Balances of the Series 199[ ]-[ ] Regular
Certificates, together with any unpaid interest on such Certificates due on
prior Distribution Dates and one month's interest at the applicable pass-through
rates on such unpaid Certificate Balances; provided that such funds will be
distributed in the applicable order of priority specified under " -
Distributions" above. If the Agreement is then being terminated, any amount
which remains on deposit in the Certificate Account (other than amounts retained
to meet claims) after distribution to the holders of the Series 199[ ]-[ ]
Regular Certificates will be distributed to the Class R Certificateholders.
COLLECTION AND OTHER SERVICING PROCEDURES
The Servicer will administer, service and make collections on the
Contracts, exercising the degree of care that the Servicer exercises with
respect to similar contracts serviced by the Servicer.
Subject to the requirements of applicable law, the Servicer will be
required to commence repossession and other realization procedures with respect
to any defaulted Contract promptly after the Servicer determines that such
Contract will not be brought current. The Servicer may rescind, cancel or make
material modifications of the terms of a Contract (including modifying the
amounts and Due Dates of Scheduled Payments) in connection with a default or
imminent default thereunder.
SERVICING COMPENSATION; CERTAIN OTHER MATTERS REGARDING THE SERVICER
For its servicing of the Contracts, the Servicer will be entitled to
receive a monthly servicing fee equal to the product of one-twelfth of [ ]%
and the Pool Scheduled Principal Balance for the related Distribution Date (the
"Monthly Servicing Fee"), whether or not the related Scheduled Payments on the
Contracts are received. The Available Distribution Amount will be net of the
Monthly Servicing Fee. See " - Payments on the Contracts; Certificate
S-54
<PAGE>
Account" above. [For so long as the Servicer is entitled to delay deposits to
the Certificate Account until on or prior to the Distribution Date, any earnings
on the amounts retained by the Servicer will constitute additional servicing
compensation.]
As part of its servicing fees, the Servicer will also be entitled to
retain, as compensation for the additional services provided in connection
therewith, 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 and real property securing such Contracts, if any.
THE TRUSTEE
[ ] (the "Trustee") has its corporate trust offices at [ ]. The
Trustee may resign at any time, in which event the Seller[s] will be obligated
to appoint a successor Trustee. The Seller[s] may also remove the Trustee if
the Trustee ceases to be eligible to continue as such under the Agreement or if
the Trustee becomes insolvent. In such circumstances, the Seller[s] will also
be obligated to appoint a successor Trustee. Any resignation or removal of the
Trustee and appointment of a successor Trustee will not become effective until
acceptance of the appointment by the successor Trustee.
The Agreement requires the Trustee to maintain, at its own expense, an
office or agency in New York City or [ ] 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 in respect of the Certificates
pursuant to the Agreement may be served.
The Trustee, or any of its affiliates, in its individual or any other
capacity, may become the owner or pledgee of Certificates with the same rights
as it would have if it were not Trustee.
The Trustee will also act as paying agent, certificate registrar and
authenticating agent under the Agreement.
[REGISTRATION OF THE OFFERED CERTIFICATES
The Offered Certificates will be book-entry Certificates (the "Book-
Entry Certificates"). Persons acquiring beneficial ownership interests in the
Offered Certificates ("Certificate Owners") will hold their Offered Certificates
through DTC in the United States, or Cedel Bank, societe anonyme ("Cedel") or
Euroclear System ("Euroclear") in Europe if they are participants of such
systems, or indirectly through organizations which are participants in such
systems. The Book-Entry Certificates will be issued in one or more certificates
which equal the aggregate principal balance of the Offered Certificates and will
initially be registered in the name of Cede & Co., the nominee of DTC. Cedel
and Euroclear will hold omnibus positions on behalf of their participants
through customers' securities accounts in Cedel's and Euroclear's names on the
books of their respective depositaries which in turn will hold such positions in
customers' securities accounts in the depositaries' names on the books of DTC.
Citibank will act as depositary for Cedel and The Chase Manhattan Bank will act
as depositary for Euroclear (in such capacities, individually the "Relevant
Depositary" and collectively the "European Depositaries"). Except as described
below, no person acquiring a Book-Entry Certificate (each, a "Beneficial
S-55
<PAGE>
Owner") will be entitled to receive a physical certificate representing such
Certificate (a "Definitive Certificate"). Unless and until Definitive
Certificates are issued, it is anticipated that the only "Certificateholder" of
the Offered Certificates will be Cede & Co., as nominee of DTC. Certificate
Owners will not be Certificateholders as that term is used in the Agreement.
Certificate Owners are only permitted to exercise their rights indirectly
through Participants and DTC.
The beneficial owner's ownership of a Book-Entry Certificate will be
recorded on the records of the brokerage firm, bank, thrift institution or other
financial intermediary (each, a "Financial Intermediary") that maintains the
beneficial owner's account for such purpose. In turn, the Financial
Intermediary's ownership of such Book-Entry Certificate will be recorded in the
records of DTC (or of a participating firm that acts as agent for the Financial
Intermediary, whose interest will in turn be recorded on the records of DTC, if
the beneficial owner's Financial Intermediary is not a DTC participant and on
the records of Cedel or Euroclear, as appropriate).
Certificate Owners will receive all distributions of principal of and
interest on the Offered Certificates from the Trustee through DTC and DTC
participants. While the Offered Certificates are outstanding (except under the
circumstances described below), under the rules, regulations and procedures
creating and affecting DTC and its operations (the "Rules"), DTC is required to
make book-entry transfers among Participants on whose behalf it acts with
respect to the Offered Certificates and is required to receive and transmit
distributions of principal of, and interest on, the Offered Certificates.
Participants and indirect participants with whom Certificate Owners have
accounts with respect to Offered Certificates are similarly required to make
book-entry transfers and receive and transmit such distributions on behalf of
their respective Certificate Owners. Accordingly, although Certificate Owners
will not possess certificates representing their respective interests in the
Offered Certificates, the Rules provide a mechanism by which Certificate Owners
will receive distributions and will be able to transfer their interest.
Certificateholders will not receive or be entitled to receive
certificates representing their respective interests in the Offered
Certificates, except under the limited circumstances described below. Unless
and until Definitive Certificates are issued, Certificateholders who are not
Participants may transfer ownership of Offered Certificates only through
Participants and indirect participants by instructing such Participants and
indirect participants to transfer Offered Certificates, by book-entry transfer,
through DTC for the account of the purchasers of such Offered Certificates,
which account is maintained with their respective Participants. Under the Rules
and in accordance with DTC's normal procedures, transfers of ownership of
Offered Certificates will be executed through DTC and the accounts of the
respective Participants at DTC will be debited and credited. Similarly, the
Participants and indirect participants will make debits or credits, as the case
may be, on their records on behalf of the selling and purchasing
Certificateholders.
Because of time zone differences, credits of securities received in
Cedel or Euroclear as a result of a transaction with a Participant will be made
during subsequent securities settlement processing and dated the business day
following the DTC settlement date. Such credits or any transactions in such
securities settled during such processing will be reported to the relevant
Euroclear or Cedel Participants on such business day. Cash received in Cedel or
Euroclear as a result of sales of securities by or through a Cedel Participant
(as defined below) or
S-56
<PAGE>
Euroclear Participant (as defined below) to a DTC Participant will be received
with value on the DTC settlement date but will be available in the relevant
Cedel or Euroclear cash account only as of the business day following settlement
in DTC. For information with respect to tax documentation procedures relating to
the Certificates, see "Certain Federal Income Tax Consequences--REMIC
Certificates--C. Taxation of Regular Certificates--9. Taxation of Certain
Foreign Investors" and "--10. Backup Withholding" in the Prospectus and "Global
Clearance, Settlement and Tax Documentation Procedures--Certain U.S. Federal
Income Tax Documentation Requirements" in Annex I hereto.
Transfers between Participants will occur in accordance with DTC
rules. Transfers between Cedel Participants and Euroclear Participants will
occur in accordance with their respective rules and operating procedures.
Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly or indirectly through Cedel
Participants or Euroclear Participants, on the other, will be effected in DTC in
accordance with DTC rules on behalf of the relevant European international
clearing system by the Relevant Depositary; however, such cross-market
transactions will require delivery of instructions to the relevant European
international clearing system by a counterparty in such system in accordance
with its rules and procedures and within its established deadlines (European
time). The relevant European international clearing system will, if the
transaction meets its settlement requirements, deliver instructions to the
Relevant Depositary to take action to effect final settlement on its behalf by
delivering or receiving securities in DTC, and making or receiving payment in
accordance with normal procedures for same day funds settlement applicable to
DTC. Cedel Participants and Euroclear Participants may not deliver instructions
directly to the European Depositaries.
DTC, which is a New York-chartered limited purpose trust company,
performs services for its participants, some of which (and/or their
representatives) own DTC. In accordance with its normal procedures, DTC is
expected to record the positions held by each DTC participant in the Book-Entry
Certificates, whether held for its own account or as a nominee for another
person. In general, beneficial ownership of Book-Entry Certificates will be
subject to the Rules, as in effect from time to time.
Cedel Bank, societe anonyme, 67 Bd Grande-Duchesse Charlotte, L-1331
Luxembourg, was incorporated in 1970 as a limited company under Luxembourg law.
Cedel is owned by banks, securities dealers and financial institutions, and
currently has about 100 shareholders, including U.S. financial institutions or
their subsidiaries. No single entity may own more than five percent of Cedel's
stock.
Cedel is registered as a bank in Luxembourg, and as such is subject to
regulation by the Institute Monetaire Luxembourgeois, "IML", the Luxembourg
Monetary Authority, which supervises Luxembourg banks.
Cedel holds securities for its customers ("Cedel Participants") and
facilitates the clearance and settlement of securities transactions by
electronic book-entry transfers between their accounts. Cedel provides various
services, including safekeeping, administration, clearance and settlement of
internationally traded securities and securities lending and borrowing. Cedel
S-57
<PAGE>
also deals with domestic securities markets in several countries through
established depository and custodial relationships. Cedel has established an
electronic bridge with Morgan Guaranty Trust as the Euroclear Operator in
Brussels to facilitate settlement of trades between systems. Cedel currently
accepts over 70,000 securities issues on its books.
Cedel's customers are world-wide financial institutions including
underwriters, securities brokers and dealers, banks, trust companies and
clearing corporations. Cedel's United States customers are limited to
securities brokers and dealers and banks. Currently, Cedel has approximately
3,000 customers located in over 60 countries, including all major European
countries, Canada, and the United States. Indirect access to Cedel is available
to other institutions which clear through or maintain a custodial relationship
with an account holder of Cedel.
Euroclear was created in 1968 to hold securities for its participants
("Euroclear Participants") and to clear and settle transactions between
Euroclear Participants through simultaneous electronic book-entry delivery
against payment, thereby eliminating the need for physical movement of
certificates and any risk from lack of simultaneous transfers of securities and
cash. Transactions may be settled in any of 29 currencies, including United
States dollars. Euroclear includes various other services, including securities
lending and borrowing and interfaces with domestic markets in several countries
generally similar to the arrangements for cross-market transfers with DTC
described above. Euroclear is operated by the Brussels, Belgium office of
Morgan Guaranty Trust Company of New York (the "Euroclear Operator"), under
contract with Euroclear Clearance Systems S.C., a Belgian cooperative
corporation (the "Cooperative"). All operations are conducted by the Euroclear
Operator, and all Euroclear securities clearance accounts and Euroclear cash
accounts are accounts with the Euroclear Operator, not the Cooperative. The
Cooperative establishes policy for Euroclear on behalf of Euroclear
Participants. Euroclear Participants include banks (including central banks),
securities brokers and dealers and other professional financial intermediaries.
Indirect access to Euroclear is also available to other firms that clear through
or maintain a custodial relationship with a Euroclear Participant, either
directly or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such, it
is regulated and examined by the Board of Governors of the Federal Reserve
System and the New York State Banking Department, as well as the Belgian Banking
Commission.
Securities clearance accounts and cash accounts with the Euroclear
Operator are governed by the Terms and Conditions Governing Use of Euroclear and
the related Operating Procedures of the Euroclear System and applicable Belgian
law (collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within Euroclear, withdrawals of securities and
cash from Euroclear and receipts of payments with respect to securities in
Euroclear. All securities in Euroclear are held on a tangible basis with
attribution of specific certificates to specific securities clearance accounts.
The Euroclear Operator acts under the Terms and Conditions only on behalf of
Euroclear Participants, and has no record of or relationship with persons
holding through Euroclear Participants.
S-58
<PAGE>
Distributions on the Book-Entry Certificates will be made on each
Distribution Date by the Trustee to DTC. DTC will be responsible for crediting
the amount of such payments to the accounts of the applicable DTC participants
in accordance with DTC's normal procedures. Each DTC participant will be
responsible for disbursing such payments to the beneficial owners of the Book-
Entry Certificates that it represents and to each Financial Intermediary for
which it acts as agent. Each such Financial Intermediary will be responsible
for distributing funds to the beneficial owners of the Book-Entry Certificates
that it represents.
Under a book-entry format, beneficial owners of the Book-Entry
Certificates may experience some delay in their receipt of payments, since such
payments will be forwarded by the Trustee to Cede. Distributions with respect
to Certificates held through Cedel or Euroclear will be credited to the cash
accounts of Cedel Participants or Euroclear Participants in accordance with the
relevant system's rules and procedures, to the extent received by the Relevant
Depositary. Such distributions will be subject to tax reporting in accordance
with relevant United States tax laws and regulations. See "Certain Federal
Income Tax Consequences--REMIC Certificates--C. Taxation of Regular
Certificates--9. Taxation of Certain Foreign Investors" and "--10. Backup
Withholding" in the Prospectus. Because DTC can only act on behalf of Financial
Intermediaries, the ability of a beneficial owner to pledge Book-Entry
Certificates to persons or entities that do not participate in the Depository
system, or otherwise take actions in respect of such Book-Entry Certificates,
may be limited due to the lack of physical certificates for such Book-Entry
Certificates. In addition, issuance of the Book-Entry Certificates in the book-
entry form may reduce the liquidity of such Certificates in the secondary market
since certain potential investors may be unwilling to purchase Certificates for
which they cannot obtain physical certificates.
Monthly and annual reports on the Trust will be provided to Cede, as
nominee of DTC, and may be made available by Cede to beneficial owners upon
request, in accordance with the rules, regulations and procedures creating and
affecting the Depository, and to the Financial Intermediaries to whose DTC
accounts the Book-Entry Certificates of such beneficial owners are credited.
DTC has advised the Trustee that, unless and until Definitive
Certificates are issued, DTC will take any action permitted to be taken by the
holders of the Book-Entry Certificates under the Agreement only at the direction
of one or more Financial Intermediaries to whose DTC accounts the Book-Entry
Certificates are credited, to the extent that such actions are taken on behalf
of Financial Intermediaries whose holdings include such Book-Entry Certificates.
Cedel or the Euroclear Operator, as the case may be, will take any other action
permitted to be taken by a Certificateholder under the Agreement on behalf of a
Cedel Participant or Euroclear Participant only in accordance with its relevant
rules and procedures and subject to the ability of the Relevant Depository to
effect such actions on its behalf through DTC. DTC may take actions, at the
direction of the related Participants, with respect to some Offered Certificates
which conflict with actions taken with respect to other Offered Certificates.
Definitive Certificates will be issued to beneficial owners of the
Book-Entry Certificates, or their nominees, rather than to DTC, only if (a) DTC
or GreenPoint advises the Trustee in writing that DTC is no longer willing,
qualified or able to discharge properly its responsibilities as nominee and
depository with respect to the Book-Entry Certificates and
S-59
<PAGE>
GreenPoint or the Trustee is unable to locate a qualified successor, (b)
GreenPoint, at its sole option, with the consent of the Trustee, elects to
terminate a book-entry system through DTC or (c) after the occurrence of an
event of default under the Agreement, beneficial owners having Percentage
Interests aggregating not less than 51% of the Book-Entry Certificates advise
the Trustee and DTC through the Financial Intermediaries and the DTC
participants in writing that the continuation of a book-entry system through DTC
(or a successor thereto) is no longer in the best interests of beneficial
owners.
Upon the occurrence of any of the events described in the immediately
preceding paragraph, the Trustee will be required to notify all beneficial
owners of the occurrence of such event and the availability through DTC of
Definitive Certificates. Upon surrender by DTC of the global certificate or
certificates representing the Book-Entry Certificates and instructions for re-
registration, the Trustee will issue Definitive Certificates, and thereafter the
Trustee will recognize the holders of such Definitive Certificates as
Certificateholders under the Agreement.
Although DTC, Cedel and Euroclear have agreed to the foregoing
procedures in order to facilitate transfer of Offered Certificates among
participants of DTC, Cedel and Euroclear, they are under no obligation to
perform or continue to perform such procedures and such procedures may be
discontinued at any time.
Neither the Seller or the Servicer nor the Trustee will have any
responsibility for any aspect of the records relating to or payments made on
account of beneficial ownership interests of the Book-Entry Certificates held by
Cede & Co., as nominee for DTC, or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.]
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
Upon the issuance of the Offered Certificates, Orrick, Herrington &
Sutcliffe LLP, special counsel to the Seller, will deliver its opinion that,
assuming (i) the making of appropriate elections, (ii) compliance with
applicable provisions of the Code, including Sections 860A through 860G of the
Code (the "REMIC Provisions"), and related Treasury regulations, and (iii)
compliance by the Seller, the Servicer and the Trustee with all of the
provisions of the related Agreements, (a) the Trust Fund will qualify, for
federal income tax purposes, as a "real estate mortgage investment conduit" (a
"REMIC") within the meaning of the REMIC Provisions, and (b) the Offered
Certificates, together with the Class B-2 Certificates, evidence the "regular
interests" in such REMIC and (c) the Class R Certificates is the sole class of
"residual interests" in such REMIC, respectively, each within the meaning of the
REMIC Provisions in effect on the date hereof.
The following general discussion of the anticipated federal income tax
consequences of the purchase, ownership and disposition of Offered Certificates,
to the extent it relates to matters of law or legal conclusions with respect
thereto, represents the opinion of Orrick, Herrington & Sutcliffe LLP subject to
the qualifications set forth herein. In addition, Orrick, Herrington &
Sutcliffe LLP has prepared or reviewed the statements in this Prospectus
Supplement under the heading "Certain Federal Income Tax Consequences," and is
of the opinion that such statements are correct in all material respects. Such
statements are intended as
S-60
<PAGE>
an explanatory discussion of the possible effects of the classification of the
Trust Fund as a REMIC for federal income tax purposes on investors generally and
of related tax matters affecting investors generally, but do not purport to
furnish information in the level of detail or with the attention to an
investor's specific tax circumstances that would be provided by an investor's
own tax advisor. Accordingly, each investor is advised to consult its own tax
advisors with regard to the tax consequences to it of investing in the Offered
Certificates.
The Offered Certificates will be Regular Certificates (as defined in
the Prospectus under "Certain Federal Income Tax Consequences--REMIC
Certificates"). Generally, the Offered Certificates will be treated as debt
instruments for federal income tax purposes. Holders of Offered Certificates
will be required to report income with respect to such Offered Certificates
under the accrual method of accounting, regardless of their normal tax
accounting method.
For federal income tax reporting purposes, the Class __ and Class __
Certificates will be treated as having been issued with original issue
discount. All other classes of Offered Certificates will be treated as not
having been issued with original issue discount for federal income tax reporting
purposes. The prepayment assumption that will be used in determining the rate
of accrual of original issue discount, market discount and premium, if any, for
federal income tax purposes will be based on the assumption that, subsequent to
the date of any determination the Contracts will prepay at a rate equal to 170%
of the Prepayment Assumption. No representation is made that the Contracts will
prepay at that rate or at any other rate. See "Certain Federal Income Tax
Consequences--REMIC Certificates--C. Taxation of Regular Certificates--2.
Original Issue Discount" and "--5. Premium" in the Prospectus.
If the method for computing original issue discount described in the
Prospectus results in a negative amount for any period with respect to a
Certificateholder, the amount of original issue discount allocable to such
period would be zero and such Certificateholder will be permitted to offset such
negative amount only against future original issue discount (if any)
attributable to such Certificates.
In certain circumstances OID Regulations permit the holder of a debt
instrument to recognize original issue discount under a method that differs from
that used by the issuer. Accordingly, it is possible that the holder of a
Certificate may be able to select a method for recognizing original issue
discount that differs from that used by the REMIC administrator in preparing
reports to the Certificateholders and the IRS.
Certain classes of the Offered Certificates may be treated for federal
income tax purposes as having been issued at a premium. Whether any holder of
such a class of Certificates will be treated as holding a certificate with
amortizable bond premium will depend on such Certificateholder's purchase price
and the distributions remaining to be made on such Certificate at the time of
its acquisition by such Certificateholder. Holders of such classes of
Certificates should consult their tax advisors regarding the possibility of
making an election to amortize such premium. See "Certain Federal Income Tax
Consequences--REMIC Certificates--C. Taxation of Regular Certificates" and "--5.
Premium" in the Prospectus.
The Offered Certificates will be treated as assets described in
Section 7701(a)(19)(C) of the Code and "real estate assets" under Section
856(c)(4)(A) of the Code
S-61
<PAGE>
generally in the same proportion that the assets of the Trust Fund would be so
treated. In addition, interest on the Offered Certificates will be treated as
"interest on obligations secured by mortgages on real property" under Section
856(c)(3)(B) of the Code generally to the extent that such Offered Certificates
are treated as "real estate assets" under Section 856(c)(4)(A) of the Code.
Moreover, the Offered Certificates (other than the Residual Certificates) will
be "qualified mortgages" within the meaning of Section 860G(a)(3) of the Code if
transferred to another REMIC on its startup day in exchange for a regular or
residual interest therein. However, prospective investors in Offered
Certificates that will be generally treated as assets described in Section
860G(a)(3) of the Code should note that, notwithstanding such treatment, any
repurchase of such a Certificate pursuant to the right of the Master Servicer or
the Company to repurchase such Offered Certificates may adversely affect any
REMIC that holds such Offered Certificates if such repurchase is made under
circumstances giving rise to a Prohibited Transaction Tax. See "The Pooling and
Servicing Agreement--Termination" herein and "Certain Federal Income Tax
Consequences--REMIC Certificates" in the Prospectus.
For further information regarding federal income tax consequences of
investing in the Offered Certificates, see "Certain Federal Income Tax
Consequences--REMICs" in the Prospectus.
S-62
<PAGE>
ERISA CONSIDERATIONS
GENERAL
The Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and Section 4975 of the Code impose certain restrictions on employee
benefit or other plans that are subject to ERISA and/or Section 4975 of the Code
("Plans") and on persons who are fiduciaries with respect to such Plans. See
"ERISA Considerations" in the Prospectus.
Prospective Plan investors should consult with their legal advisors
concerning the impact of ERISA and the Code, the applicability of the Exemption
(defined below) and other administrative exemptions under ERISA and the
potential consequences in their specific circumstances, prior to making an
investment in the Offered Certificates. Moreover, each Plan fiduciary should
determine whether under the general fiduciary standards of investment prudence
and diversification an investment in the Offered 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.
SENIOR CERTIFICATES
The Department of Labor ("DOL") has granted to [ ] administrative
exemptions [ ] (collectively, the "Exemption")) from certain of the
prohibited transaction rules of ERISA. The Exemption exempts from the
prohibitions of Sections 406(a) and 407(a) of ERISA, and the related excise tax
provisions of Section 4975 of the Code, the purchase, holding and resale by
Plans of pass-through certificates representing interests in trusts that hold
assets consisting primarily of certain receivables, loans and other obligations
that are secured and meet the general conditions summarized below. The
receivables covered by the Exemption include manufactured housing installment
sales contracts and installment loan agreements secured by manufactured homes
such as the Contracts.
Among the general conditions which must be satisfied for the Exemption
to apply to the acquisition, holding and resale by a Plan of the Senior
Certificates are the following:
(1) The acquisition of the Senior Certificates by a Plan is on terms
(including the price for the Senior 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 Senior Certificates
acquired by the Plan are not subordinated to the rights and interests
evidenced by other Certificates of the Trust.
(3) The Senior Certificates acquired by the Plan have received a
rating at the time of such acquisition that is in one of the three highest
generic rating categories from either Standard & Poor's Ratings Group
("S&P"), Duff & Phelps Credit Rating Co. ("Duff & Phelps"), Moody's or
Fitch (the "Exemption Rating Agencies").
S-63
<PAGE>
(4) The Trustee is not an affiliate of the Underwriters, GreenPoint,
the obligor under any Alternative Credit Enhancement, any Obligor with
respect to Contracts included in the Trust Fund constituting more than 5%
of the aggregate unamortized principal balance of the assets in the Trust
Fund, or any affiliate of such parties. (Such parties, and the Trustee and
its affiliates, are sometimes referred to herein collectively as the
"Restricted Group"). As of the date hereof, no Obligor with respect to
Contracts included in the Trust Fund is an Obligor with respect to
Contracts constituting more than 5% of the aggregate unamortized principal
balance of the assets of the Trust Fund.
(5) The sum of all payments made to and retained by the Underwriters
in connection with the distribution of the Senior Certificates represents
not more than reasonable compensation for underwriting the Senior
Certificates. The sum of all payments made to and retained by the Seller
pursuant to the sale of the Contracts to the Trust Fund represents not more
than the fair market value of such Contracts. The sum of all payments made
to and retained by GreenPoint, represents not more than reasonable
compensation for GreenPoint's services under the Agreement and
reimbursement of GreenPoint's reasonable expenses in connection therewith.
(6) The Plan 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.
In addition, the Exemption exempts from the prohibitions of Sections
406(a), 406(b) and 407(a) of ERISA, and the related excise tax provisions of
Section 4975 of the Code, transactions undertaken in connection with the
servicing, management and operation of such a trust pursuant to a binding
pooling and servicing agreement, subject to the foregoing general conditions and
to certain additional requirements. The Seller believes that the Exemption will
apply to such transactions undertaken with respect to the Trust Fund and the
Contracts and that all conditions of the Exemption other than those within the
control of the investors have been or will be met.
The Exemption also exempts from the prohibition of Sections 406(b)(1)
and 406(b)(2) of ERISA, and the related excise tax provisions of Section 4975 of
the Code, the direct or indirect sale, exchange or transfer of Senior
Certificates between either Seller or the Underwriters and a Plan when the
person who has discretionary authority or renders investment advice with respect
to the investment of the Plan's assets in the Senior Certificates (the
"Fiduciary") is (a) an obligor with respect to 5% or less of the fair market
value of Contracts in the Trust Fund or (b) an affiliate of any such person,
subject to the general conditions summarized above and to the following
additional requirements:
(1) No member of the Restricted Group is a sponsor of the Plan.
S-64
<PAGE>
(2) In connection with the initial issuance of Senior Certificates,
at least 50% in Percentage Interests of such Class of Certificates is
acquired by persons independent of the Restricted Group and at least 50% of
the aggregate interest in the Trust Fund is acquired by persons independent
of the Restricted Group.
(3) The Plan's investment in the Senior Certificates does not exceed
25% in Percentage Interests of any such Class of Certificates outstanding
at the time of acquisition.
(4) Immediately after the acquisition of the Senior Certificates, no
more than 25% of the assets of a Plan with respect to which the Fiduciary
has discretionary authority or renders investment advice are invested in
certificates representing an interest in a trust containing assets sold or
serviced by the same entity.
The Exemption also applies to the direct or indirect acquisition or
disposition of Senior Certificates by a Plan in the secondary market if certain
conditions are met and the continued holding of Senior Certificates acquired in
initial or secondary markets.
On July 21, 1997, the DOL published in the Federal Register an
amendment to the Exemption, which extends exemptive relief to certain mortgage-
backed and asset-backed securities transactions using pre-funding accounts for
trusts issuing pass-through certificates. With respect to the Certificates, the
amendment will generally allow Subsequent Contracts supporting payments to
Certificateholders, and having a value equal to no more than 25% of the total
principal amount of the Certificates, to be transferred to the Trust during the
Pre-Funding Period, instead of requiring that all the Contracts be either
identified or transferred on or before the Closing Date. In general, the relief
applies to the purchase, sale and holding of Certificates which otherwise
qualify for the Exemption, provided that the following general conditions are
met:
(1) the ratio of the amount allocated to the Pre-Funding Account to
the total principal amount of the Certificates must not exceed 25%;
(2) all Subsequent Contracts transferred to the Trust after the
Closing Date must meet the same terms and conditions for eligibility as the
Initial Contracts used to create the Trust, which terms and conditions have
been approved by one of the Exemption Rating Agencies;
(3) the transfer of the Subsequent Contracts to the Trust during the
Pre-Funding Period must not result in the Certificates 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 pre-funding, the weighted average
annual percentage interest rate (the "Average Interest Rate") for all of
the Contracts in the Trust at the end of the Pre-Funding Period must not be
more than 100 basis points lower than
S-65
<PAGE>
the Average Interest Rate for the Contracts which were transferred to the
Trust on the Closing Date;
(5) either:
(i) the characteristics of the Subsequent Contracts must be
monitored by an insurer or other credit support provider which is
independent of the Seller; or
(ii) an independent accountant retained by the Seller must
provide the Seller with a letter (with copies provided to the
Exemption Rating Agencies rating the Certificates, the Underwriter and
the Trustee) stating whether or not the characteristics of the
Subsequent Contracts conform to the characteristics described in the
Prospectus Supplement and/or Agreement. In preparing such letter, the
independent accountant must use the same type of procedures as were
applicable to the Contracts which were transferred to the Trust as of
the Closing Date;
(6) the Pre-Funding Period 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 Agreement or
an event of default occurs;
(7) amounts transferred to the Pre-Funding Account and any capitalized
interest account used in connection with the pre-funding may be invested
only in cash or in investments which are permitted by the Exemption Rating
Agencies rating the Certificates, and such investment must be described in
the Agreement and must:
(i) be direct obligations of, or obligations fully guaranteed as
to timely payment of principal and interest by, the United States or
any agency or instrumentality thereof (provided that such obligations
are backed by the full faith and credit of the United States); or
(ii) 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 Prospectus or Prospectus Supplement must describe the duration
of the Pre-Funding Period;
(9) 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 Plans.
[The Seller believes that the Exemption will apply to the acquisition
and holding of Senior Certificates by Plans and that all conditions of the
Exemption other than those within the control of the investors have been met.]
In addition,
S-66
<PAGE>
as of the date hereof, no Obligor with respect to 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 Senior Certificates should consult with its own counsel with
respect to the potential consequences under ERISA and the Code of the Plan's
acquisition and ownership of Senior Certificates. Assets of a Plan should not be
invested in Senior Certificates unless it is clear that the Exemption will apply
and exempt all potential prohibited transactions. See "ERISA Considerations" in
the Prospectus.
Before purchasing a Senior Certificate, a fiduciary of a Plan should
make its own determination as to the availability of the exemptive relief
provided in the Exemption or the availability of any other prohibited
transaction exemptions, and whether the conditions of any such exemption will be
applicable to the Certificate. Any fiduciary of a Plan considering whether to
purchase a Senior Certificate should also carefully review with its own legal
advisors the applicability of the fiduciary duty and prohibited transaction
provisions of ERISA and Section 4975 of the Code to such investment. See "ERISA
Considerations" in the Prospectus.
CLASS M AND CLASS B-1 CERTIFICATES
A Plan fiduciary or other person investing "plan assets" of any Plan
will not be permitted to purchase or hold the Class M and Class B-1
Certificates, unless such person delivers to the Trustee the certificate or
opinion referred to below, as such actions may give rise to a non-exempt
prohibited transaction under ERISA or Section 4975 of the Code. See "ERISA
Considerations" in the Prospectus. Because the Class M and Class B-1
Certificates do not meet the requirements of the Exemption, it does not provide
exemptive relief for the purchase or holding of such Certificates with "plan
assets" of any Plan.
In addition, no transfer of a Class M or Class B-1 Certificate shall
be registered unless the prospective transferee provides the Trustee, the Seller
and the Servicer with (a) a certification to the effect that such transferee (1)
is neither an employee benefit plan subject to Section 406 or Section 407 of
ERISA or a plan subject to Section 4975 of the Code, the trustee of any such
plan or a person acting on behalf of any such plan nor a person using "plan
assets" of any such plan, or (2) if such transferee is an insurance company, it
is purchasing such Certificates with funds contained in an "insurance company
general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the purchase and
holding of such Certificates is eligible for the exemptive relief available
under Sections I and III of PTCE 95-60; or (b) an opinion of counsel (a "Benefit
Plan Opinion") satisfactory to the Trustee, the Seller and the Servicer, and
upon which the Trustee, the Seller and the Servicer shall be entitled to rely,
to the effect that the purchase or holding of such Class M or Class B-1
Certificate by the prospective transferee will not result in any non-exempt
prohibited transaction under ERISA or Section 4975 of the Code and will not
subject the Trustee, the Seller or the Servicer to any obligation in addition to
those undertaken by such entities in the Agreement, which opinion of counsel
shall not be an expense of the Trustee, the Seller or the Servicer. Owners of
the Class M or Class B-1 Certificates will be deemed to have made one of the
certifications in clauses (a)(1) and (a)(2) above.
S-67
<PAGE>
CERTAIN LEGAL ASPECTS OF THE CONTRACTS
[ ]
RATINGS
It is a condition to the issuance of the Certificates that the Senior
Certificates be rated "[ ]" by [ ], that the Class M Certificates be rated at
least "[ ]" by [ ] and that the Class B Certificates be rated at least "[ ]" by
[ ]. 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 the offered Certificates should be evaluated
independently of similar security ratings assigned to other kinds of securities.
The ratings assigned by [ ] to pass-through certificates address the
likelihood of the receipt by the related certificateholders of their allocable
share of principal and/or interest on the underlying assets. [ ] ratings take
into consideration the credit quality of the related underlying assets, any
credit support arrangements, structural and legal aspects associated with such
certificates, and the extent to which the payment stream on such underlying
assets is adequate to make payments required by such certificates. [ ] ratings
on such certificates do not, however, constitute a statement regarding frequency
of prepayments on the underlying assets or as to whether yield may be adversely
affected as a result thereof. An explanation of the significance of such
ratings may be obtained from [ ], [ ], New York, New York [ ], telephone [( )-
].
The Seller has not requested a rating on the Offered Certificates by
any rating agency other than [ ]. However, there can be no assurance as to
whether any other rating agency will rate any or all of the Offered
Certificates, or if it did, what rating would be assigned to the Offered
Certificates by any such other rating agency. A rating on any or all of the
Offered Certificates by certain other rating agencies, if assigned at all, may
be lower than the rating assigned to such Certificates by [ ].
LEGAL INVESTMENT
The [Senior and Class M Certificates] offered hereby will not
constitute "mortgage related securities" under the Secondary Mortgage Market
Enhancement Act of 1984, as amended ("SMMEA") until such time as the balance of
the Pre-Funding Account is reduced to zero. At such time the [Senior and Class M
Certificates] will constitute legal investments for certain types of investors
to the extent provided in SMMEA. Such institutions should consult their own
legal advisors in determining whether and to what extent the Senior Certificates
constitute legal investments for such investors.
Because the Class B-1 Certificates will not, at the time of issuance,
be rated in one of the two highest rating categories of Moody's and Fitch, the
Class B-1 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 B-1 Certificates. No representation
is made as to any regulatory requirements or considerations (including without
limitation regulatory capital or permissible investment requirements) applicable
to the purchase of the Class B-1 Certificates by banks, savings and loan
associations or other financial institutions.
S-68
<PAGE>
Such institutions should consult their own legal advisors in determining whether
and to what extent the Offered Certificates constitute legal investments for
such investors. See "Legal Investment" in the Prospectus.
METHOD OF DISTRIBUTION
Subject to the terms and conditions of the Underwriting Agreement
dated [ , 19 ] (the "Underwriting Agreement"), the Seller has agreed to sell,
and [each of ] (the "Underwriters") has agreed to purchase from the Seller[s],
the respective principal amounts of the Offered Certificates set forth below its
name in the table below.
<TABLE>
<CAPTION>
Underwriters
------------
<S> <C>
Principal Amount of
- -------------------
Class A-1 Certificates................................................. $
[Class A-IO Certificates................................................ $ ]
Class M Certificates.................................................... $
Class B-1 Certificates.................................................. $
</TABLE>
In the Underwriting Agreement, the Underwriters have agreed, subject
to the terms and conditions set forth therein, to purchase all of the Offered
Certificates offered hereby if any Offered Certificates are purchased. In the
event of default by an Underwriter, the Underwriting Agreement provides that, in
certain circumstances, the Underwriting Agreement may be terminated.
The Seller has been advised by the Underwriters that they propose
initially to offer the Offered Certificates to the public at the prices set
forth herein, and to certain dealers at such prices less the initial concession
not in excess of [ %] of the Class A-1 Certificate Balance, [ %] of the Class A-
IO offering price, [ %] of the Class M Certificate Balance and [ %] of the Class
B-1 Certificate Balance. The Underwriters may allow dealers, and such dealers
may allow, a concession not in excess of [ %] of the Class A-1 Certificate
Balance, [[ %] of the Class A-IO offering price,] [ %] of the Class M
Certificate Balance and [ %] of the Class B-1 Certificate Balance. After the
initial public offering of the Offered Certificates, the public offering prices
and such concessions may be changed.
The Underwriting Agreement provides that the Seller will indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended, or contribute to payments the Underwriters
may be required to make in respect thereof.
The Underwriters will reimburse certain expenses of the Seller.
In connection with the sale of the Offered Certificates, the
Underwriters and other persons participating in the sale may engage in
transactions that stabilize, maintain or otherwise affect the price of the
Offered Certificates. Specifically, the Underwriters may over-allot in
connection with the sale, creating a short position in the Offered Certificates
for their own account. To cover over-allotments or to stabilize the price of
the Offered Certificates, the Underwriters may bid for, and purchase, Offered
Certificates in the open market. The Underwriters may also impose a penalty bid
whereby they may reclaim selling concessions allowed to an underwriter or a
dealer for distributing the Offered Certificates, if the Underwriters
S-69
<PAGE>
repurchase previously distributed Offered Certificates in transactions to cover
their short position, in stabilization transactions or otherwise. Finally, the
Underwriters may bid for, and purchase, Offered Certificates in market making
transactions. These activities may stabilize or maintain the market price of the
Offered Certificates above market levels that may otherwise prevail. The
Underwriters are not required to engage in these activities and may end any of
these activities at any time.
USE OF PROCEEDS
[Substantially all of the net proceeds to be received from the sale of
the Offered Certificates will be used by the Seller for general corporate
purposes, including the purchase of the Contracts and the payment of other
expenses connected with pooling the Contracts and issuing the Offered
Certificates.]
LEGAL MATTERS
Certain legal matters relating to the Offered Certificates, including
legal matters relating to material federal income tax consequences concerning
the Offered Certificates, will be passed upon for the Seller by Orrick,
Herrington & Sutcliffe LLP, Los Angeles, California and for the Underwriters by
[ ].
S-70
<PAGE>
INDEX OF SIGNIFICANT DEFINITIONS
<TABLE>
<S> <C>
Additional Contracts......................................... 3
Agreement.................................................... 2, 36
Alternative Credit Enhancement............................... 10, 51
Available Distribution Amount................................ 4, 43
CBE.......................................................... 34
Cede......................................................... 12
Cedel........................................................ 56
Cedel Participants........................................... 58
Certificate Account.......................................... 36, 42
Certificate Balance.......................................... 7, 47
Certificate Owners........................................... 12, 36
Certificateholders........................................... ii, 12
Certificates................................................. i
Class A Certificates......................................... ii, 1
Class A Interest Distribution Amount......................... 6, 45
Class B Certificates......................................... 1
Class B Interest Distribution Amount......................... 6
Class B-2 Distribution Amount................................ 50
Class B-2 Principal Liquidation Loss Amount.................. 51
Class M Certificates......................................... 1
Class M Interest Distribution Amount......................... 6, 46
Class R Certificates......................................... 1
Closing Date................................................. 41
Code......................................................... 13
Collection Period............................................ 2
Contract Files............................................... 38
Contract Pool................................................ i
Contract Schedule............................................ 38
Contracts.................................................... i, 2
Determination Date........................................... 43
Distribution Date............................................ ii
DOL.......................................................... 63
DTC.......................................................... 1
Due Date..................................................... 3
Eligible Institution......................................... 42
Eligible Investments......................................... 42
Eligible Substitute Contract................................. 41
Enhancement Payment.......................................... 50
ERISA........................................................ 63
Excess Contract Payment...................................... 44
Excess Interest.............................................. 49
Exemption.................................................... 63
FDIC......................................................... 42
Fiduciary.................................................... 64
First Distribution Date...................................... 2
</TABLE>
S-71
<PAGE>
<TABLE>
<S> <C>
Formula Principal Distribution Amount.......................... 6
GFC............................................................ ii
GreenPoint..................................................... i
Initial Pass-Through Rate...................................... 16
Land Home Contracts............................................ 3
Land-in-Lieu Contracts......................................... 3
Legal Investment............................................... 14
Limited Guarantee.............................................. ii, 10, 50
Liquidated Contract............................................ 46
Liquidation Proceeds........................................... 7, 46
Manufactured Home.............................................. 2
Minimum Termination Amount..................................... 53
Monthly Advance................................................ 11
Monthly Servicing Fee.......................................... 55
Net Contract Rate.............................................. 16
Net Liquidation Proceeds....................................... 49
Nonrecoverable Advance......................................... 50
Notional Principal Amount...................................... 4
Offered Certificates........................................... ii
OID............................................................ 13
Outstanding Amount Advanced.................................... 50
Percentage Interest............................................ 4
Plans.......................................................... 63
Pool Scheduled Principal Balance............................... 7
Pre-Funded Amount.............................................. 41
Pre-Funding Account............................................ 41
Pre-Funding Period............................................. 41
Prepayment and Yield Considerations............................ 12
Prepayment Model............................................... 30
Prospectus..................................................... i
PTCE 95-60..................................................... 67
Record Date.................................................... 37
REMIC.......................................................... 61
REMIC Provisions............................................... 61
Replaced Contract.............................................. 41
Reserve Account................................................ 7, 47
Reserve Account Cap............................................ 48
Reserve Account Draw Amount.................................... 7
Restricted Group............................................... 64
Scheduled Principal Balance.................................... 6
Scheduled Principal Reduction Amount........................... 46
Seller......................................................... i
Senior Certificate Balance..................................... 7
Senior Certificates............................................ ii, 1
Series 199[ ]-[ ] Regular Certificates......................... 1
Series 199[ ]-[ ] Residual Certificates........................ 1
</TABLE>
S-72
<PAGE>
<TABLE>
<S> <C>
Servicer.......................................................... 1
SMMEA............................................................. 14, 68
Structuring Assumptions........................................... 31
Subordinate Certificate Balance................................... 7
Subordinate Certificates.......................................... ii, 1
Subsequent Contracts.............................................. 3
Subsequent Transfer Dates......................................... 41
Total Regular Principal Amount.................................... 6
Trust Fund........................................................ i, 4
Trustee........................................................... 1, 55
Underwriters...................................................... iii, 69
Underwriting Agreement............................................ 69
Value............................................................. 18
WAC............................................................... 29
WAM............................................................... 29
Yield Table....................................................... 34
</TABLE>
S-73
<PAGE>
ANNEX I
GLOBAL CLEARANCE, SETTLEMENT AND
TAX DOCUMENTATION PROCEDURES
Except in certain limited circumstances, the globally offered
GreenPoint Manufactured Housing Contract Trust V Senior/Subordinate Pass-Through
Certificates, Series 1998-2 (the "Global Securities") will be available only in
book-entry form. Investors in the Global Securities may hold such Global
Securities through any of The Depository Trust Company ("DTC"), Cedel or
Euroclear. The Global Securities will be tradable as home market instruments
in both the European and U.S. domestic markets. Initial settlement and all
secondary trades will settle in same-day funds.
Secondary market trading between investors holding Global Securities
through Cedel and Euroclear will be conducted in the ordinary way in accordance
with their normal rules and operating procedures and in accordance with
conventional eurobond practice (i.e., seven calendar day settlement).
Secondary market trading between investors holding Global Securities
through DTC will be conducted according to the rules and procedures applicable
to U.S. corporate debt obligations.
Secondary cross-market trading between Cedel or Euroclear and DTC
Participants holding Certificates will be effected on a delivery-against-payment
basis through the respective Depositaries of Cedel and Euroclear (in such
capacity) and as DTC Participants.
Non-U.S. holders (as described below) of Global Securities will be
subject to U.S. withholding taxes unless such holders meet certain requirements
and deliver appropriate U.S. tax documents to the securities clearing
organizations or their participants.
INITIAL SETTLEMENT
All Global Securities will be held in book-entry form by DTC in the
name of Cede & Co. as nominee of DTC. Investors' interests in the Global
Securities will be represented through financial institutions noting on their
behalf as direct and indirect Participants in DTC. As a result, Cedel and
Euroclear will hold positions on behalf of their participants through their
respective Depositaries, which in turn will hold such positions in accounts as
DTC Participants.
Investors electing to hold their Global Securities through DTC will
follow the settlement practices applicable conventional eurobonds, except that
there will be no temporary global security and no "lock-up" or restricted
period. Investors securities custody accounts will be credited with their
holdings against payment in same-day funds on the settlement date.
Investors electing to hold their Global Securities through Cedel or
Euroclear accounts will follow the settlement procedures applicable to
conventional eurobonds, except that there will be no temporary global security
and no "lock-up" restricted period. Global Securities
I-1
<PAGE>
will be credited to the securities custody accounts on the settlement date
against payment same-day funds.
SECONDARY MARKET TRADING
Since the purchaser determines the place of delivery, it is important
to establish at the time of the trade where both the purchaser's and seller's
accounts are located to ensure that settlement can be made on the desired value
date.
Trading between DTC Participants. Secondary market trading between
DTC Participants will be settled using the procedures applicable to prior
manufactured housing contract pass-through certificates issues in same-day
funds.
Trading between Cedel and/or Euroclear Participants. Secondary market
trading between Cedel Participants or Euroclear Participants will be settled
using the procedures applicable to conventional eurobonds in same-day funds.
Trading between DTC seller and Cedel or Euroclear purchaser. When
Global Securities are to be transferred from the account of a DTC Participant to
the account of a Cedel Participant or a Euroclear Participant, the purchaser
will send instructions to Cedel or Euroclear through a Cedel Participant or
Euroclear Participant at least one business day prior to settlement. Cedel or
Euroclear will instruct the respective Depositary, as the case may be, to
receive the Global Securities against payment. Payment will include interest
accrued on the Global Securities from and including the last coupon payment date
to and excluding the settlement date, on the basis of the actual number of days
in such accrual period and a year assumed to consist of 360 days. For
transactions settling on the 31st of the month, payment will include interest
accrued to and excluding the first day of the following month. Payment will
then be made by the respective Depositary of the DTC Participant's account
against delivery of the Global Securities. After settlement has been completed,
the Global Securities will be credited to the respective clearing system and by
the clearing system, in accordance with its usual procedures, to the Cedel
Participant's or Euroclear Participant's account. The securities credit will
appear the next day (European time) and the cash debt will be back-valued to,
and the interest on the Global Securities will accrue from, the value date
(which would be the preceding day when settlement occurred in New York). If
settlement is not completed on the intended value date (i.e., the trade fails),
the Cedel or Euroclear cash debt will be valued instead as of the actual
settlement date.
Cedel Participants and Euroclear Participants will need to make
available to the respective clearing systems the funds necessary to process
same-day funds settlement. The most direct means of doing so is to preposition
funds for settlement, either from cash on hand or existing lines of credit, as
they would for any settlement occurring within Cedel or Euroclear. Under this
approach, they may take on credit exposure to Cedel or Euroclear until the
Global Securities are credited to their accounts one day later.
As an alternative, if Cedel or Euroclear has extended a line of credit
to them, Cedel Participants or Euroclear Participants can elect not to
preposition funds and allow that credit line to be drawn upon the finance
settlement. Under this procedure, Cedel Participants or Euroclear Participants
purchasing Global Securities would incur overdraft charges for one day,
I-2
<PAGE>
assuming they cleared the overdraft when the Global Securities were credited to
their accounts. However, interest on the Global Securities would accrue from the
value date. Therefore, in many cases the investment income on the Global
Securities earned during that one-day period may substantially reduce or offset
the amount of such overdraft charges, although this result will depend on each
Cedel Participant's or Euroclear Participant's particular cost of funds.
Since the settlement is taking place during New York business hours,
DTC Participants can employ their usual procedures for sending Global Securities
to the respective European Depositary for the benefit of Cedel Participants or
Euroclear Participants. The sale proceeds will be available to the DTC seller
on the settlement date. Thus, to the DTC Participants a cross-market
transaction will settle no differently than a trade between two DTC
Participants.
Trading between Cedel or Euroclear Seller and DTC Purchaser. Due to
time zone differences in their favor, Cedel Participants and Euroclear
Participants may employ their customary procedures for transactions in which
Global Securities are to be transferred by the respective clearing system,
through the respective Depositary, to a DTC Participant. The seller will send
instructions to Cedel Participants or Euroclear Participants through a Cedel
Participant or Euroclear Participant at least one business day prior to
settlement. In these cases Cedel or Euroclear will instruct the respective
Depositary, as appropriate, to deliver the Global Securities to the DTC
Participant's account against payment. Payment will include interest accrued on
the Global Securities from and including the last coupon payment to and
excluding the settlement date on the basis of either the actual number of days
in such accrual period and a year assumed to consist of 360 days or a 360-day
year of twelve 30-day months, as applicable to the related class of Global
Securities. For transactions settling on the 31st of the month, payment will
include interest accrued to and excluding the first day of the following month.
The payment will then be reflected in the account of the Cedel Participant or
Euroclear Participant the following day, and receipt of the cash proceeds in the
Cedel Participant's or Euroclear Participant's account would be back-valued to
the value date (which would be the preceding day, when settlement occurred in
New York). Should the Cedel Participant or Euroclear Participant have a line of
credit with its respective clearing system and elect to be in debt in
anticipation of receipt of the sale proceeds in its account, the back-valuation
will extinguish any overdraft incurred over that one-day period. If settlement
is not completed on the intended value date (i.e., the trade fails), receipt of
the cash proceeds in the Cedel Participant's or Euroclear Participant's account
would instead be valued as of the actual settlement date.
Finally, day traders that use Cedel or Euroclear and that purchase
Global Securities from DTC Participants for delivery to Cedel Participants or
Euroclear Participants should note that these trades would automatically fail on
the sale side unless affirmative action were taken. At least three techniques
should be readily available to eliminate this potential problem:
(a) borrowing through Cedel or Euroclear for one day (until the
purchase side of the day trade is reflected in their Cedel or Euroclear
accounts) in accordance with the clearing system's customary procedures;
I-3
<PAGE>
(b) borrowing the Global Securities in the U.S. from a DTC
Participant no later than one day prior to settlement, which would give the
Global Securities sufficient time to be reflected in their Cedel or
Euroclear account in order to settle the sale side of the trade; or
(c) staggering the value dates for the buy and sell sides of the
trade so that the value date for the purchase from the DTC Participant is
at least one day prior to the value date for the sale to the Cedel
Participant or Euroclear Participant.
CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS
A beneficial owner of Global Securities holding securities through
Cedel or Euroclear (or through DTC if the holder has an address outside the
U.S.) will be subject to the 30% U.S. withholding tax that generally applies to
payments of interest (including original issue discount) on registered debt
issued by U.S. Persons, unless, under currently applicable laws, (i) each
clearing system, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business in the chain of
intermediaries between such beneficial owner and the U.S. entity required to
withhold tax complies with applicable certification requirements and (ii) such
beneficial owner takes one of the following steps to obtain an exemption or
reduced tax rate:
Exemption for non-U.S. Persons (Form W-8). Beneficial owners of
Global Securities that are non-U.S. Persons can obtain a complete exemption from
the withholding tax by filing a signed Form W-8 (Certificate of Foreign Status).
If the information shown on Form W-8 changes, a new Form W-8 must be filed
within 30 days of such change.
Exemption for non-U.S. Persons with effectively connected income (Form
4224). A non-U.S. Person, including a non-U.S. corporation or bank with a U.S.
branch, for which the interest income is effectively connected with its conduct
of a trade or business in the United States, can obtain an exemption from the
withholding tax by filing Form 4224 (Exemption from Withholding of Tax on Income
Effectively Connected with the Conduct of a Trade or Business in the United
States).
Exemption or reduced rate for non-U.S. Persons resident in treaty
countries (Form 1001). Non-U.S. Persons that are Certificate Owners residing in
a country that has a tax treaty with the United States can obtain an exemption
or reduced tax rate (depending on the treaty terms) by filing Form 1001
(Ownership, Exemption or Reduced Rate Certificate). If the treaty provides only
for a reduced rate, withholding tax will be imposed at that rate unless the
filer alternatively files Form W-8. Form 1001 may be filed by the Certificate
Owner or his agent.
Exemption for U.S. Persons (Form W-9). U.S. Persons can obtain a
complete exemption from the withholding tax by filing Form W-9 (Payer's Request
for Taxpayer Identification Number and Certification).
U.S. Federal Income Tax Reporting Procedure. The Certificate Owner of
a Global Security or, in the case of a Form 1001 or a Form 4224 filer, his
agent, files by submitting the appropriate form to the person through whom it
holds (the clearing agency, in the case of persons holding directly on the books
of the clearing agency). Form W-8 and Form 1001 are
I-4
<PAGE>
effective for three calendar years and Form 4224 is effective for one calendar
year. The term "U.S. Person" means (i) a citizen or resident of the United
States, (ii) a corporation or partnership organized in or under the laws of the
United States or any political subdivision thereof or (iii) an estate or trust
the income of which is includible in gross income for United States tax
purposes, regardless of its source. This summary does not deal with all aspects
of U.S. Federal income tax withholding that may be relevant to foreign holders
of the Global Securities. Investors are advised to consult their own tax
advisors for specific tax advice concerning their holding and disposing of the
Global Securities. Further, the U.S. Treasury Department has recently finalized
new regulations that will revise some aspects of the current system for
withholding on amounts paid to foreign persons. Under these regulations,
interest or OID paid to a nonresident alien would continue to be exempt from
U.S. withholding taxes (including backup withholding) provided that the holder
complies with the new certification procedures.
I-5
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
PROSPECTUS
SUBJECT TO COMPLETION, DATED JULY 23, 1998
GREENPOINT CREDIT CORP., SELLER AND SERVICER
MANUFACTURED HOUSING CONTRACT TRUST PASS-THROUGH CERTIFICATES
(ISSUABLE IN SERIES)
Manufactured Housing Pass-Through Certificates ("Certificates") of one
or more series (each, a "Series") may be sold from time to time under this
Prospectus and a Prospectus Supplement for each such Series. The Certificates
of each Series may be issued in one or more classes or subclasses (each, a
"Class"), as further described herein. If the Certificates of a Series are
issued in more than one Class, all or less than all of such Classes may be sold
under this Prospectus, and there may be separate Prospectus Supplements for one
or more of such Classes so sold. Any reference herein to the Prospectus
Supplement relating to a Series comprised of more than one Class should be
understood to refer to each of the Prospectus Supplements relating to the
Classes sold hereunder.
The Certificates of each Series will represent interests, as specified
in the related Prospectus Supplement, in a trust fund (a "Trust Fund") created
by GreenPoint Credit Corp. ("GreenPoint" or the "Seller").
CERTAIN FACTORS SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE
CERTIFICATES. SEE "RISK FACTORS' HEREIN AND IN THE RELATED PROSPECTUS
SUPPLEMENT.
THE CERTIFICATES WILL NOT REPRESENT INTERESTS IN OR OBLIGATIONS OF
GREENPOINT OR, UNLESS OTHERWISE SPECIFIED IN THE RELATED PROSPECTUS SUPPLEMENT,
ANY OF ITS AFFILIATES. THE CERTIFICATES WILL NOT BE INSURED OR GUARANTEED BY
ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY, THE UNDERWRITER OR ANY OF ITS
AFFILIATES, GREENPOINT OR (EXCEPT AS OTHERWISE SPECIFIED IN THE RELATED
PROSPECTUS SUPPLEMENT) ANY OF ITS AFFILIATES. EXCEPT AS OTHERWISE SPECIFIED IN
THE RELATED PROSPECTUS SUPPLEMENT, THE COLLECTIONS ON THE CONTRACTS WILL
CONSTITUTE THE ONLY SOURCE OF FUNDS FOR PAYMENT ON THE CERTIFICATES.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
This Prospectus may not be used to consummate sales of Certificates
unless accompanied by a Prospectus Supplement.
The date of this Prospectus is ________, 1998.
<PAGE>
The Trust Fund for each Series of Certificates will be separate from
the Trust Fund for any other Series of Certificates. Each Trust Fund will
include a pool (each, a "Contract Pool") of manufactured housing installment
sales contracts and installment loan agreements (the "Contracts") together with
certain contract rights and other rights relating to such Contracts. GreenPoint
will act as the servicer of the Contracts in each Trust Fund (together with any
successor servicer appointed as described herein, the "Servicer").
The Contracts comprising each Contract Pool will be conveyed to the
relevant Trust Fund by the Seller. Each Contract will have been either (i)
originated or purchased by the Seller, in each case on an individual basis in
the ordinary course of its business or (ii) purchased by the Seller in bulk from
other lenders or finance companies (including from Bank of America, FSB in the
Acquisition (as defined herein)), from governmental agencies or
instrumentalities or from other entities. Interests in each Trust Fund will be
evidenced by a separate Series of Certificates.
If a Series of Certificates is comprised of more than one Class, the
related Prospectus Supplement will set forth the interest in the applicable
Trust Fund represented by each Class sold hereunder. The timing of
distributions of principal or of interest or of both to the holders of
Certificates of such Classes may be on a sequential, pro-rata or other basis as
specified in the related Prospectus Supplement. In addition, if specified in
the related Prospectus Supplement, the rights of the holders of the Certificates
of one or more Classes of a multiple-Class Series to receive distributions with
respect to some or all of the assets of the related Trust Fund may be
subordinate to such rights of the holders of the Certificates of one or more
other Classes.
Neither the Seller nor any of its affiliates will have any obligations
with respect to any Series of Certificates except, in the case of the Seller,
for obligations arising from certain representations and warranties with respect
to the Contracts sold by it in the related Contract Pool and, in the case of the
Servicer, for certain contractual servicing obligations, each as further
described herein. See "Risk Factors--No Recourse" herein.
To the extent specified in the related Prospectus Supplement, the
holders of the Certificates of any Series, or of one or more Classes within a
Series, may be entitled to the benefit of overcollateralization or subordination
of one or more Classes of Certificates within such Series, one or more spread
accounts or other reserve funds, one or more letters of credit, one or more
surety bonds or other credit facilities and/or one or more certificate purchase
agreements or other liquidity facilities. See "Credit and Liquidity
Enhancement" herein and the related Prospectus Supplement.
Unless otherwise specified in the applicable Prospectus Supplement,
the Certificates of a Series or of any Class within a Series will be issuable in
the form of one or more global certificates represented by book-entries on the
records of a depository or participating members thereof. See "Reports to
Certificateholders," "Risk Factors," and "Description of the Certificates--
Global Certificates" herein and the related Prospectus Supplement.
There will have been no public market for any Certificates sold
hereunder prior to the offering thereof and there is no assurance that any such
market will develop. The
ii
<PAGE>
Underwriters named in the Prospectus Supplement relating to a Series may from
time to time buy and sell Certificates of such Series, but there can be no
assurance that an active secondary market therefor will develop, and there is no
assurance that any such market, if established, will continue. See "Risk
Factors" herein.
An election may be made to cause the Trust Fund relating to a Series
of Certificates to be treated as a real estate mortgage investment conduit (a
"REMIC") for federal income tax purposes. See "Certain Federal Income Tax
Consequences" herein.
iii
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE..............................................iv
ADDITIONAL INFORMATION.......................................................................iv
REPORTS TO CERTIFICATEHOLDERS.................................................................v
SUMMARY OF TERMS..............................................................................1
RISK FACTORS.................................................................................10
THE CONTRACT POOLS...........................................................................14
THE SELLER...................................................................................18
The Acquisition.........................................................................18
Loan Originations.......................................................................19
Underwriting Practices..................................................................19
Servicing...............................................................................21
PREPAYMENT AND YIELD CONSIDERATIONS..........................................................23
Prepayment Considerations...............................................................23
Yield Considerations....................................................................24
DESCRIPTION OF THE CERTIFICATES..............................................................25
General.................................................................................26
Conveyance of Contracts.................................................................27
Payments on Contracts...................................................................28
Distributions on Certificates...........................................................28
Global Certificates.....................................................................31
Optional and Mandatory Repurchase of Certificates; Optional Termination and
Termination Auction................................................................32
Termination of the Agreement............................................................34
Collection and Other Servicing Procedures...............................................34
Servicing Compensation and Payment of Expenses; Certain Matters Regarding
the Servicer.......................................................................35
Amendment...............................................................................38
The Trustee.............................................................................39
Indemnification.........................................................................39
CREDIT AND LIQUIDITY ENHANCEMENT.............................................................40
Subordination...........................................................................40
Reserve Funds...........................................................................42
Credit Facilities.......................................................................43
Liquidity Facilities....................................................................43
CERTAIN FEDERAL INCOME TAX CONSEQUENCES......................................................44
</TABLE>
<PAGE>
TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
Page
<S> <C>
REMIC Elections.........................................................................45
REMIC Certificates......................................................................45
Non-REMIC Certificates..................................................................69
OTHER TAX CONSEQUENCES.......................................................................73
RESTRICTIONS ON TRANSFER OF REMIC RESIDUAL CERTIFICATES......................................73
TAX-EXEMPT INVESTORS.........................................................................74
LEGAL INVESTMENT.............................................................................74
ERISA CONSIDERATIONS.........................................................................75
CERTAIN LEGAL ASPECTS OF THE CONTRACTS.......................................................77
The Contracts (Other than Land Home and Land-in Lieu Contracts).........................77
Land Home and Land-in-Lieu Contracts....................................................81
Certain Matters Relating to Insolvency..................................................84
Consumer Protection Laws................................................................84
Transfers of Manufactured Homes; Enforceability of Restrictions on Transfer.............85
Applicability of Usury Laws.............................................................85
RATINGS......................................................................................86
METHOD OF DISTRIBUTION.......................................................................86
USE OF PROCEEDS..............................................................................87
LEGAL MATTERS................................................................................87
EXPERTS......................................................................................88
INDEX OF SIGNIFICANT DEFINITIONS.............................................................89
</TABLE>
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
With respect to any Class of Certificates that is supported by a
guarantee of GreenPoint Financial Corp. ("GFC"), GFC's Annual Report on
Form 10-K for the year ended December 31, 1997 and Quarterly Reports on
form 10-Q for the periods ended March 31 and June 30, 1998, which have been
filed with the Commission, are hereby incorporated by reference in this
Prospectus and the related Prospectus Supplement.
All reports and other documents filed by the Servicer with respect to
the Trust Fund for any Series of Certificates, pursuant to Section 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") subsequent to the date of this Prospectus and prior to the termination of
the offering of the Certificates of such Series shall be deemed to be
incorporated by reference into this Prospectus and to be made a part hereof.
All reports and other documents filed by the GFC pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of the offering of the Certificates of such Series
shall be deemed to be incorporated by reference into this Prospectus and the
Prospectus Supplement relating to a Class of Certificates that is supported by a
guarantee of GFC, and to be a part thereof from the respective dates of filing
of such documents. Any statement contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as modified or superseded, to constitute a part of this Prospectus.
Upon request by any person to whom this Prospectus and the applicable
Prospectus Supplement are delivered in connection with the offering of one or
more Classes of Certificates, the Servicer will provide or cause to be provided
without charge a copy of any such documents and/or reports incorporated herein
by reference, in each case to the extent such documents or reports relate to
such Classes of Certificates, other than the exhibits to such documents (unless
such exhibits are specifically incorporated by reference in such documents).
Requests to the Servicer should be directed orally or in writing to GreenPoint
Credit Corp., telephone number (212) 834-1000. The Seller has determined that
its financial statements are not material to the offering of any Certificates.
ADDITIONAL INFORMATION
This Prospectus contains, and the Prospectus Supplement for each
Series of Certificates will contain, a summary of certain material terms of
certain of the documents referred to herein and therein, but neither contains or
will contain all of the information set forth in the Registration Statement of
which this Prospectus is a part (the "Registration Statement"). For further
information, reference is made to such Registration Statement and the exhibits
thereto which the Seller has filed with the Securities and Exchange Commission
(the "Commission"), Washington, D.C., under the Securities Act. Statements
contained in this Prospectus and any Prospectus Supplement describing a
provision of any contract or other document referred to are summaries, and if
this Prospectus or such Prospectus Supplement indicates that such contract or
other document has been filed as an exhibit to the Registration Statement,
reference is made to
iv
<PAGE>
the copy of the contract or other document filed as an exhibit, each such
statement being qualified in all respects by reference to the actual provision
being described. Copies of the Registration Statement can be inspected and, upon
payment of the Commission's prescribed charges, copies can be obtained at the
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the Commission's following regional
offices: Northeast Regional Office, 7 World Trade Center, Suite 1300, New York,
New York 10048; and Midwest Regional Office, Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. The Commission maintains a web site
at http://www.sec.gov that contains reports and other documents filed by
registrants electronically with the Commission.
REPORTS TO CERTIFICATEHOLDERS
Unless and until Definitive Certificates (as defined herein) with
respect to a Trust Fund are issued, monthly and annual reports, which contain
unaudited information concerning the Trust Fund and are prepared by the
Servicer, will be sent on behalf of the Trust Fund to Cede & Co. ("Cede"), as
nominee of The Depository Trust Company ("DTC") and registered holder of the
Certificates offered hereby, pursuant to the Agreement (as defined herein). See
"Description of the Certificates--Global Certificates." Such reports will not
constitute financial statements prepared in accordance with generally accepted
accounting principles. The Agreement will not require the sending of, and the
Seller does not intend to send, any of its financial reports to registered
holders (the "Certificateholders") of the Certificates offered hereby or to
owners (the "Certificate Owners") of beneficial interests in the Certificates.
The Servicer will file with the Commission such periodic reports with respect to
the Trust Fund as are required under the Exchange Act, and the rules and
regulations of the Commission thereunder. If the number of Certificateholders
of record is below 300, the Certificates may cease to be subject to the periodic
reporting requirements of the Exchange Act. In that case, the Servicer may
cease to file such reports with the Commission. The Trustee would, however,
continue to provide periodic reports to Certificateholders as and to the extent
described in the Prospectus Supplement.
v
<PAGE>
SUMMARY OF TERMS
This summary is qualified in its entirety by reference to the detailed
information appearing elsewhere in this Prospectus and by reference to the
information with respect to each Series of Certificates contained in the related
Prospectus Supplement. Reference is made to the "Index of Significant
Definitions" herein beginning at page 90 for the location in this Prospectus of
the definitions of certain capitalized terms.
<TABLE>
<S> <C>
Title of Certificates............... Manufactured Housing Contract Trust Pass-Through Certificates
(Issuable in Series).
Seller.............................. GreenPoint Credit Corp. ("GreenPoint").
Servicer............................ GreenPoint (together with any successor servicer under the
Agreement (as defined herein), the "Servicer").
Risk Factors........................ Certain risk factors are particularly relevant to a decision to
invest in any Certificates sold hereunder. See "Risk Factors"
herein.
The Contracts....................... The Certificates of any Series will represent undivided
ownership interest in a pool (a "Contract Pool") of certain
manufactured housing installment sales contracts and installment
loan agreements (each, a "Contract" and, collectively, the
"Contracts"). Contracts comprising a Contract Pool will have
been either (i) originated or purchased by the Seller, in each
case on an individual basis in the ordinary course of its
business or (ii) purchased by the Seller in bulk from other
lenders or finance companies (including from Bank of America,
FSB in the Acquisition (as defined herein) and including from
lenders and finance companies with whom GreenPoint may have or
may establish referral arrangements), from governmental agencies
or instrumentalities or from other entities. Each Contract will
be secured by a new or used manufactured home (each manufactured
home securing a Contract being referred to herein as a
"Manufactured Home") and, in certain cases, by a mortgage, deed
of trust or other instrument securing the real estate on which
the Manufactured Home is located ("Land Home" or "Land-in-Lieu
Contract"). Unless otherwise specified in the related
Prospectus Supplement, none of the Contracts or collections
thereon will be insured or guaranteed by any governmental agency
or instrumentality. The applicable Prospectus Supplement will
specify if any of the related Contracts are Land Home or
Land-in-Lieu Contracts and whether the annual percentage rate
("Contract Rate") for each such Contract is fixed, is variable
or increases ("steps up") in specified increments on certain
dates. The Prospectus Supplement relating to each Series of
Certificates will provide information as of the first day of the
month of initial
</TABLE>
1
<PAGE>
<TABLE>
<S> <C>
issuance of such Certificates (the "Cut-off Date") with respect
to, among other things, (i) the number, the aggregate unpaid
principal balance, and the range of outstanding principal
balances of the Contracts comprising the related Contract
Pool; (ii) the weighted average of the Contract Rates
("Weighted Average Contract Rate") of the Contracts and the
distribution of Contract Rates as of the related Cut-off Date;
(iii) the weighted average original and remaining terms to
maturity of the Contracts and the distribution of remaining
terms to maturity; (iv) the average outstanding principal
balance of the Contracts; (v) the geographical distribution of
the related Manufactured Homes at origination; (vi) the years of
origination of the Contracts; (vii) the distribution of original
principal balances of the Contracts; (viii) the percentage
amount of Contracts secured by new or used Manufactured Homes;
(ix) the range of and weighted average loan-to-value ratios at
origination; and (x) the month and year in which the final
scheduled payment date for the Contract with the latest maturity
is scheduled to occur. If a Contract Pool contains Step-Up Rate
Contracts (as defined herein), the related Prospectus Supplement
will specify the percentage of the Contract Pool comprised of
such Contracts, the period during which the Contract Rates for
such Contracts will be stepped up, the range of increases in
such Contract Rates and the range of increases in the Scheduled
Payments (as defined herein) for such Contracts. If a Contract
Pool contains variable rate Contracts, the related Prospectus
Supplement will contain a description of the basis on which such
rates are determined, including any maximum or minimum rates and
the frequency with which any such rate adjusts. The Prospectus
Supplement relating to a Series of Certificates also will
contain certain information about Contracts in the related Trust
Fund that are Land Home Contracts (as defined herein),
Land-in-Lieu Contracts (as defined herein) or Contracts that are
partially guaranteed by the Veterans Administration or partially
insured by the Federal Housing Administration. In addition, if
so specified in the related Prospectus Supplement, additional
Contracts may be purchased from GreenPoint during the
Pre-Funding Period as defined in the related Prospectus
Supplement, from funds on deposit in a Pre-Funding Account, as
defined in the related Prospectus Supplement. To the extent
that the Seller believes such information to be material, any
Prospectus Supplement may also include additional information
concerning the related Contract Pool that is stored in the
electronic data processing system of the Seller.
Description of Certificates......... Each Series of Certificates will be issued pursuant to a pooling
and servicing agreement (each, an "Agreement") entered into by
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
GreenPoint as Seller and as Servicer, the trustee specified in
the related Prospectus Supplement (the "Trustee"), and such
other parties, if any, as may be specified in the related
Prospectus Supplement. The Certificates of a Series may be
issued in one or more classes or subclasses (each referred to in
this Prospectus as a "Class"). If the Certificates of a Series
are issued in more than one Class, the Certificates of all or
less than all of such Classes may be sold under this Prospectus,
and there may be separate Prospectus Supplements relating to one
or more of such Classes so sold. Any reference herein to the
Prospectus Supplement relating to a Series comprised of more
than one Class should be understood to refer to each of the
Prospectus Supplements relating to the Classes of such Series
sold hereunder. Any reference herein to the Certificates of a
Class should be understood as a reference to the Certificates of
a Class within a Series, the Certificates of a subclass within a
Class or all of the Certificates of a single-Class Series, as
the context may require.
The Certificates of each Series will evidence an interest, as
specified in the related Prospectus Supplement, in a trust fund
(a "Trust Fund") created by the Seller pursuant to an Agreement.
Each Trust Fund will include a Contract Pool together with
certain contract rights and other rights relating to such
Contracts (as discussed below). Each Trust Fund may from time
to time also include title to any Manufactured Home that is
repossessed following a Contract default, hazard insurance
claims and proceeds from the sale of any such Manufactured Home
or such hazard insurance claims. The Contracts comprising each
Contract Pool will be sold to the related Trust Fund by the
Seller.
Non-Recourse Obligations............ The Certificates will not represent interests in or obligations
of GreenPoint or, unless otherwise specified in the related
Prospectus Supplement, any of its affiliates. The Certificates
will not be insured or guaranteed by any governmental agency or
instrumentality, the Underwriter or any of its affiliates,
GreenPoint or (except as otherwise specified in the related
Prospectus Supplement) any of its affiliates. Except as
otherwise specified in the related Prospectus Supplement, the
collections on the Contracts will constitute the only source of
funds for payment on the Certificates.
Distributions on Certificates....... All Certificates will entitle the holders thereof to
distributions, on the dates specified in the related Prospectus
Supplement (each, a "Distribution Date"), from amounts collected
on the underlying Contracts. The Certificates of a Class may
entitle the holders thereof to (a) distributions of both
principal and interest, (b) distributions of principal only or
(c) distributions of interest only.
</TABLE>
3
<PAGE>
<TABLE>
<S> <C>
Such distributions will be made in accordance with a formula
described in the related Prospectus Supplement, and, unless
otherwise specified in such Prospectus Supplement,
distributions allocable to a Class of Certificates will be
applied first to interest, if any, and second to principal,
if any. To the extent specified in the related Prospectus
Supplement, the rights of the holders of the Certificates of
one or more Classes of a multiple-Class Series to receive
distributions of principal or of interest or both from
amounts collected on the Contracts may be subordinate to such
rights of the holders of Certificates of one or more other
Classes. See "Credit and Liquidity Enhancement" herein and the
applicable Prospectus Supplement.
A. Distributions of Principal...... If the Certificates of a Class entitle the holders thereof to
distributions of principal, the related Prospectus Supplement
will specify an initial aggregate principal balance for the
Certificates of the Class (the related "Certificate Balance")
and a method of computing the amount of principal, if any, to be
distributed to the holders of such Certificates on each
Distribution Date. Unless otherwise specified in the related
Prospectus Supplement, principal distributions for the
Certificates of a Class will be computed on the basis of a
formula which, on each Distribution Date, allocates all or a
portion of the Total Regular Principal Amount relating to that
Distribution Date to the Certificates of that Class. The "Total
Regular Principal Amount" is the total amount by which the
aggregate outstanding principal balance of the Contracts in the
related Contract Pool is reduced during one or more collection
periods prior to the Distribution Date designated in such
Prospectus Supplement (each, a "Collection Period"). Such
reduction may occur as a result of actuarially predetermined
scheduled principal reductions, receipt of principal
prepayments, liquidation of Contracts, losses on Contracts and
repurchases of Contracts under certain conditions, the failure
of a third party credit support provider, if any, to make a
required payment, or a combination of the foregoing events. See
"The Contract Pools," "Description of the Certificates--Conveyance
of Contracts," "Description of the Certificates--Optional and
Mandatory Repurchase of Certificates; Termination Auction" and
"Description of the Certificates--Collection and Other
Servicing Procedures" herein. Distributions with respect to
all or a portion of the Total Regular Principal Amount are
sometimes referred to herein as distributions of "Regular
Principal." The Total Regular Principal Amount with respect
to any Contract Pool and any Distribution Date may be
estimated in a manner specified in the related
Prospectus Supplement.
If, due to liquidation losses or other circumstances adversely
</TABLE>
4
<PAGE>
<TABLE>
<S> <C>
affecting the collections on the underlying Contract Pool, the
Contract collections available on any Distribution Date to make
distributions of Regular Principal to the holders of the
Certificates of a Class are less than the portion of the Total
Regular Principal Amount allocable to such Class, the deficiency
may be made up from (i) the amount, if any, by which the
interest collected on nondefaulted Contracts during the same
Collection Period exceeds the interest distribution due to the
holders of Certificates for the related Series, the servicing
fee of the Servicer (to the extent such servicing fee is payable
prior to distributions of interest to the holders of any Class
of Certificates) and other expenses of the Trust Fund or (ii)
funds available from one or more forms of credit support, but
only to the extent, if any, specified in the applicable
Prospectus Supplement. Additionally, if so specified in the
related Prospectus Supplement, if GreenPoint is acting as
Servicer, GreenPoint may subordinate the Monthly Servicing Fee
for a Series with respect to all, or a portion of, the amounts
due to the related Certificateholders on the terms and
conditions set forth in such Prospectus Supplement. See "Credit
and Liquidity Enhancement" herein. If specified in the
applicable Prospectus Supplement, the Certificate Balance of the
Certificates of a Class will be reduced on each Distribution
Date by the full amount of the portion of the Total Regular
Principal Amount allocable to such Class even if, due to
deficient Contract collections, a full distribution thereof is
not made.
The applicable distribution formula for each Class of a
multiple-Class Series may allocate the Total Regular Principal
Amount among the various Classes on a pro rata, sequential or
other basis, as specified in the related Prospectus Supplement.
If specified in the related Prospectus Supplement, any such
formula may entitle the holders of Certificates of a particular
Class to receive on certain Distribution Dates, distributions of
Regular Principal from particular sources of credit support upon
the occurrence of certain losses or delinquencies, even if the
holders of the Certificates of such Class would not have been
entitled to receive principal distributions on such Distribution
Dates from amounts collected on the underlying Contracts in the
absence of such losses or delinquencies.
If specified in the applicable Prospectus Supplement, the
Certificates of a Class may entitle the holders thereof to
special principal distributions on particular Distribution Dates
that are unrelated to the Total Regular Principal Amount for any
such Distribution Date ("Special Principal Distributions").
Special Principal Distributions may be made, under the
circumstances set forth in the applicable Prospectus Supplement,
from interest
</TABLE>
5
<PAGE>
<TABLE>
<S> <C>
collected on the underlying Contract Pool, from funds
available from one or more forms of credit support or from
such other source as may be specified in such Prospectus
Supplement. The Certificates of a Class having an initial
Certificate Balance may entitle the holders thereof to
distributions of Regular Principal only, to distributions of
Regular Principal and to Special Principal Distributions or to
Special Principal Distributions only. However, unless otherwise
stated in the related Prospectus Supplement, the Certificates of
a Class will not entitle the holders thereof to aggregate
principal distributions in excess of the initial Certificate
Balance for such Class.
B. Distributions of Interest....... The distribution formula for a Class of Certificates having an
initial Certificate Balance may, but need not, also specify a
method of computing the interest, if any, to be distributed on
specified Distribution Dates (which may include all or less than
all of the Distribution Dates) to the holders of the
Certificates of such Class. Such interest may be equal, subject
to such adjustments as may be described in the related
Prospectus Supplement, to a specified number of days' interest
on the applicable Certificate Balance (before giving effect to
any reduction thereof on such Distribution Date), calculated at
a rate (the "Pass-Through Rate") specified in the related
Prospectus Supplement. The Pass-Through Rate may be fixed or
variable, and, if specified in the related Prospectus
Supplement, may shift from a variable rate to a fixed rate under
the conditions specified in such Prospectus Supplement. See
"Description of the Certificates--Distributions on
Certificates--B. Distributions of Interest" herein for a
general description of the types of variable Pass-Through Rates
that might be applicable to a Class of Certificates.
Alternatively, such interest may be equal to all or a portion
(which portion will be determined as described in the related
Prospectus Supplement) of the interest due on the related
Contracts during one or more Collection Periods occurring prior
to such Distribution Date. Classes of Certificates that do not
entitle the holders thereof to receive distributions of
principal may nevertheless entitle such holders to receive
interest distributions calculated on this basis. If, due to
liquidation losses or other circumstances adversely affecting
the collections on the underlying Contract Pool, the Contract
collections available to make distributions of interest to the
holders of the Certificates of a Class are less than the amount
of interest computed as described above, the deficiency may be
made up from other sources, but only to the extent, if any,
specified in the related Prospectus Supplement. See "Credit and
Liquidity Enhancement" herein and the applicable Prospectus
Supplement.
</TABLE>
6
<PAGE>
<TABLE>
<S> <C>
C. Residual Interests.............. If specified in the related Prospectus Supplement, a Class of
Certificates in any Series may evidence a residual interest in
the related Trust Fund (the "Residual Interest"). Any such
Class will not have been registered under the Securities Act and
will not be offered or sold pursuant to this Prospectus.
Certificates evidencing a Residual Interest will not have the
features described above. Rather, unless otherwise specified in
such Prospectus Supplement, such Certificates will entitle the
holders thereof to receive distributions from amounts collected
on the Contracts which would not be needed to make distributions
to the holders of other interests in the Trust Fund (or to pay
expenses of the related Trust Fund) in the absence of
liquidation losses or other events resulting in deficient
Contract collections.
In addition, if specified in the related Prospectus Supplement,
certain or all Certificates evidencing Residual Interests may
also entitle the holders thereof to receive additional
distributions of assets of the related Trust Fund, to the extent
any such assets remain after being applied to make distributions
to the holders of other interests in the Trust Fund (or to pay
expenses of the Trust Fund). The Certificates evidencing a
Residual Interest may entitle the holders thereof to
distributions at various times throughout the life of the
related Trust Fund or only upon termination of the Trust Fund,
all as more fully set forth in the related Prospectus
Supplement. If an election is made to treat the related Trust
Fund as a REMIC, the holders of a Residual Interest in such
Trust Fund will be subject to federal income taxation with
respect to their ownership of such Residual Interest as
described herein under "Certain Federal Income Tax
Consequences--REMIC Certificates--D. Taxation of Residual
Certificates."
Global Certificates................. Unless otherwise specified in the related Prospectus Supplement,
the Certificates of a Series, or of one or more Classes within a
Series, will be issuable in the form of one or more global
certificates (each, a "Global Certificate") to be held by Cede &
Co. ("Cede"), as nominee of The Depository Trust Company
("DTC"), on behalf of the beneficial owners (the "Certificate
Owners") of the Certificates, as described herein under
"Description of the Certificates--Global Certificates." If some
or all of the Certificates of a Series are issued in the form of
one or more Global Certificates, certain monthly and annual
reports prepared by the Servicer under the related Agreement
will be sent on behalf of the related Trust Fund to Cede and not
to the Certificate Owners, as described in "Reports to
Certificateholders" above.
</TABLE>
7
<PAGE>
<TABLE>
<S> <C>
Credit and Liquidity Enhancement.... The extent, if any, to which a Class of Certificates in any
Series may be entitled to the benefit of one or more forms of
credit and liquidity enhancement by means of
overcollateralization or subordination of one or more Classes of
Certificates in such Series, the deposit of funds into one or
more spread accounts or other reserve funds, the issuance of one
or more letters of credit, a limited guarantee of GreenPoint
Financial Corp. ("GFC"), surety bonds, or other credit
facilities, or a combination thereof, and/or the performance
under one or more certificate purchase agreements or other
liquidity facilities, or a combination thereof, will be
described in the related Prospectus Supplement. See "Credit and
Liquidity Enhancement" herein and the related Prospectus
Supplement.
Advances............................ The extent, if any, to which the Servicer will be required to
make advances of delinquent scheduled payments on the Contracts
in a Contract Pool will be described in the related Prospectus
Supplement.
Optional Termination and The Servicer has the option to purchase from the Trust Fund all
Termination Auction................ Contracts then outstanding and all other property in the Trust
Fund on any Distribution Date after the First Distribution Date
if, among other conditions, the Pool Scheduled Principal Balance
is less than 10% (or such other percentage as may be specified
in the related Prospectus Supplement) of the Cut-off Date Pool
Principal Balance. See "Description of the Certificates--
Optional Termination and Termination Auction" herein. During
that period, the Servicer also may direct the Trustee to
conduct a Termination Auction for the sale of all Contracts
then outstanding in the Trust Fund, and, in any event, if the
Servicer has not exercised the option call within 90 days of
the first Distribution Date when the Pool Scheduled Principal
Balance is less than 10% (or such other percentage as may be
specified in the related Prospectus Supplement) of the Cut-off
Date Pool Principal Balance, the Servicer shall direct the
Trustee to conduct a Termination Auction. See "Description of
the Certificates--Optional Termination and Termination Auction"
herein. Any early termination of the Trust Fund and early
retirement of the Certificates that results from the Servicer's
exercise of the option call or a successful Termination Auction
may have an effect on an investor's yield on such Certificates.
See "Prepayment and Yield Considerations" herein and in the
Prospectus Supplement.
Federal Income Tax Consequences..... The federal income tax consequences of the purchase, ownership
and disposition of the Certificates in any Series will depend
on, among other factors, whether an election is made to treat
the related Trust Fund as a REMIC under the provisions of the
</TABLE>
8
<PAGE>
<TABLE>
<S> <C>
Internal Revenue Code of 1986, as amended (the "Code"). See
"Certain Federal Income Tax Consequences--REMIC Certificates"
herein for a discussion of the federal income tax consequences
of the purchase, ownership and disposition of the Certificates
in any Series if such an election is made. See "Certain Federal
Income Tax Consequences--Non-REMIC Certificates" for a
discussion of the federal income tax consequences of the
purchase, ownership and disposition of the Certificates in any
Series if such an election is not made.
ERISA Considerations................ A fiduciary of any employee benefit or other plan subject to the
Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or Section 4975 of the Code should carefully review
with its own legal advisors whether the purchase or holding of
Certificates could give rise to a transaction that is prohibited
or otherwise impermissible under ERISA or the Code. See "ERISA
Considerations" herein and in the related Prospectus Supplement.
If specified in the related Prospectus Supplement, certain
Certificates sold hereunder will not be transferable to certain
benefit plan investors except under the conditions set forth in
such Prospectus Supplement.
Legal Investment.................... Unless otherwise indicated in the applicable Prospectus
Supplement, any Certificates offered hereby that are rated by at
least one nationally recognized statistical rating organization
in one of its two highest rating categories will generally
constitute "mortgage related securities" under the Secondary
Mortgage Market Enhancement Act of 1984, as amended ("SMMEA")
and, as such, would be "legal investments" for certain types of
institutional investors to the extent provided in SMMEA.
Certain state laws have overridden SMMEA and, therefore,
institutional investors should review with their own legal
advisors whether such Certificates would constitute a legal
investment. In addition, some Classes of Certificates offered
hereby may not be rated in one of the two highest rating
categories and thus would not constitute "mortgage related
securities." See "Legal Investment" herein and in the related
Prospectus Supplement.
Ratings............................. It is a condition to the issuance of each Class of Certificates
sold under this Prospectus that it be rated at the time of
issuance by at least one nationally recognized statistical
rating organization in one of its four highest rating
categories. 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 Class of Certificates should be evaluated
independently of similar security ratings assigned to other
kinds of securities, including Certificates in the same Series
</TABLE>
9
<PAGE>
<TABLE>
<S> <C>
or Certificates of other Series sold under this Prospectus.
Ratings on manufactured housing contract pass-through
certificates address the likelihood of the receipt by
Certificateholders of their allocable share of principal and
interest on the underlying manufactured housing contract assets.
These ratings address structural and legal aspects associated
with such certificates, the extent to which the payment stream
on such underlying assets is adequate to make payments required
by such certificates and the credit quality of the credit
enhancer, if any. Ratings on the Certificates do not, however,
constitute a statement regarding the likelihood of principal
prepayments by Obligors under the Contracts in the related
Contract Pool, the degree by which prepayments made by such
Obligors might differ from those originally anticipated or
whether the yield originally anticipated by investors of any
Series of Certificates may be adversely affected as a result of
such prepayments. As a result, investors of any Series of
Certificates might suffer a lower than anticipated yield. See
"Rating" herein and in the related Prospectus Supplement.
</TABLE>
RISK FACTORS
Prospective purchasers of Certificates should consider, among other
things, the following factors in connection with the purchase of Certificates.
This Prospectus contains forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Securities Exchange
Act. Actual results could differ materially from those projected in the
forward-looking statements as a result of the risk factors set forth below and
elsewhere in this Prospectus.
1. Limited Liquidity. There can be no assurance that a secondary
market will develop for Certificates or, if it does develop, that it will
provide the holders of Certificates with liquidity of investment or that it will
remain for the term of such Certificates.
2. Book-entry Form. To the extent any Certificate is represented by
a Global Certificate, the issuance of such Certificates in book-entry form may
reduce the liquidity of such Certificates in the secondary trading market since
investors may be unwilling to purchase Certificates for which they cannot obtain
physical certificates. See "Description of the Certificates--Global
Certificates" herein.
3. Economic Conditions. An investment in Certificates may be affected
by, among other things, a downturn in national, regional or local economic
conditions. The geographic location of the Manufactured Homes in any Contract
Pool at origination of the related Contract will be set forth in the related
Prospectus Supplement under "The Contract Pool." Regional and local economic
conditions are often volatile and, historically, regional and
10
<PAGE>
local economic conditions, as well as national economic conditions, have
affected the delinquency, loan loss and repossession experience of manufactured
housing installment sales contracts and/or installment loan contracts
(hereinafter generally referred to as "contracts" or "manufactured housing
contracts"). Sufficiently high delinquencies and liquidation losses on the
Contracts in any contract pool will have the effect of reducing, and possibly
eliminating, the protection against loss afforded by any credit enhancement
supporting any Class of the related Certificates. If such protection is
eliminated with respect to a Class of Certificates, the holders of such
Certificates will bear all risk of loss on the related Contracts and will have
to rely on the value of the related Manufactured Homes for recovery of the
outstanding principal of and unpaid interest on any defaulted Contracts in the
related Contract Pool. See "Credit and Liquidity Enhancement" herein and the
related Prospectus Supplement.
4. Losses and Credit Risk. Manufactured housing generally
depreciates in value, regardless of its location. Thus, Certificateholders
should expect that, as a general matter, the market value of any Manufactured
Home will be lower than the outstanding balance of the related Contract. To the
extent that the Servicer is required to repossess Manufactured Homes because of
owner defaults under the Contracts, liquidation losses will likely occur. The
primary protection of Certificateholders against these liquidation losses comes
from three sources: first, the amount (the "Excess Interest"""), if any, by
which the interest collected on nondefaulted Contracts during a Collection
Period exceeds interest distributions due to the holders of the Regular
Certificates and, unless otherwise specified in the related Prospectus
Supplement, the Monthly Servicing Fee; second, any Credit Facility or Reserve
Fund that may support one or more Classes of Certificates, and third, as to the
holders of Senior Certificates, the subordination in interest of the junior
Classes of Certificates. The amount of Excess Interest can vary from Contract
Pool to Contract Pool, and will be reduced if interest-only Certificates are
issued. If the liquidation losses exceed the amount of Excess Interest and any
Credit Facility or Reserve Fund, the payments on Certificates will be delayed
and losses are likely to occur that will be borne by the holders of the
Certificates. To the extent that the Certificates have been designated as senior
or subordinate, the most junior certificates would be the first to bear these
delays or losses. See "The Contract Pools" and "Credit and Liquidity
Enhancement" herein and in the related Prospectus Supplement.
5. No Recourse. The Certificates will not represent interests in or
obligations of GreenPoint or, unless otherwise specified in the related
Prospectus Supplement, any of its affiliates. The Certificates will not be
insured or guaranteed by any governmental agency or instrumentality, the
Underwriter or any of its affiliates, GreenPoint or (except as otherwise
specified in the related Prospectus Supplement) any of its affiliates. Except as
otherwise specified in the related Prospectus Supplement, the collections on the
Contracts will constitute the only source of funds for payment on the
Certificates.
6. Security Interests of the Trust Fund in the Manufactured Homes.
On the date of initial issuance of Certificates in any Series, the Seller will
convey the related Contracts to the related Trust Fund. If so provided in the
related Prospectus Supplement, GreenPoint, as Servicer, will obtain and maintain
physical possession of the Contract documents as custodian and agent for the
related Trustee. Each Contract is secured by a security interest in a
Manufactured Home and, in the case of Land Home Contracts or Land-in-Lieu
Contracts (both as defined herein), the real estate on which the related
Manufactured Home is located.
11
<PAGE>
Perfection of security interests in the Manufactured Homes and enforcement of
rights to realize upon the value of the Manufactured Homes as collateral for the
Contracts are subject to a number of federal and state laws, including the
Uniform Commercial Code (the "UCC") as adopted in the states in which the
Manufactured Homes are located and such states' certificate of title statutes,
and, in the case of Land Home Contracts or Land-in-Lieu Contracts, their real
estate laws. Under such federal and state laws, a number of factors may limit
the ability of a holder of a perfected security interest in Manufactured Homes
to realize upon such Manufactured Homes or may limit the amount realized to less
than the amount due under the related Contract. See "Certain Legal Aspects of
the Contracts--Security Interests in the Manufactured Homes" and "Land Home and
Land-in-Lieu Contracts" herein.
GreenPoint will not retitle any certificates of title that are in the
name of Bank of America, FSB or BankAmerica Housing Services, a division of Bank
of America, FSB relating to any contracts that it purchases in the Acquisition
as described under "The Seller." Further, unless otherwise specified in the
related Prospectus Supplement, the certificates of title for the Manufactured
Homes will show "Bank of America, FSB," "BankAmerica Housing Services, a
division of Bank of America, FSB" or "GreenPoint Credit Corp." as the lienholder
and the UCC financing statements, where applicable, will show "Bank of America,
FSB," "BankAmerica Housing Services, a division of Bank of America, FSB" or
"GreenPoint Credit Corp." as secured party. Because of the expense and
administrative inconvenience involved, GreenPoint will not amend the
certificates of title to change the lienholder specified therein to the relevant
Trustee at the time Contracts are conveyed to a Trust Fund, and will not execute
any transfer instrument (including, among other instruments, UCC-3 assignments)
relating to any Manufactured Home in favor of the relevant Trustee or deliver
any certificate of title to such Trustee or note thereon such Trustee's
interest. Similarly, GreenPoint will not record an assignment to the Trustee of
the mortgage, deed of trust or other instrument securing each Land Home or Land-
in-Lieu Contract. In some states, in the absence of such an amendment,
notation, execution, delivery or recordation of assignment, the assignment to
the Trustee of the security interest in the Manufactured Homes, or the mortgage,
deed of trust or other instrument securing a Land Home Contract, may not be
effective or such security interest may not be perfected. If any otherwise
effectively assigned security interest in favor of the Trustee is not perfected,
such assignment of the security interest to the Trustee may not be effective
against creditors of GreenPoint or Bank of America, FSB, as the case may be,
which continues to be specified as lienholder on any certificate of title or as
secured party on any UCC filing, or against a receiver or trustee in bankruptcy
for GreenPoint or Bank of America, FSB, as applicable. Pursuant to the
Agreement, GreenPoint will (i) represent and warrant that each Contract complies
with all requirements of law and (ii) provide certain warranties relating to the
validity, perfection and priority of the security interest in each Manufactured
Home securing a Contract. A breach by GreenPoint of any such warrant that
materially and adversely affects the related Trust Fund's interest in a Contract
will create an obligation on GreenPoint to repurchase, or at its option
substitute another contract for, such Contract, unless such breach is cured
within the time period specified in the related Agreement. If GreenPoint does
not honor such repurchase or substitute obligation in respect of a Contract, the
Trustee may not have a perfected first-priority security interest in the related
Manufactured Home or, if applicable, the related real property.
7. Federal and State Consumer Protection Laws. Numerous federal and
state consumer protection laws could adversely affect the interest of any Trust
Fund in the
12
<PAGE>
Contracts comprising the related Contract Pool. For example, as described herein
under "Certain Legal Aspects of the Contracts--Consumer Protection Laws," the
Soldiers' and Sailors' Civil Relief Act of 1940, as amended (the "Relief Act")
could, under certain circumstances, cap the amount of interest that may be
charged on certain Contracts at 6% per annum and may hinder the ability of the
Servicer to foreclose on such Contracts in a timely fashion. In addition, other
federal and state consumer protection laws impose requirements on lending under
installment sales contracts and installment loan agreements such as the
Contracts, and the failure by the lender or seller of goods to comply with such
requirements could give rise to liabilities of assignees for amounts due under
such agreements and the right of set-off against claims by such assignees. These
laws could apply to any Trust Fund as assignee of the related Contracts.
Pursuant to each Agreement, GreenPoint will represent and warrant that each
Contract complies with all requirements of law. To the extent described in the
applicable Prospectus Supplement under "Description of Certificates--Conveyance
of Contracts," a breach of any such representation or warranty that materially
and adversely affects the related Trust Fund's interest in a Contract will
create an obligation by GreenPoint to repurchase, or at its option substitute
another contract for, such Contract, unless such breach is cured within the time
period specified in the related Agreement. GreenPoint will not have any
obligation to repurchase any Contract because of limitations imposed under the
Relief Act, however.
8. Prepayment Considerations. The prepayment experience on the
Contracts underlying any Series of Certificates (including prepayments due to
liquidations of defaulted Contracts) will affect the average life and the
maturity of such Certificates. Prepayments on the Contracts in any Contract Pool
may be influenced by a variety of economic, geographic, social and other
factors, including repossessions, aging, seasonality and interest rates. Other
factors affecting prepayment on such Contracts include changes in housing needs,
job transfers and unemployment. In addition, in the event a partial prepayment
is made on a Contract, or a Contract is prepaid in full, interest on such
Contract to the extent of such prepayment will cease to accrue as of the date of
prepayment. If with respect to any Trust Fund such prepayments and related
interest shortfalls were sufficiently high during a Collection Period, the
Available Distribution Amount (as defined in the applicable Prospectus
Supplement) for the related Distribution Date could be less than the amount of
principal and interest that would be distributable to the related
Certificateholders in the absence of such shortfalls. See "Prepayment and Yield
Considerations" herein and in the related Prospectus Supplement.
9. Difficulty in Pledging. To the extent transactions in
Certificates can be effected only through DTC, participating organizations,
indirect participants and certain banks, the ability of a Certificate Owner to
pledge any such Certificate to persons or entities that do not participate in
the DTC system, or otherwise to take actions in respect of such Certificates,
may be limited due to the lack of physical certificates representing any such
Certificate. See "Description of the Certificates--Global Certificates" herein.
10. Potential Delays in Receipt of Distributions. To the extent any
Certificate is represented by a Global Certificate, Certificate Owners with
respect thereto may experience some delay in their receipt of distributions.
Distributions will be forwarded by the Trustee to DTC and DTC will credit such
distributions to the accounts of its Participants (as defined herein), which
will thereafter credit them to the accounts of Certificate Owners either
directly or
13
<PAGE>
indirectly through indirect participants. See "Description of the Certificates--
Global Certificates" herein.
11. Insolvency or Bankruptcy of GreenPoint. GreenPoint intends that
each transfer of Certificates to the related Trust Fund constitutes a sale,
rather than a pledge of the Contracts to secure indebtedness of GreenPoint.
However, if GreenPoint were to become a debtor under the federal bankruptcy
code, it is possible that a creditor or trustee in bankruptcy of GreenPoint or
GreenPoint as debtor-in-possession may argue that the sale of the Contracts by
GreenPoint could be recharacterized as a borrowing secured by a pledge of the
Contracts. Such an attempt, even if unsuccessful, could result in delays in or
reductions of distributions on the Certificates.
12. Bankruptcy of Servicer. In the event of a bankruptcy of
GreenPoint, the trustee-in-bankruptcy for GreenPoint could prevent the
termination of GreenPoint as Servicer if no event of default under the
applicable Agreement exists other than the bankruptcy of the Servicer. Such
restriction could result in a delay or possibly a reduction in payments on the
Certificates to the extent GreenPoint received (but did not deposit with the
Trustee) Contract collections before the date of bankruptcy. See "Certain Legal
Aspects of the Contracts" herein.
13. Limited Operating History of Seller and Servicer. GreenPoint
was incorporated on May 8, 1998 for the purpose of acquiring the manufactured
housing contract business from Bank of America, FSB as described under "The
Seller The Acquisition" herein. Accordingly, GreenPoint has a limited operating
history, and no relevant delinquency and loss experience is available. Neither
GreenPoint nor any of its affiliates were previously engaged in the origination
or servicing of manufactured housing contracts prior to the Acquisition.
Potential Certificateholders should consider the risks associated with the
Seller's and Servicer's limited operating history with respect to servicing and
originating manufactured housing installment sales contracts and installment
loan agreements. As of ____________, 1998, the Servicer services manufactured
housing installment loans with an aggregate principal balance of $___ million,
of which $[800] million were acquired from Bank of America, FSB in the
Acquisition.
14. Limited Guarantee of GFC. If the related Prospectus Supplement
so specifies, certain Classes of Certificates may be entitled to the benefits of
a limited guarantee of GFC which would be an unsecured obligation of GFC and
would not be supported by any letter of credit or other enhancement arrangement.
THE CONTRACT POOLS
Each Contract contained in a Contract Pool will have been either (i)
originated or purchased by the Seller, in each case on an individual basis in
the ordinary course of its business and/or (ii) purchased by GreenPoint in bulk
from other lenders or finance companies (including from Bank of America, FSB in
the Acquisition (as defined herein)), from other lenders or finance companies
(including Bank of America, FSB of any of its affiliates) with whom GreenPoint
may have or may establish referral arrangements, from governmental agencies or
instrumentalities or from the portfolios of other entities that purchase and
hold manufactured housing contracts ("Bulk Sellers"), all as more particularly
specified in the related Prospectus Supplement. Each Contract will be secured
by a new or used Manufactured Home and, in the
14
<PAGE>
case of a Land Home or Land-in-Lieu Contract, by real property upon which the
Manufactured Home is located. Unless otherwise specified in the related
Prospectus Supplement, the Contracts will not be insured by any governmental
agency or instrumentality. However, if so specified in the related Prospectus
Supplement, some or all of the Contracts and collections thereon will, subject
to the conditions described below, be partially insured by the Federal Housing
Administration or partially guaranteed by the Veterans Administration.
On the date of initial issuance of the Certificates of any Series,
GreenPoint will convey the Contracts comprising the related Contract Pool to the
related Trust Fund. GreenPoint, as Servicer, will obtain and maintain
possession of all Contract documents.
Unless otherwise specified in the applicable Prospectus Supplement,
the Agreement relating to each Contract Pool will require the related
Manufactured Homes to comply with the requirements of certain federal statutes
which generally would require the Manufactured Homes to have a minimum of 400
square feet of living space and a minimum width of 102 inches and to be of a
kind customarily used at a fixed location. Such statutes would also require the
Manufactured Homes to be transportable in one or more sections, built on a
permanent chassis and designed to be used as dwellings, with or without
permanent foundations, when connected to the required utilities. The statutes
also would require that the security interest in any Manufactured Home include
the plumbing, heating, air conditioning and electrical systems relating to such
Manufactured Home.
Each Agreement will require the Servicer to maintain hazard insurance
policies with respect to each Manufactured Home in the amounts and manner set
forth herein under "Description of the Certificates--Servicing Compensation and
Payment of Expenses; Certain Matters Regarding the Servicer--A. Hazard Insurance
Policies." Generally, no other insurance will be required with respect to the
Manufactured Homes, the Contracts or any Contract Pool.
Each Contract Pool may contain actuarial or simple interest Contracts
(as further described below) bearing a Contract Rate that is fixed or variable
or increases in specified increments on particular dates (a "Step-Up Rate").
The rate at which the Contracts in a particular Contract Pool bear interest will
be further described in the applicable Prospectus Supplement. Unless otherwise
specified in the applicable Prospectus Supplement, each Contract will provide
for payments on scheduled monthly due dates (each, a "Due Date"). The day of
each month constituting the Due Date will vary from Contract to Contract.
Unless the Contracts bear interest at a variable rate, the scheduled payment due
on each monthly Due Date (the "Scheduled Payment") will be specified in the
Contract. The Scheduled Payments for fixed-rate Contracts will be constant
assuming no prepayments. Unless otherwise specified in the applicable
Prospectus Supplement, the Scheduled Payments for Contracts bearing interest at
a Step-Up Rate ("Step-Up Rate Contracts") will increase on the dates on which
the Contract Rates are stepped up. In addition, unless otherwise specified in
the related Prospectus Supplement, the Contracts may be prepaid in full or in
part at any time.
Unless otherwise stated in the applicable Prospectus Supplement,
Scheduled Payments whether for actuarial or simple interest Contracts, may be
paid prior to their Due Dates, whether in, or in months prior to, the months of
their Due Dates. Thus, the obligor under a Contract (each, an "Obligor") may,
in June, pay the Scheduled Payments due in June, July and
15
<PAGE>
August. In that event, no further payment will become due on such Contract until
the September Due Date. In the case of a simple interest Contract, the Obligor
would have to instruct the Servicer to apply such payment as a pay-ahead of
future Scheduled Payments; otherwise such payment would be applied as a partial
principal prepayment. There is no limit to the number of Scheduled Payments that
may be paid ahead in this manner. The effect of paid-ahead Scheduled Payments
will be different for actuarial Contracts than for simple interest Contracts, as
further described below.
The Scheduled Payments for each actuarial Contract (whether a fixed
rate Contract or a Step-Up Rate Contract) will fully amortize the principal
balance of the Contract over its term. The portion of each Scheduled Payment
allocable to principal is equal to the total amount thereof less the portion
allocable to interest. The portion of each Scheduled Payment due in a
particular month that is allocable to interest is a precomputed amount equal to
one month's interest (determined on the basis of a thirty-day month and a 360-
day calendar year) on the principal balance of the Contract, which principal
balance is determined by reducing the initial principal balance by the principal
portion of all Scheduled Payments that were due in prior months (whether or not
such Scheduled Payments were timely made) and all prior partial principal
prepayments. Thus, each Scheduled Payment will be applied to interest and to
principal in accordance with a precomputed allocation, whether such Scheduled
Payments are received in advance of or subsequent to their Due Dates. Unless
otherwise specified in the applicable Prospectus Supplement, all payments
received in a Collection Period on an actuarial Contract in excess of the
related Obligor's Scheduled Payment (other than payments not allocated to
principal and interest (such as late payment charges) or payments sufficient to
pay in full the outstanding principal balance of and all accrued and unpaid
interest on such Contract) are applied as a partial prepayment of principal on
the Contract, unless (i) the related Obligor notifies or confirms with the
Servicer that such payments are to be applied to future Scheduled Payments in
the order of the Due Dates of such payments or (ii) the amount of such excess
payment is approximately equal (subject to a variance of plus or minus 10%) to
the amount of a future Scheduled Payment.
If simple interest Contracts are to be included in the related
Contract Pool, the related Prospectus Supplement will describe the
characteristics of such simple interest Contracts.
Unless otherwise specified in the related Prospectus Supplement, the
Scheduled Payments on variable rate Contracts will be allocated between
principal and interest as described above for actuarial Contracts based upon the
Contract Rate in effect when such Scheduled Payments are due. Unless otherwise
specified in the related Prospectus Supplement, the amounts of such Scheduled
Payments will be adjusted, on the basis described in such Prospectus Supplement,
whenever the related variable rate is adjusted.
If so specified in the applicable Prospectus Supplement, the related
Contract Pool may contain Contracts which combine certain features of actuarial
and simple interest Contracts.
If specified in the related Prospectus Supplement, certain Contracts
("Land Home Contracts" and "Land-in-Lieu Contracts") will also be secured by
liens on the real estate on which the related Manufactured Homes are located.
Unless otherwise specified in the related Prospectus Supplement, all Land Home
Contracts will have financed the purchase of the related
16
<PAGE>
Manufactured Home together with the real estate on which the Manufactured Home
is located. In certain jurisdictions, a lender cannot obtain separate evidence
of its lien on the Manufactured Home securing a Land Home Contract and its lien
on the property on which the Manufactured Home is located. In those
jurisdictions, the only evidence of liens on the Manufactured Homes securing
Land Home Contracts will be the deeds of trust, mortgages or similar security
instruments (in each case, a "Mortgage") on the real estate on which the
Manufactured Homes are located. It is a policy of GreenPoint, to obtain title
insurance policies, where available, with respect to any such Land Home Contract
that it originates insuring that the related Manufactured Home is subject to the
lien of the related Mortgage, although title policies may not have been obtained
with respect to Land Home Contracts acquired from Bulk Sellers and some title
insurers will not insure the Manufactured Home unless it is permanently attached
to the land. Where the real estate on which the related Manufactured Home is
located is owned by the related Obligor, the Obligor may provide a Mortgage on
the real estate in lieu of all or part of any required down payment for any such
Contract. Any such Contract is referred to herein as a "Land-in-Lieu Contract"
rather than a "Land Home Contract." Generally, separate evidences of liens on
Manufactured Homes and the real property securing Land-in-Lieu Contracts are
obtained. However, no title insurance is obtained in respect of such Contracts.
See "Certain Legal Aspects of the Contracts--Land Home and Land-in-Lieu
Contracts" herein.
A Contract Pool may include "staged-funding" Contracts which provide
multiple disbursements to an Obligor to finance the purchase of a Manufactured
Home or the acquisition or improvement of the real estate on which the
Manufactured Home will be located. The Obligor pays only the interest on the
disbursed amount of the loan (or an additional origination fee which is
financed, in lieu of interest) until the final disbursement, and, following the
final disbursement, pays both interest and principal. Unless otherwise
specified in the related Prospectus Supplement, no Contract Pool will contain a
stage funding Contract unless such stage funding Contract has been fully
disbursed.
The Prospectus Supplement relating to each Series of Certificates will
provide information as of the Cut-off Date for such Series with respect to,
among other things, (i) the number, the aggregate principal balance, and the
range of outstanding principal balances of the Contracts comprising the related
Contract Pool; (ii) the weighted average of the Contract Rates ("Weighted
Average Contract Rate") of the Contracts and the distribution of Contract Rates;
(iii) the weighted average original and remaining terms to maturity of the
Contracts and the distribution of remaining terms to maturity; (iv) the average
outstanding principal balance of the Contracts; (v) the geographical
distribution of the related Manufactured Homes at origination; (vi) the years of
origination of the Contracts; (vii) the distribution of original principal
balances of the Contracts; (viii) the percentage amount of Contracts secured by
new or used Manufactured Homes; (ix) the range of and weighted average loan-to-
value ratios at origination; and (x) the month and year in which the final
scheduled payment date for the Contract with the latest maturity is scheduled to
occur. If a Contract Pool contains Step-Up Rate Contracts, the related
Prospectus Supplement will specify the percentage of the Contract Pool comprised
of such Contracts, the period during which the Contract Rates for such Contracts
will be stepped up, the range of increases in such Contract Rates and the range
of increases in the Scheduled Payments for such Contracts. If a Contract Pool
contains variable rate Contracts, the related Prospectus Supplement will contain
a description of the basis on which such rates are determined, including any
maximum or minimum rates and the frequency with which any such rate adjusts.
The
17
<PAGE>
Prospectus Supplement relating to a Series of Certificates also will contain
certain information about Contracts in the related Trust Fund that are Land Home
Contracts, Land-in-Lieu Contracts or Contracts that are partially guaranteed by
the Veterans Administration or partially insured by the Federal Housing
Administration. If the Trust Fund includes a Pre-Funding Account, as defined in
the related Prospectus Supplement, such Prospectus Supplement will specify the
conditions that must be satisfied prior to any transfer of Additional Contracts
and/or Subsequent Contracts, as described in such Prospectus Supplement,
including the requisite characteristics of such Additional Contracts or
Subsequent Contracts. In addition, to the extent GreenPoint's management
believes such information to be material, any Prospectus Supplement may also
include additional information concerning the related Contract Pool that is
stored in the electronic data processing system of GreenPoint.
To the extent any Contracts in a Contract Pool were purchased by
GreenPoint from one or more Bulk Sellers, the applicable Prospectus Supplement
will contain a description of certain practices observed by such seller or
sellers, as the case may be, in connection with any such purchase.
THE SELLER
GreenPoint is a Delaware corporation and a wholly owned subsidiary of
GreenPoint Bank ("GreenPoint Bank"), a New York state chartered bank.
GreenPoint Bank is a wholly owned subsidiary of GFC, a publicly traded
corporation whose shares are traded on the New York stock exchange. As of
December 31, 1997, GFC and its consolidated subsidiaries had total deposits of
$10,973.0 million, total assets of $13,083.5 million and total stockholders'
equity of $1,269.6 million. As of [ ], GreenPoint had total assets of $[ ],
total liabilities of $[ ] and total stockholders' equity of $[ ]. The
headquarters of GFC. and GreenPoint are located in New York, New York.
THE ACQUISITION
On April 11, 1998, GreenPoint Bank executed an agreement (the "Sale
Agreement") with BankAmerica Corporation, the parent of Bank of America, FSB for
the sale of the operating business of the BankAmerica Housing Services division
of Bank of America, FSB to GreenPoint (such sale is referred to herein as the
"Acquisition"). GreenPoint was formed in May 1998 as a Delaware corporation for
the purpose of acquiring the such operating business of the BankAmerica Housing
Services division of Bank of America, FSB from Bank of America, FSB. The
Acquisition was consummated on [ ], 1998. The operating business of the
BankAmerica Housing Services division consisted primarily of originating,
purchasing and servicing manufactured housing installment sale contracts and
installment loan agreements. Pursuant to the terms of the Sale Agreement,
GreenPoint also purchased $[800] million in aggregate principal balance of
manufactured housing installment sale contracts and installment loan agreements
in the Acquisition. The origination and underwriting practices of Bank of
America, FSB and its affiliates relating to the manufactured housing installment
sale contracts and installment loan agreements acquired by GreenPoint in the
Acquisition were substantially similar to those described under "--Loan
Originations" below.
18
<PAGE>
As of ____________, 1998, GreenPoint owned $____ million in aggregate
principal balance of manufactured housing contracts, of which $[ ]were
acquired from Bank of America, FSB in the Acquisition.
LOAN ORIGINATIONS
GreenPoint purchases and originates manufactured housing contracts on
an individual basis through 46 regional offices throughout the United States,
serving 48 states. Regional personnel of GreenPoint arrange to purchase
manufactured housing contracts originated by manufactured housing dealers
located throughout the United States. Generally, these purchases resulted from
GreenPoint division's regional office personnel contacting dealers located in
their regions and explaining GreenPoint's available financing plans, terms,
prevailing rates and credit and financing policies. If a dealer wished to make
such financing available to its customers, the dealer would apply for dealer
approval. Upon satisfactory results of GreenPoint's investigation of the
dealer's creditworthiness and general business reputation, GreenPoint and the
dealer would enter into a dealer agreement. GreenPoint also originates
manufactured housing contracts and installment loan agreements directly with
customers.
UNDERWRITING PRACTICES
With respect to each retail manufactured housing contract that was
purchased from a dealer, the general practice of GreenPoint has been that the
dealer submit the customer's credit application, manufacturer's invoice (if the
contract was for a new home) and certain other information relating to the
contract to the applicable regional office of GreenPoint. Personnel at the
regional office analyze the creditworthiness of the customer and certain other
aspects of the proposed transaction. If the creditworthiness of the customer
and other aspects of the transaction are approved by the regional office, the
customer and the dealer execute a contract on a form provided or approved in
advance by the GreenPoint. After the manufactured home financed under the
contract is delivered and set up by the dealer, and the customer has moved in,
GreenPoint purchases the contract from the dealer.
Because manufactured homes generally depreciate in value, GreenPoint's
management believes that the creditworthiness of a potential obligor should be
the most important criterion in determining whether to approve the purchase or
origination of a contract. As a result, the underwriting guidelines of
GreenPoint generally require regional office personnel to examine each
applicant's credit history, residence history, employment history and debt-to-
income ratio. There is no minimum requirement for any of these criteria,
although GreenPoint has developed certain guidelines for employment history and
debt-to-income ratios. In the case of employment history, GreenPoint generally
requires its regional office personnel to consider whether the applicant had
worked continuously for the same employer for at least 24 months and, if not,
whether the applicant has worked in the same occupational field for at least 24
months. The recommended debt-to-income ratio for a particular credit
application depends on the credit score recommendation (described below)
generated for that application. In general, the maximum debt-to-income ratio
for each application that is approved by the credit scoring system ranged from
70 percent to 53 percent, based on GreenPoint's estimate of the applicant's
after-tax income. Although GreenPoint has guidelines for some of these
criteria, GreenPoint's management does not believe that an applicant's inability
to satisfy some of these guidelines
19
<PAGE>
warrants denial of credit in all cases. For example, if an applicant fails to
meet a guideline by a certain margin for one of the criteria mentioned above,
the applicant generally must exceed the threshold for one or more other criteria
by a compensating margin for such applicant's credit application to be approved.
In addition, in special cases, credit applications are approved even if certain
of the criteria are not met. For these reasons, management of GreenPoint believe
that the ultimate decision whether to approve or reject a credit application
should be made by regional office personnel. To assist personnel in evaluating
credit applications, GreenPoint utilizes a second generation Fair-Isaacs credit
scoring system in July 1997. The Fair-Isaacs credit scoring system generates a
recommendation to approve or deny a credit application based on certain criteria
established by GreenPoint. The underwriting guidelines of GreenPoint allows the
recommendation generated by the Fair-Isaacs credit scoring system to be used by
regional personnel as a guide in determining whether to extend credit to an
applicant, but do not require regional personnel to make credit decisions based
solely on the system's recommendations. GreenPoint does not disclose the
criteria used by this credit scoring system either to regional personnel or to
the dealers assisting in the preparation of credit applications. The criteria
will be periodically reviewed by of GreenPoint, and modified as necessary.
It is the policy of GreenPoint that one authorized person provide
written approval of credit applications for amounts up to or equal to certain
limits and that two authorized persons provide written approval of credit
applications for amounts over those limits. The credit limits established by
the division vary with each regional office. In addition, each person
authorized to make these credit decisions has to be either a regional manager or
another regional office employee to whom the authority to approve credit
applications has been delegated. Any such delegated authority may be limited in
that the person to whom such authority was delegated may not have been
authorized to approve credit applications for contracts with initial principal
amounts above certain specified levels. The qualifications of all regional
office personnel authorized to approve or reject credit applications are
reviewed and approved by GreenPoint's senior management. Generally, both the
dealer service manager and the credit manager in each regional office (in
addition to the regional manager) have authority to approve credit applications.
However, each regional office may at various times have additional, or in some
cases fewer, personnel authorized to approve or reject credit applications.
GreenPoint has no set qualifications for regional managers or for other
employees to whom authority to approve credit applications may be delegated;
rather, such authority is given commensurate with such manager's or employee's
experience.
It is the policy of GreenPoint that each credit application be
approved or rejected within one to seven days after receipt. Thus, there was
less time for credit investigation than is the case, for example, with loans for
site-built homes. Although GreenPoint's management believes that the seven-day
period for approval or rejection of each credit application is consistent with
industry practice, no assurance can be given that any credit application that
was approved in one to seven days would have been approved if a longer period
had been provided for credit investigation.
The credit review and approval practices of each regional office are
subject to internal reviews and audits that, through sampling, examine the
nature of the verification of credit histories, residence histories, employment
histories and debt-to-income ratios of the applicants and evaluate the credit
risks associated with the contracts purchased through such
20
<PAGE>
regional offices by rating the obligors on such contracts according to their
credit histories, employment histories and debt-to-income ratios. Selection of
underwriting files for review is generally made by the personnel performing the
examination, without prior knowledge on the part of regional office personnel of
the files to be selected for review. However, GreenPoint has no requirement that
any specific random selection procedures be followed and no assurance can be
given that the files reviewed in any examination process are representative of
the contract originations in the related regional office. In addition, no
statistical analysis is performed on the results of any such examination of
underwriting files.
With respect to new and used manufactured homes, GreenPoint's policy
is to finance no more than 95% of the total buyer's cost of any manufactured
home (including taxes and insurance premiums) plus 100% of the costs
attributable to prepaid finance charges and closing costs that are financed. In
the case of new manufactured homes, the maximum amount financed also cannot
exceed 130% of the manufacturer's invoice price plus taxes, insurance, freight
charges, certain dealer installed equipment and certain set-up costs. For used
manufactured homes, the amount financed cannot not exceed 95% of the retail
value, as specified in the NADA Mobile/Manufactured Housing Appraisal Guide or
the "Kelley Blue Book" plus taxes, insurance and certain set-up costs. With
respect to Land Home and Land-in-Lieu Contracts, GreenPoint's policy is to
finance no more than (i) 95% of the value of the real property as determined by
appraisal or tax assessment, plus the total buyer's cost of the manufactured
home (including taxes and insurance premiums), plus the cost of improvements to
the land and 100% of the costs attributable to prepaid finance charges and
closing costs that are financed or (ii) in the case of a manufactured home that
is already located on the land, 95% of the final appraised value of the land and
manufactured home together and 100% of the costs attributable to prepaid finance
charges and closing costs that are financed.
GreenPoint requires a down payment in the form of cash and/or the
trade-in value of a previously owned manufactured home and/or, in the case of
Land-in-Lieu Contracts, an estimated value of equity in real property pledged as
an additional collateral. For previously owned homes, the trade-in allowance
accepted by the dealer must have be consistent with the value of such home
determined by GreenPoint in light of current market conditions. The value of
real property pledged as additional collateral is estimated by regional
personnel or appraisers who are familiar with the area in which the property is
located.
Underwriting policies for the origination or purchase on an individual
basis of manufactured housing contracts are established by GreenPoint's
management at its headquarters in San Diego.
SERVICING
GreenPoint, through the manufactured housing regional office system,
services all of the manufactured housing contracts that it purchases or
originates, whether on an individual basis or in bulk. Generally, whenever any
contracts are sold, GreenPoint will retain servicing responsibilities with
respect to such contracts. In addition, GreenPoint may make arrangements
pursuant to which it services, or would service, manufactured housing contracts
owned by other entities. Such contracts were not originated, and would not be
purchased, by GreenPoint. Servicing responsibilities include collecting
principal and interest payments, taxes, insurance
21
<PAGE>
premiums and other payments from obligors and, when such contracts are not owned
by GreenPoint, remitting principal and interest payments to the owners thereof,
to the extent such owners are entitled thereto. Collection procedures include
repossession and resale of manufactured homes securing defaulted contracts (and
foreclosure if land is involved) and, if deemed advisable by GreenPoint,
entering into workout arrangements with obligors under certain defaulted
contracts. Although decisions as to whether to repossess any manufactured home
are made on an individual basis, GreenPoint's general policy is to institute
repossession procedures promptly after regional office personnel determine that
it is unlikely that a defaulted contract will be brought current, and thereafter
to diligently pursue the resale of such manufactured homes.
Because GreenPoint is recently formed and has a limited operating
history, GreenPoint's management believes that the historical statistical data
relating to the delinquency and repossession experience of contracts serviced by
GreenPoint is not informative. If in the future, however, GreenPoint's
management believes such information may be informative, GreenPoint may publish
such information in the Prospectus Supplement.
Certain historical data relating to the delinquency and repossession
experience of the contracts serviced by Bank of America, FSB prior to the
Acquisition by GreenPoint is available. However, GreenPoint's management
likewise believes that such information is not relevant or informative since
GreenPoint, and not Bank of America, FSB, is now servicing such contracts.
22
<PAGE>
PREPAYMENT AND YIELD CONSIDERATIONS
PREPAYMENT CONSIDERATIONS
Unless otherwise specified in the related Prospectus Supplement, the
Contracts in any Contract Pool 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 and the
maturity of the related Certificates. Except to the limited extent that may be
set forth in the related Prospectus Supplement, GreenPoint does not maintain
statistics with respect to the rate of prepayment of manufactured housing
contracts in its servicing portfolio. A Contract Pool might include Contracts
with Contract Rates that are generally higher or lower, in absolute terms or in
comparison to prevailing rates, than the contract rates of the contracts from
which are derived certain historical statistical data set forth in the
Prospectus or Prospectus Supplement. As a result, the prepayment performance of
the Contracts contained in that Contract Pool might be higher or lower than the
prepayment performance of the contracts reflected in the historical data. In
addition, GreenPoint's management is aware of limited publicly available
information relating to historical rates of prepayment on manufactured housing
contracts. However, GreenPoint's management believes that neither the
prepayment experience of other pools of manufactured housing contracts nor the
historical rates of prepayment for any other manufactured housing contracts will
necessarily be indicative of the rate of prepayment that may be expected to be
exhibited by the Contracts in any other Contract Pool. Nevertheless,
GreenPoint's management anticipates that a number of Contracts will be prepaid
in full in each year during which any related Certificates are outstanding. The
amount of prepayments on such Contracts (including prepayments due to
liquidations of defaulted Contracts) during any particular year may be
influenced by a variety of economic, geographic, social and other factors,
including repossessions, aging, seasonality, interest rates and the rate at
which manufactured homeowners sell their manufactured homes. Other factors
affecting prepayments on such Contracts include changes in Obligors' housing
needs, job transfers, unemployment and Obligors' net equity in manufactured
homes. Because of the depreciating nature of manufactured housing, which limits
the possibilities for refinancing, and because the terms of manufactured housing
contracts are generally shorter than the terms for mortgage loans secured by
site-built homes (and changes in interest rates have a correspondingly smaller
effect on the monthly payments on manufactured housing contracts as opposed to
mortgage loans secured by site-built homes), changes in interest rates may play
a smaller role in prepayment behavior of manufactured housing contracts than
they do in the prepayment behavior of loans secured by mortgages on site-built
homes. Conversely, local economic conditions and certain of the other factors
mentioned above are likely to play a larger role in the prepayment behavior of
manufactured housing contracts than they do in the prepayment behavior of loans
secured by mortgages on site-built homes.
Repurchases of Contracts on account of certain breaches of
representations and warranties as described in the applicable Prospectus
Supplement also will have the effect of prepaying such Contracts and therefore
will affect the average life of and yield on the Certificates. See "Description
of the Certificates--Conveyance of Contracts." In addition, most of the
Contracts contain provisions that prohibit the related owner from selling the
Manufactured Home without the prior consent of the holder of the related
Contract. Such provisions are similar to "due-on-sale" clauses and may not be
enforceable in certain states. See "Certain Legal
23
<PAGE>
Aspects of the Contracts--Transfers of Manufactured Homes; Enforceability of
Restrictions on Transfer" herein. The Servicer's policy is to permit most sales
of Manufactured Homes where the proposed buyer meets the Servicer's then current
underwriting standards and enters into an assumption agreement.
To the extent provided in the related Prospectus Supplement, the
Servicer under each Agreement will have the option to purchase all of the
Contracts in the related Contract Pool, at the price and under the conditions
specified in such Prospectus Supplement, when the aggregate Pool Principal
Balance (as defined in the related Prospectus Supplement) of the Contract Pool
has been reduced to 10% (or such other percentage as may be specified in the
related Prospectus Supplement) of its initial Pool Principal Balance. The
exercise of any such option will affect the average life of and yield on the
related Certificates. To the extent provided in the related Prospectus
Supplement, the Trustee for the related Trust Fund shall solicit bids for the
purchase of the Contracts remaining in the Trust Fund at a Termination Auction
(as defined herein) within ninety days following the Distribution Date as of
which the Pool Principal Balance for a Contract Pool is less than 10% (or such
other percentage as may be specified in the related Prospectus Supplement) of
such Contract Pool's Cut-off Date Pool Principal Balance. The sale and
consequent termination of the related Trust Fund pursuant to a Termination
Auction will affect the average life and yield on the related Certificates.
The average life and maturity of the Certificates of any Class will
also be affected by the amount and timing of any Special Principal Distributions
to the holders of such Certificates. In addition, if any Certificate of a Class
is subject to mandatory repurchase, the occurrence of the Repurchase Date (as
hereinafter defined) for such Certificate will have the same effect as the
maturation of such Certificate (with the repurchase price being equivalent to
the amount due at maturity). See "Description of the Certificates--
Distributions on Certificates" and "Description of the Certificates--Optional
and Mandatory Repurchase of Certificates; Termination Auction" herein. The
Prospectus Supplement relating to any Class that is entitled to Special
Principal Distributions or is subject to mandatory repurchase will contain a
description of the conditions under which such distributions or repurchases will
take place and a description of some of the factors that might affect the rate
of Special Principal Distributions or the timing of any Repurchase Dates.
Information regarding the "Prepayment Model" (to be defined in the
related Prospectus Supplement) or any other rate of assumed prepayment, as
applicable, will be set forth in the Prospectus Supplement applicable to the
relevant Class or Classes of Certificates offered hereby.
YIELD CONSIDERATIONS
To the extent that any credit enhancement or any advancing obligation
of the Servicer described in the related Prospectus Supplement is insufficient
to protect the holders of any Class of Certificates from losses or delinquencies
on the related Contract Pool, the yield to such holders from their investment in
such Certificates will be adversely affected should such losses or delinquencies
occur. In the absence of losses or delinquencies which are not covered by
credit enhancement or advances, respectively, on a Distribution Date, the
effective yield on the Certificates will depend upon, among other things, the
price at which the Certificates are
24
<PAGE>
purchased, the rate at which the Contracts for the related Trust Fund liquidate
or are prepaid and the amount and timing of any Special Principal Distributions.
If a purchaser of Certificates purchases them at a discount (premium) and
calculates its anticipated yield to maturity based on an assumed rate of
distributions of principal on such Certificates that is faster (slower) than the
rate actually realized, such purchaser's actual yield to maturity will be lower
than the yield so calculated by such purchaser. Losses which are covered by
credit enhancement, but on later than anticipated Distribution Dates, will have
the same effect on anticipated yield as prepayments that are made later than
anticipated, as just described, depending on whether the Certificates were
purchased at a discount or premium.
The yield to holders of any Class of Certificates may be below that
otherwise produced by the applicable Pass-Through Rate because, while, in the
absence of losses or delinquencies, one month's interest on the related
Contracts will be collected during each Collection Period, the portion of such
interest to which the holders of such Certificates are entitled will not be
distributed until the first Distribution Date after such Collection Period.
If a Certificate is subject to mandatory repurchase, the yield to the
Repurchase Date will be affected by, among other things, the applicable
repurchase price, the ability of any Liquidity Facility Provider (as hereinafter
defined) to distribute the repurchase price and the date, if any, on which the
Repurchase Date occurs. If, in connection with a mandatory repurchase, the
repurchase price for a Certificate is equal to its Percentage Interest (as
hereinafter defined) of the then current Certificate Balance, and the
Certificate is purchased at a discount, and the purchaser calculates its
anticipated yield to the Repurchase Date based on an assumed Repurchase Date
that is earlier than the actual Repurchase Date, then such purchaser's actual
yield to maturity will be lower than it would have been if a repurchase occurred
on the assumed date.
The payment features of the Contracts comprising any Contract Pool (as
described above under "The Contract Pools") may, under certain extraordinary
circumstances, cause the amounts collected thereon during particular Collection
Periods to be insufficient to fund all distributions of principal and interest
to the holders of some or all of the Certificates of the related Series, even in
the absence of losses or delinquencies. Such circumstances could occur if a
sufficiently large number of partial or full prepayments, as a percentage of the
then outstanding Pool Principal Balance of the related Contract Pool, are
received on Contracts in a particular Collection Period, if such prepayments are
made in advance of such Contracts' respective Due Dates during such Collection
Period. In such case, a non-default collection shortfall could occur because
interest that actually accrues on such Contracts is less than interest that
would have accrued if the payments were paid on the Contracts' respective Due
Dates. A non-default collection shortfall could adversely affect the yield to
holders of any Class of Certificates to the extent such shortfalls are not
covered by credit enhancement or advances.
DESCRIPTION OF THE CERTIFICATES
Each Series of Certificates will be issued pursuant to a separate
Agreement. The following summaries describe certain 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 the description set forth in the
related Prospectus Supplement. Section references contained herein refer to
sections
25
<PAGE>
of the form of Agreement filed as an exhibit to the Registration Statement. The
Prospectus Supplement for each Series will describe the specific material
provisions of the Agreement relating to such Series. Capitalized terms used and
not otherwise defined herein shall have the meanings assigned to them in the
form of Agreement filed as an exhibit to the Registration Statement.
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 such Classes may be sold pursuant to this Prospectus,
and there may be separate Prospectus Supplements relating to one or more of such
Classes so sold. Any reference herein to the Prospectus Supplement relating to
a Series comprised of more than one Class should be understood as a reference to
each of the Prospectus Supplements relating to the Classes sold hereunder. Any
reference herein to the Certificates of a Class should be understood to refer to
the Certificates of a Class within a Series, the Certificates of a subclass
within a Series or all of the Certificates of a single-Class Series, as the
context may require.
The Certificates will be issued in the denominations specified in the
related Prospectus Supplement. (Section 6.02.) The "Percentage Interest" of a
Certificate is the percentage obtained from dividing the original denomination
of such Certificate by the initial principal balance of all of the Certificates
of such Class. Interest-only Certificates will have no Percentage Interest.
Certificates, if issued in registered form ("Definitive Certificates") to
Certificate Owners or nominees thereof, will be transferable and exchangeable at
the corporate trust office of the Trustee or, if it so elects, at the office of
an agent in New York, New York. (Sections 6.02 and 9.11.) No service charge
will be made for any registration of exchange or transfer, but the Trustee may
require payment of a sum sufficient to cover any tax or other governmental
charge. (Section 6.02.)
The Certificates of each Series will evidence an interest, as
specified in the related Prospectus Supplement, in a Trust Fund. Each Trust
Fund will include (i) a Contract Pool, including certain rights to receive
payments on the Contracts comprising such Contract Pool on and after the Cut-off
Date, (ii) the amounts held from time to time in the "Certificate Account" (as
described in the applicable Prospectus Supplement under "--Payment on Contracts;
Certificate Account") maintained by the Trustee pursuant to the Agreement, (iii)
any property which initially secured a Contract and which is acquired in the
process of realizing thereon, (iv) the obligations of GreenPoint, under certain
conditions, to repurchase Contracts sold by it with respect to which certain
representations and warranties have been breached and not cured, (v) certain
contractual servicing obligations of the Servicer, (vi) the proceeds of all
insurance policies described herein and (vii) if applicable, one or more forms
of credit support. If so specified in the related Prospectus Supplement, a
limited guarantee of GFC may exist and, unless otherwise specified therein, will
be a part of the Trust Fund.
GreenPoint will convey the Contracts to the Trustee. See "The
Contract Pools" herein and "--Conveyance of Contracts" below. GreenPoint, as
Servicer, will service the Contracts pursuant to the Agreement. Unless
otherwise specified in the related Prospectus Supplement, the Contract documents
will be held for the benefit of the Trustee by the Servicer.
26
<PAGE>
CONVEYANCE OF CONTRACTS
On the date of initial issuance of the Certificates of a Series,
GreenPoint will sell to the Trustee, without recourse, all of its right, title
and interest in and to the Contracts sold by it, and all rights under the
standard hazard insurance policies on the related Manufactured Homes. The
conveyance of the Contracts to the Trustee will include a conveyance of all
rights to receive Scheduled Payments thereon that were due on or after the Cut-
off Date, even if received prior to the Cut-off Date, as well as all rights to
any payments received on or after the Cut-off Date other than late receipts of
Scheduled Payments that were due prior to the Cut-off Date. The Contracts will
be described on a schedule attached to the Agreement (the "Contract Schedule").
The Contract Schedule will include the principal balance of each Contract as of
the Cut-off Date, the amount of each Scheduled Payment due on each Contract as
of the Cut-off Date, the Contract Rate on each Contract (determined as of the
Cut-off Date) and the maturity date of each Contract. GreenPoint will be
required to complete a review of all of the originals of the Contracts, the
certificates of title to, or other evidence of a perfected security interest in,
the Manufactured Homes, any related Mortgages, if any, and any assignments or
modifications of the foregoing (collectively, the "Contract Files") confirming
the accuracy of the Contract Schedule delivered to the Trustee within the time
period set forth in the related Agreement. Any Contract discovered not to agree
with such schedule in a manner that is materially adverse to the interests of
the Certificateholders will be repurchased by GreenPoint, or replaced with
another Contract, except that if the discrepancy relates to the principal
balance of a Contract (determined as described above), GreenPoint may, under
certain conditions, deposit cash in the Certificate Account in an amount
sufficient to offset such discrepancy. The Trustee will not review the Contract
Files. (Section 2.01.)
If so provided in the related Prospectus Supplement, the Servicer will
hold, as custodian and agent on behalf of the Trustee, the original Contracts
and copies of documents and instruments relating to each Contract and the
security interest in the Manufactured Home, and real property, if any, relating
to each Contract. In order to give notice of the Trustee's right, title and
interest in and to the Contracts, a UCC-1 financing statement identifying the
Trustee as the secured party and identifying all the Contracts as collateral
will be filed in the appropriate office in the appropriate states. The
Contracts will be stamped or otherwise marked to reflect their assignment to the
Trustee. To the extent that the Contracts do not constitute "chattel paper"
within the meaning of the UCC as in effect in the applicable jurisdictions or to
the extent that the Contracts do constitute chattel paper and a subsequent
purchaser is able to take physical possession of the Contracts without notice of
such assignment, the Trustee's interest in the Contracts could be defeated. See
"Certain Legal Aspects of the Contracts--Security Interests in the Manufactured
Homes" and "Land Home and Land-in-Lieu Contracts" herein.
GreenPoint will make certain representations and warranties to the
Trustee with respect to each Contract sold by it. The applicable Prospectus
Supplement will describe the representations and warranties made by GreenPoint
in connection with the Contracts conveyed to the related Trust Fund, the terms
pursuant to which GreenPoint will be obligated to repurchase, at the price
specified therein, any Contract sold by it if any such representation and
warranty has been breached (unless such breach has been cured or otherwise is
not required to be cured), and the terms pursuant to which GreenPoint may remedy
any such breach. (Section 3.05.)
27
<PAGE>
PAYMENTS ON CONTRACTS
The applicable Prospectus Supplement will specify the arrangements
pursuant to which Contract collections are held pending distribution to
Certificateholders. (Section 4.05.) Certain Contract collections will be
applied to pay the Servicer's servicing compensation and to reimburse it for
certain expenses, as set forth in each Prospectus Supplement and as set forth
herein under "--Servicing Compensation and Payment of Expenses; Certain Matters
Regarding the Servicer" below.
DISTRIBUTIONS ON CERTIFICATES
The Certificates of any Class will entitle the holders thereof to
distributions, on the Distribution Dates specified in the related Prospectus
Supplement, from amounts collected on the underlying Contracts. The
Certificates of a Class may entitle the holders thereof to (a) distributions of
both principal and interest, (b) distributions of principal only, or (c)
distributions of interest only. Such distributions will be made in accordance
with a formula described in the related Prospectus Supplement, and, unless
otherwise specified in such Prospectus Supplement, such distributions will be
applied first to interest, if any, and second to principal, if any. To the
extent specified in the related Prospectus Supplement, the rights of the holders
of the Certificates of one or more Classes of a multiple Class Series to receive
distributions of principal or of interest or of both from amounts collected on
the Contracts may be subordinate to such rights of the holders of Certificates
of one or more other Classes. See "Credit and Liquidity Enhancement" herein.
B. Distributions of Principal. If the Certificates of a Class
entitle the holders thereof to distributions of principal, the related
Prospectus Supplement will specify an initial aggregate Certificate Balance for
the Certificates of such Class and a method of computing the amount of
principal, if any, to be distributed to the holders of such Certificates on each
Distribution Date. Unless otherwise specified in the related Prospectus
Supplement, principal distributions for the Certificates of a Class will be
computed on the basis of a formula which, on each Distribution Date, allocates
all or a portion of the Total Regular Principal Amount relating to such
Distribution Date to the Certificates of such Class. The "Total Regular
Principal Amount" is the total amount by which the aggregate outstanding
principal balance of the Contracts in the related Contract Pool is reduced
during one or more collection periods prior to such Distribution Date designated
in such Prospectus Supplement (each, a "Collection Period"). Such reduction may
occur as a result of actuarially predetermined scheduled principal reductions,
receipt of principal prepayments, liquidation of Contracts, repurchases of
Contracts under certain conditions, losses on Contracts, the failure of a third
party credit support provider, if any, to make a required payment, or a
combination of any of the foregoing events. See "The Contract Pools" and "--
Servicing Compensation and Payment of Expenses; Certain Matters Regarding the
Servicer" herein. Distributions with respect to all or a portion of the Total
Regular Principal Amount are sometimes referred to herein as distributions of
"Regular Principal." The Total Regular Principal Amount with respect to any
Contract Pool and any Distribution Date may be estimated in a manner specified
in the related Prospectus Supplement.
If, due to liquidation losses or other circumstances adversely
affecting the collections on the underlying Contract Pool, the Contract
collections available on any
28
<PAGE>
Distribution Date to make distributions of Regular Principal to the holders of
the Certificates of a Class are less than the portion of the Total Regular
Principal Amount allocable to such Class, the deficiency may be made up from (i)
the amount ("Excess Interest"), if any, by which the interest collected on
nondefaulted Contracts during the same Collection Period exceeds the interest
distribution due to the holders of the Certificates for the related Series and,
unless otherwise specified in the related Prospectus Supplement and if
GreenPoint is acting as Servicer, the Monthly Servicing Fee (as defined
hereinafter and in the related Prospectus Supplement), or (ii) funds available
from one or more forms of credit support referred to below, but only to the
extent, if any, specified in the applicable Prospectus Supplement. See "Credit
and Liquidity Enhancement" herein. If specified in the applicable Prospectus
Supplement, the Certificate Balance of the Certificates of a Class will be
reduced on each Distribution Date by the full amount of the portion of the Total
Regular Principal Amount allocable to such Class even if, due to deficient
Contract collections, a full distribution thereof is not made.
The applicable distribution formula for each Class of a multiple-Class
Series may allocate the Total Regular Principal Amount among the various Classes
on a pro rata, sequential or other basis, as specified in the related Prospectus
Supplement. If specified in the related Prospectus Supplement, any such formula
may entitle the holders of Certificates of a particular Class to receive on
certain Distribution Dates, distributions of Regular Principal from particular
sources of funds (e.g., one or more of the forms of credit support referred to
below) upon the occurrence of certain losses or delinquencies, even if the
holders of the Certificates of such Class would not have been entitled to
receive principal distributions on such Distribution Dates from amounts
collected on the underlying Contracts in the absence of such losses or
delinquencies.
If specified in the applicable Prospectus Supplement, the Certificates
of a Class may entitle the holders thereof to Special Principal Distributions on
particular Distribution Dates that are unrelated to the Total Regular Principal
Amount for any such Distribution Date ("Special Principal Distributions").
Special Principal Distributions may be made, under the circumstances set forth
in the applicable Prospectus Supplement, from interest collected on the
underlying Contract Pool, from funds available from one or more forms of credit
support or from any other source specified in such Prospectus Supplement. The
Certificates of a Class having an initial Certificate Balance may entitle the
holders thereof to distributions of Regular Principal only, to distributions of
Regular Principal and to Special Principal Distributions or to Special Principal
Distributions only. However, unless otherwise stated in the related Prospectus
Supplement, the Certificates of a Class will not entitle the holders thereof to
aggregate principal distributions in excess of the initial Certificate Balance
for such Class.
C. Distributions of Interest. The distribution formula for a Class
of Certificates having an initial Certificate Balance may, but need not, also
specify a method of computing the interest, if any, to be distributed on
specified Distribution Dates (which may include all or less than all of the
Distribution Dates) to the holders of the Certificates of such Class. Such
interest may be equal, subject to such adjustments as may be described in the
related Prospectus Supplement, to a specified number of days' interest on the
applicable Certificate Balance (before giving effect to any reduction thereof on
such Distribution Date), calculated at a rate (the "Pass-Through Rate")
specified in the related Prospectus Supplement. The Pass-Through Rate may be
fixed or variable, and, if specified in the related Prospectus Supplement, may
shift from a variable rate to a fixed rate under the conditions specified in
such Prospectus
29
<PAGE>
Supplement. Variable Pass-Through Rates may vary from time to time based upon
changes in an index or other measure of certain market rates, all as more fully
described in the related Prospectus Supplement. In that case, the time period
between Pass-Through Rate adjustments (each, a "Rate Period") and the specific
basis on which the Pass-Through Rate for each Rate Period will be determined
(including the particular market rates and measures thereof relevant for
determining the Pass-Through Rate for each Rate Period) may remain constant or
may change from time to time at the election of the Servicer or otherwise, all
as specified in the related Prospectus Supplement. Variable Pass-Through Rates
may also vary from time to time, in the manner specified in the related
Prospectus Supplement, based upon changes in the weighted average of the
Contract Rates of the Contracts in the related Contract Pool or on any other
basis. To the extent set forth in the related Prospectus Supplement, variable
Pass-Through Rates may also have floor rates and/or ceiling rates which may be
fixed or subject to adjustment as set forth in such Prospectus Supplement. In
addition, a variable Pass-Through Rate may be converted to a fixed Pass-Through
Rate at the election of the Seller or upon the occurrence of certain conditions.
In that event, the related Prospectus Supplement will set forth the conditions
under which the variable Pass-Through Rate may be converted to a fixed Pass-
Through Rate.
Rather than entitling the holders thereof to receive distributions of
interest based upon a Pass-Through Rate, the distribution formula for the
Certificates of a Class may entitle the holders thereof to distributions of
interest on specified Distribution Dates (which may include all or less than all
of the Distribution Dates) equal, in the case of any such Distribution Date, to
all or a portion (which portion will be determined as described in the related
Prospectus Supplement) of the interest payable on the related Contracts during
one or more Collection Periods occurring prior to such Distribution Date.
Classes of Certificates that do not entitle the holders thereof to receive
distributions of principal may nevertheless entitle such holders to receive
interest distributions calculated on this basis.
If, due to liquidation losses or other circumstances adversely
affecting the collections on the underlying Contract Pool, the Contract
collections available to make distributions of interest to the holders of the
Certificates of a Class are less than the amount of interest computed as
described above, the deficiency may be made up from other sources, but only to
the extent, if any, specified in the applicable Prospectus Supplement. See
"Credit and Liquidity Enhancement" herein.
Each Prospectus Supplement will contain information relating to the
full amounts of principal and interest required to be distributed to the holders
of the related Class or Classes of Certificates, to the extent there are
sufficient Contract collections available therefor (sometimes referred to herein
as "full distributions"), from amounts paid or payable on the underlying
Contracts.
D. Residual Interests. If specified in the related Prospectus
Supplement, a Class of Certificates sold hereunder may evidence a residual
interest in the related Trust Fund (the "Residual Interest"). Certificates
evidencing a Residual Interest will not have the features described above.
Rather, unless otherwise specified in such Prospectus Supplement, such
Certificates will entitle the holders thereof to receive distributions from
amounts collected on the Contracts which would not be needed to make
distributions to the holders of other interests in the Trust Fund (or to pay
expenses of the Trust Fund) in the absence of liquidation losses or other
30
<PAGE>
events resulting in deficient Contract collections. In addition, if specified in
such Prospectus Supplement, any such Certificates may also entitle the holders
thereof to receive additional distributions of assets of the related Trust Fund,
to the extent any such assets remain after being applied to make distributions
to the holders of other interests in the Trust Fund (or to pay expenses of the
Trust Fund). Further, is so specified in the related Prospectus Supplement, any
amounts due to the holders of a Residual Interest with respect to any Series may
be subordinated to amounts due to holders of Certificates of another Series to
the extent described in such Prospectus Supplement. The Certificates evidencing
a Residual Interest may entitle the holders thereof to distributions at various
times throughout the life of the related Trust Fund or only upon termination of
the Trust Fund, all as more fully set forth in the related Prospectus
Supplement. If an election is made to treat the related Trust Fund as a REMIC
(as hereinafter defined), the holders of a Residual Interest in such Trust Fund
will be subject to federal income taxation with respect to their ownership of
such Residual Interest as described herein under "Certain Federal Income Tax
Consequences--REMIC Certificates--D. Taxation of Residual Certificates."
GLOBAL CERTIFICATES
Unless otherwise specified in the applicable Prospectus Supplement,
the Certificates of a Series, or of one or more Classes within a Series, will be
issuable in the form of one or more global certificates (each, a "Global
Certificate") that are initially registered in the name of Cede & Co. ("Cede"),
as nominee of The Depository Trust Company ("DTC"), on behalf of the beneficial
owners (the "Certificate Owners") of the Certificates. DTC is a limited-purpose
trust company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code, and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC accepts securities for
deposit from its participating organizations ("Participants") and facilitates
the clearance and settlement of securities transactions between Participants in
such securities through electronic book-entry changes in accounts of
Participants, thereby eliminating the need for physical movement of
certificates. Participants include securities brokers and dealers, banks and
trust companies and clearing corporations and may include certain other
organizations. Indirect access to the DTC system is also available to others
such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a Participant, either directly or
indirectly ("Indirect Participants").
Certificate Owners who are not Participants but desire to purchase,
sell or otherwise transfer ownership of Certificates may do so only through
Participants (unless and until Definitive Certificates are issued). In
addition, Certificate Owners will receive all distributions of principal of, and
interest on, the Certificates from the Trustee through DTC and Participants.
Certificate Owners will not receive or be entitled to receive certificates
representing their respective interests in the Certificates, except under the
limited circumstances described below. In addition, if some or all of the
Certificates of a Series are issued in the form of one or more Global
Certificates, certain monthly and annual reports prepared by the Servicer under
the related Agreement will be sent on behalf of the related Trust Fund to Cede
and not to the Certificate Owners.
Unless and until Definitive Certificates are issued, it is anticipated
that the only "Certificateholder" of the Certificates will be Cede, as nominee
of DTC. Certificate Owners will
31
<PAGE>
not be Certificateholders as that term is used in the Agreement. Certificate
Owners are only permitted to exercise the rights of Certificateholders
indirectly through Participants and DTC.
Unless otherwise specified in the related Prospectus Supplement, while
the Certificates are outstanding (except under the circumstances described
below), under the rules, regulations and procedures creating and affecting DTC
and its operations (the "DTC Rules"), Participants are required to make book-
entry transfers through DTC's facilities with respect to the Certificates, and
DTC as the sole holder of the Certificates is required to receive and transmit
distributions of principal of, and interest on, the Certificates. Unless and
until Definitive Certificates are issued, Certificate Owners who are not
Participants may transfer ownership of Certificates only through Participants by
instructing such Participants to transfer Certificates, by book-entry transfer,
through DTC for the account of the purchasers of such Certificates, which
account is maintained with their respective Participants. Under the DTC Rules
and in accordance with DTC's normal procedures, transfers of ownership of
Certificates will be executed through DTC, and the accounts of the respective
Participants at DTC will be debited and credited.
Definitive Certificates will be issued to Certificate Owners, or their
nominees, rather than to DTC, only if (i) the Servicer advises the Trustee in
writing that DTC is no longer willing or qualified to discharge properly its
responsibilities as nominee and depository with respect to the Certificates and
the Servicer or the Trustee is unable to locate a qualified successor, (ii) the
Seller, at its option, elects to terminate the book-entry system through DTC, or
(iii) after the occurrence of an Event of Default (See "--Servicing Compensation
and Payment of Expenses; Certain Matters Regarding the Servicer--Events of
Default" below), Certificate Owners having a majority in Percentage Interests of
each Class of the Certificates advise the Trustee and DTC through the
Participants, in writing, that the continuation of a book-entry system through
DTC (or a successor thereto) to the exclusion of any physical certificates being
issued to Certificate Owners is no longer in the best interests of Certificate
Owners. Upon issuance of Definitive Certificates to Certificate Owners, such
Certificates will be transferable directly (and not exclusively on a book-entry
basis), and registered holders will deal directly with the Trustee with respect
to transfers, notices and distributions.
Except as otherwise specified in the related Prospectus Supplement,
unless and until Definitive Certificates are issued, DTC will take any action
permitted to be taken by a Certificateholder under the Agreement only at the
direction of one or more Participants to whose DTC accounts the Certificates are
credited and will take such action with respect to any Percentage Interests of
the Certificates only at the direction of and on behalf of such Participants
with respect to such Percentage Interests of the Certificates. DTC may take
actions, at the direction of the related Participants, with respect to some
Certificates which conflict with actions taken with respect to other
Certificates.
OPTIONAL AND MANDATORY REPURCHASE OF CERTIFICATES; OPTIONAL TERMINATION AND
TERMINATION AUCTION
A. Optional Repurchase. Unless otherwise specified in the
applicable Prospectus Supplement, the Servicer for any Trust Fund will have the
option to repurchase, upon giving notice mailed no later than the Distribution
Date next preceding the month of the exercise
32
<PAGE>
of such option, all outstanding Contracts after the first Distribution Date on
which the Pool Scheduled Principal Balance (as defined hereinafter) is less than
10% (or such other percentage as may be specified in the related Prospectus
Supplement) of the initial Pool Principal Balance on the Cut-off Date. The price
at which the Servicer for such Trust Fund may repurchase the related Contracts
will equal, after deductions of related advances by the Servicer, the greater of
(a) the sum of (x) 100% of the Pool Scheduled Principal Balance of each Contract
(other than any Contract as to which the related Manufactured Home has been
acquired and not yet disposed of and whose fair market value is included
pursuant to clause (y) below) as of the final Distribution Date, and (y) the
fair market value of such acquired property (as determined by the Servicer) and
(b) the aggregate fair market value (as determined by the Servicer) of all of
the assets of such Trust Fund, plus, in the case of both clause (a) and (b), an
amount sufficient to reimburse Certificateholders for each outstanding Class for
any shortfall in interest due thereto in respect of prior Distribution Dates.
Notwithstanding the foregoing, the Servicer's option shall not be exercisable if
there will not be distributed to the Certificateholders for each outstanding
Class an amount equal to the aggregate Certificate Balance for each outstanding
Class together with any shortfall in interest due to such Certificateholders in
respect of prior Distribution Dates and one month's interest on the aggregate
Certificate Balance for each outstanding Class at the respective Pass-Through
Rates for such Classes (the "Minimum Termination Amount"). See "Description of
the Certificates--Optional Termination" in the related Prospectus Supplement.
(Section 10.01.)
B. Mandatory Repurchase. Some or all of the Certificates of a Class
may be subject to repurchase by or on behalf of the Seller at the option of the
holders thereof and/or at the option of the Seller, but only to the extent, at
the prices, on the dates and under the conditions specified in the related
Prospectus Supplement. In addition, some or all of the Certificates of a Class
may be subject to mandatory repurchase by or on behalf of the Seller to the
extent, at the prices, on the dates and under the conditions specified in the
related Prospectus Supplement. On the date on which any Certificate is subject
to repurchase (the "Repurchase Date") the holder thereof will cease to be
entitled to any benefit of the Certificate or the related Agreement and will be
entitled only to receive from the Trustee the repurchase price of the
Certificate upon surrender thereof at the office or agency designated by the
Trustee. To the extent specified in the related Prospectus Supplement, the funds
necessary to distribute the repurchase price of any Certificate subject to
mandatory or optional repurchase as described therein will be provided under a
certificate purchase agreement or other Liquidity Facility as described in
"Credit and Liquidity Enhancement" herein.
C. Optional or Mandatory Termination Auction. If specified in the
applicable Prospectus Supplement, on any Distribution Date after the
Distribution Date on which the Pool Scheduled Principal Balance is less than 10%
(or such other percentage as may be specified in the related Prospectus
Supplement) of the Cut-off Date Pool Principal Balance, the Servicer will, in
addition to the option to repurchase the Contracts discussed above, have the
option to direct the Trustee to solicit bids for the purchase at an auction (the
"Termination Auction") of the Contracts remaining in the Trust Fund. Unless the
Servicer has either exercised the option to repurchase the Contracts or directed
the Trustee to conduct a Termination Auction within 90 days of the Distribution
Date on which the Pool Scheduled Principal Balance is less than 10% (or such
other percentage as may be specified in the related Prospectus Supplement) of
the Cut-off Date Pool Principal Balance, the Servicer shall, to the extent
specified in the related
33
<PAGE>
Prospectus Supplement, be obligated to direct the Trustee to conduct such a
Termination Auction. In any Termination Auction, the Servicer shall give notice
as specified in the applicable Prospectus Supplement before the date on which
the Termination Auction is to occur. The Trustee will solicit each
Certificateholder, the Seller and one or more active participants in the asset-
backed securities or manufactured housing contract market that are not
affiliated with GreenPoint to make a bid to purchase the Contracts at the
Termination Auction. The Trustee will sell all the Contracts to the highest
bidder, subject, among other things, to (i) the requirement that the highest bid
equal or exceed the Minimum Termination Amount, and (ii) the requirement that at
least one bid be tendered by an active participant in the asset-backed
securities or manufactured housing contract market that is not affiliated with
GreenPoint. If the foregoing requirements are satisfied, the successful bidder
or bidders shall deposit the aggregate purchase price for the Contracts in the
Certificate Account. If the foregoing requirements are not satisfied, the
purchase shall not occur and distributions will continue to be made on the
Certificates. Any sale and consequent termination of the Trust Fund as a result
of a Termination Auction must constitute a "qualified liquidation" of the Trust
Fund under Section 860F of the Code. (Section 10.1)
TERMINATION OF THE AGREEMENT
The Agreement will terminate upon the last action required to be taken
by the Trustee on the final Distribution Date following the earlier of (i) the
purchase or sale of all Contracts and all property acquired in respect of any
Contract remaining in the Trust Fund as described above under "--Optional and
Mandatory Repurchase of Certificates; Termination Auction" or (ii) the final
payment or other liquidation (or any advance with respect thereto) of the last
Contract remaining in the relevant Trust Fund (including the disposition of all
property acquired upon repossession of any Manufactured Home). (Section 10.01.)
In the event of the termination of any Agreement, the holders of
Certificates of any Class of the related Series will be entitled to receive,
upon presentation and surrender of their Certificates at the office or agency
designated by the Trustee, a final distribution in an amount computed as
described in the related Prospectus Supplement.
COLLECTION AND OTHER SERVICING PROCEDURES
Except as otherwise provided in the related Agreement, the Servicer
may rescind, cancel or make material modifications of the terms of a Contract
(including modifying the amounts and Due Dates of Scheduled Payments) in
connection with a default or imminent default thereunder. However, unless
otherwise specified in the related Prospectus Supplement and unless required by
the applicable law or to bring Contracts into conformity with the
representations and warranties contained in the Agreement, the Servicer may not
rescind, cancel or materially modify any Contract unless the Servicer obtains an
opinion of counsel to the effect that such action will not have certain adverse
federal income tax consequences. (Section 4.07.)
34
<PAGE>
SERVICING COMPENSATION AND PAYMENT OF EXPENSES; CERTAIN MATTERS REGARDING THE
SERVICER
The monthly servicing fee (the "Monthly Servicing Fee") and any
additional servicing compensation with respect to the Contracts underlying a
Series of Certificates will be specified in the applicable Prospectus
Supplement. (Section 1.01.) If so specified in the related Prospectus
Supplement, if GreenPoint is acting as Servicer, GreenPoint may subordinate the
Monthly Servicing Fee for a Series with respect to all, or a portion of, the
amounts due to the related Certificateholders on the terms and conditions set
forth in such Prospectus Supplement.
The Monthly Servicing Fee provides compensation for customary
manufactured housing contract third-party servicing activities to be performed
by the Servicer for the Trust Fund and for additional administrative services
performed by the Servicer on behalf of the Trust Fund. 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 with respect to each Contract.
Administrative services performed by the Servicer on behalf of the Trust Fund
include calculating distributions to Certificateholders and providing related
data processing and reporting services for Certificateholders and on behalf of
the Trustee. Unless otherwise specified in the applicable Prospectus
Supplement, expenses incurred in connection with servicing the Contracts and
paid by the Servicer from its Monthly Servicing Fee include, without limitation,
payment of fees and expenses of accountants, payment of all fees and expenses
incurred in connection with the enforcement of Contracts (except liquidation
expenses and certain other expenses) and payment of expenses incurred in
connection with distributions and reports to Certificateholders. The Servicer
will be reimbursed out of the liquidation proceeds from a defaulted Contract for
all reasonable, out-of-pocket liquidation expenses incurred by it in realizing
upon the related Manufactured Home as well as for advances of taxes and
insurance premiums previously made with respect to any such Contract (to the
extent not previously recovered).
Unless otherwise specified in the related Prospectus Supplement, as
part of its servicing fees, the Servicer will also be entitled to retain, as
compensation for the additional services provided in connection therewith, any
fees for late payments made by Obligors, conversion fees relating to variable
rate Contracts, a fee associated with the enforcement of deficiency amounts on
Liquidated Contracts if deficiency amounts are recoverable under the laws of the
applicable jurisdiction, 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. (Sections 4.15 and 5.03.) To the
extent specified in the related Prospectus Supplement, the Servicer will also be
entitled to use payments of principal and interest (including Liquidation
Proceeds net of Liquidation Expenses) for its own benefit, without an obligation
to pay interest or any other investment return thereon, until the related
Distribution Date.
Unless otherwise specified in the applicable Prospectus Supplement,
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 Agreement, so long as such successor has a
net worth of at least $50 million and has serviced at least $100 million of
35
<PAGE>
manufactured housing contracts for at least one year. The Servicer may assign
its rights and delegate its duties under the Agreement (whereupon it will no
longer be liable for the obligations of the Servicer under the Agreement),
provided that, among other conditions, any rating assigned to the Certificates
will not be reduced because of such assignment and delegation. (Sections 7.04,
7.06 and 7.07.)
A. Hazard Insurance Policies. Unless otherwise specified in the
related Prospectus Supplement, the Servicer will be obligated to cause to be
maintained one or more hazard insurance policies with respect to each
Manufactured Home in an amount at least equal to the lesser of its maximum
insurable value or the principal amount due from the Obligor under the related
Contract. Such hazard insurance policies will, at a minimum, provide fire and
extended coverage on terms and conditions customary in manufactured housing
hazard insurance policies. If a Manufactured Home is located within a federally
designated flood area, the Servicer will, to the extent required by applicable
law or regulation, also be obligated to cause flood insurance to be maintained
in an amount equal to the lesser of the amounts described above or the maximum
amount available for such Manufactured Home under the federal flood insurance
programs. Such policies may provide for customary deductible amounts. Coverage
thereunder will be required to be sufficient to avoid the application of any co-
insurance provisions. Such policies will be required to contain a standard loss
payee clause in favor of the Servicer and its successors and assigns. In
general, the Servicer will not be obligated to cause to be obtained and
maintained hazard insurance policies that provide earthquake coverage. If
earthquake coverage is required with respect to Contracts in a particular Trust
Fund, that fact will be disclosed in the related Prospectus Supplement.
Unless otherwise specified in the related Prospectus Supplement, all
amounts collected by the Servicer under a hazard or flood insurance policy will
be applied either to the restoration or repair of the Manufactured Home or
against the remaining principal balance of the related Contract upon
repossession of the Manufactured Home, after reimbursing the Servicer for
amounts previously advanced by it for such purposes. The Servicer may satisfy
its obligation to maintain hazard and flood insurance policies with respect to
each Manufactured Home by maintaining a blanket policy insuring against hazard
and flood losses on the related Obligor's interest in such Manufactured Home.
Such blanket policy may contain a deductible clause, in which case the Servicer
will be required to make payments to the related Trust Fund in the amount of any
deductible amounts in connection with insurance claims on repossessed
Manufactured Homes.
Unless otherwise specified in the related Prospectus Supplement, if
the Servicer repossesses a Manufactured Home on behalf of the Trustee, the
Servicer is required to either maintain a Hazard Insurance Policy with respect
to such Manufactured Home meeting the requirements set forth above, or to
indemnify the Trust Fund against any damage to such Manufactured Home prior to
resale or other disposition. (Section 4.09.)
B. Evidence as to Compliance. Unless otherwise specified in the
related Prospectus Supplement, the Servicer will be required to deliver to the
Trustee each year an officer's certificate executed by an officer of the
Servicer (i) stating that a review of the activities of the Servicer during the
preceding calendar year and of performance under the Agreement has been made
under the supervision of such officer, and (ii) stating that to the best of such
officer's
36
<PAGE>
knowledge, the Servicer has fulfilled all its obligations under the Agreement
throughout such year, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officer and the
nature and status thereof. Such officer's certificate will be accompanied by a
statement of a firm of independent public accountants to the effect that, on the
basis of an examination of certain documents and records relating to servicing
of the Contracts under the Agreement (or, at the Servicer's option, the
Contracts and other contracts being serviced by the Servicer under agreements
similar to the Agreement), conducted in accordance with generally accepted
auditing standards, the Servicer's servicing has been conducted in compliance
with the provisions of the Agreement (or such agreements), except (i) such
exceptions as such firm believes to be immaterial and (ii) such other exceptions
as may be set forth in such statement. (Sections 4.20 and 4.21.)
C. Events of Default. Unless otherwise specified in the related
Prospectus Supplement, events of default under the Agreement will consist of (i)
any failure by the Servicer to make any deposit or payment required of it under
the Agreement which continues unremedied for five days after the giving of
written notice, (ii) any failure by the Servicer duly to observe or perform in
any material respect any of its other covenants or agreements in the Agreement
which continues unremedied for 30 days after the giving of written notice of
such failure, and (iii) certain events of insolvency, readjustment of debt,
marshaling of assets and liabilities or other similar proceedings regarding the
Servicer. Unless otherwise specified in the related Prospectus Supplement,
"notice" as used in this paragraph means notice to the Servicer by the Trustee,
the Seller or, if applicable, the Credit Facility Provider, or to the Servicer,
the Trustee and the Seller by the holders of Certificates evidencing interests
("Fractional Interests") in the outstanding principal balance of outstanding
Certificates that, in the aggregate, equal at least 25% of the principal balance
of all outstanding Certificates (excluding Certificates held by the Seller or
any of its affiliates). (Section 8.01.)
D. Rights Upon Event of Default. Unless otherwise specified in the
related Prospectus Supplement so long as an event of default remains unremedied,
the Trustee may (but only with the consent of the Credit Facility Provider (if
any) if the Credit Facility has not expired or if the Credit Facility has
expired or been terminated and such Credit Facility Provider has not been
reimbursed for all amounts due it), and at the written direction of the holders
of Certificates evidencing Fractional Interests aggregating not less than 51%
shall, terminate all of the rights and obligations of the Servicer under the
Agreement and in and to the related Contracts, whereupon (subject to applicable
law regarding the Trustee's ability to make monthly 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. If the Trustee is obligated to succeed the
Servicer but is unwilling or unable so to act, it may appoint or petition a
court of competent jurisdiction for the appointment of a Servicer. Pending such
appointment, the Trustee is obligated to act in such capacity. The Trustee and
such successor Servicer may agree upon the servicing compensation to be paid,
which in no event may be greater than a monthly amount specified in the
Agreement. (Sections 7.07 and 8.01.)
Unless otherwise specified in the related Prospectus Supplement, no
Certificateholder will have any right under the Agreement to institute any
proceeding with respect to the Agreement unless such holder previously has given
to the Trustee written notice of
37
<PAGE>
default and unless the holders of Certificates evidencing Fractional Interests
aggregating not less than 25% have requested the Trustee in writing to institute
such 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 such proceeding. The Trustee will be under no obligation to take
any action or institute, conduct or defend any litigation under the Agreement at
the request, order or direction of any of the holders of Certificates, unless
such Certificateholders have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which the Trustee may
incur. (Sections 8.01 and 11.08.)
AMENDMENT
Unless otherwise specified in the related Prospectus Supplement, the
Agreement may be amended by the Seller, the Servicer and the Trustee without the
consent of the Certificateholders (but only with the consent of the Credit
Facility Provider (if any) if the Credit Facility has not expired or if the
Credit Facility has expired or been terminated and such Credit Facility Provider
has not been reimbursed for all amounts due it), (i) to cure any ambiguity, (ii)
to correct or supplement any provision therein that may be inconsistent with any
other provision therein, (iii) to add to the duties or obligations of the
Servicer, (iv) to obtain a rating from a nationally recognized rating agency or
to maintain or improve the ratings of any Class of the Certificates then given
by any rating agency (it being understood that, after obtaining the rating of
the Certificates from the rating agencies specified in such Agreement, none of
the Trustee, the Seller or the Servicer is obligated to obtain, maintain or
improve any rating assigned to the Certificates), or (v) to make any other
provisions with respect to matters or questions arising under such Agreement,
provided that such action will not, as evidenced by an opinion of counsel,
adversely affect in any material respect the interests of the
Certificateholders. The Agreement may also be amended, by the Seller, the
Servicer and the Trustee with the consent of at least 51% of the holders of
Certificates of each Class affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
such Agreement or of modifying in any manner the rights of the
Certificateholders; provided, however, that no such amendment shall (i) reduce
in any manner the amount of, or delay the timing of, any distributions on any
Certificate, without the consent of the Holder of such Certificate as the case
may be, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in (i),
without the consent of the Holders of Certificates of such Class evidencing, as
to such Class, Percentage Interests aggregating 66% or (iii) reduce the
aforesaid percentage of Certificates the holders of which are required to
consent to any such amendment, without the consent of the holders of all
Certificates then outstanding, and no such amendment shall adversely affect the
status of the Trust Fund as a REMIC.
Unless otherwise specified in the applicable Prospectus Supplement,
the Agreement may also be amended from time to time, without the consent of any
Certificateholders, by the Seller, the Trustee and the Servicer to modify,
eliminate or add to the provisions of the Agreement to (i) maintain the
qualification of the Trust Fund as a REMIC under the Code or avoid, or minimize
the risk of, the imposition of any tax on the Trust Fund under the Code that
would be a claim against the Trust Fund assets, provided that an opinion of
counsel is delivered to the Trustee to the effect that such action is necessary
or appropriate to maintain such qualification or avoid any such tax or minimize
the risk of its imposition, or (ii) prevent the Trust Fund from entering into
any "prohibited transaction" as defined in Section
38
<PAGE>
860F of the Code, provided that an opinion of counsel is delivered to the
Trustee to the effect that such action is necessary or appropriate to prevent
the Trust Fund from entering into such prohibited transaction. (Section 11.01.)
The Agreement may otherwise be subject to amendment without the
consent of any Certificateholders and, under certain circumstances, without the
consent of the Trustee, if and to the extent specified in the related Prospectus
Supplement.
THE TRUSTEE
The Trustee with respect to a Series will be identified in the
applicable Prospectus Supplement. Unless otherwise specified therein, the
Trustee may resign at any time, in which event the Seller will be obligated to
appoint a successor Trustee. The Seller may also remove the Trustee if the
Trustee ceases to be eligible to continue as such under the related Agreement or
if the Trustee becomes insolvent. In such circumstances, the Seller will also
be obligated to appoint a successor Trustee. Any resignation or removal of the
Trustee and appointment of a successor Trustee will not become effective until
acceptance of the appointment by the successor Trustee. (Section 9.07.)
Unless otherwise specified in the related Prospectus Supplement, the
Agreement for any Series will require the Trustee to maintain, at its own
expense, an office or agency in New York City where the Certificates for such
Series may be surrendered for registration of transfer or exchange and where
notices and demands to or upon the Trustee and the Certificate Registrar in
respect of such Certificates pursuant to the related Agreement may be served.
Unless otherwise specified in the related Prospectus Supplement, the
Trustee, or any of its affiliates, in its individual or any other capacity, may
become the owner or pledgee of the Certificates of any Series with the same
rights as it would have if it were not Trustee.
Unless otherwise specified in the related Prospectus Supplement, the
Trustee will act as Paying Agent, Certificate Registrar and Authenticating Agent
for the related Series of Certificates.
INDEMNIFICATION
Unless otherwise specified in the applicable Prospectus Supplement,
each Agreement will provide that neither the Servicer nor any of its directors,
officers, employees or agents will be under any liability to the Trustee or the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to such Agreement, or for errors in judgment;
provided, however, that such provision shall not protect the Servicer or any
such person against any liability that would otherwise be imposed by reason of
willful misfeasance, bad faith or gross negligence. The Servicer shall not be
under any obligation to appear in, prosecute or defend any legal action which
arises under an Agreement (other than in connection with the enforcement of any
Contract in accordance with the Agreement) and which in its opinion may involve
it in any expenses or liability; provided, however, that the Servicer may in its
discretion undertake any such other legal action which it may deem necessary or
desirable in respect of the Agreement and the rights and duties of the parties
thereto. In such event, the legal expenses and costs of such other legal action
and any liability resulting therefrom
39
<PAGE>
shall be expenses, costs and liabilities payable from the Trust Fund and the
Servicer shall be entitled to be reimbursed therefor from amounts collected on
the Contracts. (Section 7.05.)
CREDIT AND LIQUIDITY ENHANCEMENT
To the extent specified in the related Prospectus Supplement, a Class
of Certificates may be entitled to the benefit of one or more of the following
forms of credit and liquidity enhancement:
SUBORDINATION
The Certificates of one or more Classes of a multiple-Class Series
(the "Senior Certificates") may afford the holders thereof a right to receive
distributions of principal or of interest or of both on each Distribution Date
from amounts collected on the related Contract Pool that is prior to the right
to receive such distributions afforded by the Certificates of the other Class or
Classes (the "Junior Certificates" or "Subordinate Certificates"). Unless
otherwise specified in the related Prospectus Supplement, this prior right will
result from one or both of the following two features:
1. The Senior Certificates will entitle the holders thereof to
receive on some or all Distribution Dates, prior to any distribution of
principal or of interest or of both (as specified in the related Prospectus
Supplement) being made to the holders of the Junior Certificates on any such
Distribution Date, a full distribution of principal or of interest or of both
principal and interest (as specified in the related Prospectus Supplement) from
amounts collected on the Contracts during the related Collection Period(s). To
the extent that Contract collections during the related Collection Period(s)
would, in the absence of liquidation losses or other circumstances adversely
affecting such Contract collections, have been applied to make distributions to
the holders of the Junior Certificates, this feature will enhance the likelihood
of timely receipt by the holders of the Senior Certificates of full
distributions of principal or of interest or of both in accordance with the
applicable distribution formula.
2. The distribution formula for the Senior Certificates (other than
interest-only Certificates) will entitle the holders thereof to receive, on some
or all Distribution Dates, all or a disproportionate share of the Total Regular
Principal Amount until the Certificate Balance of the Senior Certificates has
been reduced to zero. See "Description of Certificates--Distributions on
Certificates--A. Distributions of Principal" above. This feature, in effect,
will provide the holders of the Senior Certificates (other than holders of
interest-only Certificates) with a prior right to receive the principal
collected on the Contracts until the Certificate Balance of the Senior
Certificates has been reduced to zero. The degree of priority will depend on the
share of the Total Regular Principal Amount to which the holders of the Senior
Certificates (other than holders of interest-only Certificates) are entitled on
particular Distribution Dates. If the holders of the Senior Certificates (other
than holders of interest-only Certificates) are entitled to receive all of the
Total Regular Principal Amount on each Distribution Date (to the extent of the
Contract collections available to make distributions of Regular Principal on
such Distribution Date), then the holders of the Senior Certificates (other than
holders of interest-only Certificates) will, in effect, have a right to receive
all principal collected on the Contracts that is absolutely prior to the right
of the holders of the Junior Certificates to receive any principal collected on
the
40
<PAGE>
Contracts. If, however, the holders of the Senior Certificates (other than
holders of interest-only Certificates) are entitled to receive only a
disproportionate share of the Total Regular Principal Amount, or are entitled to
receive all or a disproportionate share of the Total Regular Principal Amount
only on certain Distribution Dates, then the prior right of the holders of the
Senior Certificates (other than holders of interest-only Certificates) to
receive distributions of principal collected on the Contracts will, to that
extent, be limited. The prior right to receive distributions of principal
collections described above will enhance the likelihood that the holders of the
Senior Certificates (other than holders of interest-only Certificates) will
ultimately receive distributions of principal in an aggregate amount equal to
the initial Certificate Balance of the Senior Certificates. It will not,
however, enhance the likelihood of timely receipt by the holders of the Senior
Certificates of full distributions of the amounts to which they would have been
entitled in the absence of liquidation losses or other circumstances adversely
affecting Contract collections.
If specified in the related Prospectus Supplement, the features
described above may be characteristic of different Classes within a multiple-
Class Series. Thus, Certificates which constitute Senior Certificates under the
criteria described in paragraph 1 above may constitute Junior Certificates under
the criteria described in paragraph 2 above, and Certificates which constitute
Senior Certificates under the criteria described in paragraph 2 above may
constitute Junior Certificates under the criteria described in paragraph 1
above. In general, the splitting of the features described above among two
separate Classes of a multiple-Class Series will undercut the protection against
loss afforded by each of such features. The particular effects of any such
splitting will be discussed in the applicable Prospectus Supplement. The
following discussion is based on the assumption that the features described
above will not be characteristic of different Classes within a multiple-Class
Series.
The degree of protection against loss provided to the holders of the
Senior Certificates at any time by either of the subordination features
described above will be determined primarily by the degree to which the
aggregate principal balance of the underlying Contracts (the "Pool Principal
Balance") exceeds the Certificate Balance of the Senior Certificates (and to a
lesser extent, if the holders of the Senior Certificates also have a prior right
to receive interest, by the degree to which the interest payable on the
Contracts, net of the portions thereof used to pay the servicing fee of the
Servicer (if such servicing fee is payable prior to distributions of interest to
the holders of the Senior Certificates) and other expenses of the Trust Fund,
exceeds the interest distributable to the holders of the Senior Certificates).
The relative levels of the Certificate Balance of the Senior Certificates (the
"Senior Certificate Balance") and the related Pool Principal Balance, and hence
the degree of protection against loss afforded by the subordination features
described above, may change over time depending on, among other things, the
formula by which principal is distributed to the holders of the Senior
Certificates and the level of liquidation losses on the underlying Contracts.
Generally, if the holders of Senior Certificates (other than holders of
interest-only Certificates) receive a disproportionate share of the Total
Regular Principal Amount on any Distribution Date, the effect will be to
increase, as a relative matter, the degree by which the Pool Principal Balance
exceeds the Certificate Balance of the Senior Certificates, thus increasing the
degree of protection against loss afforded by the subordination of the Junior
Certificates. In addition, Special Principal Distributions to the holders of
the Senior Certificates from sources other than principal collections on the
underlying Contracts generally will increase the degree of protection against
loss above the protection that would have been provided if such distributions
were not
41
<PAGE>
made (because the Senior Certificate Balance will be reduced without a reduction
in the Pool Principal Balance). On the other hand, if, due to liquidation losses
or other circumstances adversely affecting Contract collections, the holders of
Senior Certificates (other than holders of interest-only Certificates) receive
less than their proportionate share of the Total Regular Principal Amount, the
effect will be to decrease, as a relative matter, the degree to which the Pool
Principal Balance exceeds the Certificate Balance of the Senior Certificates,
thus decreasing the degree of protection against loss afforded by the
subordination of the Junior Certificates. The effects of particular principal
distribution formulae in this regard will be discussed in the applicable
Prospectus Supplement. The description of any such effects in a particular
Prospectus Supplement may relate the Certificate Balances of the Senior
Certificates to Pool Principal Balances which are estimated or adjusted as
described therein. Such Pool Principal Balances may sometimes be referred to in
a Prospectus Supplement as "Pool Scheduled Principal Balances."
Where there is more than one Class of Junior Certificates, the rights
of one or more of such Classes of Junior Certificates to receive distributions
of principal, interest or principal and interest may be subordinated to the
rights of one or more other Classes of Junior Certificates to receive such
distributions. Any Class of Junior Certificates that is entitled to receive
such distributions from Contract Pool collections prior to any other Class of
Junior Certificates is a "mezzanine" Class of Junior Certificates. The
subordination of any Class of Junior Certificate to a mezzanine Class of Junior
Certificates will enhance the likelihood of timely receipt by the holders of
such mezzanine Class of Junior Certificates relative to any Class of Junior
Certificates that is subordinate to such mezzanine Class of Junior Certificates.
Junior Certificates, including any mezzanine Classes of Junior Certificates, may
only be sold hereunder if rated in one of the four highest rating categories of
a nationally recognized statistical rating organization. (See "Rating" herein).
The effect of any subordination on any Classes of Junior Certificates sold
hereunder will be discussed in the applicable Prospectus Supplement.
RESERVE FUNDS
The Certificates of one or more Classes may be entitled to the benefit
of one or more spread accounts or other reserve funds (each, a "Reserve Fund")
which, to the extent specified in the related Prospectus Supplement, will cover
shortfalls created when collections on the related Contract Pool that are
available to make distributions to the holders of such Certificates are not
sufficient to fund full distributions of principal, interest or principal and
interest to such Certificateholders. Any Reserve Fund may be available to cover
all or a portion of such shortfalls and may be available to cover any
shortfalls, no matter what the cause, or only shortfalls due to certain causes
(e.g., liquidation losses only or delinquencies only), all as specified in the
related Prospectus Supplement. In addition, to the extent specified in the
related Prospectus Supplement, a Reserve Fund may be used to make distributions
of interest or Regular Principal to the holders of a Class of Certificates on
particular Distribution Dates upon the occurrence of certain losses,
delinquencies or other events, even if such Certificateholders would not have
been entitled to any such distributions on such Distribution Dates in the
absence of losses, delinquencies or other events. A Reserve Fund may also be
used to fund Special Principal Distributions under the circumstances set forth
in the related Prospectus Supplement. The related Prospectus Supplement will
specify whether any Reserve Fund will be established as part of the Trust Fund
or held outside of the Trust Fund by a collateral agent or similar third
42
<PAGE>
party (who may be the Trustee acting in a different capacity) and will contain a
description of any arrangement pursuant to which the Reserve Fund is held
outside of the Trust Fund.
The method of funding any Reserve Fund, and the required levels of
funding, if any, as well as the circumstances under which amounts on deposit in
any Reserve Fund may be distributed to persons other than Certificateholders,
will be described in the applicable Prospectus Supplement. To the extent that a
Reserve Fund may be funded in whole or in part from some or all of the interest
collected on the Contracts in excess of the interest needed to make
distributions to the holders of one or more Classes of Certificates, such
Reserve Fund may be referred to in the applicable Prospectus Supplement as a
"Spread Account."
CREDIT FACILITIES
The Certificates of one or more Classes may be entitled to the benefit
of one or more letters of credit, surety bonds or similar credit facilities
(each, a "Credit Facility"). Each such Credit Facility may be in an amount
greater than, equal to or less than the Certificate Balance of the Certificates
of each Class entitled to the benefits thereof, and may be subject to reduction
or be limited as to duration, all as described in the applicable Prospectus
Supplement. To the extent specified in the related Prospectus Supplement,
amounts realized under a Credit Facility supporting the Certificates of any
Class may be used for the same purposes as amounts on deposit in Reserve Funds.
See "--Reserve Funds" above. A Credit Facility may be held by a Trustee as part
of the related Trust Fund or may be held by a collateral agent or other third
party (who may be the Trustee acting in a different capacity). The related
Prospectus Supplement will contain a description of the material terms of any
Credit Facility and any arrangement pursuant to which the Credit Facility is
held outside of the Trust Fund. Such Prospectus Supplement will also contain
certain information concerning the provider of the Credit Facility (the "Credit
Facility Provider"), which information will have been provided to the Seller by
the Credit Facility Provider for use in such Prospectus Supplement. GreenPoint
or an affiliate thereof may be a Credit Facility Provider.
If specified in the applicable Prospectus Supplement, a Credit
Facility, rather than supporting distributions of particular amounts to the
holders of Certificates of particular Classes, may, instead, support certain
collections on the related Contract Pool. These collections may be of all or a
portion of amounts due on Contracts in liquidation, all or a portion of the
scheduled monthly payments due on the Contracts or of other amounts. The extent
to which any such collections are supported by a Credit Facility which functions
in this manner will be described in the applicable Prospectus Supplement.
LIQUIDITY FACILITIES
The Certificates of one or more Classes may be entitled to the benefit
of one or more certificate purchase agreements or other liquidity facilities
(each, a "Liquidity Facility"), pursuant to which the provider of such Liquidity
Facility (the "Liquidity Facility Provider") will provide funds to be used to
purchase some or all of such Certificates on the Repurchase Dates applicable
thereto. Unless otherwise specified in the applicable Prospectus Supplement, a
Liquidity Facility will be held outside of the Trust Fund by a third party
(which may be the Trustee acting in another capacity). The related Prospectus
Supplement will contain a
43
<PAGE>
description of the material terms of any such Liquidity Facility and any
arrangement pursuant to which it is held outside of the Trust Fund, and will
contain certain information concerning the Liquidity Facility Provider, which
information will have been provided to the Seller by the Liquidity Facility
Provider for use in such Prospectus Supplement. GreenPoint or an affiliate
thereof may be a Liquidity Facility Provider. If specified in the related
Prospectus Supplement, a Reserve Fund or Credit Facility may also serve as a
Liquidity Facility.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following general discussion of the anticipated material federal
income tax consequences of the purchase, ownership and disposition of
Certificates of any Series, to the extent it relates to matters of law or legal
conclusions with respect thereto, represents the opinion of special counsel to
GreenPoint with respect to that Series on the material matters associated with
such consequences, subject to any qualifications set forth herein. Special
counsel to GreenPoint for each Series will be Orrick, Herrington & Sutcliffe
LLP, and a copy of the legal opinion of such counsel rendered in connection with
any Series of Certificates will be filed with the Commission on a Current Report
on Form 8- K within 15 days after the issuance of the related Series of
Certificates. This discussion is directed primarily to Certificateholders that
hold the Certificates as "capital assets" within the meaning of Section 1221 of
the Code (although portions thereof also may apply to Certificateholders who do
not hold Certificates as "capital assets") and it does not purport to discuss
all federal income tax consequences that may be applicable to the individual
circumstances of particular investors, some of which (such as banks, insurance
companies and foreign investors) may be subject to special treatment under the
Code. Further, the authorities on which this discussion, and the opinion
referred to below, are based are subject to change or differing interpretations,
which could apply retroactively. Prospective investors should note that no
rulings have been or will be sought from the Internal Revenue Service (the
"Service") with respect to any of the federal income tax consequences discussed
below, and no assurance can be given that the Service will not take contrary
positions. Taxpayers and preparers of tax returns (including those filed by any
REMIC or other issuer) should be aware that under applicable Treasury
regulations a provider of advice on specific issues of law is not considered an
income tax return preparer unless the advice (i) is given with respect to events
that have occurred at the time the advice is rendered and is not given with
respect to the consequences of contemplated actions, and (ii) is directly
relevant to the determination of an entry on a tax return. Accordingly,
taxpayers should consult their tax advisors and tax return preparers regarding
the preparation of any item on a tax return, even where the anticipated tax
treatment has been discussed herein. In addition to the federal income tax
consequences described herein, potential investors are advised to consider the
state, local and other tax consequences, if any, of the purchase, ownership and
disposition of Certificates in a Series. See "Other Tax Consequences."
Certificateholders are advised to consult their tax advisors concerning the
federal, state, local or other tax consequences to them of the purchase,
ownership and disposition of Certificates in a Series.
The following discussion addresses securities of two general types:
(i) certificates ("REMIC Certificates") representing interests in a Trust Fund
with respect to which an election to be treated as a "real estate mortgage
investment conduit" ("REMIC") under Sections 860A through 860G (the "REMIC
Provisions") of the Code will be made, and (ii) Grantor Trust
44
<PAGE>
Certificates representing interests in a Trust Fund ("Grantor Trust Fund") as to
which no such election will be made.
The following discussion is based in part upon the rules governing
original issue discount that are set forth in Sections 1271-1273 and 1275 of the
Code and in the Treasury regulations issued thereunder (the "OID Regulations"),
and in part upon the REMIC Provisions and the Treasury regulations issued
thereunder (the "REMIC Regulations"). The OID Regulations do not adequately
address certain issues relevant to, and in some instances provide that they are
not applicable to, securities such as the Certificates.
The following discussion is limited in applicability to the
Certificates. For purposes of this tax discussion, references to a
"Certificateholder" or a "holder" are to the beneficial owner of a Certificate.
REMIC ELECTIONS
Under the Code, an election may be made with respect to a Trust Fund
related to any Series of Certificates to treat such Trust Fund as a "real estate
mortgage investment conduit" ("REMIC") within the meaning of Section 860D(a) of
the Code, in which case the Certificates of any Class of such Series will be
either "regular interests" in the REMIC within the meaning of Section 860G(a)(1)
of the Code or "residual interests" in the REMIC within the meaning of Section
860G(a)(2) of the Code. The Prospectus Supplement for each Series of
Certificates will indicate whether each Seller of Contracts to the related
Contract Pool intends to cause an election to be made to treat the Trust Fund as
a REMIC, and if such an election is to be made, which Certificates will be
regular interests and which will be the residual interest in the REMIC. The
discussion under the heading "--REMIC Certificates" discusses Series with
respect to which the Seller of Contracts to the related Contract Pool will cause
a REMIC election to be made and the discussion under the heading "--Non-REMIC
Certificates" discusses Series with respect to which the Seller will not cause a
REMIC election to be made.
REMIC CERTIFICATES
The discussion in this section applies only to a Series of
Certificates for which a REMIC election is to be made. Upon the issuance of
each Series of Certificates for which a REMIC election is to be made, Orrick,
Herrington & Sutcliffe LLP, special counsel to GreenPoint will deliver its
opinion generally to the effect that, with respect to each such Series of
Certificates, under then existing law and assuming that a REMIC election is made
in accordance with the requirements of the Code and compliance by the Seller,
the Servicer and the Trustee for such Series with all of the provisions of the
related Agreement, the agreement or agreements, if any, providing for a Credit
Facility or a Liquidity Facility, together with any agreement documenting the
arrangement through which a Credit Facility or a Liquidity Facility is held
outside the related Trust Fund, and agreement or agreements with any
Underwriter, the Trust Fund will be a REMIC, and the Certificates of such Series
will be treated as either "regular interests" in the REMIC ("Regular
Certificates") or "residual interests" in the REMIC ("Residual Certificates").
45
<PAGE>
The following general discussion of the anticipated federal income tax
consequences of the purchase, ownership and disposition of REMIC Certificates,
to the extent it relates to matters of law or legal conclusions with respect
thereto, represents the opinion of Orrick, Herrington & Sutcliffe LLP, special
counsel to GreenPoint, subject to any qualifications set forth herein. In
addition, Orrick, Herrington & Sutcliffe LLP, special counsel to GreenPoint, has
prepared or reviewed the statements in this Prospectus under the heading
"Certain Federal Income Tax Consequences--REMIC Certificates," and are of the
opinion that such statements are correct in all material respects. Such
statements are intended as an explanatory discussion of the possible effects of
the classification of any Trust Fund as a REMIC for federal income tax purposes
on investors generally and of related tax matters affecting investors generally,
but do not purport to furnish information in the level of detail or with the
attention to an investor's specific tax circumstances that would be provided by
an investor's own tax advisor. Accordingly, each investor is advised to consult
its own tax advisors with regard to the tax consequences to it of investing in
REMIC Certificates.
A. Tax Status of REMIC Certificates. Unless otherwise specified in
the related Prospectus Supplement, the Certificates of any Series, in their
entirety, will generally be considered (i) "real estate assets" within the
meaning of Section 856(c)(4)(A) of the Code and (ii) assets described in Section
7701(a)(19)(C) of the Code (assets qualifying under one or more of those
sections, applying each section separately, "qualifying assets") for a calendar
quarter if at least 95% of the assets of the related Trust Fund are qualifying
assets during such calendar quarter. In the event the percentage of the Trust
Fund's assets which are qualifying assets falls below 95% for any calendar
quarter, then a corresponding percentage of the Certificates will be treated as
qualifying assets for such calendar quarter. Any amount includible in gross
income with respect to the Certificates will be treated as "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 Code to the extent
that the Certificates are treated as "real estate assets" within the meaning of
Section 856(c)(4)(A) of the Code. The assets of the Trust Fund will include, in
addition to the Contracts, payments on the Contracts held pending distribution,
and may include, among other assets, one or more Reserve Funds. With respect to
the treatment of Contracts as qualifying assets, (i) the Treasury Regulations
under Section 856 of the Code define a "real estate asset" under Section
856(c)(4)(A) of the Code to include a loan secured by manufactured housing that
qualifies as a single family residence under the Code, and (ii) the Treasury
Regulations under Section 7701(a)(19)(C) of the Code provide that assets
described in that Section include loans secured by manufactured housing that
qualifies as a single family residence under the Code. It is unclear whether
other assets of the Trust Fund would be treated as qualifying assets under the
foregoing sections of the Code. REMIC Certificates held by a regulated
investment company will not constitute "Government Securities" within the
meaning of Code Section 851(b)(4)(A)(ii).
B. Qualification as a REMIC. Qualification as a REMIC requires
ongoing compliance with certain conditions. The following discussion assumes
that such requirements will be satisfied by a Trust Fund so long as any REMIC
Certificates related to such Trust Fund are 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
46
<PAGE>
participation or certificate of beneficial ownership in such 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 such purchase is pursuant to a fixed price contract in
effect on the Startup Day. The REMIC Regulations provide that a manufactured
housing 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 (i) 80% of the issue price (generally, the principal balance) of the
contract at the time it was originated or (ii) 80% of the adjusted issue price
(the then outstanding principal balance, with certain 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 manufactured housing
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 as well as a published notice issued by the Internal
Revenue Service (the "Service") 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 Code, are to be treated as "qualified
mortgages" for qualifying a Trust Fund as a REMIC. Under Section 25(e)(10) of
the 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. GreenPoint will represent and warrant that each of the manufactured
homes securing the Contracts conveyed by it to a Trust Fund meets this
definition of a "single family residence." 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.
"Permitted investments" consist of (a) temporary investments of cash
received under qualified mortgages before distribution to holders of interests
in the REMIC ("cash-flow investments"), (b) amounts, such as a reserve fund, 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 certain other contingencies
("qualified reserve assets") and (c) certain 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 such 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 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 such property is
not held for more than three years unless an extension of such holding period is
obtained from the Service.
The Code requires that in order to qualify as a REMIC an entity must
make reasonable arrangements designed to ensure that certain 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"), do not hold the residual interest in
47
<PAGE>
the REMIC. Consequently, it is expected that in the case of any Trust Fund 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 such representation is false. The Code further requires that
reasonable arrangements be made to enable a REMIC to provide the Service 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 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 "Restrictions on Transfer of Residual Certificates"
below.
For certain Series of Certificates, two or more separate elections may
be made to treat segregated portions of the assets of a single Trust Fund as
REMICs for federal income tax purposes. Upon the issuance of any such series of
Certificates, Orrick, Herrington & Sutcliffe LLP, special tax counsel to
GreenPoint, will have advised GreenPoint, as described above, that at the
initial issuance of the Certificates of such Series, each such segregated
portion qualifies as a REMIC for federal income tax purposes, and that the
Certificates in such Series will be treated either as Regular Certificates or
Residual Certificates of the appropriate REMIC. Solely for the purpose of
determining whether such Regular Certificates will constitute qualifying real
estate or real property assets for certain categories of financial institutions
or real estate investment trusts as described above under "--A. Tax Status of
REMIC Certificates," some or all of the REMICs in a multiple-tier REMIC
structure may be treated as one. See the discussion below under "--C. Taxation
of Regular Certificates."
If an entity electing to be treated as a REMIC fails to comply with
one or more of the ongoing requirements of the Code for REMIC status during any
taxable year, the Code provides that the entity will not be treated as a REMIC
for such year and thereafter. In this event, an entity with multiple classes of
ownership interests may be treated as a separate association taxable as a
corporation under Treasury regulations, and interests in the REMIC may be
treated as debt or equity interests therein. If the Trust Fund were treated as
a corporation, income of the Trust Fund would be subject to corporate tax in the
hands of the Trust Fund, and, therefore, only a reduced amount might be
available for distribution to Certificateholders. The Code authorizes the
Treasury Department to issue Treasury regulations that address situations where
failure to meet one or more of the requirements for REMIC status occurs
inadvertently and in good faith, and disqualification of a REMIC would occur
absent regulatory relief. Investors should be aware, however, that the
Conference Committee Report (the "Committee Report") to the Tax Reform Act of
1986 (the "1986 Act") indicates that the relief may be accompanied by sanctions,
such as the imposition of a corporate income tax on all or a portion of the
REMIC's income for the period of time in which the requirements for REMIC status
are not satisfied. The Agreement with respect to each REMIC will include
provisions designed to maintain the related Trust Fund's status as a REMIC. It
is not anticipated that the status of any Trust Fund as a REMIC will be
terminated.
C. Taxation of Regular Certificates.
48
<PAGE>
1. General. The Regular Certificates in any Series will constitute
"regular interests" in the related REMIC. Accordingly, the Regular Certificates
will generally be treated for federal income tax purposes as debt instruments
that are issued by the related Trust Fund on the date of issuance of the Regular
Certificates and not as ownership interests in the Trust Fund or the Trust
Fund's assets. Interest, original issue discount, and market discount accrued on
a Regular Certificate will be treated as ordinary income to the holder. Each
holder must use the accrual method of accounting with regard to Regular
Certificates, regardless of the method of accounting otherwise used by such
holder. Payments of interest on REMIC Regular Certificates may be based on a
fixed rate or a variable rate as permitted by the REMIC Regulations, or may
consist of a specified portion of the interest payments on qualified mortgages
where such portion does not vary during the period the REMIC Regular Certificate
is outstanding. 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 with respect to that Regular
Certificate may be zero.
2. Original Issue Discount. Certain Regular Certificates may be
issued with "original issue discount" within the meaning of Code Section
1273(a). Any holders of Regular Certificates issued with original issue discount
generally will be required to include original issue discount in income as it
accrues, in accordance with a constant interest method that takes into account
the compounding of interest, in advance of the receipt of the cash attributable
to such income. The Servicer will report annually (or more often if required) to
the Internal Revenue Service ("IRS") and to Certificateholders such information
with respect to the original issue discount accruing on the REMIC Regular
Certificates as may be required under Code Section 6049 and the regulations
thereunder. See "--11. Reporting Requirements" below.
Rules governing original issue discount are set forth in Code Sections
1271 through 1273 and 1275 and, to some extent, in the OID Regulations. Code
Section 1272(a)(6) provides special original issue discount rules applicable to
Regular Certificates. Regulations have not yet been proposed or adopted under
Section 1272(a)(6) of the Code. Further, application of the OID Regulations to
the Regular Certificates remains unclear in some respects because the OID
Regulations generally purport not to apply to instruments to which section
1272(a)(6) applies such as Regular Certificates, and separately because they
either do not address, or are subject to varying interpretations with regard to,
several relevant issues.
Code Section 1272(a)(6) requires that a mortgage prepayment assumption
("Prepayment Assumption") be used in computing the accrual of original issue
discount on Regular Certificates and for certain other federal income tax
purposes. The Prepayment Assumption is to be determined in the manner
prescribed in Treasury regulations. To date, no such regulations have been
promulgated. The Committee Report indicates that the regulations will provide
that the Prepayment Assumption, if any, used with respect to a particular
transaction must be the same as that used by the parties in pricing the
transaction. Unless otherwise specified in the applicable Prospectus
Supplement, the Servicer will use a percentage of the prepayment assumption
specified in the applicable Prospectus Supplement in reporting original issue
discount that is consistent with this standard. However, the Servicer does not
make any representation that the Mortgage Loans will in fact prepay at a rate
equal to that prepayment assumption or at any other rate. Each investor must
make its own decision as to the appropriate prepayment assumption to be used in
deciding whether or not to purchase any of the Regular
49
<PAGE>
Certificates. The Prospectus Supplement with respect to a Series of Certificates
will disclose the prepayment assumption to be used in reporting original issue
discount, if any, and for certain other federal income tax purposes.
The total amount of original issue discount on a Regular Certificate
is the excess of the "stated redemption price at maturity" of the Regular
Certificate over its "issue price". Except as discussed in the following two
paragraphs, in general, the issue price of a particular Class of Regular
Certificates offered hereunder will be the price at which a substantial amount
of Regular Certificates of that Class are first sold to the public (excluding
bond houses and brokers).
If a Regular Certificate is sold with accrued interest that relates to
a period prior to the issue date of such Regular Certificate, the amount paid
for the accrued interest will be treated instead as increasing the issue price
of the Regular Certificate. In addition, that portion of the first interest
payment in excess of interest accrued from the Closing Date to the first
Distribution Date will be treated for federal income tax reporting purposes as
includible in the stated redemption price at maturity of the Regular
Certificate, and as excludible from income when received as a payment of
interest on the first Distribution Date. The OID Regulations suggest that some
or all of this pre-issuance accrued interest "may" be treated as a separate
asset (and hence not includible in a Regular Certificate's issue price or stated
redemption price at maturity), whose cost is recovered entirely out of interest
paid on the first Distribution Date. It is unclear how such treatment would be
elected under the OID Regulations and whether an election could be made
unilaterally by a Certificateholder.
The stated redemption price at maturity of a Regular Certificate is
equal to the total of all payments to be made on such Certificate other than
"qualified stated interest." Under the OID Regulations, "qualified stated
interest" is interest that is unconditionally payable at least annually during
the entire term of the Certificate at either (i) a single fixed rate that
appropriately takes into account the length of the interval between payments or
(ii) the current values of a single "qualified floating rate" or "objective
rate" (each, a "Single Variable Rate"). A "current value" is the value of a
variable rate on any day that is no earlier than three months prior to the first
day on which that value is in effect and no later than one year following that
day. A "qualified floating rate" is a rate whose variations can reasonably be
expected to measure contemporaneous variations in the cost of newly borrowed
funds in the currency in which the Certificate is denominated. Such a rate
remains qualified even though it is multiplied by a fixed, positive multiple not
exceeding 1.35, increased or decreased by a fixed rate, or both. Certain
combinations of rates constitute a single qualified floating rate, including (i)
interest stated at a fixed rate for an initial period of less than one year
followed by a qualified floating rate if the value of the floating rate at the
closing date is intended to approximate the fixed rate, and (ii) two or more
qualified floating rates that can be expected to have appropriately the same
values throughout the term of the Certificate. A combination of such rates is
conclusively presumed to be a single floating rate if the values of all rates on
the closing date are within 0.25% of each other. A variable rate that is
subject to an interest rate cap, floor, "governor" or similar restriction on
rate adjustment may be a qualified floating rate only if such restriction is
fixed throughout the term of the instrument, or is not reasonably expected as of
the closing date to cause the yield on the debt instrument to differ
significantly from the expected yield absent the restriction. An "objective
rate" is a rate (other than a qualified floating rate) determined using a
50
<PAGE>
single formula fixed for the life of the Certificate, which is based on (i) one
or more qualified floating rates (including a multiple or inverse of a qualified
floating rate), (ii) one or more rates each of which would be a qualified
floating rate for a debt instrument denominated in a foreign currency, (iii) the
yield of changes in price of one or more items of "actively traded" personal
property, (iv) a combination of rates described in (i), (ii) and (iii), or (v) a
rate designated by the IRS. However, a variable rate is not an objective rate if
it is reasonably expected that the average value of the rate during the first
half of the Certificate's term will differ significantly from the average value
of such rate during the final half of its term. A combination of interest stated
at a fixed rate for an initial period of less than one year followed by an
objective rate is treated as a single objective rate if the value of the
objective rate at the closing date is intended to approximate the fixed rate;
such a combination of rates is conclusively presumed to be to be a single
objective rate if the objective rate on the closing date does not differ from
the fixed rate by more than 0.25%. The qualified stated interest payable with
respect to certain variable rate debt instruments not bearing stated interest at
a Single Variable Rate generally is determined under the OID Regulations by
converting such instruments into fixed rate debt instruments. Instruments
qualifying for such treatment generally include those providing for stated
interest at (i) more than one qualified floating rates, or at (ii) a single
fixed rate and (a) one or more qualified floating rates or (b) a single
"qualified inverse floating rate" (each, a "Multiple Variable Rate"). A
qualified inverse floating rate is an objective rate equal to a fixed rate
reduced by a qualified floating rate, the variations in which can reasonably be
expected to inversely reflect contemporaneous variations in the cost of newly
borrowed funds (disregarding permissible rate caps, floors, governors and
similar restrictions such as are described above). Under these rules, some of
the payments of interest on a Certificate bearing a fixed rate of interest for
an initial period followed by a qualified floating rate of interest in
subsequent periods could be treated as included in the stated redemption price
at maturity if the initial fixed rate were to differ sufficiently from the rate
that would have been set using the formula applicable to subsequent periods. See
"Taxation of Regular Certificates--3. Variable Rate Certificates". Regular
Certificates offered hereby other than Certificates providing for variable rates
of interest or for the accretion of interest are not anticipated to have stated
interest other than "qualified stated interest", but if any such REMIC Regular
Certificates are so offered, appropriate disclosures will be made in the
Prospectus Supplement. Some or all of the payments on REMIC Regular Certificates
providing for the accretion of interest will be included in the stated
redemption price at maturity of such Certificates.
Under a de minimis rule in the Code, as interpreted in the OID
Regulations, original issue discount on a Regular Certificate will be considered
to be zero if such original issue discount is less than 0.25% of the stated
redemption price at maturity of the Regular Certificate multiplied by the
weighted average life of the Regular Certificate. For this purpose, the
weighted average life of the Regular Certificate is computed as the sum of the
amounts determined by multiplying the amount of each payment under the
instrument (other than a payment of qualified stated interest) by a fraction,
whose numerator is the number of complete years from the issue date until such
payment is made, and whose denominator is the stated redemption price at
maturity of such Regular Certificate. The IRS may be anticipated to take the
position that this rule should be applied taking into account the prepayment
assumption and the effect of any anticipated investment income. Under the OID
Regulations, Regular Certificates bearing only qualified stated interest except
for any "teaser" rate, interest holiday or similar
51
<PAGE>
provision would be treated as subject to the de minimis rule if the greater of
the deferred or foregone interest or the other original issue discount is less
than such de minimis amount.
The OID Regulations generally would treat de minimis original issue
discount as includible in income as each principal payment is made, based on the
product of the total amount of such de minimis original issue discount and a
fraction, whose numerator is the amount of such principal payment and whose
denominator is the stated principal amount of the Regular Certificate. The OID
Regulations also would permit a Certificateholder to elect to accrue de minimis
original issue discount into income currently based on a constant yield method.
See "Taxation of Regular Certificates--4. Market Discount" and "--5. Premium".
Each holder of a Regular Certificate must include in gross income the
sum of the "daily portions" of original issue discount on its Regular
Certificate for each day during its taxable year on which it held such Regular
Certificate. For this purpose, in the case of an original holder of a Regular
Certificate, the daily portions of original issue discount will be determined as
follows. A calculation will first be made of the portion of the original issue
discount that accrued during each accrual period, that is, unless otherwise
stated in the applicable Prospectus Supplement, each period that begins or ends
on a date that corresponds to a Distribution Date on the Regular Certificate and
begins on the first day following the immediately preceding accrual period
(beginning on the Closing Date in the case of the first such period). For any
accrual period such portion will equal the excess, if any, of (i) the sum of (A)
the present value of all of the distributions remaining to be made on the
Regular Certificate, if any, as of the end of the accrual period and (B) the
distribution made on such Regular Certificate during the accrual period of
amounts included in the stated redemption price at maturity, over (ii) the
adjusted issue price of such Regular Certificate at the beginning of the accrual
period. The present value of the remaining payments referred to in the
preceding sentence will be calculated based on (i) the yield to maturity of the
Regular Certificate, calculated as of the settlement date, giving effect to the
Prepayment Assumption, (ii) events (including actual prepayments) that have
occurred prior to the end of the accrual period, and (iii) the prepayment
assumption. The adjusted issue price of a Regular Certificate at the beginning
of any accrual period will equal the issue price of such Certificate, increased
by the aggregate amount of original issue discount with respect to such Regular
Certificate that accrued in prior accrual periods, and reduced by the amount of
any distributions made on such Regular Certificate in prior accrual periods of
amounts included in the stated redemption price at maturity. The original issue
discount accruing during any accrual period will be allocated ratably to each
day during the period to determine the daily portion of original issue discount
for each day. With respect to an accrual period between the settlement date and
the first Distribution Date on the Regular Certificate (notwithstanding that no
distribution is scheduled to be made on such date) that is shorter than a full
accrual period, the OID Regulations permit the daily portions of original issue
discount to be determined according to any reasonable method.
A subsequent purchaser of a Regular Certificate that purchases such
Regular Certificate at a cost (not including payment for accrued qualified
stated interest) less than its remaining stated redemption price at maturity
will also be required to include in gross income, for each day on which it holds
such Regular Certificate, the daily portions of original issue discount with
respect to such Regular Certificate, but reduced, if such cost exceeds the
"adjusted issue price", by an amount equal to the product of (i) such daily
portions and (ii) a constant
52
<PAGE>
fraction, whose numerator is such excess and whose denominator is the sum of the
daily portions of original issue discount on such Regular Certificate for all
days on or after the day of purchase. The adjusted issue price of a Regular
Certificate on any given day is equal to the sum of the adjusted issue price
(or, in the case of the first accrual period, the issue price) of the Regular
Certificate at the beginning of the accrual period during which such day occurs
and the daily portions of original issue discount for all days during such
accrual period prior to such day, reduced by the aggregate amount of
distributions previously made other than distributions of qualified stated
interest.
3. Variable Rate Certificates. Purchasers of Regular Certificates
bearing a variable rate of interest should be aware that there is uncertainty
concerning the application of Section 1272(a)(6) of the Code and the OID
Regulations to such Certificates. In the absence of other authority, the
Servicer intends to be guided by the provisions of the OID Regulations governing
variable rate debt instruments in adapting the provisions of Section 1272(a)(6)
of the Code to such Certificates for the purpose of preparing reports furnished
to Certificateholders. The effect of the application of such provisions
generally will be to cause Certificateholders holding Certificates bearing
interest at a Single Variable Rate to take into account for each period an
amount corresponding approximately to the sum of (i) the qualified stated
interest, accruing on the outstanding face amount of the Regular Certificate as
the stated interest rate for that Certificate varies from time to time and (ii)
the amount of original issue discount that would have been attributable to that
period on the basis of a constant yield to maturity for a bond issued at the
same time and issue price as the Regular Certificate, having the same face
amount and schedule of payments of principal as such Certificate, subject to the
same prepayment assumption, and bearing interest at a fixed rate equal to the
value of the applicable qualified floating rate or qualified inverse floating
rate in the case of a Certificate providing for either such rate, or equal to
the fixed rate that reflects the reasonably expected yield on the Certificate in
the case of a Certificate providing for an objective rate other than an inverse
floating rate, in each case as of the issue date. Certificateholders holding
Regular Certificates bearing interest at a Multiple Variable Rate generally will
take into account interest and original issue discount under a similar
methodology, except that the amounts of qualified stated interest and original
issue discount attributable to such a Certificate first will be determined for
an equivalent fixed rate debt instrument, the assumed fixed rates for which are
(a) for each qualified floating rate, the value of each such rate as of the
closing date (with appropriate adjustment for any differences in intervals
between interest adjustment dates), (b) for a qualified inverse floating rate,
the value of the rate as of the closing date, (c) for any other objective rate,
the fixed rate that reflects the yield that is reasonably expected for the
Certificate, and (d) for an actual fixed rate, such hypothetical fixed rate as
would result under (a) or (b) if the actual fixed rate were replaced by a
hypothetical qualified floating rate or qualified inverse floating rate such
that the fair market value of the Certificate as of the issue date would be
approximately the same as that of an otherwise identical debt instrument
providing for the hypothetical variable rate rather than the actual fixed rate.
If the interest paid or accrued with respect to a Multiple Variable Rate
Certificate during an accrual period differs from the assumed fixed interest
rate, such difference will be an adjustment (to interest or original issue
discount, as applicable) to the Certificateholder's taxable income for the
taxable period or periods to which such difference relates. Additionally,
purchasers of such Certificates should be aware that the provisions of the OID
Regulations
53
<PAGE>
applicable to variable rate debt instruments have been limited and may not apply
to some Regular Certificates having variable rates. If such a Certificate is not
governed by the provisions of the OID Regulations applicable to variable rate
debt instruments, it may be subject to the provisions thereof applicable to
instruments having contingent payments. The application of those provisions to
instruments such as variable rate Regular Certificates is subject to differing
interpretations. Prospective purchasers of variable rate Regular Certificates
are advised to consult their tax advisors concerning the tax treatment of such
Certificates.
4. Market Discount. A Certificateholder that purchases a Regular
Certificate at a market discount, that is, at a purchase price less than the
adjusted issue price (as defined under "--Taxation of Regular Certificates--2.
Original Issue Discount") of such Regular Certificate generally will recognize
market discount upon receipt of each distribution of principal. In particular,
such a holder will generally be required to allocate each payment of principal
on a Regular Certificate first to accrued market discount, and to recognize
ordinary income to the extent such principal payment does not exceed the
aggregate amount of accrued market discount on such Regular Certificate not
previously included in income. Such market discount must be included in income
in addition to any original issue discount includible in income with respect to
such Regular Certificate.
A Certificateholder may elect to include market discount in income
currently as it accrues, rather than including it on a deferred basis in
accordance with the foregoing. If made, such election will apply to all market
discount bonds acquired by such Certificateholder on or after the first day of
the first taxable year to which such election applies. In addition, the OID
Regulations permit a Certificateholder to elect to accrue all interest, discount
(including de minimis market or original issue discount) and premium in income
as interest, based on a constant yield method. If such an election were made
for a Regular Certificate with market discount, the Certificateholder would be
deemed to have made an election to currently include market discount in income
with respect to all other debt instruments having market discount that such
Certificateholder acquires during the year of the election or thereafter.
Similarly, a Certificateholder that makes this election for a Certificate that
is acquired at a premium is deemed to have made an election to amortize bond
premium, as described below, with respect to all debt instruments having
amortizable bond premium that such Certificateholder owns or acquires. The
election to accrue interest, discount and premium on a constant yield method
with respect to a Certificate is irrevocable.
Under a statutory de minimis exception, market discount with respect
to a Regular Certificate will be considered to be zero for purposes of Code
Sections 1276 through 1278 if such market discount is less than 0.25% of the
stated redemption price at maturity of such Regular Certificate multiplied by
the number of complete years to maturity remaining after the date of its
purchase. In interpreting a similar de minimis rule with respect to original
issue discount on obligations payable in installments, the OID Regulations refer
to the weighted average maturity of obligations, and it is likely that the same
rule will be applied in determining whether market discount is de minimis. It
appears that de minimis market discount on a Regular Certificate would be
treated in a manner similar to original issue discount of a de minimis amount.
See "Taxation of Regular Certificates--2. Original Issue Discount". Such
treatment would result in discount being included in income at a slower rate
than discount would be required to be included using the method described above.
However, Treasury regulations implementing the market discount de minimis
exception have not been issued in proposed or
54
<PAGE>
temporary form, and the precise treatment of de minimis market discount on
obligations payable in more than one installment therefore remains uncertain.
The 1986 Act grants authority to the Treasury Department to issue
regulations providing for the method for accruing market discount of more than a
de minimis amount on debt instruments, the principal of which is payable in more
than one installment. Until such time as regulations are issued by the Treasury
Department, certain rules described in the Committee Report will apply. Under
those rules, the holder of a bond purchased with more than de minimis market
discount may elect to accrue such market discount either on the basis of a
constant yield method or on the basis of the appropriate proportionate method
described below. Under the proportionate method for obligations issued with
original issue discount, the amount of market discount that accrues during a
period is equal to the product of (i) the total remaining market discount,
multiplied by (ii) a fraction, the numerator of which is the original issue
discount accruing during the period and the denominator of which is the total
remaining original issue discount at the beginning of the period. Under the
proportionate method for obligations issued without original issue discount, the
amount of market discount that accrues during a period is equal to the product
of (i) the total remaining market discount, multiplied by (ii) a fraction, the
numerator of which is the amount of stated interest paid during the accrual
period and the denominator of which is the total amount of stated interest
remaining to be paid at the beginning of the period. The Prepayment Assumption,
if any, used in calculating the accrual of original issue discount is to be used
in calculating the accrual of market discount under any of the above methods.
Because the regulations referred to in this paragraph have not been issued, it
is not possible to predict what effect such regulations might have on the tax
treatment of a Regular Certificate purchased at a discount in the secondary
market.
Further, a purchaser generally will be required to treat a portion of
any gain on sale or exchange of a Regular Certificate as ordinary income to the
extent of the market discount accrued to the date of disposition under one of
the foregoing methods, less any accrued market discount previously reported as
ordinary income. Such purchaser also may be required to defer a portion of its
interest deductions for the taxable year attributable to any indebtedness
incurred or continued to purchase or carry such Regular Certificate. Any such
deferred interest expense is, in general, allowed as a deduction not later than
the year in which the related market discount income is recognized. If such
holder elects to include market discount in income currently as it accrues on
all market discount instruments acquired by such holder in that taxable year or
thereafter, the interest deferral rule described above will not apply.
5. Premium. A Regular Certificate purchased at a cost (not
including payment for accrued qualified stated interest) greater than its
remaining stated redemption price at maturity will be considered to be purchased
at a premium. The holder of such a Regular Certificate may elect to amortize
such premium under the constant yield method. The OID Regulations also permit
Certificateholders to elect to include all interest, discount and premium in
income based on a constant yield method, further treating the Certificateholder
as having made the election to amortize premium generally, as discussed above.
The Committee Report indicates a Congressional intent that the same rules that
will apply to accrual of market discount on installment obligations will also
apply in amortizing bond premium under Code Section 171 on installment
obligations such as the Regular Certificates.
55
<PAGE>
6. Effects of Defaults or Delinquencies. Certain Series of
Certificates may contain one or more Classes of Subordinate Certificates. In the
event there are defaults or delinquencies on Contracts in the related Trust
Fund, amounts that would otherwise be distributed on the Subordinate
Certificates may instead be distributed on the Senior Certificates. Holders of
Subordinate Certificates nevertheless will be required to report interest income
with respect to such Certificates (including original issue discount) as such
income accrues without giving effect to delays or reductions in distributions on
such Subordinate Certificates attributable to defaults and delinquencies on such
Contracts, except to the extent that it can be established that the
undistributed amounts are not collectible. As a result, the amount of income
reported by a holder of a Subordinate Certificate in any period could
significantly exceed the amount of cash distributed to such holder in that
period. The holder will eventually be allowed a loss (or will be allowed to
report a lesser amount of income) to the extent that the aggregate amount of
distributions on the Subordinate Certificate is reduced as a result of defaults
or delinquencies on the related Contracts. However, the timing of such losses or
reductions in income is uncertain, and in some circumstances losses could be
capital losses that generally can be offset only with capital gains. Holders of
Subordinate Certificates should consult their own tax advisors on these points.
7. Sales of Certificates. If a Regular Certificate is sold or
exchanged, the seller will recognize gain or loss equal to the difference, if
any, between the amount realized (net of accrued interest) and its adjusted
basis in such Regular Certificate. A seller's adjusted basis generally will
equal the cost of such Regular Certificate to the seller, increased by any
original issue discount reported by such seller with respect to such Regular
Certificate and reduced (but not below zero) by distributions received by such
seller (other than payments of qualified stated interest) and by any amortized
premium. Except as described above "--4. Market Discount" and with respect to
the next three paragraphs, any such gain or loss will be capital gain or loss
provided the Regular Certificate is held as a capital asset. The Taxpayer Relief
Act of 1997 (the "1997 Act") has changed the tax rates and holding periods
applicable to long-term capital gains of individuals. Because the tax rates and
applicable holding periods will vary depending upon a Certificateholder's
individual circumstances, investors should consult their own tax advisors
concerning the effect of these 1997 Act changes.
Gain from the disposition of a Regular Certificate that might
otherwise be capital gain will be treated as ordinary income to the extent that
such gain does not exceed the excess, if any, of (i) the amount that would have
been includible in the seller's gross income had income accrued at a rate equal
to 110% of "the applicable Federal rate" under Section 1274(d) of the Code
(generally, an average yield of United States Treasury obligations of different
ranges of maturities published monthly by the Service), determined as of the
date of purchase of such Regular Certificate, over (ii) the amount of income
actually includible in the gross income of the seller with respect to the
Regular Certificate.
Regular Certificates will be "evidences of indebtedness" within the
meaning of Section 582(c)(1) of the Code, and accordingly, gain or loss
recognized from a sale of a Regular Certificate by a bank or thrift institution
to which such section applies would be ordinary income or loss.
56
<PAGE>
If GreenPoint is determined to have intended on the date of issue of
the Regular Certificates to call all or any portion of the Regular Certificates
prior to their stated maturity within the meaning of Section 1271(a)(2)(A) of
the Code, any gain realized upon a sale, exchange, retirement, or other
disposition of a Regular Certificate would be considered ordinary income to the
extent it does not exceed the unrecognized portion of the original issue
discount, if any, with respect to the Regular Certificate. The OID Regulations
provide that the intention to call rule will not be applied to mortgage-backed
securities such as the Regular Certificates. In addition, under the OID
Regulations, a mandatory sinking fund or call option is not evidence of an
intention to call.
8. Pass-Through of Expenses Other Than Interest. If a Trust Fund
for which a REMIC election is made is considered a "single-class REMIC" (as
defined below), a portion of such Trust Fund's servicing, administrative and
other non-interest expenses will be allocated as a separate item to those
Regular Certificateholders that are "pass-through interest holders" (as defined
below). Such a holder would be required to add its allocable share, if any, of
such expenses to its gross income and to treat the same amount as an item of
investment expense. An individual would generally be allowed a deduction for
such an expense item for regular tax purposes only as a miscellaneous itemized
deduction subject to the limitation under Section 67 of the Code, and may not be
allowed any deduction for such item for purposes of the alternative minimum tax.
Section 67 of the Code allows deductions for miscellaneous itemized deductions
only to the extent that in the aggregate they exceed 2% of an individual's
adjusted gross income. The Revenue Reconciliation Act of 1990 further limits
the itemized deductions allowed to certain individuals. If so specified in the
related Prospectus Supplement, the applicable Agreement will require each holder
to give the Trust Fund written notice immediately upon becoming a holder, if it
is a pass-through interest holder, or is holding a Regular Certificate on behalf
of a pass-through interest holder. The Trust Fund will report to each holder
that has given the Trust Fund such notice (and others if it is required) and to
the Service, each such holder's allocable share, if any, of the Trust Fund's
noninterest expenses. Generally, a "single-class REMIC" is defined as (i) a
REMIC that would be treated as an investment trust under Treasury regulations
but for its qualification as a REMIC or (ii) a REMIC that is substantially
similar to an investment trust but is structured with the principal purpose of
avoiding the allocation requirement imposed under Section 67 of the Code. The
term "pass-through interest holder" generally refers to individuals, entities
taxed as individuals and certain pass-through entities, but does not include
real estate investment trusts. Such investors should consult their own tax
advisors regarding consequences to them of the allocation of the Trust Fund's
non-interest expenses. In addition, the amount of itemized deductions otherwise
allowable for the taxable year of an individual whose adjusted gross income
exceeds certain thresholds will be reduced.
9. 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 (i) a citizen or resident of the United States, (ii)
a corporation or partnership organized in or under the laws of the United
States, a state (other than any partnership that is treated as not a United
States person under any Applicable Treasury regulations) thereof or the District
of Columbia or an entity taxable as such for U.S. federal income tax purposes,
(iii) an estate, the income of which is included in gross income for United
States tax purposes regardless of its source, or (iv) a trust if a court within
the United States is able to exercise primary supervision over the
administration of the trust and one or more United States fiduciaries have the
authority to control all substantial
57
<PAGE>
decisions of the trust. 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 GreenPoint and does not own actually or constructively 10% or more of
the voting stock of GreenPoint. 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 a clearing organization or financial institution. This
exemption may not apply to a Foreign Holder that owns directly or indirectly
both Regular Certificates and Residual Certificates. If for any reason the
exemption does not apply, interest paid to Foreign Holders will be subject to
U.S. withholding tax at the rate of 30% (or, if applicable, a reduced rate
provided in a tax treaty). 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
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 (i) the Foreign Holder is a
non-resident alien individual who holds the Regular Certificate as a capital
asset and who is present in the United States for 183 days or 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 United States by the
individual or the individual has a "tax home" in the United States, or (ii) 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 included in the estate of a Foreign
Holder who does not own actually or constructively 10% or more of the voting
stock of GreenPoint. Regular Certificateholders who are non-U.S. Persons and
persons related to such holders should not acquire any Residual Certificates,
and Residual Certificateholders and persons related to Residual
Certificateholders should not acquire any Regular Certificates without
consulting their tax advisors as to the possible adverse tax consequences of
doing so.
10. 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 Certificates. 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
58
<PAGE>
foreign persons. Each non-exempt Certificateholder will be required to provide,
under penalty of perjury, a certificate on IRS Form W-9 containing his or her
name, address, correct federal taxpayer identification number and a statement
that he or she is not subject to backup withholding. 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.
11. Requirements. The Servicer will report annually to the Service,
to holders of record of the Regular Certificates that are not excepted from the
reporting requirements and, to the extent required by the Code, to 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.
12. New Withholding Regulations. The Treasury Department has issued
new regulations (the "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. The New Regulations will generally be effective for payments
made after December 31, 1999, subject to certain transition rules. Prospective
investors are urged to consult their own tax advisors regarding the New
Regulations.
D. Taxation of Residual Certificates. The discussion under this
heading applies only to a Series of Certificates with respect to which a REMIC
election is made and to Residual Certificates. Such Residual Certificates will
be subject to tax rules, described below, that differ from those that would
apply if they were treated for federal income tax purposes as direct ownership
interests in the related Trust Fund or as debt instruments issued by such Trust
Fund.
1. Although a REMIC is a separate entity for federal income tax
purposes, a REMIC is not generally subject to federal income tax. Rather, the
taxable income of a REMIC is taken into account by the holders of REMIC residual
interests.
In general, each original holder of a Residual Certificate will report
on its federal income tax return, as ordinary income, its share of the "daily
portion" of the taxable income of the Trust Fund for each day during the taxable
year on which such Residual Certificateholder held a Residual Certificate. The
"daily portion" of the taxable income of the Trust Fund is determined by
allocating to each day in any calendar quarter its ratable portion of the
taxable income or net loss of the Trust Fund for such quarter, and such Residual
Certificateholder's share of the "daily portion" is based on the portion of
outstanding Residual Certificates that such Residual Certificateholder owns on
such day. REMIC taxable income will be taxable to the Residual
Certificateholders without regard to the timing or amounts of cash distributions
by the REMIC. Ordinary income derived from Residual Certificates will be
"portfolio income" for purposes of the taxation of taxpayers subject to the
limitation on the deductibility of "passive losses." As residual interests, the
Residual Certificates will be subject to tax rules, described below, that differ
from those that would apply if the Residual Certificates were treated for
federal income tax purposes as direct ownership interests in the Contracts, or
as debt instruments issued
59
<PAGE>
by the REMIC. Under certain circumstances, a Residual Certificateholder may be
required to recognize for a given period income substantially in excess of
distributions made on the Residual Certificates.
A subsequent Residual Certificateholder also will report on its
federal income tax return amounts representing a daily share of the taxable
income of the Trust Fund for each day that such Residual Certificateholder held
such Residual Certificate. Those daily amounts generally would equal the
amounts, described above, that would have been reported for the same days by a
holder of a Residual Certificate (an "Original Holder") that purchased such
Residual Certificate at its original issuance and held it continuously
thereafter. As discussed below, the taxable income of the Trust Fund will be
calculated based in part on the initial tax basis to the Trust Fund of its
assets, which in turn equals the sum of the issue prices of the Residual
Certificates and each Class of Regular Certificates. The legislative history of
the 1986 Act indicates that certain adjustments may be appropriate to reduce (or
increase) the income of a subsequent Residual Certificateholder that purchased
such Residual Certificate at a price greater than (or less than) the adjusted
basis (as defined below in "Distributions") such Residual Certificate would have
in the hands of an Original Holder. For the present, however, adjustments are
apparently not permitted or required.
2. A holder's adjusted basis in a Residual Certificate will equal
the purchase price of such Residual Certificate, increased by the amount of the
related Trust Fund's taxable income that is allocated to the holder of such
Residual Certificate, and decreased (but not below zero) by the amount of
distributions received thereon by such holder and the Trust Fund's net losses
allocated to such holder. Payments on a Residual Certificate (whether at their
scheduled times or as a result of prepayments) will generally not result in any
taxable income or loss to the holder of a Residual Certificate. If the amount of
such payment exceeds a holder's adjusted basis in its Residual Certificate,
however, the holder will recognize gain (treated as gain from the sale or
exchange of its Residual Certificate) to the extent of such excess. See "--10.
Sale or Exchange" below.
3. Taxable Income of the Trust Fund. REMIC taxable income is
generally determined in the same manner as the taxable income of an individual
using the accrual method of accounting, except that (i) the limitation on
deductibility of investment interest expense and expenses for the production of
income do not apply, (ii) all bad loans will be deductible as business bad
debts, and (iii) the limitation on the deductibility of interest and expenses
related to tax-exempt income will apply. In general, the Trust Fund's taxable
income will reflect a netting of (i) the gross income produced by the assets of
the Trust Fund, including the stated interest and any original issue discount or
market discount income on the Contracts in the related Contract Pool (net of any
amortized premium on such Contracts), income from the investment or reinvestment
of cash flows and, if applicable, reserve assets, and amortization of any issue
premium with respect to the Regular Certificates and (ii) deductions, including
stated interest and original issue discount expense on Regular Certificates that
would be permitted if the Regular Certificates were indebtedness of the Trust
Fund, servicing fees, and other administrative expenses of the Trust Fund
(except as described below under "--5. Expenses Other Than Interest"). Any gain
or loss realized by the Trust Fund from the disposition of any asset is treated
as gain or loss from the sale or exchange of property that is not a capital
asset. If there is more than one Class of Regular Certificates, deductions
allowed to the Trust Fund with respect
60
<PAGE>
to the Regular Certificates will generally be calculated separately with respect
to each Class based on the yield of that Class.
For purposes of determining its taxable income, the Trust Fund will
have an initial aggregate tax basis in its assets equal to the sum of the issue
prices of the Regular Certificates and the Residual Certificates. The issue
price of a Certificate of a Class (whether Regular Certificates or Residual
Certificates) that is publicly offered will be the initial offering price to the
public (excluding bond houses and brokers) at which a substantial amount of the
Certificates of that Class is sold, and if not publicly offered will be the
price paid by the first buyer of a Certificate of such class. If a Residual
Certificate has a negative value, it is not clear whether its issue price would
be considered to be zero or such negative amount for purposes of determining the
REMIC's basis in its assets. The REMIC Regulations imply that residual interest
cannot have a negative basis or a negative issue price. However, the preamble
to the REMIC Regulations indicates that, while existing tax rules do not
accommodate such concepts, the Service is considering the tax treatment of these
types of residual interests, including the proper tax treatment of a payment
made by the transferor of such a residual interest to induce the transferee to
acquire that interest. Absent regulations or administrative guidance to the
contrary, and unless the related Prospectus Supplement otherwise provides, it is
not expected that any Trust Fund as to which a REMIC election is made will treat
a Class of Residual Certificates as having a value of less than zero for
purposes of determining the basis of the related REMIC in its assets.
If a Trust Fund acquires a Contract and the principal amount of such
Contract (or revised issue price in the case of a Contract issued with original
issue discount) exceeds the Trust Fund's basis in such Contract by more than a
de minimis amount (as described above in "C. Taxation of Regular Certificates--
5. Market Discount"), such discount would generally be includible in the Trust
Fund's income as it accrues, in advance of receipt of the cash attributable to
such income, under a constant yield method, similar to the method for accruing
original issue discount on Regular Certificates described above in "C. Taxation
of Regular Certificates--2. Original Issue Discount." The Trust Fund's
deductions for original issue discount expense with respect to Regular
Certificates also will be determined under those rules, except that the de
minimis rule that may apply to holders of Regular Certificates and the
adjustments for holders of Regular Certificates that purchase their Certificates
at a price greater than the adjusted issue price described therein will not
apply.
If the Trust Fund's basis in a Contract exceeds the remaining stated
redemption price at maturity of such a Contract, the Trust Fund will be
considered to have acquired such Contract at a premium equal to the amount of
such excess. In the event that any Contract in the Contract Pool is acquired by
the Trust Fund at a premium, the Trust Fund will be entitled to amortize such
premium on a yield-to-maturity basis. Although the matter is not free from
doubt, the Trust Fund intends to make this calculation using a reasonable
prepayment assumption.
If a Class of Regular Certificates is issued at a price in excess of
the aggregate principal amount of such Class (the excess, the "Issue Premium"),
the portion of the Issue Premium that is considered to be amortized during a
taxable year will be treated as ordinary income of the Trust Fund for such
taxable year. Although the matter is not entirely certain, it is likely that
the Issue Premium would be amortized under a constant yield method in a manner
61
<PAGE>
analogous to the method of accruing original issue discount described above
under "C. Taxation of Regular Certificates--2. Original Issue Discount."
The taxable income recognized by a holder of a Residual Certificate in
any taxable year will be affected by, among other factors, the relationship
between the timing of interest, original issue discount or market discount
income, or amortization of premium with respect to the Contracts, on the one
hand, and the timing of deductions for interest (including original issue
discount) on the Regular Certificates, on the other hand. In the event that an
interest in the Contracts is acquired by a REMIC at a discount, and one or more
of such Contracts is prepaid, a holder of a Residual Certificate may recognize
taxable income without being entitled to receive a corresponding cash
distribution because (i) the prepayment may be used in whole or in part to make
distributions on Regular Certificates, and (ii) the discount on the Contracts
which is included in a REMIC's income may exceed its deduction with respect to
the distributions on those Regular Certificates. When there is more than one
class of Regular Certificates that receive payments sequentially (i.e., a fast-
pay, slow-pay structure), this mismatching of income and deductions is
particularly likely to occur in the early years following issuance of the
Regular Certificates, when distributions are being made in respect of earlier
classes of Regular Certificates to the extent that such classes are not issued
with substantial discount. If taxable income attributable to such a mismatching
is realized, in general, losses would be allowed in later years as distributions
on the later classes of Regular Certificates are made. The taxable income
recognized by a holder of a Residual Certificate also may be greater in earlier
years because the REMIC will use a constant yield in computing income from the
Contracts, while interest deductions with respect to Regular Certificates,
expressed as a percentage of the outstanding principal amount of the Regular
Certificates, may increase over time as earlier, lower-yielding Classes are
paid. The mismatching of income and deductions described in this paragraph, if
present with respect to a series of Residual Certificates, could have a
significant adverse effect upon the holder's after-tax rate of return. In
addition, a holder of a Residual Certificate may need to have sufficient other
sources of cash to pay any federal, state, or local income taxes due as a result
of such mismatching, or such holders must have unrelated deductions against
which to offset such income, subject to the discussion of "excess inclusions"
below in "--7. Excess Inclusions."
A Residual Certificateholder will not be permitted to amortize the
cost of its Residual Certificate as an offset to its share of the taxable income
of the Trust Fund. However, that taxable income will not include cash received
by the Trust Fund that represents a recovery of the Trust Fund's basis in its
assets (which will include the issue price of the Residual Certificates as well
as the issue price of Regular Certificates). Such recovery of basis by the
Trust Fund will have the effect of amortization of the issue price of the
Residual Certificates over the life of the Trust Fund's assets. However, in
view of the possible acceleration of the income of holders of Residual
Certificates described above, the period of time over which such issue price is
effectively amortized may be longer than the economic life of the Residual
Certificates.
The method of taxation of Residual Certificates described above can
produce a significantly lower after-tax yield for a Residual Certificate than
would be the case if (i) Residual Certificates were taxable in the same manner
as debt instruments issued by the Trust Fund or (ii) no portion of the taxable
income on the Residual Certificates in each period were treated as "excess
inclusions" (as defined below). In certain periods, taxable income and the
resulting tax
62
<PAGE>
liability on a Residual Certificate are likely to exceed payments received
thereon. In addition, a substantial tax may be imposed on certain transferors of
the Residual Certificates and certain beneficial owners of the Residual
Certificates that are "pass-through" entities. Investors should consult their
tax advisors before purchasing a Residual Certificate.
4. Net Losses of the Trust Fund. The Trust Fund will have a net
loss for a calendar quarter if its deductions for that calendar quarter exceed
its gross income for that calendar quarter. The net loss allocable to any
Residual Certificate will not be deductible by the holder to the extent that
such net loss exceeds such holder's adjusted basis (as defined above in "--2.
Distributions") in such Residual Certificate at the end of the calendar quarter
in which such loss arises (or the time of disposition of the Residual
Certificate, if earlier), determined without taking into account the net loss
for such quarter. Any net loss that is not currently deductible by reason of
this limitation may be carried forward indefinitely, but may be used only to
offset taxable income of the same Trust Fund subsequently allocated to such
Residual Certificateholder. The ability of Residual Certificateholders that are
individuals or closely-held corporations to deduct net losses may be subject to
additional limitations under the Code.
5. Expenses Other Than Interest. Except in the limited circumstance
when the Trust Fund is considered a "single-class REMIC" (as defined above in
"C. Taxation of Regular Certificates--8. Pass-Through of Expenses Other Than
Interest"), the Trust Fund's servicing, administrative and other noninterest
expenses will be allocated entirely to the Residual Certificateholders. In the
case where the Trust Fund is considered a single-class REMIC, such expenses will
be allocated proportionately among Regular and Residual Certificateholders. See
"C. Taxation of Regular Certificates--8. Pass-Through of Expenses Other Than
Interest." In either case, such expenses will be allocated as a separate item to
those holders that are "pass-through interest holders" (as defined above in "C.
Taxation of Regular Certificates--8. Pass-Through of Expenses Other Than
Interest"). Such a holder would be required to add its allocable share, if any,
of such expenses to its gross income and treat the same amount as an item of
investment expense. Limitations on the deductibility of such expenses are
described above in "C. Taxation of Regular Certificates--8. Pass-Through of
Expenses Other Than Interest." The related Agreement will require each holder to
give the Trust Fund written notice upon becoming a holder if it is a pass-
through interest holder, or is holding a Residual Certificate on behalf of a
pass-through interest holder. The Trust Fund will report quarterly to each
holder of a Residual Certificate during any calendar quarter that has given the
Trust Fund such notice (and others if it is required) and to the Service
annually such holder's allocable share, if any, of the Trust Fund's non-interest
expenses. Such investors should consult their tax advisors in determining the
consequences to them of the allocation of the Trust Fund's non-interest
expenses.
6. Prohibited Transactions; Special Taxes. Income from certain
transactions by the REMIC, called prohibited transactions, will not be part of
the calculation of income or loss includible in the federal income tax returns
of Residual Certificateholders, but rather will be taxed directly to the REMIC
at a 100% rate. Prohibited transactions generally include (i) the disposition of
qualified mortgages other than pursuant to a (a) substitution for a defective
mortgage within two years or for any qualified mortgage within three months of
the specified Startup Date, (b) repurchase of a defective mortgage, (c)
foreclosure, default, or imminent default of a qualified mortgage, (d)
bankruptcy or insolvency of the REMIC or (e) a qualified (complete) liquidation
of the REMIC, (ii) the receipt of income from assets that are not the type
63
<PAGE>
of mortgage loans or investments that the REMIC is permitted to hold, (iii) the
receipt of compensation for services or (iv) the receipt of gain from
disposition of cash flow investments other than pursuant to a qualified
(complete) liquidation of the REMIC. The Trust Fund will be subject to a tax
equal to 100% of the amount of any contributions of property made to the Trust
Fund after the Startup Day, except for certain cash contributions specified in
Section 860G(d) of the Code. An additional tax may be imposed on the Trust Fund,
at the highest marginal federal corporate income tax rate, on certain net income
from foreclosure property.
It is anticipated that the Trust Fund will not engage in any
prohibited transactions in which it would recognize a material amount of net
income or receive substantial contributions of property after the Startup Date.
However, if the Trust Fund is subject to the tax on prohibited transactions or
contributions, such tax would generally be borne by the Residual
Certificateholders.
7. Excess Inclusions. A portion of the income of the Trust Fund
allocable to a Residual Certificateholder referred to in the Code as an "excess
inclusion" will be subject to federal income tax in all events. (Excess
inclusions are defined below.) Thus, for example, an excess inclusion (i) may
not be offset by any unrelated losses or net operating loss carryovers of a
Residual Certificateholder, (ii) will be treated as "unrelated business taxable
income" within the meaning of Section 512 of the Code if the Residual
Certificateholder is a pension fund or any other organization that is subject to
tax only on its unrelated business taxable income and (iii) is not eligible for
any reduction in the rate of withholding tax in the case of a Residual
Certificateholder that is a foreign investor, as further discussed in "--13.
Foreign Investors" below. In addition, if a real estate investment trust,
regulated investment company, or certain pass-through entities own a Residual
Certificate, a portion of dividends paid by such entities would be treated as
excess inclusions in the hands of its shareholders with the same consequences as
excess inclusions attributed directly to a Residual Certificateholder.
Except as discussed in the following paragraph, with respect to any
Residual Certificateholder, the excess inclusion for any calendar quarter will
equal the excess, if any, of (i) the amount of the Trust Fund's taxable income
for the calendar quarter allocable to the Residual Certificateholder, over (ii)
the sum of the "daily accruals" (as defined below) for all days during the
calendar quarter on which the Residual Certificateholder held such Residual
Certificate. For this purpose, daily accruals with respect to a Residual
Certificateholder will be calculated by allocating to each day in such calendar
quarter its ratable portion of the product of (i) the "adjusted issue price" (as
defined below) of the Residual Certificate at the beginning of such calendar
quarter, and (ii) 120% of the "long-term Federal rate" (defined below),
calculated on the issue date of the Residual Certificate as if it were a debt
instrument and based on quarterly compounding. For this purpose, the "adjusted
issue price" of a Residual Certificate at the beginning of any calendar quarter
will equal its issue price, increased by the aggregate of the daily accruals for
all prior calendar quarters and the amount of any contributions made to the
Trust Fund with respect to the Residual Certificates after the Startup Date, and
decreased (but not below zero) by the aggregate amount of distributions made
with respect to the Residual Certificate before the beginning of such calendar
quarter. The "long-term Federal rate" is an average of current yields on
Treasury securities with a remaining term of greater than nine years, computed
and published monthly by the Service. As an exception to the general rule
described above, the Treasury has authority to issue regulations that would
treat 100% of the income
64
<PAGE>
accruing on a Residual Certificate as an excess inclusion, if the Residual
Certificates, in the aggregate, are considered not to have "significant value."
The REMIC Regulations, however, do not contain such a rule.
The Small Business Act has eliminated a special rule that formerly
permitted certain financial institutions utilizing the reserve method of
accounting for bad debts pursuant to Section 593 of the Code to use net
operating losses and other allowable deductions to offset their excess
inclusions from certain REMIC residual certificates. In addition, the Small
Business Act provides three rules for determining the effect of excess
inclusions on the alternative minimum taxable income of a holder of a REMIC
residual certificate. First, alternative minimum taxable income for such a
residual holder is determined without regard to the special rule that taxable
income cannot be less than excess inclusions. Second, a residual holder's
alternative minimum taxable income for a tax year cannot be less than the excess
inclusions for the year. Third, the amount of any alternative minimum tax net
operating loss deductions must be computed without regard to any excess
inclusions.
8. Effect of Defaults and Delinquencies. The Residual Certificates
of a multiple-Class Series may be subordinate to one or more Classes of Regular
Certificates (for purposes of this paragraph, "Senior Certificates"), and, in
the event there are defaults or delinquencies on the Contracts in the related
Contract Pool, amounts that would otherwise be distributed on the Residual
Certificates may instead be distributed on the Senior Certificates. However, the
Trust Fund will generally be required to report income in respect of Contracts
(and deductions with respect to the Regular Certificates) without giving effect
to default and delinquencies, except to the extent it can be established that
amounts due on the Contracts are uncollectible. To the extent the income on a
delinquent or defaulted Contract is greater than the deduction allowed in
respect of interest on the Regular Certificate that relates to such Contract,
the Trust Fund may recognize net income without making corresponding
distributions of cash on the Residual Certificates, and holders of Residual
Certificates will be required to report their pro rata share of the net income
of the Trust Fund without regard to the timing and amount of cash distributed on
such Residual Certificates.
9. Tax on Transfers of Residual Certificates to Certain
Organizations. An entity will not qualify as a REMIC unless there are reasonable
arrangements designed to ensure that residual interests in such entity are not
held by "disqualified organizations" (as defined below). Restrictions on the
transfer of the Residual Certificates that are intended to meet this requirement
will be included in the related Agreement and are discussed more fully in
"Restrictions on Transfer of REMIC Residual Certificates." If, notwithstanding
those restrictions, a Residual Certificate is transferred to a "disqualified
organization," a tax would be imposed in an amount equal to the product of (i)
the present value of the total anticipated excess inclusions with respect to
such Residual Certificate for periods after the transfer and (ii) the highest
marginal federal income tax rate applicable to corporations. Under the REMIC
Regulations, the anticipated excess inclusions must be determined based on (i)
events that have occurred up to the time of the transfer and (ii) the projected
payments based on the Assumed Prepayment Rate. The REMIC Regulations also
provide that the present value of the anticipated excess inclusions is
determined by discounting the anticipated excess inclusions as of the date of
the transfer using the applicable Federal rate under Section 1274(d)(1) of the
Code for the month of the transfer that would apply to a hypothetical obligation
with a term beginning on the date of
65
<PAGE>
the transfer and ending on the date the life of the REMIC is anticipated to
expire (as determined under rules described above in "--7. Excess Inclusions").
Such a tax would generally be imposed on the transferor of the Residual
Certificate, except that where such transfer is through an agent for a
disqualified organization, the tax would instead be imposed on such agent.
However, a transferor of a Residual Certificate (or an agent for a disqualified
organization) would in no event be liable for such tax with respect to a
transfer if the transferee furnishes to such transferor (or such agent) an
affidavit that the transferee is not a disqualified organization, and as of the
time of the transfer the transferor or the agent does not have actual knowledge
that such affidavit is false.
In addition, if a "pass-through entity" (as defined below) includes in
income excess inclusions with respect to a Residual Certificate, and a
disqualified organization is the record holder of an interest in such entity,
then a tax will be imposed on such entity equal to the product of (i) the amount
of excess inclusions on the Residual Certificate that are allocable to the
interest in the pass-through entity held by such disqualified organization and
(ii) the highest marginal federal income tax rate imposed on corporations.
However, a pass-through entity will in no event be liable for such tax with
respect to a record holder if the record holder furnishes the pass-through
entity with an affidavit that the record holder is not a disqualified
organization, and, as of the time the record holder becomes such a holder, the
pass-through entity does not have actual knowledge that such affidavit is false.
For these purposes, the term "disqualified organization" means (i) the
United States, any State or political subdivision thereof, any possession of the
United States, any foreign government, any international organization, or any
agency or instrumentality of the foregoing (other than an instrumentality that
is a corporation if all of its activities are subject to tax and, except for the
Federal Home Loan Mortgage Corporation, a majority of its board of directors is
not selected by an such governmental unit), (ii) an organization (other than a
cooperative described in Section 521 of the Code) which is exempt from federal
income tax (including the tax imposed by Section 511 of the Code on unrelated
business taxable income) on excess inclusions or (iii) any organization
described in Section 1381(a)(2)(C) of the Code. For these purposes, the term
"pass-through entity" means any regulated investment company, real estate
investment trust, common trust fund, partnership, trust, estate and certain
other entities described in Section 860E(e)(6) of the Code. Except as may be
provided in Treasury Regulations, any person holding an interest in a pass-
through entity as a nominee for another will, with respect to such interest, be
treated as a pass-through entity.
10. Sale or Exchange. If a Residual Certificate is sold or
exchanged, the seller will recognize gain or loss equal to the difference, if
any, between the amount realized and its adjusted basis in the Residual
Certificate (as defined above in "--2. Distributions") at the time of such sale
or exchange (except that the recognition of a loss may be limited under the
"wash sale" rules described below). In general, any such gain or loss will be
capital gain or loss, provided the Residual Certificate is held as a capital
asset as defined in Section 1221 of the Code. However, a Residual Certificate
will be an "evidence of indebtedness" within the meaning of Section 582(c)(1) of
the Code, so that gain or loss recognized from the sale of a Residual
Certificate by a bank or thrift institution to which such section applies would
be ordinary income or loss.
66
<PAGE>
Section 860F(d) of the Code and the Conference Committee Report to the
1986 Act indicate that, except as provided in Treasury Regulations, the wash
sale rules of Section 1091 of the Code will apply to dispositions of Residual
Certificates where the seller of the Residual Certificate, during the period
beginning six months before the sale or disposition of the Residual Certificate
and ending six months after such sale or disposition, acquires (or enters into
any other transaction that results in the application of Section 1091 of the
Code) any residual interest in any REMIC or any interest in a "taxable mortgage
pool" (such as a non-REMIC owner trust) that is economically comparable to a
Residual Certificate.
11. Noneconomic Residual Interests. Under the REMIC Regulations, a
transfer of a "noneconomic residual interest" (as defined below) to a Residual
Holder (other than a Foreign Holder, as discussed below) is disregarded for all
federal income tax purposes if a significant purpose of the transfer is to
enable the transferor to impede the assessment or collection of tax. If a
transfer of a residual interest is disregarded, the transferor would continue to
be treated as the owner of the residual interest and thus would continue to be
subject to tax on its allocable portion of the net income of the REMIC. A
residual interest in a REMIC (including a residual interest with a positive
value at issuance) is a "noneconomic residual interest" unless, at the time of
transfer (i) the present value of the expected future distributions on the
residual interest at least equals the product of the present value of the
anticipated excess inclusions and the highest corporate income tax rate in
effect for the year in which the transfer occurs and (ii) the transferor
reasonably expects that the transferee will receive distributions from the REMIC
at or after the time at which taxes accrue on the anticipated excess inclusions
in an amount sufficient to satisfy the accrued taxes. The anticipated excess
inclusions and the present value rate are determined in the same manner as set
forth above. The REMIC Regulations explain that a significant purpose to impede
the assessment or collection of tax exists if the transferor at the time of the
transfer either knew or should have known that the transferee would be unwilling
or unable to pay taxes due on its share of the taxable income of the REMIC. A
safe harbor is provided if (i) the transferor conducted, at the time of the
transfer, a reasonable investigation of the financial condition of the
transferee and, as a result of the investigation, the transferor found that the
transferee had historically paid its debts as they came due and found no
significant evidence to indicate that the transferee will not continue to pay
its debts as they come due in the future and (ii) the transferee represents to
the transferor that it understands that, as the holder of a non-economic
residual interest, the transferee may incur tax liabilities in excess of any
cash flows generated by the interest and that the transferee intends to pay
taxes associated with holding the residual interest as they become due. The
Agreement with respect to each Series of REMIC Certificates will require the
transferee of a Residual Certificate to certify to the statements in clause (ii)
of the preceding sentence as part of the affidavit described below under
"Restrictions on Transfer of REMIC Residual Certificates."
12. Termination. The Trust Fund related to a Series of Certificates
will terminate shortly following the retirement of Certificates in such Series.
If a Residual Certificateholder's adjusted basis in its Residual Certificate
exceeds the amount of cash distributed to such Residual Certificateholder in
final liquidation of its interest, then, although the matter is not entirely
free from doubt, it would appear that the Residual Certificateholder is entitled
to a loss equal to the amount of such excess.
67
<PAGE>
13. Foreign Investors. Unless otherwise provided in the applicable
Prospectus Supplement, no record or beneficial ownership interest in a Residual
Certificate may be transferred to a Foreign Holder. See "Restrictions on
Transfer of REMIC Residual Certificates" below. With respect to permitted
transfers to Foreign Holders, any such Residual Certificateholders should assume
that payments made on the Residual Certificates they hold will be subject to a
30% withholding tax, or such a lesser rate as may be provided under any
applicable tax treaty, except that the rate of withholding on any payments made
on Residual Certificates that are excess inclusions will not be eligible for
reduction under any applicable tax treaties. See "--7. Excess Inclusions"
above. Under the REMIC Regulations, a transfer of a residual interest that has
tax avoidance potential is disregarded for all federal income tax purposes if
the transferee is a Foreign Holder. The REMIC Regulations state that a residual
interest has tax avoidance potential unless, at the time of the transfer, the
transferor reasonably expects that, for each excess inclusion, the REMIC will
distribute to the transferee residual interest holder an amount that will equal
at least 30% of the excess inclusion, and that each such amount will be
distributed at or after the time at which the excess inclusion accrues and not
later than the close of the calendar year following the calendar year of
accrual. See "--9. Tax on Transfers of Residual Certificates to Certain
Organizations" above for rules regarding the determination of anticipated excess
inclusions. The above rules do not apply to transfers of Residual Certificates
if the transferee's income from the Residual Certificate would be effectively
connected with a United States trade or business of the transferee. The REMIC
Regulations also provide that a transfer of a Residual Certificate from a
Foreign Holder to a United States person or to a Foreign Holder in whose hands
the income from the Residual Certificate would be effectively connected with a
United States trade or business of the transferee will be disregarded if the
transfer has the effect of allowing the transferor to avoid tax on accrued
excess inclusions.
14. Mark-to-Market Rules. Treasury regulations provided that a
Residual Certificate acquired after January 3, 1995 will not be treated as a
security and therefore generally cannot be marked to market.
15. Additional Taxable Income of Residual Interests. Any payment
received by a holder of a Residual Certificate in connection with the
acquisition of such Residual Certificate will be taken into account in
determining the income of such holder for federal income tax purposes. Although
it appears likely that any such payment would be includible in income
immediately upon its receipt or accrual as ordinary income, the IRS might assert
that such payment should be included in income over time according to an
amortization schedule or according to some other method. Because of the
uncertainty concerning the treatment of such payments, holders of Residual
Certificates should consult their tax advisors concerning the treatment of such
payments for income tax purposes.
E. Other Matters Relating to REMIC Certificates; Administrative
Matters. Solely for the purposes of the administrative provisions of the Code,
each Trust Fund for which a REMIC election is made will be treated as a
partnership, and the Residual Certificateholders will be treated as the partners
thereof. The Trust Fund must maintain its books on a calendar year basis and
must file federal information returns in a manner similar to a partnership for
federal income tax purposes. Certain information on such returns will be
furnished to each Residual Certificateholder. The Trust Fund also will be
subject to the procedural and administrative rules
68
<PAGE>
of the Code applicable to partnerships, including rules for determining any
adjustments to among other things, items of REMIC income, gain, loss, deduction
or credit by the Service in a unified administrative proceeding. The holders of
Residual Certificates will generally be entitled to participate in audits of the
Trust Fund by the Service to the same extent as general partners in an audit of
a partnership. Regular Certificateholders will not be entitled to participate in
any such audits.
Each Residual Certificateholder is required to treat items on its
return consistently with their treatment on the Trust Fund's return, unless the
Residual Certificateholder either files a statement identifying the
inconsistency or establishes that the inconsistency resulted from incorrect
information received from the Trust Fund. The Service may assert a deficiency
resulting from a failure to comply with the consistency requirement without
instituting an administrative proceeding at the Trust Fund level. The Trust
Fund does not intend to register as a tax shelter pursuant to Section 6111 of
the Code because it is not anticipated that the Trust Fund will have a net loss
for any of the first five taxable years of its existence. Any person that holds
a Residual Certificate as a nominee for another person will be required to
furnish the Trust Fund, in a manner provided in Treasury Regulations, with the
name and address of such person, and other information.
Each Residual Certificateholder, by purchasing its Residual
Certificate, (A) shall be deemed to consent to the appointment of the Servicer
as (i) the "tax matters person" (within the meaning of Section 1.860F-4(d) of
the REMIC Regulations) for the Trust Fund and (ii) attorney-in-fact and agent
for any person that is the tax matters person if the Servicer is unable to serve
as the tax matters person, and (B) agrees to execute any documents required to
give effect to (A) above.
NON-REMIC CERTIFICATES
The discussion under this heading applies only to a Series of
Certificates with respect to which a REMIC election is not made ("Non-REMIC
Certificates").
A. Characterization of the Trust Fund. Upon the issuance of any
Series of Certificates with respect to which no REMIC election is made, Orrick,
Herrington & Sutcliffe LLP, special counsel to GreenPoint, will deliver its
opinion generally to the effect that with respect to each such Series of
Certificates, under then existing law and assuming compliance by the Seller, the
Servicer and the Trustee of such Series with all of the provisions of the
related Agreement, and agreement or agreements, if any, providing for a Credit
Facility or a Liquidity Facility, together with any agreement documenting the
arrangement through which a Credit Facility or a Liquidity Facility is held
outside the related Trust Fund, the agreement or agreements with any
Underwriter, for federal income tax purposes, the Trust Fund will be classified
as a grantor trust and not as a corporation or an association which is taxable
as a corporation. Accordingly, each Non-REMIC Certificateholder will be treated
for federal income tax purposes as the owner of an undivided interest in the
Contracts and other assets included in the Trust Fund. As further described
below, each holder of a Non-REMIC Certificate must therefore report on its
federal income tax return the gross income from the portion of the Contracts
that is allocable to such Non-REMIC Certificate and may deduct its share of the
expenses paid by the Trust Fund that are allocable to such Non- REMIC
Certificate, at the same
69
<PAGE>
time and to the same extent as such items would be reported by such holder if it
had purchased and held directly such interest in the Contracts and received
directly its share of the payments on the Contracts and paid directly its share
of the expenses paid by the Trust Fund when those amounts are received and paid
by the Trust Fund. A Non-REMIC Certificateholder who is an individual will be
allowed deductions for such expenses only to the extent that the sum of those
expenses and certain other of the Non-REMIC Certificateholder's miscellaneous
itemized deductions exceeds 2% of such individual's adjusted gross income. In
addition, the amount of itemized deductions otherwise allowable for the taxable
year of an individual whose adjusted gross income exceeds certain thresholds
will be reduced. Other potential limitations on deductibility are described
above in "REMIC Certificates--C. Taxation of Regular Certificates--8. Pass-
Through of Expenses Other Than Interest." Although not clear, it appears that
expenses paid by the Trust Fund, and the gross income used to pay such expenses,
should be allocated among the classes of Non-REMIC Certificates in proportion to
their respective fair market values at issuance.
Under current Service interpretations of applicable Treasury
Regulations, GreenPoint would be able to sell or otherwise dispose of any
subordinated Non-REMIC Certificates. Accordingly, GreenPoint expects 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, and 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 21, 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 such discount
in such Contracts prior to receipt of cash related to such discount. See the
discussion above under "REMIC Certificates--C. Taxation of Regular Certificates-
- -2. Original Issue Discount." Similarly, 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
Certificates--C. Taxation of Regular Certificates--4. Market Discount" and
"REMIC Certificates--C. Taxation of Regular Certificates--5. Premium."
B. Tax Status of Non-REMIC Certificates. In general, the Non-REMIC
Certificates, other than "Premium Non-REMIC Certificates" (as defined below)
will be (i) "real estate assets" within the meaning of Section 856(c)(4)(A) of
the Code and (ii) assets described in Section 7701(a)(19)(C) of the Code to the
extent the Trust Fund's assets qualify under those Sections of the Code. Any
amount includible in gross income with respect to the Non-REMIC Certificates
will be treated as "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 Code to the extent the income on the Trust Fund's assets
qualifies under that Code Section. The Service has ruled that obligations
secured by permanently installed mobile home units qualify as "real estate
assets" under Section 856(c)(4)(A) of the Code. Assets described in Section
7701(a)(19)(C) of the Code include loans secured by mobile homes not used on a
transient basis. However, whether Manufactured Homes would be viewed as
permanently installed for purposes of Section
70
<PAGE>
856 of the Code would depend on the facts and circumstances of each case. In
this regard, investors should note that, unless stated otherwise in the related
Prospectus Supplement, most of the Contracts in the related Contract Pool
prohibit the Obligor from permanently attaching the related Manufactured Home to
its site if it were not so attached on the date of the Contract. Non-REMIC
Certificates that represent the right solely to interest payments on the
Contracts and Non-REMIC Certificates that are issued at prices that
substantially exceed the portion of the principal amount of the Contracts
allocable to such Non-REMIC Certificates (both types of Non-REMIC Certificates,
"Premium Non-REMIC Certificates") should qualify under the foregoing sections of
the Code to the same extent as other Certificates, but the matter is not free
from doubt. Prospective purchasers of Certificates who may be affected by the
foregoing Code provisions should consult their tax advisors regarding the status
of the Certificates under such provisions.
C. Taxation of Non-REMIC Certificates Under Stripped Bond Rules.
Certain classes of Non-REMIC Certificates may be subject to the stripped bond
rules of Section 1286 of the Code. In general, a Non-REMIC 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: (i) if any servicing compensation is deemed to exceed a reasonable
amount; (ii) if GreenPoint or any other party retains a retained yield with
respect to the Contracts comprising a Contract pool; (iii) 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 (iv)
if Non-REMIC Certificates are issued which represent the right to interest only
payments or principal only payments. Unless the Prospectus Supplement indicates
otherwise, the Non-REMIC Certificates will be subject to the "stripped bond"
rules of Section 1286 of the Code (or, if the application of those rules to a
particular Series of Non-REMIC Certificates is uncertain, the Trust Fund will
take the position that they apply). There is some uncertainty as to how that
section will be applied to securities such as the Non-REMIC Certificates.
Investors should consult their own tax advisors regarding the treatment of the
Non-REMIC Certificates under the stripped bond rules.
Although the matter is not entirely clear and alternative
characterizations could be imposed, it appears that each stripped Non-REMIC
Certificate should be considered to be a single debt instrument issued on the
day it is purchased for purposes of calculating original issue discount. Thus,
in each month the holder of a Non-REMIC Certificate (whether a cash or accrual
method taxpayer) will be required to report interest income from the Non-REMIC
Certificate equal to the income that accrues on the Non-REMIC Certificate in
such month, calculated, in accordance with the rules of the Code relating to
original issue discount, under a constant yield method. In general, the amount
of such income reported in any month would equal the product of such holder's
adjusted basis in such Non-REMIC Certificate at the beginning of such month (see
"--D. Sales of Certificates" below) and the yield of such Non-REMIC Certificate
to such holder. Such yield would be the monthly rate (assuming monthly
compounding) determined as of the date of purchase that, if used in discounting
the remaining payments on the portion of the Contracts that is allocable to such
Non-REMIC Certificate, would cause the present value of those payments to equal
the price at which the holder purchased the Non-REMIC Certificate.
71
<PAGE>
With respect to certain categories of debt instruments, the Code
requires the use of a reasonable prepayment assumption in accruing original
issue discount and provides a method of adjusting those accruals to account for
differences between the assumed prepayment rate and the actual rate. These
rules apply to "regular interests" in a REMIC and are described under "REMIC
Certificates--C. Taxation of Regular Certificates--2. Original Issue Discount."
Regulations could be adopted applying these rules to the Non-REMIC Certificates.
Although the matter is not free from doubt, it appears that the Taxpayer Relief
Act of 1997 has expanded the requirement of the use of a reasonable prepayment
assumption to instruments such as the Non-REMIC Certificates. In the absence of
regulations interpreting the application of this requirement to such instruments
particularly where such instruments are subject to the Stripped Bond Rules, it
is uncertain whether the assumed prepayment rate would be determined based on
conditions at the time of the first sale of the Non-REMIC Certificates or, with
respect to any holder, at the time of purchase of the Non-REMIC Certificate by
that holder. Finally, if these rules were applied to the Non-REMIC
Certificates, and the principles used in calculating the amount of original
issue discount that accrues in any month would produce a negative amount of
original issue discount, it is unclear when such loss would be allowed.
In the case of a Non-REMIC Certificate acquired at a price equal to
the principal amount of the Contracts allocable to such Non-REMIC Certificate,
the use of a reasonable prepayment assumption would not have any significant
effect on the yield used in calculating accruals of interest income. In the
case, however, of a Non-REMIC Certificate acquired at a discount or premium
(that is, at a price less than or greater than such principal amount,
respectively), the use of a reasonable prepayment assumption would increase or
decrease such yield, and thus accelerate or decelerate the reporting of interest
income, respectively.
If the yield used by the holder of a Non-REMIC Certificate in
calculating the amount of interest that accrues in any month is determined based
on scheduled payments on the Contracts (that is, without using a reasonable
prepayment assumption) and such Non-REMIC Certificate was acquired at a discount
or premium, then such holder generally will recognize a net amount of ordinary
income or loss if a Contract prepays in full in an amount equal to the
difference between the portion of the prepaid principal amount of the Contract
that is allocable to the Non-REMIC Certificate and the portion of the adjusted
basis of the Non-REMIC Certificate (see "--D. Sales of Certificates" below) that
is allocable to the Contract. In general, basis would be allocated among the
Contracts in proportion to their respective principal balances determined
immediately before such prepayment. It is not clear whether any other
adjustments would be required or permitted to take account of prepayments of the
Contracts.
Solely for purposes of reporting income on the Non-REMIC Certificates
to the Service and to certain holders, as required under the Code, it is
anticipated that, unless provided otherwise in the related Prospectus
Supplement, the yield of the Non-REMIC Certificates will be calculated based on
(i) a representative initial offering price of the Non-REMIC Certificates to the
public and (ii) a reasonable Assumed Prepayment Rate, which will be the rate
used in pricing the initial offering of the Non-REMIC Certificates. (Such yield
may differ significantly from the yield to any particular holder that would be
used in calculating the interest income of such holder.) No representation is
made that the Contracts will in fact prepay at the Assumed Prepayment Rate or at
any other rate.
72
<PAGE>
D. Sales of Certificates. Upon the 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.
E. 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 above in "REMIC Certificates--C. Taxation of
Regular Certificates--9. 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 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 Certificates--C. Taxation of Regular Certificates--9. Taxation of
Certain Foreign Investors" and "--12. New Withholding Regulations."
OTHER TAX CONSEQUENCES
No advice has been received as to local income, franchise, personal
property, or other taxation in any state or locality, or as to the tax effect of
ownership of Certificates in any state or locality. Certificateholders are
advised to consult their own tax advisors with respect to any state or local
income, franchise, personal property, or other tax consequences arising out of
their ownership of Certificates.
RESTRICTIONS ON TRANSFER OF REMIC RESIDUAL CERTIFICATES
As discussed in "Certain Federal Income Tax Consequences--D. Taxation
of Residual Certificates--9. Tax on Transfers of Residual Certificates to
Certain Organizations," in order for the Trust Fund to qualify as a REMIC, there
must be reasonable arrangements designed to ensure that the Residual
Certificates are not held by disqualified organizations. Further, transfers to
"electing large partnerships" within the meaning of Section 775 of the Code or
persons that are not United States persons raise special tax issues.
Accordingly, unless the related Prospectus Supplement provides otherwise, no
record or beneficial ownership interest in a Residual Certificate that is sold
under this Prospectus may be transferred unless, among other things, the Trustee
receives (i) an affidavit from the proposed transferee to the effect that it is
not
73
<PAGE>
a "disqualified organization" or electing large partnership and is not
purchasing on behalf of a disqualified organization or electing large
partnership (see "Certain Federal Income Tax Consequences--D. Taxation of
Residual Certificates--9. Tax on Transfers of Residual Certificates to Certain
Organizations"), (ii) a representation from the proposed transferee to the
effect that it is a citizen or resident of the United States, a corporation,
partnership or other entity created or organized in or under the laws of the
United States or any political subdivision thereof, or an estate or trust whose
income from sources without the United States is includible in gross income for
United States federal income tax purposes regardless of its connection with the
conduct of a trade or business within the United States and (iii) a covenant of
the proposed transferee to the effect that the proposed transferee agrees to be
bound by and to abide by the transfer restrictions applicable to such REMIC
Residual Certificate.
TAX-EXEMPT INVESTORS
A qualified pension plan or other entity that is exempt from federal
income taxation pursuant to Section 501 of the Code (a "Tax-Exempt Investor")
nonetheless will be subject to federal income taxation to the extent that its
income is "unrelated business taxable income" ("UBTI") within the meaning of
Section 512 of the Code. All "excess inclusions" of a "REMIC" allocated to a
"Residual Certificate" held by a Tax-Exempt investor will be considered UBTI and
thus will be subject to federal income tax. See "Certain Federal Income Tax
Consequences--Certificates as REMIC Residual Interests--7. Excess Inclusions."
LEGAL INVESTMENT
The Prospectus Supplement for each Series of Certificates will specify
which, if any, of the Classes of Certificates offered thereby constitute
"mortgage related securities" for purposes of the Secondary Mortgage Market
Enhancement Act of 1984 ("SMMEA"). Classes of Certificates that qualify as
"mortgage related securities" 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 pursuant to or existing under the laws of the United States or of any
state (including the District of Columbia and Puerto Rico) 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, if a state enacted
legislation prior to October 4, 1991 specifically limiting the legal investment
authority of any such entities with respect to "mortgage related securities,"
Certificates will constitute legal investments for entities subject to such
legislation only to the extent provided therein. Approximately twenty-one
states adopted such legislation prior to the October 4, 1991 deadline.
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 limitations as to the percentage of their assets
represented thereby, federal credit unions may invest in mortgage related
securities, 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. Section 24 (Seventh), subject in each case to such
regulations as the applicable federal authority may prescribe. In this
connection, federal credit unions should review the National Credit Union
74
<PAGE>
Administration ("NCUA") Letter to Credit Unions No. 96, as modified by Letter to
Credit Unions No. 108, which includes guidelines to assist federal credit unions
in making investment decisions for mortgage related securities, and the NCUAs
regulation "Investment and Deposit Activities" (12 C.F.R. Part 703), which sets
forth certain restrictions on investment by federal credit unions in mortgage
related securities.
All depository institutions considering an investment in the
Certificates (whether or not the Class of Certificates under consideration for
purchase constitutes a "mortgage related security") should review the Federal
Financial Institutions Examination Council's Supervisory Policy Statement on the
Securities Activities (to the extent adopted by their respective regulators)
(the "Policy Statement"), setting forth, in relevant part, certain securities
trading and sales practices deemed unsuitable for an institution's investment
portfolio, and guidelines for (and restrictions on) investing in mortgage
derivative products, including "mortgage related securities," which are "high-
risk mortgage securities" as defined in the Policy Statement. According to the
Policy Statement, such "high-risk mortgage securities" include securities such
as certificates not entitled to distributions allocated to principal or
interest, or subordinated certificates. Under the Policy Statement, it is the
responsibility of each depository institution to determine, prior to purchase
(and at stated intervals thereafter), whether a particular mortgage derivative
product is a "high-risk mortgage security," and whether the purchase (or
retention) of such a product would be consistent with the Policy Statement.
The foregoing does not take into consideration the applicability of
statutes, rules, regulations, orders, guidelines or agreements generally
governing investments made by a particular investor, including, but not limited
to "prudent investor" provisions, percentage-of-assets limits and provisions
which may restrict or prohibit investment in securities which are not "interest
bearing" or "income paying."
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.
ERISA CONSIDERATIONS
The Employee Retirement Income Security Act of 1974, as amended
("ERISA"), imposes certain restrictions on employee benefit or other plans
subject to ERISA and/or Section 4975 of the Code ("Plans") and on persons having
certain specified relationships to a Plan ("Parties in Interest") with respect
to such Plans, including, for this purpose, individual retirement arrangements
described in Section 408 of the Code. Certain employee benefit plans, such as
governmental plans and church plans (if no election has been made under Section
410(d) of the Code), are not subject to the requirements of ERISA, and assets of
such plans may be invested in Certificates without regard to the ERISA
considerations described below, subject to the provisions of other applicable
federal and state law. Any such plan which is qualified under Section 401(a) of
the Code and exempt from taxation under Section 501(a) of the Code is, however,
subject to the prohibited transaction rules set forth in Section 503 of the
Code.
75
<PAGE>
Investments by Plans are subject to ERISA's general fiduciary
requirements, including the requirement of investment prudence and
diversification and the requirement that a Plan's investments be made in
accordance with the documents governing the Plan. A fiduciary which decides to
invest the assets of a Plan in Certificates should consider, among other
factors, the sensitivity of the investments to the rate of principal payments
(including prepayments) on the Contracts as discussed in "Prepayment and Yield
Considerations" herein.
The United States Department of Labor (the "DOL") has issued
regulations concerning the definition of what constitutes the assets of a Plan
(DOL Reg. Section 2510.3-101). Under the DOL regulations, the underlying assets
and properties of corporations, partnerships and certain other entities in which
a Plan makes an "equity" investment could be deemed for purposes of ERISA to be
assets of the investing Plan in certain circumstances. A beneficial interest in
a trust is defined as an "equity" interest under the DOL regulations. However,
the DOL regulations provide that, generally, the assets of an entity in which a
Plan makes an equity investment 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 in DOL Reg.
Section 2510.3-101 is a security that is widely held, freely transferable and
either registered under the Exchange Act or sold to the Plan as part of a public
offering under the Securities Act that then becomes so registered. There can be
no assurance that any Class of Certificate will qualify for this or any other
exception under the DOL regulations.
In addition to the imposition of general fiduciary standards of
investment prudence and diversification, ERISA prohibits a broad range of
transactions involving Plan assets and Parties in Interest, and imposes
additional prohibitions where Parties in Interest are fiduciaries with respect
to such Plan. To the extent that the Contracts may be deemed Plan assets of
each Plan that purchases Certificates, an investment in the Certificates by a
Plan could result in a prohibited transaction under ERISA Sections 406 and 407
and be subject to an excise tax under Section 4975 of the Code unless a
statutory or administrative exemption applies.
In Prohibited Transaction Class Exemption ("PTCE") 83-1, which amended
PTCE 81-7, the DOL exempted from ERISA's prohibited transaction rules certain
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. However, PTCE 83-1
does not apply to trusts that hold Contracts.
Each Plan fiduciary who is responsible for making the investment
decisions whether to purchase or commit to purchase and to hold Certificates
must make its own determination as to the availability of any prohibited
transaction exemptions under ERISA. Each Plan fiduciary should also 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.
Several underwriters of asset-backed securities have applied for and
obtained ERISA prohibited transaction exemptions which are in some respects
broader than PTCE 83-1 and the exceptions to the DOL regulations referred to
above. Such exemptions can only apply to
76
<PAGE>
securities backed by certain receivables, loans and other obligations that are
secured and, among other conditions, are sold in an offering with respect to
which such an underwriter serves as the sole or a managing underwriter, or as a
selling or placement agent. If such an exemption might be applicable to a Series
of Certificates, the related Prospectus Supplement will refer to such
possibility.
Any Plan fiduciary that proposes to cause a Plan to purchase
Certificates should consult with its counsel concerning the impact of ERISA and
the Code, the applicability of any exemption under ERISA and the potential
consequences in its specific circumstances, prior to making such 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.
CERTAIN LEGAL ASPECTS OF THE CONTRACTS
The following discussion contains summaries of certain legal aspects
of manufactured housing contracts, including Land Home and Land-in-Lieu
Contracts, which are general in nature. Because such legal aspects are governed
by applicable state law (which 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 HOME AND LAND-IN LIEU CONTRACTS)
General. As a result of the assignment of Contracts in a Contract Pool
to the Trustee, the related Trust Fund will succeed collectively to all of the
rights (including the right to receive payment on such Contracts), and will
assume the obligations of the obligee, under such Contracts. Each Contract
evidences both (a) the obligation of the Obligor to repay the loan evidenced
thereby, and (b) the grant of a security interest in either the Manufactured
Home, and, in the case of a Land Home Contract or Land-in-Lieu Contract, the
real estate on which the related Manufactured Home is located, to secure
repayment of such loan. Certain aspects of both features of the Contracts are
described more fully below.
The following discussion focuses on issues relating generally to
GreenPoint's or any lender's interest in manufactured housing contracts. See
"Risk Factors--Security Interests of a Trust Fund in the Manufactured Homes"
herein for a discussion of certain issues relating to the transfer to a Trust
Fund of Contracts and the related security interests in the Manufactured Homes
comprising the related Contract Pool.
Security Interests of GreenPoint in the Manufactured. Each Contract
generally will be "chattel paper" as defined in the UCC as in effect in New York
(where GreenPoint's chief executive offices are located) and the jurisdiction in
which the related Manufactured Home was located at origination. Under the UCC
as in effect in each such jurisdiction, the sale of chattel paper is treated in
a manner similar to perfection of a security interest in chattel paper.
77
<PAGE>
GreenPoint will make or cause to be made appropriate filings of UCC-1 financing
statements to give notice of the Trustee's ownership of the Contracts sold by
it. The Trustee's interest in the Contracts could be defeated if a subsequent
purchaser were able to take physical possession of the Contracts without notice
of such assignment. GreenPoint will not retitle any certificates of title that
are in the name of Bank of America, FSB or BankAmerica Housing Services, a
division of Bank of America, FSB relating to any contracts that it purchases in
the Acquisition as described under "The Seller." Unless otherwise specified in
the applicable Prospectus Supplement, GreenPoint will be required under the
related Agreement to stamp or cause to be stamped each Contract sold by it to
indicate its transfer to the Trustee. To the extent the Contracts do not
constitute "chattel paper" within the meaning of the UCC as in effect in New
York and the jurisdictions in which the related Manufactured Homes were located
at origination, these steps may not be sufficient to protect the Trustee's
interest in the Contracts against the claims of GreenPoint's (or an affiliate's)
or Bank of America, FSB's creditors, as the case may be, a trustee in bankruptcy
of GreenPoint or a receiver, conservator or trustee in bankruptcy of an
affiliate thereof that sold such Contracts to GreenPoint or bank of America,
FSB, as applicable.
The Manufactured Homes securing the Contracts in a Contract Pool may
be located in all 50 states and the District of Columbia. Security interests in
manufactured homes similar to the ones securing the Contracts ("manufactured
homes") generally 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 non-title states, perfection pursuant to the provisions of the UCC is
required. Generally, with respect to manufactured housing contracts
individually originated or purchased by GreenPoint, GreenPoint effects such
notation or delivery of the required documents and fees, and obtains possession
of the certificate of title or a lien certificate, as appropriate, under the
laws of the state in which any manufactured home securing a manufactured housing
contract is registered. If GreenPoint and its affiliates fails, due to clerical
errors or otherwise, to effect such notation or delivery, or files the security
interest under the wrong law (for example, under a motor vehicle title statute
rather than under the UCC, in a few states), GreenPoint (for itself, or as agent
of the secured lender) 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. These filings must be made in the real estate records office of the
county where the home is located. Unless otherwise specified in the related
Prospectus Supplement, most of the Contracts in any Contract Pool will contain
provisions prohibiting the Obligor from permanently attaching the Manufactured
Home to its site if it was not so attached on the date of the Contract. As long
as each Manufactured Home was not so attached on the date of the Contract and
the Obligor 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 GreenPoint's security interest in the Manufactured Home. If
78
<PAGE>
any such Manufactured Home does become attached after the date of the related
Contract, the related Contract provides that such attachment constitutes an
"event of default" that, if unremedied, gives rise to certain discrete remedies
including acceleration of the unpaid principal balance of the Contract plus
accrued interest and repossession of the Manufactured Home. Regardless of
whether a full recovery is obtained from an Obligor whose Manufactured Home
becomes attached, GreenPoint will represent that, at the date of the initial
issuance of Certificates in any Series, it had obtained a perfected first-
priority security interest in each of the Manufactured Homes securing the
related Contracts sold by it. Such representation, however, will not be based
upon an inspection of the site of any Manufactured Home to determine if the
Manufactured Home had become permanently attached to its site. See "Description
of the Certificates--Conveyance of Contracts" herein. GreenPoint will not be
required to make fixture filings or to file Mortgages with respect to any of the
Manufactured Homes (except in the case of Land Home and Land-in-Lieu Contracts,
as described below). Consequently, if a Manufactured Home is deemed subject to
real estate title or recording laws because the owner attaches it to its site or
otherwise, the Trustee's interest therein may be subordinated to the interests
of others that may claim an interest therein under applicable real estate laws.
In addition, a federal circuit court decision may adversely affect a
Trustee's interest in the Contract Pool related to a Series of Certificates even
if the related Contracts constitute chattel paper. In Octagon Gas Systems, Inc.
v. Rimmer, 995 F.2d 948 (10th Cir. 1993), the court's decision included language
to the effect that accounts sold by an entity which subsequently became bankrupt
remained property of the debtor's bankruptcy estate. Sales of chattel paper,
like sales of accounts, are governed by Article 9 of the UCC. If GreenPoint is
subject to the federal bankruptcy code and becomes a debtor under the federal
bankruptcy code, and a court were to follow the reasoning of the Tenth Circuit
and apply such reasoning to chattel paper, Certificateholders for such Series
could experience a delay in, or reduction of, distributions as to the Contracts
that constitute chattel paper and were sold to the related Trust Fund.
In the absence of fraud, forgery or permanent affixation of a
manufactured home to its site by the manufactured home owner, or administrative
error by state recording officials, the notation of the lien of GreenPoint on
the certificate of title or delivery of the required documents and fees (or if
applicable, perfection under the UCC) will be sufficient to protect GreenPoint
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 the security interest in favor of GreenPoint is
not perfected, such security interest would be subordinate to the claims of,
among others, subsequent purchasers for value of and holders of perfected
security interests in such manufactured homes.
In the event that the owner of a manufactured home moves it to a state
other than the state in which such 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 such relocation and
thereafter until the owner registers the manufactured home in such state. If
the owner were to relocate a manufactured home to another state and were to re-
register the manufactured home in such state, and if steps are not taken to re-
perfect an existing security interest in such 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
79
<PAGE>
manufactured home. GreenPoint must therefore surrender possession if it holds
the certificate of title to such manufactured home or, in the case of
manufactured homes registered in states which provide for notation of lien,
GreenPoint would receive notice of surrender if its security interest in the
manufactured home is noted on the certificate of title. Accordingly, GreenPoint
would have the opportunity to re-perfect its 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 the perfection. In the ordinary course of servicing manufactured
housing contracts, GreenPoint takes steps to effect such 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, GreenPoint must surrender possession of the certificate of title or
GreenPoint will receive notice as a result of its lien noted thereon;
accordingly, GreenPoint will have an opportunity to require satisfaction of the
related contract before release of the lien. Such protections generally would
not be available in the case of security interests in manufactured homes located
in non-title states where perfection of such security interest is achieved by
appropriate filings under the UCC (as in effect in such state). Consequently,
the security interest in the manufactured home could cease to be perfected.
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 in the manufactured home. GreenPoint will warrant in
the Agreement with respect to each Series of Certificates that, as of the date
of initial issuance of such Series of Certificates, no Manufactured Home
relating to a Contract it sold was, to its knowledge, subject to any such lien.
However, such warranty will not be based on any lien searches or other review.
See "Description of the Certificates--Conveyance of Contracts" in the Prospectus
Supplement related to a Series of Certificates for a description of the remedies
for a breach of the representations and warranties made by GreenPoint under the
related Agreement. In addition, such liens could arise after the date of
initial issuance of the Certificates. Notice may not be given to GreenPoint,
the Servicer, the Trustee or Certificateholders in the event such a lien arises.
Enforcement of Security Interests in Manufactured Homes. Unless
otherwise specified in the applicable Prospectus Supplement, the Servicer on
behalf of the Trustee, to the extent required by the related Agreement, may take
action to enforce the Trustee's security interest with respect to Contracts in
default by repossession and resale of the Manufactured Homes securing such
defaulted Contracts. In general, as long as a manufactured home has not become
subject to the real estate law, a creditor can repossess a manufactured home 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 manufactured housing contract generally must give the obligor a
number of days' notice prior to commencement of any repossession. The UCC and
consumer protection laws in most states place restrictions on repossession
sales, including requiring prior notice to the obligor and commercial
reasonableness in effecting such a sale. The law in most states also requires
that the obligor be given notice of any sales prior to resale of the unit so
that the obligor may redeem at or before such resale.
Under the laws applicable in most states, a creditor is entitled to
obtain a deficiency judgment from an obligor for any deficiency on repossession
and resale of the manufactured home securing such obligor's contract. However,
some states impose prohibitions
80
<PAGE>
or limitations on deficiency judgments, and in many cases the defaulting obligor
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 GreenPoint's ability to repossess and resell any Manufactured Home or
enforce a deficiency judgment.
LAND HOME AND LAND-IN-LIEU CONTRACTS
General. To the extent described in the applicable Prospectus
Supplement, the related Contract Pool may contain Land Home Contracts or Land-
in-Lieu Contracts. The Land Home Contracts and the Land-in-Lieu Contracts will
be secured by either first mortgages or deeds of trust, depending upon the
prevailing practice in the state in which 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 defendants. 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, pursuant to 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 property to a third party upon any default by the
borrower under the terms of the note or deed of trust. In certain states, such
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
addition, some state laws require that a copy of the
81
<PAGE>
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. Certain 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.
Because of certain requirements of the REMIC Provisions, a Trust Fund
as to which a REMIC election has been made generally must dispose of any related
Manufactured Homes acquired pursuant to repossession, foreclosure, or similar
proceedings within three years after acquisition. Consequently, if the
Servicer, acting on behalf of the Trust, is unable to sell a Manufactured Home
in the course of its ordinary commercial practices within 33 months after its
acquisition thereof (or a longer period as permitted by the Agreement), the
Servicer will auction such home to the highest bidder (which bidder may be the
Servicer) in an auction reasonably designed to produce a fair price. There can
be no assurance that the price for any Manufactured Home would not be
substantially lower than the unpaid principal balance of the Contract relating
thereto. In fact, manufactured homes, unlike site-built homes, generally
depreciate in value, and it has been industry experience that, upon repossession
and resale, the amount recoverable on a manufactured home securing an
installment sales contract is generally lower than the principal balance of the
contract.
Rights of Redemption. In some states, after sale pursuant to a deed
of trust or foreclosure of a mortgage, the borrower and certain foreclosed
junior lienors or other parties are given a statutory period in which to redeem
the property from the foreclosure sale. In certain 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
82
<PAGE>
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 expense of ownership until the expiration of the redemption period.
Anti-Deficiency Legislation and Other Limitations on Lenders. Certain
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.
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 certain other states, the lender has the option of bringing a
personal action against the borrower on the debt without first exhausting such
security; however, in some of these states, the lender, following judgment on
such personal action, may be deemed to have elected a remedy and may be
precluded from exercising remedies with respect to 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 such
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 and/or enforce a deficiency
judgment. For example, with respect to a Land Home Contract, in a proceeding
under the federal Bankruptcy Code, the court may prevent a lender from
foreclosing on the home, and when a court determines that the value of a home is
less than the principal balance of the loan, the court may 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, reduce the monthly payments due under such mortgage loan, change the
rate of interest and/or alter the mortgage loan repayment schedule.
83
<PAGE>
The 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 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, Fair Credit Billing
Act, Fair Credit Reporting Act, and related statutes and regulations. These
federal laws and state laws impose specific statutory liabilities upon 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.
CERTAIN MATTERS RELATING TO INSOLVENCY
GreenPoint intends that each transfer of Certificates to the related
Trust Fund constitutes a sale, rather than a pledge of the Contracts to secure
indebtedness of GreenPoint. However, if GreenPoint were to become a debtor
under the federal bankruptcy code, it is possible that a creditor or trustee in
bankruptcy of GreenPoint or GreenPoint as debtor-in-possession may argue that
the sale of the Contracts by GreenPoint could be recharacterized as a borrowing
secured by a pledge of the Contracts. Such an attempt, even if unsuccessful,
could result in delays in or reductions of distributions on the Certificates.
CONSUMER PROTECTION LAWS
The so-called "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 certain related lenders and assignees) to transfer such contract free of
notice of claims by the obligor thereunder. The effect of this rule is to
subject the assignee of such a contract to all claims and defenses which the
obligor could assert against the seller of goods. Liability under this rule is
limited to amounts paid under such 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 assignee against such obligor. Generally, this rule will
apply to any Contracts conveyed to the Trustee and to any claims made by the
Servicer on behalf of the Trustee, as GreenPoint's assignee. Numerous other
federal and state consumer protection laws impose requirements applicable to the
origination and lending pursuant to such 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 or create liability for the Trust Fund.
The Soldiers' and Sailors' Civil Relief Act of 1940, as amended (the
"Relief Act") could, under certain circumstances, cap the amount of interest
that may be charged on certain Contracts at 6% and may hinder the ability of the
Servicer to foreclose on such Contracts in a timely fashion. Under the terms of
the Relief Act, if so required by an obligor under a manufactured housing
contract who enters military service after the origination of such 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), such obligor may not
84
<PAGE>
be charged interest above an annual rate of 6% during the period of such
obligor's active duty status, unless a court orders otherwise upon application
of the lender. In addition, the Relief Act imposes limitations which would
impair the ability of any lender to foreclose on an affected contract during the
obligor's period of active duty status and within three months thereafter. It is
possible that application of the Relief Act to certain of the Contracts could
have an effect, for an indeterminate period of time, on the ability of the
Servicer to collect full amounts of interest or foreclose on such Contract, and
could result in delays in payment or losses to the holders of the Certificates.
GreenPoint will not make any representation or warranty as to whether any
Contract is or could become subject to the Relief Act.
TRANSFERS OF MANUFACTURED HOMES; ENFORCEABILITY OF RESTRICTIONS ON TRANSFER
Unless otherwise specified in the related Prospectus Supplement, the
Contracts comprising any Contract Pool generally will prohibit the sale or
transfer of the related Manufactured Homes without the consent of the obligee
and permit the acceleration of the maturity of the Contracts by the obligee upon
any such sale or transfer to which GreenPoint has not consented. Under the
Agreement for a Series of Certificates (unless otherwise specified in the
related Prospectus Supplement), GreenPoint will be required to consent to any
such transfer and to permit the assumption of the related Contract if the
proposed buyer meets the Servicer's underwriting standards and enters into an
assumption agreement, the Servicer determines that permitting such assumption
will not materially increase the risk of nonpayment of the Contract and such
action will not adversely affect or jeopardize any coverage under any insurance
policy required by such Agreement. If the Servicer determines that these
conditions have not been fulfilled, then it will be required to withhold its
consent to the transfer, but only to the extent permitted under the Contract and
applicable law and governmental regulations and only to the extent that such
action will not adversely affect or jeopardize any coverage under any insurance
policy required by the Agreement. In certain cases, a delinquent Obligor may
attempt to transfer a Manufactured Home in order to avoid a repossession
proceeding with respect to such Manufactured Home.
In the case of a transfer of a Manufactured Home after which the
obligee desires to accelerate the maturity of the related Contract, the
obligee's ability to do so will depend on the enforceability under state law of
the clause permitting acceleration on transfer. The Garn-St. Germain Depository
Institutions Act of 1982 preempts, subject to certain exceptions and conditions,
state laws prohibiting enforcement of such clauses applicable to manufactured
homes. To the extent such exceptions and conditions apply in some states, the
Servicer may be prohibited from enforcing such a clause in respect of certain
Manufactured Homes.
APPLICABILITY OF USURY LAWS
Title V of the Depository Institutions Deregulation and Monetary
Controls Act of 1980, as amended ("Title V"), 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 related to any Series of Certificates would be covered under Title V
if, among other things, they satisfy certain conditions governing the terms of
any prepayments, late charges and deferral fees and contain a requirement of a
30-day notice period prior to instituting any action leading to repossession of
the related unit.
85
<PAGE>
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 rejected 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 so rejected, any state is authorized by the law to
adopt a provision limiting discount points or other charges on loans covered by
Title V. GreenPoint will represent, in the Agreement for a Series of
Certificates (unless otherwise specified in the related Prospectus Supplement),
that the Contracts sold by it comply with applicable usury laws.
RATINGS
It is a condition to the issuance of the Certificates of each Series
offered hereby that at the time of issuance they shall have been rated in one of
the four highest rating categories by the nationally recognized statistical
rating agency or agencies specified in the related Prospectus Supplement.
Ratings on manufactured housing contract pass-through certificates
address the likelihood of the receipt by Certificateholders of their allocable
share of principal and interest on the underlying manufactured housing contract
assets. These ratings address structural and legal aspects associated with such
certificates, the extent to which the payment stream on such underlying assets
is adequate to make payments required by such certificates and the credit
quality of the credit enhancer or guarantor, if any. Ratings on the
Certificates do not, however, constitute a statement regarding the likelihood of
principal prepayments by Obligors under the Contracts in the related Contract
Pool, the degree by which prepayments made by such Obligors might differ from
those originally anticipated or whether the yield originally anticipated by
investors of any Series of Certificates may be adversely affected as a result of
such prepayments. As a result, investors of any Series of Certificates might
suffer a lower than anticipated yield.
A rating on any or all of the Certificates of any Series by certain
other rating agencies, if assigned at all, may be lower than the rating or
ratings assigned to such Certificates by the rating agency or agencies specified
in the related Prospectus Supplement. 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. Each security rating should be
evaluated independently of any other security rating.
METHOD OF DISTRIBUTION
The Seller may sell Certificates of each Series to or through
underwriters (the "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. The Seller intends
that Certificates be offered through such 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 such methods.
86
<PAGE>
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 so specified in the Prospectus Supplement relating to a Series of
Certificates, the Seller or any affiliate thereof may purchase some or all of
one or more Classes of Certificates of such Series from the Underwriter or
Underwriters at a price specified in such Prospectus Supplement. Such purchaser
may thereafter from time to time offer and sell, pursuant to this Prospectus,
some or all of such Certificates so purchased directly, through one or more
Underwriters to be designated at the time of the offering of such Certificates
or through broker-dealers acting as agent and/or principal. Such offering may
be restricted in the manner specified in such Prospectus Supplement. Such
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 the Seller 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 the Seller
and any profit on the resale of the Certificates by them may be deemed to be
underwriting discounts and commissions, under the Securities Act. Any such
Underwriters or agents will be identified, and any such compensation received
from the Seller will be described, in the Prospectus Supplement.
Under agreements which may be entered into by GreenPoint, Underwriters
and agents who participate in the distribution of the Certificates may be
entitled to indemnification by GreenPoint against certain liabilities, including
liabilities under the Securities Act.
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 such market, if established, will continue.
USE OF PROCEEDS
Unless otherwise specified in the applicable Prospectus Supplement,
substantially all of the net proceeds to be received from the sale of the
Certificates will be used by the Seller for general corporate purposes,
including the payment of expenses in connection with pooling the Contracts and
issuing the Certificates.
LEGAL MATTERS
Certain legal matters relating to the Certificates, including legal
matters relating to material federal income tax consequences concerning the
Certificates, will be passed upon for GreenPoint by Orrick, Herrington &
Sutcliffe LLP, Los Angeles, California.
87
<PAGE>
EXPERTS
The consolidated financial statements of GFC as of December 31, 1997
and 1996 incorporated in this Prospectus by reference to GFC's Annual Report on
Form 10-K for the year ended December 31, 1997 have been so incorporated in
reliance on the report by PricewaterhouseCoopers LLP, independent accountants,
given on the authority of said firm as experts in accounting and auditing.
The consolidated financial statements of GFC as of December 31, 1995
incorporated in this Prospectus by reference to GFC's Annual Report on Form 10-K
for the year ended December 31, 1997 have been so incorporated in reliance on
the report by KPMG Peat Marwick LLP, independent accountants, given on the
authority of said firm as experts in accounting and auditing.
88
<PAGE>
INDEX OF SIGNIFICANT DEFINITIONS
<TABLE>
<CAPTION>
Page in Prospectus
on Which Term
is Defined
------------------
<S> <C>
1986 Act................................................................49
1997 Act................................................................56
Acquisition.............................................................18
adjusted issue price....................................................53
Agreement................................................................2
Bulk Sellers............................................................14
capital assets..........................................................44
cash-flow investments...................................................97
Cede..................................................................v, 7
Certificate Account.....................................................26
Certificate Balance......................................................4
Certificate Owners....................................................v, 7
Certificateholder...................................................32, 45
Certificateholders.......................................................v
Certificates.............................................................i
Class.................................................................i, 3
clearing agency.........................................................31
clearing corporation....................................................31
Code.....................................................................9
Collection Period................................................... 4, 28
Commission...........................................................cover
Committee Report........................................................49
Contract.................................................................1
Contract Files..........................................................27
Contract Pool....................................................... ii, 1
Contract Rate............................................................1
Contract Schedule.......................................................27
contracts...............................................................11
Contracts........................................................... ii, 1
Credit Facility.........................................................43
Credit Facility Provider................................................43
Cut-off Date.............................................................1
daily portion.............................................................
Definitive Certificates.................................................27
disqualified organization...........................................66, 74
Disqualified Organizations..............................................48
Distribution Date....................................................... 3
DOL...................................................................v, 7
DTC.....................................................................31
DTC Rules...............................................................32
Due Date................................................................15
ERISA................................................................9, 75
excess inclusions.........................................................
Excess Interest.....................................................11, 29
</TABLE>
89
<PAGE>
<TABLE>
<CAPTION>
Page in Prospectus
on Which Term
is Defined
------------------
<S> <C>
Exchange Act.........................................................cover
foreclosure property................................................. 48
Foreign Holder....................................................... 58
Fractional Interests................................................. 37
full distributions................................................... 30
GFC..................................................................iv, 8
Global Certificate...................................................8, 31
Grantor Trust Fund................................................... 45
GreenPoint........................................................... 1
GreenPoint Bank...................................................... 18
holder............................................................... 45
Indirect Participants................................................ 31
IRS.................................................................. 49
Issue Premium........................................................ 62
Junior Certificates.................................................. 40
Kelley Blue Book..................................................... 21
Land Home............................................................ 1
Land Home Contract................................................... 17
Land Home Contracts.................................................. 16
Land-in-Lieu Contract................................................1, 17
Land-in-Lieu Contracts............................................... 16
Liquidity Facility................................................... 44
Liquidity Facility Provider.......................................... 44
long-term Federal rate............................................... 65
Manufactured Home.................................................... 1
manufactured homes................................................... 77
manufactured housing contracts....................................... 11
mezzanine............................................................ 42
Minimum Termination Amount........................................... 33
Monthly Servicing Fee................................................ 35
Mortgage............................................................. 17
mortgage related securities..........................................9, 75
mortgage related security............................................ 75
Multiple Variable Rate............................................... 51
NCUA................................................................. 75
New Regulations...................................................... 59
noneconomic residual interest........................................ 59
Non-REMIC Certificates............................................... 70
notice............................................................... 37
Obligor.............................................................. 15
OID Regulations...................................................... 45
Original Holder...................................................... 60
</TABLE>
90
<PAGE>
<TABLE>
<CAPTION>
Page in Prospectus
on Which Term
is Defined
------------------
<S> <C>
Participants....................................................... 31
Parties in Interest................................................ 75
passive losses..................................................... 60
pass-through entity................................................ 67
pass-through interest holder....................................... 57
pass-through interest holders...................................... 57
Pass-Through Rate.................................................. 6, 30
Percentage Interest................................................ 26
permitted investments.............................................. 47
Plans.............................................................. 76
Policy Statement................................................... 75
Pool Principal Balance............................................. 41
Pool Scheduled Principal Balances.................................. 42
portfolio income................................................... 60
Premium Non-REMIC Certificates..................................... 71
Prepayment Assumption.............................................. 50
Prepayment Model................................................... 24
prohibited transaction............................................. 39
PTCE............................................................... 76
qualified liquidation.............................................. 34
qualified mortgage................................................. 47
qualified mortgages................................................ 47
qualified replacement mortgage..................................... 47
qualified reserve assets........................................... 48
Rate Period........................................................ 30
Registration Statement............................................. iv
Regular Certificates............................................... 46
regular interests.................................................. 45, 49
Regular Principal.................................................. 28
Relief Act......................................................... 13, 84
REMIC..............................................................iii, 45
REMIC Certificates................................................. 45
REMIC Provisions................................................... 45
REMIC Regulations.................................................. 45
Repurchase Date.................................................... 33
Reserve Fund....................................................... 42
Residual Certificates.............................................. 46
Residual Interest.................................................. 7, 30
residual interests................................................. 45
Sale Agreement..................................................... 18
Scheduled Payment.................................................. 15
Seller............................................................. i
Senior Certificate Balance......................................... 41
Senior Certificates................................................ 40
Series............................................................. i
Service............................................................ 44, 47
Servicer........................................................... ii, 1
Single Variable Rate............................................... 50
single-class REMIC................................................. 57
SMMEA.............................................................. 9, 75
</TABLE>
91
<PAGE>
<TABLE>
<CAPTION>
Page in Prospectus
on Which Term
is Defined
------------------
<S> <C>
Special Principal Distributions......................................5, 29
Spread Account....................................................... 43
staged-funding....................................................... 17
Startup Day.......................................................... 47
steps up............................................................. 1
Step-Up Rate......................................................... 15
Step-Up Rate Contracts............................................... 15
Subordinate Certificates............................................. 40
Tax-Exempt Investor.................................................. 74
Termination Auction.................................................. 34
Title V.............................................................. 85
Total Regular Principal Amount.......................................4, 28
Trust Fund........................................................... i, 3
Trustee.............................................................. 3
UBTI................................................................. 74
UCC.................................................................. 12
Underwriters......................................................... 86
Weighted Average Contract Rate.......................................1, 17
</TABLE>
92
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
<TABLE>
<CAPTION>
<S> <C>
Registration fee........................................................ $*
Printing and engraving.................................................. *
Legal fees and expenses................................................. *
Accounting fees and expenses............................................ *
Trustee's fees and expenses............................................. *
Blue Sky Qualification Fees and Expenses (including Counsel Fees)....... *
Rating Agency Fee....................................................... *
Miscellaneous........................................................... *
Total................................................................... $*
</TABLE>
________
* To be filed by amendment.
Item 15. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of Delaware,
as amended, under which the Registrants are incorporated, empowers a
corporation, subject to certain limitations, to indemnify its directors and
officers against the actual and reasonable expenses of defending litigation
against them in their capacities as directors and officers.
1. GreenPoint Credit Corp. Section 42 of GreenPoint Credit Corp.'s
-----------------------
By-Laws provides as follows:
Indemnification. The corporation shall indemnify and hold harmless,
---------------
to the full extent permitted by law as the same exists or may be hereafter
amended (but, in the case of any amendment, only to the extent that the
amendment permits the corporation to provide broader indemnification rights than
permitted by law prior to its amendment), any person (an "indemnitee") who is
made, or threatened to be made, a party to or is otherwise involved in any
action, suit or proceeding (whether civil, criminal, administrative or
investigative) by reason of the fact that he or his testator or intestate is or
was a director, officer, employee or agent of the corporation or serves or
served, in any capacity, any other enterprise (including, without limitation,
service with respect to an employee benefit plan) at the request of the
corporation (whether the basis of such action, suit or proceeding is alleged
action in an official capacity as a director, officer, employee or agent or in
any other capacity) against all expense, liability and
II-1
<PAGE>
loss (including attorneys' fees, judgments, fines, ERISA excise taxes or
penalties and amounts paid in settlement) reasonably incurred or suffered by
such indemnitee in connection therewith; provided, however, that, except as
provided below with respect to actions, suits, or proceedings to enforce rights
to indemnification, the corporation shall indemnify any such indemnitee in
connection with an action, suit or proceeding (or part thereof) initiated by
such person only if such action, suit or proceeding (or part thereof) was
authorized by the Board of Directors of the corporation. The right to
indemnification conferred in this Paragraph 42 shall include the right to be
paid by the corporation the expenses incurred in defending any such proceeding
in advance of its final disposition to the maximum extent permitted by law. The
rights to indemnification and to the advancement of expenses conferred by this
Paragraph 42 shall be contract rights and such rights shall continue as to an
indemnitee who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the indemnitee's heirs, executors and administrators.
If a claim under this Paragraph 42 is not paid in full by the
corporation within sixty (60) days after a written claim has been received by
the corporation, except in the case of a claim for an advancement of expenses,
in which case the applicable period shall be twenty (20) days, the indemnitee
may at any time thereafter bring suit against the corporation to recover the
unpaid amount of the claim. If successful in whole or in part in any such suit,
the indemnitee shall be entitled to be paid also the expenses of prosecuting or
defending such suit. In any suit brought by the indemnitee to enforce a right
to indemnification or to an advancement of expenses hereunder, the burden of
proving that the indemnitee is not entitled to be indemnified, or to such
advancement of expenses, under this Paragraph 42 or otherwise, shall be on the
corporation.
The rights to indemnification and to the advancement of expenses
conferred in this Paragraph 42 shall not be exclusive of any other right which
any person may have or hereafter acquire under any statute, the corporation's
Certificate of Incorporation, Bylaws, agreement, vote of shareholders or
directors or otherwise.
The corporation may, to the extent authorized from time to time by the
Board of Directors, grant rights to indemnification and to the advancement of
expenses to any employee or agent of the corporation to the fullest extent of
the provisions of this Paragraph 42 with respect to the indemnification and
advancement of expenses of directors and officers of the corporation.
There is directors' and officers' liability insurance presently
outstanding, which insures directors and officers of GreenPoint Credit Corp.
against claims arising out of the performance of their duties.
The Pooling Agreement for each Series of Certificates will provide
that no director, officer, employee or agent of GreenPoint Credit Corp. is
liable to any holder of Certificates or to the Trustee on behalf of the holders
of such Certificates, or to any other person, except on account of such
director's, officer's, employee's or agent's own willful misfeasance, bad faith,
gross negligence or reckless disregard of duty. The Pooling Agreement for each
Series will further provide that, with the exceptions stated above, a director,
officer, employee or agent of GreenPoint Credit Corp. is entitled to be
indemnified by the Trust Fund against all liability in connection with the
mortgage pool evidenced by such Series.
II-2
<PAGE>
2. GreenPoint Financial Corp. Article Tenth of GreenPoint Financial
--------------------------
Corp.'s Certificate of Incorporation provides as follows:
A. Each person who was or is made a party or is threatened to be made a
party to or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (hereinafter a "proceeding"),
by reason of the fact that he or she is or was a Director or an Officer of the
Corporation or is or was serving at the request of the Corporation as a
Director, Officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to an
employee benefit plan (hereinafter an "indemnitee") whether the basis of such
proceeding is alleged action in an official capacity as a Director, Officer,
employee or agent or in any other capacity while serving as a Director, Officer,
employee or agent, shall be indemnified and held harmless by the Corporation to
the fullest extent authorized by the Delaware General Corporation Law, as the
same exists or may hereafter be amended (but, in the case of any such amendment,
only to the extent that such amendment permits the Corporation to provide
broader indemnification rights than such law permitted the Corporation to
provide prior to such amendment), against all expense, liability and loss
(including attorneys' fees judgments, fines, ERISA excise taxes or penalties and
amounts paid in settlement) reasonably incurred or suffered by such indemnitee
in connection therewith; provided, however, that, except as provided in Section
C hereof with respect to proceedings to enforce rights to indemnification, the
Corporation shall indemnify any such indemnitee in connection with a proceeding
(or party thereof) initiated by such indemnitee only if such proceeding (or part
thereof) was authorized by the Board of Directors of the Corporation.
B. The right to indemnification conferred in Section A of this Article
TENTH shall include the right to be paid by the Corporation the expenses
incurred in defending any such proceeding in advance of its final disposition
(hereinafter an "advancement of expenses); provided, however, that, if the
Delaware General Corporation Law requires, an advancement of expenses incurred
by an indemnitee in his or her capacity as a Director or Officer (and not in any
other capacity in which service was or is rendered by such indemnitee,
including, without limitation, services to an employee benefit plan) shall be
made only upon delivery to the Corporation of an undertaking (hereinafter an
"undertaking"), by or on behalf of such indemnitee, to repay all amounts so
advanced if it shall ultimately be determined by final judicial decision from
which there is no further right to appeal (hereinafter a "final adjudication")
that such indemnitee is not entitled to be indemnified for such expenses under
this Section or otherwise. The rights to indemnification and to the advancement
of expenses conferred in Sections A and B of this Article TENTH shall be
contract rights and such rights shall continue as to an indemnitee who has
ceased to be a Director, Officer, employee or agent and shall inure to the
benefit of the indemnitee's heirs, executors and administrators.
C. If a claim under Section A or B of this Article TENTH is not paid in
full by the Corporation within sixty days after a written claim has been
received by the Corporation, except in the case of a claim for an advancement of
expenses, in which case the applicable period shall be twenty days, the
indemnitee may at any time thereafter bring suit against the Corporation to
recover the unpaid amount of the claim. If successful in whole or in part in
any such suit, or in a suit brought by the Corporation to recover an advancement
of expenses pursuant to the terms of an undertaking, the indemnitee shall be
entitled to be paid also the expenses of prosecuting or defending such suit. In
(i) any suit brought by the indemnitee to enforce a right to
II-3
<PAGE>
indemnification hereunder (but not in a suit brought by the indemnitee to
enforce a right to an advancement of expenses) it shall be a defense that, and
(ii) in any suit by the Corporation to recover an advancement of expenses
pursuant to the terms of an undertaking, the Corporation shall be entitled to
recover such expenses upon a final adjudication that the indemnitee has not met
any applicable standard for indemnification set forth in the Delaware General
Corporation Law. Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such suit that indemnification of the
indemnitee is proper in the circumstances because the indemnitee has met the
applicable standard of conduct set forth in the Delaware General Corporation
Law, nor an actual determination by the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) that the indemnitee
has not met such applicable standard of conduct, shall create a presumption that
the indemnitee has not met the applicable standard of conduct or, in the case of
such a suit brought by the indemnitee has not met the applicable standard of
conduct or, in the case of such a suite brought by the indemnitee, be a defense
to such suit. In any suite brought by the indemnitee to enforce a right to
indemnification or to an advancement of expenses hereunder, or by the
Corporation to recover an advancement of expenses pursuant to the terms of an
undertaking, the burden of proving that the indemnitee is not entitled to be
indemnified, or to such advancement of expenses, under this Article TENTH or
otherwise shall be on the Corporation.
D. The rights to indemnification and to the advancement of expenses
conferred in this Article TENTH shall not be exclusive of any other right which
any person may have or hereafter acquire under any statute, the Corporation's
Certificate of Incorporation, Bylaws, agreement, vote of stockholders or
Disinterested Directors or otherwise.
E. The Corporation may maintain insurance, at its expense, to protect
itself and any Director, Officer, employee or agent of the Corporation or
Subsidiary or Affiliate or another corporation, partnership, joint venture,
trust or other enterprise against any expense, liability or loss, whether or not
the Corporation would have the power to indemnify such person against such
expense, liability or loss under the Delaware General Corporation Law.
F. The Corporation may, to the extent authorized from time to time by the
Board of Directors, grant rights to indemnification and to the advancement of
expenses to any employee or agent of the Corporation to the fullest extent of
the provisions of this Article TENTH with respect to the indemnification and
advancement of expenses of Directors and Officers of the Corporation.
II-4
<PAGE>
Item 16. Exhibits
<TABLE>
<CAPTION>
Exhibit Description of Exhibit
- ------------------- ---------------------------------------------------------------------------------
<S> <C>
1.1 Form of Underwriting Agreement.
2.1 Not Applicable.
3(i).1 Certificate of Incorporation of GreenPoint Financial Corp.
3(i).2 Certificate of Incorporation of GreenPoint Credit Corp.
3(ii).1 By-Laws of GreenPoint Financial Corp.
3(ii).2 By-Laws of GreenPoint Credit Corp.
4.1 Form of Pooling and Servicing Agreement.
5.1* Opinion of Orrick, Herrington & Sutcliffe LLP with respect to legality.
8.1* Opinion of Orrick, Herrington & Sutcliffe LLP with respect to tax matters.
12.1 Not Applicable.
15.1 Not Applicable.
23.1* Consent of Orrick, Herrington & Sutcliffe LLP (included in Exhibit 8.1 hereto).
23.2* Consent of PricewaterhouseCoopers LLP.
23.3* Consent of KPMG Peat Marwick, LLP.
24.1 Powers of Attorney (included in signature page hereto).
25.1 Not Applicable.
26.1 Not Applicable.
27.1 Not Applicable.
99.1 Not Applicable.
</TABLE>
* To be filed by amendment.
Item 17. Undertakings.
In accordance with Item 512 of Regulation S-K under the Securities Act
of 1933, as amended (the "Securities Act"), each of the undersigned registrants
hereby undertakes:
1. To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement: (i) to
include any prospectus required by Section 10(a)(3) of the Securities Act
of 1933; (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 in 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) 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 (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.
II-5
<PAGE>
Provided, however, that paragraphs (1)(i) and (1)(ii) of this section
do not apply if the registration statement is on Form S-3, Form S-8 or Form
F-3, and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with
or furnished to the Commission by the registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement.
2. That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
3. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
4. That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report
pursuant to Section 13(a) or 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.
5. That, for purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this registration statement as of the time it was declared
effective.
6. That, 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.
7. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or persons
controlling the registrants pursuant to the foregoing provisions, the
registrants are aware that 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 either of the registrants of expenses incurred or paid by a director,
officer or controlling person of either 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. Each registrant, as applicable, will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of
II-6
<PAGE>
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.
II-7
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Howard C. Bluver, Jeffrey Leeds and
Charles P. Richardson, or any of them, his true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for him and his
name, place and stead, in any and all capacities, to sign any or all amendments
(including post-effective amendments) to the Registration Statement, and to file
the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said attorneys-in-
fact and agents, or any of them, or their or his substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURES TITLE DATE
- ---------- ----- ----
/s/ Andy Occhino President and Treasurer July 23, 1998
___________________ (Principal Executive,
Andy Occhino Financial and
Accounting Officer),
and Director
/s/ Thomas J. Jurek Vice President, July 23, 1998
- ------------------- Secretary and Director
Thomas J. Jurek
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 Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on July 23, 1998.
GREENPOINT CREDIT CORP.
By: /s/ Andy Occhino
------------------
Andy Occhino
Director and President
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Howard C. Bluver, Jeffrey Leeds and
Charles P. Richardson, or any of them, his true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for him and his
name, place and stead, in any and all capacities, to sign any or all amendments
(including post-effective amendments) to the Registration Statement, and to file
the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said attorneys-in-
fact and agents, or any of them, or their or his substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ Thomas S. Johnson
- -------------------------
Thomas S. Johnson Chairman of the Board July 23, 1998
and Chief Executive
Officer
/s/ Bharat B. Bhatt
- -------------------------
Bharat B. Bhatt Member of the Board, July 23, 1998
President and Chief
Operating Officer
/s/ Jeffrey Leeds
- -------------------------
Jeffrey Leeds Executive Vice July 23, 1998
President, Finance
(Principal Financial
Officer)
/s/ Mary Beth Farrell
- -------------------------
Mary Beth Farrell Senior Vice President July 23, 1998
and Comptroller
/s/ Wilfred O. Uhl
- -------------------------
Wilfred O. Uhl Director July 23, 1998
/s/ Robert M. McLane
- -------------------------
Robert M. McLane Director July 23, 1998
/s/ Dan F. Huebner
- -------------------------
Dan F. Huebner Director July 23, 1998
- -------------------------
Robert P. Quinn Director July , 1998
/s/ Robert F. Vizza
- -------------------------
Robert F. Vizza Director July 23, 1998
/s/ William M. Jackson
- -------------------------
William M. Jackson Director July 23, 1998
/s/ Jules Zimmerman
- -------------------------
Jules Zimmerman Director July 23, 1998
/s/ Charles B. McQuade
- -------------------------
Charles B. McQuade Director July 23, 1998
/s/ Alvin N. Puryear
- -------------------------
Alvin N. Puryear Director July 23, 1998
- -------------------------
Susan J. Kropf Director July , 1998
- -------------------------
Edward C. Schmults Director July , 1998
</TABLE>
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 Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on July 23, 1998.
GREENPOINT FINANCIAL CORP.
By: /s/ Thomas S. Johnson
-------------------------
Thomas S. Johnson
Chairman of the Board
and Chief Executive Officer
<PAGE>
Exhibit Index
-------------
<TABLE>
<CAPTION>
Exhibit Description of Exhibit
- ------------------- ---------------------------------------------------------------------------------
<S> <C>
1.1 Form of Underwriting Agreement.
2.1 Not Applicable.
3(i).1 Certificate of Incorporation of GreenPoint Financial Corp.
3(i).2 Certificate of Incorporation of GreenPoint Credit Corp.
3(ii).1 By-Laws of GreenPoint Financial Corp.
3(ii).2 By-Laws of GreenPoint Credit Corp.
4.1 Form of Pooling and Servicing Agreement.
5.1* Opinion of Orrick, Herrington & Sutcliffe LLP with respect to legality.
8.1* Opinion of Orrick, Herrington & Sutcliffe LLP with respect to tax matters.
12.1 Not Applicable.
15.1 Not Applicable.
23.1* Consent of Orrick, Herrington & Sutcliffe LLP (included in Exhibit 8.1 hereto).
23.2* Consent of PricewaterhouseCoopers LLP.
23.3* Consent of KPMG Peat Marwick, LLP.
24.1 Powers of Attorney (included in signature page hereto).
25.1 Not Applicable.
26.1 Not Applicable.
27.1 Not Applicable.
99.1 Not Applicable.
</TABLE>
* To be filed by amendment.
<PAGE>
EXHIBIT 1.1
GREENPOINT CREDIT CORP. MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE PASS-THROUGH CERTIFICATES, SERIES 199[]-[]
[FORM OF ]UNDERWRITING AGREEMENT
[Date]
[Underwriter]
(for itself and the other Underwriters
named in Schedule I hereto)
[___________]
[___________]
Ladies and Gentlemen:
GreenPoint Credit Corp. ("GreenPoint" or the "Contract Seller"),
proposes, subject to the terms and conditions stated in this Underwriting
Agreement (the "Underwriting Agreement"), to sell to the underwriters named in
Schedule I hereto (the "Underwriters;" provided, however, that if you are the
-------- -------
only underwriter named in Schedule I, then the terms "Underwriter" and
"Underwriters" shall refer solely to you) certain of its GreenPoint Credit Corp.
Manufactured Housing Contract Senior/Subordinate Pass-Through Certificates,
Series 199[]-[] (the "Certificates"), as specified in Schedule II hereto (the
"Offered Certificates"), to be issued pursuant to a Pooling and Servicing
Agreement (the "Agreement") to be dated as of [____], [__] by and among,
GreenPoint Credit Corp., as a Contract Seller and Servicer, and [__________], as
Trustee (the "Trustee"). The "Cut-Off Date" shall be the close of business on
[__________]. The Certificates will be executed by the Trustee and will
evidence undivided interests in the Trust Fund (as defined in the Agreement)
consisting primarily of a pool (the "Pool") of manufactured housing installment
sales contracts and installment loan agreements (the "Contracts") sold by the
Contract Seller to the Trust Fund pursuant to the Agreement, and listed in an
exhibit to the Agreement. The Certificates are described more fully in the
Prospectus (which term is defined below), which the Contract Seller is
furnishing to you.
Section 1. Representations and Warranties. The Contract Seller represents
------------------------------
and warrants to, and agrees with, each Underwriter that:
(a) It has caused to be filed with the Securities and Exchange
Commission (the "Commission") a registration statement (No. 333-[_____]) on
Form S-3, as amended by Pre-Effective Amendment No. 1 thereto, dated
[_________], for the registration under the Securities Act of 1933, as
amended (the "Act"), of the Offered Certificates, which registration
statement has become effective on [__________] (the "Effective Date") and
copies of which have heretofore been delivered to you, and pursuant to Rule
424 a preliminary prospectus supplement dated [__________], a copy of which
has been delivered to you. It proposes to cause to be filed with the
Commission pursuant to Rule 424 under the Act a final prospectus
supplement, dated the date specified in Schedule II hereto, relating to the
Offered Certificates and the method of distribution thereof, and has
previously advised you of all further information (financial and other)
<PAGE>
with respect to the Offered Certificates set forth therein. Such
registration statement, including the exhibits thereto and any documents
incorporated by reference therein, as amended or incorporated by reference
as of the date hereof, and the information deemed to be part thereof
pursuant to Rule 430A(b) under the Act, is hereinafter called the
"Registration Statement;" the prospectus included therein (including all
documents incorporated by reference therein), in the form in which it will
be filed with the Commission pursuant to Rule 424 under the Act, is
hereinafter called the "Base Prospectus;" the supplement to the Base
Prospectus, in the form in which it will be filed with the Commission
pursuant to Rule 424 of the Act, is hereinafter called the "Prospectus
Supplement;" and the Base Prospectus and the Prospectus Supplement together
are hereby called the "Prospectus." Any preliminary form of the Prospectus
Supplement which has heretofore been filed pursuant to Rule 402(a) or Rule
424 is hereinafter called a "Preliminary Prospectus Supplement." It will
not, without your prior consent, file any other amendment to the
Registration Statement or make any change in the Base Prospectus or the
Prospectus Supplement until after the period in which a prospectus is
required to be delivered to purchasers of the Offered Certificates under
the Act. All references in this Underwriting Agreement to amendments or
supplements to the Registration Statement or the Prospectus shall be deemed
to mean and include the filing of any document under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). The Contract Seller
meets the requirements for use of Form S-3 under the Act at all relevant
times.
(b) As of the date hereof, when the Registration Statement became
effective, when the Prospectus Supplement is first filed pursuant to Rule
424 under the Act, when, after the date hereof and prior to the Closing
Date (as defined in Schedule II hereto), any amendment to the Registration
Statement becomes effective, when any supplement to the Prospectus
Supplement is filed with the Commission, and at the Closing Date, (i) the
Registration Statement, as amended as of any such time, and the Prospectus,
as amended or supplemented as of any such time, complied or will comply in
all material respects with the applicable requirements of the Act and the
rules thereunder and (ii) the Registration Statement, as amended as of any
such time, did not and will not contain any untrue statement of a material
fact and did not and will not omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading, and the Prospectus, as amended or supplemented as of any such
time, did not and will not contain an untrue statement of a material fact
and did not and will not 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, it makes no
-------- -------
representations or warranties as to the information contained in or omitted
from the Registration Statement or the Prospectus or any amendment thereof
or supplement thereto made in reliance upon and in conformity with written
information furnished to the Contract Seller by you, or by any Underwriter
through you, specifically for use in the preparation thereof.
(c) It is a Delaware corporation, duly organized and validly existing
under the laws of the State of Delaware, with full power and authority to
conduct its business as currently operated, and to enter into and perform
its obligations under this Underwriting Agreement and the Agreement and it
is conducting its manufactured housing business so
2
<PAGE>
as to comply in all material respects with all applicable statutes,
ordinances, rules and regulations of the jurisdictions in which it is
conducting such business and where the failure to so comply would have a
material adverse effect on the transactions contemplated hereunder or its
ability to perform its obligations under the Agreement.
(d) It is not aware of (i) any request by the Commission for any further
amendment of the Registration Statement or the Prospectus or for any
additional information, (ii) the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose or (iii) any
notification with respect to the suspension of the qualification of the
Offered Certificates for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose.
(e) At or prior to the Closing Date, it will have entered into the
Agreement; it has duly authorized, executed and delivered this Underwriting
Agreement and the Agreement; when delivered by the Contract Seller, this
Underwriting Agreement and the Agreement will have been duly authorized,
executed and delivered by it and will constitute a valid and binding
agreements of the Contract Seller, enforceable against it in accordance
with its terms, except that the enforceability thereof may be subject to:
(i) bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights generally;
(ii) general principles of equity regardless of whether enforcement is
sought in a proceeding of equity or at law; and (iii) limitations of public
policy under applicable securities laws as such relate to the
enforceability of rights to indemnity under the Agreement or this
Underwriting Agreement.
(f) The Certificates and the Agreement conform in all material respects
to the descriptions thereof contained in the Prospectus. As of the Closing
Date, the Offered Certificates will be duly and validly executed and
delivered by it, and will, when duly and validly authenticated by the
Trustee and delivered to you in accordance with this Underwriting Agreement
and the Agreement, be entitled to the benefits of the Agreement.
(g) Neither the issuance and sale of the Offered Certificates, nor the
consummation by the Contract Seller of any other transactions contemplated
in this Underwriting Agreement, nor the fulfillment of the terms of the
Agreement or this Underwriting Agreement will result in the breach of any
term or provision of the articles of association or by-laws of the Contract
Seller or conflict with, result in a material breach, violation or
acceleration of or constitute a default under, the terms of any indenture
or other agreement or instrument to which it or any of its subsidiaries is
a party or by which it is bound, or any statute, order or regulation
applicable to the Contract Seller or any of its subsidiaries of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over the Contract Seller or any of its subsidiaries. Neither
the Contract Seller nor any of its subsidiaries is a party to, bound by or
in breach or violation of any indenture or other agreement or instrument,
or subject to or in violation of any statute, order or regulation of any
court, regulatory body, administrative
3
<PAGE>
agency or governmental body having jurisdiction over it, which materially
and adversely affects the ability of the Contract Seller to perform its
obligations under the Agreement.
(h) There are no actions or proceedings against, or investigations of,
the Contract Seller pending, or, to the knowledge of the Contract Seller,
threatened, before any court, administrative agency or other tribunal (i)
asserting the invalidity of this Underwriting Agreement, the Agreement or
the Certificates, (ii) seeking to prevent the issuance of the Certificates
or the consummation of any of the transactions contemplated by this
Underwriting Agreement or the Agreement, (iii) which are reasonably likely
to be adversely determined and which might materially and adversely affect
the performance by the Contract Seller of its obligations under, or the
validity or enforceability of, this Underwriting Agreement, the Agreement
or the Certificates or (iv) seeking to affect adversely the federal income
tax attributes of the Offered Certificates described in the Prospectus.
(i) There has not been any material adverse change in its business,
operations, financial condition, properties or assets since the date of its
latest quarterly financial statement which would have a material adverse
effect on its ability to perform its obligations under the Agreement.
(j) Any taxes, fees and other governmental charges in connection with
the execution and delivery of this Underwriting Agreement and the Agreement
and the execution, delivery and sale of the Offered Certificates have been
or will be paid at or prior to the Closing Date.
(k) Immediately prior to the assignment of the Contracts sold by it to
the Trustee, as contemplated by the Agreement, it will have the power and
authority to sell such Contracts to the Trustee, and upon the execution and
delivery of the Agreement by the Trustee, the Trustee will have acquired
all of its right, title and interest in and to the Contracts.
(l) Neither it nor the Trust Fund is, and neither the issuance and sale
of the Certificates nor the activities of the Trust Fund pursuant to the
Agreement will cause the Contract Seller or the Trust Fund to be an
"investment company" or under the control of an "investment company" as
such terms are defined in the Investment Company Act of 1940, as amended.
Section 2. Purchase and Sale. Subject to the terms and conditions and in
-----------------
reliance upon the representations and warranties herein set forth, the Contract
Seller agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Contract Seller, the amount of
the Offered Certificates set forth opposite each such Underwriter's name in
Schedule I hereto. The purchase price for the Offered Certificates as a
percentage of the principal balance of the Contracts as of the Cut-Off Date is
set forth in Schedule II hereto. There will be added to the purchase price of
the Offered Certificates interest in respect of the Offered Certificates at the
pass-through rate applicable to the Offered Certificates as specified in
Schedule II from [__________] to but not including the Closing Date.
4
<PAGE>
Section 3. Delivery and Payment. Delivery of and payment for the Offered
--------------------
Certificates shall be made at the date, location and time of delivery set forth
in Schedule II hereto, or such later date as the Underwriters shall designate,
which date and time may be postponed by agreement between the Underwriters and
the Contract Seller or as provided in Section 9 hereof (such date, location and
time of delivery and payment for the Offered Certificates being herein called
the "Closing Date"). Delivery of the Offered Certificates shall be made to the
Underwriters against payment by the Underwriters of the purchase price thereof
to or upon the order of the Contract Seller in immediately available funds as
specified in Schedule II hereto. The Offered Certificates to be so delivered
shall be in definitive, fully registered form, unless otherwise agreed, in such
denominations and registered in the name of Cede & Co., as nominee of The
Depository Trust Company, unless otherwise specified by the Contract Seller in
writing not less than three full business days in advance of the Closing Date.
The Contract Seller agrees to have the Offered Certificates available for
inspection and checking by the Underwriters in [New York, New York], not later
than 1:00 p.m. on the business day prior to the Closing Date.
Section 4. Offering by Underwriters. It is understood that the
------------------------
Underwriters propose to offer the Offered Certificates for sale to the public as
set forth in the Prospectus.
Section 5. Agreements. The Contract Seller agrees with the Underwriters
----------
that:
(a) It will prepare a supplement to the Base Prospectus setting forth
the amount of Offered Certificates covered thereby and the terms thereof
not otherwise specified in the Base Prospectus, the expected proceeds to
the Contract Seller from the sale of such Offered Certificates, and such
other information as the Underwriters and the Contract Seller may deem
appropriate in connection with the offering of such Offered Certificates.
It will promptly advise the Underwriters (i) when the Prospectus shall have
been filed or transmitted to the Commission for filing pursuant to Rule
424, (ii) when any amendment to the Registration Statement shall have
become effective, (iii) of any request by the Commission for any amendment
to the Registration Statement or the Prospectus or for any additional
information, (iv) when notice is received from the Commission that any
post-effective amendment to the Registration Statement has become or will
become effective, (v) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose, (vi) of the
receipt by the Contract Seller of any notification with respect to the
suspension of the qualification of the Offered Certificates for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose, and (vii) of the occurrence of any event that would cause the
Registration Statement, as then in effect, to contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. The
Contract Seller will not file any amendment to the Registration Statement
or supplement to the Prospectus unless it has furnished you with a copy for
your review prior to filing and will not file any such proposed amendment
or supplement to which you reasonably object until after the period in
which a prospectus is required to be delivered to purchasers of the Offered
Certificates under the Act. Subject to the foregoing sentence, it will
cause the Prospectus Supplement to be transmitted to the
5
<PAGE>
Commission for filing pursuant to Rule 424 under the Act by any means
reasonably contemplated to result in compliance with said Rule. It will use
its best efforts to prevent the issuance of any such stop order and, if
issued, to obtain as soon as possible the withdrawal thereof.
(b) If at any time when a prospectus relating to the Offered
Certificates is required to be delivered under the Act, any event occurs,
as a result of which the Prospectus as then amended or supplemented would
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in light of the
circumstances under which they were made not misleading, or if it shall be
necessary to amend or supplement the Prospectus to comply with the Act or
the rules under the Act, it will promptly prepare and file with the
Commission, subject to paragraph (a) of this Section 5, an amendment or
supplement that will correct such statement or omission or an amendment
that will effect such compliance and, if such amendment or supplement is
required to be contained in a post-effective amendment to the Registration
Statement, it will use its best efforts to cause such amendment of the
Registration Statement to be made effective as soon as possible.
(c) It will furnish to the Underwriters and counsel for the
Underwriters, without charge, a signed copy of the Registration Statement
and each amendment thereto (including exhibits thereto) and as many copies
of the Registration Statement and each amendment thereto (without exhibits
thereto) as the Underwriters may reasonably request and, so long as
delivery of a prospectus by an Underwriter or dealer may be required by the
Act, as many copies of the Base Prospectus, the Preliminary Prospectus
Supplement, if any, and the Prospectus Supplement and any amendments and
supplements thereto as the Underwriters may reasonably request.
(d) So long as the Offered Certificates shall be outstanding, it will
cause the Servicer to deliver to the Underwriters the annual statement as
to compliance and the annual statement of a firm of independent public
accountants, furnished to the Trustee by the Servicer pursuant to Sections
4.20 and 4.21 of the Agreement, as soon as such statements are furnished to
the Trustee.
(e) It will furnish such information, execute such instruments and take
such action, if any, as may be required to qualify the Offered Certificates
for sale under the laws of such jurisdictions as the Underwriters may
designate, and will maintain such qualification in effect so long as
required for the distribution of the Offered Certificates; provided,
--------
however, that it shall not be required to qualify to do business in any
-------
jurisdiction where it is not now so qualified or to take any action that
would subject it to general or unlimited service of process in any
jurisdiction where it is not now so subject.
(f) It will pay all costs and expenses in connection with the
transactions contemplated hereby, including, but not limited to, the fees
and disbursements of its counsel; the costs and expenses of printing (or
otherwise reproducing) and delivering the Agreement and the Offered
Certificates; accounting fees and disbursements; the costs and expenses in
connection with the qualification or exemption of the Offered Certificates
under state securities or blue sky laws (including filing fees but not fees
and
6
<PAGE>
disbursements of counsel in connection therewith) in connection with the
preparation of any blue sky survey and in connection with any determination
of the eligibility of the Offered Certificates for investment by
institutional investors; the expenses of printing any such blue sky survey;
the cost and expenses in connection with the preparation, printing and
filing of the Registration Statement (including exhibits thereto), the Base
Prospectus, any Preliminary Prospectus Supplement and the Prospectus
Supplement, the preparation and printing of this Underwriting Agreement and
the furnishing to the Underwriters of such copies of each Preliminary
Prospectus Supplement and Prospectus Supplement as the Underwriters may
reasonably request and the fees of rating agencies. Except as provided in
Section 7 hereof, the Underwriters shall be responsible for paying all
costs and expenses incurred by them in connection with their purchase and
sale of the Offered Certificates, including the fees of counsel to any
Underwriter.
Section 6. Conditions to the Obligations of the Underwriters. The
-------------------------------------------------
obligations of the Underwriters to purchase the Offered Certificates as provided
in this Underwriting Agreement shall be subject to the accuracy of the
representations and warranties on the part of the Contract Seller contained
herein as of the date hereof and the Closing Date, the accuracy of the
statements of the Contract Seller made in any officer's certificate pursuant to
the provisions hereof, the performance by the Contract Seller of its obligations
hereunder, and the following additional conditions with respect to the Offered
Certificates:
(a) The Registration Statement shall have become effective and no stop
order suspending the effectiveness of the Registration Statement, as
amended from time to time, shall have been issued and not withdrawn; no
proceedings for that purpose shall have been instituted or, to the best
knowledge of the Contract Seller, threatened; and the Prospectus Supplement
shall have been filed or transmitted for filing with the Commission in
accordance with Rule 424 under the Act.
(b) The Contract Seller shall have delivered to you a certificate, dated
the Closing Date, of any Vice President, Assistant Treasurer or any
Assistant Secretary thereof to the effect that the signer of such
certificate has carefully examined this Underwriting Agreement, the
Registration Statement and the Prospectus and that: (i) the representations
and warranties made by it in this Underwriting Agreement are true and
correct in all material respects at and as of the Closing Date with the
same effect as if made on the Closing Date, (ii) it has complied with all
the agreements and satisfied all the conditions on its part to be performed
or satisfied at or prior to the Closing Date, (iii) no stop order
suspending the effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or, to the
knowledge of such signer, threatened, and (iv) nothing has come to such
signer's attention that would lead such signer to believe that the
Prospectus contains any untrue statement of a material fact or omits to
state any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
(c) The Underwriters shall have received from [ ], counsel for the
Contract Seller, a favorable opinion, dated the Closing Date and in form
and substance satisfactory to counsel for the Underwriters.
7
<PAGE>
In addition, [ ] shall state that they have participated in conferences
with your representatives and with representatives of the Contract Seller
concerning the Registration Statement and the Prospectus and have considered the
matters required to be stated therein and the statements contained therein,
although such counsel need not independently verified the accuracy, completeness
or fairness of such statements. Based upon and subject to the foregoing, such
counsel shall state that nothing has come to its attention to cause it to
believe that the Registration Statement (excluding any exhibits filed
therewith), as of the Effective Date, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, that the Prospectus,
as of the date of the Prospectus Supplement and as of the Closing Date,
contained or contains an untrue statement of a material fact or omitted or omits
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading (it being understood that such counsel have not been requested to
and such counsel does not make any comment in this paragraph with respect to the
financial statements, schedules and other financial and statistical information
contained in the Registration Statement or the Prospectus).
(d) The Underwriters shall have received from in-house counsel for
the Contract Seller, a favorable opinion, dated the Closing Date and in
form and substance satisfactory to counsel for the Underwriters.
(e) The Underwriters shall have received from [__________], counsel
for the Underwriters, a favorable opinion, dated the Closing Date and in
form and substance satisfactory to the Underwriters.
(f) The Underwriters shall have received from [______] certified
public accountants, a letter dated the Closing Date and satisfactory in
form and substance to the Underwriters and counsel for the Underwriters, to
the effect that they have performed certain specified procedures, as a
result of which they determined that the information of an accounting,
financial or statistical nature set forth in the Base Prospectus under the
headings "The Seller" and "Prepayment and Yield Considerations"and in the
Prospectus Supplement under the headings "The Seller" and "Prepayment and
Yield Considerations" agrees with the records of the Contract Seller or the
Servicer, as the case may be.
(g) The Underwriters shall have received from [______] certified
public accountants, a letter dated the Closing Date and satisfactory in
form and substance to the Underwriters and counsel for the Underwriters, to
the effect that they have performed certain specified procedures and
computations, as a result of which they have determined that the
information of an accounting, financial or statistical nature set forth in
the Prospectus Supplement under the headings "The Contract Pool," "The
Seller" and "Prepayment and Yield Considerations" agrees with such
computations.
(h) The Underwriters shall have received (i) from [Moody's Investors
Service, Inc., a rating letter assigning a rating of Aaa to the Class A-1
Certificates, a rating of at least Aa3 to the Class M Certificates, a
rating of at least Baa2 to the Class B-1 Certificates and a rating of at
least Ba2 to the Class B-2 Certificates; and (ii) from Fitch IBCA, Inc., a
rating letter assigning a rating of AAA to the Class A-1 Certificates, a
8
<PAGE>
rating of at least AA- to the Class M Certificates, a rating of at least
BBB to the Class B-1 Certificates and a rating of at least BB to the Class
B-2 Certificates, which ratings shall not have been withdrawn.]
(i) The Underwriters shall have received from counsel to the Trustee,
a favorable opinion dated the Closing Date and in form and substance
satisfactory to counsel for the Underwriters.
(j) There shall not have been any material adverse change in the
Contract Seller's business, operations, financial condition, properties or
assets since the date of its latest quarterly financial statement, which
change would have a material adverse effect on its ability to perform its
obligations under the Agreement.
Section 7. Reimbursement of Underwriters' Expenses. If the sale of any
---------------------------------------
Offered Certificates provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth in Section 6 hereof
is not satisfied, provided, however, that the Contract Seller shall have no
-------- -------
obligation to reimburse the Underwriters pursuant to this Section 7 if such
condition was not satisfied as a result of the actions of the Underwriters,
their agents or their counsel, or because of any refusal, inability or failure
on the part of the Contract Seller to perform any agreement herein or therein or
comply with any provision hereof or thereof, other than by reason of a default
by any of the Underwriters, the Contract Seller will reimburse the Underwriters
severally upon demand for all reasonable and documented out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
incurred by them in connection with the proposed purchase and sale of such
Offered Certificates.
9
<PAGE>
Section 8. Indemnification and Contribution.
--------------------------------
(a) The Contract Seller will indemnify and hold harmless each Underwriter
and its respective directors, officers, agents and employees against claims,
damages, or liabilities, joint or several, to which each such Underwriter or
director, officer, agent or employee thereof may become subject, under the Act
or otherwise, insofar as such losses, claims, damages, or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any part of the
Registration Statement when such part became effective, or in the Registration
Statement, any Preliminary Prospectus Supplement, the Prospectus, or any
amendment or supplement thereto or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter and their respective directors, officers, agents and
employees for any reasonable and documented legal or other expenses incurred by
such Underwriter or director, officer, agent or employee thereof, as incurred,
in connection with investigating or defending against such loss, claim, damage,
liability or action; provided, however, (i) that the Contract Seller shall not
-------- -------
be liable in any such case to the extent that any such loss, claim, damage, or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Contract Seller by you, or
by any Underwriter through you, specifically for use therein, and (ii) such
indemnity with respect to any Preliminary Prospectus or Preliminary Prospectus
Supplement shall not inure to the benefit of any Underwriter (or any person
controlling any Underwriter) from whom the person asserting any such loss,
claim, damage or liability purchased the Offered Certificates which are the
subject thereof if such person did not receive a copy of the Prospectus (or the
Prospectus as amended or supplemented) at or prior to the confirmation of the
sale of such Offered Certificates to such person in any case where such delivery
is required by the Act and the untrue statement or omission of a material fact
contained in such Preliminary Prospectus or Preliminary Prospectus Supplement
was corrected in the Prospectus (or the Prospectus as amended or supplemented).
(b) Each Underwriter, severally but not jointly, will indemnify and hold
harmless the Contract Seller and its respective directors, officers, agents and
employees against any losses, claims, damages, or liabilities to which the
Contract Seller or director, officer, agent or employee thereof may become
subject, under the Act or otherwise, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
part of the Registration Statement when such part became effective, or in any
Preliminary Prospectus Supplement, the Prospectus, or any amendment or
supplement thereto or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made therein in reliance upon and
in conformity with written information furnished to the Contract Seller by you,
or by such Underwriter through you, specifically for use therein, and will
reimburse the Contract Seller and its respective directors, officers, agents and
employees for any reasonable and documented legal or other expense incurred by
the Contract Seller or director, officer, agent or employee thereof, as
incurred, in connection with investigating or defending against any such loss,
claim, damage, liability or action.
10
<PAGE>
(c) Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the omission to so notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section 8 except to the extent that the failure of the indemnified party to
notify the indemnifying party prejudices the rights of the indemnifying party.
In case any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein, and to the extent that it may
elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof, with counsel satisfactory to such indemnified party (which may
be counsel representing the indemnifying party); provided, however, that if the
-------- -------
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and approval by
the indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
connection with the assertion of legal defenses in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (in addition to local counsel), approved by the Underwriters in
the case of Subsection (a) of this Section 8, representing the indemnified
parties under such Subsection (a) who are parties to such action), (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the expense of
the indemnifying party; and except that, if clause (i) or (iii) is applicable,
such liability shall be only in respect of the counsel referred to in such
clause (i) or (iii). In the event a party settles any claim or action for which
it would otherwise be indemnified against pursuant to Section 8 without the
consent of the indemnifying party, such indemnified party shall waive any rights
to indemnification hereunder in connection with such claim or action; provided,
however, the indemnified party may settle such claim or action without the
consent of the indemnifying party and without waiving its rights to
indemnification if the indemnified party acts in accordance with the advice of
separate counsel engaged in accordance with this Subsection (c).
(d) If the indemnification provided for in this Section 8 is unavailable
or insufficient to hold harmless an indemnified party under Subsection (a) or
(b) above, then the Contract Seller and each indemnifying Underwriter shall
contribute to the amount paid or payable by such indemnified party as a result
of the losses, claims, damages, or liabilities referred to in Subsection (a) or
(b) above, (i) in such proportion as is appropriate to reflect the relative
benefits received by the Contract Seller on the one hand and the Underwriters on
the other from the offering of the Offered Certificates, or (ii) if the
allocation provided by clause (i) above is not
11
<PAGE>
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above, but also the
relative fault of the Contract Seller on the one hand and the Underwriters on
the other in connection with the statement or omissions that resulted in such
losses, claims, damages, or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Contract Seller on the one
hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total proceeds from the offering of the Offered Certificates
(before deducting expenses) received by the Contract Seller bear to the total
compensation and profit (before deducting expenses) received or realized by the
Underwriters from the purchase and resale, or underwriting, of the Offered
Certificates. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Contract Seller, on the one hand, or the
Underwriters, on the other, and the parties' relative intent, knowledge, access
to information, and opportunity to correct or prevent such untrue statement or
omission. The Contract Seller, on the one hand, and the Underwriters, on the
other, agree that it would not be just and equitable if contributions pursuant
to this Subsection (d) were to be determined by pro rata allocation (even if the
--- ----
Underwriters were treated as one entity for such purpose) or by any other method
of allocation that does not take account the equitable considerations referred
to in the first sentence of this Subsection (d). The amount paid by an
indemnified party as a result of the losses, claims, damages, or liabilities
referred to in the first sentence of this Subsection (d) shall be deemed to
include any reasonable and documented legal or other expense incurred by such
indemnified party in connection with investigating or defending against any
action or claim which is the subject of this Subsection (d). Notwithstanding the
provisions of this Subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which (x) the total price at
which the Offered Certificates underwritten by it and distributed to the public
were offered to the public exceeds (y) the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this Subsection
(d) to contribute shall be several in proportion to their respective
underwriting obligations and not joint; provided that in the case of the
indemnification provided in the second paragraph of Subsection (b), only the
Underwriter furnishing the Collateral Term Sheets, Structural Term Sheets or
Computational Materials, as the case may be, that are the subject of such
indemnification shall contribute in respect thereof pursuant to this Subsection
(d).
(e) The obligations of the Contract Seller under this Section 8 shall be
in addition to any liability which the Contract Seller may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act or the Exchange Act; and
the obligations of the Underwriters under this Section 8 shall be in addition to
any liability that the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each director of the Contract
Seller (including any person who, with his consent, is named in the Registration
Statement as about to become a director of the Contract Seller), to each officer
of the Contract Seller who has signed the Registration Statement and to each
person, if any, who controls the Contract Seller within the meaning of the Act
or the Exchange Act.
12
<PAGE>
Section 9. Substitution of Underwriters. If any Underwriter shall fail
----------------------------
to take up and pay for the amount of the Offered Certificates agreed by such
Underwriter to be purchased under this Underwriting Agreement upon tender of
such Offered Certificates in accordance with the terms hereof, and the amount of
the Offered Certificates not purchased does not aggregate more than 10% of the
total amount of the Offered Certificates set forth in Schedule I hereto, the
remaining Underwriters shall be obligated to take up and pay for the Offered
Certificates that the withdrawing or defaulting Underwriter agreed but failed to
purchase.
This Underwriting Agreement shall terminate if (i) any Underwriter shall
fail to take up and pay for the amount of the Offered Certificates agreed by
such Underwriter to be purchased under this Underwriting Agreement (such
Underwriter being a "Defaulting Underwriter") upon tender of such Offered
Certificates in accordance with the terms hereof, (ii) the amount of the Offered
Certificates not purchased aggregates more than 10% of the total amount of the
Offered Certificates set forth in Schedule I hereto, and (iii) arrangements
satisfactory to the remaining Underwriters and the Contract Seller for the
purchase of such Offered Certificates by other persons are not made within 36
hours thereafter. In the event of any such termination, the Contract Seller
shall not be under any liability to any Underwriter (except to the extent
provided in Section 5(f) and Section 8 hereof) nor shall any Underwriter (other
than an Underwriter who shall have failed, otherwise than for some reason
permitted under this Underwriting Agreement, to purchase the amount of the
Offered Certificates which such Underwriter agreed to purchase hereunder) be
under any liability to the Contract Seller (except to the extent provided in
Section 8 hereof). Nothing herein shall be deemed to relieve any Defaulting
Underwriter from any liability it may have to the Contract Seller or any other
Underwriter by reason of its failure to take up and pay for Offered Certificates
as agreed to by such Defaulting Underwriter.
Section 10. Termination. Notwithstanding anything herein contained, this
-----------
Underwriting Agreement may be terminated in the absolute discretion of the
Underwriters, by written notice given to the Contract Seller, if after the
execution of this Underwriting Agreement and prior to the delivery and payment
for all Offered Certificates (i) there has occurred any material adverse change
in the condition (financial or otherwise), earnings, business or properties of
the Contract Seller and its respective subsidiaries, taken as a whole, the
effect of which in the reasonable judgment of the Underwriters materially
impairs the investment quality of the Offered Certificates; (ii) trading
generally shall have been suspended or materially limited on or by the New York
Stock Exchange; (iii) a general moratorium on commercial banking activities in
[New York] shall have been declared by either Federal or [New York] State
authorities; or (iv) there shall have occurred any outbreak or material
escalation of hostilities in which the United States is involved, and
declaration of war by Congress or any other substantial national or
international calamity or emergency if, in the reasonable judgment of the
Underwriters, the effect of any such outbreak, escalation, declaration, calamity
or emergency makes it impracticable to proceed with completion of the sale and
payment for the Offered Certificates on the terms specified in this Underwriting
Agreement and the Prospectus Supplement.
Section 11. Representations and Indemnities to Survive. The respective
------------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Contract Seller or its officers and the Underwriters set forth in or made
pursuant to this Underwriting Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter, the
Contract Seller or any of the officers, directors or controlling persons
referred to in Section 8
13
<PAGE>
hereof, and will survive delivery of and payment for the Offered Certificates.
The provisions of Section 7 and 8 hereof shall survive the termination or
cancellation of this Underwriting Agreement.
Section 12. Notices. All communications hereunder will be in writing and
-------
effective only on receipt, and, if sent to the Underwriters, will be mailed,
delivered, telegraphed or telecopied and confirmed to them at the addresses set
forth at the beginning of this Underwriting Agreement, Attention: General
Counsel; if sent to the Contract Seller or the Servicer, will be mailed,
delivered, telegraphed or telecopied and confirmed to it at the following
address: GreenPoint Credit Corp., 10089 Willow Creek Road, San Diego, California
92131, Attention: Manager, Investor Servicing, with copies Howard C. Bluver,
Esq., 90 Park Avenue, New York, New York 10016 and Andy Occhino, Esq., 90 Park
Avenue, New York, New York 10016.
Section 13. Successors. This Underwriting Agreement will inure to the
----------
benefit of and be binding upon the parties hereto and their respective
successors and the officers and directors and controlling persons referred to in
Section 8 hereof, and their successors and assigns, and no other person will
have any right or obligation hereunder.
Section 14. Applicable Law; Counterparts. This Underwriting Agreement
----------------------------
will be governed by and construed in accordance with the laws of the State of
New York without giving effect to the provisions thereof concerning conflict of
laws. This Underwriting Agreement may be executed in any number of counterparts,
each of which shall for all purposes be deemed to be an original and all of
which shall together constitute but one and the same instrument.
14
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us a counterpart hereof, whereupon this letter and
your acceptance shall represent a binding agreement among the Contract Seller
and the Underwriters.
Very truly yours,
GREENPOINT CREDIT CORP.
By:_____________________________________
Name:
Title:
Accepted at [New York, New York]
as of the date first written
above.
[UNDERWRITER],
for itself and the other Underwriters
named on Schedule I hereto
By:_________________________________
Name:_______________________________
Title:______________________________
15
<PAGE>
SCHEDULE I
Amount of Series 199[]-[],
Class [A-1] Certificates to
Underwriter be Purchased
----------- ------------
[UNDERWRITER] $ []
Amount of Series 199[]-[],
Class M Certificates to
Underwriter be Purchased
----------- ------------
[UNDERWRITER] $ []
Amount of Series 199[]-[],
Class B-1 Certificates to
Underwriter be Purchased
----------- ------------
[UNDERWRITER] $ []
I-1
<PAGE>
SCHEDULE II
<TABLE>
<S> <C>
Registration Statement No. 333-[_____]
Base Prospectus dated [Date]
Prospectus Supplement dated [Date]
Title of Certificates Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificates,
Series 199[]-[]
Amount of Offered Certificates
(approximate; subject to
a variance of plus/minus 5%):
Class [A-1] Certificates $[]
Class M Certificates $[]
Class B-1 Certificates $[]
Pass-Through Rate:
Class [A-1] Certificates []%
Class M Certificates []%*
Class B-1 Certificates []%*
* Subject to a maximum rate as described in the Agreement.
Purchase Price Percentage:
Class [A-1] Certificates []% (plus accrued interest)
Class M Certificates []% (plus accrued interest)
Class B-1 Certificates []% (plus accrued interest)
Cut-Off Date: [Date]
Closing Date: [Date] at the offices of [ ]
Manner of payment for Certificates Immediately available funds
Office for delivery of Certificates []
Office of payment for Certificates [ ]
Office for checking Certificates []
Denominations: $1,000 and integral multiples of $1 in excess
thereof
</TABLE>
Modification of representations and warranties contained in Section 1 of the
Underwriting Agreement: [indicate, if any, or state "None"]
None
II-1
<PAGE>
Modification of opinion of counsel delivered pursuant to Section 6(c) of the
Underwriting Agreement: [indicate, if any, or state "None"]
None
Modification of items to be covered by the letter from [Independent Accountants]
delivered pursuant to Section 6(i) of the Underwriting Agreement: [indicate, if
any, or state "None"]
None
Modification of items to be covered by the letter from [Independent Accountants]
delivered pursuant to Section 6(j) of the Underwriting Agreement: [indicate, if
any, or state "None"]
None
II-2
<PAGE>
EXHIBIT 3(i).1
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
* * * * * * * *
GP FINANCIAL CORP., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of GP Financial
Corp., resolutions were duly adopted authorizing a proposed amendment of the
Certificate of Incorporation of said corporation, declaring said amendment to be
desirable and directing that such amendment be considered at the next annual
meeting of the stockholders of said corporation. The resolution authorizing the
proposed amendment is as follows:
RESOLVED, that the Board of Directors hereby approves a change in
the name of the Corporation to "GreenPoint Financial Corp." and
authorizes an amendment to the Corporation's Certificate of
Incorporation to change the name of the Corporation to "GreenPoint
Financial Corp."
SECOND: That thereafter, at the next annual meeting of the
stockholders of said corporation duly called and held, upon notice in accordance
with Section 222 of the General Corporation Law of the State of Delaware, the
necessary number of shares as required by statute were voted in favor of the
amendment.
THIRD: That, pursuant to such approvals of the Board of Directors and
of the stockholders of said corporation, the Certificate of Incorporation of GP
Financial Corp. is hereby
<PAGE>
amended by changing the FIRST Article thereof so that, as amended, said Article
-----
shall be and read as follows:
FIRST: The name of the Corporation is GreenPoint Financial Corp.
-----
(hereinafter sometimes referred to as the "Corporation").
FOURTH: That the aforesaid amendment was duly adopted in
accordance with the applicable provisions of sections 242 of the General
Corporation Law of the State of Delaware.
FIFTH: That this Certificate of Amendment of the Certificate of
Incorporation shall be effective upon filing with the Secretary of State of the
State of Delaware.
IN WITNESS WHEREOF, said corporation has caused this
certificate to be signed by Thomas S. Johnson, its Chairman, President and Chief
Executive Officer, and attested to by Howard C. Bluver, its Secretary, this 5th
day of March, 1995.
GP FINANCIAL CORP.
By: /s/ Thomas S. Johnson
------------------------------------
Thomas S. Johnson
Chairman, President and Chief Executive
Officer
ATTEST:
By: /s/ Howard C. Bluver
------------------------
Howard C. Bluver
Secretary
<PAGE>
PAGE 1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
_______________________________
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THAT "GREENPOINT FINANCIAL CORP." IS DULY INCORPORATED UNDER THE LAWS OF
THE STATE OF DELAWARE AND IS IN GOOD STANDING AND HAS A LEGAL CORPORATE
EXISTENCE NOT HAVING BEEN CANCELLED OR DISSOLVED SO FAR AS THE RECORDS OF THIS
OFFICE SHOW AND IS DULY AUTHORIZED TO TRANSACT BUSINESS.
THE FOLLOWING DOCUMENTS HAVE BEEN FILED:
CERTIFICATE OF INCORPORATION, FILED THE THIRTY-FIRST DAY OF AUGUST, A.D.
1933, AT 1:53 O'CLOCK P.M.
CERTIFICATE OF AMENDMENT, CHANGING ITS NAME FROM "GP FINANCIAL CORP." TO
"GREENPOINT FINANCIAL CORP.", FILED THE FIFTH DAY OF MAY, A.D. 1995, AT 2:30
O'CLOCK P.M.
AND I DO HEREBY FURTHER CERTIFY THAT THE AFORESAID CERTIFICATES ARE THE
ONLY CERTIFICATES ON RECORD OF THE AFORESAID CORPORATION.
AND I DO HEREBY FURTHER CERTIFY THAT THE ANNUAL REPORTS HAVE BEEN FILED TO
DATE.
AND I DO HEREBY FURTHER CERTIFY THAT THE FRANCHISE TAXES HAVE BEEN PAID TO
DATE.
[SEAL] /s/ Edward J. Freel
--------------------------------------
Edward J. Freel, Secretary of State
AUTHENTICATION:
2349618 8310 8486611
DATE:
971175219 05-29-97
<PAGE>
PAGE 1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
______________________________
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
INCORPORATION OF "GP FINANCIAL CORP.", FILED IN THIS OFFICE ON THE THIRTY-FIRST
DAY OF AUGUST, A.D. 1993, AT 1:53 O'CLOCK P.M.
[SEAL] /s/ Edward J. Freel
-----------------------------------
Edward J. Freel, Secretary of State
AUTHENTICATION:
2349618 8100 8486609
DATE:
971175219 05-29-97
<PAGE>
CERTIFICATE OF INCORPORATION
OF
GP FINANCIAL CORP.
FIRST: The name of the Corporation is GP FINANCIAL CORP. (hereinafter
-----
sometimes referred to as the "Corporation").
SECOND: The address of the registered office of the Corporation in the
------
State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City
of Wilmington, County of New Castle. The name of the registered agent at that
address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
-----
activity for which a corporation may be organized under the General Corporation
Law of the State of Delaware.
FOURTH: A. The total number of shares of all classes of stock which the
------
Corporation shall have authority to issue is two hundred seventy million
(270,000,000) consisting of:
1. fifty million (50,000,000) shares of Preferred Stock, par
value one cent ($.01) per share (the "Preferred Stock"); and
2. two hundred twenty million (220,000,000) shares of Common
Stock, par value one cent ($.01) per share (the "Common Stock").
B. The Board of Directors is authorized, subject to any limitations
prescribed by law, to provide for the issuance of the shares of Preferred Stock
in series, and by filing a certificate pursuant to the applicable law of the
State of Delaware (such certificate being hereinafter referred to as a
"Preferred Stock Designation"), to establish from time to time the number of
shares to be included in each such series, and to fix the designation, powers,
preferences, and rights of the shares of each such series and any
qualifications, limitations or
1
<PAGE>
restrictions thereof. The number of authorized shares of Preferred Stock may be
increased or decreased (but not below the number of shares then outstanding) by
the affirmative vote of the holders of a majority of the Common Stock, without a
vote of the holders of the Preferred Stock, or of any series thereof, unless a
vote of any such holders is required pursuant to the terms of any Preferred
Stock Designation.
C. 1. Notwithstanding any other provision of this Certificate of
Incorporation, in no event shall any record owner of any outstanding Common
Stock which is beneficially owned, directly or indirectly, by a person who, as
of any record date for the determination of stockholders entitled to vote on any
matter, beneficially owns Common Stock in excess of the "Limit", (as defined at
Section C.2.(c) of this Article FOURTH) be entitled, or permitted to vote in
respect of the shares held in excess of the Limit. The number of votes which
may be cast by any record owner by virtue of the provisions hereof in respect of
Common Stock beneficially owned by such person beneficially owning shares in
excess of the Limit shall be a number equal to the total number of votes which a
single record owner of all Common Stock beneficially owned by such person would
be entitled to cast subject to the provisions of this Article FOURTH, multiplied
by a fraction, the numerator of which is the number of shares of Common Stock
which are both beneficially owned by such person and owned of record by such
record owner and the denominator of which is the total number of shares of
Common Stock beneficially owned by such person owning shares in excess of the
Limit.
2. The following definitions shall apply to this Section C of
this Article
FOURTH:
(a) "Affiliate" shall have the meaning ascribed to it in
Rule 12b-2 of the General Rules and Regulations under the Securities Exchange
Act of 1934, as in effect on the date of filing of this Certificate of
Incorporation.
2
<PAGE>
(b) "Beneficial ownership" shall be determined pursuant to
Rule 13d-3 of the General Rules and Regulations under the Securities Exchange
Act of 1934 (or any successor rule or statutory provision), or, if said Rule
13d-3 shall be rescinded and there shall be no successor rule or provision
thereto, pursuant to said Rule 13d-3 as in effect on the date of filing of this
Certificate of Incorporation; provided, however, that a person shall, in any
event, also be deemed the "beneficial owner" of any Common Stock:
(1) which such person or any of its Affiliates
beneficially owns, directly or indirectly; or
(2) which such person or any of its Affiliates has (i)
the right to acquire (whether such right is exercisable immediately or only
after the passage of time), pursuant to any agreement, arrangement or
understanding (but shall not be deemed to be the beneficial owner of any voting
shares solely by reason of an agreement, contract, or other arrangement with
this Corporation to effect any transaction which is described in any one or more
of clauses 1 through 5 of Section A of Article EIGHTH, regardless of whether or
not such agreement, contract or other arrangement is with an Interested
Stockholder, as defined therein) or upon the exercise of conversion rights,
exchange rights, warrants, or options or otherwise, or (ii) sole or shared
voting or investment power with respect thereto pursuant to any agreement,
arrangement, understanding, relationship or otherwise (but shall not be deemed
to be the beneficial owner of any voting shares solely by reason of a revocable
proxy granted for a particular meeting of stockholders, pursuant to a public
solicitation of proxies for such meeting, with respect to shares of which
neither such person nor any such Affiliate is otherwise deemed the beneficial
owner); or
(3) which are beneficially owned, directly or
indirectly, by any other person with which such first mentioned person or any of
its Affiliates acts as a
3
<PAGE>
partnership, limited partnership, syndicate or other group pursuant to any
agreement, arrangement or understanding for the purpose of acquiring, holding,
voting or disposing of any shares of capital stock of this Corporation; and
provided further, however, that (1) no Director or Officer of this Corporation
(or any Affiliate of any such Director or Officer) shall, solely by reason of
any or all of such Directors or Officers acting in their capacities as such, be
deemed, for any purposes hereof, to beneficially own any Common Stock
beneficially owned by any other such Director or Officer (or any Affiliate
thereof), and (2) neither any employee stock ownership or similar plan of this
Corporation or any subsidiary of this Corporation, nor any trustee with respect
thereto or any Affiliate of such trustee (solely by reason of such capacity of
such trustee), shall be deemed, for any purposes hereof, to beneficially own any
Common Stock held under any such plan. For purposes of computing the percentage
of beneficial ownership of Common Stock of a person, the outstanding Common
Stock shall include shares deemed owned by such person through application of
this subsection but shall not include any other Common Stock which may be
issuable by this Corporation pursuant to any agreement, or upon exercise of
conversion rights, warrants or options, or otherwise. For all other purposes,
the outstanding Common Stock shall include only Common Stock then outstanding
and shall not include any Common Stock which may be issuable by this Corporation
pursuant to any agreement, or upon the exercise of conversion rights, warrants
or options, or otherwise.
(c) The "Limit" shall mean 10% of the then-outstanding
shares of Common Stock.
(d) A "person" shall include an individual, firm, a group
acting in concert, a corporation, a partnership, an association, a joint
venture, a pool, a joint stock company, a trust, an unincorporated organization
or similar company, a syndicate or any other group formed for the purpose of
acquiring, holding or disposing of securities, or any other entity.
4
<PAGE>
3. The Board of Directors shall have the power to construe and apply
the provisions of this section and to make all determinations necessary or
desirable to implement such provisions, including but not limited to matters
with respect to (i) the number of shares of Common Stock beneficially owned by
any person (ii) whether a person is an Affiliate of another, (iii) whether a
person has an agreement, arrangement or understanding with another as to the
matters relating to in the definition of beneficial ownership, (iv) the
application of any other definition or operative provision of this section to
the given facts, or (v) any other matter relating to the applicability or effect
of this section.
4. The Board of Director shall have the right to demand that any
person who is reasonably believed to beneficially own Common Stock in excess of
the Limit (or holds of record Common Stock beneficially owned by any person in
excess of the Limit) supply the Corporation with complete information as to (i)
the record owner(s) of all shares beneficially owned by such person who is
reasonable believed to own shares in excess of the Limit, (ii) any other factual
matter relating to the applicability or effect of this section as may reasonably
be requested of such person.
5. Except as otherwise provided by law or expressly provided in this
Section C, the presence, in person or by proxy, of the holders of record of
shares of capital stock of the Corporation entitling the holders thereof to cast
a majority of the votes (after giving effect to the provisions of this Section
C) entitled to be cast by the holders of shares of capital stock of the
Corporation entitled to vote shall constitute a quorum at all meetings of the
stockholders, and every reference in this Certificate of Incorporation to a
majority or other proportion of capital stock (or the holders thereof) for
purposes of determining any quorum requirement or any requirement for
stockholder consent or approval shall be deemed to refer to such majority or
5
<PAGE>
other proportion of the votes (or the holders thereof) then entitled to be cast
in respect of such capital stock.
6. Any constructions, applications, or determinations made by the
Board of Directors, pursuant to this section in good faith and on the basis of
such information and assistance as was then reasonably available for such
purpose shall be conclusive and binding upon the Corporation and its
stockholders.
7. In the event any provision (or portion thereof) of this Section C
shall be found to be invalid, prohibited or unenforceable for any reason, the
remaining provisions (or portions thereof) of this Section shall remain in full
force and effect, and shall be construed as if such invalid, prohibited or
unenforceable provision had been stricken herefrom or otherwise rendered
inapplicable, it being the intent of this Corporation and its stockholders that
each such remaining provision (or portion thereof) of this Section C remain, to
the fullest extent permitted by law, applicable and enforceable as to all
stockholders, including stockholders beneficially owning an amount of stock over
the Limit, notwithstanding any such finding.
FIFTH: The following provisions are inserted for the management of the
-----
business and the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and of
its Directors and stockholders:
A. The business and affairs of the Corporation shall be managed by
or under the direction of the Board of Directors. In addition to the powers and
authority expressly conferred upon them by statute or by this Certificate of
Incorporation or the Bylaws of the Corporation, the Directors are hereby
empowered to exercise all such powers and do all such acts and things as may be
exercised or done by the Corporation.
6
<PAGE>
B. The Directors of the Corporation may be elected by voice vote,
except that upon demand therefor by a stockholder entitled to vote or his or her
proxy, a written ballot shall be required.
C. Any action required or permitted to be taken by the stockholders
of the Corporation must be effected at a duly called annual or special meeting
of stockholders of the Corporation and may not be effected by any consent in
writing by such stockholders.
D. Special meetings of stockholders of the Corporation may be called
only by the Board of Directors pursuant to a resolution adopted by a majority of
the Whole Board or as otherwise provided in the Bylaws. The term "Whole Board"
shall mean the total number of authorized directorships (whether or not there
exist any vacancies in previously authorized directorships at the time any such
resolution is presented to the Board for adoption) (the "Whole Board").
SIXTH: A. The number of Directors shall be fixed from time to time
-----
exclusively by the Board of Directors pursuant to a resolution adopted by a
majority of the Whole Board. The Directors shall be divided into three classes,
as nearly equal in number as reasonably possible, with the term of office of the
first class to expire at the first annual meeting of stockholders, the term of
office of the second class to expire at the annual meeting of stockholders one
year thereafter and the term of office of the third class to expire at the
annual meeting of stockholders two years thereafter with each Director to hold
office until his or her successor shall have been duly elected and qualified.
At each annual meeting of stockholders following such initial classification and
election, Directors elected to succeed those Directors whose terms expire shall
be elected for a term of office to expire at the third succeeding annual meeting
of stockholders after their election with each Director to hold office until his
or her successor shall have been duly elected and qualified.
7
<PAGE>
B. Subject to the rights of the holders of any series of Preferred
Stock then outstanding, newly created directorships resulting form any increase
in the authorized number of Directors or any vacancies in the Board of Directors
resulting form death, resignation, retirement, disqualification, removal from
office or other cause may be filled only by a majority vote of the Directors
then in office, even if less than a quorum, and Directors so chosen shall hold
office for a term expiring at the annual meeting of stockholders at which the
term of office of the class to which they have been chosen expires. No decrease
in the number of Directors constituting the Board of Directors shall shorten the
term of any incumbent Director.
C. Advance notice of stockholder nominations for the election of
Directors and of business to be brought by stockholders before any meeting of
the stockholders of the Corporation shall be given in the manner provided in the
Bylaws of the Corporation.
D. Subject to the rights of the holders of any series of Preferred
Stock then outstanding, any Directors, or the entire Board of Directors, may be
removed from office at any time, but only for cause and only by the affirmative
vote of the holders of at least 80 percent of the voting power of all of the
then-outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of Directors (after giving effect to the provisions of
Article FOURTH of this Certificate of Incorporation ("Article FOURTH")), voting
together as a single class.
SEVENTH: The Board of Directors is expressly empowered to adopt, amend or
-------
repeal Bylaws of the Corporation. Any adoption, amendment or repeal of the
Bylaws of the corporation by the Board of Directors shall require the approval
of a majority of the Whole Board. The stockholders shall also have power to
adopt, amend or repeal the Bylaws of the Corporation; provided, however, that,
in addition to any vote of the holders of any class or series of stock of this
Corporation required by law or by this Certificate of Incorporation, the
affirmative vote of
8
<PAGE>
the holders of at least 80 percent of the voting power of all of the then-
outstanding shares of the capital stock of the Corporation entitled to vote
generally in the election of Directors (after giving effect to the provisions of
Article FOURTH, voting together as a single class, shall be required to adopt,
amend or repeal any provisions of the Bylaws of the Corporation.
EIGHTH: A. In addition to any affirmative vote required by law or this
------
Certificate of Incorporation, and except as otherwise expressly provided in this
Article EIGHTH.
1. any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with (i) any Interested Stockholder (as
hereinafter defined) or (ii) any other corporation (whether or not itself an
Interested Stockholder) which is, or after such merger or consolidation would
be, an Affiliate (as hereinafter defined) of an Interested Stockholder; or
2. any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of transactions) to or with
any Interested Stockholder, or any Affiliate of any Interested Stockholder, of
any assets of the Corporation or any Subsidiary having an aggregate Fair Market
Value (as hereinafter defined) equal or exceeding 25% or more of the combined
assets of the Corporation and its Subsidiaries; or
3. the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of transactions) of any securities of
the Corporation or any Subsidiary to any Interested Stockholder or any Affiliate
of any Interested Stockholder in exchange or cash, securities or other property
(or a combination thereof) having an aggregate Fair Market Value (as hereinafter
defined) equaling or exceeding 25% of the outstanding common stock of the
Corporation and its Subsidiaries, except for any issuance or transfer pursuant
to an employee benefit plan of the Corporation or any Subsidiary thereof; or
9
<PAGE>
4. the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of an Interested
Stockholder or any Affiliate of any Interested Stockholder; or
5. any reclassification of securities (including any reverse
stock split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any other
transaction (whether or not with or into or otherwise involving an Interested
Stockholder) which has the effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any class of equity or
convertible securities of the Corporation or any Subsidiary which is directly or
indirectly owned by any Interested Stockholder or any Affiliate of any
Interested Stockholder; shall require the affirmative vote of the holders of at
least 80% of the voting power of the then-outstanding shares of stock of the
Corporation entitled to vote in the election of Directors (the "Voting Stock")
(after giving effect to the provisions of Article FOURTH), voting together as a
single class. Such affirmative vote shall be required notwithstanding the fact
that no vote may be required, or that a lesser percentage may be specified, by
law or by any other provisions of this Certificate of Incorporation or any
Preferred Stock Designation or in any agreement with any national securities
exchange or otherwise.
The term "Business Combination" as used in this Article EIGHTH shall mean
any transaction which is referred to in any one or more of paragraphs 1 through
5 of Section A of this Article EIGHTH.
B. The provisions of Section A of this Article EIGHTH shall not be
applicable to any particular Business Combination, and such Business Combination
shall require only the affirmative vote of the majority of the outstanding
shares of capital stock entitled to vote (after giving effect of the provisions
of Article FOURTH), or such vote (if any) as is required by law
10
<PAGE>
or by this Certificate of Incorporation, if, in the case of any Business
Combination that does not involve any cash or other consideration being received
by the stockholders of the Corporation solely in their capacity as stockholders
of the Corporation, the condition specified in the following paragraph 1 is met
or, in the case of any other Business Combination, all of the conditions
specified in either of the following paragraphs 1 or 2 are met:
1. The Business Combination shall have been approved by a
majority of the Disinterested Directors (as hereinafter defined).
2. All of the following conditions shall have been met:
(a) The aggregate amount of the cash and the Fair Market
Value as of the date of the consummation of the Business Combination of
consideration other than cash to be received per share by the holders of Common
Stock in such Business Combination shall at least be equal to the higher of the
following:
(1) (if applicable) the Highest Per Share Price (as
hereinafter defined), including any brokerage commissions, transfer taxes and
soliciting dealers' fees, paid by the Interested Stockholder or any of its
Affiliates for any shares of Common Stock acquired by it (i) within the two-year
period immediately prior to the first public announcement of the proposal of the
Business Combination (the "Announcement Date"), or (ii) in the transaction in
which it became an Interested Stockholder, whichever is higher.
(2) the Fair Market Value per share of Common Stock on
the Announcement Date or on the date on which the Interested Stockholder became
an Interested Stockholder (such latter date is referred to in this Article
EIGHTH as the "Determination Date"), whichever is higher.
(b) The aggregate amount of the cash and the Fair
Market Value as of the date of the consummation of the Business Combination of
consideration other
11
<PAGE>
than cash to be received per share by holders of shares of any class of
outstanding Voting Stock other than Common Stock shall be at least equal to the
highest of the following (it being intended that the requirements of this
subparagraph (b) shall be required to be met with respect to every such class of
outstanding Voting Stock, whether or not the Interested Stockholder has
previously acquired any shares of a particular class of Voting Stock):
(1) (if applicable) the Highest Per Share Price (as hereinafter
defined), including any brokerage commissions, transfer taxes and soliciting
dealers' fees, paid by the Interested Stockholder for any shares of such class
of Voting Stock acquired by it (i) within the two-year period immediately prior
to the Announcement Date, or (ii) in the transaction in which it became an
Interested Stockholder, whichever is higher;
(2) (if applicable) the highest preferential amount per share to
which the holders of shares of such class of Voting Stock are entitled in the
event of any voluntary or involuntary liquidation, dissolution or winding up of
the Corporation; and
(3) the Fair Market Value per share of such class of Voting
Stock on the Announcement Date or on the Determination Date, whichever is
higher.
(c) The consideration to be received by holders of a particular
class of outstanding Voting Stock (including Common Stock) shall be in cash or
in the same form as the Interested Stockholder has previously paid for shares of
such class of Voting Stock. If the interested Stockholder has paid for shares of
any class of Voting Stock with varying forms of consideration, the form of
consideration to be received per share by holders of shares of such class of
Voting Stock shall be either cash or the form used to acquire the largest number
of shares of such class of Voting Stock previously acquired by the Interested
Stockholder.
12
<PAGE>
The price determined in accordance with subparagraph B.2 of this Article EIGHTH
shall be subject to appropriate adjustment in the event of any stock dividend,
stock split, combination of shares of similar event.
(d) After such Interested Stockholder has become an Interested
Stockholder and prior to the consummation of such Business Combination: (1)
except as approved by a majority of the Disinterested Directors (as hereinafter
defined), there shall have been no failure to declare and pay at the regular
date therefor any full quarterly dividends (whether or not cumulative) on any
outstanding stock having preference over the Common Stock as to dividends or
liquidation; (2) there shall have been (i) no reduction in the annual rate of
dividends paid on the Common Stock (except as necessary to reflect any
subdivision of the Common Stock), except as approved by a majority of the
Disinterested Directors, and (ii) an increase in such annual rate of dividends
as necessary to reflect any reclassification (including any reverse stock
split), recapitalization, reorganization or any similar transaction which has
the effect of reducing the number of outstanding shares of the Common Stock,
unless the failure to so increase such annual rate is approved by a majority of
the Disinterested Directors, and (e) neither such Interested Stockholder or any
of its Affiliates shall have become the beneficial owner of any additional
shares of Voting Stock except as part of the transaction which results in such
Interested Stockholder becoming an Interested Stockholder.
(e) After such Interested Stockholder has become an Interested
Stockholder, such Interested Stockholder shall not have received the benefit,
directly or indirectly (except proportionately as a stockholder), of any loans,
advances, guarantees, pledges or other financial assistance of any tax credits
or other tax advantages provided, directly or indirectly, by the Corporation,
whether in anticipation of or in connection with such Business Combination or
otherwise.
13
<PAGE>
(f) A proxy of information statement describing the proposed
Business Combination and complying with the requirements of the Securities
Exchange Act of 1934 and the rules and regulations thereunder (or any subsequent
provisions replacing the Securities Exchange Act of 1934 and the rules or
regulations thereunder) shall be mailed to stockholders of the Corporation at
least 30 days prior to the consummation of such Business Combination (whether or
not such proxy or information statement is required to be mailed pursuant to
such Act or subsequent provisions).
C. For the purposes of this Article EIGHTH:
1. A "Person" shall include an individual, firm, a group acting
in concert, a corporation, a partnership, an association, a joint venture, a
pool, a joint stock company, a trust, an unincorporated organization or similar
company, a syndicate or any other group formed for the purpose of acquiring,
holding or disposing of securities or any other entity.
2. "Interested Stockholder" shall mean any person (other than
the Corporation or any Holding Company or Subsidiary thereof) who or which:
(a) is the beneficial owner, directly or indirectly, of
more than 10% of the outstanding Voting Stock; or
(b) is an Affiliate of the Corporation and at any time
within the two-year period immediately prior to the date in question was the
beneficial owner, directly or indirectly, of 10% or more of the voting power of
the then outstanding Voting Stock; or
(c) is an assignee of or has otherwise succeeded to any
shares of Voting Stock which were at any time within the two-year period
immediately prior to the date in question beneficially owned by any Interested
Stockholder, if such assignment or succession shall have occurred in the course
of a transaction or series of transactions not involving a public offering
within the meaning of the Securities Act of 1993.
14
<PAGE>
3. For purposes of this Article EIGHTH, "beneficial ownership"
shall be determined in the manner provided in Section C of Article FOURTH
hereof.
4. "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as in effect on the date
of filing of this Certificate of Incorporation.
5. "Subsidiary" means any corporation of which a majority of
any class of equity security is owned, directly or indirectly, by the
Corporation; provided, however, that for the purposes of the definition of
Interested Stockholder set forth in Paragraph 2 of this Section C, the term
"Subsidiary" shall mean only a corporation of which a majority of each class of
equity security is owned, directly or indirectly, by the Corporation.
6. "Disinterested Director" means any member of the Board of
Directors who is unaffiliated with the Interested Stockholder and was a member
of the Board of Directors prior to the time that the Interested Stockholder
became an Interested Stockholder, and any Director who is thereafter chosen to
fill any vacancy on the Board of Directors or who is elected and who, in either
event, is unaffiliated with the Interested Stockholder and in connection with
his or her initial assumption of office is recommended for appointment or
election by a majority of Disinterested Directors then on the Board of
Directors.
7. "Fair Market Value" means: (a) in the case of stock, the
highest closing sales price of the stock during the 30-day period immediately
preceding the date in question of a share of such stock on the National
Association of Securities Dealers Automated Quotation System or any system then
in use, or, if such stock is admitted to trading on a principal United States
securities exchange registered under the Securities Exchange Act of 1934, Fair
Market Value shall be the highest sale price reported during the 30-day period
preceding the date in question, or, if no such quotations are available, the
Fair Market Value on the date in question
15
<PAGE>
of a share of such stock as determined by the Board of Directors in good faith,
in each case with respect to any class of stock, appropriately adjusted for any
dividend or distribution in shares of such stock or any stock split or
reclassification of outstanding shares of such stock into a greater number of
shares of such stock or any combination or reclassification of outstanding
shares of such stock into a smaller number of shares of such stock, and (b) in
the case of property other than cash or stock, the Fair Market Value of such
property on the date in question as determined by the Board of Directors in good
faith.
8. Reference to "Highest Per Share Price" shall in each case
with respect to any class of stock reflect an appropriate adjustment for any
dividend or distribution in shares of such stock or any stock split or
reclassification of outstanding shares of such stock into a greater number of
shares of such stock or any combination or reclassification of outstanding
shares of such stock into a smaller number of shares of such stock.
9. In the event of any Business Combination in which the
Corporation survives, the phrase "consideration other than cash to be received"
as used in Subparagraphs (a) and (b) of Paragraph 2 of Section B of this Article
EIGHTH shall include the shares of Common Stock and/or the shares of any other
class outstanding Voting Stock retained by the holders of such shares.
D. A majority of the Disinterested Directors of the Corporation
shall have the power and duty to determine for the purposes of this Article
EIGHTH, on the basis of information known to them after reasonable inquiry: (a)
whether a person is an Interested Stockholder; (b) the number of shares of
Voting Stock beneficially owned by any person; (c) whether a person is an
Affiliate or Associate of another; and (d) whether the assets which are the
subject of any Business Combination have, or the consideration to be received
for the issuance or transfer of securities by the Corporation or any Subsidiary
in any Business Combination has
16
<PAGE>
an aggregate Fair Market Value equaling or exceeding 25% of the combined Fair
Market Value of the Common Stock of the Corporation and its Subsidiaries. A
majority of the Disinterested Directors shall have the further power to
interpret all of the terms and provisions of this Article EIGHTH.
E. Nothing contained in this Article EIGHTH shall be construed to
relieve any Interested Stockholder form any fiduciary or other obligation
imposed by law.
F. Notwithstanding any other provisions of this Certificate of
Incorporation or any provision of law which might otherwise permit a lesser vote
or no vote, but in addition to any affirmative vote of the holders of any
particular class or series of the Voting Stock required by law, this Certificate
of Incorporation or any Preferred Stock Designation, the affirmative vote of the
holders of at least 80 percent of the voting power of all of the then-
outstanding shares of the Voting Stock (after giving effect to the provisions of
Article FOURTH), voting together as a single class, shall be required to alter,
amend or repeal this Article EIGHTH:
NINTH: The Board of Directors of the Corporation, when evaluating any
-----
offer of another Person (as defined in Article EIGHTH hereof) to (A) make a
tender or exchange offer for any equity security of the Corporation, (B) merge
or consolidate the Corporation with another corporation or entity or (C)
purchase or otherwise acquire all or substantially all of the properties and
assets of the Corporation, may, in connection with the exercise of its judgment
in determining what is in the best interest of the Corporation and its
stockholders, give due consideration to all relevant factors, including, without
limitation, those factors that Directors of any subsidiary of the Corporation
may consider in evaluating any action that may result in a change or potential
change in the control of the subsidiary, and the social and economic effect of
acceptance of such offer: on the Corporation's present and future customers and
employees and those of its
17
<PAGE>
Subsidiaries (as defined in Article EIGHTH hereof); on the communities in which
the Corporation and its Subsidiaries operate or are located; on the ability of
the Corporation to fulfill its corporate objective as a holding company under
applicable laws and regulations; and on the ability of its subsidiary to fulfill
the objectives of a stock form financial institution under applicable statues
and regulations.
TENTH: A. Each person who was or is made a party or is threatened to be
-----
made a party to or is otherwise involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative (hereinafter a
"proceeding"), by reason of the fact that he or she is or was a Director or an
Officer of the Corporation or is or was serving at the request of the
Corporation as a Director, Officer, employee or agent of another corporation or
of a partnership, joint venture, trust or other enterprise, including service
with respect to an employee benefit plan (hereinafter an "indemnitee"), whether
the basis of such proceeding is alleged action in an official capacity as a
Director, Officer, employee or agent or in any other capacity while serving as a
Director, Officer, employee or agent, shall be indemnified and held harmless by
the Corporation to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended (but, in the
case of any such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than such law permitted
the Corporation to provide prior to such amendment), against all expense,
liability and loss (including attorneys' fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid in settlement) reasonably incurred or
suffered by such indemnitee in connection therewith; provided, however, that,
except as provided in Section C hereof with respect to proceedings to enforce
rights to indemnification's, the Corporation shall indemnify any such indemnitee
in
18
<PAGE>
connection with a proceeding (or part thereof) initiated by such indemnitee only
if such proceeding (or part thereof) was authorized by the Board of Directors of
the Corporation.
B. The right to indemnification conferred in Section A of this
Article TENTH shall include the right to be paid by the Corporation the expenses
incurred in defending any such proceeding in advance of its final disposition
(hereinafter an "advancement of expenses"); provided, however, that, if the
Delaware General Corporation Law requires, an advancement of expenses incurred
by an indemnitee in his or her capacity as a Director or Officer (and not in any
other capacity in which service was or is rendered by such indemnitee,
including, without limitation, services to an employee benefit plan) shall be
made only upon delivery to the Corporation of an undertaking (hereinafter an
"undertaking"), by or on behalf of such indemnitee, to repay all amounts so
advanced if it shall ultimately be determined by final judicial decision from
which there is no further right to appeal (hereinafter a "final adjudication")
that such indemnitee is not entitled to be indemnified for such expenses under
this Section or otherwise. The rights to indemnification and to the advancement
of expenses conferred in Section A and B of this Article TENTH shall be contract
rights and such rights shall continue as to an indemnitee who has ceased to be a
Director, Officer, employee or agent and shall inure to the benefit of the
indemnitee's heirs, executors and administrators.
C. If a claim under Section A or B of this Article TENTH is not paid
in full by the Corporation within sixty days after a written claim has been
received by the Corporation, except in the case of a claim for an advancement of
expenses, in which case the applicable period shall be twenty days, the
indemnitee may at any time thereafter bring suit against the Corporation to
recover the unpaid amount of the claim. If successful in whole or in part in any
such suit, or in a suit brought by the Corporation to recover an advancement of
expenses pursuant to the terms of an undertaking, the indemnitee shall be
entitled to be paid also the expenses of prosecuting or
19
<PAGE>
defending such suit. In (i) any suit brought by the indemnitee to enforce a
right to indemnification hereunder (but not in a suit brought by the indemnitee
to enforce a right to an advancement of expenses) it shall be a defense that,
and (iii) in any suit by the Corporation to recover an advancement of expenses
pursuant to the terms of an undertaking, the Corporation shall be entitled to
recover such expenses upon a final adjudication that the indemnitee has not met
any applicable standard for indemnification set forth in the Delaware General
Corporation Law. Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) that the indemnitee
has not met such applicable standard of conduct or, in the case of such a suit
brought by the indemnitee, be a defense to such suit. In any suit brought by the
indemnitee to enforce a right to indemnification or to an advancement of
expenses hereunder, or by the Corporation to recover an advancement of expenses
pursuant to the terms of an undertaking, the burden of proving that the
indemnitee is not entitled to be indemnified, or to such advancement of
expenses, under this Article TENTH or otherwise shall be on the Corporation.
D. The rights to indemnification and to the advancement of expenses
conferred in this Article TENTH shall not be exclusive of any other right which
any person may have or hereafter acquire under any statute, the Corporation's
Certificate of Incorporation, Bylaws, agreement, vote of stockholders or
Disinterested Directors or otherwise.
20
<PAGE>
E. The Corporation may maintain insurance, at its expense, to
protect itself and any Director, Officer, employee or agent of the Corporation
or Subsidiary or Affiliate or another corporation, partnership, joint venture,
trust or other enterprise against any expense, liability or loss, whether or not
the Corporation would have the power to indemnify such person against such
expense, liability or loss under the Delaware General Corporation law.
F. The Corporation may, to the extent authorized from time to time
by the Board of Directors, grant rights to indemnification and to the
advancement of expenses to any employee or agent of the Corporation to the
fullest extent of the provisions of this Article TENTH with respect to the
indemnification and advancement of expenses of Directors and Officers of the
Corporation.
ELEVENTH: A Director of this Corporation shall not be personally liable to
--------
the Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a Director, except for liability (i) for any breach of the Director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts of
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the Director derived an improper
personal benefit. If the Delaware General Corporation Law is amended to
authorize corporate action further eliminating or limiting the personal
liability of Directors, then the liability of a Director of the Corporation
shall be eliminated or limited to the fullest extent permitted by the Delaware
General Corporation Law, as so amended.
Any repeal or modification of the foregoing paragraph by the stockholders
of the Corporation shall not adversely affect any right or protection of a
Director of the Corporation existing at the time of such repeal or modification.
21
<PAGE>
TWELFTH: The Corporation reserves the right to amend or repeal any
-------
provision contained in this Certificate of Incorporation in the manner
prescribed by the laws of the State of Delaware and all rights conferred upon
stockholders are granted subject to this reservation; provided, however, that,
notwithstanding any other provision of this Certificate of Incorporation or any
provision of law which might otherwise permit a lesser vote or no vote, but in
addition to any vote of the holders of any class or series of the stock of this
Corporation required by law or by this Certificate of Incorporation, the
affirmative vote of the holders of at least 80 percent of the voting power of
all of the then-outstanding shares of the capital stock of the Corporation
entitled to vote generally in the election of Directors (after giving effect to
the provisions of Article FOURTH), voting together as a single class, shall be
required to amend or repeal this Article TWELFTH, Section C of Article FOURTH,
Sections C or D of Article FIFTH, Article SIXTH, Article SEVENTH, Article
EIGHTH, Article NINTH or Article TENTH.
THIRTEENTH: The name and mailing address of the sole incorporator are as
follows:
Name Mailing Address
---- ---------------
Siobain M. Perkins, Post Office Box 1347, Wilmington, DE 19899
I, the undersigned, being the incorporator, for the purpose of forming a
corporation under the laws of the State of Delaware do make, file and record
this Certificate of Incorporation, and, accordingly, have hereto set my hand
this 31st day of August, 1993.
/s/ Siobain M. Perkins
-------------------------
Siobain M. Perkins
22
<PAGE>
EXHIBIT 3(i).2
CERTIFICATE OF INCORPORATION
OF
GreenPoint Credit Corp.
1. The name of the corporation is GreenPoint Credit Corp.
2. The address of its registered office in the State of Delaware is
30 Old Rudnick Lane, Suite 100, Dover, Delaware 19901. The name of its
registered agent at such address is Lexis Document Services, Inc.
3. The nature of the business to be conducted 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.
4. The total number of shares of stock which the corporation shall
have authority to issue is 200 shares of common stock, no par value.
5. The by-laws of the corporation may be amended by the board of
directors.
6. A director of the corporation shall not be personally liable to
the corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director except for liability (i) for any breach of the director's
duty of loyalty to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law, or (v) for any transaction from which the director derived any improper
personal benefit. No amendment to or repeal of this Article 6 shall apply to or
have any effect on the liability or alleged liability of any director of the
corporation for or with respect to any acts or omissions of such director
occurring prior to such amendment or repeal. If the General Corporation Law of
the State of Delaware is amended hereafter to expand or limit the liability of a
director, then the liability of a director of the corporation shall be expanded
to the extent required or limited to the extent permitted by the General
Corporation Law of the State of Delaware, as so amended.
<PAGE>
7. The name and mailing address of each incorporator is as follows:
NAME MAILING ADDRESS
---- ---------------
Richard A. Langer Richard A. Langer
McNamee, Lochner, Titus &
Williams, P.C.
75 State St. - P.O. Box 459
Albany, NY 12201-0459
I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the General Corporation Law of the
State of Delaware, do make this Certificate, hereby declaring and certifying
that this is my act and deed and the facts herein stated are true, and
accordingly have hereunto set my hand this 1st day of May, 1998.
/s/ Richard A. Langer
----------------------------------
Richard A. Langer
McNamee, Lochner, Titus &
Williams, P.C.
75 State Street - P.O. Box 459
Albany, New York 12201-0459
2
<PAGE>
EXHIBIT 3(II).1
GREENPOINT FINANCIAL CORP.
BYLAWS
As of January 1, 1998
<PAGE>
GREENPOINT FINANCIAL CORP.
BYLAWS
ARTICLE I - STOCKHOLDERS
------------------------
Section 1. Annual Meeting.
--------- --------------
An annual meeting of the stockholders, for the election of Directors
to succeed those whose terms expire and for the transaction of such other
business as may properly come before the meeting, shall be held at such place,
on such date, and at such time as the Board of Directors shall each year fix,
which date shall be within thirteen (13) months subsequent to the later of the
date of incorporation or the last annual meeting of stockholders.
Section 2. Special Meetings.
--------- ----------------
Subject to the rights of the holders of any class or series of
preferred stock of the Corporation, special meetings of stockholders of the
Corporation may be called only by the Board of Directors pursuant to a
resolution adopted by a majority of the Whole Board. The term "Whole Board"
shall mean the total number of Directors which the Corporation would have if
there were no vacancies on the Board of Directors (hereinafter the "Whole
Board").
Section 3. Notice of Meetings.
--------- ------------------
Written notice of the place, date, and time of all meetings of the
stockholders shall be given, not less than ten (10) nor more than sixty (60)
days before the date on which the meeting is to be held, to each stockholder
entitled to vote at such meeting, except as otherwise provided herein or
required by law.
When a meeting is adjourned to another place, date or time, written
notice need not
<PAGE>
be given of the adjourned meeting if the place, date and time thereof are
announced at the meeting at which the adjournment is taken; provided, however,
that if the date of any adjourned meeting is more than thirty (30) days after
the date for which the meeting was originally noticed, or if a new record date
is fixed for the adjourned meeting, written notice of the place, date, and time
of the adjourned meeting shall be given in conformity herewith. At any adjourned
meeting, any business may be transacted which might have been transacted at the
original meeting.
Section 4. Quorum.
--------- ------
At any meeting of the stockholders, the holders of a majority of all
of the shares of the stock entitled to vote at the meeting, present in person or
by proxy (after giving effect to the provisions of Article FOURTH of the
Corporation's Certificate of Incorporation), shall constitute a quorum for all
purposes, unless or except to the extent that the presence of a larger number
may be required by law. Where a separate vote by a class or classes is required,
a majority of the shares of such class or classes present in person or
represented by proxy (after giving effect to the provisions of Article FOURTH of
the Corporation's Certificate of Incorporation) shall constitute a quorum
entitled to take action with respect to that vote on that matter.
If a quorum shall fail to attend any meeting, the chairman of the
meeting or the holders of a majority of the shares of stock entitled to vote who
are present, in person or by proxy, may adjourn the meeting to another place,
date, or time.
Section 5. Organization.
--------- ------------
2
<PAGE>
The Chairman of the Board of the Corporation or, in his or her
absence, such person as the Board of Directors may have designated or, in the
absence of such a person, such person as may be chosen by the holders of a
majority of the shares entitled to vote who are present, in person or by proxy,
shall call to order any meeting of the stockholders and act as chairman of the
meeting. In the absence of the Secretary of the Corporation, the secretary of
the meeting shall be such person as the chairman appoints.
Section 6. Conduct of Business.
--------- -------------------
(a) The chairman of any meeting of stockholders shall determine the
order of business and the procedures at the meeting, including such regulation
of the manner of voting and the conduct of discussion as seem to him or her in
order. The date and time of the opening and closing of the polls for each matter
upon which the stockholders will vote at the meeting shall be announced at the
meeting.
(b) At any annual meeting of the stockholders, only such business
shall be conducted as shall have been brought before the meeting (i) by or at
the direction of the Board of Directors or (ii) by any stockholder of the
Corporation who is entitled to vote with respect thereto and who complies with
the notice procedures set forth in this Section 6(b). For business to be
properly brought before an annual meeting by a stockholder, the business must
relate to a proper subject matter for stockholder action and the stockholder
must have given timely notice thereof in writing to the Secretary of the
Corporation. To be timely, a stockholder's notice must be delivered or mailed to
and received at the principal executive office of the Corporation not less than
ninety (90) days prior to the date of the annual
3
<PAGE>
meeting; provided, however, that in the event that less than one hundred (100)
days' notice or prior public disclosure of the date of the meeting is given or
made to stockholders, notice by the stockholder to be timely must be received
not later than the close of business on the 10th day following the day on which
such notice of the date of the annual meeting was mailed or such public
disclosure was made. A stockholder's notice to the Secretary shall set forth as
to each matter such stockholder proposes to bring before the annual meeting (i)
a brief description of the business desired to be brought before the annual
meeting and the reasons for conducting such business at the annual meeting, (ii)
the name and address, as they appear on the Corporation's books, of the
stockholder proposing such business, (iii) the class and number of shares of the
Corporation's capital stock that are beneficially owned by such stockholder and
(iv) any material interest of such stockholder in such business. Notwithstanding
anything in these Bylaws to the contrary, no business shall be brought before or
conducted at an annual meeting except in accordance with the provisions of this
Section 6(b). The Chairman of the Board or other person presiding over the
annual meeting shall, if the facts so warrant, determine and declare to the
meeting that business was not properly brought before the meeting in accordance
with the provisions of this Section 6(b) and, if he should so determine, he
shall so declare to the meeting and any such business so determined to be not
properly brought before the meeting shall not be transacted.
At any special meeting of the stockholders, only such business shall
be conducted as shall have been brought before the meeting by or at the
direction of a majority of the Whole Board of Directors.
4
<PAGE>
(c) Only persons who are nominated in accordance with the procedures
set forth in these Bylaws shall be eligible for election as Directors.
Nominations of persons for election to the Board of Directors of the Corporation
may be made at a meeting of stockholders at which directors are to be elected
only (i) by or at the direction of the Board of Directors or (ii) by any
stockholder of the corporation entitled to vote for the election of Directors at
the meeting who complies with the notice procedures set forth in this Section
6(c). Such nominations, other than those made by or at the direction of the
Board of Directors, shall be made by timely notice in writing to the Secretary
of the Corporation. To be timely, a stockholder's notice shall be delivered or
mailed to and received at the principal executive office of the Corporation not
less than ninety (90) days prior to the date of the meeting; provided, however,
that in the event that less than one hundred (100) days' notice or prior
disclosure of the date of the meeting is given or made to stockholders, notice
by the stockholder to be timely must be so received not later than the close of
business on the 10th day following the day on which such notice of the date of
the meeting was mailed or such public disclosure was made. Such stockholder's
notice shall set forth (i) as to each person whom such stockholder proposes to
nominate for election or re-election as a Director, all information relating to
such person that is required to be disclosed in solicitations of proxies for
election of Directors, or is otherwise required, in each case pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended (including
such person's written consent to being named in the proxy statement as a nominee
and to serving as a Director if elected); and (ii) as to the stockholder giving
the notice (x) the name and address, as they
5
<PAGE>
appear on the Corporation's books, of such stockholder and (y) the class and
number of shares of the Corporation's capital stock that are beneficially owned
by such stockholder. At the request of the Board of Directors any person
nominated by the Board of Directors for election as a Director shall furnish to
the Secretary of the Corporation that information required to be set forth in a
stockholder's notice of nomination which pertains to the nominee. No person
shall be eligible for election as a Director of the Corporation unless nominated
in accordance with the provisions of this Section 6(c). The Chairman of the
Board or other person presiding at the meeting shall, if the facts so warrant,
determine that a nomination was not made in accordance with such provisions and,
if he or she shall so determine, he or she shall so declare to the meeting and
the defective nomination shall be disregarded.
Section 7. Proxies and Voting.
--------- ------------------
At any meeting of the stockholders, every stockholder entitled to vote
may vote in person or by proxy authorized by an instrument in writing filed in
accordance with the procedure established for the meeting. Any facsimile
telecommunication or other reliable reproduction of the writing or transmission
created pursuant to this paragraph may be substituted or used in lieu of the
original writing or transmission for any and all purposes for which the original
writing or transmission could be used, provided that such copy, facsimile
telecommunication or other reproduction shall be a complete reproduction of the
entire original writing or transmission.
All voting, including the election of Directors but excepting where
otherwise required
6
<PAGE>
by law or by the governing documents of the Corporation, my be made by a voice
vote; provided, however, that upon demand therefore by a stockholder entitled to
vote or his or her proxy, a stock vote shall be taken. Every stock vote shall be
taken by ballot, each of which shall state the name of the stockholder or proxy
voting and such other information as may be required under the procedures
established for the meeting. The Board of Directors shall, in advance of any
meeting of stockholders, appoint one or more inspectors to act at the meeting
and make a written report thereof. The Board of Directors may designate one or
more persons as alternate inspectors to replace any inspector who fails to act.
If no inspector or alternate is able to act at a meeting of stockholders, the
Chairman of the Board, or in his absence such 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 duties, shall take and sign an oath
faithfully to execute the duties of inspector with strict impartiality and
according to the best of his ability.
All elections for Directors shall be determined by a plurality of the
votes cast, and except as otherwise required by law, the Certificate of
Incorporation or these Bylaws, all other matters shall be determined by a
majority of the votes cast affirmatively or negatively.
Section 8. Stock List.
--------- ----------
A complete list of stockholders entitled to vote at any meeting of
stockholders, arranged in alphabetical order for each class of stock and showing
the address of each such stockholder and the number of shares registered in his
or her name, shall be open to the examination of any such stockholder, for any
purpose germane to the meeting, during
7
<PAGE>
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 stock list shall also be kept at the place of the meeting during
the whole time thereof and shall be open to the examination of any such
stockholder who is present. This list shall presumptively determine the identity
of the stockholders entitled to vote at the meeting and the number of shares
held by each of them.
Section 9. Consent of Stockholders in Lieu of Meeting.
--------- ------------------------------------------
Subject to the rights of the holders of any class or series of
preferred stock of the Corporation, any action required or permitted to be taken
by the stockholders of the Corporation must be effected at an annual or special
meeting of stockholders of the Corporation and may not be effected by any
consent in writing by such stockholders.
ARTICLE II - BOARD OF DIRECTORS
Section 1. General Powers, Number and Term of Office.
---------- -----------------------------------------
The business and affairs of the Corporation shall be under the
direction of its Board of Directors. The number of Directors who shall
constitute the Whole Board shall be such number as the majority of the Whole
Board shall from time to time have designated except in the absence of such
designation such number shall be 16. The Board of Directors shall annually elect
a Chairman of the Board from among its members who shall when present, preside
at meetings of the Board of Directors.
8
<PAGE>
The Directors, other than those who may be elected by the holders of
any class or series of Preferred Stock, shall be divided, with respect to the
time for which they severally hold office, into three classes, with the term of
office of the first class to expire at the first annual meeting of stockholders,
the term of office of the second class to expire at the annual meeting of
stockholders one year thereafter and the term of office of the third class to
expire at the annual meeting of stockholders two years thereafter, with each
Director to hold office until his or her successor shall have been duly elected
and qualified. At each annual meeting of stockholders, Directors elected to
succeed those Directors whose terms then expire shall be elected for a term of
office to expire at the third succeeding annual meeting of stockholders after
their election, with each Director to hold office until his or her successor
shall have been duly elected and qualified.
Section 2. Vacancies and Newly Created Directorships.
--------- -----------------------------------------
Subject to the rights of the holders of any class or series of
Preferred Stock, and unless the Board of Directors otherwise determines, newly
created directorships resulting from any increase in the authorized number of
directors or any vacancies in the Board of Directors resulting from death,
resignation, retirement, disqualification, removal from office or other cause
may be filled only by a majority vote of the Directors then in office, though
less than a quorum, and Directors so chosen shall hold office for a term
expiring at the annual meeting of stockholders at which the term of office of
the class to which they have been elected expires and until such Director's
successor shall have been duly elected and qualified. No decrease in the number
of authorized directors constituting the Board shall shorten the term
9
<PAGE>
of any incumbent Director.
Section 3. Regular Meetings.
---------- ----------------
Regular meetings of the Board of Directors shall be held at such place
or places, on such date or dates, and at such time or times as shall have been
established by the Board of Directors and publicized among all Directors. A
notice of each regular meeting shall not be required.
Section 4. Special Meetings.
--------- ----------------
Special meetings of the Board of Directors may be called by a majority
of the Directors then in office (rounded up to the nearest whole number), or by
the Chairman of the Board and shall be held at such place, on such date, and at
such time as they, or he or she, shall fix. Notice of the place, date, and time
of each such special meeting shall be given each Director by whom is it not
waived by mailing written notice not less than five (5) days before the meeting
or by telegraphing or telexing or by facsimile transmission of the same not less
than twenty-four (24) hours before the meeting. Unless otherwise indicated in
the notice thereof, any and all business may be transacted at a special meeting.
Section 5. Quorum.
--------- ------
At any meeting of the Board of Directors, a majority of the Whole
Board shall constitute a quorum for all purposes. If a quorum shall fail to
attend any meeting, a majority of those present may adjourn the meeting to
another place, date, or time, without further notice or waiver thereof.
Section 6. Participation in Meetings By Conference Telephone.
--------- -------------------------------------------------
10
<PAGE>
Members of the Board of Directors, or of any committee thereof, may
participate in a meeting of such Board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other and such participation shall
constitute presence in person at such meeting.
Section 7. Conduct of Business.
--------- -------------------
At any meeting of the Board of Directors, business shall be transacted
in such order and manner as the Board or the Chairman of the Board may from time
to time determine, and all matters shall be determined by the vote of a majority
of the Directors present, except as otherwise provided herein or required by
law. Action may be taken by the Board of Directors without a meeting if all
members thereof consent thereto in writing, and the writing or writings are
filed with the minutes of proceedings of the Board of Directors.
Section 8. Powers.
--------- ------
The Board of Directors may, except as otherwise required by law,
exercise all such powers and do all such acts and things as may be exercised or
done by the Corporation, including, without limiting the generality of the
foregoing, the unqualified power:
(1) To declare dividends from time to time in accordance with law;
(2) To purchase or otherwise acquire any property, rights or
privileges on such terms as it shall determine;
(3) To authorize the creation, making and issuance, in such form as
it may determine, of written obligations of every kind, negotiable or non-
negotiable, secured or unsecured, and to do all things necessary in connection
therewith;
11
<PAGE>
(4) To remove any Officer of the Corporation with or without cause,
and from time to time to devolve the powers and duties of any Officer upon any
other person for the time being;
(5) To confer upon any Officer of the Corporation the power to
appoint, remove and suspend subordinate Officers, employees and agents;
(6) To adopt from time to time such stock option, stock purchase,
bonus or other compensation plans for Directors, Officers, employees and agents
of the Corporation and its subsidiaries as it may determine;
(7) To adopt from time to time such insurance, retirement, and other
benefit plans for Directors, Officers, employees and agents of the Corporation
and its subsidiaries as it may determine; and,
(8) To adopt from time to time regulations, not inconsistent with
these Bylaws, for the management of the Corporation's business and affairs.
Section 9. Compensation of Directors.
--------- -------------------------
Directors, as such, may receive, pursuant to resolution of the Board
of Directors, fixed fees and other compensation for their services as Directors,
including, without limitation, their services as members of committees of the
Board of Directors.
Section 10. Retirement of Directors.
---------- -----------------------
Except for the initial members of the Board of Directors, no person
shall be eligible for initial election as a Director who is 65 years of age or
more. No person may be elected, appointed, nominated or otherwise serve as a
Director of the Corporation after December 31
12
<PAGE>
of the year in which such person attains the age of 72, grandfathering the three
Directors who currently (as at April 1994) have attained the age of 72 or more
to the age of 75. Vacancies on the Board of Directors created by operation of
this provision may be filled in accordance with these Bylaws.
ARTICLE III - COMMITTEES
Section 1. Committees of the Board of Directors.
--------- ------------------------------------
The Board of Directors, by a vote of a majority of the Whole Board of
Directors, may from time to time designate committees of the Board, with such
lawfully delegable powers and duties as it thereby confers, to serve at the
pleasure of a majority of the Whole Board and shall, for these committees and
any others provided for herein, elect a Director or Directors to serve as the
member or members, designating, if it desires, other Directors as alternate
members who may replace any absent or disqualified member at any meeting of the
committee. The Board of Directors, by a resolution adopted by a majority of the
Whole Board may terminate any committee previously established. Any committee so
designated by resolution adopted by a majority of the Whole Board may exercise
the power and authority of the Board of Directors to declare a dividend, to
authorize the issuance of stock or to adopt a certificate of ownership and
merger pursuant to Section 253 of the Delaware General Corporation Law if the
resolution which designates the committee or a supplemental resolution of the
Board of Directors shall so provide. In the absence or disqualification of any
member of any committee and any alternate member in his or her place, the member
or
13
<PAGE>
members of the committee present at the meeting and not disqualified from
voting, whether or not he or she or they constitute a quorum, may by unanimous
vote appoint another member of the Board of Directors to act at the meeting in
the place of the absent or disqualified member.
Section 2. Conduct of Business.
--------- -------------------
Each committee may determine the procedural rules for meeting and
conducting its business and shall act in accordance therewith, except as
otherwise provided herein or required by law or the Board of Directors. Adequate
provision shall be made for notice to members of all meetings; a majority of the
members shall constitute a quorum unless the committee shall consist of one (1)
or two (2) members, in which event one (1) member shall constitute a quorum; and
all matters shall be determined by a majority vote of the members present.
Action may be taken by any committee without a meeting if all members thereof
consent thereto in writing, and the writing or writings are filed with the
minutes of the proceedings of such committee.
Section 3. Nominating Committee.
--------- --------------------
The Board of Directors, by resolution adopted by a majority of the
Whole Board, shall appoint a Nominating Committee of the Board, consisting of
not less than three (3) members of the Board of Directors. The Nominating
Committee shall have authority (a) to review any nominations for election to the
Board of Directors made by a stockholder of the Corporation pursuant to Section
6(c)(ii) of Article I of these Bylaws in order to determine compliance with such
Bylaw and (b) to recommend to the Whole Board nominees for election to the
14
<PAGE>
Board of Directors (i) to replace those Directors whose terms expire at the
annual meeting of stockholders next ensuing and (ii) to fill vacancies resulting
from death, resignation, retirement, disqualification, removal from office or
other cause, or resulting from an increase in the authorized number of
Directors.
ARTICLE IV - OFFICERS
Section 1. Generally.
--------- ---------
(a) The Board of Directors shall choose a Chairman of the Board, who
shall be the Chief Executive Officer, and a Secretary and from time to time may
choose such other officers as it may deem proper. The Chairman of the Board
shall be a member of the Board of Directors. Any number of offices may be held
by the same person.
(b) The term of office of all Officers shall be until the next annual
election of Officers and until their respective successors are chosen but any
Officer may be removed from office at any time by the affirmative vote of a
majority of the authorized number of Directors then constituting the Board of
Directors, or by the Chairman of the Board.
(c) All Officers chosen by the Board of Directors or the Chairman of
the Board shall each have such powers and duties as generally pertain to their
respective Offices, subject to the specific provisions of this ARTICLE IV. Such
officers shall also have such powers and duties as from time to time may be
conferred by the Board of Directors.
Section 2. Chairman of the Board of Directors and Chief Executive
--------- ------------------------------------------------------
Officer.
- -------
The Chairman of the Board and Chief Executive Officer, subject to the
provisions of
15
<PAGE>
these Bylaws and to the direction of the Board of Directors, shall serve in a
general executive capacity and, when present, shall preside at all meetings of
the stockholders of the Corporation. He shall perform all duties and have all
powers which are commonly incident to the office of Chairman of the Board or
which are delegated to him by the Board of Directors. He shall have power to
sign all stock certificates, contracts and other instruments of the Corporation
which are authorized.
He shall also have general responsibility for the management and
control of the business and affairs of the Corporation and shall perform all
duties and have all powers which are commonly incident to the office of Chief
Executive Officer or which are delegated to it by the Board of Directors.
Subject to the direction of the Board of Directors, he shall have general
supervision of all of the other Officers, employees and agents of the
Corporation.
Section 3. President. The President shall be designated as Chief
---------- ---------
Operating Officer and shall perform such administrative and executive duties as
from time to time may be assigned or delegated by the Chairman of the Board. In
the absence of or inability of the Chairman of the Board to act, the President
shall perform all the duties of the Chairman of the Board.
Section 4. Vice President.
--------- --------------
The Vice Presidents shall perform the duties and exercise the powers
usually incident to their respective offices and/or such other duties and powers
as may be properly assigned to them by the Board of Directors or the Chairman of
the Board. A Vice President or Vice
16
<PAGE>
Presidents may be designated as Executive Vice President or Senior Vice
President.
Section 5. Secretary.
--------- ---------
The Secretary or Assistant Secretary shall issue notices of meetings,
shall keep their minutes, shall have charge of the seal and the corporate books,
shall perform such other duties and exercise such other powers as are usually
incident to such office and/or such other duties and powers as are properly
assigned thereto by the Board of Directors or the Chairman of the Board. Subject
to the direction of the Board of Directors, the Secretary shall have the power
to sign all stock certificates.
Section 6. Assistant Secretaries and Other Officers.
--------- ----------------------------------------
The Board of Directors or the Chairman of the Board may appoint one or
more Assistant Secretaries and such other Officers who shall have such powers
and shall perform such duties as are provided in these Bylaws or as may be
assigned to them by the Board of Directors or the Chairman of the Board.
Section 7. Action with Respect to Securities of Other Corporations.
--------- -------------------------------------------------------
Unless otherwise directed by the Board of Directors, the Chairman of
the Board or any Officer of the Corporation authorized by the Chairman of the
Board shall have power to vote and otherwise act on behalf of the Corporation,
in person or by proxy, at any meeting of stockholders of or with respect to any
action of stockholders of any other corporation in which this Corporation may
hold securities and otherwise to exercise any and all rights and powers which
this Corporation may possess by reason of its ownership of securities in such
other corporation.
17
<PAGE>
ARTICLE V - STOCK
Section 1. Certificates of Stock.
--------- ---------------------
Each stockholder shall be entitled to a certificate signed by, or in
the name of the Corporation by, the Chairman of the Board or the President, and
by the Secretary or an Assistant Secretary, certifying the number of shares
owned by him or her. Any or all of the signatures on the certificate may be a
facsimile.
Section 2. Transfers of Stock.
--------- ------------------
Transfers of stock shall be made only upon the transfer books of the
Corporation kept at an office of the Corporation or by transfer agents
designated to transfer shares of the stock of the Corporation. Except where a
certificate is issued in accordance with Section 4 Article V of these Bylaws, an
outstanding certificate for the number of shares involved shall be surrendered
for cancellation before a new certificate is issued therefor.
Section 3. Record Date.
--------- -----------
In order that the Corporation may determine the stockholders entitled
to notice of or to vote at any meeting of stockholders, or to receive payment of
any dividend or other distribution or allotment of any rights or 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 on which the resolution
fixing the record date is adopted and which record date shall not be more than
sixty (60) days nor less than ten (10) days before the date of any meeting of
stockholders, nor more than sixty (60) days prior to the time for such other
action as hereinbefore described;
18
<PAGE>
provided, however, that if no record date is fixed by the Board of Directors,
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 next day preceding the day on which the meeting is held, and,
for determining stockholders entitled to receive payment of any dividend or
other distribution or allotment or rights or to exercise any rights of change,
conversion or exchange of stock or for any other purpose, the record date shall
be at the close of business on the day on which the Board of Directors adopts a
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 4. Lost, Stolen or Destroyed Certificates.
--------- --------------------------------------
In the event of the loss, theft or destruction of any certificate of
stock, another may be issued in its place pursuant to such regulations as the
Board of Directors may establish concerning proof of such loss, theft or
destruction and concerning the giving of a satisfactory bond or bonds of
indemnity.
Section 5. Regulations.
--------- -----------
The issue, transfer, conversion and registration of certificates of
stock shall be governed by such other regulations as the Board of Directors may
establish.
ARTICLE VI - NOTICES
19
<PAGE>
Section 1. Notices.
--------- -------
Except as otherwise specifically provided herein or required by law,
all notices required to be given to any stockholder, Director, Officer, employee
or agent shall be in writing and may in every instance be effectively given by
hand delivery to the recipient thereof, by depositing such notice in the mails,
postage paid, or by sending such notice by prepaid telegram or mailgram or other
courier. Any such notice shall be addressed to such stockholder, Director,
Officer, employee or agent at his or her last known address as the same appears
on the books of the Corporation. The time when such notice is received, if hand
delivered, or dispatched, if delivered through the mails or by telegram or
mailgram or other courier, shall be the time of the giving of the notice.
Section 2. Waivers.
--------- -------
A written waiver of any notice, signed by a stockholder, Director,
Officer, employee or agent, whether before or after the time of the event for
which notice is to be given, shall be deemed equivalent to the notice required
to be given to such stockholder, Director, Officer, employee or agent. Neither
the business nor the purpose of any meeting need be specified in such a waiver.
ARTICLE VII - MISCELLANEOUS
Section 1. Facsimile Signatures.
--------- ---------------------
In addition to the provisions for use of facsimile signatures
elsewhere specifically authorized in these Bylaws, facsimile signatures of any
Officer or officers of the Corporation
20
<PAGE>
EXHIBIT 3(II).2
Bylaws
Of
GreenPoint Credit Corp.
OFFICES
-------
1. Corporate Offices. The corporation may have such corporate offices,
-----------------
anywhere within and without the State of Delaware as the Board of Directors from
time to time may appoint, or the business of the corporation may require. The
"principal place of business," "principal business" or "executive office or
offices" of the corporation may be fixed and so designated from time to time by
the Board of Directors.
2. (a) Records. The corporation shall keep at its principal place of
-------
business, original or duplicate books in which shall be recorded the number of
its shares subscribed, the names of the owners of its shares, the numbers owned
of record by them respectively, the amount of shares paid, and by whom, the
transfer of said shares with the date of transfer, and from time to time such
other or additional records, statements, lists, and information as may be
required by law, including the shareholders' lists mentioned in Paragraph 10 of
these Bylaws.
(b) Inspection of Records. A shareholder, if he be entitled and
---------------------
demands to inspect the records of the corporation pursuant to any statutory or
other legal right, shall be privileged to inspect such records only during the
usual and customary hours of business and in such manner as will not unduly
interfere with the regular conduct of the business of the corporation. No
shareholder shall use or permit to be used or acquiesce in the use by others of
any information so obtained to any competitor or prospective competitor of the
corporation. The corporation as a condition precedent to any shareholder's
inspection of the records of the corporation may require the shareholder to
indemnify the corporation against any loss or damage which may be suffered by it
arising out of or resulting from any unauthorized disclosure made or permitted
to be made by such shareholder of information obtained in the course of such
inspection.
SEAL
----
3. Corporate Seal. The corporate seal shall have inscribed thereon the
--------------
name of the corporation and the words: "Corporate Seal", Delaware and the year
of incorporation. The seal may be used by causing it or a facsimile thereof to
be impressed or affixed or in any manner reproduced.
-1-
<PAGE>
SHAREHOLDERS' MEETING
---------------------
4. Place of Meeting. All meetings of the shareholders shall be held at
----------------
the principal place of business of the corporation, except such meetings as the
Board of Directors, to the extent permissible by law, expressly determines shall
be held elsewhere, in which case such meetings may be held, upon notice thereof
as hereinafter provided, at such other place or places, as the Board of
Directors shall have determined, and as shall be stated in such notice.
5. (a) Annual Meetings. An annual meeting of shareholders shall be held
---------------
each year on such day and date and at such time as may be expressly determined
by the Board of Directors at which meeting the shareholders shall elect a Board
of Directors and transact such other business as may properly be brought before
the meeting.
(b) Special Meetings. Special meetings of the shareholders may be
----------------
held for any purpose or purposes. They may be called by the President or by the
Board of Directors, or by the holders of not less than a majority of all
outstanding shares entitled to vote at any such meeting. A request for a
special meeting of shareholders shall state the purpose or the purposes of the
proposed meeting.
(c) Written Consent. Unless otherwise provided in the Certificate of
---------------
Incorporation, any action required to be taken at any annual or special meeting
of shareholders of the corporation, or any action which may be taken at any
annual or special meeting of such shareholders, may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding shares 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. Prompt notice of the taking of the corporate action
without a meeting by less than unanimous written consent shall be given to those
shareholders who have not consented in writing.
6. (a) Notice. Written or printed notice of each meeting of the
------
shareholders, whether annual or special, stating the place, day and hour of the
meeting, and, in case of a special meeting, the purpose or purposes thereof,
shall be delivered or given to each shareholder entitled to vote thereat, not
less than ten (10) days nor more than sixty (60) days prior to the meeting,
unless, as to a particular matter, other or further notice is required by law,
in which case such other or further notice shall be given.
Any notice of a shareholders' meeting sent by mail shall be deemed to
be delivered when deposited in the United States mail
-2-
<PAGE>
with postage thereon prepaid addressed to the shareholder at his address as it
appears on the records of the corporation.
The "call" and "notice" of any such meeting shall be deemed to be
synonymous.
(b) Presiding Officials. Every meeting of the corporation for
-------------------
whatever object, shall be convened by the Chairman of the Board or President, or
by the officer or person who called the meeting by notice as above provided, but
it shall be presided over by the officers specified in Paragraphs 28 and 29 of
these Bylaws; provided, however, that the shareholders at any meeting, by a
majority vote in amount of shares represented thereat, and notwithstanding
anything to the contrary elsewhere in these Bylaws, may select any persons of
their choosing to act as Chairman and Secretary of such meeting or any session
thereof.
(c) Waiver of Notice. Whenever any notice is required to be given
----------------
under the provisions of these Bylaws, or the Certificate of Incorporation or of
any law, a waiver thereof in writing signed by the person or persons entitled to
such notice whether before or after the time stated therein, shall be deemed the
equivalent to the giving of such notice.
7. (a) Business which may be Transacted at Annual Meetings. At each
----------------------------------------------------
annual meeting of the shareholders, the shareholders shall elect, by ballot, a
Board of Directors to hold office until the next succeeding annual meeting and
they may transact such other business as may be desired, whether or not the same
was specified in the notice of the meeting, unless the consideration of such
other business without its having been specified in the notice of the meeting as
one of the purposes thereof, is prohibited by law.
(b) Business which may be Transacted at Special Meetings. Business
----------------------------------------------------
transacted at all special meetings shall be confined to the purposes stated in
the notice of such meetings.
8. Quorum. Except as otherwise may be provided by law or by the
------
Certificate of Incorporation, the holders of a majority of the voting shares
issued and outstanding and entitled to vote thereat, present in person or by
proxy, shall be requisite for and shall constitute a quorum, at all meetings of
the shareholders for the transaction of business. Every decision of a majority
in amount of shares of such quorum shall be valid as a corporate act, except in
those specific instances in which a larger vote is required by law or by the
Certificate of Incorporation. If, however, such quorum should not be present at
any meeting, the shareholders present and entitled to vote shall have power
successively to adjourn the meeting, without notice other than announcement at
such adjournment. At such adjourned meeting at which a quorum is present any
business may be transacted which might have been transacted at the meeting as
originally notified.
-3-
<PAGE>
9. (a) Proxies. At any meeting of the shareholders, every shareholder
-------
having the right to vote shall be entitled to vote in person, or by proxy
executed in writing by such shareholder or by his duly authorized attorney-in-
fact. No proxy shall be valid after three (3) years from the date of its
execution, unless otherwise provided in the proxy.
If the Board of Directors shall not have closed the transfer books of
the corporation or set a record date for the determination of its shareholders
entitled to vote, as provided in Paragraph 35 of these Bylaws, no person shall
be admitted to vote directly or by proxy except those in whose names the shares
of the corporation shall have stood on the transfer books on 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.
(b) Registered Shareholders; Exceptions; Stock Ownership Presumed.
-------------------------------------------------------------
The corporation shall be entitled to treat the holder of any share or shares of
stock of the corporation, as recorded on the stock record or transfer books of
the corporation as the holder of record and as the holder and owner in fact
thereof and, accordingly, shall not be required to recognize any equitable or
other claim to or interest in such share(s) on the part of any other person,
firm, partnership, corporation or association, whether or not the corporation
shall have express or other notice thereof, save as is otherwise expressly
required by law, and the term "shareholder" as used in these Bylaws means one
who is a holder of record of shares of the corporation; provided, however, that
if permitted by law
(i) shares standing in the name of another corporation domestic or
foreign may be voted by such officer, agent or proxy as the Bylaws of such
corporation prescribe, or, in the absence of such provision, as the Board of
Directors of such corporation may determine;
(ii) shares standing in the name of a deceased person may be voted by
his administrator or executor either in person or by proxy; and shares standing
in the name of a guardian, curator, or trustee shall be entitled, as such
fiduciary, to vote shares held by him without a transfer of such shares into his
name;
(iii) shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into his name if authority so to do
be contained in an appropriate order of the court by which such receiver was
appointed; and
(iv) a shareholder whose shares are pledged shall be entitled to vote
such shares until the shares have been transferred
-4-
<PAGE>
of record into the name of the pledgee, and thereafter the pledgee shall be
entitled to vote the shares so transferred.
10. Shareholders' Lists. A complete list of the shareholders entitled to
-------------------
vote at each meeting of the shareholders arranged in alphabetical order, with
the address of, and the number of voting shares held by each, shall be prepared
by the officer of the corporation having charge of the stock transfer books of
the corporation, and shall for a period of ten (10) days prior to the meeting be
kept on file either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of meeting, or, if not so
specified, at the place where the meeting is to be held, and shall at any time
during the usual hours for business be subject to inspection by any shareholder.
A similar or duplicate list shall also be produced and kept open for the
inspection by any shareholder during the whole time of the meeting. The
original share ledger or transfer book or a duplicate thereof kept at the
principal place of business of the corporation shall be prima facie evidence of
who are shareholders entitled to examine such list, ledger or transfer book or
to vote at any meeting as shareholders. Failure to comply with the foregoing
shall not affect the validity of any action taken at any such meeting.
DIRECTORS
---------
11. Directors--Number. There shall be at least one (1) director of this
-----------------
Corporation. The number of directors to actually serve from time to time shall
be determined by the Board of Directors.
12. (a) Powers of the Board. The property, affairs and business of the
-------------------
corporation shall be managed by and under the direction of the directors, acting
as a board. The board shall have and is vested with all and unlimited powers
and authorities, except as may be expressly limited by law, the Certificate of
Incorporation or these Bylaws, to do or cause to be done any and all lawful
things for and in behalf of the corporation, to exercise or cause to be
exercised any or all of its powers, privileges and franchises, and to seek the
effectuation of its objects and purposes.
(b) Contracts. No contract or other transaction between this
---------
corporation and any other corporation shall be impaired, affected or
invalidated, nor shall any director be liable in any way by reason of the fact
that any one or more of the directors of this corporation is or are interested
in, or is a director or officer, or are directors or officers of such other
corporation, provided that such facts are disclosed or made known to the board.
(c) Certain Related Party Transactions. Any director, personally and
----------------------------------
individually, may be a party to or may be interested in any contract or
transaction of this corporation, and no director
-5-
<PAGE>
shall be liable in any way by reason of such interest, provided that the fact of
such interest be disclosed or made known to the board, and provided that the
board shall authorize, approve or ratify such contract or transaction by the
vote (not counting the vote of any such director) of a majority of a quorum,
notwithstanding the presence of any such director at the meeting at which such
action is taken. Such director or directors may be counted in determining the
presence of a quorum at such meeting. This Paragraph shall not be construed to
impair or invalidate or in any way affect any contract or other transaction
which would otherwise be valid under the law (common, statutory or otherwise)
applicable thereto.
13. Meetings of Directors. All meetings of the directors shall be held at
---------------------
the principal business office of the corporation unless for any particular
meeting the directors agree and consent to the holding of the meeting elsewhere,
in which event the meeting may be held at such place agreed upon, either within
or without the State of Delaware.
Members of the Board of Directors may participate in a meeting of such
Board by means of a conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other at
the same time. Participants by such means shall constitute presence in person
at a meeting.
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 or 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 or committee.
14. Meetings of the Newly Elected Board--Notice. The members of each
-------------------------------------------
newly elected board shall meet at the place of the shareholders meeting
immediately following such meeting, and no notice of such meeting shall be
necessary to the newly elected directors in order legally to constitute the
meeting; provided, however, that a quorum shall be present; or the members of
such board may meet at such time and place as shall be consented to in writing
by all of the newly elected directors. Each director, upon his election, shall
qualify by accepting the office of director, and his attendance at, or his
written approval of the minutes of the first meeting of the newly elected
directors, shall constitute his acceptance of such office; or he may execute
such acceptance by a separate writing, which shall be placed in the minute book.
15. Regular Meetings--Notice. Regular meetings of the board may be held
------------------------
without notice at such time or times and place either within or without the
State of Delaware as shall from time to time
-6-
<PAGE>
be fixed by resolution of the whole board. Any business may be transacted at a
regular meeting.
16. Special Meetings--Notice. Special meetings of the board may be called
------------------------
by the President, or the most senior Vice President, in title, or, if there be
more than one Vice President each having an equally senior title, by the Vice
President of equally senior title who is most senior in length of service, by
giving two (2) days' notice of such meeting to each director, either personally
or by mail, or by telegram or facsimile, stating the time, place and purposes of
any such meeting. Special meetings shall be called by any one of such officers
in like manner and on like notice when requested in writing to do so by any one
or more directors.
"Notice" and "call" with respect to such meetings shall be deemed to
be synonymous.
17. Quorum. At all meetings of the board, a majority of the directors
------
then in office shall, unless a greater number for any particular matter is
required by the Certificate of Incorporation or these Bylaws, constitute a
quorum for the transaction of business, and the act of a majority of the
directors present at any meeting at which there is a quorum, except as may be
otherwise specifically provided by statute, by the Certificate of Incorporation,
or by these Bylaws, shall be the act of the Board of Directors.
Less than a quorum may adjourn a meeting successively until a quorum
is present, and no notice of adjournment shall be required.
18. Waiver by Writing. Any notice provided or required to be given to the
-----------------
directors may be waived in writing by any of them, whether before, at or after
the time stated therein.
19. Waiver by Attendance. Attendance of a director at any meeting shall
--------------------
constitute a waiver of notice of such meeting, except where he attends for the
express purpose and so states at the opening of the meeting, of objecting to the
transaction of any business because the meeting is not lawfully called or
convened.
20. Vacancies. If the office of any director becomes vacant by reason of
---------
death or resignation, a majority of the survivors or remaining directors, though
less than a quorum, may fill the vacancy until a successor shall have been duly
elected at a shareholders' meeting.
21. 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 may designate one or more directors as alternate members
of any committee, who may replace any absent or disqualified member at any
meeting of the committee.
-7-
<PAGE>
Any such committee, 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; but no such committee shall have the power or
authority in reference to the following matters: (i) approving or adopting, or
recommending to the shareholders, any action or matter expressly required by the
General Corporation Law of Delaware to be submitted to shareholders for approval
or (ii) adopting, altering, amending or repealing any Bylaw of the corporation.
Such committee or committees shall have such name or names as may be determined
from time to time by resolution adopted by the Board of Directors.
Each committee shall keep regular minutes of its meetings and report the
same to the Board of Directors when required.
22. Compensation of Directors and Committee Members. Directors and
-----------------------------------------------
members of all committees may receive such salary for their services as such,
and/or fixed sum and expenses of attendance, if any, for attendance at each
regular or special meeting of the board or committee as may be set by resolution
of the Board of Directors from time to time; provided that nothing herein
contained shall be construed to preclude any director or committee member from
serving the corporation in any other capacity and receiving compensation
therefor.
23. Removal of Directors. The shareholders shall have the power by a
--------------------
majority vote of the holders of shares at an annual meeting or at a special
meeting expressly called for that purpose, to remove any director or all
directors from office with or without cause.
OFFICERS
--------
24. (a) Elected Officers. The following officers of the corporation
----------------
shall be elected by the Board of Directors, and shall be deemed elected
officers: A President, a Vice President, a Secretary, and a Treasurer; and, if
the Board of Directors desires, a Chairman of the Board and additional Vice
Presidents, as well as one or more Assistant Secretaries and Assistant
Treasurers.
Any two (2) or more such offices, other than President and Secretary,
may be held by the same person.
An elected officer shall be deemed qualified when he enters upon the
duties of the office to which he has been elected and furnishes any bond
required by the board; but the board may also require of such person his written
acceptance and promise faithfully to discharge the duties of such office.
-8-
<PAGE>
(b) Election of Officers. The Board of Directors annually, at its
--------------------
first meeting after each annual meeting of the shareholders, shall elect a
President, Vice President, Secretary and Treasurer. The board then, or from
time to time, may elect a Chairman of the Board and such additional Vice
Presidents and also such Assistant Secretaries and Assistant Treasurers as it
may deem advisable or necessary.
(c) Term of Office. Each elected officer of the corporation shall
--------------
hold his office for the term for which he was elected, or until he resigns or is
removed by the board, whichever first occurs.
(d) Appointment of Officers and Agents--Terms of Office. The board
---------------------------------------------------
from time to time may also appoint such other officers and agents for the
corporation as it shall deem necessary or advisable. The board may, unless
prohibited by law, delegate the power to appoint other officers and agents to
the President, or his designee, or a committee. All appointed officers and
agents shall hold their respective positions at the pleasure of the board, or at
the pleasure of the President, or his designee, or a committee, if such are
empowered by the board to remove officers and agents. All appointed officers
and agents shall exercise such powers and perform such duties as shall be
determined from time to time by the board, or a committee, or by an elected
officer empowered by the board to make such determination.
25. Removal. Any officer or agent elected or appointed by the Board of
-------
Directors, and any employee, may be removed or discharged by the board with or
without cause.
26. Salaries and Compensation. Salaries and compensation of all elected
-------------------------
officers of the corporation shall be fixed, increased or decreased by the Board
of Directors, but this power, except the salary or compensation of the
President, may, unless prohibited by law, be delegated by the board to the
President, or his designee, or a committee. Salaries and compensation of all
other appointed officers and agents, and employees of the corporation may be
fixed, increased or decreased by the Board of Directors, but until action is
taken with respect thereto by the Board of Directors, the same may be fixed,
increased or decreased by the President, or his designee, or by such other
officer or officers as may be empowered by the Board of Directors to do so.
27. Delegation of Authority to Hire, Discharge, etc. The board from time
------------------------------------------------
to time may delegate to the President, or other officer of the corporation,
authority to hire, discharge and fix and modify the duties, salary or other
compensation of employees of the corporation under their jurisdiction, and the
board may delegate to such officer similar authority with respect to obtaining
and retaining for the corporation the services of attorneys, accountants and
other experts.
-9-
<PAGE>
28. The President. The President shall be the chief executive officer of
-------------
the corporation. Except as otherwise provided for in Paragraph 6 of these
Bylaws, the President, shall preside at all meetings of the shareholders and
directors. He shall have general and active management of the business of the
corporation and shall carry into effect all directions and resolutions of the
board.
The President may execute all bonds, notes, debentures, mortgages, and
other contracts requiring a seal, under the seal of the corporation and may
cause the seal to be affixed thereto, and all other instruments for and in the
name of the corporation.
The President, when authorized so to do by the board, may execute powers of
attorney from, for and in the name of the corporation to such proper person or
persons as he may deem fit, in order that thereby the business of the
corporation may be furthered or action taken as may be deemed by him necessary
or advisable in furtherance of the interests of the corporation.
The President, except as may be otherwise directed by the board, shall
attend meetings of shareholders of other corporations to represent this
corporation thereat and to vote to take action with respect to the shares of any
such corporation owned by this corporation in such manner as he shall deem to be
for the interest of the corporation or as may be directed by the board.
The President, shall, unless the board otherwise provides, be ex officio a
member of all standing committees. The President shall have such general (and
concurrent) executive powers and duties of supervision and management as are
usually vested in the office of the chief executive of a corporation.
The President shall have such other or further duties and authority as may
be prescribed elsewhere in these Bylaws or from time to time by the Board of
Directors.
29. Vice President. The most senior Vice President, in title, or, if
--------------
there be more than one Vice President each having an equally senior title, the
Vice President of equally senior title who is most senior in length of service,
shall, in the absence, disability or inability to act of the President, perform
the duties and exercise the powers of the President. Each Vice President shall
perform such other duties as the Board of Directors and/or the President shall
from time to time prescribe.
30. The Secretary and Assistant Secretary. The Secretary shall attend all
-------------------------------------
meetings of the board and, except as otherwise provided for in Paragraph 6 of
these Bylaws, all meetings of the shareholders, and shall record or cause to be
recorded all votes taken and the minutes of all proceedings in a minute book of
the corporation to be kept for that purpose. He shall perform like
-10-
<PAGE>
duties for any committees when requested by the board or any such committee to
do so.
The Secretary shall have the principal responsibility to give, or cause to
be given, notice of all meetings of the shareholders and of the Board of
Directors, but this shall not lessen the authority of others to give such notice
as is authorized elsewhere in these Bylaws.
He shall see that all books, records, lists and information, or duplicates
required to be maintained at the registered or other office of the corporation
are so maintained.
He shall keep in safe custody the seal of the corporation, and when duly
authorized to do so shall affix the same to any instrument requiring it, and
when so affixed, he shall attest the same by his signature.
He shall perform such other duties and have such other authority as may be
prescribed elsewhere in these Bylaws, or from time to time by the Board of
Directors or the President, under whose direct supervision he shall be.
He shall have the general duties, powers and responsibilities of a
Secretary of a corporation.
The Assistant Secretaries, in the order of their seniority in service, in
the absence, disability or inability to act of the Secretary, shall perform the
duties and exercise the powers of the Secretary, and shall perform such other
duties as the board may from time to time prescribe.
31. The Treasurer and Assistant Treasurer. The Treasurer, if one is
-------------------------------------
elected and if one is not elected than the President, shall have the
responsibility for the safekeeping of the funds and securities of the
corporation, and shall keep or cause to be kept full and accurate accounts of
receipts and disbursements in books belonging to the corporation. He shall
keep, or cause to be kept, all other books of accounts and accounting records of
the corporation, and shall deposit or cause to be deposited all monies and other
valuable effects in the name and to the credit of the corporation in such
depositories as may be designated by the Board of Directors.
He shall disburse, or permit to be disbursed, the funds of the corporation
as may be ordered, or authorized generally, by the board and shall render to the
President of the corporation and the directors whenever they may require it, an
account of all his transactions as Treasurer and of those under his
jurisdiction, and of the financial condition of the corporation.
-11-
<PAGE>
He shall render a full financial report at the annual meeting of
shareholders if so requested.
He shall perform such other duties and shall have such other
responsibilities and authority as may be prescribed elsewhere in these Bylaws or
from time to time by the Board of Directors.
He shall have the general duties, powers and responsibilities of a
Treasurer of a corporation, and shall be the Chief Financial and Accounting
Officer of the corporation.
If required by the board, he shall give the corporation a bond in a sum and
with one or more sureties satisfactory to the board, for the faithful
performance of the duties of his office, and for the restoration to the
corporation, in the case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control which belong to the corporation.
The Assistant Treasurers, in the order of their seniority in service shall,
in the absence, disability or inability to act of the Treasurer, perform the
duties and exercise the powers of the Treasurer, and shall perform such other
duties as the Board of Directors shall from time to time prescribe.
32. Duties of Officers may be Delegated. If any officer of the
-----------------------------------
corporation be absent or unable to act, or for any other reason that the board
may deem sufficient, the board may delegate for the time being, some or all of
the functions, duties, powers, and responsibilities of any officer to any other
officer, or to any other agent or employee of the corporation or other
responsible person, provided a majority of the whole board concurs therein.
SHARES OF STOCK
---------------
33. Certificates for Shares of Stock. The shares of stock of the
--------------------------------
corporation shall be represented by a certificate or may be uncertificated. The
certificates for shares of stock of the corporation shall be numbered, shall be
in such form as may be prescribed by the Board of Directors in conformity with
law, and shall be entered in the stock books of the corporation as they are
issued, and such entries shall show the name and address of the person, firm,
partnership, corporation or association to whom each certificate is issued.
Each certificate shall have printed, typed or written thereon the name of the
person, firm, partnership, corporation or association to whom it is issued, and
number of shares represented thereby and shall be signed by the President or a
Vice President, and the Secretary or an Assistant Secretary of the corporation
and sealed with the seal of the corporation, which seal may be facsimile,
engraved or printed. If the corporation has a registrar, a transfer agent, or a
transfer clerk who actually signs such certificates, the signature of any of the
other officers
-12-
<PAGE>
above mentioned may be facsimile, engraved or printed. In case any such officer
who has signed or whose facsimile signature has been placed upon any such
certificate shall have ceased to be such officer before such certificate is
issued, such certificate may nevertheless be issued by the corporation with the
same effect as if such officer were an officer at the date of its issue.
34. Transfers of Shares; Transfer Agent; Registrar. Transfers of shares
----------------------------------------------
of stock shall be made on the stock record or transfer books of the corporation
only by the person named in the stock certificate, or by his attorney lawfully
constituted in writing, and upon surrender of the certificate therefor. The
stock record book and other transfer records shall be in the possession of the
Secretary or of a transfer agent or clerk for the corporation. The corporation,
by resolution of the board, may from time to time appoint a transfer agent, and,
if desired, a registrar, under such arrangements and upon such terms and
conditions as the board deems advisable; but until and unless the board appoints
some other person, firm or corporation as its transfer agent (and upon the
revocation of any such appointment, thereafter until a new appointment is
similarly made) the Secretary of the corporation shall be the transfer agent or
clerk of the corporation, without the necessity of any formal action of the
board, and the Secretary shall perform all of the duties thereof.
35. Closing of Transfer Books. The Board of Directors shall have a power
-------------------------
to close the stock transfer books of the corporation for a period of not less
than ten (10) nor more than sixty (60) days preceding the date of any meeting of
the shareholders, or the date for payment of any dividend, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
shares shall go into effect; provided, however, that in lieu of closing the
stock transfer books as aforesaid, the Board of Directors may fix in advance a
date not less than ten (10) nor more than sixty (60) days preceding the date of
any meeting of shareholders, or the date for the payment of any dividend, or the
date for the allotment of rights, or the date when any change or conversion or
exchange of shares shall go into effect, as a record date for the determination
of the shareholders entitled to a notice of, and to vote at, any such meeting or
any adjournment thereof, or entitled to receive payment of any such dividend, or
to any such allotment of rights, or to exercise the rights in respect to any
such change, conversion or exchange of shares; and in such case such
shareholders and only such shareholders as shall be shareholders of record on
the date so fixed shall be entitled to such notice of, and to vote at, such
meeting, and any adjournment thereof, or to receive payment of such dividend, or
to receive such allotment of rights, or to exercise such rights as the case may
be, notwithstanding any transfer of any shares on the books of the corporation
after such date of closing of the transfer books, or such record date fixed as
aforesaid; provided, further, however,
-13-
<PAGE>
the Board of Directors may, in its discretion, fix a new record date for an
adjourned meeting.
36. Lost or Destroyed Certificates. In case of the loss or destruction of
------------------------------
any certificate for shares of stock of the corporation, upon due proof of the
registered owner thereof or his representatives, by affidavit of such loss or
otherwise, the President and Secretary may issue a duplicate certificate
(plainly marked "duplicate") in its place, upon the corporation being fully
indemnified therefor. When authorizing such issue of a new certificate or
certificates, the President may, in his discretion and as a condition precedent
to the issuance thereof, require the owner of such lost or destroyed certificate
or certificates, or his legal representative to advertise the same in such
manner as it shall require and/or give the corporation a bond in such sum and
with such surety or sureties as it may direct as indemnity against any claim
that may be made against the corporation with respect to the certificate alleged
to have been lost or destroyed.
GENERAL
-------
37. Fixing of Capital--Transfers of Surplus. Except as may be
---------------------------------------
specifically otherwise provided in the Certificate of Incorporation, the Board
of Directors is expressly empowered to exercise all authority conferred upon it
or the corporation by any law or statute, and in conformity therewith, relative
to:
(a) The determination of what part of the consideration received for
shares of the corporation shall be capital, capital surplus, and/or stated
capital,
(b) Increasing or decreasing capital or stated capital,
(c) Transferring surplus, earned surplus or capital surplus to
capital or stated capital,
(d) The consideration to be received by the corporation for its
shares, and
(e) All similar or related matters.
38. Dividends. Ordinary dividends upon the shares of the corporation,
---------
subject to the provisions of the Certificate of Incorporation, and of any
applicable law, may be declared by the Board of Directors at any regular or
special meeting. Dividends may be paid in cash, in property, or in shares of
its stock, and to the extent and in the manner provided by law, out of any
available earned surplus or earnings or surplus or capital surplus of the
corporation which is unreserved and unrestricted or as provided by law.
-14-
<PAGE>
Liquidating dividends or dividends representing a distribution of paid-in
surplus or a return of capital shall be made only when and in the manner
permitted by law.
39. Creation of Reserves. Before the payment of any dividend, there may
--------------------
be set aside out of any funds of the corporation available for dividends such
sum or sums as the directors from time to time, in their reasonable discretion,
think proper as a reserve fund or funds, to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property of the
corporation, or for such other purposes as the directors shall think conclusive
to the interests of the corporation, and the directors may abolish any such
reserve in the manner in which it was created.
40. Checks. All checks or instruments for the payment of money and all
------
notes of the corporation shall be signed by such officer or officers or such
other person or persons as the Board of Directors may from time to time
designate.
41. Fiscal Year. The fiscal year of the corporation shall be fixed by the
-----------
Board of Directors.
42. Indemnification. The corporation shall indemnify and hold harmless,
---------------
to the full extent permitted by law as the same exists or may be hereafter
amended (but, in the case of any amendment, only to the extent that the
amendment permits the corporation to provide broader indemnification rights than
permitted by law prior to its amendment), any person (an "indemnitee") who is
made, or threatened to be made, a party to or is otherwise involved in any
action, suit or proceeding (whether civil, criminal, administrative or
investigative) by reason of the fact that he or his testator or intestate is or
was a director, officer, employee or agent of the corporation or serves or
served, in any capacity, any other enterprise (including, without limitation,
service with respect to an employee benefit plan) at the request of the
corporation (whether the basis of such action, suit or proceeding is alleged
action in an official capacity as a director, officer, employee or agent or in
any other capacity) against all expense, liability and loss (including
attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts
paid in settlement) reasonably incurred or suffered by such indemnitee in
connection therewith; provided, however, that, except as provided below with
respect to actions, suits, or proceedings to enforce rights to indemnification,
the corporation shall indemnify any such indemnitee in connection with an
action, suit or proceeding (or part thereof) initiated by such person only if
such action, suit or proceeding (or part thereof) was authorized by the Board of
Directors of the corporation. The right to indemnification conferred in this
Paragraph 42 shall include the right to be paid by the corporation the expenses
incurred in defending any such proceeding in advance of its final disposition
-15-
<PAGE>
to the maximum extent permitted by law. The rights to indemnification and to the
advancement of expenses conferred by this Paragraph 42 shall be contract rights
and such rights shall continue as to an indemnitee who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
indemnitee's heirs, executors and administrators.
If a claim under this Paragraph 42 is not paid in full by the corporation
within sixty (60) days after a written claim has been received by the
corporation, except in the case of a claim for an advancement of expenses, in
which case the applicable period shall be twenty (20) days, the indemnitee may
at any time thereafter bring suit against the corporation to recover the unpaid
amount of the claim. If successful in whole or in part in any such suit, the
indemnitee shall be entitled to be paid also the expenses of prosecuting or
defending such suit. In any suit brought by the indemnitee to enforce a right
to indemnification or to an advancement of expenses hereunder, the burden of
proving that the indemnitee is not entitled to be indemnified, or to such
advancement of expenses, under this Paragraph 42 or otherwise, shall be on the
corporation.
The rights to indemnification and to the advancement of expenses conferred
in this Paragraph 42 shall not be exclusive of any other right which any person
may have or hereafter acquire under any statute, the corporation's Certificate
of Incorporation, Bylaws, agreement, vote of shareholders or directors or
otherwise.
The corporation may, to the extent authorized from time to time by the
Board of Directors, grant rights to indemnification and to the advancement of
expenses to any employee or agent of the corporation to the fullest extent of
the provisions of this Paragraph 42 with respect to the indemnification and
advancement of expenses of directors and officers of the corporation.
43. Amendment. These Bylaws may be altered, amended or repealed or new
---------
Bylaws may be adopted by the shareholders or by the Board of Directors, when
such power is conferred upon the Board of Directors by the Certificate of
Incorporation. If the power to adopt, alter, amend or repeal Bylaws is
conferred upon the Board of Directors by the Certificate of Incorporation it
shall not divest or limit the power of the shareholders to adopt, amend or
repeal Bylaws.
/s/ Thomas J. Jurek
Thomas J. Jurek
Secretary
-16-
<PAGE>
EXHIBIT 4.1
GREENPOINT CREDIT CORP.,
CONTRACT SELLER AND SERVICER,
and
[ ],
TRUSTEE
[FORM OF] POOLING AND SERVICING AGREEMENT
Dated as of [ ]
GreenPoint Credit Corp. Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificates
Series 199[]-[]
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I. DEFINITIONS.............................................................................. 2
Section 1.01. Terms............................................................................... 2
Section 1.02. Construction........................................................................ 30
ARTICLE II. CONVEYANCE OF CONTRACTS; REPRESENTATIONS AND WARRANTIES.................................. 31
Section 2.01. Conveyance of Contracts............................................................. 31
Section 2.02. Filing and Assignment; Name Change or Relocation.................................... 32
Section 2.03. Acceptance by Trustee............................................................... 32
Section 2.04. Certificate Ratings................................................................. 33
Section 2.05. Representations and Warranties Regarding the Servicer............................... 33
Section 2.06. Covenants of the Contract Seller, Trustee and Servicer.............................. 34
Section 2.07. Authentication and Delivery of Certificates......................................... 34
Section 2.08. Covenants of the Servicer........................................................... 35
ARTICLE III. REPRESENTATIONS AND WARRANTIES BY THE CONTRACT SELLER.................................... 36
Section 3.01. Representations and Warranties of the Contract Seller............................... 36
Section 3.02. Representations and Warranties Regarding Each Contract.............................. 37
Section 3.03. Representations and Warranties Regarding the Contracts in the
Aggregate........................................................................... 41
Section 3.04. Representations and Warranties Regarding the Contracts.............................. 42
Section 3.05. Repurchases of Contracts or Substitution of Contracts for Breach of
Representations and Warranties...................................................... 42
Section 3.06. General............................................................................. 45
ARTICLE IV. ADMINISTRATION AND SERVICING OF CONTRACTS................................................ 46
Section 4.01. Responsibility for Contract Administration and Servicing............................ 46
Section 4.02. Standard of Care.................................................................... 46
Section 4.03. Records............................................................................. 46
Section 4.04. Inspection.......................................................................... 47
Section 4.05. Establishment of and Deposits in Certificate Accounts............................... 47
Section 4.06. Payment of Taxes.................................................................... 48
Section 4.07. Enforcement......................................................................... 48
Section 4.08. Transfer of Certificate Account..................................................... 49
</TABLE>
-i-
<PAGE>
TABLE OF CONTENTS
-----------------
(Continued)
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 4.09. Maintenance of Hazard Insurance Policies........................................... 49
Section 4.10. Fidelity Bond and Errors and Omissions Insurance................................... 50
Section 4.11. Collections under Hazard Insurance Policies; Consent to Transfers of
Manufactured Homes; Assumption Agreements.......................................... 51
Section 4.12. Realization upon Defaulted Contracts............................................... 52
Section 4.13. Costs and Expenses................................................................. 52
Section 4.14. Trustee to Cooperate............................................................... 52
Section 4.15. Servicing and Other Compensation................................................... 53
Section 4.16. Custody of Contracts............................................................... 54
Section 4.17. REMIC Compliance................................................................... 55
Section 4.18. Management of REO Property......................................................... 59
Section 4.19. Reports to the Securities and Exchange Commission.................................. 61
Section 4.20. Annual Statement as to Compliance.................................................. 61
Section 4.21. Annual Independent Public Accountants' Servicing Report............................ 62
Section 4.22. Retitling of Land Home Contracts................................................... 62
ARTICLE V. PAYMENTS, MONTHLY ADVANCES AND MONTHLY REPORTS.......................................... 63
Section 5.01. Monthly Advances by the Servicer................................................... 63
Section 5.02. Payments........................................................................... 63
Section 5.03. Permitted Withdrawals from the Certificate Account................................. 68
Section 5.04. Monthly Reports.................................................................... 69
Section 5.05. Certificate of Servicing Officer................................................... 75
Section 5.06. Other Data......................................................................... 75
Section 5.07. Statements to Certificateholders................................................... 75
Section 5.08. Reserve Account.................................................................... 81
ARTICLE VI. THE CERTIFICATES........................................................................ 83
Section 6.01. The Certificates................................................................... 83
Section 6.02. Certificate Register; Registration of Transfer and Exchange of
Certificates....................................................................... 84
Section 6.03. Mutilated, Destroyed, Lost or Stolen Certificates.................................. 88
Section 6.04. Persons Deemed Owners.............................................................. 88
</TABLE>
-ii-
<PAGE>
TABLE OF CONTENTS
-----------------
(Continued)
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 6.05. Access to List of Certificateholders' Names and Addresses.......................... 89
Section 6.06. Global Certificates................................................................ 89
Section 6.07. Notices to Depository.............................................................. 90
Section 6.08. Definitive Certificates............................................................ 90
ARTICLE VII. THE CONTRACT SELLER AND THE SERVICER.................................................... 92
Section 7.01. Liabilities to Obligors............................................................ 92
Section 7.02. Servicer's Indemnities............................................................. 92
Section 7.03. Operation of Indemnities........................................................... 92
Section 7.04. Merger or Consolidation of the Contract Seller or the Servicer..................... 92
Section 7.05. Limitation on Liability of the Contract Seller, the Servicer and
Others............................................................................. 93
Section 7.06. Assignment by Servicer............................................................. 93
Section 7.07. Successor to the Servicer.......................................................... 94
ARTICLE VIII. EVENTS OF DEFAULT....................................................................... 96
Section 8.01. Events of Default.................................................................. 96
Section 8.02. Waiver of Defaults................................................................. 97
Section 8.03. Trustee to Act; Appointment of Successor........................................... 97
Section 8.04. Notification to Certificateholders................................................. 97
Section 8.05. Effect of Transfer................................................................. 98
Section 8.06. Transfer of the Accounts........................................................... 98
ARTICLE IX. CONCERNING THE TRUSTEE.................................................................. 99
Section 9.01. Duties of Trustee.................................................................. 99
Section 9.02. Certain Matters Affecting the Trustee.............................................. 100
Section 9.03. Trustee not Liable for Certificates or Contracts................................... 101
Section 9.04. Trustee May Own Certificates....................................................... 101
Section 9.05. Servicer to Pay Fees and Expenses of Trustee, Paying Agent and
Certificate Administrator.......................................................... 101
Section 9.06. Eligibility Requirements for Trustee............................................... 102
Section 9.07. Resignation and Removal of the Trustee............................................. 102
Section 9.08. Successor Trustee.................................................................. 103
</TABLE>
-iii-
<PAGE>
TABLE OF CONTENTS
-----------------
(Continued)
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 9.09. Merger or Consolidation of Trustee................................................. 104
Section 9.10. Appointment of Co-Trustee or Separate Trustee...................................... 104
Section 9.11. Appointment of Office or Agency.................................................... 105
Section 9.12. Certificate Administrator.......................................................... 105
Section 9.13. Appointment of Paying Agent........................................................ 106
ARTICLE X. TERMINATION............................................................................. 107
Section 10.01. Termination........................................................................ 107
ARTICLE XI. MISCELLANEOUS PROVISIONS................................................................ 112
Section 11.01. Amendment.......................................................................... 112
Section 11.02. Recordation of Agreement; Counterparts............................................. 113
Section 11.03. Governing Law...................................................................... 113
Section 11.04. Calculations....................................................................... 113
Section 11.05. Notices............................................................................ 114
Section 11.06. Severability of Provisions......................................................... 115
Section 11.07. Assignment......................................................................... 115
Section 11.08. Limitation on Rights of Certificateholders......................................... 115
Section 11.09. Inspection and Audit Rights........................................................ 116
Section 11.10. Certificates Nonassessable and Fully Paid.......................................... 116
Section 11.11. Official Record.................................................................... 116
</TABLE>
-iv-
<PAGE>
This POOLING AND SERVICING AGREEMENT, dated as of [ ]
(the "Agreement"), is executed by and between GreenPoint Credit Corp.
("GreenPoint"), as the Contract Seller and Servicer, and [ ],
as trustee (together with its permitted successors in trust, the "Trustee").
GreenPoint Credit Corp., as the Contract Seller and Servicer, has duly
authorized the execution and delivery of this Agreement to provide for the
issuance of GreenPoint Credit Corp. Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificates, Series 199[]-[] (the
"Certificates"). The Certificates issued hereunder shall be limited to the
amount herein described. All covenants and agreements made by the Contract
Seller herein are for the benefit and security of the Certificateholders. The
Contract Seller is entering into this Agreement, and the Trustee is accepting
the trusts created hereby for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged.
In consideration of the premises and the mutual agreements hereinafter
set forth, the parties hereto agree as follows:
<PAGE>
ARTICLE I
DEFINITIONS
Section 1.01. Terms.
-----
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
Adverse REMIC Event: As defined in Section 4.17(f) hereof.
-------------------
Advisor: As defined in Section 10.01(b)(3) hereof.
-------
Affiliate: As to any specified Person, any other Person controlling
---------
or controlled by or under common control with such specified Person. For the
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" or "controlled" have meanings
correlative to the foregoing.
Aggregate Net Liquidation Losses: With respect to the time of
--------------------------------
reference thereto, the aggregate of the amounts by which (i) the outstanding
principal balance of each Contract that during such time of reference had become
a Liquidated Contract, plus accrued and unpaid interest thereon at the related
Contract Rate to the Due Date for such Contract in the Collection Period in
which such Contract became a Liquidated Contract exceeds (ii) the Net
Liquidation Proceeds for such Contract.
Agreement: This Pooling and Servicing Agreement and any and all
---------
amendments or supplements hereto.
Annual Servicing Rate: 1.00% per annum (or, in the case of a
---------------------
successor Servicer engaged at any time after GreenPoint is no longer the
Servicer, the percentage agreed upon pursuant to Section 7.07).
Auction Date: As defined in Section 10.01(b) hereof.
------------
Available Distribution Amount: As to any Distribution Date, the sum
-----------------------------
of (a) the amount on deposit or otherwise credited to the Certificate Account as
of the end of the Collection Period ending immediately prior to such
Distribution Date, less the portion of such amount (i) permitted to be withdrawn
by the Servicer pursuant to Section 5.03 or (ii) constituting Excess Contract
Payments and (b) the Monthly Advance for such Distribution Date actually made in
respect of such Distribution Date.
Average Sixty-Day Delinquency Ratio: As to any Distribution Date, the
-----------------------------------
arithmetic average of the Sixty-Day Delinquency Ratios for such Distribution
Date and the two preceding Distribution Dates.
-2-
<PAGE>
Average Thirty-Day Delinquency Ratio: As to any Distribution Date,
------------------------------------
the arithmetic average of the Thirty-Day Delinquency Ratios for such
Distribution Date and the two preceding Distribution Dates.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii)
------------
a day on which banking institutions in the City of New York, New York, or the
State of California or the city in which the Corporate Trust Office of the
Trustee is located are authorized or obligated by law or executive order to be
closed.
Cap Rate: With respect to each of the Class [ ] Certificates, that
--------
interest rate set forth in subparagraph (a) of the definitions of Class [ ]
Pass-Through Rates, respectively.
Certificate: Any of the GreenPoint Credit Corp. Manufactured Housing
-----------
Contract Senior/Subordinate Pass-Through Certificates, Series 199[]-[].
Certificate Account: The separate Eligible Account created and
-------------------
initially maintained by the Trustee pursuant to Section 4.05 in the name of the
Trustee for the benefit of the Holders of the Certificates. Funds in the
Certificate Account shall be held in trust for the aforementioned
Certificateholders for the uses and purposes set forth in this Agreement.
Certificate Administrator: The Person appointed by the Trustee
-------------------------
from time to time pursuant to Section 9.12.
Certificate Balance: When used with respect to a single Class, the
-------------------
Class [A-1, Class M, Class B-1, Class B-2 or Class R] Certificate Balance, as
applicable; and when used with respect to more than one Class of Certificates,
the sum of the Class [A-1, Class M, Class B-1, Class B-2 or Class R] Certificate
Balance, as applicable.
Certificate Owner: With respect to a Global Certificate, the person
-----------------
that is the beneficial owner of an interest in such Global Certificate.
Certificate Register: The register maintained pursuant to
--------------------
Section 6.02 hereof.
Certificateholder or Holder: The person in whose name a Certificate
----------------- ------
is registered in the Certificate Register (initially, Cede & Co., as nominee for
the Depository, in the case of any Global Certificates), except that solely for
the purpose of giving any consent pursuant to this Agreement, any Certificate
registered in the name of the Contract Seller, the Servicer or any Affiliate of
the Contract Seller or the Servicer shall be deemed not to be Outstanding and
the Percentage Interest evidenced thereby shall not be taken into account in
determining whether the requisite amount of Percentage Interests necessary to
effect such consent has been obtained; provided, however, that if any such
-------- -------
Person (including the Contract Seller) owns 100% of the Percentage Interests
evidenced by a Class of Certificates, such Certificates shall be deemed to be
Outstanding for purposes of any provision hereof that requires the consent of
the Holders of Certificates of a particular Class as a condition to the taking
of any action hereunder. The Trustee is entitled to rely conclusively on a
certification of the Contract Seller, the Servicer or
-3-
<PAGE>
any Affiliate of the Contract Seller or the Servicer in determining which
Certificates are registered in the name of an Affiliate of the Contract Seller
or the Servicer.
Class or Class [A-1, Class A-IO], Class M, Class B-1, Class B-2 or
------ ---------- ----------- ------- --------- ---------
Class R: Pertaining to Class [A-1 Certificates, Class A-IO], Class M
- -------
Certificates, Class B-1 Certificates, Class B-2 Certificates or Class R
Certificates, as the case may be.
[Class A-1 Certificate: Any one of the Certificates, executed and
----------------------
authenticated as provided herein, substantially in the form set forth in Exhibit
-------
B-1 and Exhibit C hereto.
- --- ---------
Class A-1 Certificate Balance: At any time, the Initial Class A-1
-----------------------------
Certificate Balance minus the sum of all principal distributions previously made
to the Class A-1 Certificateholders (including distributions made pursuant to
clause (x) of Section 5.02).
Class A-1 Distribution Amount: As to any Distribution Date, the total
-----------------------------
amount distributed to the Class A-1 Certificateholders pursuant to Section 5.02.
Class A-1 Interest Distribution Amount: As to any Distribution Date,
--------------------------------------
an amount equal to the sum of (a) one month's interest (or with respect to the
First Distribution Date, interest from and including the Closing Date to but
excluding the First Distribution Date) and at the Class A-1 Pass-Through Rate
on the Class A-1 Certificate Balance as of such Distribution Date (before giving
effect to the principal distributions on such Distribution Date) and (b) any
Class A-1 Unpaid Interest Shortfall.
Class A-1 Interest Shortfall: As to any Distribution Date, any amount
----------------------------
by which the amount distributed to Holders of Class A-1 Certificates on such
Distribution Date is less than the amount computed pursuant to clause (a) of the
definition of "Class A-1 Interest Distribution Amount."
Class A-1 Pass-Through Rate: [ ]% per annum.
---------------------------
Class A-1 Unpaid Interest Shortfall: As to any Distribution Date, the
-----------------------------------
amount, if any, by which the aggregate of the Class A-1 Interest Shortfalls for
prior Distribution Dates exceeds all prior distributions made pursuant to
Section 5.02 in respect of prior Class A-1 Interest Shortfalls, plus accrued
interest thereon (to the extent payment thereof is legally permissible) at the
Class A-1 Pass-Through Rate on such amount with respect to such prior
Distribution Dates.
Class A-IO Certificate: Any one of the Certificates, executed and
----------------------
authenticated as provided herein, substantially in the form set forth in Exhibit
-------
B-[2] and Exhibit C hereto.
- ----- ---------
Class A-IO Distribution Amount: As to any Distribution Date, the
------------------------------
total amount distributed to the Class A-IO Certificateholders pursuant to
Section 5.02.
Class A-IO Interest Distribution Amount: As to any Distribution Date,
---------------------------------------
an amount equal to the sum of (a) one month's interest at the Class A-IO Pass-
Through Rate on the Class A-IO
-4-
<PAGE>
Notional Principal Amount as of the preceding Distribution Date and (b) any
Class A-IO Unpaid Interest Shortfall.
Class A-IO Interest Shortfall: As to any Distribution Date, any
-----------------------------
amount by which the amount distributed to the Holders of Class A-IO Certificates
on such Distribution Date is less than the amount computed pursuant to clause
(a) of the definition of "Class A-IO Interest Distribution Amount."
Class A-IO Notional Principal Amount: At any time, the Pool
------------------------------------
Scheduled Principal Balance.
Class A-IO Pass-Through Rate: 0.15% per annum.
----------------------------
Class A-IO Unpaid Interest Shortfall: As to any Distribution Date,
------------------------------------
the amount, if any, by which the aggregate of the Class A-IO Interest Shortfalls
for prior Distribution Dates exceeds all prior distributions made pursuant to
Section 5.02 in respect of prior Class A-IO Interest Shortfalls, plus accrued
interest thereon (to the extent payment thereof is legally permissible) at the
Class A-IO Pass-Through Rate on such amount with respect to such prior
Distribution Dates.]
Class B Certificate Balance: As to any Distribution Date, the sum of
---------------------------
the Class B-1 and Class B-2 Certificate Balances (before giving effect to the
principal distributions on such Distribution Date).
Class B Percentage: As to any Distribution Date, (i) if the Class B
------------------
Principal Distribution Test has been met or both the Senior Certificate Balance
and the Class M Certificate Balance are zero immediately prior to such
Distribution Date, the percentage equivalent of a fraction, the numerator of
which is the Class B Certificate Balance immediately prior to such Distribution
Date and the denominator of which is the sum of:
(a) the Senior Certificate Balance immediately prior to such
Distribution Date,
(b) the Class M Certificate Balance immediately prior to such
Distribution Date, and
(c) the Class B Certificate Balance immediately prior to such
Distribution Date,
or (ii) if the Class B Principal Distribution Test has not been met and both the
Senior Certificate Balance and the Class M Certificate Balance are not zero
immediately prior to such Distribution Date, zero; provided that the Class B
Percentage shall not be greater than 100% less the sum of the Senior Percentage
and the Class M Percentage.
Class B Principal Distribution Test: The Class B Principal
-----------------------------------
Distribution Test will be met in respect of a Distribution Date if the following
conditions are satisfied:
(1) the Distribution Date is on or after the Distribution Date in
[ ];
-5-
<PAGE>
(2) the percentage equivalent of a fraction, the numerator of which
is the Class B Certificate Balance immediately prior to such Distribution
Date and the denominator of which is the Pool Scheduled Principal Balance
immediately prior to such Distribution Date, is equal to at least [ ]%
(which is approximately 1.5 times the percentage equivalent of the
fraction, the numerator of which is the sum of (a) the Initial Class B-1
Certificate Balance and (b) the Initial Class B-2 Certificate Balance and
the denominator of which is the Cut-Off Date Pool Principal Balance);
(3) the Cumulative Realized Losses as of such Distribution Date do
not exceed (a) if such Distribution Date is from and including [ ] and
up to and including [ ], [ ]% of the Cut-Off Date Pool Principal
Balance, (b) if such Distribution Date is from and including [ ] and up
to and including [ ], [ ]% of the Cut-Off Date Pool Principal
Balance, (c) if such Distribution Date is from and including [ ] and up
to and including [ ], [ ]% of the Cut-Off Date Pool Principal Balance
and (d) if such Distribution Date is in or after [ ], [ ]% of the
Cut-Off Date Pool Principal Balance;
(4) the Current Realized Loss Ratio as of such Distribution Date does
not exceed [ ]%;
(5) the Average Sixty-Day Delinquency Ratio as of such Distribution
Date does not exceed [ ]%; and
(6) the Average Thirty-Day Delinquency Ratio as of such Distribution
Date does not exceed [ ]%.
Class B-1 Certificate: Any one of the Certificates, executed and
---------------------
authenticated as provided herein, substantially in the form set forth in Exhibit
-------
B-[3] and Exhibit C hereto.
- ----- ---------
Class B-1 Certificate Balance: At any time, the Initial Class B-1
-----------------------------
Certificate Balance minus the sum of all principal distributions previously made
to the Class B-1 Certificateholders.
Class B-1 Distribution Amount: As to any Distribution Date, the total
-----------------------------
amount distributed to the Class B-1 Certificateholders pursuant to Section 5.02.
Class B-1 Interest Distribution Amount: As to any Distribution Date, an
--------------------------------------
amount equal to the sum of (a) one month's interest at the Class B-1 Pass-
Through Rate on the Class B-1 Certificate Balance as of such Distribution Date
(before giving effect to the principal distributions on such Distribution Date)
and (b) any Class B-1 Unpaid Interest Shortfall.
Class B-1 Interest Shortfall: As to any Distribution Date, any amount by
----------------------------
which the amount distributed to Holders of Class B-1 Certificates on such
Distribution Date is less than the amount computed pursuant to clause (a) of the
definition of "Class B-1 Interest Distribution Amount."
Class B-1 Pass-Through Rate: The lesser of (a) [ ]% per annum and (b)
---------------------------
the Net Weighted Average Contract Rate.
-6-
<PAGE>
Class B-1 Unpaid Interest Shortfall: As to any Distribution Date, the
-----------------------------------
amount, if any, by which the aggregate of the Class B-1 Interest Shortfalls for
prior Distribution Dates exceeds all prior distributions made pursuant to
Section 5.02 in respect of prior Class B-1 Interest Shortfalls, plus accrued
interest thereon (to the extent payment thereof is legally permissible) at the
Class B-1 Pass-Through Rate on such amount with respect to such prior
Distribution Dates.
Class B-2 Certificate: Any one of the Certificates, executed and
---------------------
authenticated as provided herein, substantially in the form set forth in Exhibit
-------
B-[4] and Exhibit C hereto.
- ----- ---------
Class B-2 Certificate Balance: At any time, the Initial Class B-2
-----------------------------
Certificate Balance minus the sum of all principal distributions previously made
to the Class B-2 Certificateholders.
Class B-2 Distribution Amount: As to any Distribution Date, the total
-----------------------------
amount distributed to the Class B-2 Certificateholders pursuant to Section 5.02.
Class B-2 Interest Distribution Amount: As to any Distribution Date, an
--------------------------------------
amount equal to the sum of (a) one month's interest at the Class B-2 Pass-
Through Rate on the Class B-2 Certificate Balance as of such Distribution Date
(before giving effect to the principal distributions on such Distribution Date)
and (b) any Class B-2 Unpaid Interest Shortfall.
Class B-2 Interest Shortfall: As to any Distribution Date, any amount by
----------------------------
which the amount distributed to Holders of Class B-2 Certificates on such
Distribution Date is less than the amount computed pursuant to clause (a) of the
definition of "Class B-2 Interest Distribution Amount."
Class B-2 Pass-Through Rate: The lesser of (a) [ ]% per annum and (b)
---------------------------
the Net Weighted Average Contract Rate.
Class B-2 Unpaid Interest Shortfall: As to any Distribution Date, the
-----------------------------------
amount, if any, by which the aggregate of the Class B-2 Interest Shortfalls for
prior Distribution Dates exceeds all prior distributions made pursuant to
Section 5.02 in respect of prior Class B-2 Interest Shortfalls, plus accrued
interest thereon (to the extent payment thereof is legally permissible) at the
Class B-2 Pass-Through Rate on such amount with respect to such prior
Distribution Dates.
Class M Certificate: Any one of the Certificates, executed and
-------------------
authenticated as provided herein, substantially in the form set forth in Exhibit
-------
B-[5] and Exhibit C hereto.
- ----- ---------
Class M Certificate Balance: At any time, the Initial Class M Certificate
---------------------------
Balance minus the sum of all principal distributions previously made to the
Class M Certificateholders.
Class M Distribution Amount: As to any Distribution Date, the total amount
---------------------------
distributed to the Class M Certificateholders pursuant to Section 5.02.
Class M Interest Distribution Amount: As to any Distribution Date, an
------------------------------------
amount equal to the sum of (a) one month's interest at the Class M Pass-Through
Rate on the Class M Certificate
-7-
<PAGE>
Balance as of such Distribution Date (before giving effect to the principal
distributions on such Distribution Date) and (b) any Class M Unpaid Interest
Shortfall.
Class M Interest Shortfall: As to any Distribution Date, any amount by
--------------------------
which the amount distributed to Holders of Class M Certificates on such
Distribution Date is less than the amount computed pursuant to clause (a) of the
definition of "Class M Interest Distribution Amount."
Class M Pass-Through Rate: The lesser of (a) [ ]% per annum and (b) the
-------------------------
Net Weighted Average Contract Rate.
Class M Percentage: As to any Distribution Date, (i) if the Class M
------------------
Principal Distribution Test has been met or the Senior Certificate Balance is
zero immediately prior to such Distribution Date, the percentage equivalent of a
fraction, the numerator of which is the Class M Certificate Balance immediately
prior to such Distribution Date and the denominator of which is the sum of:
(a) the Senior Certificate Balance immediately prior to such Distribution
Date,
(b) the Class M Certificate Balance immediately prior to such Distribution
Date, and
(c) if the Class B Principal Distribution Test has been met, the Class B
Certificate Balance immediately prior to such Distribution Date, or, if the
Class B Principal Distribution Test has not been met, zero,
or (ii) if the Class M Principal Distribution Test has not been met and the
Senior Certificate Balance is not zero immediately prior to such Distribution
Date, zero; provided that the Class M Percentage shall not be greater than 100%
less the Senior Percentage.
Class M Principal Distribution Test: The Class M Principal Distribution
-----------------------------------
Test will be met in respect of a Distribution Date if the following conditions
are satisfied:
(1) the Distribution Date is on or after the Distribution Date in
[ ];
(2) the percentage equivalent of a fraction, the numerator of which
is the sum of (a) the Class M Certificate Balance immediately prior to such
Distribution Date and (b) the Class B Certificate Balance immediately prior
to such Distribution Date and the denominator of which is the Pool
Scheduled Principal Balance immediately prior to such Distribution Date, is
equal to at least [ ]% (which is 1.5 times the percentage equivalent of
the fraction, the numerator of which is the sum of (a) the Initial Class M
Certificate Balance, (b) the Initial Class B-1 Certificate Balance and (c)
the Initial Class B-2 Certificate Balance and the denominator of which is
the Cut-Off Date Pool Principal Balance);
(3) the Cumulative Realized Losses as of such Distribution Date do
not exceed (a) if such Distribution Date is from and including [ ] and
up to and including [ ], [ ]% of the Cut-Off Date Pool Principal
Balance, (b) if such Distribution Date is from
-8-
<PAGE>
and including [ ] and up to and including [ ], [ ]% of the Cut-Off Date
Pool Principal Balance, (c) if such Distribution Date is from and including
[ ] and up to and including [ ], [ ]% of the Cut-Off Date Pool Principal
Balance and (d) if such Distribution Date is in or after [ ], [ ]% of the
Cut-Off Date Pool Principal Balance;
(4) the Current Realized Loss Ratio as of such Distribution Date does
not exceed [ ]%;
(5) the Average Sixty-Day Delinquency Ratio as of such Distribution
Date does not exceed [ ]%; and
(6) the Average Thirty-Day Delinquency Ratio as of such Distribution
Date does not exceed [ ]%.
Class M Unpaid Interest Shortfall: As to any Distribution Date, the
---------------------------------
amount, if any, by which the aggregate of the Class M Interest Shortfalls for
prior Distribution Dates exceeds all prior distributions made pursuant to
Section 5.02 in respect of prior Class M Interest Shortfalls, plus accrued
interest thereon (to the extent payment thereof is legally permissible) at the
Class M Pass-Through Rate on such amount with respect to such prior Distribution
Dates.
Class R Certificate: Any one of the Certificates, executed and
-------------------
authenticated as provided herein, substantially in the form set forth in Exhibit
-------
D hereto.
- -
[Clause X Amount: As defined in Section 5.02(a).
----------------
Clause Y Amount: As to any Distribution Date, $9,999,998, which is
---------------
equivalent to 2% of the Cut-Off Date Pool Principal Balance.]
Closing Date: [ ].
------------
Code: The Internal Revenue Code of 1986, including any successor or
----
amendatory provisions.
Collected Scheduled Payments: As to any Distribution Date, (a) the amount
----------------------------
on deposit in the Certificate Account as of the end of the related Collection
Period, less (b) the sum of (i) the aggregate of all Partial Prepayments
collected during such Collection Period, (ii) the aggregate of all payments
collected during such Collection Period on Contracts that were prepaid in full
during such Collection Period (less the aggregate of the scheduled payments due
on such Contracts that were delinquent as of the beginning of such Collection
Period and recovered out of such collections), (iii) the aggregate of the Net
Liquidation Proceeds collected in respect of all Contracts that became
Liquidated Contracts during such Collection Period (less the aggregate of
scheduled payments due on such Contracts that were delinquent at the beginning
of such Collection Period and recovered out of such collections and less any
Repossession Profits collected during such Collection Period), (iv) the
aggregate of the Repurchase Prices of all Contracts that were repurchased by the
Contract Seller pursuant to Section 3.05 (less the aggregate of scheduled
payments due on such Contracts that were delinquent at the beginning of
-9-
<PAGE>
such Collection Period and recovered out of such collections), (v) the amounts
permitted to be withdrawn by the Servicer from the Certificate Account pursuant
to clauses (i), (ii), (iii), (iv), (v) and (vii) of Section 5.03, and (vi)
amounts representing Excess Contract Payments.
Collection Period: With respect to any Distribution Date, the calendar
-----------------
month preceding the month of the Distribution Date.
Computer Tape: The computer tape generated by the Servicer on behalf of
-------------
the Contract Seller which provides information relating to the Contracts sold by
the Contract Seller, and includes the master file and the history file.
Contract: Any one of the manufactured housing installment sale contracts
--------
or installment loan agreements, including any Land Home Contracts, described in
the Contract Schedule and constituting part of the corpus of the Trust Fund,
which Contracts are to be sold and assigned by the Contract Seller to the
Trustee and which are the subject of this Agreement. The Contracts include all
related security interests and any and all rights to receive payments which are
due pursuant thereto from and after the Cut-Off Date, but exclude any rights to
receive payments which were due pursuant thereto prior to the Cut-Off Date.
Contract File: As to each Contract other than a Land Home Contract, (a)
-------------
the original copy of the Contract, (b) the original title document issued to the
Contract Seller as secured lender or agent therefor for the related Manufactured
Home, unless the laws of the jurisdiction in which the related Manufactured Home
is located do not provide for the issuance of any title documents for
manufactured housing to secured lenders, (c) evidence of one or more of the
following types of perfection of the security interest in favor of the Contract
Seller as secured lender or agent therefor in the related Manufactured Home
granted by such Contract, as appropriate: (1) notation of such security
interest on the title document, (2) a financing statement meeting the
requirements of the UCC, with evidence of recording in the appropriate offices
indicated thereon, or (3) such other evidence of perfection of a security
interest in a manufactured housing unit as is customary in such jurisdiction,
(d) the assignment of the Contract from the manufactured housing dealer to the
Contract Seller, if any, including any intervening assignments, and (e) any
extension, modification or waiver agreement(s).
Contract Pool: The pool of Contracts held in the Trust Fund.
-------------
Contract Rate: With respect to each Contract, the per annum rate of
-------------
interest borne by such Contract, as set forth in such Contract.
Contract Schedule: The list identifying each Contract, as amended from
-----------------
time to time, constituting part of the corpus of the Trust Fund, which list is
attached hereto as Exhibit A and which (a) identifies each Contract by contract
---------
number and name and address of the Obligor, and (b) sets forth as to each
Contract (i) the Scheduled Principal Balance as of the Cut-Off Date, (ii) the
amount of each monthly payment due from the Obligor, (iii) the Contract Rate,
and (iv) the maturity date.
-10-
<PAGE>
Contract Seller: GreenPoint.
---------------
Corporate Trust Office: The principal corporate trust office of the
----------------------
Trustee at which, at any particular time, its corporate trust business shall be
administered, which office at the date of execution of this Agreement is located
at [ ], except that for purposes of Section 9.11, such term shall mean the
office or agency of the Trustee in the [ ].
Cumulative Realized Losses: As to any Distribution Date, the Aggregate Net
--------------------------
Liquidation Losses for the period from the Cut-Off Date through the end of the
Collection Period preceding the month of such Distribution Date.
Current Realized Loss Ratio: As to any Distribution Date, the annualized
---------------------------
percentage equivalent of the fraction, the numerator of which is the sum of the
Aggregate Net Liquidation Losses for the three preceding Collection Periods and
the denominator of which is the arithmetic average of the Pool Scheduled
Principal Balances for such Distribution Date and the preceding two Distribution
Dates.
Cut-Off Date: The close of business on [ ].
------------
Cut-Off Date Pool Principal Balance: $[ ].
-----------------------------------
Deficiency Event: As defined in Section 5.02(a).
----------------
Definitive Certificates: As defined in Section 6.08.
-----------------------
Denomination: With respect to each Regular Certificate [(other than a
------------
Class A-IO Certificate)], the amount set forth on the face thereof as the
"Initial Principal Balance of this Certificate." With respect to each [Class IO
and each] Class R Certificate, the Percentage Interest appearing on the face
thereof.
Depository: The initial Depository shall be the Depository Trust Company,
----------
the nominee of which is Cede & Co., or any other organization registered as a
"clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended. The Depository shall initially be the registered Holder of
the Global Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(3) of the Uniform Commercial Code of
the State of New York.
Depository Agreement: The agreement among the Contract Seller, the Trustee
--------------------
and the initial Depository, dated as of the Closing Date, substantially in the
form of Exhibit I.
---------
Depository Participant: 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: With respect to any Distribution Date, the third
------------------
Business Day prior to such Distribution Date.
-11-
<PAGE>
Disqualified Organization: Any organization defined as a "disqualified
-------------------------
organization" under Section 860E(e)(5) of the Code, which includes any of the
following: (i) the United States, any State or political subdivision thereof,
any possession of the United States, or any agency or instrumentality of any of
the foregoing (other than an instrumentality which is a corporation if all of
its activities are subject to tax and, except for the FHLMC, a majority of its
board of directors is not selected by such governmental unit), (ii) a foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing, (iii) any organization (other than certain farmers'
cooperatives described in Section 521 of the Code) which is exempt from the tax
imposed by Chapter 1 of the Code (including the tax imposed by Section 511 of
the Code on unrelated business taxable income), (iv) rural electric and
telephone cooperatives described in Section 1381(a)(2)(C) of the Code and (v)
any other Person so designated by the Trustee based upon an Opinion of Counsel
that the holding of an Ownership Interest in a Class R Certificate by such
Person may cause the Trust Fund, or any Person having an Ownership Interest in
any Class of Certificates (other than such Person) to incur a liability for any
federal tax imposed under the Code that would not otherwise be imposed but for
the Transfer of an Ownership Interest in a Certificate to such Person. The
terms "United States", "State" and "international organization" shall have the
meanings set forth in Section 7701 of the Code or successor provisions.
Distribution Date: The 10th day of each calendar month after the initial
-----------------
issuance of the Certificates, or if such 10th day is not a Business Day, the
next succeeding Business Day, commencing [ ].
Due Date: The day of the month on which each scheduled payment of
--------
principal and interest is due on a Contract, exclusive of any days of grace.
Eligible Account: An account that is one of the following (i) an account
----------------
maintained with a FDIC-insured depository institution which is subject to
examination by federal or state authorities and the commercial paper of which
has a rating of [P-1 from Moody's (if rated by Moody's) and F-1 from Fitch (if
rated by Fitch)] or the long-term deposits or long-term unsecured senior debt
obligations of which are in one of the two highest rating categories of [Moody's
and Fitch (if rated by Fitch)], or maintained with a depository institution that
is otherwise acceptable to each Rating Agency (as evidenced by a letter from
each Rating Agency to such effect), (ii) a trust account maintained with the
Trustee or, if the Certificate Administrator is not the Trustee, with the
Certificate Administrator, in which the funds are either held uninvested or
invested solely in Eligible Investments, or (iii) an account that is otherwise
acceptable to the Rating Agencies, as evidenced by a letter from each Rating
Agency, without a reduction or withdrawal of the rating of the Certificates.
Eligible Investments: One or more of the following in the order of
--------------------
priority specified herein:
(a) any common trust fund, collective investment trust or money market
fund acceptable to [Fitch and rated Aaa by Moody's]; and
-12-
<PAGE>
(b) other obligations or securities that are acceptable to each Rating
Agency as an Eligible Investment hereunder and will not result in a reduction in
or withdrawal of the then current rating or ratings of the Certificates, as
evidenced by a letter to such effect from each Rating Agency;
[provided, however, that no investments in "interest only" stripped obligations
shall qualify as an Eligible Investment pursuant to this definition.]
Eligible Substitute Contract: As to any Replaced Contract for which such
----------------------------
Eligible Substitute Contract is being substituted pursuant to Section 3.05(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 3.03, 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) has not been delinquent for more than 31 days as
to any scheduled payment due within twelve months of the date of its
substitution. In addition, a Substitute Contract which is a Land Home Contract
may only be used to replace a Replaced Contract which was a Land Home Contract.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
-----
ERISA Restricted Certificate: Any Class [M, Class B-1, Class B-2 or Class
----------------------------
R] Certificate.
Event Of Default: Any one of the Events of Default described in Section
----------------
8.01 hereof.
Excess Contract Payment: With respect to any Contract, any portion of a
-----------------------
payment of principal and interest on such Contract, that (a) is in excess of the
scheduled payment (or is an integral multiple thereof and has not been
identified by the Obligor as a Principal Prepayment), (b) is not a Principal
Prepayment and (c) is not part of the Liquidation Proceeds of such Contract or
the Repurchase Price of such Contract paid pursuant to Section 3.05.
Extension Fee: Any extension fee paid by the Obligor on a Contract.
-------------
FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.
----
FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
-----
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Fidelity Bond: A fidelity bond to be maintained by the Servicer pursuant
-------------
to Section 4.10.
-13-
<PAGE>
First Distribution Date: [ ].
-----------------------
[Fitch: Fitch Investors Service, L.P. or any successor thereto.]
------
FNMA: The Federal National Mortgage Association, a federally chartered and
----
privately owned corporation organized and existing under the Federal National
Mortgage Association Charter Act, or any successor thereto.
Formula Principal Distribution Amount: As to any Distribution Date, an
-------------------------------------
amount equal to the sum of (a) the Total Regular Principal Amount for such
Distribution Date and (b) any previously undistributed shortfalls in the
distribution of the Total Regular Principal Amount in respect of prior
Distribution Dates.
Fractional Interest: As to any Certificate [(other than a Class A-IO
-------------------
Certificate)], the product of (a) the Percentage Interest evidenced by such
Certificate multiplied by (b) the amount derived from dividing the Certificate
Balance of the Class represented by such Certificate by the aggregate
Certificate Balances of each Class. [As to any Class A-IO Certificate, the
product of (a) the Percentage Interest evidenced by such Certificate multiplied
by (b) 1.00%.]
Global Certificate: 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 and as described in Section 6.06). On the Closing Date, only
the Class [A-1, Class A-IO], Class M and Class B-1 Certificates will be Global
Certificates.
GreenPoint: GreenPoint Credit Corp., its successors or assigns.
----------
Guarantor: GreenPoint Financial Corp.
---------
Hazard Insurance Policy: With respect to each Contract, the policy of fire
-----------------------
and extended coverage insurance (and federal flood insurance, if applicable)
required to be maintained for the related Manufactured Home, as provided in
Section 4.09 (which may be a blanket insurance policy maintained by the Servicer
in accordance with the terms and conditions of Section 4.09).
Independent Contractor: Either (i) any Person (other than the Servicer or
----------------------
the Trustee) that would be an "independent contractor" with respect to the Trust
Fund within the meaning of Section 856(d)(3) of the Code if the Trust Fund were
a real estate investment trust (except that the ownership test set forth in that
Section shall be considered to be met by any Person that owns, directly or
indirectly, 35 percent or more of any Class of Certificates, or such other
interest in any Class of Certificates as is set forth in an Opinion of Counsel,
which shall be at no expense to the Trustee or the Trust Fund, delivered to the
Trustee), so long as the Trust Fund does not receive or derive any income from
such person and provided that the relationship between such Person and the Trust
Fund is at arm's length, all within the meaning of Treasury Regulation Section
1.856-4(b)(5), or (ii) any other Person (including the Servicer and the Trustee)
upon receipt by the Trustee of an Opinion of Counsel, which shall be at no
expense to the Trustee or
-14-
<PAGE>
the Trust Fund, to the effect that the taking of any action in respect of any
REO Property by such Person, subject to any conditions therein specified, that
is otherwise herein contemplated to be taken by an Independent Contractor will
not cause such REO Property to cease to qualify as "foreclosure property" within
the meaning of Section 860G(a)(8) of the Code (determined without regard to the
exception applicable for purposes of Section 860D(a) of the Code).
Initial Class A-1 Certificate Balance: $[ ].
-------------------------------------
[Initial Class A-IO Notional Principal Amount: $[ ].]
---------------------------------------------
Initial Class M Certificate Balance: $[ ].
-----------------------------------
Initial Class B-1 Certificate Balance: $[ ].
-------------------------------------
Initial Class B-2 Certificate Balance: $[ ].
-------------------------------------
Interest Accrual Period: With respect to any Distribution Date and each
-----------------------
Class of Regular Certificates, the one month period beginning on the tenth day
of the month of the month preceding the month in which such Distribution Date
occurs [(or, with respect to the First Distribution Date and the Class A-1
Certificates, the Closing Date)] and ending on the ninth day of the month in
which such Distribution Date.
Land Home Contract: A Contract that is secured by a mortgage or deed of
------------------
trust on real estate on which the related Manufactured Home is situated (as well
as by such related Manufactured Home).
Land Home Contract File: As to each Land Home Contract, (a) the original
-----------------------
copy of the Land 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 Home Contract from the originator (if other than the Contract Seller)
to the applicable Contract Seller, (d) if such Land Home Contract was originated
by the Contract Seller, an endorsement of such Land Home Contract by the
applicable Contract Seller, and (e) any extension, modification or waiver
agreement(s).
Late Payment Fees: Any late payment fees paid by Obligors on Contracts
-----------------
after all sums received have been allocated first to regular installments due or
overdue and all such installments are then paid in full.
Latest Due Date: The latest date on which any Contract matures.
---------------
Limited Guaranty: That certain Limited Guaranty executed by Guarantor for
----------------
the benefit of the Trust Fund.
-15-
<PAGE>
Liquidated Contract: Any defaulted Contract as to which the Servicer has
-------------------
determined that all amounts [(other than amounts in respect of any deficiency)]
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 Home Contracts, Mortgaged Property,
has been realized upon and liquidated and the proceeds of such disposition have
been received shall be deemed to be a Liquidated Contract.
Liquidation Expenses: All reasonable out-of-pocket expenses (exclusive of
--------------------
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 Home Contracts, Mortgaged
Property, is liquidated, including legal fees and expenses, any unreimbursed
amount expended by the Servicer pursuant to Sections 4.06, 4.07, 4.09 or 4.13
(to the extent such amount is reimbursable under the terms of Sections 4.06,
4.07, 4.09 or 4.13, as the case may be) with respect to such Contract, and any
unreimbursed expenditures for property taxes or other taxes or charges or for
property restoration or preservation that are related to such liquidation.
Liquidation Proceeds: Cash (including insurance proceeds other than those
--------------------
applied to the restoration of the related Manufactured Home or Mortgaged
Property or released to the related Obligor in accordance with the normal
servicing procedures of the Servicer, but excluding deficiency amounts) received
in connection with the liquidation of defaulted Contracts, whether through
repossession or otherwise.
Loan-To-Value Ratio: The fraction, expressed as a percentage, the
-------------------
numerator of which is the original principal balance of the related Contract and
the denominator of which is the Original Value of the related Manufactured Home.
Majority In Interest: As to any Class of Regular Certificates, the Holders
--------------------
of Certificates of such Class evidencing, in the aggregate, at least 51% of the
Percentage Interests evidenced by all Certificates of such Class.
Manufactured Home: A unit of manufactured housing which meets the
-----------------
requirements of Section 25(e)(10) of the Code, securing the indebtedness of the
Obligor under the related Contract.
Minimum Termination Amount: As of any time after the Pool Scheduled
--------------------------
Principal Balance is less than 10% of the Cut-Off Date Pool Principal Balance,
whether in the case of a Termination Auction or a purchase of Contracts by the
Servicer pursuant to Section 10.01(a)(ii) hereof, an amount equal to the sum of
(a) the Class [A-1 Certificate Balance, (b) any shortfall in interest due to the
Class A-1 Certificateholders in respect of prior Distribution Dates, (c) one
month's interest on the Class A-1 Certificate Balance at the Class A-1 Pass-
Through Rate, (d) any shortfall in interest due to the Class A-IO
Certificateholders in respect of prior Distribution Dates, (e) one month's
interest on the Class A-IO Notional Principal Amount at the Class A-IO Pass-
Through Rate,] [(f)] the Class M Certificate Balance, [(g)] any shortfall in
interest due to the Class M Certificateholders in respect of prior Distribution
Dates, [(h)] one
-16-
<PAGE>
month's interest on the Class M Certificate Balance at the Class M Pass-Through
Rate, [(i)] the Class B-1 Certificate Balance,[(j)] any shortfall in interest
due to the Class B-1 Certificateholders in respect of prior Distribution Dates,
(ii) one month's interest on the Class B-1 Certificate Balance at the Class B-1
Pass-Through Rate, [(k)] the Class B-2 Certificate Balance, [(l)] any shortfall
in interest due to the Class B-2 Certificateholders in respect of prior
Distribution Dates, and [(m)] one month's interest on the Class B-2 Certificate
Balance at the Class B-2 Pass-Through Rate.
Monthly Advance: As to any Distribution Date, the lesser of (1) (a) the
---------------
amount, if any, by which (i) the Scheduled Amount exceeds (ii) the Collected
Scheduled Payments, less (b) the amount of any scheduled payment on a Contract
due during the related Collection Period which the Servicer has determined would
be a Nonrecoverable Advance if an advance in respect of such scheduled payment
were made and (2) the amount by which the Available Distribution Amount
(exclusive of the Monthly Advance component thereof) for such Distribution Date
is less than the sum of (a) the Total Regular Principal Amount and (b) the sum
of the Class [A-1 Interest Distribution Amount, the Class A-IO] Interest
Distribution Amount, the Class M Interest Distribution Amount, the Class B-1
Interest Distribution Amount and the Class B-2 Interest Distribution Amount.
Monthly Advance Reimbursement Amount: Any amount received or deemed to be
------------------------------------
received by the Servicer pursuant to Section 5.01(b) or (c) in reimbursement of
a Monthly Advance made out of its own funds.
Monthly Report: The monthly report described in Section 5.04.
--------------
Monthly Servicing Fee: As of any Distribution Date, an amount equal to
---------------------
one-twelfth of 1.00% per annum (or, in the case of a successor Servicer engaged
at any time after GreenPoint is no longer the Servicer, the percentage agreed
upon pursuant to Section 7.07) of the Pool Scheduled Principal Balance for such
Distribution Date.
[Moody's: Moody's Investors Service, Inc. or any successor thereto.]
--------
Mortgage: 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 Home Contract.
Mortgaged Property: The property subject to the lien of a Mortgage.
------------------
Net Contract Rate: The rate of interest per annum borne by a Contract
-----------------
minus the Annual Servicing Rate.
Net Liquidation Proceeds: As to any Liquidated Contract, Liquidation
------------------------
Proceeds net of the sum of (i) Liquidation Expenses, (ii) all accrued and unpaid
interest thereon through the date the related Contract becomes a Liquidated
Contract and (iii) any amount required to be paid to the Obligor or any other
Person with an interest in the Manufactured Home or Mortgaged Property that is
senior to the interest of the Trust Fund.
-17-
<PAGE>
Net Weighted Average Contract Rate: As to any Distribution Date, the
----------------------------------
weighted average (weighted by outstanding principal balance) of the Net Contract
Rates of all of the Contracts at the beginning of the related Collection Period.
Non-United States Person: Any Person other than a United States Person.
------------------------
Nonrecoverable Advance: Any advance made or proposed to be made pursuant
----------------------
to Section 5.01 which the Servicer believes, in its good faith judgment, is not,
or if made would not be, ultimately recoverable from late payments, Liquidation
Proceeds or otherwise. In determining whether an advance is or will be
nonrecoverable, the Servicer need not take into account that it might receive
any amounts in a deficiency judgment. The determination by the Servicer that
any advance is, or if made would constitute, a Nonrecoverable Advance, shall be
evidenced by an Officers' Certificate of the Servicer delivered to the Trustee
and stating the reasons for such determination.
Obligor: Each Person who is indebted under a Contract or who has acquired
-------
a Manufactured Home subject to a Contract.
Officer's Certificate: A certificate (i) signed by the Chairman of the
---------------------
Board, the Vice Chairman of the Board, the President, a Vice President (however
denominated), an Assistant Vice President, the Treasurer, the Secretary, or one
of the assistant treasurers or assistant secretaries of the Contract Seller or
the Servicer (or any other officer customarily performing functions similar to
those performed by any of the above designated officers and also to whom, with
respect to a particular matter, such matter is referred because of such
officer's knowledge of and familiarity with a particular subject) or (ii) if
provided for in this Agreement, signed by a Servicing Officer and delivered to
the Contract Seller and the Trustee, as the case may be, as required by this
Agreement.
Opinion Of Counsel: A written opinion of counsel, who may be the in-house
------------------
counsel for the Contract Seller or the Servicer, reasonably acceptable to the
Trustee and the Contract Seller, as the case may be.
Original Value: With respect to any Manufactured Home that was new at the
--------------
time the related Contract was originated, the retail stated cash sale price of
such Manufactured Home, plus taxes and, to the extent financed under such
Contract, closing fees paid to third parties, insurance and prepaid finance
charges. With respect to any Manufactured Home that was used at the time the
related Contract was originated, the total delivered sales price of such
Manufactured Home, plus taxes and, to the extent financed under such Contract,
closing fees paid to third parties, insurance and prepaid finance charges.
Outstanding: With respect to any Contract as to the time of reference
-----------
thereto, a Contract that has not been fully prepaid, has not become a Liquidated
Contract, and has not been repurchased pursuant to Section 3.05 prior to such
time of reference.
-18-
<PAGE>
Outstanding Amount Advanced: As to any Distribution Date, the aggregate of
---------------------------
all Monthly Advances made by the Servicer out of its own funds pursuant to
Section 5.01 less the aggregate of all Monthly Advance Reimbursement Amounts
actually received by the Servicer prior to such Distribution Date.
Ownership Interest: Any legal or beneficial, direct or indirect, ownership
------------------
or other interest.
Partial Prepayment: Any Principal Prepayment other than a Principal
------------------
Prepayment in Full.
Paying Agent: Any paying agent appointed pursuant to Section 9.13.
------------
Percentage Interest: As to any Certificate (other than a Class R
-------------------
Certificate) of any Class, the percentage interest evidenced thereby in
distributions required to be made on the Certificates of such Class, such
percentage interest being equal to the percentage obtained by dividing the
original denomination of such Certificate by the aggregate of the original
denominations of all of the Certificates of such Class; and as to a Class R
Certificate, the percentage set forth on the face thereof.
Permitted Transferee: Any Person other than (i) a Disqualified
--------------------
Organization or (ii) a Non-United States Person.
Person: Any individual, corporation, partnership, joint venture,
------
association, joint-stock company, trust, unincorporated organization or
government, or any agency or political subdivision thereof.
Pool Factor: As of any Distribution Date and as to any Class of
-----------
Certificates, the percentage obtained by dividing the Class [A-1 Certificate
Balance,] the Class M Certificate Balance, the Class B-1 Certificate Balance or
the Class B-2 Certificate Balance, as the case may be (after giving effect to
the principal distributions on such Distribution Date), by the Initial Class [A-
1 Certificate Balance,] the Initial Class M Certificate Balance, the Initial
Class B-1 Certificate Balance or the Initial Class B-2 Certificate Balance, as
the case may be, carried out to seven decimal places.
Pool Scheduled Principal Balance: As to any Distribution Date, the Cut-Off
--------------------------------
Date Pool Principal Balance less the aggregate of the Total Regular Principal
Amounts for all prior Distribution Dates.
Principal Prepayment: (i) Subject to clause (ii) of this definition, with
--------------------
respect to any Contract, any payment or any portion thereof or other recovery on
such Contract (other than a Liquidated Contract or a Contract repurchased
pursuant to Section 3.05) that exceeds the amount necessary to bring such
Contract current as of any Due Date unless (A) the related Obligor has notified
or confirmed with the Servicer that such payment is to be applied as Scheduled
Payments for future Due Dates or (B) the amount of such excess payment is
approximately equal (subject to a variance of plus or minus 10%) to the amount
of the Scheduled Payment on the next Due Date; (ii) notwithstanding the
provisions of the preceding clause (i), if any payment or any
-19-
<PAGE>
portion thereof or other recovery on a Contract (other than a Liquidated
Contract or a Contract repurchased pursuant to Section 3.05) is sufficient to
pay the outstanding principal balance of such Contract, all accrued and unpaid
interest at the Contract Rate to the payment date and, at the option of the
Servicer, all other outstanding amounts owing on such Contract, the portion of
the payments or recoveries on such Contract during such Collection Period that
is equal to the Scheduled Principal Balance of such Contract after giving effect
to the scheduled payment on such Contract due in such Collection Period; and
(iii) any cash deposit made with respect to a Contract pursuant to Section 3.05.
Principal Prepayment In Full: Any Principal Prepayment specified in clause
----------------------------
(ii) of the definition of the term "Principal Prepayment."
Private Certificate: Any Class B-2 or Class R Certificate.
-------------------
Rating Agency: [Either Moody's Investors Service, Inc. or Fitch Investors
-------------
Service, L.P.]
Record Date: With respect to any Distribution Date, the close of business
-----------
on the Business Day preceding such Distribution Date.
Regular Certificates: Any one of the Class [A-1, Class A-IO,] Class M,
--------------------
Class B-1 or Class B-2 Certificates.
REMIC: A "real estate mortgage investment conduit" within the meaning of
-----
Section 860D of the Code.
REMIC Administrator: GreenPoint, or any successor thereto meeting the
-------------------
requirements set forth in Section 4.17 (c).
REMIC Provisions: Provisions of the federal income tax law relating to
----------------
real estate mortgage investment conduits, which appear at sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
proposed, temporary and final regulations and published rulings, notices and
announcements promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
REO Account: As defined in Section 4.17.
-----------
REO Property: As defined in Section 4.17.
------------
Replaced Contract: A Contract as to which the Contract Seller has a
-----------------
Repurchase Obligation and which, at the Contract Seller's option, is replaced in
the Trust Fund by an Eligible Substitute Contract pursuant to Section 3.05.
Repossession Profits: As to any Distribution Date, the excess, if any, of
--------------------
Net Liquidation Proceeds in respect of each Contract that became a Liquidated
Contract during the related Collection Period over the sum of the remaining
principal balance of such Contract plus accrued and unpaid interest at the
related Contract Rate on the remaining principal balance thereof from
-20-
<PAGE>
the Due Date to which interest was last paid by the Obligor to the Due Date in
the month in which such Contract became a Liquidated Contract.
Repurchase Obligation: The obligation of the Contract Seller, set forth in
---------------------
Section 3.05, to repurchase the related Contracts as to which there exists an
uncured breach of a representation or warranty contained in Sections 3.02 or
3.03.
Repurchase Price: With respect to any Contract required to be repurchased
----------------
hereunder, an amount equal to the remaining principal amount outstanding on such
Contract as of the beginning of the month of repurchase plus accrued interest
from the Due Date with respect to which the Obligor last made a payment to the
Due Date in the Collection Period in which such Contract is repurchased.
[Reserve Account: The separate Eligible Account created and initially
----------------
maintained by the Trustee pursuant to Section 5.08 in the name of the Trustee
for the benefit of the Holders of the Certificates and designated "[Trustee] in
trust for registered holders of GreenPoint Credit Corp. Manufactured Housing
Contract Senior/Subordinate Pass-Through Certificates, Series 199[]-[]". Funds
in the Reserve Account shall be held in trust for the aforementioned
Certificateholders for the uses and purposes set forth in this Agreement.]
[Reserve Account Cap: As to any Distribution Date (after giving effect to
--------------------
distributions due thereon) after the Closing Date and until none of the Class
[A-1, Class A-IO,] Class M and Class B-1 Certificates remain outstanding, the
Reserve Account Cap shall be $[ ] (which is [ ]% of the Cut-Off Date Pool
Principal Balance) and (ii) as to any Distribution Date (after giving effect to
distributions due thereon) after none of the Class [A-1, Class A-IO,] Class M
and Class B-1 Certificates remain outstanding, the Reserve Account Cap shall be
the lesser of the then outstanding Class B-2 Certificate Balance and $[ ].]
[Reserve Account Draw Amount: An amount which is equal to the lesser of
----------------------------
(a) the amount then on deposit in the Reserve Account and (b) the amount, if
any, by which the aggregate of amounts due to Certificateholders in clauses (i)
through (viii) of Section 5.02(a) exceeds the Available Distribution Amount on
such Distribution Date.]
[Reserve Account Trigger: As of any Distribution Date, a Reserve Account
-----------------------
Trigger will be in effect if any of the following conditions are in effect as of
such Distribution Date or were in effect for any of the immediately preceding
eleven Distribution Dates:
(1) the Cumulative Realized Losses as of such Distribution Date exceed
(a) if such Distribution Date is from and including July 1998 and up to and
including December 1998, 0.50% of the Cut-Off Date Pool Principal Balance,
(b) if such Distribution Date is from and including January 1999 and up to
and including June 1999, 1.00% of the Cut-Off Date Pool Principal Balance,
(c) if such Distribution Date is from and including July 1999 and up to and
including December 1999, 1.50% of the Cut-Off Date Pool Principal Balance,
(d) if such Distribution Date is from and including January 2000 and up to
and including June 2000, 2.25% of the Cut-Off Date Pool Principal
-21-
<PAGE>
Balance, (e) if such Distribution Date is from and including July 2000 and
up to and including December 2000, 3.00% of the Cut-Off Date Pool Principal
Balance, (f) if such Distribution Date is from and including January 2001
and up to and including June 2001, 4.00% of the Cut-Off Date Pool Principal
Balance, (g) if such Distribution Date is from and including July 2001 and
up to and including December 2001, 5.00% of the Cut-Off Date Pool Principal
Balance, (h) if such Distribution Date is from and including January 2002
and up to and including June 2003, 6.00% of the Cut-Off Date Pool Principal
Balance, (i) if such Distribution Date is from and including July 2003 and
up to and including June 2004, 7.00% of the Cut-Off Date Pool Principal
Balance, (j) if such Distribution Date is from and including July 2004 and
up to and including June 2005, 8.50% of the Cut-Off Date Pool Principal
Balance, (k) if such Distribution Date is in or after July 2005, 9.5% of
the Cut-Off Date Pool Principal Balance;
(2) the Current Realized Loss Ratio as of such Distribution Date
exceeds 2.5%;
(3) the Average Sixty-Day Delinquency Ratio as of such Distribution
Date exceeds 3.5%; or
(4) the Average Thirty-Day Delinquency Ratio as of such Distribution
Date exceeds 5.5%.]
Responsible Officer: When used with respect to the Trustee, the Paying
-------------------
Agent or the Certificate Administrator, the chairman or vice chairman of the
board of directors, the chairman or vice chairman of any executive committee of
the board of directors, the president, any vice president, any assistant vice
president, the secretary, any assistant secretary, the treasurer, any assistant
treasurer, the cashier, any assistant cashier, any trust officer or assistant
trust officer, the controller or any assistant controller, or any other officer
customarily performing functions similar to those performed by any of the above
designated officers and also, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer's knowledge of
and familiarity with the particular subject.
Scheduled Amount: As to any Distribution Date, the amount equal to the
----------------
aggregate of the scheduled payments that were due during the Collection Period
ending immediately prior to such Distribution Date in respect of Contracts that
were Outstanding immediately following such Collection Period or whose last
scheduled payment was due during such Collection Period.
Scheduled Payment: As to any Distribution Date and each Contract, the
-----------------
amount equal to the scheduled payment that was due during the Collection Period
ending immediately prior to such Distribution Date in respect of each such
Contract that was Outstanding immediately following such Collection Period or
whose last scheduled payment was due during such Collection Period.
Scheduled Principal Balance: As to any Contract and any Distribution Date,
---------------------------
the principal balance of such Contract (before any adjustment by reason of
bankruptcy, moratorium or similar
-22-
<PAGE>
waiver or grace period) as of the Due Date in the Collection Period next
preceding such Distribution Date (or, with respect to the First Distribution
Date, as of the Cut-Off Date) as specified in the amortization schedule for such
Contract at the time relating thereto, after giving effect to all previous
Partial Prepayments, all previous scheduled principal payments (whether or not
paid) and to the scheduled payment of principal due on such Due Date.
Scheduled Principal Reduction Amount: As to any Distribution Date, (a) the
------------------------------------
sum of the scheduled payments due during the Collection Period ending
immediately prior to such Distribution Date in respect of all Contracts that are
Outstanding at the beginning of such Collection Period less (b) 1/12th of the
product of (i) the Pool Scheduled Principal Balance prior to giving effect to
the Total Regular Principal Amount for such Distribution Date, and (ii) the
weighted average Contract Rate for such Contracts, calculated on the basis of
the remaining principal balances of such Contracts as of the first day of such
Collection Period; provided that, on each anniversary of the First Distribution
--------
Date (or, at the option of the Servicer, on more than one Distribution Date, as
selected by the Servicer, in each year), the Scheduled Principal Reduction
Amount shall equal the amount, reflecting any adjustments by reason of
bankruptcy, moratorium or similar waiver or grace period, Principal Payments in
Full, and other reductions, if any, necessary to cause the Pool Scheduled
Principal Balance for the Distribution Date next succeeding such Distribution
Date to equal the aggregate of the Scheduled Principal Balances for such
Distribution Date.
Securities Act: The Securities Act of 1933, as amended.
--------------
Senior Certificates: The Class [A-1 Certificates and the Class A-IO
-------------------
Certificates.]
Senior Certificate Balance: As to any Distribution Date, the sum of the
--------------------------
Class [A-1 and Class [ ] Certificate Balance].
[Senior Percentage: As to any Distribution Date, the percentage equivalent
------------------
of a fraction, the numerator of which is the Senior Certificate Balance
immediately prior to such Distribution Date and the denominator of which is the
sum of:
(i) the Senior Certificate Balance immediately prior to such
Distribution Date,
(ii) if the Class M Principal Distribution Test has been met, the
Class M Certificate Balance immediately prior to such Distribution Date or,
if the Class M Principal Distribution Test has not been met, zero, and
(iii) if the Class B Principal Distribution Test has been met, the
Class B Certificate Balance immediately prior to such Distribution Date or,
if the Class B Principal Distribution Test has not been met, zero;
provided that the Senior Percentage shall not be greater than 100%.]
-23-
<PAGE>
Servicer: GreenPoint, or its successors in interest or any successor
--------
servicer under this Agreement as provided by Section 7.07.
[Servicer Deficiency Amount: With respect to any Distribution Date, the
--------------------------
product of the Deficiency Percentage and the aggregate of the Deficiency Amounts
received during the immediately preceding Collection Period.]
Servicing File: All documents, records, and other items maintained by the
--------------
Servicer with respect to a Contract and not included in the corresponding
Contract File or the Land Home Contract, as applicable, including the credit
application, credit reports and verifications, appraisals, tax and insurance
records, payment records, insurance claim records, correspondence, and all
historical computerized data files.
Servicing Officer: Any officer of the Servicer involved in, or responsible
-----------------
for, the administration and servicing of the Contracts whose name appears on a
list of servicing officers furnished to the Trustee by the Servicer, as such
list may from time to time be amended.
Sixty-Day Delinquency Ratio: As to any Distribution Date, the percentage
---------------------------
equivalent of the fraction, the numerator of which is the aggregate of the
outstanding principal balances (as of the end of the preceding Collection
Period) of all Contracts (including Contracts in respect of which the related
Manufactured Home has been repossessed but not yet liquidated) as to which a
scheduled monthly payment thereon (without giving effect to any adjustments
thereto by reason of a bankruptcy or similar proceeding of the Obligor or any
extension or modification granted to such Obligor) is delinquent 60 days or more
as of the end of such Collection Period and the denominator of which is the Pool
Scheduled Principal Balance for such Distribution Date.
Startup Day: As defined in Section 4.17(b) hereof.
-----------
Tax: As defined in Section 4.17(g) hereof.
---
Tax Matters Person: The person designated as "tax matters person" in the
------------------
manner provided under Treasury regulation Section 1.860F-4(d) and Section 6231
of the Code. Initially, this person shall be the Servicer.
Termination Auction: As defined in Section 10.01(b) hereof.
-------------------
Thirty-Day Delinquency Ratio: As to any Distribution Date, the percentage
----------------------------
equivalent of the fraction, the numerator of which is the aggregate of the
outstanding principal balances (as of the end of the preceding Collection
Period) of all Contracts (including Contracts in respect of which the related
Manufactured Home has been repossessed but not yet liquidated) as to which a
scheduled monthly payment thereon (without giving effect to any adjustments
thereto by reason of a bankruptcy or similar proceeding of the Obligor or any
extension or modification granted to such Obligor) is delinquent 30 days or more
as of the end of such Collection Period and the denominator of which is the Pool
Scheduled Principal Balance for such Distribution Date.
-24-
<PAGE>
Total Regular Principal Amount: As to any Distribution Date, an amount
------------------------------
equal to the sum of (a) the Scheduled Principal Reduction Amount for such
Distribution Date, (b) all Partial Prepayments received during the immediately
preceding Collection Period, (c) the Scheduled Principal Balance of each
Contract for which a Principal Prepayment in Full was received during the
immediately preceding Collection Period, (d) the Scheduled Principal Balance of
each Contract that became a Liquidated Contract during the immediately preceding
Collection Period, and (e) the Scheduled Principal Balance of each Contract that
was repurchased during the immediately preceding Collection Period pursuant to
Section 3.05.
Transfer: Any direct or indirect transfer or sale of any Ownership
--------
Interest in a Class R Certificate.
Transferee: Any Person who is acquiring by Transfer any Ownership Interest
----------
in a Class R Certificate.
Trustee: [ ], or its successors or assigns or any successor
-------
under this Agreement.
Trust Fund: The corpus of the trust created by this Agreement, to the
----------
extent described herein, consisting of the Contracts (including the security
interest created thereby), including all rights to receive payments on the
Contracts due on or after the Cut-Off Date, such assets as shall from time to
time be identified as deposited in the Certificate Account, the amounts, if any,
on deposit in the Reserve Account, each Manufactured Home and Mortgaged Property
which secured a Contract (which has not been repurchased pursuant to Section
3.05) and which has been acquired in realizing upon such Contract, the
Repurchase Obligation, and the proceeds of the Hazard Insurance Policies.
UCC: The Uniform Commercial Code, as in effect in the relevant
---
jurisdiction.
United States Person: A citizen or resident of the United States, a
--------------------
corporation, partnership or other entity created or organized in, or under the
laws of, the United States, any state thereof or the District of Columbia (other
than a partnership not treated as a United States person under any applicable
Treasury Regulations), or an estate or trust whose income is subject to United
States federal income tax regardless of the source of income.
Voting Rights: The portion of the voting rights of all of the Certificates
-------------
that is allocated to any Certificate. As of any date of determination, [98]% of
the Voting Rights shall be allocated among Holders of the Regular Certificates
[(other than the Class A-IO Certificates)] in proportion to the Certificate
Balances of their respective Certificates on such date, [1% of the Voting Rights
shall be allocated among Holders of the Class A-IO Certificates in proportion to
the Class A-IO Notional Principal Amount of their respective Certificates on
such date,] and [1]% of the Voting Rights shall be allocated among Holders of
the Class R Certificates, in each case allocated among the Certificates of each
such Class in accordance with their respective Percentage Interests.
-25-
<PAGE>
Section 1.02. Construction.
------------
Unless the context of this Agreement otherwise clearly requires, references
to the plural include the singular, the singular the plural and the part the
whole and "or" has the inclusive meaning sometimes represented by the phrase
"and/or." The words "include" or "including" shall be deemed followed by the
phrase "without limitation." The words "hereof," "herein," "hereunder" and
similar terms in this Agreement refer to the Agreement as a whole and not to any
particular provision of this Agreement. The Section and other headings contained
in this Agreement are for reference purposes only and shall not control or
affect the construction of this Agreement or the interpretation thereof in any
respect. Section, subsection, Schedule, Appendix and Exhibit references are to
this Agreement unless otherwise specified. The date as of which this Agreement
is dated has been assigned solely for purposes of identification, and does not
signify the date as of which assets are transferred, securities are issued, or
any other actions are taken hereunder, and the parties specifically acknowledge
and agree that the conveyance of the Contracts pursuant to Section 2.01 and the
delivery of the Certificates pursuant to Section 2.07 have occurred on and are
effective as of the Closing Date.
-26-
<PAGE>
ARTICLE II
CONVEYANCE OF CONTRACTS; REPRESENTATIONS AND WARRANTIES
Section 2.01. Conveyance of Contracts.
-----------------------
(a) The Contract Seller, concurrently with the execution and delivery
hereof, does hereby transfer, sell, assign, set over and otherwise convey to the
Trustee without recourse (i) all of the right, title and interest of the
Contract Seller in and to the Contracts listed in the Contract Schedule, as
amended from time to time, (including the security interests created thereby),
including all principal of and interest due on or with respect to the Contracts
on or after the Cut-Off Date (other than payments of principal and interest due
on the Contracts before the Cut-Off Date), (ii) all of the rights under all
Hazard Insurance Policies relating to the Manufactured Homes securing the
Contracts for the benefit of the creditors under such Contracts, (iii) all
documents contained in the Contract Files and in the Land Home Contract Files,
and (iv) all proceeds of any of the foregoing.
The ownership of each Contract and the contents of the related Contract
File or Land Home Contract File, as applicable, and Servicing File are vested in
the Trustee. The Servicer hereby disclaims any and all right, title and other
ownership interest in and to the Contracts (including the security interests
created thereby). The contents of each Contract File and, except as provided in
Section 4.16(e), the contents of each Land Home Contract File, as applicable,
and Servicing File are and shall be held by the Servicer for the benefit of the
Trustee as the owner thereof (it being understood that the Servicer's possession
of the contents of each Contract File or Land Home Contract File, as applicable,
and Servicing File so retained is for the sole purpose of servicing the related
Contract, and such retention and possession by the Servicer is in a custodial
capacity only). Neither the Contract Seller nor the Servicer shall take any
action inconsistent with the Trustee's ownership of the Contracts, and the
Contract Seller and the Servicer shall promptly indicate to all inquiring
parties that the Contracts have been sold, transferred, assigned, set over and
conveyed to the Trustee and shall not claim any ownership interest in the
Contracts.
(b) Although the parties intend that the conveyance of the Contract
Seller's right, title and interest in and to the Contracts pursuant to this
Agreement shall constitute a purchase and sale and not a loan, if such
conveyances are deemed to be a loan, the parties intend that the rights and
obligations of the parties to such loan shall be established pursuant to the
terms of this Agreement. The parties also intend and agree that the Contract
Seller shall be deemed to have granted to the Trustee, and the Contract Seller
does hereby grant to the Trustee, a perfected first-priority security interest
in (i) all of its right, title and interest, whether now owned or hereafter
acquired, in and to the Contracts listed in the Contract Schedule, as amended
from time to time (including the security interests created thereby), including
all principal of and interest due on or with respect to the Contracts on or
after the Cut-Off Date (other than payments of principal and interest due on the
Contracts before the Cut-Off Date), (ii) all of the rights under all Hazard
Insurance Policies relating to the Manufactured Homes securing the Contracts for
the benefit of the creditors under such Contracts, (iii) all documents contained
in the Contract Files and in the
-27-
<PAGE>
Land Home Contract Files, and (iv) all proceeds of any of the foregoing. The
parties intend and agree 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, 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. Filing and Assignment; Name Change or Relocation.
------------------------------------------------
(a) On or prior to the Closing Date, the Servicer shall cause to be filed
in the office of the Secretary of State of California for all Contracts sold by
the Contract Seller hereunder, a UCC-1 financing statement signed by the
Contract Seller describing the related Contracts as collateral and naming the
Contract Seller as debtor and the Trustee as secured party.
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' interests in the Contracts and their proceeds and the
Manufactured Homes and the Mortgaged Properties against all other Persons,
including 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;
provided, however, that GreenPoint, so long as it is the Servicer, shall not be
- -------- -------
required to cause notations to be made on any document of title relating to any
Manufactured Home or to execute any transfer instrument relating to any
Manufactured Home (other than a notation or a transfer instrument necessary to
show the Contract Seller as the lienholder or legal title holder) or, except as
provided in Section 4.22, to file documents in real property records with
respect to a Manufactured Home or related Contract, absent notice from the
Trustee or the Contract Seller or actual knowledge that such Manufactured Home
that does not secure a Land Home Contract has become real property under
applicable state law; and further provided, that the Servicer shall have no
------- --------
obligation pursuant to this sentence with respect to any failure to maintain a
first-priority perfected security interest which results from a breach of any
representation or warranty in Section 3.02(j) or (u) as to the Trustee's
security interest in a Manufactured Home, except to enforce the Contract
Seller's obligations in respect thereof in Section 3.05. The Trustee and the
Contract Seller agree to take whatever action is necessary to enable the
Servicer to fulfill its obligations as set forth in this Section 2.02(a).
(b) The Servicer agrees to pay all reasonable costs and disbursements in
connection with its duties specified in this Section 2.02.
Section 2.033. Delivery of the Limited Guaranty.
--------------------------------
On or prior to the Closing Date, the Contract Seller shall cause to be
delivered to the Servicer and the Trustee the Limited Guaranty, validly executed
by the Guarantor.
-28-
<PAGE>
Section 2.04. Acceptance by Trustee.
---------------------
The Trustee hereby acknowledges conveyance of the Contracts to the Trustee
and declares that the Trustee, directly or through a custodian (which shall be
the Servicer pursuant to Section 4.16, except as provided under Section
4.16(e)), holds and will hold such Contract Files in trust for the use and
benefit of all present and future Certificateholders. The Trustee hereby
certifies (without any independent investigation) that it has no notice or
knowledge of (i) any adverse claim, lien or encumbrance with respect to any
Contract, (ii) any Contract being overdue or dishonored, (iii) any evidence on
the face of any Contract of any security interest therein adverse to the
Trustee's interest, or (iv) any defense against or claim against any Contract by
the Obligor or by any other party. Nothing in this Agreement shall be construed
to constitute acceptance by the Trustee or the Trust Fund of any liability or
obligation of the Contract Seller, whether on any Contract, to any Obligor, or
otherwise.
Section 2.04. Certificate Ratings.
-------------------
On the Closing Date, the Trustee shall authenticate and deliver the
Certificates upon instructions from the Contract Seller pursuant to Section 2.07
and the following documents:
(a) A letter from each Rating Agency confirming that the Class [A-1, Class
A-IO,] Class M, Class B-1 and Class B-2 Certificates have been assigned the
rating of ["P-1", "Aaa", "Aa3," "Baa2", and "Ba2", respectively (in the case of
Moody's) and "F-1+", "AAA", "AA-", "BBB" and "BB", respectively (in the case of
Fitch)], and
(b) An Officer's Certificate from the Servicer to the effect that the
Servicer has deposited in the Certificate Account $[ ], which is all amounts
received on the Contracts from and including the Cut-Off Date up to and
including [_].
Notwithstanding anything in this Agreement to the contrary, the Servicer
shall deposit into the Certificate Account all amounts in respect of the
Contracts received on or after [ ] or otherwise required to be deposited
in the Certificate Account by other provisions of this Agreement pursuant to
Section 4.05.
Section 2.05. Representations and Warranties Regarding the Servicer.
-----------------------------------------------------
The Servicer makes the following representations and warranties to the
Trustee and the Certificateholders:
(a) Organization and Good Standing. The Servicer is a federal savings
------------------------------
bank, duly organized, validly existing and in good standing under the laws of
the United States, and the Servicer has the corporate power to own its assets
and to transact the respective business in which it is currently engaged. The
Servicer is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which its type of organization and 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 its business, properties, assets, or condition
(financial or other).
-29-
<PAGE>
(b) Authorization; Binding Obligations. The Servicer has the power and
----------------------------------
authority to make, execute, deliver and perform this Agreement and all of the
transactions contemplated under the Agreement, and has taken all necessary
corporate action to authorize the execution, delivery and performance of this
Agreement. When executed and delivered, this Agreement will constitute the
legal, valid and binding obligation of the Servicer 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 Servicer 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, except such as have been obtained or where the
failure to obtain any such consent, license, approval or authorization, or to
make any registration or declaration does not materially adversely affect the
interests of the Trust Fund or the interests of the Certificateholders therein.
(d) No Violations. The execution, delivery and performance of this
-------------
Agreement by the Servicer will not violate any provision of any existing
law or regulation or any order or decree of any court applicable to the Servicer
or the charter or bylaws of the Servicer, or constitute a material breach of any
mortgage, indenture, contract or other agreement to which the Servicer is a
party or by which the Servicer may be bound except where such violation or
breach does not materially adversely affect the interests of the Trust Fund or
the interests of the Certificateholders therein.
(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 Servicer, threatened, against the Servicer or any of its
properties or with respect to this Agreement or the Certificates which, if
adversely determined, would in the opinion of the Servicer have a material
adverse effect on the transactions contemplated by this Agreement.
Within 60 days of the earlier of discovery by the Servicer or receipt
of notice by the Servicer of the breach of any representation, warranty or
covenant of the Servicer set forth in this Section 2.05 which materially and
adversely affects the interests of the Certificateholders in any Contract, the
Servicer shall cure such breach in all material respects.
Section 2.06. Covenants of the Contract Seller, Trustee and Servicer.
------------------------------------------------------
Upon discovery by any of the Contract Seller, the Servicer or the Trustee
of a breach of any of the representations, warranties and covenants set forth in
Article III hereof which materially and adversely affects the value of the
Contracts or the interests of the Certificateholders in the Contracts (or which
materially and adversely affects the value of or the interest of the
Certificateholders in the related Contract in the case of a representation,
warranty or covenant set forth in Article III hereof and relating to a
particular Contract), the party discovering such breach shall give prompt
written notice to the other parties. The cure of such
-30-
<PAGE>
breach or the repurchase or substitution for any affected Contract shall be done
in accordance with Section 3.05.
Section 2.07. Authentication and Delivery of Certificates.
-------------------------------------------
The Trustee acknowledges the transfer and assignment to it of the
Trust Fund and, concurrently with such transfer and assignment, has executed,
authenticated and delivered to or upon the order of the Contract Seller, the
Certificates in authorized denominations evidencing the entire ownership of the
Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the rights
referred to above for the benefit of all present and future Holders of the
Certificates.
Section 2.08. Covenants of the Servicer.
-------------------------
The Servicer hereby covenants to the Contract Seller and the Trustee
that no written information, certificate of an officer, statement furnished in
writing or written report delivered to the Contract Seller, any Affiliate of the
Contract Seller or the Trustee and prepared by the Servicer pursuant to this
Agreement will contain any untrue statement of a material fact or omit to state
a material fact necessary to make the information, certificate, statement or
report not misleading.
-31-
<PAGE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES BY THE CONTRACT SELLER
Section 3.01. Representations and Warranties of the Contract Seller.
-----------------------------------------------------
The Contract Seller makes the following representations and
warranties to the Trustee:
(a) Organization and Good Standing; Licensing. It is a federal savings
-----------------------------------------
bank, duly organized, validly existing and in good standing under the laws of
the United States, and it has the corporate power to own its assets and to
transact the business in which it is currently engaged. It is duly qualified to
do business as a foreign corporation and is in good standing in each
jurisdiction in which its type of organization and 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
Contract Seller. It was properly licensed in each jurisdiction at the time of
purchase or origination of each Contract originated or purchased on an
individual basis by it in such jurisdiction to the extent required by the laws
of such jurisdiction as applied to the purchase or origination and servicing of
such Contract, except where the failure to be so licensed does not materially
adversely affect the interests of the Trust Fund or the Certificateholders in
and to such Contract.
(b) Authorization; Binding Obligations. It has the power and authority
----------------------------------
to make, execute, deliver and perform this Agreement and all of the transactions
contemplated under this Agreement, and has taken all necessary corporate action
to authorize the execution, delivery and performance of this Agreement. When
executed and delivered, this Agreement will constitute the legal, valid and
binding obligation of the Contract 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. It 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, except such as have been obtained or where the
failure to obtain any such consent, license, approval or authorization, or to
make any registration or declaration does not materially adversely affect the
interests of the Trust Fund or the interests of the Certificateholders therein.
(d) No Violations. The execution, delivery and performance of this
-------------
Agreement by the Contract Seller will not violate any provision of any existing
law or regulation or any order or decree of any court applicable to the Contract
Seller or the charter or bylaws of the Contract Seller, or constitute a material
breach of any mortgage, indenture, contract or other agreement to which the
Contract Seller is a party or by which the Contract Seller may be bound except
where
-32-
<PAGE>
such violation or breach does not materially adversely affect the interests of
the Trust Fund or the interests of the Certificateholders therein.
(e) Litigation. No litigation or administrative proceeding of or before
----------
any court, tribunal or governmental body is currently pending or, to its
knowledge, threatened, against it or any of its properties or with respect to
this Agreement or the Certificates which, if adversely determined, would in the
opinion of the Contract Seller have a material adverse effect on the
transactions contemplated by this Agreement.
(f) Chief Executive Office. As of the Closing Date, its chief executive
----------------------
office is in New York.
(g) Name Change or Relocation. During the term of this Agreement,
-------------------------
it will not change its name, identity or structure or relocate its chief
executive office without first giving written notice to the Trustee. If any
change in the Contract Seller'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, the Contract
Seller, no later than five days after the effective date of such change, shall
file such amendments as may be required to preserve and protect the
Certificateholders' interests in the Contracts and proceeds thereof and in the
Manufactured Homes and the Mortgaged Properties.
Section 3.02. Representations and Warranties Regarding Each Contract.
------------------------------------------------------
The Contracts listed on the Contract Schedule have been sold by the
Contract Seller to the Trust Fund on the date of execution and delivery hereof.
As a condition of the purchase by the Trust Fund, the Contract Seller represents
and warrants to the Trustee as to each Contract sold by it to the Trust Fund as
of the Closing Date (except as otherwise expressly stated):
(a) Payments. As of the Cut-Off Date, no Contract was more than 59 days
--------
delinquent.
(b) 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 the Land Home Contract File, as applicable.
(c) 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 and by general principles of equity.
(d) 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
-33-
<PAGE>
the defense of usury, and no such right of rescission, setoff, counterclaim or
defense has been asserted with respect thereto.
(e) Insurance. The Manufactured Home securing the Contract is covered
---------
by a Hazard Insurance Policy in the amount required by Section 4.09. All
premiums due as of the Closing Date on such insurance have been paid in full to
the applicable providers of such insurance.
(f) Origination. To the knowledge of the Contract Seller, the
-----------
Contract was either (i) originated by a manufactured housing dealer acting in
the regular course of its business, and purchased on an individual basis by
GreenPoint or (ii) originated by GreenPoint in the ordinary course of its
business.
(g) 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
such Contract from the Contract Seller to the Trust Fund under this Agreement
unlawful.
(h) Compliance with Law. All requirements of any federal, state or local
-------------------
law, including usury, truth-in-lending and equal credit opportunity laws and
lender licensing laws, applicable to the Contract have been complied with.
(i) Contract in Force. The Contract has not been satisfied or
-----------------
subordinated in whole or in part or rescinded, the Manufactured Home securing
the Contract has not been released from the lien of the Contract in whole or in
part and, in the case of a Land Home Contract, the related Mortgaged Property
has not been released from the related Mortgage.
(j) Valid Security Interest. The Contract, other than any Land Home
-----------------------
Contract, creates a valid, subsisting and enforceable first-priority security
interest in favor of GreenPoint as secured lender, or agent thereof, in the
Manufactured Home covered thereby; such security interest has been assigned by
the Contract Seller as secured lender to the Trustee in accordance with the
terms herein and; the Trustee has a valid and perfected first-priority security
interest in such Manufactured Home. Each Mortgage is a valid first lien in favor
of GreenPoint on real property securing the amount owed by the Obligor under the
related Land 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
Mortgage is located or specifically reflected in the appraisal obtained in
connection with the origination of the related Land Home Contract obtained by
GreenPoint 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 applicable Contract Seller has assigned all of
its right, title and interest in such Land 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 Home Contract.
-34-
<PAGE>
(k) Capacity of Parties. All parties to the Contract had capacity to
-------------------
execute the Contract.
(l) Good Title. It purchased the Contract for value and took possession
----------
thereof, without knowledge that the Contract was subject to any security
interest. It has not sold, assigned or pledged the Contract to any Person other
than the Trust Fund, and prior to the transfer of the Contract by the Contract
Seller to the Trust Fund, it had good and marketable title thereto free and
clear of any encumbrance, equity, loan, pledge, charge, claim or security
interest and was the sole owner thereof with full right to transfer the Contract
to the Trust Fund.
(m) No Defaults. As of the Cut-Off Date, there was no default, breach,
-----------
violation or event permitting acceleration existing under the Contract and to
its knowledge, 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 (a) above). The Contract Seller has not waived any such
default, breach, violation or event permitting acceleration.
(n) No Liens. As of the Closing Date, there are, to its 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.
(o) Equal Installments. The Contract has a fixed Contract Rate and
------------------
provides for level monthly payments of principal and interest which fully
amortize the loan over its term. The scheduled monthly payment allocable to
interest on the Contract is calculated on the basis that each scheduled monthly
payment is applied on its Due Date, regardless of when it is actually made.
(p) Enforceability. The Contract contains customary and enforceable
--------------
provisions such as to render the rights and remedies of the holder thereof
adequate for the realization against the collateral of the benefits of the
security.
(q) Contract Schedule. The information set forth in Exhibit A
----------------- ---------
is true and correct.
(r) One Original. There is only one original executed Contract. Such
------------
original Contract is in the custody of the Servicer on the Closing Date.
(s) Loan-to-Value Ratio. At the time of its origination, such Contract
-------------------
had a Loan-to-Value Ratio (rounded to the nearest 1%) not greater than [ ]%.
(t) Not Real Estate. With respect to each Contract other than a
---------------
Land Home Contract, the related Manufactured Home is personal property and 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 was personal
property and was not considered or classified as part of the real estate on
which it was located under the laws of the jurisdiction in which it was located
at the time the related Contract was executed by the parties thereto, and with
respect to each Contract including Land
-35-
<PAGE>
Home Contracts the related Manufactured Home is, to the Contract Seller's
knowledge, free of damage (including earthquake or hurricane damage) and in good
repair.
(u) Notation of Security Interest. With respect to each Contract other
-----------------------------
than a Land 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 Contract 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 or the making of a fixture filing
under the UCC is required to perfect a security interest in manufactured
housing, such filings have been duly made and show the Contract Seller as the
secured party. If the related Manufactured Home secures a Land 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 Contract
Seller as mortgagee. In 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 Contract Seller and any
trustee in bankruptcy of the applicable Contract Seller) claiming an interest in
such Manufactured Home. Assuming consummation of the transactions contemplated
herein 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
claiming an interest in such Manufactured Home and, if applicable, such
Mortgaged Property.
(v) Secondary Mortgage Market Enhancement Act. The related Manufactured
-----------------------------------------
Home is a "manufactured home" within the meaning of 42 United States Code,
Section 5402(6); GreenPoint was a federally-chartered savings bank, as of the
time of each Contract's origination or purchase by the Contract Seller as
required under Section 3(a)(41)(A)(ii) of the Securities Exchange Act of 1934,
as amended.
(w) Qualified Mortgage for REMIC. Each Contract is secured by a
----------------------------
"single family residence" within the meaning of Section 25(e)(10) of the Code.
The fair market value of the Manufactured Home securing each Contract was at
least equal to 80% of the adjusted issue price of the Contract at either (i) the
time the Contract was originated (determined pursuant to the REMIC Provisions)
or (ii) the time the Contract is transferred to the Trust Fund. Each Contract
is a "qualified mortgage" under Section 860G(a)(3) of the Code.
(x) Stamping of Contracts. Within 90 days of the Closing Date, each
---------------------
original Contract will have been stamped with the following legend: "This
Contract has been assigned to [ ], as Trustee under the
Pooling and Servicing Agreement dated as of [ ] (between
such Trustee and GreenPoint) or to any successor Trustee thereunder."
(y) Actuarial Contracts. Each Contract is an actuarial manufactured
-------------------
housing installment loan agreement or a manufactured housing installment sales
contract.
-36-
<PAGE>
(z) Land Home Contracts. No Contract other than a Land Home Contract is
-------------------
secured, or intended to be secured, in whole or in part by the lien of a
mortgage or deed of trust creating a first lien or an estate in fee simple in
the real property.
(aa) Financing of Real Property. No Contract other than a Land Home
--------------------------
Contract has financed any amount in respect of real property.
(bb) Minimum and Maximum Contract Rate. The Contract with the lowest
---------------------------------
Contract Rate has a Contract Rate of [ ]% and the Contract with the highest
Contract Rate has a Contract Rate of [ ]%.
Section 3.03. Representations and Warranties Regarding the Contracts in the
-------------------------------------------------------------
Aggregate.
- ---------
The Contract Seller represents and warrants that:
(a) Amounts. The aggregate principal amounts payable by Obligors under
-------
the Contracts as of the Cut-Off Date (including scheduled principal payments due
on or after the Cut-Off Date but paid prior to the Cut-Off Date) equal or exceed
the Cut-Off Date Pool Principal Balance. The percentage (by outstanding
principal balance as of the Cut-Off Date) of the Contracts having a Net Contract
Rate that is less than the Cap Rate on the Class [ ] Certificates is
approximately [ ]% the percentage (by outstanding principal balance as of the
Cut-Off Date) of the Contracts having a Net Contract Rate that is less than the
Cap Rate on the Class M Certificates is approximately [ ]%, the percentage (by
outstanding principal balance as of the Cut-Off Date) of the Contracts having a
Net Contract Rate that is less than the Cap Rate on the Class B-1 Certificates
is approximately [ ]%, and the percentage (by outstanding principal balance as
of the Cut-Off Date) of the Contracts having a Net Contract Rate that is less
than the Cap Rate on the Class B-2 Certificates is approximately [ ]%.
(b) Characteristics. The Contracts have the following characteristics
---------------
as of the Cut-Off Date: (i) Contracts representing approximately
[ ]% of the Contracts by remaining principal balance are attributable to
loans for purchases of new Manufactured Homes, and approximately [ ]% thereof
is attributable to loans for purchases of used Manufactured Homes; (ii) not more
than approximately [ ]% of the Contracts by remaining principal balance as of
the Cut-Off Date are secured by Manufactured Homes located in any one state, not
more than [ ]% of the Contracts by remaining principal balance are secured by
Manufactured Homes located in an area with the same zip code, not more than [
]% of the Contracts by remaining principal balance are secured by Manufactured
Homes located in the same manufactured housing park, (iii) no Contract has a
remaining maturity of more than [ ] months; (iv) no Contract was originated
before [ ]; and (v) the final scheduled payment date on the Contract with the
latest maturity is in [ ].
(c) Computer Tape. The Computer Tape made available by the Servicer
-------------
as of the close of business on [ ] was accurate as of its date and includes a
description of the same Contracts that are described in the Contract Schedule.
-37-
<PAGE>
(d) Marking Records. Within seven (7) days following the
---------------
Closing Date, the Contract Seller will have caused the portions of the
electronic master record of its manufactured housing installment sales contracts
and installment loan agreements relating to the Contracts sold by it as of the
Closing Date to be clearly and unambiguously marked to indicate that such
Contracts constitute part of the Trust Fund and are owned by the Trust Fund in
accordance with the terms of the trust created hereunder.
(e) No Adverse Selection. Except to ensure compliance with the
--------------------
representations and warranties made in Sections 3.02 and 3.03, no selection
procedures have been intentionally employed to achieve an adverse effect in
selecting the Contracts.
Section 3.04. Representations and Warranties Regarding the Contracts.
------------------------------------------------------
The Contract Seller represents and warrants that:
(a) Possession. Immediately prior to the Closing Date, the
----------
Servicer will have possession of each original Contract and the related Contract
File or Land Home Contract File, as applicable (except for any certificate of
title that has not yet been returned from the appropriate public recording
office). There are and there will be no custodial agreements in effect
materially and adversely affecting the right of the Contract Seller to make, or
to cause to be made, any delivery required hereunder.
(b) Bulk Transfer Laws. The transfer, assignment and conveyance
------------------
of the Contracts, the Contract Files and the Land Home Contract Files by the
Contract Seller to the Trust Fund as contemplated by this Agreement are not
subject to the bulk transfer or any similar statutory provisions in effect in
any applicable jurisdiction.
Section 3.05. Repurchases of Contracts or Substitution of Contracts for Breach
----------------------------------------------------------------
of Representations and Warranties.
---------------------------------
(a) The Contract Seller shall either (i) repurchase a Contract
sold by it to the Trust Fund at such Contract's Repurchase Price, or (ii) if the
Contract Seller is able to satisfy the conditions of Section 3.05(b), remove
such Contract from the Trust Fund and substitute therefor an Eligible Substitute
Contract in accordance with and subject to the limitations of Section 3.05(b),
in each case within 90 days after the Contract Seller becomes aware, or receives
written notice from the Servicer or the Trustee, of a breach of a representation
or warranty of the Contract Seller set forth in Section 3.02 or 3.03 of this
Agreement that materially adversely affects the Trust Fund's interest in such
Contract, unless such breach has been cured; provided, however, that with
-------- -------
respect to any Contract incorrectly described on the Contract Schedule with
respect to remaining principal balance, which the Contract Seller would
otherwise be required to repurchase pursuant to this Section 3.05, the Contract
Seller may, in lieu of repurchasing such Contract, deposit in the Certificate
Account not later than one Business Day after such Determination Date cash in an
amount sufficient to cure such deficiency or discrepancy; and further provided,
------- --------
that with respect to a breach of a representation or warranty relating to the
Contracts in the aggregate and not to any particular Contract, the Contract
Seller may select
-38-
<PAGE>
Contracts to repurchase or substitute for such that, had such Contracts not been
included as part of the Contract Pool and after giving effect to such
substitution, if any, there would have been no breach of such representation or
warranty; and further provided, that in connection with any Contract that the
------- --------
Contract Seller is required to repurchase, the Contract Seller shall at its own
expense deliver to the Trustee an opinion of counsel to the effect that the
repurchase of such Contract will not cause the Trust Fund to fail to qualify as
a REMIC at any time any Certificate is outstanding under then applicable REMIC
Provisions, be deemed a contribution to the Trust Fund after the Startup Day or
cause any "prohibited transaction," in each case, that will result in the
imposition of a tax under the applicable REMIC Provisions. It is understood and
agreed that the obligation of the Contract Seller to repurchase or substitute
for any Contract sold by it as to which a breach of a representation or warranty
set forth in Section 3.02 or 3.03 of this Agreement has occurred and is
continuing shall constitute the sole remedy respecting such breach available to
the Certificateholders, the Trust Fund or the Trustee; provided, however, that
-------
the Contract Seller shall defend and indemnify the Trustee, the Certificate
Administrator, the Trust Fund 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 suffered by any of them as
a result of third-party claims arising out of any breach of a representation or
warranty set forth in Section 3.02(c), (d), (g), (h) or (w) of this Agreement.
Notwithstanding any other provision of this Agreement, the obligation of the
Contract Seller under this Section 3.05 shall not terminate upon an Event of
Default.
Notwithstanding any other provision of this Agreement to the contrary,
any amount received on or recovered with respect to repurchased Contracts or
Replaced Contracts during or after the month of repurchase shall be the property
of the Contract Seller and need not be deposited in the Certificate Account.
Notwithstanding the foregoing, the Contract Seller shall not deposit
cash into the Certificate Account pursuant to this Section 3.05 after the three-
month period beginning on the Closing Date unless it shall first have obtained
an Opinion of Counsel to the effect that such deposit will not give rise to any
tax under Section 86OF(a) (1) of the Code or Section 86OG(d) of the Code. Any
such deposit shall not be invested.
The Trustee shall have no obligation to pay any taxes pursuant to this
Section 3.05, other than from moneys provided to it by the Contract Seller or
from moneys held therefor pursuant to Section 4.17. The Trustee shall be deemed
conclusively to have complied with this Section 3.05 if it follows the
directions of the Servicer required to be provided in the preceding paragraph.
Upon the repurchase of any Contract by the Contract Seller, the Trustee shall
delete such Contract from the Contract Schedule.
For reasons of administrative convenience in servicing of the
Contracts, notwithstanding the above provisions of this Section 3.05(a), the
Contract Seller shall not be required to repurchase or substitute for any
Contract relating to a Manufactured Home located in any jurisdiction on account
of a breach of the representation or warranty contained in Section 3.02(j) or
(u) of this Agreement solely on the basis of failure by the Contract Seller to
cause notations to be made on any document of title relating to any such
Manufactured Home or to
-39-
<PAGE>
execute any transfer instrument (including any UCC-3 assignments) relating to
any such Manufactured Home (other than a notation or a transfer instrument
necessary to show the Contract Seller as lienholder or legal title holder)
unless (i) a court of competent jurisdiction has adjudged that, because of such
failure, the Trustee does not have a perfected first-priority security interest
in such related Manufactured Home, or (ii) (A) the Servicer has received written
advice of counsel to the effect that a court of competent jurisdiction has held
that, solely because of a substantially similar failure on the part of a pledgor
or assignor of manufactured housing contracts (who has perfected the assignment
or pledge of such contracts), a perfected first-priority security interest was
not created in favor of the pledgee or assignee (as the case may be) in a
related manufactured home which is located in such jurisdiction and which is
subject to the same laws regarding the perfection of security interests therein
as apply to Manufactured Homes located in such jurisdiction, and (B) the
Servicer shall not have completed all appropriate remedial action with respect
to such Manufactured Home within 90 days after receipt of such written advice.
Any such advice shall be from counsel selected by the Servicer on a
nondiscriminatory basis from among the counsel used by the Servicer in its
general business in the jurisdiction in question. The Servicer shall have no
obligation on an ongoing basis to seek any advice with respect to the matters
described in clause (ii) above. However, the Servicer shall seek advice with
respect to such matters whenever information comes to the attention of its
general counsel which causes such general counsel to determine that a holding of
the type described in clause (ii)(A) might exist. If any counsel selected by the
Servicer informs the Servicer that no holding of the type described in clause
(ii)(A) exists, such advice shall be conclusive and binding on the parties with
respect to the applicable date and jurisdiction.
(b) On or prior to the date that is the second anniversary of the Closing
Date, the Contract Seller, at its election, may substitute a Contract for any
Contract that it is otherwise obligated to repurchase pursuant to Section
3.05(a) (such Contract being referred to as the "Replaced Contract") upon
satisfaction of the following conditions:
(i) the Contract to be substituted for the Replaced Contract is an
Eligible Substitute Contract and the Contract Seller delivers an Officer's
Certificate, substantially in the form of Exhibit E, to the Trustee
---------
certifying that such Contract is an Eligible Substitute Contract,
describing in reasonable detail how such Contract satisfies the definition
of the term "Eligible Substitute Contract" (as to satisfaction of
representations and warranties, such description shall be that such
Contract satisfies such representations and warranties) and certifying that
the Contract File or the Land Home Contract File, as applicable, for such
Contract is in the possession of the Servicer;
(ii) the Contract Seller shall have delivered to the Trustee evidence
of filing with the appropriate office in California of a UCC-1 financing
statement executed by the Contract Seller as debtor and naming the Trustee
as secured party and listing such Contract as collateral;
(iii) the Contract Seller shall have delivered to the Trustee an
Opinion of Counsel (a) to the effect that the substitution of such Contract
for such Replaced Contract will not cause the Trust Fund to fail to qualify
as a REMIC at any time any Certificate is
-40-
<PAGE>
outstanding under then applicable REMIC Provisions, be deemed a
contribution to the Trust Fund after the Startup Day or cause any
"prohibited transaction," in each case, that will result in the imposition
of a tax under the applicable REMIC Provisions, and (b) to the effect that,
except as to Contracts that are Land Home Contracts, no filing or other
action other than the filing of financing statements on Form UCC-1 with the
Secretary of State of the State of California, naming the Contract Seller
as debtor and the Trustee as secured party as required by Section 3.05(a)
of this Agreement and the filing of continuation statements as required by
Section 2.02(a) is necessary to perfect as against third parties the
conveyance of the substitute Contract by the Contract Seller to the
Trustee; and
(iv) if the Scheduled Principal Balance of such Replaced Contract is
greater than the Scheduled Principal Balance of such Contract, the Contract
Seller shall have deposited in the Certificate Account the amount of such
excess (which amount shall be deemed a Principal Prepayment on such
Contract) and shall have included in the Officer's Certificate required by
clause (i) above a certification that such deposit has been made.
Upon satisfaction of such conditions, the Trustee shall add such
Contract to, and delete such Replaced Contract from, the Contract Schedule (or
cause such addition and deletion to be accomplished). Such substitution shall
be effected prior to the first Determination Date that occurs more than 90 days
after the Contract Seller becomes aware or receives written notice from the
Servicer or the Trustee, of the breach referred to in Section 3.05(a).
(c) Promptly after the repurchase referred to in Section 3.05(a) or the
substitution referred to in Section 3.05(b), the Trustee shall execute such
documents as are presented to it by the Contract Seller and are reasonably
necessary to reconvey the repurchased Contract or Replaced Contract, as the case
may be, to the Contract Seller.
(d) Notwithstanding anything in this Section 3.05 to the contrary, in the
event any Opinion of Counsel referred to in this Section 3.05 indicates that a
repurchase or substitution, as the case may be, of a Contract will result in the
imposition of a tax under the applicable REMIC Provisions with respect to
"prohibited transactions," or deemed a contribution to the REMIC after the
"start-up day," the Contract Seller shall not be required to repurchase or
substitute the Contract to which such Opinion of Counsel relates unless and
until the Servicer has determined there is an actual or imminent default with
respect thereto or that the defect or breach giving rise to the repurchase or
substitution obligation adversely affects the enforceability of such Contract.
Section 3.06. General.
-------
(a) It is understood and agreed that the representations and warranties in
this Article III hereof shall remain operative and in full force and effect,
shall survive the transfer and conveyance of the Contracts by the Contract
Seller to the Trustee and shall inure to the benefit of the Trustee.
-41-
<PAGE>
(b) Any cause of action against the Contract Seller relating to
or arising out of the breach of any of its respective representations and
warranties made in this Article III shall accrue as to any Contract upon (i)
discovery of such breach by the Contract Seller or notice thereof by the Trustee
or Servicer to the Contract Seller, (ii) failure by the Contract Seller to cure
such breach, and (iii) demand upon the Contract Seller by the Trustee for all
amounts payable in respect of such Contract under this Agreement.
-42-
<PAGE>
ARTICLE IV
ADMINISTRATION AND SERVICING OF CONTRACTS
Section 4.01. Responsibility for Contract Administration and Servicing.
--------------------------------------------------------
GreenPoint hereby agrees to act as Servicer under this Agreement. The
Certificateholders by their acceptance of the Certificates consent to GreenPoint
acting as Servicer. The Servicer shall service and administer the Contracts
and, subject to the terms of this Agreement, shall have full power and authority
to do any and all things which it may deem necessary or desirable in connection
with such servicing and administration. Subject to Section 4.02, without
limiting the generality of the foregoing, the Servicer hereby is authorized and
empowered, when the Servicer believes it appropriate in its best judgment, to
execute and deliver, on behalf of the Certificateholders and the Trust Fund or
any of them, any and all instruments of satisfaction or cancellation, or of
partial or full release or discharge and all other comparable instruments, with
respect to the Contracts, with respect to the Manufactured Homes and with
respect to the Mortgaged Property. The Trustee shall furnish the Servicer with
any powers of attorney and other documents necessary or appropriate to enable
the Servicer to service and administer the Contracts. The relationship of the
Servicer (and of any successor to the Servicer as servicer under this Agreement)
to the Trustee under this Agreement is intended by the parties to be that of an
independent contractor and not that of a joint venturer, partner or agent of the
Trustee.
Section 4.02. Standard of Care.
----------------
In managing, administering, servicing and making collections on the
Contracts pursuant to this Agreement, the Servicer will, consistent with the
terms of this Agreement and applicable law, act with reasonable care, using that
degree of skill and care that it exercises with respect to similar manufactured
housing contracts owned and/or serviced by it, but in no event using a degree of
skill and care that is lower than that used generally in the servicing industry
for such manufactured housing contracts; provided, however, that notwithstanding
-------- -------
the foregoing, the Servicer shall not release or waive the right to collect the
unpaid balance on any Contract except if default or foreclosure on such Contract
has occurred or in the reasonable judgment of the Servicer is imminent and such
waiver or release is in the best interest of the Trust, in the reasonable
judgement of the Servicer. Notwithstanding anything to the contrary contained
in this Agreement, no provision of this Agreement shall be construed so as to
require the Servicer to take any action or fail to take any action in respect of
a Contract which action or failure violates applicable law.
Section 4.03. Records.
-------
The Servicer, during the period it is servicer hereunder, shall
maintain such books of account and other records as will enable the Trustee (if
the Trustee so elects in its discretion) to determine the status of each
Contract. Without limiting the generality of the preceding sentence, the
Servicer shall keep such records in respect of Liquidation Expenses as will
enable the Trustee
-43-
<PAGE>
(if the Trustee so elects in its discretion) to determine that the correct
amount of Net Liquidation Proceeds in respect of a Liquidated Contract has been
deposited in the Certificate Account.
Section 4.04. Inspection.
----------
(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 relating to the Contracts and will
cause its personnel to assist in any examination of such records by the Trustee
or any of its authorized agents. The examination referred to in this Section
4.04 will be conducted in a manner which does not interfere unreasonably with
the Servicer's normal operations or customer or employee relations. Without
otherwise limiting the scope of the examination which the Trustee may make, the
Trustee or its authorized agents, using generally accepted audit procedures, may
in their discretion verify the status of each Contract and review the records
relating thereto for conformity to Monthly Reports prepared pursuant to Article
V 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 Contract Schedule at its principal executive office for
inspection by Certificate Owners.
Section 4.05. Establishment of and Deposits in Certificate Accounts.
-----------------------------------------------------
On or before the Closing Date, the Trustee shall have established, and
thereafter shall maintain, a Certificate Account which is an Eligible Account,
in the form of a segregated trust account titled "GreenPoint Credit Corp.
Manufactured Housing Contract Senior/Subordinate Pass-Through Certificates,
Series 199[]-[], Certificate Account in trust for the Trustee as trustee for the
benefit of the Certificateholders." As of the Closing Date, the Certificate
Account shall be a segregated trust account established at [ ] and shall be
invested in the Trustee's Corporate Trust Short-Term Investment Fund (as long as
such fund is an Eligible Investment) or other similar Eligible Investment
selected by the Trustee. Eligible Investments shall mature or, in the case of a
money market fund, be redeemed not later than the Business Day immediately
preceding the Distribution Date next following the date of such investment
(except that, if such Eligible Investment is an obligation of the institution
that maintains the Certificate Account, then such Eligible Investments shall
mature or, in the case of a money market fund, be redeemed not later than such
Distribution Date), and shall not be sold or disposed of prior to its maturity.
All such Eligible Investments shall be made in the name of the Trustee, as
trustee for the benefit of the Certificateholders. Without limiting the
generality of the foregoing, the Trustee shall select obligations for the
investment of the Certificate Account from among the investments specified in
clauses (a) and (b) of the definition of "Eligible Investments." The Trustee
shall select such Eligible Investments, which shall mature as provided above, in
such manner as to achieve the following objectives in the order stated: (1)
preservation of principal values; and (2) maximization of income.
All net income and gain realized from any such investments, to the
extent provided by this Agreement, shall be added to the Certificate Account.
-44-
<PAGE>
The Servicer shall deposit in the Certificate Account, as promptly as
practicable (but not later than the close of business of the second Business
Day) following receipt thereof:
(1) All amounts received from Obligors with respect to principal of
and interest on the Contracts (including Excess Contract Payments);
(2) All Net Liquidation Proceeds;
(3) All amounts required to be deposited by the Contract Seller
pursuant to Sections 3.05(a) and (b);
(4) All Monthly Advances pursuant to Section 5.01;
(5) Any proceeds of Hazard Insurance Policies pursuant to Section
4.11 and any amounts in respect of indemnification pursuant to Section
7.03;
(6) All amounts required to be withdrawn from an REO Account and
deposited in the Certificate Account in accordance with Section 4.17; and
(7) All Deficiency Amounts.
Section 4.06. Payment of Taxes.
----------------
If the Servicer becomes aware of the nonpayment by an Obligor of a
real or personal property tax or other tax or charge which may result in a lien
upon a Manufactured Home or Mortgaged Property prior to, or equal to or
coordinate with, the lien of the related Contract, the Servicer, consistent with
Section 4.02, shall take action, including the payment of such taxes or charges
to avoid the attachment of any such lien. If the Servicer shall have paid any
such real or personal property tax or other tax or charge directly on behalf of
an Obligor, the Servicer shall seek reimbursement therefor only from the related
Obligor (except as provided in the last sentence of this Section 4.06) and may
separately add such amount to the Obligor's obligation as provided by the
Contract, but, for the purposes of this Agreement, may not add such amount to
the remaining principal balance of the Contract. If the Servicer shall have
repossessed a Manufactured Home or Mortgaged Property on behalf of the
Certificateholders and the Trustee, the Servicer shall pay the amount of any
such tax or charge arising during the time such Manufactured Home is in the
Servicer's possession or title to the Mortgaged Property is in the name of the
Servicer (or any Person acting on behalf of the Servicer), unless the Servicer
is contesting in good faith such tax or charge or the validity of the claimed
lien on such Manufactured Home or Mortgaged Property. If the Obligor does not
reimburse the Servicer for payment of such taxes or charges pursuant to this
Section 4.06 and the related Contract is liquidated after a default, the
Servicer shall be reimbursed for its payment of such taxes or charges out of the
related Liquidation Proceeds.
-45-
<PAGE>
Section 4.07. Enforcement.
-----------
(a) The Servicer, consistent with Section 4.02, shall act with
respect to the Contracts in such manner as will maximize the receipt of
principal and interest on such Contracts.
(b) The Servicer shall sue to enforce or collect upon Contracts
and, where permitted by applicable law, any Deficiency at its own expense, in
its own name, if possible, or as agent for the Contract Owner in its own name,
if possible, or as agent for the Trust Fund. 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 Certificateholders 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. If there has been a recovery of attorneys' fees in favor of
the Servicer or the Trust Fund in an action involving the enforcement of a
Contract, the Servicer shall be reimbursed out of such recovery for its out-of-
pocket attorney's fees and expenses incurred in such enforcement action.
(c) The Servicer shall exercise any rights of recourse against
third persons that exist with respect to any Contract in accordance with Section
4.02. In exercising recourse rights, the Servicer is authorized on the
Trustee's behalf to reassign the Contract or to resell the related Manufactured
Home and, if applicable, the Mortgaged Property, to the Person against whom
recourse exists at the price set forth in the document creating the recourse.
(d) The Servicer may grant to the Obligor on any Contract any
rebate, refund or adjustment out of the Certificate Account that is required
because of an overpayment in connection with the partial prepayment or
prepayment in full of the Contract or otherwise. The Servicer may rescind,
cancel or make material modifications of the terms of any Contract (including
modifying the amounts and due dates of scheduled monthly payments); provided
--------
that, unless required by applicable law or to bring Contracts into conformity
with the representations and warranties contained in Article III, the Servicer
will not permit any rescission or cancellation of any Contract or any material
modification of a Contract other than in connection with a default or an
imminent default on such Contract unless the Servicer obtains an Opinion of
Counsel to the effect that such modification will not cause the Trust Fund to
fail to qualify as a REMIC or result in the imposition of taxes on the Trust
Fund under the REMIC Provisions. Notwithstanding the foregoing, the Servicer
may, without an Opinion of Counsel, make a one-time modification to the Contract
Rate with respect to any Contract by an amount equal to the lesser of (i) 5% of
such Contract Rate and (ii) 0.50%.
Section 4.08. Transfer of Certificate Account.
-------------------------------
The Trustee may transfer the Certificate Account to a different
depository institution from time to time, so long as the Certificate Account
remains an Eligible Account. The Trustee shall
-46-
<PAGE>
give notice of any transfer of the Certificate Account to each Rating Agency
prior to such transfer.
Section 4.09. Maintenance of Hazard Insurance Policies.
----------------------------------------
(a) Except as otherwise provided in subsection (b) of this
Section 4.09, 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 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 of the related Contract, whichever is
less; provided that such Hazard Insurance Policies may provide for customary
--------
deductible amounts, and further provided 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. If a Manufactured Home is located within
a federally designated special flood hazard area, the Servicer shall, to the
extent required by applicable law or regulation, also cause 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. 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 add
separately such premium to the Obligor's obligation as provided by the Contract,
but may not add such premium to the remaining principal balance of the Contract
for purposes of this Agreement. If the Obligor does not reimburse the Servicer
for payment of such premiums and the related Contract is liquidated after a
default, the Servicer shall be reimbursed for its payment of such premiums out
of the related Liquidation Proceeds.
(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 4.09, 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 as provided in subsection (a) of this
Section 4.09 resulting from the absence or insufficiency of individual Hazard
Insurance Policies. Any such blanket policy shall be substantially in the form
that is the industry standard for blanket insurance policies issued to cover
Manufactured Homes and in the amount sufficient to cover all losses on the
Contracts. The Servicer shall pay, out of its own funds, the premium for such
policy on the basis described therein and shall deposit in the Certificate
Account, on the Business Day next preceding the Determination Date following the
Collection Period in which the insurance proceeds from claims in respect of any
Contracts under such blanket policy are or should have been received, the
deductible amount with respect to such claims. 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 4.09.
-47-
<PAGE>
(c) If the Servicer shall have repossessed a Manufactured Home
on behalf of the Trustee, the Servicer shall either (i) maintain at its expense
a Hazard Insurance Policy with respect to such Manufactured Home, except that
the Servicer shall be responsible for depositing any deductible amount with
respect to all claims under individual Hazard Insurance Policies, or (ii)
indemnify the Trust Fund against any damage to such Manufactured Home prior to
resale or other disposition that would have been covered by such Hazard
Insurance Policy.
(d) Any cost incurred by the Servicer in maintaining any of the
foregoing insurance, for the purpose of calculating monthly distributions to
Certificateholders, shall not be added to the amount owing under the Contract,
notwithstanding that the terms of the Contract so permit. The Servicer shall
not be entitled to reimbursement from the Contract Seller, the Trustee or the
Certificateholders for such costs. Such costs (other than the cost of the
blanket policy) shall only be recovered out of later payments by the Obligor for
such premiums or, if the related Contract is liquidated after a default, out of
the related Liquidation Proceeds.
Section 4.10. Fidelity Bond and Errors and Omissions Insurance.
------------------------------------------------
The Servicer shall maintain, at its own expense, a blanket fidelity
bond and an errors and omissions insurance policy, with broad coverage with
responsible companies acceptable to FNMA and FHLMC, on all officers, employees
or other persons acting in any capacity with regard to the Contracts to handle
funds, money, documents and papers relating to the Contracts. Any such fidelity
bond and errors and omissions insurance shall protect and insure the Servicer
against losses, including forgery, theft, embezzlement, fraud, errors and
omissions and negligent acts of such persons. No provision of this Section 4.10
requiring such fidelity bond and errors and omissions insurance shall diminish
or relieve the Servicer from its duties and obligations as set forth in this
Agreement. The minimum coverage under any such bond and insurance policy shall
be in an amount as is customary for servicers that service a portfolio of
manufactured housing installment sales contracts of $100 million or more and
that are generally acceptable as servicers to institutional investors. On or
before April 1 of every year, the Servicer shall cause to be delivered to the
Trustee a certified true copy of such fidelity bond and insurance policy and a
statement from the surety and the insurer that such fidelity bond or insurance
policy shall in no event be terminated or materially modified without 30 days'
prior written notice to the Trustee.
Section 4.11. Collections under Hazard Insurance Policies; Consent to Transfers
-----------------------------------------------------------------
of Manufactured Homes; Assumption Agreements.
--------------------------------------------
(a) In connection with its activities as administrator and
servicer of the Contracts, the Servicer agrees to present, on behalf of itself,
the Trustee and the Certificateholders, claims to the insurer under any Hazard
Insurance Policies and, in this regard, to take such reasonable action as shall
be necessary to permit recovery under any Hazard Insurance Policies or any
blanket policies obtained pursuant to Section 4.09(b). Any amounts collected by
the Servicer under any such Hazard Insurance Policies shall be deposited in the
Certificate Account pursuant to Section 4.05, except to the extent they are
applied to the restoration of the related Manufactured Home or released to the
related Obligor in accordance with the normal servicing procedures of the
Servicer.
-48-
<PAGE>
(b) In connection with any transfer of ownership of a
Manufactured Home by an Obligor to a Person, the Servicer shall consent to any
such transfer and permit the assumption by such Person of the Contract related
to such Manufactured Home, provided that (i) such Person, in the judgment of the
--------
Servicer, meets the Servicer's underwriting standards then in effect, (ii) such
Person enters into an assumption agreement, (iii) the Servicer determines that
permitting such assumption by such Person will not materially increase the risk
of nonpayment of such Contract and (iv) such action will not adversely affect or
jeopardize any coverage under any insurance policy required by this Agreement.
In the event the Servicer determines that the conditions of the proviso of the
preceding sentence have not been fulfilled, then the Servicer shall withhold its
consent to any such transfer, but only to the extent permitted under the
Contract and applicable law and governmental regulations and only to the extent
that such action will not adversely affect or jeopardize any coverage under any
insurance policy required by this Agreement. In connection with any such
assumption, the rate of interest borne by, and all other material terms of, the
related Contract shall not be changed.
(c) In any case in which a Manufactured Home or Mortgaged
Property is to be conveyed to a Person by an Obligor, and such Person is to
enter into an assumption agreement or modification agreement or supplement to
the Contract in accordance with Section 4.11(b) or Section 4.07(d), upon the
closing of such conveyance, the Servicer shall cause the originals of the
assumption agreement, the release (if any), or the modification or supplement to
the Contract to be deposited with the Contract File or the Land Home Contract
File, as applicable, for such Contract. Any fee collected by the Servicer for
entering into an assumption or substitution of liability agreement with respect
to such Contract will be retained by the Servicer as additional servicing
compensation.
Section 4.12. Realization upon Defaulted Contracts.
------------------------------------
Subject to applicable law, the Servicer shall repossess, foreclose
upon or otherwise comparably convert the ownership of Manufactured Homes and
Mortgaged Property securing all Contracts that come into default and which the
Servicer believes in its good faith business judgment will not be brought
current. Subject to Section 4.17, the Servicer shall manage, conserve and
protect such Manufactured Homes and Mortgaged Property for the purposes of their
prompt disposition and sale, and shall dispose of such Manufactured Homes and
Mortgaged Property on such terms and conditions as it deems in the best
interests of the Certificateholders. If the Servicer has actual knowledge that
a Mortgaged Property is affected by hazardous waste, then the Servicer shall not
cause the Contract Seller 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 Home Contract File with respect to the
related Contract. In connection with such activities, the Servicer shall follow
such practices and procedures as are consistent with Section 4.02.
-49-
<PAGE>
Section 4.13. Costs and Expenses.
------------------
Except as otherwise expressly provided herein, all costs and expenses
incurred by the Servicer in carrying out its duties under this Agreement,
including all fees and expenses incurred in connection with the enforcement of
Contracts (including enforcement of defaulted Contracts and repossessions of
Manufactured Homes and Mortgaged Property securing such Contracts), shall be
paid by the Servicer, and the Servicer shall not be entitled to reimbursement
hereunder, except to the extent such reimbursement is specifically provided for
in this Agreement. Notwithstanding the foregoing, the Servicer shall be
reimbursed out of the Liquidation Proceeds of a defaulted Contract for
Liquidation Expenses incurred by it in realizing upon the related Manufactured
Home and Mortgaged Property, including, but not limited to: (i) costs of
refurbishing and securing such Manufactured Home; (ii) transportation expenses
incurred in moving the Manufactured Home; (iii) reasonable legal fees and
expenses of outside counsel; and (iv) sales commissions paid to Persons that are
not Affiliates of the Servicer. The Servicer shall not incur any Liquidation
Expenses unless it determines in its good faith business judgment that incurring
such expenses will increase the Net Liquidation Proceeds from such Manufactured
Home and Mortgaged Property.
Section 4.14. Trustee to Cooperate.
--------------------
(a) Upon payment in full of any Contract, the Servicer will
notify the Trustee on the next Distribution Date by a certificate of a Servicing
Officer (which certification shall include a statement to the effect that all
amounts received or to be received in connection with such payment which are
required to be deposited in the Certificate Account pursuant to Section 4.05
have been 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 security interest in the Manufactured Home. The Servicer
shall determine when a Contract has been paid in full. To the extent
insufficient payments are received on a Contract mistakenly determined by the
Servicer to be prepaid or paid in full and satisfied, the shortfall shall be
paid by the Servicer out of its own funds by deposit into the Certificate
Account.
(b) From time to time as appropriate for servicing and
foreclosure in connection with any Land 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 Home Contract and the
related Land 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 Home
Contract to be released to the Servicer with a notation that the Land Home
Contract has been assigned to the Trustee.
(c) The Servicer's receipt of a Land Home Contract and/or Land
Home Contract File shall obligate the Servicer to return the original Land Home
Contract and the related Land Home Contract File to the Trustee, or any person
acting on behalf of the Trustee, when its need by the Servicer has ceased unless
the Contract shall be liquidated, repurchased or replaced as described in
Section 3.05.
-50-
<PAGE>
(d) Upon request of a Servicing Officer, the Trustee shall, at
the expense of the Servicer, perform such acts as are reasonably requested by
the Servicer (including the execution of documents) and otherwise cooperate with
the Servicer in the enforcement of rights and remedies with respect to
Contracts.
Section 4.15. Servicing and Other Compensation.
--------------------------------
The Servicer, as compensation for its activities hereunder including
the payment of fees and expenses of the Trustee, the Certificate Administrator
and the Paying Agent pursuant to Section 9.05, shall be entitled to receive on
each Distribution Date the Monthly Servicing Fee and Repossession Profits
pursuant to Section 5.03.
Additional servicing compensation in the form of Late Payment Fees or
Extension Fees and any transfer of equity or assumption fees shall be retained
by the Servicer. The Servicer shall not be reimbursed for its costs and
expenses in servicing the Contracts except as otherwise expressly provided
herein.
No transfer, sale pledge or other disposition of the Servicer's right
to receive all or any portion of the Monthly Servicing Fee shall be made, and
any such attempted transfer, sale, pledge or other disposition shall be void,
unless such transfer is made to a successor Servicer in connection with the
assumption by such successor Servicer of the duties hereunder pursuant to
Section 7.07 and all (and not a portion) of the Monthly Servicing Fee is
transferred to such successor Servicer.
Section 4.16. Custody of Contracts.
--------------------
(a) Subject to the terms and conditions of this Section 4.16,
the Servicer agrees to act as custodian of the Contract Files (other than the
Land Home Contract Files) for the benefit of the Certificateholders and the
Trust Fund. The Certificateholders by their acceptance of the Certificates,
consent to the Servicer acting as custodian, and the Servicer agrees to maintain
the Contract Files (other than the Land Home Contract Files) as custodian
therefor.
(b) The Servicer agrees to maintain the related Contract Files
(other than the Land Home Contract Files) at its offices where they are
presently maintained, or at such other offices of the Servicer in the State of
California as shall from time to time be identified to the Trustee by ten days'
prior written notice. The Servicer may temporarily move individual Contract
Files, Land Home Contract Files or, in each case, 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 (other than the Land Home 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,
-51-
<PAGE>
maintain a current inventory thereof and conduct annual physical
inspections of Contract Files held by it under this Agreement;
(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 4.16, the Servicer agrees
to act in accordance with the standard of care set forth in Section 4.02. 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 further agrees not to assert any beneficial ownership interests in the
Contracts, the Contract. The Servicer agrees to indemnify the
Certificateholders and the Trustee for any and all liabilities, obligations,
losses, damages, payments, costs or expenses of any kind whatsoever which may be
imposed on, incurred or asserted against 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 other Person.
(e) Not later than 60 days from the Closing Date, the Contract Seller
shall deliver, or cause to be delivered, to the Trustee the following:
(ii) the Land Home Contract Files;
(iii) the original Land Home Contract endorsed as provided in
Section 3.02(x) (which endorsement may be manual or facsimile signature) on
behalf of the Contract Seller; and
(iv) an Assignment from GreenPoint to the Trustee, which Assignment
shall be in form and substance for recording, but shall not be recorded
except as required by Section 4.22 below;
Notwithstanding anything to the contrary contained in this Section 4.16(e), in
those instances where the public recording office retains the original Mortgage,
the Assignment of the Mortgage or the intervening Assignments of the Mortgage
after it has been recorded, the Contract Seller shall be deemed to have
satisfied its obligations hereunder upon delivery to the Trustee of a copy of
such Mortgage, such Assignment or Assignments of Mortgage certified by the
public recording office to be a true copy of the recorded original thereof.
Within 90 days following the Closing Date, the Trustee shall review each
Land Home Contract File to determine that all required documents set forth in
each item of the first paragraph of this Section 4.16(e) have been executed and
received and that such documents relate to the
-52-
<PAGE>
Land Home Contracts identified on the Contract Schedule. For purposes of this
determination, the Trustee may rely on the purported due execution and
genuineness of any signature thereon. If within such 90 day period the Trustee
finds that any document constituting a part of a Land Home Contract File was not
executed, defective or received or is unrelated to the Land Home Contracts
identified in the Contract Schedule (in this Section 4.16(e), a "defect"), the
Trustee shall promptly upon the conclusion of its review notify the Servicer and
the Servicer shall notify the Contract Seller. The Contract Seller shall have a
period of 90 days from receipt of such notice within which to correct or cure
any such defect after the Contract Seller has been notified of such. If the
Contract Seller cannot correct or cure any such defect with respect to a Land
Home Contract within such 90 day period, it shall comply with the provisions of
Section 3.05 hereof.
If recordation of any Assignment is required hereunder, the original of
each such recorded Assignment shall be delivered to the Trustee within 10 days
following the date on which it is returned to the Contract Seller by the office
with which such Assignment was filed for recordation. Upon receipt by the
Trustee of the recorded Assignment, such recorded Assignment shall become part
of the Land Home Contract File.
(f) Custodial Arrangements. The Trustee may appoint a custodian who is
----------------------
acceptable to the Servicer and the Contract Seller and who, upon execution of a
custodial agreement, shall maintain possession of the Land Home Contract Files,
together with assignments in recordable form, to the Trustee or another
custodian designated by the Trustee, and the Trustee agrees that upon such
delivery it shall maintain, or cause such custodian to maintain, or such part of
them as the Trustee shall direct, as agent of the Trustee pursuant to the terms
of such custodial agreement. The appointment of such custodian shall not relieve
the trustee of its obligations hereunder.
The Trustee shall keep the Servicer apprised at all times after the Closing
Date of the location of the Land Home Contract Files. The Trustee shall take
all steps that are reasonably necessary or appropriate in order to facilitate
the Servicer's access to the Land Home Contract Files during normal business
hours of the Trustee or any custodian and shall cooperate fully with the
Servicer in securing such access.
Section 4.17. REMIC Compliance.
----------------
(A) The REMIC Administrator shall make an election to treat the Trust Fund
as a REMIC under the Code and, if necessary, under applicable state law. Such
election will be made on Form 1066 or other appropriate federal tax or
information return (including Form 8811) or any appropriate state return for the
taxable year ending on the last day of the calendar year in which the
Certificates are issued. For the purposes of the REMIC election in respect of
the Trust Fund, each of the Class A, Class M and Class B Certificates shall be
designated as the "regular interests" and the Class R Certificates shall be
designated as the sole class of "residual interests" in the REMIC. The REMIC
Administrator and the Trustee shall not permit the creation of any "interests"
(within the meaning of Section 860G of the Code) in the REMIC other than the
Certificates.
-53-
<PAGE>
(B) The Closing Date is hereby designated as the "startup day" (the
"Startup Date") of the Trust Fund within the meaning of Section 860G(a)(9) of
the Code.
(C) The REMIC Administrator shall at all times hold a Class R Certificate
representing a 0.01% Percentage Interest of all Class R Certificates and shall
be designated as "the tax matters person" with respect to the REMIC in the
manner provided under Treasury regulations section 1.860F-4(d) and temporary
Treasury regulations section 301.6231(a)(7)-1T. The REMIC Administrator, as tax
matters person, shall (i) act on behalf of the REMIC in relation to any tax
matter or controversy involving the Trust Fund and (ii) represent the Trust Fund
in any administrative or judicial proceeding relating to an examination or audit
by any governmental taxing authority with respect thereto. The legal expenses,
including without limitation attorneys' or accountants' fees, and costs of any
such proceeding and any liability resulting therefrom shall be expenses of the
Trust Fund and the REMIC Administrator shall be entitled to reimbursement
therefor out of amounts attributable to the Contracts on deposit in the
Certificate Account provided by Section 5.03 unless such legal expenses and
costs are incurred by reason of the Servicer's willful misfeasance, bad faith or
gross negligence. If the REMIC Administrator is no longer the Servicer
hereunder, at its option the REMIC Administrator may continue its duties as tax
matters person and shall be paid reasonable compensation not to exceed $3,000
per year by any successor Servicer hereunder for so acting as the REMIC
Administrator.
(D) The REMIC Administrator shall prepare or cause to be prepared all of
the tax returns that it determines are required with respect to the REMIC
created hereunder and deliver such tax returns in a timely manner to the Trustee
and the Trustee shall sign and file such tax returns in a timely manner. The
expenses of preparing such returns shall be borne by the REMIC Administrator
without any right of reimbursement therefor. The REMIC Administrator agrees to
indemnify and hold harmless the Trustee with respect to any tax liability
arising from the Trustee's signing of tax returns that contain errors or
omissions. The Trustee and Servicer shall promptly provide the REMIC
Administrator with such information as the REMIC Administrator may from time to
time request for the purpose of enabling the REMIC Administrator to prepare tax
returns.
(E) The REMIC Administrator shall provide (i) to any transferor of a Class
R Certificate such information as is necessary for the application of any tax
relating to the transfer of a Class R Certificate to any Person who is not a
Permitted Transferee, (ii) to the Trustee and the Trustee shall forward to the
Certificateholders such information or reports as are required by the Code or
the REMIC Provisions including reports relating to interest, original issue
discount and market discount or premium (using the Prepayment Assumption) and
(iii) to the Internal Revenue Service the name, title, address and telephone
number of the person who will serve as the representative of the REMIC.
(F) The REMIC Administrator and the Servicer shall take such actions and
shall cause the REMIC created hereunder to take such actions as are reasonably
within the REMIC Administrator's or the Servicer's control and the scope of its
duties more specifically set forth herein as shall be necessary or desirable to
maintain the status thereof as a REMIC under the REMIC Provisions (and the
Trustee shall assist the Servicer and the REMIC Administrator, to
-54-
<PAGE>
the extent reasonably requested by the Servicer and the REMIC Administrator to
do so). The REMIC Administrator and the Servicer shall not knowingly or
intentionally take any action, cause the Trust Fund to take any action or fail
to take (or fail to cause to be taken) any action reasonably within their
respective control that, under the REMIC Provisions, if taken or not taken, as
the case may be, could (i) endanger the status of the REMIC as a REMIC or (ii)
result in the imposition of a tax upon the REMIC (including but not limited to
the tax on prohibited transactions as defined in Section 860F(a)(2) of the Code
and the tax on contributions to a REMIC set forth in Section 860(G)(d) of the
Code) (either such event, in the absence of an Opinion of Counsel or the
indemnification referred to in this sentence, an "Adverse REMIC Event") unless
the REMIC Administrator or the Servicer, as applicable, has received an Opinion
of Counsel (at the expense of the party seeking to take such action or, if such
party fails to pay such expense, and the REMIC Administrator or the Servicer, as
applicable, determines that taking such action is in the best interest of the
Trust Fund and the Certificateholders, at the expense of the Trust Fund, but in
no event at the expense of the REMIC Administrator, the Contract Seller, the
Servicer or the Trustee) to the effect that the contemplated action will not,
with respect to the REMIC created hereunder, endanger such status or, unless the
REMIC Administrator, the Servicer or both, as applicable, determine in its or
their sole discretion to indemnify the Trust Fund against the imposition of such
a tax, result in the imposition of such a tax. Wherever in this Agreement a
contemplated action may not be taken because the timing of such action might
result in the imposition of a tax on the Trust Fund, or may only be taken
pursuant to an Opinion of Counsel that such action would not impose a tax on the
Trust Fund, such action may nonetheless be taken provided that the indemnity
given in the preceding sentence with respect to any taxes that might be imposed
on the Trust Fund has been given and that all other preconditions to the taking
of such action have been satisfied. The Trustee shall not take or fail to take
any action (whether or not authorized hereunder) as to which the REMIC
Administrator or the Servicer, as applicable, has advised it in writing that it
has received an Opinion of Counsel to the effect that an Adverse REMIC Event
could occur with respect to such action. In addition, prior to taking any action
with respect to the REMIC or its assets, or causing the REMIC to take any
action, which is not expressly permitted under the terms of this Agreement, the
Trustee will consult with the REMIC Administrator or the Servicer, as
applicable, or its designee, in writing, with respect to whether such action
could cause an Adverse REMIC Event to occur with respect to the REMIC, and the
Trustee shall not take any such action or cause the REMIC to take any such
action as to which the REMIC Administrator or the Servicer, as applicable, has
advised it in writing that an Adverse REMIC Event could occur. The REMIC
Administrator or the Servicer, as applicable, may consult with counsel to make
such written advice, and the cost of same shall be borne by the party seeking to
take the action not expressly permitted by this Agreement, but in no event at
the expense of the REMIC Administrator or the Servicer. At all times as may be
required by the Code, the Servicer will to the extent within its control and the
scope of its duties more specifically set forth herein, maintain substantially
all of the assets of the REMIC as "qualified mortgages" as defined in Section
860G(a)(3) of the Code and "permitted investments" as defined in Section
860G(a)(5) of the Code.
-55-
<PAGE>
(G) In the event that any tax, including interest, penalties, additional
amounts or additions to tax (a "Tax"), is imposed on the Trust Fund, such Tax
shall be charged against amounts otherwise required to be distributed to the
Holders of the Class R Certificates. The Trustee is hereby authorized to
retain, or cause the Paying Agent to retain, from amounts otherwise required to
be distributed to the Holders of the Class R Certificates sufficient funds to
pay or provide for the payment of, and to actually pay, or cause the Paying
Agent to pay, such Tax as is legally owed by the Trust Fund (but such
authorization shall not prevent the Servicer from contesting any such Tax in
appropriate proceedings, and withholding payment of such Tax, if permitted by
law, pending the outcome of such proceedings). To the extent that sufficient
amounts cannot be so retained to pay or provide for the payment of any tax
imposed on gain realized from any prohibited transaction (as defined in the
REMIC Provisions), the Trustee is hereby authorized to and shall segregate, into
a separate non-interest-bearing account, the net income from such prohibited
transactions and pay, or cause the Paying Agent to pay, such Tax. In the event
any (i) amounts initially retained from amounts required to be distributed to
the Holders of the Class R Certificates and (ii) income so segregated and
applied towards the payment of such Tax shall not be sufficient to pay such Tax
in its entirety, the amount of the shortfall shall be paid from funds in the
Certificate Account notwithstanding anything to the contrary contained herein.
To the extent any such segregated income or funds from the Certificate Account
are paid to the Internal Revenue Service, the Trustee shall retain, or cause to
be retained, an amount equal to the amount of such income or funds so paid from
future amounts otherwise required to be distributed to the Holders of the Class
R Certificates and shall deposit such retained amounts in the Certificate
Account for distribution to the Holders of the Regular Certificates.
(H) The Trustee and the Servicer shall, for federal income tax purposes,
maintain books and records with respect to the REMIC on a calendar year and on
an accrual basis or as otherwise may be required by the REMIC Provisions.
(I) Following the Startup Day, neither the Servicer nor the Trustee shall
accept any contributions of assets to the REMIC unless (subject to Section
4.17(f)) the Servicer and the Trustee shall have received an Opinion of Counsel
(at the expense of the party seeking to make such contributions) to the effect
that the inclusion of such assets in the REMIC will not cause the REMIC to fail
to qualify as a REMIC at any time that any Certificates are outstanding or
subject the REMIC to any tax under the REMIC Provisions or other applicable
provisions of federal, state and local law or ordinances.
(J) Neither the Servicer nor the Trustee shall (subject to Section 4.17(f))
enter into any arrangement by which the REMIC will receive a fee or other
compensation for services nor permit the REMIC to receive any income from assets
other than "qualified mortgages" as defined in Section 860G(a)(3) of the Code or
"permitted investments" as defined in Section 860G(a)(5) of the Code.
(K) Solely for the purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
Regulations, the "latest possible maturity date" by which the Certificate
Balance of each Class of Certificates
-56-
<PAGE>
representing a regular interest in the REMIC would be reduced to zero is [ ]
which is the Distribution Date immediately following the latest schedule
maturity of any Contract.
(L) Within 30 days after the Closing Date, the REMIC Administrator shall
prepare and file with the Internal Revenue Service Form 8811, "Information
Return for Real Estate Mortgage Investment Conduits (REMIC) and Issuers of
Collateralized Debt Obligations" for the REMIC.
(M) Neither the Trustee nor the Servicer shall sell, dispose of or
substitute for any of the Contracts (except in connection with (i) the default,
imminent default or foreclosure of a Contract, including but not limited to, the
acquisition or sale of a Manufactured Home or a Mortgaged Property acquired by
deed in lieu of foreclosure, (ii) the bankruptcy of the REMIC, (iii) the
termination of the REMIC pursuant to Article X of this Agreement or (iv) a
purchase of Contracts pursuant to Article III of this Agreement) nor acquire any
assets for the REMIC, nor sell or dispose of any investments in the Certificate
Account for gain nor accept any contributions to the REMIC after the Closing
Date unless it has received an Opinion of Counsel that such sale, disposition,
substitution or acquisition will not (a) affect adversely the status of the
REMIC as a REMIC or (b) unless the Servicer has determined in its sole
discretion to indemnify the Trust Fund against such tax, cause the REMIC to be
subject to a tax on "prohibited transactions" or "contributions" pursuant to the
REMIC Provisions.
(N) Each Holder of a Class R Certificate, by purchasing such Class R
Certificate, agrees to give the Servicer written notice that it is a "pass-
through interest holder" within the meaning of Temporary Treasury Regulations
Section 1.67-3T(a)(2)(i)(A) immediately upon becoming the Holder of such Class R
Certificate, if it is, or is holding such Class R Certificate on behalf of, a
"pass-through interest holder."
(O) In the event that any Manufactured Home or Mortgaged Property is
acquired in a repossession (an "REO Property"), the Servicer shall sell any REO
Property within three years of its acquisition by the Trust Fund, unless (i) at
least 60 days before such three-year period would otherwise expire, the Servicer
applies for an extension of such three-year period pursuant to Sections
856(e)(3) and 860G(a)(8)(A) of the Code, in which case the Servicer shall sell
such REO Property within the applicable extension period or (ii) at the request
of the Servicer, the Trustee seeks, and subsequently receives, an Opinion of
Counsel, addressed to the Trustee and the Servicer, to the effect that the
holding by the Trust Fund of such REO Property subsequent to three years after
its acquisition will not result in the imposition of taxes on "prohibited
transactions" of the Trust Fund as defined in Section 860F of the Code or cause
the Trust Fund to fail to qualify as a REMIC at any time that any Certificates
are outstanding. The Servicer shall manage, conserve, protect and operate each
REO Property solely for the purpose of its prompt disposition and sale in a
manner that does not cause any such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
result in the receipt by the REMIC of any "income from non-permitted assets"
within the meaning of Section 860F(a)(2)(B) of the Code or any "net income from
foreclosure property" which is subject to taxation under the REMIC Provisions.
In connection with its efforts to sell such REO Property, the Servicer shall
either itself or through an agent selected by the Servicer protect and conserve
-57-
<PAGE>
such REO Property in the same manner and to such extent as is customary in the
locality where such REO Property is located and may, incident to its
conservation and protection of the interests of the Certificateholders, rent the
same, or any part thereof, as the Servicer deems to be in the best interest of
the Servicer and the Certificateholders for the period prior to the sale of such
REO Property.
(P) The Servicer shall segregate and hold all funds collected and received
in connection with the operation of any REO Property separate and apart from its
own funds and general assets and shall establish and maintain with respect to
each REO Property an account held in trust for the Trustee for the benefit of
the Certificateholders (each, an "REO Account"), which shall be an Eligible
Account and the funds therein shall be invested in Eligible Investments that
will mature not later than the Business Day preceding the applicable
Determination Date. The Servicer shall be entitled to retain or withdraw any
interest income paid on funds deposited in each REO Account by the depository.
(Q) The Servicer shall deposit, or cause to be deposited, on a daily basis
in each REO Account all revenues received with respect to operation of the
related REO Property and shall withdraw therefrom funds necessary for the proper
operation, management and maintenance of the REO Property. On or before each
Determination Date, the Servicer shall withdraw from each REO Account and
deliver to the Trustee for deposit into the Certificate Account the income from
the REO Property on deposit in the REO Account, net of its reasonable fees and
expenses.
(R) The disposition of REO Property shall be carried out by the Servicer
at such price and upon such terms and conditions as the Servicer shall deem
necessary or advisable, as shall be normal and usual in its general servicing
activities.
(S) The proceeds from the disposition of any REO Property, net of any
reimbursement to the Servicer as provided above, shall be deposited in the REO
Account and shall be deposited in the Certificate Account when the related
Contract becomes a Liquidated Contract.
Section 4.18. Management of REO Property.
--------------------------
(a) If the Trustee acquires any REO Property pursuant to Section 4.17, the
Servicer shall have full power and authority, subject only to the specific
requirements and prohibitions of this Agreement, to do any and all things in
connection therewith as are consistent with the manner in which the Servicer
manages and operates similar property owned by the Servicer or any of its
Affiliates, all on such terms and for such period as the Servicer deems to be in
the best interests of Certificateholders, and, consistent therewith, shall
withdraw from the REO Account, to the extent of amounts on deposit therein with
respect to such REO Property, funds necessary for the proper operation,
management and maintenance of such REO Property, including:
(i) all insurance premiums due and payable in respect to such REO
Property;
-58-
<PAGE>
(ii) all real estate taxes and assessments in respect to such REO
Property that may result in the imposition of a lien thereon; and
(iii) all costs and expenses necessary to maintain such REO Property.
To the extent that amounts on deposit in the REO Account in respect of any
REO Property are insufficient for the purposes set forth in (i)-(iii) above with
respect to such REO Property, the Servicer shall advance from its own funds such
amount as is necessary for such purposes if, but only if, the Servicer would
make such advances if the Servicer owned such REO Property and if in the
Servicer's judgment, the payment of such amounts will be recoverable from the
operation or sale of such REO Property.
(b) Notwithstanding the foregoing, the Servicer shall not:
(i) authorize or permit any construction on any REO Property, other
than the completion of a building or other improvement thereon, and then
only if more than ten percent of the construction of such building or other
improvement was completed before default on the related Contract became
imminent, all within the meaning of Section 856(e)(4)(B) of the Code; or
(ii) directly operate, or allow any other Person to directly
operate, any REO Property on any date more than 90 days after its date of
acquisition;
unless, in any such case, the Servicer has requested and received an Opinion of
Counsel to the effect that such action will not cause such REO Property to fail
to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code at any time that it is held by the Trust Fund, in which case the
Servicer may take such actions as are specified in such Opinion of Counsel.
(c) The Servicer may contract with any Independent Contractor for the
operation and management of any REO Property, provided that:
(i) the terms and conditions of any such contract may not be
inconsistent herewith;
(ii) any such contract shall require, or shall be administered to
require, that (A) the Independent Contractor pay all costs and expenses
incurred in connection with the operation and management of such REO
Property, including those listed in subsection (a) hereof, (B) hold all
related revenues in a segregated account, which shall be an Eligible
Account, and (C) remit all related revenues collected (net of such costs
and expenses and any fees retained by such Independent Contractor) to the
Servicer on a monthly or more frequent basis;
(iii) none of the provisions of this Section 4.18(c) relating to any
such contract or to actions taken through any such Independent Contractor
shall be deemed to relieve the Servicer of any of its duties and
obligations to the Trustee on behalf of
-59-
<PAGE>
Certificateholders with respect to the operation and management of any such
REO Property; and
(iv) the Servicer shall be obligated with respect thereto to the same
extent as if it alone were performing all duties and obligations in
connection with the operation and management of such REO Property.
The Servicer shall be entitled to enter into any agreement with any
Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Servicer by such Independent
Contractor, and nothing in this Agreement shall be deemed to limit or modify
such indemnification. The Servicer shall be entitled to pay all fees owed to
any such Independent Contractor out of the REO Account pursuant to Section 4.17.
(d) Subject to Section 4.18(b), the Servicer shall itself be entitled to
operate and manage any foreclosure property and, in such event, shall be
entitled to pay itself a monthly management fee in accordance with Section 4.17;
provided that the amount of such management fee shall not exceed the amount
- --------
customarily charged for the operation and management of similar property in the
locality of such REO Property by property managers other than the Servicer or
its Affiliates.
Section 4.19. Reports to the Securities and Exchange Commission.
-------------------------------------------------
The Servicer shall use reasonable efforts to assist the Contract
Seller in obtaining any information maintained by it in the ordinary course of
performing its duties hereunder that is necessary for the Contract Seller, on
behalf of the Trust Fund, to cause to be filed with the Securities and Exchange
Commission any periodic reports required to be filed under the provisions of the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Securities and Exchange Commission thereunder.
Section 4.20. Annual Statement as to Compliance.
---------------------------------
The Servicer will deliver to the Contract Seller, the Trustee and each
Rating Agency on or before April 1 of each year, beginning with the first April
1 that occurs after the Cut-Off Date, an Officer's Certificate (i) stating that
a review of the activities of the Servicer during the preceding calendar year
and of performance under this Agreement has been made under such officer's
supervision, and (ii) stating that to the best of such officer's knowledge,
based on such review, the Servicer has fulfilled all its obligations under this
Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof.
Section 4.21. Annual Independent Public Accountants' Servicing Report.
-------------------------------------------------------
On or before April 1 of each year, beginning with the first April 1
that occurs after the Cut-Off Date, 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 furnish a statement to the Contract
Seller, the Trustee and each Rating Agency to the effect that such firm
-60-
<PAGE>
has examined certain documents and records relating to the servicing of the
Contracts under this Agreement and, at the option of the Servicer, manufactured
housing installment sale contracts and installment loan agreements under pooling
and servicing agreements substantially similar to this Agreement with regard to
servicing procedures (such statement to have attached thereto a schedule setting
forth the pooling and servicing agreements covered thereby, including this
Agreement) and that, on the basis of such examination conducted substantially in
compliance with this Agreement or such agreements, as the case may be, and
generally accepted auditing standards, such servicing has been conducted
substantially in compliance with this Agreement or such pooling and servicing
agreements, as the case may be, except for such exceptions as such firm believes
to be immaterial and such other exceptions or errors in records that may be set
forth in such statement. For purposes of such statement, such firm may assume
conclusively that all pooling and servicing agreements among the Contract
Seller, the Servicer and the Trustee relating to certificates evidencing an
interest in actuarial manufactured housing contracts are substantially similar
to one another, except for any such pooling and servicing agreement which by its
terms specifically states otherwise.
Section 4.22. Retitling of Land Home Contracts.
--------------------------------
If the Servicer receives actual notice or knowledge that the Servicer
is no longer assigned a long-term senior debt rating from [Moody's of Baa3] or
higher, or an equivalent rating from any nationally recognized statistical
rating organization, the Servicer shall promptly provide notice to the Trustee
that it no longer has such rating. If at any time during the term of this
Agreement the Trustee receives written notice from the Servicer that the
Contract Seller does not have a long-term senior debt rating from [Moody's of
Baa3] or higher, or an equivalent rating from any nationally recognized
statistical rating organization, or if the Trustee otherwise becomes aware that
the Servicer is no longer assigned such rating, the Trustee, at the Contract
Seller's expense, shall file promptly in the appropriate recording offices the
assignments to the Trustee on behalf of the Trust Fund of each Mortgage securing
a Land Home Contract.
-61-
<PAGE>
ARTICLE V
PAYMENTS, MONTHLY ADVANCES AND MONTHLY REPORTS
Section 5.01. Monthly Advances by the Servicer.
--------------------------------
(a) By the close of business on the day prior to each
Distribution Date, the Servicer shall (i) cause to be deposited, out of its own
funds, in the Certificate Account the Monthly Advance for the related
Distribution Date, (ii) direct the Trustee to apply all or a portion of the
Excess Contract Payments in the Certificate Account to make such Monthly
Advance, or (iii) do any combination of clauses (i) and (ii) to make such
Monthly Advance. To the extent that an Excess Contract Payment (or any portion
thereof) that has been applied pursuant to clause (ii) or (iii) is required for
application as to all or a portion of a scheduled payment due on the related
Contract, the Servicer shall deposit, out of its own funds, the amount of such
Excess Contract Payment (or the portion thereof required for such scheduled
payment) into the Certificate Account on the immediately succeeding Due Date,
and the amount so deposited will become part of the Outstanding Amount Advanced.
(b) The Servicer shall reimburse itself for the Outstanding
Amount Advanced out of (i) collections of delinquent payments of principal and
interest on Contracts as to which the Servicer previously made a Monthly
Advance, (ii) available funds in the Certificate Account attributable to Excess
Contract Payments or (iii) any combination of clauses (i) and (ii) above.
(c) If the Servicer determines that any advance made pursuant to
Section 5.01(a) has become a Nonrecoverable Advance and at the time of such
determination there exists an Outstanding Amount Advanced, then the Servicer
shall reimburse itself out of funds in the Certificate Account for the amount of
such Nonrecoverable Advance (but only if there will not be a shortfall in
respect of principal and interest distributions on the Certificates (other than
the Class R Certificates) for the next succeeding Distribution Date) by
withdrawing such amount pursuant to Section 5.03(v), but not in excess of such
Outstanding Amount Advanced. If a Contract becomes a Liquidated Contract and at
such time there exists an Outstanding Amount Advanced, then the Servicer shall
reimburse itself out of funds in the Certificate Account for the portion of
Monthly Advances equal to the aggregate of delinquent scheduled payments on such
Contract to the Due Date in the Collection Period in which such Contract became
a Liquidated Contract, but not in excess of such Outstanding Amount Advanced.
Section 5.02. Payments.
--------
[FIRST ALTERNATE SUBSECTION (a) On each Distribution Date, the
Trustee shall withdraw from the Certificate Account an amount equal to the sum
of the Available Distribution Amount and the Reserve Account Draw Amount, if
any, for such Distribution Date and apply such amount, in the following order of
priority, to the distribution of:
(i) to the Senior Certificateholders, the Class [A-1 Interest
Distribution Amount and the Class A-IO] Interest Distribution concurrently
to the Class [A-1 and the
-62-
<PAGE>
Class A-IO] Certificateholders, respectively; provided that if the
--------
Available Distribution Amount, together with the Reserve Account Draw
Amount, is insufficient to make the full distributions of interest referred
to in this clause (i), the Available Distribution Amount, together with the
Reserve Account Draw Amount, shall be distributed on such Classes of
Certificates pro rata based on such full amounts allocable to such Classes;
(ii) to the Senior Certificateholders [(other than the Class A-IO
Certificateholders)], the Senior Percentage of the Formula Principal
Distribution Amount in the following order of priority:
(III) to the Class A-1 Certificateholders until the Certificate
Balance of the Class A-1 Certificates is reduced to zero;
(iii) to the Class M Certificateholders, the Class M Interest
Distribution Amount;
(iv) to the Class M Certificateholders, the Class M Percentage of
the Formula Principal Distribution Amount until the Class M Certificate
Balance is reduced to zero;
(v) to the Class B-1 Certificateholders, the Class B-1 Interest
Distribution Amount;
(vi) to the Class B-1 Certificateholders, the Class B Percentage of
the Formula Principal Distribution Amount until the Class B-1 Certificate
Balance is reduced to zero;
(vii) to the Class B-2 Certificateholders, the Class B-2 Interest
Distribution Amount;
(viii) to the Class B-2 Certificateholders, the Class B Percentage of
the Formula Principal Distribution Amount (less any portion thereof
distributed pursuant to clause (vi) above) until the Class B-2 Certificate
Balance is reduced to zero;
(ix) if such Distribution Date is on or after the earlier of (a) the
Distribution Date in [ ] and (b) the first Distribution Date on which
the percentage equivalent of a fraction, the numerator of which is the Pool
Scheduled Principal Balance (after giving effect to distributions with
respect to principal) for such Distribution Date and the denominator of
which is the Cut-Off Date Pool Principal Balance, is less than or equal to
[ ]%, to the Reserve Account, any remaining Available Distribution
amount to the extent necessary to increase the funds in the Reserve Account
to the Reserve Account Cap;
(X) if such Distribution Date is on or after [ ], and the Class [A-
1] Certificate Balance has not been reduced to zero after the application
of distributions on such Distribution Date to the Class [A-1]
Certificateholders pursuant to clause (ii) above, to the Class A-1
Certificateholders until the Class [A-1] Certificate Balance has been
reduced to zero; and
-63-
<PAGE>
(xI) to the Class R Certificateholders, any remaining Available
Distribution Amount.
Notwithstanding the foregoing, on any Distribution Date on which the Class
M Certificate Balance has not been reduced to zero and the amount distributable
(the "initial distribution") to holders of the Class B-2 Certificates pursuant
to clause (viii) above would cause (x) the sum of (i) the Class B-2 Certificate
Balance and (ii) the amount on deposit in the Reserve Account (in each case,
after giving effect to the initial distribution) (such sum, the "Clause X
Amount") to be less than (y) $[ ] (the "Clause Y Amount"), which is 2% of the
Cut-Off Date Pool Principal Balance, then the distribution to holders of the
Class B-2 Certificates pursuant to clause (viii) above will be reduced to such
amount as will cause the Clause X Amount to equal, as nearly as possible, the
Clause Y Amount, and the Available Distribution Amount that remains after such
reduced distribution to the Class B-2 Certificateholders will be distributed on
account of principal pro rata to holders of the Senior Certificates and the
Class M Certificates on the basis of their Certificate Balances to the extent
necessary to reduce such Certificate Balances to zero.
In addition, notwithstanding the prioritization of the distribution of the
Formula Principal Distribution Amount to the Holders of the Senior Certificates
pursuant to clause (ii) above, on a Distribution Date, if any, in respect of
which a Deficiency Event is in effect, the portion of the Formula Principal
Distribution Amount for such Distribution Date that would otherwise be
distributed sequentially to the Class [A-1] Certificateholders pursuant to
clause (ii) above will instead be distributed to the Class [A-1]
Certificateholders pro rata based upon the Certificate Balance of each such
Class until the Certificate Balances of the Class [A-1] Certificates have been
reduced to zero. A "Deficiency Event" will be in effect for any Distribution
Date as to which the Pool Scheduled Principal Balance is equal to or less than
the aggregate of the Certificate Balances of the Class [A-1] Certificates.
Furthermore, notwithstanding the foregoing, if the percentage of the
Formula Principal Distribution Amount allocable to the Holders of the Class [
] Certificates on any Distribution Date pursuant to clause (ii) above exceeds
the Class [ ] Certificate Balance for such Distribution Date, such excess
will be distributed to the Class M and Class B-1 Certificateholders (or the
Class B-2 Certificateholders if the Class B-1 Certificate Balance has been
reduced to zero) on the basis of the Class M and Class B Percentages,
respectively. If the percentage of the Formula Principal Distribution Amount
allocable to the Class M Certificateholders on any Distribution Date pursuant to
clause (iv) above exceeds the Class M Certificate Balance for any such
Distribution Date, such excess will be distributed to the Class B-1
Certificateholders until the Class B-1 Certificate Balance is reduced to zero
(and to the Class B-2 Certificateholders thereafter until the Class B-2
Certificate Balance is reduced to zero). [The Class A-IO Notional Principal
Amount is only for convenience in certain calculations. The Class A-IO
Certificateholders do not have the right to receive distributions allocable to
principal hereunder.]
Such distributions to the Class [A-1 Certificateholders, Class A-IO]
Certificateholders, Class M Certificateholders, Class B-1 Certificateholders and
Class B-2 Certificateholders shall be made such that the Trustee shall
distribute (a) to each Class [A-1] Certificateholder as of the preceding Record
Date an amount equal to the product of the aggregate Percentage Interest
evidenced by such Certificateholder's Class [A-1 Certificates and the Class A-1
Distribution Amount for such Distribution Date, (b) to each Class A-IO
Certificateholder as of the preceding Record Date an amount equal to the product
of the aggregate Percentage Interest
-64-
<PAGE>
evidenced by such Certificateholder's Class A-IO Certificates and the Class A-IO
Distribution Amount for such Distribution Date,] [(c)] to each Class M
Certificateholder as of the preceding Record Date an amount equal to the product
of the aggregate Percentage Interest evidenced by such Certificateholder's Class
M Certificates and the Class M Distribution Amount, [(d)] to each Class B-1
Certificateholder as of the preceding Record Date an amount equal to the product
of the aggregate Percentage Interest evidenced by such Certificateholder's Class
B-1 Certificates and the Class B-1 Distribution Amount for such Distribution
Date and [(e)] to each Class B-2 Certificateholder as of the preceding Record
Date an amount equal to the product of the aggregate Percentage Interest
evidenced by such Certificateholder's Class B-2 Certificates and the Class B-2
Distribution Amount for such Distribution Date. The Trustee shall pay each
Certificateholder of record by check mailed to such Certificateholder at the
address for such Certificateholder appearing on the Certificate Register;
provided that if such Certificateholder holds Certificates evidencing a
- --------
Percentage Interest aggregating 10% or more with respect to such Class and has
given the Trustee appropriate written instructions at least 10 days prior to the
related Distribution Date (which instructions, until revised, shall remain
operative for all Distribution Dates thereafter), the Trustee shall pay such
Certificateholder by wire transfer of funds. If on any Determination Date the
Servicer determines that there are no Contracts outstanding and no other funds
or assets in the Trust Fund other than the funds in the Certificate Account, the
Servicer promptly shall instruct the Trustee to send the final distribution
notice to each Certificateholder and make provision for the final distribution
in accordance with Section 10.01(c). Final payment of any Certificate shall be
made only upon presentation of such Certificate at the office or agency of the
Certificate Registrar.]
[SECOND ALTERNATE SUBSECTION (A) On each Distribution Date, the Trustee
shall withdraw from the Certificate Account an amount equal to the sum of the
Available Distribution Amount and the Reserve Account Draw Amount, if any, for
such Distribution Date and apply such amount, in the following order of
priority, to the distribution of:
(i) to the Senior Certificateholders, the Class [A-1] Interest
Distribution Amount [concurrently to the Class A-1 Certificateholders,
respectively; provided that if the Available Distribution Amount, together
--------
with the Reserve Account Draw Amount, is insufficient to make the full
distributions of interest referred to in this clause (i), the Available
Distribution Amount, together with the Reserve Account Draw Amount, shall
be distributed on such Classes of Certificates pro rata based on such full
amounts allocable to such Classes;]
(ii) to the Senior Certificateholders, the Formula Principal
Distribution Amount in the following order of priority:
(a) to the Class [A-1 Certificateholders until the Certificate
Balance of the Class A-1 Certificates is reduced to zero;]
-65-
<PAGE>
(iii) to the Class M Certificateholders, the Class M Interest
Distribution Amount;
(iv) to the Class M Certificateholders, the Formula Principal
Distribution Amount until the Class M Certificate Balance is reduced to
zero;
(v) to the Class B-1 Certificateholders, the Class B-1 Interest
Distribution Amount;
(vi) to the Class B-1 Certificateholders, the Formula Principal
Distribution Amount until the Class B-1 Certificate Balance is reduced to
zero;
(vii) to the Class B-2 Certificateholders, the Class B-2 Interest
Distribution Amount;
(viii) to the Class B-2 Certificateholders, the Formula Principal
Distribution Amount until the Class B-2 Certificate Balance is reduced to
zero;
(ix) to the Reserve Account, any remaining Available Distribution
Amount until the amount on deposit therein equals the Reserve Account Cap;
[(x) to the extent GreenPoint is acting as Servicer, to GreenPoint
the payment of the Monthly Servicing Fee;]
[(xi) to the Guarantor, any amounts owing in respect of the Limited
Guaranty;]
[(xii) to Holders of the Class [ ] of Series [ ] and [ ], any
shortfalls in payment due to such Holders on such Distribution Date;] and
(x) to the Class R Certificateholders, any remaining Available
Distribution Amount.
In addition, notwithstanding the prioritization of the distribution of the
Formula Principal Distribution Amount to the Holders of the Senior Certificates
pursuant to clause (ii) above, on a Distribution Date, if any, in respect of
which a Deficiency Event is in effect, the portion of the Formula Principal
Distribution Amount for such Distribution Date that would otherwise be
distributed sequentially to the Class [A-1] Certificateholders pursuant to
clause (ii) above will instead be distributed to the Class [A-1]
Certificateholders pro rata based upon the Certificate Balance of each such
Class until the Certificate Balances of the Class [A-1] Certificates have been
reduced to zero. A "Deficiency Event" will be in effect for any Distribution
Date as to which the Pool Scheduled Principal Balance is equal to or less than
the aggregate of the Certificate Balances of the Class [A-1] Certificates.
Furthermore, notwithstanding the foregoing, if the Formula Principal
Distribution Amount allocable to the Holders of the Class [ ] Certificates on
any Distribution Date pursuant to clause (ii) above exceeds the Class [ ]
Certificate Balance for such Distribution Date, such
-66-
<PAGE>
excess will be distributed to the Class M Certificateholders. If the Formula
Principal Distribution Amount allocable to the Class M Certificateholders on any
Distribution Date pursuant to clause (iv) above exceeds the Class M Certificate
Balance for any such Distribution Date, such excess will be distributed to the
Class B-1 Certificateholders. If the Formula Principal Distribution Amount
allocable to the Class B-1 Certificateholders on any Distribution Date pursuant
to clause (vi) above exceeds the Class B-1 Certificate Balance for any such
Distribution Date, such excess will be distributed to the Class B-2
Certificateholders.
Such distributions to the Class [A-1] Certificateholders, Class M
Certificateholders, Class B-1 Certificateholders and Class B-2
Certificateholders shall be made such that the Trustee shall distribute (a) to
each Class [A-1] Certificateholder as of the preceding Record Date an amount
equal to the product of the aggregate Percentage Interest evidenced by such
Certificateholder's Class [A-1] Certificates and the Class [A-1] Distribution
Amount for such Distribution Date, [(b)] to each Class M Certificateholder as of
the preceding Record Date an amount equal to the product of the aggregate
Percentage Interest evidenced by such Certificateholder's Class M Certificates
and the Class M Distribution Amount, [(c)] to each Class B-1 Certificateholder
as of the preceding Record Date an amount equal to the product of the aggregate
Percentage Interest evidenced by such Certificateholder's Class B-1 Certificates
and the Class B-1 Distribution Amount for such Distribution Date and [(d)] to
each Class B-2 Certificateholder as of the preceding Record Date an amount equal
to the product of the aggregate Percentage Interest evidenced by such
Certificateholder's Class B-2 Certificates and the Class B-2 Distribution Amount
for such Distribution Date. The Trustee shall pay each Certificateholder of
record by check mailed to such Certificateholder at the address for such
Certificateholder appearing on the Certificate Register; provided that if such
--------
Certificateholder holds Certificates evidencing a Percentage Interest
aggregating 10% or more with respect to such Class and has given the Trustee
appropriate written instructions at least 10 days prior to the related
Distribution Date (which instructions, until revised, shall remain operative for
all Distribution Dates thereafter), the Trustee shall pay such Certificateholder
by wire transfer of funds. If on any Determination Date the Servicer determines
that there are no Contracts outstanding and no other funds or assets in the
Trust Fund other than the funds in the Certificate Account, the Servicer
promptly shall instruct the Trustee to send the final distribution notice to
each Certificateholder and make provision for the final distribution in
accordance with Section 10.01(c). Final payment of any Certificate shall be made
only upon presentation of such Certificate at the office or agency of the
Certificate Registrar.]
(b) On each Distribution Date, the Trustee shall withdraw from the
Certificate Account (solely out of the Available Distribution Amount for such
Distribution Date after giving effect to the distributions made to the
Certificateholders pursuant to Section 5.02(a)(i)-(viii) and to the Reserve
Account pursuant to Section 5.02(a)(ix) on such Distribution Date) and
distribute the amount specified in Section 5.02(a)(x) for such Distribution Date
to the Class R Certificateholders by wire transfer of immediately available
funds. Such distribution shall be made by a means that is mutually acceptable
to the Trustee and the Class R Certificateholders.
(c) Each distribution with respect to a Global Certificate shall be paid
to the Depository, which shall credit the amount of such distribution to the
accounts of its Depository
-67-
<PAGE>
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 Global Certificate are to be made by the Depository and the
Depository Participants in accordance with the provisions of the Certificates.
Neither the Trustee, the Certificate Registrar, the Contract Seller nor the
Servicer shall have any responsibility therefor. 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 Certificates as set forth in [Exhibit B-1,
-----------
Exhibit B-2, Exhibit B-3, Exhibit B-4, Exhibit B-5] and Exhibit C (reverse of
- ----------- ----------- ----------- ----------- -------------
Certificates) hereto.
Section 5.03. Permitted Withdrawals from the Certificate Account.
--------------------------------------------------
The Servicer may, from time to time as provided herein, make
withdrawals from the Certificate Account of amounts deposited therein pursuant
to Section 4.05 that are attributable to the Contracts for the following
purposes:
(i) to pay to the Contract Seller with respect to each Contract
sold by it or property acquired in respect thereof that has been
repurchased or replaced pursuant to Section 3.05, all amounts received
thereon that are specified in such Section to be property of the Contract
Seller;
(ii) to reimburse itself for the payment of taxes or charges out of
Liquidation Proceeds (to the extent not previously retained from such
Liquidation Proceeds prior to their deposit) or out of payments expressly
made by the related Obligor to reimburse the Servicer for such taxes or
charges, as permitted by Section 4.06;
(iii) [to the extent that GreenPoint is not acting as Servicer,] to
pay to itself the Monthly Servicing Fee, Servicer Deficiency Amounts and
Repossession Profits, if any;
(iv) to reimburse itself or a previous Servicer out of Liquidation
Proceeds (to the extent not previously retained from Liquidation Proceeds
prior to their deposit in the Certificate Account) in respect of a
Manufactured Home and out of payments by the related Obligor (to the extent
of payments expressly made by the Obligor to reimburse the Servicer for
insurance premiums) for expenses incurred by it in respect of such
Manufactured Home that are specified as being reimbursable to it pursuant
to Section 4.07, 4.09, or 4.13 or to a previous Servicer under Section
7.07;
(v) to reimburse itself for any Nonrecoverable Advances and for
Monthly Advances in respect of Liquidated Contracts, in each case, in
accordance with Section 5.01(c);
(vi) after the Class [A-1] Certificate Balance, [Class A-IO Notional
Principal Amount,] Class M Certificate Balance, Class B-1 Certificate
Balance, and Class B-2
-68-
<PAGE>
Certificate Balance have been reduced to zero, to reimburse the Servicer
and the REMIC Administrator, pro rata, for expenses incurred and
reimbursable to the Servicer pursuant to Section 7.05 and to the REMIC
Administrator pursuant to Section 4.17(c); and
(vii) to withdraw any amount deposited in the Certificate Account
that was not required to be deposited therein (including any collections on
the Contracts that, pursuant to Section 2.01(a), are not part of the Trust
Fund).
Since, in connection with withdrawals pursuant to clauses (i), (ii) and
(iv) of this Section 5.03, the Servicer'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 clauses.
Section 5.04. Monthly Reports.
---------------
At least one Business Day prior to each Distribution Date, the Servicer
shall cause the Trustee, the Rating Agencies and the Certificate Administrator
to receive a Monthly Report, which report shall include the following
information with respect to the immediately following Distribution Date:
(A) the Class [A-1] Distribution Amount for such Distribution Date;
(B) the amount of principal to be distributed to the Class [A-1]
Certificateholders, separately stating the contribution thereto from each of the
amounts specified in clauses (a) through (e), inclusive, of the definition of
Total Regular Principal Amount and from the amount of clause (b) of the
definition of Formula Principal Distribution Amount;
(C) the amount of interest to be distributed to Class [A-1]
Certificateholders on such Distribution Date (separately identifying any Class
[A-1] Unpaid Interest Shortfall included in such distribution);
(D) the remaining Class [A-1] Certificate Balance after giving effect to
the payment of principal to be made on such Distribution Date (on which interest
will be calculated on the next succeeding Distribution Date);
[(E) the Class A-IO Distribution Amount for such Distribution Date;
(F) the amount of interest to be distributed to Class A-IO
Certificateholders on such Distribution Date (separately identifying any Class
A-IO Unpaid Interest Shortfall included in such distribution);
(G) the remaining Class A-IO Notional Principal Amount after giving
effect to the payment of principal to be made on such Distribution Date (on
which interest will be calculated on the next succeeding Distribution Date);]
-69-
<PAGE>
[(H)] the Class M Distribution Amount for such Distribution
Date;
[(I)] the amount of principal to be distributed to the Class M
Certificateholders, separately stating the contribution thereto from each of the
amounts specified in clauses (a) through (e), inclusive, of the definition of
Total Regular Principal Amount and from the amount of clause (b) of the
definition of Formula Principal Distribution Amount;
[(J)] the amount of interest to be distributed to Class M
Certificateholders on such Distribution Date (separately identifying any Class M
Unpaid Interest Shortfall included in such distribution);
[(K)] the remaining Class M Certificate Balance after giving
effect to the payment of principal to be made on such Distribution Date (on
which interest will be calculated on the next succeeding Distribution Date);
[(L)] the Class B-1 Distribution Amount for such Distribution
Date;
[(M)] the amount of principal to be distributed to the Class B-1
Certificateholders, separately stating the contribution thereto from each of the
amounts specified in clauses (a) through (e), inclusive, of the definition of
Total Regular Principal Amount and from the amount of clause (b) of the
definition of Formula Principal Distribution Amount;
[(N)] the amount of interest to be distributed to Class B-1
Certificateholders on such Distribution Date (separately identifying any Class
B-1 Unpaid Interest Shortfall included in such distribution);
[(O)] the remaining Class B-1 Certificate Balance after giving
effect to the payment of principal to be made on such Distribution Date (on
which interest will be calculated on the next succeeding Distribution Date);
[(P)] the Class B-2 Distribution Amount for such Distribution
Date;
[(Q)] the amount of principal to be distributed to the Class B-2
Certificateholders, separately stating the contribution thereto from each of the
amounts specified in clauses (a) through (e), inclusive, of the definition of
Total Regular Principal Amount and from the amount of clause (b) of the
definition of Formula Principal Distribution Amount;
[(R)] the amount of interest to be distributed to Class B-2
Certificateholders on such Distribution Date (separately identifying any Class
B-2 Unpaid Interest Shortfall included in such distribution);
[(S)] the remaining Class B-2 Certificate Balance after giving
effect to the payment of principal to be made on such Distribution Date (on
which interest will be calculated on the next succeeding Distribution Date);
-70-
<PAGE>
[(T)] the total amount of Monthly Servicing Fee payable on such
Distribution Date, the amount of any reimbursement to the Servicer pursuant to
Section 7.05, and any Late Payment Fees, Extension Fees and assumption fees paid
during the prior Collection Period, and the amount of any other fees payable out
of the Trust Fund;
[(U)] the number of and aggregate remaining principal balance of
Contracts with payments delinquent 31 to 59, 60 to 89, and 90 or more days,
respectively;
[(V)] the number of Contracts that were repurchased or replaced by
the Contract Seller in accordance with Section 3.05 during the prior Collection
Period, identifying such Contracts and (i) the Repurchase Price of such
Contracts and (ii) the amount, if any, paid by the Contract Seller due to the
differences, if any, between the remaining principal balances of the replaced
Contracts and the Eligible Substitute Contracts;
[(W)] the Pool Factor for the Class [A-1] Certificates, Class M
Certificates, Class B-1 Certificates and Class B-2 Certificates after giving
effect to the payment of principal to be made on such Distribution Date;
[(X)] the aggregate principal balances of all Contracts that are
not Liquidated Contracts and in respect of which the related Manufactured Homes
have been repossessed or foreclosed upon;
[(Y)] the Aggregate Net Liquidation Losses through the Collection
Period immediately preceding such Distribution Date;
[(Z) the Senior Percentage;]
[(AA) the Class M Percentage;]
[(BB) the Class B Percentage;]
[(CC)] the balance, if any, in the Reserve Account (before and
after giving effect to the distributions on such Distribution Date);
[(DD)] the Reserve Account Draw Amount, if any, required to be paid
for such Distribution Date [and any withdrawals made from the Reserve Account
since the last Distribution Date pursuant to Section 5.03];
[(EE)] the Average Thirty Day Delinquency Ratio and the Average
Sixty Day Delinquency Ratio for such Distribution Date;
[(FF)] the Cumulative Realized Losses (as a percentage of the Cut-
Off Date Pool Principal Balance) for such Distribution Date;
[(GG)] the Current Realized Loss Ratio for such Distribution
Date;
-71-
<PAGE>
[(HH)] the amount of any Monthly Advance and the Outstanding Amount
Advanced with respect to such Distribution Date;
[(II)] the amounts, if any, deposited into the Reserve Account for
such Distribution Date;
[(JJ)] the amount, if any, to be distributed to the Class R
Certificateholders;
[(KK)] the weighted average Contract Rate for the Contract
Pool for the Collection Period immediately preceding the month of such
Distribution Date;
[(LL)] the number of Manufactured Homes currently held by the
Servicer due to repossessions and the aggregate principal balance of the related
defaulted Contracts;
[(MM) whether the Class M Principal Distribution Test and/or the
Class B Principal Distribution Test are met with respect to such Distribution
Date;]
[(NN) the Clause X Amount and whether the Clause X Amount is equal
to or less than the Clause Y Amount;]
[(OO)] the Pool Scheduled Principal Balance, expressed as a
percentage of the Cut-Off Date Pool Principal Balance; and
[(pp) the aggregate of the Deficiency Amounts and Servicer
Deficiency Amounts received for the preceding Collection Period.]
Copies of all Monthly Reports shall be provided by the Servicer to
each Rating Agency. Neither the Trustee nor the Certificate Administrator shall
be under any duty to recalculate or verify the information provided to it by the
Servicer. The Servicer shall deliver a written notice to the Trustee not later
than three Business Days next preceding a Distribution Date if it cannot provide
the Trustee and the Certificate Administrator with a Monthly Report for such
Distribution Date.
Section 5.05. Certificate of Servicing Officer.
--------------------------------
Each Monthly Report pursuant to Section 5.04 shall be accompanied by a
certificate of a Servicing Officer substantially in the form of Exhibit F,
---------
certifying the accuracy of the Monthly Report and that such officer is not aware
of the occurrence of an Event of Default or of an event that, with notice or
lapse of time or both, would become an Event of Default, or if such officer is
aware that such an event has occurred and is continuing, specifying the event
and its status.
Section 5.06. Other Data.
----------
In addition, the Servicer, on request of the Trustee or the
Certificate Administrator, shall furnish the Trustee or the Certificate
Administrator (as the case may be) such underlying data as may reasonably be
requested.
-72-
<PAGE>
Section 5.07. Statements to Certificateholders.
--------------------------------
Concurrently with each distribution to Certificateholders pursuant to
this Article V, the Trustee shall mail, or cause the Paying Agent to mail, to
each Certificateholder at the address appearing on the Certificate Register a
statement as of the related Distribution Date prepared by the Servicer setting
forth:
(1) the Class [A-1] Distribution Amount for such Distribution Date;
(2) the amount of principal to be distributed to the Class [A-1]
Certificateholders, separately stating the contribution thereto from each
of the amounts specified in clauses (a) through (e), inclusive, of the
definition of Total Regular Principal Amount and from the amount of clause
(b) of the definition of Formula Principal Distribution Amount;
(3) the amount of interest to be distributed to Class [A-1]
Certificateholders on such Distribution Date (separately identifying any
Class [A-1] Unpaid Interest Shortfall included in such distribution);
(4) the remaining Class [A-1] Certificate Balance after giving
effect to the payment of principal to be made on such Distribution Date (on
which interest will be calculated on the next succeeding Distribution
Date);
[(5) the Class A-IO Distribution Amount for such Distribution Date;
(6) the amount of interest to be distributed to Class A-IO
Certificateholders on such Distribution Date (separately identifying any
Class A-IO Unpaid Interest Shortfall included in such distribution);
(7) the remaining Class A-IO Notional Principal Amount after giving
effect to the payment of principal to be made on such Distribution Date (on
which interest will be calculated on the next succeeding Distribution
Date);]
[(8)] the Class M Distribution Amount for such Distribution Date;
[(9)] the amount of principal to be distributed to the Class M
Certificateholders, separately stating the contribution thereto from each
of the amounts specified in clauses (a) through (e), inclusive, of the
definition of Total Regular Principal Amount and from the amount of clause
(b) of the definition of Formula Principal Distribution Amount;
[(10)] the amount of interest to be distributed to Class M
Certificateholders on such Distribution Date (separately identifying any
Class M Unpaid Interest Shortfall included in such distribution);
-73-
<PAGE>
[(11)] the remaining Class M Certificate Balance after giving effect
to the payment of principal to be made on such Distribution Date (on which
interest will be calculated on the next succeeding Distribution Date);
[(12)] the Class B-1 Distribution Amount for such Distribution Date;
[(13)] the amount of principal to be distributed to the Class B-1
Certificateholders, separately stating the contribution thereto from each
of the amounts specified in clauses (a) through (e), inclusive, of the
definition of Total Regular Principal Amount and from the amount of clause
(b) of the definition of Formula Principal Distribution Amount;
[(14)] the amount of interest to be distributed to Class B-1
Certificateholders on such Distribution Date (separately identifying any
Class B-1 Unpaid Interest Shortfall included in such distribution);
[(15)] the remaining Class B-1 Certificate Balance after giving
effect to the payment of principal to be made on such Distribution Date (on
which interest will be calculated on the next succeeding Distribution
Date);
[(16)] the Class B-2 Distribution Amount for such Distribution Date;
[(17)] the amount of principal to be distributed to the Class B-2
Certificateholders, separately stating the contribution thereto from each
of the amounts specified in clauses (a) through (e), inclusive, of the
definition of Total Regular Principal Amount and from the amount of clause
(b) of the definition of Formula Principal Distribution Amount;
[(18)] the amount of interest to be distributed to Class B-2
Certificateholders on such Distribution Date (separately identifying any
Class B-2 Unpaid Interest Shortfall included in such distribution);
[(19)] the remaining Class B-2 Certificate Balance after giving
effect to the payment of principal to be made on such Distribution Date (on
which interest will be calculated on the next succeeding Distribution
Date);
[(20)] the number and aggregate remaining principal balance of
Contracts that are delinquent 31 to 59 days, 60 to 89 days, and 90 or more
days, respectively;
[(21)] the amount of fees and expenses payable out of the Trust Fund
for such Collection Period;
[(22)] the percentage obtained by dividing the aggregate Certificate
Balances (after giving effect to the distributions on the Certificates made
on such Distribution Date) by the aggregate Initial Certificate Balances;
-74-
<PAGE>
[(23) the Senior Percentage;]
[(24) the Class M Percentage;]
[(25) the Class B Percentage;]
[(26)] the balance in the Reserve Account, if any (before and after
giving effect to the distributions on such Distribution Date);
[(27)] the Reserve Account Draw Amount, if any, for such Distribution
Date and the amount thereof applied to interest and principal on the Class
[A-1, Class A-IO,] Class M, Class B-1 and Class B-2 Certificates, stated
separately; [and any withdrawals made from the Reserve Account since the
last Distribution Date pursuant to Section 5.03;
[(28)] the Average Thirty Day Delinquency Ratio and the Average Sixty
Day Delinquency Ratio for such Distribution Date;
[(29)] the Cumulative Realized Losses (as a percentage of the Cut-Off
Date Pool Principal Balance) for such Distribution Date;
[(30)] the Current Realized Loss Ratio for such Distribution Date;
[(31)] the amount of any Monthly Advance and the Outstanding Amount
Advanced with respect to such Distribution Date;
[(32)] the amounts, if any, to be distributed to the Reserve Account
for such Distribution Date; and
[(33)] such other customary factual information as is available to
the Servicer as the Servicer deems necessary and can obtain reasonably from
its existing data base to enable Certificateholders to prepare their tax
returns.
In the case of information furnished pursuant to clauses (1) through [(33)]
above, the amounts shall be expressed as a dollar amount per Certificate with a
$1,000 denomination.
Within a reasonable period of time after the end of each calendar year,
subject to the next sentence, but in no event later than 90 days after the end
of such year, the Servicer shall prepare and furnish to the Trustee, the Paying
Agent and the Certificate Administrator, and the Trustee, promptly upon receipt,
shall furnish or cause the Paying Agent to furnish to each Person who at any
time during the calendar year was the Holder of a Certificate, a statement
containing the information set forth in clauses (2) and (3) above, in the case
of Class [A-1] Certificateholders, [(6) and (7) above, in the case of Class A-IO
Certificateholders,] [(9) and (10)] above, in the case of Class M
Certificateholders, [(13) and (14)] above, in the case of Class B-1
Certificateholders and [(17) and (18)] above, in the case of Class B-2
Certificateholders, aggregated for such calendar year or applicable portion
thereof during which such Person was a Certificateholder. Such obligation of
the Servicer shall be deemed to have been satisfied to the extent that
-75-
<PAGE>
substantially comparable information shall be provided by the Servicer pursuant
to any requirements of the Code as from time to time in force. On each
Distribution Date, the Servicer shall forward or cause to be forwarded by mail
to each Holder of a Class R Certificate, a copy of the Monthly Report for such
Distribution Date. The Servicer shall also forward or cause to be forwarded by
mail to each Holder of a Class R Certificate, a statement setting forth such
information as the Servicer deems necessary or appropriate.
Within a reasonable period of time after the end of each calendar year, the
Servicer shall furnish or cause to be furnished to each Person who at any time
during the calendar year was a Holder of a Class R Certificate a statement
containing the applicable distribution information provided pursuant to this
Section 5.07 aggregated for such calendar year or applicable portion thereof
during which such Person was a Holder of a Class R Certificate. Such obligation
of the Servicer shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Servicer pursuant
to any requirements of the Code. A Certificate Owner holding Certificates of a
Class representing in the aggregate at least 5% of the Percentage Interests of
such Class shall, upon written request to the Trustee certifying its beneficial
ownership of such Certificates, be entitled to receive copies of all reports
provided by the Trustee. Copies of all reports provided by the Trustee to the
Certificateholders shall also be provided to each Rating Agency.
Section 5.08. Reserve Account.
---------------
(a) [On the Closing Date, the Trustee shall establish and
maintain the Reserve Account titled "[Trustee] in trust for registered holders
of GreenPoint Credit Corp. Manufactured Housing Contract Senior/Subordinate
Pass-Through Certificates, Series 199[]-[]" as part of the Trust Fund for the
benefit of the Certificateholders as described herein. [The Reserve Account
shall have an initial balance as of the Closing Date of zero, and will be funded
from time to time in accordance with clause (ix) of Section 5.02(a).][The
Contract Sellers shall cause the Reserve Account to have an initial balance of
$6,859,826 on or prior to the Closing Date. To the extent funds on deposit in
the Reserve Account fall below the Reserve Account Cap, the Reserve Account will
be replenished from time to time in accordance with clause [(ix)] of Section
5.02(a).] On each Distribution Date, the Trustee, based upon information in the
Monthly Report, shall withdraw the Reserve Account Draw Amount, if any, from the
Reserve Account and deposit it in the Certificate Account. Any Reserve Account
Draw Amount shall be applied pursuant to Section 5.02. After giving effect to
the withdrawal of the Reserve Account Draw Amount, if any, for a Distribution
Date, the excess, if any, of the amount on deposit in the Reserve Account over
the Reserve Account Cap shall be distributed to the Class R Certificateholders.]
(b) [Amounts held in the Reserve Account shall be invested by
the Trustee in Eligible Investments in the name of the Trustee, as Trustee,
maturing, or in the case of a money market fund redeemable (without premium or
penalty) not later than one Business Day prior to the next succeeding
Distribution Date (except that if such Eligible Investment is an obligation of
the institution that maintains the Reserve Account, then such Eligible
Investment shall mature, or in the case of a money market fund shall be
redeemed, not later than such Distribution Date) and
-76-
<PAGE>
shall not be sold or disposed of prior to its maturity. All net income and gain,
if any, from any such investments in respect of a Distribution Date shall be
paid to the Holders of the Class R Certificates.]
-77-
<PAGE>
ARTICLE VI
THE CERTIFICATES
Section 6.01. The Certificates.
----------------
The Certificates shall be substantially in the forms attached hereto
as Exhibit B-1, [Exhibit B-2, Exhibit B-3, Exhibit B-4, Exhibit B-5] and Exhibit
----------- ----------- ----------- ----------- ------------ -------
C. The Class [A-1, , Class A-IO,] Class M, Class B-1 and Class B-2 Certificates
- -
shall be issuable in registered form, in the minimum dollar denominations,
integral dollar multiples in excess thereof (except that one Certificate in each
Class may be issued in a different amount which must be in excess of the
applicable minimum dollar denomination) and aggregate dollar denominations per
Class as set forth in the following table:
<TABLE>
<CAPTION>
Integral Initial Certificate
Multiples in Balance [or
Minimum Excess of Latest Scheduled Initial Class A-IO
Class Denomination Minimum Distribution Date Notional Principal
- ----- ------------ ------- ----------------- Amount]
-------
<S> <C> <C> <C> <C>
[A-1] $ 1,000 $1 $
[A-IO $ 1,000 $1 $]
M $ 1,000 $1 $
B-1 $ 1,000 $1 $
B-2 $250,000 $1 $;
</TABLE>
provided, that one Class B-2 Certificate will have a denomination representing
the remainder of the Initial Class B-2 Certificate Balance.
The Class R Certificate shall initially be issued with no principal
balance.
The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by an authorized officer. Certificates bearing the manual
or facsimile signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trustee, notwithstanding that such individuals or any of them have ceased to
be so authorized prior to the authentication and delivery of such Certificates
or did not hold such offices at the date of such authentication and delivery. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form set forth as attached hereto executed
by the Trustee by manual signature, and such certificate of authentication upon
-78-
<PAGE>
any Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication. On the Closing
Date, the Trustee shall authenticate the Certificates to be issued at the
written direction of the Contract Seller or any Affiliate thereof.
The Contract Seller shall provide, or cause to be provided, to the
Trustee on a continuous basis, an adequate inventory of Certificates to
facilitate transfers.
Section 6.02. Certificate Register; Registration of Transfer and Exchange of
--------------------------------------------------------------
Certificates.
------------
(a) The Trustee shall maintain, or cause to be maintained, a
Certificate Register for the Trust Fund in which, subject to the provisions of
subsections (b) and (c) below and to such reasonable regulations as it may
prescribe, the Trustee shall provide for the registration of Certificates and of
transfers and exchanges of Certificates as herein provided. Upon surrender for
registration of transfer of any Certificate, the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Certificates of the same Class and of like aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates that the Certificateholder making the
exchange is entitled to receive. Every Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Trustee duly executed by the
holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or exchange
shall be canceled and subsequently destroyed by the Trustee in accordance with
the Trustee's customary procedures.
(b) No Transfer of a Private Certificate shall be made unless
such Transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under the Securities Act and such state securities
laws. In the event that a Transfer is to be made in reliance upon an exemption
from the Securities Act and such laws, in order to assure compliance with the
Securities Act and such laws, the Certificateholder desiring to effect such
Transfer and such Certificateholder's prospective transferee, at no expense to
the Trustee, the Contract Seller or the Servicer, shall be required to provide
to the Trustee, the Contract Seller and the Servicer, an investment letter
substantially the forms set forth in Exhibit H (the "Transferor Certificate"),
---------
with respect to the Class B-2 Certificates, and either Exhibit J (the
---------
"Investment Letter") or Exhibit K (the "Rule
---------
-79-
<PAGE>
144A Letter") or as otherwise acceptable to the Contract Seller. In the event
that such a Transfer is to be made within two years from the date of the initial
issuance of Certificates pursuant hereto (other than a Transfer as to which the
proposed transferee has provided a Rule 144A Letter), there shall also be
delivered to the Trustee, the Contract Seller and the Servicer an Opinion of
Counsel that such Transfer may be made pursuant to an exemption from the
Securities Act and such state securities laws, which Opinion of Counsel shall
not be an expense of the Contract Seller, the Servicer or the Trustee. The
Contract Seller shall provide to any Holder of Private Certificate and any
prospective transferee designated by any such Holder, information regarding the
Certificates and the Contracts and such other information as shall be necessary
to satisfy the condition to eligibility set forth in Rule 144A(d)(4) for
Transfer of any Private Certificate without registration thereof under the
Securities Act pursuant to the registration exemption provided by Rule 144A. The
Trustee and the Servicer shall cooperate with the Contract Seller in providing
the Rule 144A information referenced in the preceding sentence, including
providing to the Contract Seller such information regarding the Certificates,
the Contracts and other matters regarding the Trust Fund as the Contract Seller
shall reasonably request to meet its obligation under the preceding sentence.
Each Holder of a Private Certificate desiring to effect such Transfer shall, and
does hereby agree to, indemnify the Trustee, the Contract Seller and the
Servicer 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.
No transfer of an ERISA Restricted Certificate will be made unless the
Trustee has received either (i) an Opinion of Counsel, at no expense to the
Trustee, the Contract Seller or the Servicer, acceptable to and in form and
substance satisfactory to the Trustee, the Contract Seller and the Servicer with
respect to the permissibility of such transfer under ERISA and Section 4975 of
the Code and stating, among other things, that the transferee's acquisition of
such ERISA Restricted Certificate will not constitute or result in a non-exempt
prohibited transaction under Section 406 of ERISA or Section 4975 of the Code
and will not subject the Servicer, the Contract Seller or the Trustee to any
obligation or liability in addition to those undertaken in this Agreement or
(ii) a representation letter from the transferee, substantially in the form of
paragraph 5 of Exhibit G (as to the Class R Certificates) or Exhibit J or
Exhibit K (as to the Class M, Class B-1 or Class B-2 Certificates).
(c) (i) Each Person who has or who acquires any Ownership Interest
in a Class R Certificate shall be deemed by the acceptance or acquisition of
such Ownership Interest to have agreed to be bound by the following provisions
and to have irrevocably authorized the Trustee or its designee under clause
(iii)(A) below to deliver payments to a Person other than such Person and to
negotiate the terms of any mandatory sale under clause (iii)(B) below and to
execute all instruments of transfer and to do all other things necessary in
connection with any such sale. The rights of each Person acquiring any
Ownership Interest in a Class R Certificate are expressly subject to the
following provisions:
(A) Each Person holding or acquiring any Ownership Interest in a
Class R Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as a
Permitted Transferee.
-80-
<PAGE>
(B) In connection with any proposed Transfer of any Ownership Interest
in a Class R Certificate, the Trustee shall require delivery to it, and
shall not register the Transfer of any Class R Certificate until its
receipt of, (I) an affidavit and (a "Transfer Affidavit," in the form
attached hereto as Exhibit G-1) from the proposed Transferee, representing
and warranting, among other things, that it is a Permitted Transferee, that
it is not acquiring its Ownership Interest in the Class R Certificate that
is the subject of the proposed Transfer as a nominee, trustee or agent for
any Person who is not a Permitted Transferee, that for so long as it
retains its Ownership Interest in a Class R Certificate, it will endeavor
to remain a Permitted Transferee, and that it has reviewed the provisions
of this Section 6.02(c) and agrees to be bound by them, and (II) a
certificate, in the form attached hereto as Exhibit G-2, from the Holder
wishing to transfer the Class R Certificate, representing and warranting,
among other things, that no purpose of the proposed Transfer is to impede
the assessment or collection of tax.
(C) Notwithstanding the delivery of a Transfer Affidavit by a proposed
Transferee under clause (B) above, if a Responsible Officer of the Trustee
who is assigned to this Agreement has actual knowledge that the proposed
Transferee is not a Permitted Transferee, no Transfer of an Ownership
Interest in a Class R Certificate to such proposed Transferee shall be
effected.
(D) Each Person holding or acquiring any Ownership Interest in a Class
R Certificate shall agree (x) to require a Transfer Affidavit from any
other Person to whom such Person attempts to transfer its Ownership
Interest in a Class R Certificate and (y) not to transfer its Ownership
Interest unless it provides a certificate to the Trustee in the form
attached hereto as Exhibit G-2.
(E) Each Person holding or acquiring an Ownership Interest in a Class
R Certificate, by purchasing an Ownership Interest in such Certificate,
agrees to give the Trustee written notice that it is a "pass-through
interest holder" within the meaning of Temporary Treasury Regulations
Section 1.67-3T(a)(2)(i)(A) immediately upon acquiring an Ownership
Interest in a Class R Certificate, if it is, or is holding an Ownership
Interest in a Class R Certificate on behalf of, a "pass-through interest
holder."
(ii) The Trustee will register the Transfer of any Class R Certificate
only if it shall have received the Transfer Affidavit, a certificate of the
Holder requesting such transfer in the form attached hereto as Exhibit G-2.
Transfers of the Class R Certificates to Non-United States Persons and
Disqualified Organizations (as defined in Section 860E(e)(5) of the Code) are
prohibited.
(iii) (A) If any Disqualified Organization shall become a holder of a
Class R Certificate, then the last preceding Permitted Transferee shall be
restored, to the extent permitted by law, to all rights and obligations as
Holder thereof retroactive to the date of registration of such Transfer of such
Class R Certificate. If a Non-United States Person shall
-81-
<PAGE>
become a holder of a Class R Certificate, then the last preceding United States
Person shall be restored, to the extent permitted by law, to all rights and
obligations as Holder thereof retroactive to the date of registration of such
transfer of such Class R Certificate. If a transfer of a Class R Certificate is
disregarded pursuant to the provisions of Treasury Regulations Section 1.860E-1
or Section 1.860G-3, then the last preceding Permitted Transferee shall be
restored, to the extent permitted by law, to all rights and obligations as
Holder thereof retroactive to the date of registration of such Transfer of such
Class R Certificate. The Trustee shall be under no liability to any Person for
any registration of Transfer of a Class R Certificate that is in fact not
permitted by this Section 6.02(c) or for making any payments due on such
Certificate to the holder thereof or for taking any other action with respect to
such holder under the provisions of this Agreement.
(B) If any purported Transferee shall become a Holder of a Class R
Certificate in violation of the restrictions in this Section 6.02(c) and to the
extent that the retroactive restoration of the rights of the Holder of such
Class R Certificate as described in clause (iii)(A) above shall be invalid,
illegal or unenforceable, then either the Servicer shall have the right, without
notice to the holder or any prior holder of such Class R Certificate, to sell
such Class R Certificate to a purchaser selected by the Servicer on such terms
as the Servicer may choose. Such purported Transferee shall promptly endorse
and deliver each Class R Certificate in accordance with the instructions of the
Servicer. Such purchaser may be the Servicer itself or any Affiliate of the
Servicer. The proceeds of such sale, net of the commissions (which may include
commissions payable to the Servicer or its Affiliates), expenses and taxes due,
if any, will be remitted by the Servicer to such purported Transferee. The
terms and conditions of any sale under this clause (iii)(B) shall be determined
in the sole discretion of the Servicer, and the Servicer shall not be liable to
any Person having an Ownership Interest in a Class R Certificate as a result of
its exercise of such discretion.
(iv) The Servicer, on behalf of the Trustee, shall use its reasonable
efforts to make available, upon written request from the Trustee, all
information necessary to compute any tax imposed (A) as a result of the Transfer
of an Ownership Interest in a Class R Certificate to any Person who is a
Disqualified Organization, including the information regarding "excess
inclusions" of such Class R Certificates required to be provided to the Internal
Revenue Service and certain Persons as described in Treasury Regulations
Sections 1.860D-1(b)(5) and 1.860E-2(a)(5), and (B) as a result of any regulated
investment company, real estate investment trust, common trust fund,
partnership, trust, estate or organization described in Section 1381 of the Code
that holds an Ownership Interest in a Class R Certificate having as among its
record holders at any time any Person who is a Disqualified Organization.
Reasonable compensation for providing such information may be required by the
Servicer from such Person.
(v) The provisions of this Section 6.02(c) set forth prior to this clause
(v) may be modified, added to or eliminated pursuant to Section 11.01, provided
that there shall have also been delivered to the Trustee the following:
(A) written notification from each Rating Agency to the effect that
the modification, addition to or elimination of such provisions will not
cause such Rating
-82-
<PAGE>
Agency to downgrade its then-current ratings, if any, of any Class of the
Class A, Class M or Class B below the lower of the then-current rating or
the rating assigned to such Certificates as of the Closing Date by such
Rating Agency; and
(B) a certificate of the Servicer stating that the Servicer has
received an Opinion of Counsel, in form and substance satisfactory to the
Servicer, to the effect that such modification, addition to or absence of such
provisions will not cause Trust Fund to cease to qualify as a REMIC and will not
cause (x) the Trust Fund to be subject to an entity-level tax caused by the
Transfer of any Class R Certificate to a Person that is a Disqualified
Organization or (y) a Certificateholder or another Person to be subject to a
REMIC-related tax caused by the Transfer of a Class R Certificate to a Person
that is not a Permitted Transferee.
(d) The preparation and delivery of all certificates and opinions referred
to above in this Section 6.02 shall not be an expense of the Trust Fund, the
Trustee, the Contract Seller or the Servicer.
Section 6.03. Mutilated, Destroyed, Lost or Stolen Certificates.
-------------------------------------------------
If (a) any mutilated Certificate is surrendered to the Trustee, or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate and of the ownership thereof and (b) there is delivered to
the Trustee and the Certificate Administrator, if any, such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Trustee that such Certificate has been acquired by a
bona fide purchaser, the Trustee shall execute, authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like Class, tenor and Percentage Interest. In
connection with the issuance of any new Certificate under this Section 6.03, 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 (including the fees and expenses of the Trustee) connected therewith.
Any replacement Certificate issued pursuant to this Section 6.03 shall
constitute complete and indefeasible evidence of ownership in the Trust Fund, as
if originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time. All Certificates surrendered to the Trustee under
the terms of this Section 6.03 shall be canceled and destroyed by the Trustee in
accordance with its standard procedures without liability on its part.
Section 6.04. Persons Deemed Owners.
---------------------
The Servicer, the Trustee and any agent of the Servicer or the Trustee
may treat the person in whose name any Certificate is registered as the owner of
such Certificate for the purpose of receiving distributions as provided in this
Agreement and for all other purposes whatsoever, and neither the Servicer, the
Trustee nor any agent of the Servicer or the Trustee shall be affected by any
notice to the contrary.
-83-
<PAGE>
Section 6.05. Access to List of Certificateholders' Names and Addresses.
---------------------------------------------------------
If three or more Certificateholders (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication that such Certificateholders propose to transmit or if the
Contract Seller or Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt of
such request, provide the Contract Seller, the Servicer or such
Certificateholders at such recipients' expense the most recent list of the
Certificateholders of the Trust Fund held by the Trustee, if any. The Contract
Seller and every Certificateholder, by receiving and holding a Certificate,
agree that the Trustee shall not be held accountable by reason of the disclosure
of any such information as to the list of the Certificateholders hereunder,
regardless of the source from which such information was derived.
Section 6.06. Global Certificates.
-------------------
The Class [A-1, Class A-IO,] Class M and Class B-1 Certificates, upon
original issuance, shall be issued in the form of one or more typewritten
Certificates representing the Global Certificates, to be delivered to the
Depository by or on behalf of the Contract Seller. Such Global Certificates
shall initially be registered on the Certificate Register in the name of the
Depository or its nominee, and no Certificate Owner will receive a definitive
certificate representing such Certificate Owner's interest in such Certificates,
except as provided in Section 6.08. Unless and until definitive, fully
registered Certificates ("Definitive Certificates") have been issued to the
Certificate Owners of such Certificates pursuant to Section 6.08:
(a) the provisions of this Section shall be in full force and effect;
(b) the Contract Seller, the Servicer and the Trustee may treat
the Depository and the Depository Participants for all purposes as the
authorized representative of the respective Certificate Owners of such
Certificates and, in the case of distributions, with the Depository as the
authorized representative of the Depository Participants and the Certificate
Owners;
(c) registration of the Global Certificates may not be
transferred by the Trustee except to another Depository;
(d) the rights of the respective Certificate Owners of such
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of such Certificates and the Depository and/or the Depository
Participants. Pursuant to the Depository Agreement, unless and until Definitive
Certificates are issued with respect to the Class [A-1, Class A-IO,] Class M and
Class B-1 Certificates pursuant to Section 6.08, the Depository will make book-
entry transfers among the Depository Participants and receive and transmit
distributions of principal and interest on the related Certificates to such
Depository Participants;
-84-
<PAGE>
(e) the Depository may collect its usual and customary fees, charges
and expenses from its Depository Participants;
(f) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants; and
(g) to the extent that the provisions of this Section conflict with
any other provisions of this Agreement, the provisions of this Section shall
control.
For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of,
Certificateholders evidencing a specified percentage of the Certificate Balance
of a Class of Certificates, such direction or consent may be given by
Certificate Owners (acting through the Depository and the Depository
Participants) owning Global Certificates evidencing the requisite percentage of
the Certificate Balance [or Class A-IO Notional Principal Amount] of such Class
of Certificates[, as applicable,] or the requisite Percentage Interests.
Section 6.07. Notices to Depository.
---------------------
Whenever any notice or other communication is required to be given to
Certificateholders of any Class with respect to which Global Certificates have
been issued, unless and until Definitive Certificates shall have been issued to
the related Certificate Owners, the Trustee shall give all such notices and
communications to the Depository.
Section 6.08. Definitive Certificates.
-----------------------
If, after Global Certificates have been issued with respect to Class
[A-1, Class A-IO,] Class M and Class B-1 Certificates, (a) the Servicer advises
the Trustee that the Depository is no longer willing or able to discharge
properly its responsibilities under the Depository Agreement with respect to
such Certificates and the Trustee or the Contract Seller is unable to locate a
qualified successor, (b) the Contract Seller, at their sole option, advise the
Trustee that they elect to terminate the book-entry system with respect to such
Certificates through the Depository or (c) after the occurrence and continuation
of an Event of Default, Certificate Owners of such Global Certificates having
not less than 51% of the Voting Rights evidenced by the related Class advise the
Trustee and the Depository in writing through the Depository Participants that
the continuation of a book-entry system with respect to such Certificates
through the Depository (or its successor) is no longer in the best interests of
the Certificate Owners with respect to such Certificates, then the Trustee shall
notify all Certificate Owners of such Class of Certificates, through the
Depository, of the occurrence of any such event and of the availability of
Definitive Certificates for such Class to Certificate Owners requesting the
same. The Contract Seller shall provide the Trustee with an adequate inventory
of certificates to facilitate the issuance and transfer of Definitive
Certificates. Upon surrender to the Trustee of any such Certificates by the
Depository, accompanied by registration instructions from the Depository for
registration, the Trustee shall authenticate and deliver such Definitive
Certificates. Neither the Contract Seller nor the Trustee shall be liable for
any delay in delivery of such instructions and each may
-85-
<PAGE>
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of such 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 such Definitive Certificates as Certificateholders hereunder.
-86-
<PAGE>
ARTICLE VII
THE CONTRACT SELLER AND THE SERVICER
Section 7.01. Liabilities to Obligors.
-----------------------
No liability to any Obligor under any of the Contracts arising out of
any act or omission to act of the Servicer in servicing the Contracts prior to
the Closing Date is intended to be assumed by the Contract Seller, the Trustee,
the Certificate Administrator 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 Contract
Seller, the Trustee, the Certificate Administrator and the Certificateholders
expressly disclaim such assumption.
Section 7.02. Servicer's Indemnities.
----------------------
The Servicer shall defend and indemnify the Trust Fund, the Trustee,
the Certificate Administrator, the Certificate Registrar, the Paying Agent, the
Contract Seller and the Certificateholders against any and all costs, expenses,
losses, damages, claims or liabilities, including reasonable fees and expenses
of counsel and expenses of litigation, arising from third party claims or
actions (including penalties or fees imposed by any governmental or regulatory
body or agency) in respect of any action taken by the Servicer with respect to
any Contract or Manufactured Home constituting a failure by the Servicer to
perform its obligations under this Agreement. This indemnity shall survive any
Event of Default (but a Servicer's obligations under this Section 7.02 shall not
relate to any actions of any subsequent Servicer after an Event of Default) and
any payment of the amount owing under, or any repurchase by the Contract Seller
of, any such Contract.
Section 7.03. Operation of Indemnities.
------------------------
Indemnification under this Article VII shall include reasonable fees
and expenses of counsel and expenses of litigation. Any amounts received by the
Trustee from the Servicer pursuant to this Article VII shall be deposited in the
Certificate Account pursuant to Section 4.05. If the Servicer has made any
indemnity payments to the Trustee pursuant to this Article VII and the Trustee
thereafter collects any of such amounts from others, the Trustee will repay such
amounts collected to the Servicer, together with any interest collected thereon.
Section 7.04. Merger or Consolidation of the Contract Seller or the Servicer.
--------------------------------------------------------------
The Contract Seller and the Servicer will each keep in full effect
their existence, rights and franchises as a national banking association or
federal savings bank, as the case may be, and will obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Contracts and
to perform its duties under this Agreement.
-87-
<PAGE>
Any Person into which the Contract Seller or the Servicer may be
merged or consolidated, or any corporation or association resulting from any
merger, conversion or consolidation to which the Contract Seller or the Servicer
shall be a party, or any Person succeeding to the business of the Contract
Seller or the Servicer, shall be the successor of the Contract Seller or 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 requirements of Section 7.07 with respect to the
qualifications of a successor to the Servicer. The Contract Seller and the
Servicer shall promptly notify each Rating Agency of any such merger to which it
is a party.
Section 7.05. Limitation on Liability of the Contract Seller, the Servicer and
----------------------------------------------------------------
Others.
------
Neither the Contract Seller, the Servicer nor any of their directors,
officers, employees or agents shall be under any liability to the Trustee or the
Certificateholders for any errors in judgment or any action taken or for
refraining from the taking of any action, pursuant to this Agreement; provided,
--------
however, that this provision shall not protect the Contract Seller or any such
- -------
Person against any liability that would otherwise be imposed by reason of its
willful misconduct, or gross negligence; provided, further that this provision
-------- -------
shall not protect the Servicer or any such Person against any liability that
would otherwise be imposed by reason of its willful misconduct or gross
negligence. The Contract Seller, the Servicer and any of their directors,
officers, employees or agents may rely on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. Neither the Contract Seller nor the Servicer shall be under any
obligation to appear in, prosecute or defend any legal action which arises under
this Agreement (other than in connection with the enforcement of any Contract in
accordance with this Agreement) and which in its opinion may involve it in any
expenses or liability; provided, however, that the Servicer may in its
-------- -------
discretion undertake any such other legal action which it may deem necessary or
desirable in respect to this Agreement and the rights and duties of the parties
hereto. In such event, the legal expenses and costs of such other legal action
and any liability resulting therefrom shall be expenses, costs and liabilities
payable from the Certificate Account, and the Servicer shall be entitled to be
reimbursed therefor out of the Certificate Account as provided by Section 5.03.
Section 7.06. Assignment by Servicer.
----------------------
Notwithstanding any provision to the contrary in this Agreement,
without the consent of the Trustee or any Certificateholder, the Servicer may,
with the prior written consent of the Contract Seller, which consents shall not
be unreasonably withheld, assign its rights and delegate its duties and
obligations under this Agreement; provided that the Person accepting such
--------
assignment or delegation shall be a Person which is satisfactory to the Contract
Seller, in its respective sole judgment, shall be willing to service the
Contracts, and shall execute and deliver to the Contract Seller an agreement, in
form and substance reasonably satisfactory to the Contract Seller and the
Trustee, which contains an assumption by such Person of the due and punctual
performance and observance of each covenant and condition to be performed or
observed by the Servicer under this Agreement; and further provided that each
------- --------
Rating Agency's
-88-
<PAGE>
rating of any Class of the Certificates in effect immediately prior to such
assignment and delegation will not be withdrawn or reduced as a result of such
assignment and delegation, as evidenced by a letter from each Rating Agency. In
the case of any such assignment and delegation, the Servicer shall be released
from its obligations under this Agreement, except that the Servicer shall remain
liable for all liabilities and obligations incurred by it as Servicer hereunder
prior to the satisfaction of the conditions to such assignment and in
delegation.
Section 7.07. Successor to the Servicer.
-------------------------
In connection with the termination of the Servicer's responsibilities
and duties under this Agreement pursuant to Section 8.01, the Trustee shall (i)
succeed to and assume all of the Servicer's responsibilities, rights, duties and
obligations under this Agreement (except the duty to pay and indemnify the
Trustee pursuant to Section 9.05 hereof), or (ii) with the consent of the
Contract Seller, which consent shall not be unreasonably withheld, appoint a
successor which shall have a net worth of not less than $50,000,000 and shall
have serviced for at least one year prior to such appointment a portfolio of not
less than $100,000,000 principal balance of manufactured housing installment
sale contracts or installment loans and which shall succeed to all rights and
assume all of the responsibilities, duties and liabilities of the Servicer under
this Agreement prior to the termination of the Servicer's responsibilities,
duties and liabilities under this Agreement (except that the duty to pay and
indemnify the Trustee pursuant to Section 9.05 hereof shall be subject to
negotiation at the time of such appointment). If the Trustee has become the
successor to the Servicer in accordance with this Section 7.07, the Trustee may,
if it shall be unwilling to continue to so act, or shall, if it is unable to so
act, appoint, or petition a court of competent jurisdiction to appoint, a
successor satisfying the requirements set out in clause (ii) above. In
connection with any appointment of a successor Servicer, the Trustee may make
such arrangements for the compensation of such successor out of payments on
Contracts as it and such successor shall agree or such court shall determine;
provided, however, that the Monthly Servicing Fee shall not be in excess of a
- -------- -------
monthly amount equal to 1/12th of the product of 1% and the Pool Scheduled
Principal Balance for the Distribution Date in respect of which such
compensation is being paid without the consent of all of the Certificateholders
and notice to each Rating Agency. If the Servicer's duties, responsibilities and
liabilities under this Agreement should be terminated pursuant to Section 7.06
or 8.01, the Servicer shall discharge such duties and responsibilities during
the period from the date it acquires knowledge of such termination until the
effective date thereof with the same degree of diligence and prudence which it
is obligated to exercise under this Agreement, shall cooperate with the Trustee
and any successor Servicer in effecting the termination of the Servicer's
responsibilities and rights hereunder, and shall take no action whatsoever that
might impair or prejudice the rights or financial condition of its successor.
The assignment by a Servicer pursuant to Section 7.06 or removal of Servicer
pursuant to Section 8.01 shall not become effective until a successor shall be
appointed pursuant to this Section 7.07 and shall in no event relieve the
Contract Seller of liability pursuant to Section 3.05 for breach of the
representations and warranties made pursuant to Section 3.02 or 3.03. The
Servicer being terminated pursuant to Section 8.01 or Section 7.06 shall bear
all costs of a transfer of servicing therefrom, including but not limited to
those of the Trustee reasonably
-89-
<PAGE>
allocable to specific employees and overhead, legal fees and expenses, and costs
of amending the Agreement, if necessary.
Any successor appointed as provided herein shall execute, acknowledge
and deliver to the Servicer and to the Trustee an instrument accepting such
appointment, whereupon such successor shall become fully vested with all the
rights, powers, duties, responsibilities, obligations and liabilities of the
Servicer, with like effect as if originally named as a party to this Agreement
and the Certificates. Any assignment by or termination of the Servicer pursuant
to Section 7.06 or 8.01 or the termination of this Agreement pursuant to Section
10.01 shall not affect any claims that the Trustee may have against the Servicer
arising prior to any such termination or resignation.
The Servicer shall timely deliver to the successor the funds in the
Certificate Account and REO Account and all Contract Files, Land Home Contract
Files and related documents and statements held by it hereunder and the Servicer
shall account for all funds and shall execute and deliver such instruments and
do such other things as reasonably may be required to more fully and definitely
vest and confirm in the successor all such rights, powers, duties,
responsibilities, obligations and liabilities of the Servicer. 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 transfer instruments in respect of certificates
of title and financing statements relating to the Manufactured Homes), and to do
any and all acts or things necessary or appropriate to effect the purposes of
such notice of termination.
Upon a successor's acceptance of appointment as such, the Trustee
shall notify in writing the Certificateholders and each Rating Agency of such
appointment.
-90-
<PAGE>
ARTICLE VIII
EVENTS OF DEFAULT
Section 8.01. Events of Default.
-----------------
In case one or more of the following Events of Default shall occur and
be continuing, that is to say:
(a) any failure by the Servicer to make any deposit or payment,
or to remit to the Trustee any payment, required to be made under the terms of
this Agreement which continues unremedied for a period of five days after the
date upon which written notice of such failure, requiring the same to be
remedied, shall have been given to the Servicer by the Trustee or the Contract
Seller or to the Servicer, the Trustee and the Contract Seller by the Holders of
Certificates evidencing Fractional Interests aggregating not less than 25%; or
(b) failure on the part of the Servicer duly to observe or
perform in any material respect any other of the covenants or agreements on the
part of the Servicer set forth in this Agreement, including the failure to
deliver a Monthly Report, which continues unremedied for a period of 30 days
after the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Servicer by the Trustee or the Contract
Seller or to the Servicer, the Trustee and the Contract Seller by the Holders of
Certificates evidencing Fractional Interests aggregating not less than 25%; or
(c) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an involuntary case under any
present or future federal or state bankruptcy, insolvency or similar law or
appointing a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, shall have
been entered against the Servicer, and such decree or order shall have remained
in force undischarged or unstayed for a period of 60 days; or
(d) the Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating to
the Servicer or of or relating to all or substantially all of the Servicer's
property; or
(e) the Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations or
take any corporate action in furtherance of the foregoing;
then, and in each and every such case, so long as such Event of Default shall
not have been cured or waived, the Trustee may, and, the Trustee shall at the
written direction of the Holders of Certificates evidencing Fractional Interests
aggregating not less than 51% by notice in writing to the Servicer, terminate
all the rights and obligations of the Servicer under this Agreement and in
-91-
<PAGE>
and to the Contracts and the proceeds thereof, except any responsibility for its
acts or omissions during its tenure as Servicer hereunder. The Trustee shall
send a copy of a notice of any Event of Default to each Rating Agency and the
Contract Seller. On or after the receipt by the Servicer of such written notice,
all authority and power of the Servicer under this Agreement, whether with
respect to the Contracts or otherwise, shall pass to and be vested in the
successor appointed pursuant to Section 7.07. Upon the occurrence of an Event of
Default which shall not have been remedied, the Trustee may also pursue whatever
rights it may have at law or in equity to damages, including injunctive relief
and specific performance. The Trustee will have no obligation to take any action
or institute, conduct or defend any litigation under this Agreement at the
request, order or direction of any of the Certificateholders unless such
Certificateholders have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which the Trustee may incur.
Section 8.02. Waiver of Defaults.
------------------
The Holders of Certificates evidencing Fractional Interests
aggregating not less than 25% may waive any default by the Servicer in the
performance of its obligations hereunder and its consequences, except that a
default in the making of any required remittance to the Trustee for distribution
on any of the Certificates may be waived only by the affected
Certificateholders. Upon any such waiver of a past default, such default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other default or impair any right consequent thereon
except to the extent expressly so waived.
Section 8.03. Trustee to Act; Appointment of Successor.
----------------------------------------
On and after the time the Servicer receives a notice of termination
pursuant to Section 8.01, the Trustee or its appointed agent shall be the
successor in all respects to the Servicer as provided in Section 7.07 hereof.
Notwithstanding the above, or anything in Section 7.07 to the contrary, the
Trustee, if it becomes Servicer pursuant to this Section, shall have no
responsibility or obligation (i) to repurchase or substitute any Contract, (ii)
for any representation or warranty of the Servicer hereunder, and (iii) for any
act or omission of either a predecessor or successor Servicer other than the
Trustee. The Trustee may conduct any activity required of it as Servicer
hereunder through an Affiliate or through an agent. Neither the Trustee nor any
other successor Servicer shall be deemed to be in default hereunder due to any
act or omission of a predecessor Servicer, including but not limited to failure
to timely deliver to the Trustee any Monthly Report, any funds required to be
deposited to the Trust Fund, or any breach of its duty to cooperate with a
transfer of servicing as required by Section 7.07.
Section 8.04. Notification to Certificateholders.
----------------------------------
(a) Upon any such termination pursuant to Section 8.01, the
Trustee shall give prompt written notice thereof to the Contract Seller, the
Certificateholders at their respective addresses appearing in the Certificate
Register and to each Rating Agency.
-92-
<PAGE>
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Holders of Certificates notice of each
such Event of Default hereunder known to the Trustee, unless such Event of
Default shall have been cured or waived.
Section 8.05. Effect of Transfer.
------------------
(a) After a transfer of servicing duties to a successor Servicer
pursuant to Section 7.04, 7.06, 7.07 or 8.01, the Trustee or the successor
Servicer may notify Obligors to make payments that are due under the Contracts
after the effective date of the transfer of servicing duties directly to the
successor Servicer.
(b) After the transfer of servicing duties to a successor Servicer
pursuant to Section 7.04, 7.06, 7.07 or 8.01, the replaced Servicer shall have
no further obligations with respect to the management, administration, servicing
or collection of the Contracts, but in the case of a transfer pursuant to
Section 7.07 or 8.01 shall remain liable for any liability arising from the
replaced Servicer's actions hereunder and shall remain entitled to any
compensation due the replaced Servicer that had already accrued prior to such
transfer.
(c) A transfer of servicing duties to a successor Servicer shall
not affect the rights and duties of the parties hereunder (including but not
limited to the indemnities of the Servicer pursuant to Article VII), other than
those relating to the management, administration, servicing or collection of the
Contracts.
Section 8.06. Transfer of the Accounts.
------------------------
Notwithstanding the provisions of Section 8.01, if the Certificate
Account shall be maintained with the Servicer or an Affiliate of the Servicer
and an Event of Default shall occur and be continuing, the Servicer, after five
days' written notice from the Trustee, or in any event within ten days after the
occurrence of the Event of Default, shall establish a new account, which shall
be an Eligible Account, conforming with the requirements of this Agreement, at
the trust department of the Trustee or with a depository institution other than
the Servicer or an Affiliate of the Servicer, and shall promptly transfer all
funds in the Certificate Account to such new Certificate Account, which shall
thereafter be deemed the Certificate Account for the purposes hereof.
-93-
<PAGE>
ARTICLE IX
CONCERNING THE TRUSTEE
Section 9.01. Duties of Trustee.
-----------------
The Trustee, prior to the occurrence of an Event of Default and after
the curing or waiving of all Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are set forth
specifically in this Agreement. In case an Event of Default has occurred of
which a Responsible Officer has knowledge (which has not been cured or waived),
the Trustee shall exercise such of the rights and powers vested in it by this
Agreement and use the same degree of care and skill in their exercise as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs, unless it is acting as Servicer pursuant to Section 8.03 in which
case it will use the same degree of care and skill as the Servicer.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are required specifically to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own misconduct; provided, however, that:
-------- -------
(i) Prior to the occurrence of an Event of Default, and after the
curing or waiver of all such Events of Default 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 rely
conclusively, 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;
(ii) The Trustee shall not be liable personally for an error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(iii) The Trustee shall not be liable personally with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of the Holders of Certificates evidencing
Fractional Interests aggregating not less than 25% as 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.
-94-
<PAGE>
None of the provisions contained in this Agreement shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties as Trustee hereunder or in the
exercise of any of its rights or powers if there is reasonable ground for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it.
The Trustee shall have no liability for any loss on any Eligible Investment
except and only to the extent that it is an Obligor thereon.
Section 9.02. Certain Matters Affecting the Trustee.
-------------------------------------
Except as otherwise provided in Section 9.01:
(a) The Trustee may rely upon and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate, certificate
of auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) The Trustee may consult with counsel, and any written advice of its
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it hereunder
in good faith and in accordance with such advice or Opinion of Counsel;
(c) The Trustee shall be under no obligation to exercise any of the trusts
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;
(d) The Trustee shall not be liable personally for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Agreement;
(e) Prior to the occurrence of an Event of Default hereunder and after the
curing or waiving of all Events of Default which may have occurred, the Trustee
shall not be bound to make any investigation into the computations, facts or
matters stated in any resolution, certificate, statement, instrument, opinion,
report, any Monthly Report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing so to do by the Holders of
Certificates evidencing Fractional Interests aggregating not less than 25%;
provided, however, that if the payment within a reasonable time to the Trustee
- -------- -------
of the costs, expenses or liabilities likely to be incurred by it in the making
of such investigation is, in the opinion of the Trustee, not reasonably assured
to the Trustee by the security afforded to it by the terms of this Agreement,
the Trustee may require reasonable indemnity against such expense or liability
as a
-95-
<PAGE>
condition to such proceeding. The reasonable expense of every such examination
shall be paid by the Servicer, if an Event of Default shall have occurred and is
continuing, and otherwise by the Certificateholders requesting the
investigation;
(f) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys; provided, however, that any Affiliate of the Contract Seller may only
-------- -------
perform ministerial or custodial duties hereunder as agent for the Trustee; and
(g) The Trustee shall examine any directions, notices or other
communications received from the Servicer, the Contract Seller or any
Certificateholder (or agent thereof) to determine if such directions, notices or
other communications appear on their face to have been made and to otherwise be
in accordance with the requirements of this Agreement. As long as the Trustee
has acted in good faith and has not been negligent in making determinations
required by this Section 9.02(g), the Trustee may conclusively rely on such
directions, notices or other communications and shall incur no liability
hereunder for complying with, or assuming the truth of the statements contained
in, any such direction, notice or other communication.
Section 9.03. Trustee not Liable for Certificates or Contracts.
------------------------------------------------
The recitals contained herein and in the Certificates (other than the
authentication of the Certificates) shall be taken as the statements of the
Contract Seller or the Servicer, as the case may be, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations or
warranties as to the validity or sufficiency of this Agreement, of the
Certificates (except that the Certificates shall be duly and validly
authenticated by it) or of any Contract or related document. The Trustee shall
not be accountable for the use or application by the Contract Seller or the
Servicer of any of the Certificates or of the proceeds of such Certificates, or
for the use or application of any funds paid to the Contract Seller or the
Servicer in respect of the Contracts or deposited in or withdrawn from the
Certificate Account by the Contract Seller or the Servicer.
Section 9.04. Trustee May Own Certificates.
----------------------------
The Trustee in its individual or any other capacity may become the owner or
pledgee of Certificates and may transact business with the other parties hereto
with the same rights it would have if it were not Trustee.
Section 9.05. Servicer to Pay Fees and Expenses of Trustee, Paying Agent and
--------------------------------------------------------------
Certificate Administrator.
-------------------------
The Servicer covenants and agrees to pay, from its own funds, to the
Trustee, the Paying Agent and the Certificate Administrator from time to time,
and the Trustee, the Paying Agent and the Certificate Administrator shall each
be entitled to, reasonable compensation (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
for all services rendered by it in the execution of the trust hereby created and
in the exercise and
-96-
<PAGE>
performance of any of the powers and duties hereunder of the Trustee, and the
Servicer will pay (out of its own funds) or reimburse the Trustee, the Paying
Agent and the Certificate Administrator, to the extent requested by the Trustee,
the Paying Agent or the Certificate Administrator, as the case may be, for all
reasonable expenses, disbursements and advances incurred or made by the Trustee,
the Paying Agent or the Certificate Administrator, as the case may be, in
accordance with any of the provisions of this Agreement, and the reasonable
compensation and the expenses and disbursements of its counsel and of all
persons not regularly in its employ, and the expenses incurred by the Trustee in
connection with the appointment of an office or agency pursuant to Section 9.11,
except any such expense, disbursement or advance as may arise from its
negligence or bad faith. The Servicer also covenants and agrees to indemnify
(out of its own funds) the Trustee, the Paying Agent and the Certificate
Administrator for, and to hold each of them harmless against, any loss,
liability or expense incurred without negligence or bad faith on the part of the
Trustee, the Paying Agent or the Certificate Administrator, as the case may be,
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. The covenants in this
Section 9.05 shall b for the benefit of the Trustee, the Paying Agent and the
Certificate Administrator in their respective capacities as Trustee, Certificate
Administrator, Paying Agent and Certificate Registrar hereunder, and shall
survive the termination of this Agreement.
Section 9.06. Eligibility Requirements for Trustee.
------------------------------------
There shall at all times be a Trustee hereunder which shall be
qualified to maintain an Eligible Account and shall be either (a) [
] ("[ ]") or any other Person into which [ ]
is merged or consolidated or to which substantially all of the properties and
assets of [ ] are transferred as an entirety, provided that
--------
such other Person has accepted appointment as Trustee under this Agreement in
accordance with this Article IX, and further provided that such entity is not an
------- --------
Affiliate of the Contract Seller, is authorized to exercise corporate trust
powers under the laws of the United States of America, any State thereof or the
District of Columbia and has all necessary trust powers to perform its
obligations hereunder, or (b) a corporation or banking association organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000, and
subject to supervision or examination by Federal or State authority, and which
is not an Affiliate of the Contract Seller; further provided that either (i)
------- --------
such entity has long-term debt rated at least A3 by Moody's or the equivalent by
any nationally recognized statistical rating organization, or (ii) each Rating
Agency provides a letter to the effect that such appointment will not affect the
then current ratings of the Certificates. If the corporation or banking
association referred to in clause (b) of the previous sentence publishes reports
of condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section 9.06,
the combined capital and surplus of such corporation or banking association
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
maintain an office in New York.
-97-
<PAGE>
If at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 9.06, it shall resign immediately in the manner and
with the effect hereinafter specified in this Article IX.
Section 9.07. Resignation and Removal of the Trustee.
--------------------------------------
The Trustee at any time may resign and be discharged from the trusts
hereby created by giving written notice thereof to the Contract Seller, the
Servicer and each Rating Agency. Upon receiving such notice of resignation, the
Contract Seller shall promptly appoint a successor trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
resigning Trustee and one copy to the successor trustee. If no successor
trustee shall have been so appointed and have accepted 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 9.06 and shall fail to resign after written
request therefor by the Contract Seller, or if at any time the Trustee shall
become incapable of acting, or shall be adjudged bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Contract Seller may remove the Trustee and 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 and
the Certificateholders.
The Holders of Certificates evidencing Fractional Interests
aggregating not less than 50% may remove the Trustee at any time and appoint a
successor trustee by written instrument or instruments, in triplicate, signed by
such Certificateholders or their attorneys-in-fact duly authorized, one complete
set of which instruments shall be delivered to the Contract Seller, one complete
set to the Trustee so removed and one complete set to the successor so
appointed.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 9.07 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 9.08.
Section 9.08. Successor Trustee.
-----------------
Any successor trustee appointed as provided in Section 9.07 shall
execute, acknowledge and deliver to the Contract Seller and to its predecessor
trustee, with a copy to the Servicer, an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor trustee
and the appointment of such successor trustee shall become effective, and such
successor trustee, without any further act, deed or conveyance, shall become
fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with the like effect as if originally named as trustee
herein. The predecessor trustee shall execute and deliver
-98-
<PAGE>
such instruments and do such other things as reasonably may be required to more
fully and certainly vest and confirm in the successor trustee all such rights,
powers, duties and obligations.
No successor trustee shall accept appointment as provided in this
Section 9.08 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 9.06.
Upon acceptance of appointment by a successor trustee as provided
in this Section 9.08, the Servicer shall mail notice of the succession of such
trustee hereunder to all Certificateholders at their addresses as shown in the
Certificate Register, to the Contract Seller and each Rating Agency. If the
Servicer fails to mail such notice within 10 days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Contract Seller.
Section 9.09. Merger or Consolidation of Trustee.
----------------------------------
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to the business of the Trustee, shall be the successor of
the Trustee hereunder, provided such corporation shall be eligible under the
--------
provisions of Section 9.06, 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. Upon succession of a successor trustee as provided in
this Section 9.09, the successor Trustee shall mail notice of the succession of
such trustee hereunder to all Certificateholders at their addresses as shown in
the Certificate Register, to the Servicer, the Contract Seller and each Rating
Agency.
Section 9.10. Appointment of Co-Trustee or Separate Trustee.
---------------------------------------------
Notwithstanding any other provisions hereof, at any time, for the
purpose of (i) meeting any legal requirements of any jurisdiction in which any
part of the Trust Fund or property securing the same may be located at the time,
or (ii) meeting any legal requirements with respect to the holding of the
Contracts, the Contract Seller and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees, jointly
with the Trustee, or separate trustee or separate trustees, of all or any part
of the Trust Fund, and to vest in such Person or Persons, in such capacity, such
title to the Trust Fund, or any part thereof, and, subject to the other
provisions of this Section 9.10, such powers, duties, obligations, rights and
trusts as the Contract Seller and the Trustee may consider necessary or
desirable. If the Contract Seller shall not have joined in such appointment
within 15 days after the receipt by it of a request so to do, or in case an
Event of Default shall have occurred and be continuing, the Trustee alone shall
have the power to make such appointment. No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a successor
trustee under Section 9.06 hereunder, and no notice to Certificateholders of the
appointment of co-trustee(s) or separate trustee(s) shall be required under
Section 9.08 hereof.
-99-
<PAGE>
In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 9.10, all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that, under any law of any jurisdiction in which
any particular act or acts are to be performed or under any regulation
applicable to any of the Contracts (whether as Trustee hereunder or as successor
to the Servicer hereunder), the Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust Fund or any portion
thereof in any such jurisdiction) shall be exercised and performed by such
separate trustee or co-trustee at the direction of the Trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article IX. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
Any separate trustee or co-trustee may, at any time, appoint the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee. Nothing in this Section 9.10 shall relieve the Trustee of
its duties, obligations or liabilities under this Agreement.
Section 9.11. Appointment of Office or Agency.
-------------------------------
The Trustee will appoint an office or agency in the City of New York
where Certificates may be surrendered for registration of transfer or exchange.
The Trustee initially designates [ ] for such purpose. The Certificate
Register will be kept in [ ] at the offices of the Certificate Registrar
located at the Corporate Trust Office and may be kept in an electronic form
capable of printing out a hard copy of the Certificate Register. The Trustee
will maintain an office at the address stated in Section 11.05 hereof where
notices and demands to or upon the Trustee in respect of the Certificates may be
served. 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.
Section 9.12. Certificate Administrator.
-------------------------
The Trustee may, from time to time, appoint a Certificate
Administrator for the purpose of performing, as the Trustee's agent, those
duties hereunder that are specifically designated
-100-
<PAGE>
herein as performable by the Certificate Administrator; provided, however, that
-------- -------
the Certificate Administrator shall at all times satisfy the eligibility
requirements of a Trustee set forth in Section 9.06. As of the Closing Date, the
Trustee shall be the Certificate Administrator unless and until the Trustee
appoints a successor Certificate Administrator. In performing its duties
hereunder, the Certificate Administrator (if not the Trustee) shall have the
benefit of the provisions of this Agreement to the same extent that the Trustee
would have the benefit of such provisions if the Trustee were itself performing
such duties. The Certificate Administrator (including the Trustee solely in its
capacity as Certificate Administrator) shall not have any fiduciary
responsibility to the Contract Seller, the Servicer or the Certificateholders
except when acting as Paying Agent. Additionally, the Certificate Administrator
shall be entitled to rely upon all directions, calculations and other
information received by the Contract Seller, the Trustee or the Servicer without
any duty to independently verify such directions, calculations or other
information.
Section 9.13. Appointment of Paying Agent.
---------------------------
The Trustee may appoint a Paying Agent for the purpose of making
distributions to Certificateholders pursuant to Section 5.02 and payments
pursuant to 3.17 and 9.01(c). Any Paying Agent or its parent company so
appointed either shall be a bank or trust company and shall have a rating
acceptable to each Rating Agency. In the event of any such appointment, on or
prior to each Distribution Date, the Trustee shall deposit or cause to be
deposited with the Paying Agent, from amounts in the Certificate Account, a sum
sufficient to make the payments to Certificateholders in the amounts and in the
manner provided for in Section 5.02, such sum to be held in trust for the
benefit of the Certificateholders. The Trustee is hereby initially appointed as
Paying Agent.
In performing its duties hereunder, the Paying Agent shall have the
benefit of the provisions of this Agreement to the same extent that the Trustee
would have the benefit of such provisions if the Trustee were itself performing
such duties. Additionally, the Paying Agent shall be entitled to rely upon all
information received from the Servicer without any duty to independently verify
or recalculate any such information.
The Trustee shall cause the Paying Agent to execute and deliver to the
Trustee an instrument in which such Paying Agent shall agree with the Trustee
that such Paying Agent is at all times acting as agent for the Trustee and such
Paying Agent will hold all sums held by it for the payment to Certificateholders
entitled thereto until such sums shall be paid to such Certificateholders.
-101-
<PAGE>
ARTICLE X
TERMINATION
Section 10.01. Termination.
-----------
(a) The respective obligations and responsibilities of the Contract
Seller, the Servicer (except as to Section 9.05) and the Trustee shall terminate
upon the earlier of: (i) the final payment or other liquidation (or any advance
with respect thereto) of the last Contract or the disposition of all property
acquired upon repossession of any Contract and the remittance of all funds due
hereunder; (ii) at the option of the Servicer, on any Distribution Date after
the first Distribution Date on which the Pool Scheduled Principal Balance is
less than 10% of the Cut-Off Date Pool Principal Balance and subject to the
prior consummation of the Termination Auction as contemplated pursuant to
Section 10.01(b) below, upon the purchase by the Servicer of the Outstanding
Contracts at a price equal to the greater of (a) the sum of (x) 100% of the
Scheduled Principal Balance of each Contract (other than any Contract as to
which the related Manufactured Home has been acquired and not yet disposed of
and whose fair market value is included pursuant to Clause (y) below) as of the
final Distribution Date, and (y) the fair market value of such acquired property
(as determined by the Servicer 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 10.01(c)(i)), and (b) the
aggregate fair market value (as determined by the Servicer as of the close of
business on such third Business Day) of all the assets in the Trust Fund, plus,
in the case of both clause (a) and clause (b), an amount sufficient to pay any
Class [A-1 Unpaid Interest Shortfall, Class A-IO] Unpaid Interest Shortfall,
Class M Unpaid Interest Shortfall, Class B-1 Unpaid Interest Shortfall and any
Class B-2 Unpaid Interest Shortfall and the remittance of all funds due
hereunder; provided, that the purchase price of such Contracts shall in no event
--------
be less than the Minimum Termination Amount [(without regard to amounts on
deposit in the Reserve Account)] as of the Distribution Date on which the
Servicer purchases such Contracts; or (iii) the sale of all Contracts that
remain outstanding, pursuant to a Termination Auction as contemplated by Section
10.01(b) below and the remittance of all funds due hereunder. Notwithstanding
anything herein to the contrary, 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.
(b) Termination Auction. The Servicer shall provide written notice
-------------------
to the Trustee of the occurrence of the Distribution Date as of which the
Pool Scheduled Principal Balance is less than 10% of the Cut-Off Date Pool
Principal Balance within three Business Days following such Distribution Date.
Thereupon, the Trustee shall in accordance with the procedures and schedule set
forth in Exhibit L hereto (the "Auction Procedures"), make a commercially
---------
reasonable effort to sell at fair market value in a commercially reasonable
manner and upon commercially reasonable terms but subject to the earlier
purchase by the Servicer of the Outstanding Contracts as provided in Section
10.01(a) above, by conducting an auction (the "Termination Auction") of the
Contracts remaining in the Trust Fund in order to effect a termination of the
Trust Fund on a date selected by the Trustee (the "Auction Date"), but in any
case within ninety days following
-102-
<PAGE>
the Distribution Date as of which the Pool Scheduled Principal Balance is less
than 10% of the Cut-Off Date Pool Principal Balance. The Contract Seller (and
the Servicer if GreenPoint is not the Servicer) may, but shall not be required
to, bid at the Termination Auction. The Trustee shall be entitled to retain
counsel of its choice to represent it in the Termination Auction, and the fees
and expenses of such counsel shall be paid by the Contract Seller. The Trustee
shall sell and transfer the Contracts to the highest bidder therefor at the
Termination Auction provided that:
(1) the Termination Auction has been conducted in accordance with the
Auction Procedures;
(2) the Trustee has received good faith bids for the Contracts from
at least two prospective purchasers that are considered by the Trustee, in
its sole discretion, to be competitive participants in the market for
Manufactured housing installment sale contracts; provided, that at least
--------
one of such prospective purchasers shall not be an Affiliate of either of
the Contract Seller;
(3) a financial advisor selected by the Trustee, the fees of whom
shall be an expense of the Contract Seller, as advisor to the Trustee (in
such capacity, the "Advisor"), shall have advised the Trustee in writing
that at least two of such bidders are participants in the market for
manufactured housing retail installment sale contracts and are willing and
able to purchase the Contracts (the Trustee may in its discretion select
itself or an affiliate thereof as Advisor);
(4) the highest bid in respect of the Contracts is not less than the
aggregate fair market value of the Contracts (as determined by the Trustee
in its sole discretion);
(5) any bid submitted by the Contract Seller or any Affiliate of the
Contract Seller shall be independently verified and represented in writing
by a qualified independent third party evaluator (which may include the
Advisor or an investment banking firm) selected by the Trustee and may only
be considered if such evaluator determines that the bid reasonably
represents the fair market value of the Contracts;
(6) the highest bid would result in proceeds from the sale of the
Contracts which will be at least equal to the Minimum Termination Amount
(without regard to amounts on deposit in the Reserve Account)];
(7) such sale and consequent termination of the Trust Fund must
constitute a "qualified liquidation" of the Trust Fund under Section 860F
of the Code, including the requirement that the proceeds of such qualified
liquidation are credited or distributed to the holders of regular residual
interests within 90 days from the date upon which the Trust Fund adopts a
plan of complete liquidation (the Trustee may, in its discretion, require
that the purchaser of such Contracts provide an Opinion of Counsel to that
effect); and
-103-
<PAGE>
(8) the terms of the Termination Auction must be made available to
all bidders and must stipulate that the Servicer be retained to service the
Contracts on terms substantially similar to those in this Agreement.
Provided that all of the conditions set forth in clauses (1) through (8)
have been met, the Trustee shall sell and transfer the Contracts, without
representation, warranty or recourse of any kind whatsoever, to such highest
bidder in accordance with and upon completion of the Auction Procedures. The
Trustee shall deposit the purchase price for the Contracts in the Certificate
Account at least one Business Day prior to the fourth Distribution Date
following the Distribution Date as of which the Pool Scheduled Principal Balance
is less than 10% of the Cut-Off Date Pool Principal Balance. The provisions of
subsections (c) and (d) of this Section 10.01 also shall apply with respect to
any Termination Auction. In the event that any of such conditions are not met
or such highest bidder fails or refuses to comply with any of the Auction
Procedures, the Trustee shall decline to consummate such sale and transfer. In
such case the Termination Auction shall be concluded and the Trustee shall be
under no further duty to solicit bids for or otherwise to attempt to sell the
Contracts.
(c) (i) Notice of any termination, specifying the Distribution Date upon
which all Certificateholders may surrender their Certificates to the Trustee for
payment and cancellation, shall be given promptly by the Servicer by letter to
the Certificateholders, the Trustee, the Contract Seller and each Rating Agency
mailed no later than the 10th day of the month next preceding the month of such
final distribution, specifying (i) the Distribution 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, (ii) the
amount of any such final payment, and (iii) that the Record Date otherwise
applicable to such Distribution Date is not applicable, payments being made only
upon presentation and surrender of the Certificates at the office or agency of
the Trustee therein specified. After giving such notice, the Trustee shall not
register the transfer or exchange of any Certificates. If such notice is given
in connection with the Servicer's election to purchase, the Servicer shall
deposit in the Certificate Account on the Business Day prior to the applicable
Distribution Date the amount described in Section 10.01(a)(ii). The amount so
deposited shall not be invested.
(ii) Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed, from funds in the Certificate Account, to
Certificateholders, in proportion to their respective Percentage Interests,
an amount equal to (a) as to the Class [A-1 Certificates, the Class A-1
Certificate Balance together with the Class A-1 Unpaid Interest Shortfall
and one month's interest at the Class A-1 Pass-Through Rate on the Class A-
1 Certificate Balance, (b) as to the Class A-IO Certificates, the Class A-
IO Unpaid Interest Shortfall and one month's interest at the Class A-IO
Pass-Through Rate on the Class A-IO Notional Principal Amount ,] [(c)] as
to the Class M Certificates, the Class M Certificate Balance together with
the Class M Unpaid Interest Shortfall and one month's interest at the Class
M Pass-Through Rate on the Class M Certificate Balance, [(d)] as to the
Class B-1 Certificates, the Class B-1 Certificate Balance together with the
Class B-1 Unpaid Interest Shortfall and one month's interest at the Class
B-1 Pass-Through Rate on the Class B-1 Certificate Balance and [(e)] as to
the Class B-2
-104-
<PAGE>
Certificates, the Class B-2 Certificate Balance together with the Class B-2
Unpaid Interest Shortfall and one month's interest at the Class B-2 Pass-
Through Rate on the Class B-2 Certificate Balance.
(iii) Upon such termination, any amounts remaining in the Certificate
Account and the Reserve Account (other than amounts retained to meet
claims) shall be paid to the Class R Certificateholders. Following such
final deposit, the Servicer shall prepare and the Trustee shall execute all
assignments, endorsements and other instruments necessary to effectuate
such transfer. The distribution on the final Distribution Date shall be in
lieu of the distribution otherwise required to be made on such Distribution
Date in respect of the Certificates and the Class R Certificate.
(d) If any Certificateholder does not surrender its Certificate for
cancellation by the final Distribution Date specified in the written notice
required in Section 10.01(c)(i), any amounts retained in the Certificate Account
that are owed to such Certificateholder shall be withdrawn from the Certificate
Account and held in an escrow account with the Trustee pending distribution
pursuant to this Section 10.01(d). Any amounts so held shall not be invested.
The Trustee shall give a second written notice to the remaining
Certificateholders to surrender their Certificates for cancellation and receive
the final distribution with respect thereto. If within two years after the
second notice all the Certificates shall not have been surrendered for
cancellation, the Trustee shall so notify the Contract Seller and the Contract
Seller may take appropriate steps, or may appoint an agent to take appropriate
and reasonable steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of, and
only to the extent of, the funds and other assets which remain in trust
hereunder.
Upon any termination pursuant to the exercise of the purchase option
contained in Section 10.01(a)(ii), the consummation of a sale pursuant to a
Termination Auction or otherwise, the Trust Fund shall be terminated in
accordance with the following additional requirements, unless the Trustee has
received an Opinion of Counsel to the effect that the failure of the Trust Fund
to comply with the requirements of this Section 10.01 will not (i) result in the
imposition of taxes on "prohibited transactions" of the Trust Fund as described
in Section 860F of the Code, (ii) cause the Trust Fund to fail to qualify as a
REMIC at any time that any Certificates are outstanding, or (iii) result in the
imposition of taxes on contributions of additional assets to the Trust Fund
under Section 860G(d) of the Code:
(i) Within 90 days prior to the final Distribution Date set forth in
the notice given by the Servicer or the Trustee under this Section 10.01,
the Holders of the Class R Certificates shall adopt a plan of complete
liquidation of the Trust Fund;
(ii) At or after the time of adoption of such a plan of complete
liquidation and at or prior to the final Distribution Date, the Servicer as
agent of the Trustee shall sell all of the assets of the Trust Fund to the
purchaser thereof (which may be the Servicer) for cash (other than assets
that will be converted to cash prior to the final Distribution Date); and
-105-
<PAGE>
(iii) At or after the time of adoption of such a plan of complete
liquidation and at or prior to the final Distribution Date, the Trustee
shall credit or distribute all proceeds of the liquidation (plus the cash),
less assets retained to meet claims, to the Certificateholders.
By its acceptance of a Class R Certificate, each Holder thereof hereby agrees to
adopt such a plan of complete liquidation upon the written request of the
Servicer and to take such other action in connection therewith as may be
reasonably requested by the Contract Seller.
-106-
<PAGE>
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Amendment.
---------
This Agreement may be amended from time to time by the Contract
Seller, the Servicer and the Trustee without the consent of any of the
Certificateholders, (i) to cure any ambiguity, (ii) to correct or supplement any
provisions herein, (iii) to add to the duties or obligations of the Servicer,
(iv) to obtain a rating from a nationally recognized rating agency or to
maintain or improve the ratings of any Class of Certificates by each Rating
Agency (it being understood that after obtaining ratings for the Certificates
from [Moody's and Fitch,] none of the Trustee, the Contract Seller or the
Servicer is obligated to obtain, maintain or improve any rating assigned to the
Certificates) or (v) to make such other provisions with respect to matters or
questions arising under this Agreement, as shall not be inconsistent with any
other provisions herein; provided that such action shall not, as evidenced by an
--------
Opinion of Counsel, adversely affect in any material respect the interests of
any Certificateholder. Notwithstanding the foregoing, without the consent of the
Certificateholders, the Trustee, the Contract Seller and the Servicer may at any
time and from time to time amend this Agreement to modify, eliminate or add to
any of its provisions to such extent as shall be necessary or appropriate to
maintain the qualification of the Trust Fund as a REMIC under the Code or to
avoid or minimize the risk of the imposition of any tax on the Trust Fund
pursuant to the Code that would be a claim against the Trust Fund at any time
prior to the final redemption of the Certificates, provided that the Trustee has
been provided an Opinion of Counsel, which opinion shall be an expense of the
party requesting such opinion but in any case shall not be an expense of the
Trustee, to the effect that such action is necessary or appropriate to maintain
such qualification or to avoid or minimize the risk of the imposition of such a
tax.
This Agreement may also be amended from time to time by the Contract
Seller, the Servicer and the Trustee with the consent of the Holders of a
Majority In Interest of each Class of Regular Certificates affected thereby for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement or of modifying in any manner the rights
of the Holders of Certificates; provided, however, that no such amendment shall
-------- -------
(i) reduce in any manner the amount of, or delay the timing of, payments
required to be distributed on any Certificate without the consent of the Holder
of such Certificate, (ii) adversely affect in any material respect the interests
of the Holders of any Class of Certificates in a manner other than as described
in (i), without the consent of the Holders of Certificates of such Class
evidencing, as to such Class, Percentage Interests aggregating 66% or (iii)
reduce the aforesaid percentages of Certificates the Holders of which are
required to consent to any such amendment, without the consent of the Holders of
all such Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel, which opinion shall be an expense of the party
requesting such amendment but in any case shall not be an expense of the
Trustee, to the effect that such amendment will not cause the imposition
-107-
<PAGE>
of any tax on the Trust Fund or the Certificateholders or cause the Trust Fund
to fail to qualify as a REMIC at any time that any Certificates are outstanding.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance of such amendment to each Certificateholder and
each Rating Agency.
It shall not be necessary for the consent of Certificateholders under
this Section 11.01 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
regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel, satisfactory to the Trustee
that (i) such amendment is permitted and is not prohibited by this Agreement and
that all requirements for amending this Agreement have been complied with; and
(ii) either (A) the amendment does not adversely affect in any material respect
the interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 11.01.
Section 11.02. Recordation of Agreement; Counterparts.
--------------------------------------
This Agreement is subject to recordation in all appropriate public
offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Contracts are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Servicer at its expense.
For the purpose of facilitating the recordation of this Agreement as
herein provided 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 such counterparts shall constitute but one and
the same instrument.
Section 11.03. Governing Law
-------------
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF [CALIFORNIA] APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED IN THE STATE OF [CALIFORNIA] AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Section 11.04. Calculations
------------
Except as otherwise provided in this Agreement, all Pass-Through Rate,
interest rate and basis point calculations under this Agreement will be made
with respect to each Class of Regular Certificates [(other than the Class A-1
Certificates)] on the basis of a 360-day year and twelve
-108-
<PAGE>
thirty-day months and will be carried out to at least three decimal places. [The
Class A-1 Pass-Through Rate will be calculated on the basis of a 360-day year
and actual number of days in the related Interest Accrual Period and will be
carried out to at least three decimal places.] Interest on the Regular
Certificates with respect to a Distribution Date will accrue during the related
Interest Accrual Period.
Section 11.05. Notices
-------
(a) The Trustee shall use its best efforts to promptly provide
notice to each Rating Agency with respect to each of the following of which it
has actual knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Event of Default that has not been cured;
3. The resignation or termination of the Servicer or the Trustee and
the appointment of any successor or any assignment of this Agreement pursuant to
Section 7.06;
4. The repurchase or substitution of Contracts pursuant to
Section 3.05;
5. The final payment to Certificateholders;
6. A sale of any Class R Certificate; and
7. Any shortfalls arising from the failure of the Servicer to
advance as required pursuant to Section 5.01 hereof.
In addition, the Servicer shall promptly furnish to each Rating Agency
copies of the following:
1. Each report to Certificateholders described in Section 5.07;
2. Each annual statement as to compliance described in Section
4.20; and
3. Each annual independent public accountants' servicing report
described in Section 4.21.
(b) All directions, demands and notices hereunder shall be in writing and
shall be deemed to have been duly given when delivered to (i) in the case of the
Contract Seller: GreenPoint Credit Corp., 10089 Willow Creek Road, San Diego, CA
92131-1690, Attention: Manager, Investor Servicing (or such other address as may
be hereafter furnished to the Trustee and the Servicer by the Contract Seller in
writing) (ii) in the case of the Servicer: GreenPoint Credit Corp., 10089 Willow
Creek Road, San Diego, CA 92131-1690, Attention: Manager, Investor Servicing (or
such other address as may be hereafter furnished to the Contract Seller and the
Trustee by the Servicer in writing), with copies to Howard C. Bluver, Esq., 90
Park Avenue, New York, New York 10016 and Andy Occhino, Esq., 90 Park Avenue,
New York, New York
-109-
<PAGE>
10016, (iii) in the case of the Trustee, [ ], (or such other address as the
Trustee may hereafter furnish to the Contract Seller and the Servicer in
writing); and (iv) in the case of the Rating Agencies, [(1) Moody's Investors
Service, Inc., 99 Church Street, New York, New York 10007 and (2) Fitch
Investors Service, L.P., One State Street, New York, New York 10004.] Notices to
Certificateholders shall be deemed given when mailed, first class postage
prepaid, to their respective addresses appearing in the Certificate Register.
Section 11.06. Severability of Provisions
--------------------------
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 11.07. Assignment.
----------
Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Sections 7.04 and 7.06, this Agreement may not be assigned
by the Servicer without the prior written consent of the Trustee and the
Contract Seller.
Section 11.08. Limitations on Rights of Certificateholders.
-------------------------------------------
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the Trust
Fund, or otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.
No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of an Event of Default and of the continuance thereof, as hereinbefore provided,
and unless the Holders of Certificates evidencing not less than 25% of the
Voting Rights evidenced by the Certificates shall also have made written request
to the Trustee to institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses, and liabilities to be
incurred therein or thereby, and the Trustee, for 60 days after its receipt of
such notice, request
-110-
<PAGE>
and offer of indemnity shall have neglected or refused to institute any such
action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 11.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 11.09. Inspection and Audit Rights.
---------------------------
The Servicer agrees that, on reasonable prior notice, it will permit any
representative of the Contract Seller or the Trustee during the Servicer's
normal business hours, to examine all the books of account, records, reports and
other papers of the Servicer relating to the Contracts, to make copies and
extracts therefrom, to cause such books to be audited by independent certified
public accountants selected by the Contract Seller or the Trustee and to discuss
its affairs, finances and accounts relating to the Contracts with its officers,
employees and independent public accountants (and by this provision the Servicer
hereby authorizes such accountants to discuss with such representative such
affairs, finances and accounts), all at such reasonable times and as often as
may be reasonably requested. Any out-of-pocket expense incident to the exercise
by the Contract Seller or the Trustee of any right under this Section 11.09
shall be borne by the party requesting such inspection; all other such expenses
shall be borne by the Servicer.
Section 11.10. Certificates Nonassessable and Fully Paid.
-----------------------------------------
It is the intention of the Contract Seller that Certificateholders shall
not be personally liable for obligations of the Trust Fund, that the interests
in the Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof by
the Trustee pursuant to this Agreement, are and shall be deemed fully paid.
Section 11.11. Official Record.
---------------
The Contract Seller agrees that this Agreement is and shall remain at all
times prior to the time at which this Agreement terminates an official record of
GreenPoint as referred to in Section 13(e) of the Federal Deposit Insurance Act,
as amended by 12 U.S.C. Section 1823(e). The officer signing below on behalf of
GreenPoint represents that by so signing he or she is an officer of GreenPoint
of the level of vice president or higher within the meaning of the "Policy
Statement Regarding Qualified Financial Contracts" dated December 12, 1989
issued by the FDIC.
-111-
<PAGE>
IN WITNESS WHEREOF, the Contract Seller, the Servicer and the Trustee have
caused their names to be signed hereto by their respective officers thereunto
duly authorized as of the day and year first above written.
[ ],
not in its individual capacity, but solely as Trustee
By:
_________________________________________________
Name:
Title:
GreenPoint CREDIT CORP.,
as Servicer and Contract Seller
By:
__________________________________________________
Name:
Title:
-112-
<PAGE>
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
On ____________, 199__ before me, _____________________, Notary Public,
personally appeared __________, proved to me on the basis of satisfactory
evidence to be the person whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his authorized capacity and that
by his signature on the instrument the person, or the entity upon behalf of
which the person acted, executed the instrument.
WITNESS my hand and official seal.
________________________________________
Notary Public
My Commission expires___________________
[Notarial Seal]
<PAGE>
STATE OF ________ )
) ss.
COUNTY OF _______ )
On this __th day of __________, 199__, before me, a notary public in and
for said State, appeared __________, personally known to me on the basis of
satisfactory evidence to be a __________, of [ ], a national
banking association that executed the within instrument, and also known to me to
be the person who executed it on behalf of such corporation, and acknowledged to
me that such national banking association executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
____________________________________
Notary Public
My Commission expires_______________
[Notarial Seal]
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<S> <C>
Exhibit A................Contract Schedule
Exhibit B-1..............Form of Class [A-1] Certificate
Exhibit B-2..............Form of Class [A-IO] Certificate]
Exhibit B-[3]............Form of Class A-M Certificate
Exhibit B-[4]............Form of Class B-1 Certificate
Exhibit B-[5]............Form of Class B-2 Certificate
Exhibit C................Form of Reverse of Certificates
Exhibit D................Class R Certificate
Exhibit E................Form of Certificate Regarding Substitution of Eligible
Substitute Contract
Exhibit F................Form of Certificate of Servicing Officer
Exhibit G-1..............Transfer Affidavit
Exhibit G-2..............Form of Transferor Certificate for Class R Certificates
Exhibit H................Form of Transferor Certificate for Class B-2
Certificates
Exhibit I................Form of Depository Agreement
Exhibit J................Form of Investment Letter and Form of ERISA
Representations
Exhibit K................Form of Rule 144A Letter
Exhibit L................Termination Auction Procedures
</TABLE>
<PAGE>
EXHIBIT B-1
CLASS [A-1] CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
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 OF
1986, AS AMENDED (THE "CODE").
[THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE
U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS
CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS [_________], 19[__].
ASSUMING THAT THE MORTGAGE LOANS PREPAY AT [____]% OF THE STANDARD PREPAYMENT
ASSUMPTION (AS DESCRIBED IN THE PROSPECTUS SUPPLEMENT), [AND ASSUMING A CONSTANT
PASS-THROUGH RATE EQUAL TO THE INITIAL PASS-THROUGH RATE,] THIS CERTIFICATE HAS
BEEN ISSUED WITH NO MORE THAN $[_____] OF OID PER $1,000 OF INITIAL CERTIFICATE
PRINCIPAL BALANCE, THE YIELD TO MATURITY IS [___]% AND THE AMOUNT OF OID
ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NOT MORE THAN $[______] PER $1,000
OF INITIAL CERTIFICATE PRINCIPAL BALANCE, COMPUTED USING THE APPROXIMATE METHOD.
NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL PREPAY AT A RATE BASED ON
THE STANDARD PREPAYMENT ASSUMPTION OR AT ANY OTHER RATE OR AS TO THE CONSTANCY
OF THE PASS-THROUGH RATE.]
Certificate No. : [A-1]-[__]
Date of Pooling and Servicing Agreement : [______________]
Cut-off Date : [______________]
Exhibit B-1-1
<PAGE>
First Distribution Date : [______________]
Initial Certificate Balance of
this Certificate ("Denomination") : $[_____________]
Initial Certificate Balance of all
Class [A-1] Certificates : $[_____________]
Pass-Through Rate : [____]%
Month of Last Scheduled
Distribution Date : [______________]
CUSIP : [______________]
GREENPOINT CREDIT CORP. MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE PASS-THROUGH CERTIFICATES
SERIES 199[]-[]
evidencing a percentage interest in any distributions allocable to the
Class [A-1] Certificates with respect to a Trust Fund consisting primarily
of a pool of fixed-rate conventional manufactured housing contracts (the
"Contracts") formed and sold by
GreenPoint Credit Corp., as Contract Seller (the "Contract Seller")
which manufactured housing contracts were originated or acquired by GreenPoint
Credit Corp. ("GreenPoint"), and are initially serviced by GreenPoint (the
"Servicer").
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Balance at any time may be less than
the Certificate Balance as set forth herein. Neither this Certificate nor the
Contracts are insured or guaranteed by the Contract Seller, the Servicer or the
Trustee referred to below or any of their respective Affiliates or by any
governmental agency or instrumentality.
This certifies that [Cede & Co.] is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the denomination of
this Certificate by the aggregate of the denominations of all Class [A-1]
Certificates) in certain monthly distributions with respect to a Trust Fund
consisting of the Contracts deposited by the Contract Seller. The Trust Fund
was created pursuant to a Pooling and Servicing Agreement, dated as of
[______________] (the "Agreement"), between the Contract Seller, the Servicer,
and [______________], as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Exhibit B-1-2
<PAGE>
Pursuant to the terms of the Agreement, a distribution will be made on the
10/th/ day of each month or, if such 10/th/ day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the applicable Record Date
in an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the Class [A-1] Distribution Amount on such Distribution Date
pursuant to Section 5.02 of the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day preceding such Distribution Date.
Distributions to the Holder of this Class [A-1] Certificate shall be applied
first to interest and then to principal.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall hold Class [A-1]
Certificates evidencing a Percentage Interest aggregating 10% or more or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the Corporate Trust Office or such other
location specified in the notice to Certificateholders of such final
distribution.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the Agreement
or be valid for any purpose unless the certificate of authentication hereon has
been manually executed by an authorized officer of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: [______________].
[______________],
not in its individual capacity, but solely as Trustee
By __________________________________________
Authorized Signatory
Exhibit B-1-3
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Class [A-1] Certificates
referred to in the within-named Agreement
[______________],
not in its individual capacity, but solely as Trustee
By _____________________________________
Authorized Signatory
Exhibit B-1-4
<PAGE>
EXHIBIT B-2
CLASS [A-IO] CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
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 OF
1986, AS AMENDED (THE "CODE").
[THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE
U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS
CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS [_________], 19[__].
ASSUMING THAT THE MORTGAGE LOANS PREPAY AT [____]% OF THE STANDARD PREPAYMENT
ASSUMPTION (AS DESCRIBED IN THE PROSPECTUS SUPPLEMENT), [AND ASSUMING A CONSTANT
PASS-THROUGH RATE EQUAL TO THE INITIAL PASS-THROUGH RATE,] THIS CERTIFICATE HAS
BEEN ISSUED WITH NO MORE THAN $[_____] OF OID PER $1,000 OF INITIAL CERTIFICATE
PRINCIPAL BALANCE, THE YIELD TO MATURITY IS [___]% AND THE AMOUNT OF OID
ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NOT MORE THAN $[______] PER $1,000
OF INITIAL CERTIFICATE PRINCIPAL BALANCE, COMPUTED USING THE APPROXIMATE METHOD.
NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL PREPAY AT A RATE BASED ON
THE STANDARD PREPAYMENT ASSUMPTION OR AT ANY OTHER RATE OR AS TO THE CONSTANCY
OF THE PASS-THROUGH RATE.]
Certificate No. : [A-IO]-[__]
Date of Pooling and Servicing Agreement : [______________]
Cut-off Date : [______________]
Exhibit B-10-1
<PAGE>
First Distribution Date : [______________]
Initial Class [A-IO] Notional Principal Amount of
this Certificate ("Denomination") : $[_____________]
Initial Notional Principal Amount of all
Class [A-IO] Certificates : $[_____________]
Portion of the Class [A-IO] Notional Principal
Amount as of the Cut-Off Date Evidenced by this
Certificate $[_____________]
Pass-Through Rate : [____]%
Month of Last Scheduled
Distribution Date : [______________]
CUSIP : [______________]
GREENPOINT CREDIT CORP. MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE PASS-THROUGH CERTIFICATES
SERIES 199[]-[]
evidencing a percentage interest in any distributions allocable to the
Class [A-IO] Certificates with respect to a Trust Fund consisting primarily
of a pool of fixed-rate conventional manufactured housing contracts (the
"Contracts") formed and sold by
GreenPoint Credit Corp., as Contract Seller (the "Contract Seller")
which manufactured housing contracts were originated or acquired by GreenPoint
Credit Corp. ("GreenPoint"), and are initially serviced by GreenPoint (the
"Servicer").
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Balance at any time may be less than
the Certificate Balance as set forth herein. Neither this Certificate nor the
Contracts are insured or guaranteed by the Contract Seller, the Servicer or the
Trustee referred to below or any of their respective Affiliates or by any
governmental agency or instrumentality.
This certifies that [Cede & Co.] is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the denomination of
this Certificate by the aggregate of the denominations of all Class [A-IO]
Certificates) in certain monthly distributions with respect to a Trust Fund
consisting of the Contracts deposited by the Contract Seller. The Trust Fund
was created pursuant to a Pooling and Servicing Agreement, dated as of
[______________] (the "Agreement"), between the Contract Seller, the Servicer,
and [______________], as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the
Exhibit B-10-2
<PAGE>
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
10/th/ day of each month or, if such 10/th/ day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the applicable Record Date
in an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the Class [A-IO] Distribution Amount on such Distribution Date
pursuant to Section 5.02 of the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day preceding such Distribution Date.
References to Class [A-IO] Notional Principal Amount are only for convenience in
certain calculations and do not represent the right to receive any distribution
allocable to principal.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall hold Class [A-IO]
Certificates evidencing a Percentage Interest aggregating 10% or more or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the Corporate Trust Office or such other
location specified in the notice to Certificateholders of such final
distribution.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the Agreement
or be valid for any purpose unless the certificate of authentication hereon has
been manually executed by an authorized officer of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: [______________].
[______________],
not in its individual capacity, but solely as Trustee
By ________________________________________
Authorized Signatory
Exhibit B-10-3
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Class [A-IO] Certificates
referred to in the within-named Agreement
[______________],
not in its individual capacity, but solely as Trustee
By ________________________________________
Authorized Signatory
Exhibit B-10-4
<PAGE>
EXHIBIT B-[3]
CLASS M CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
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 OF
1986, AS AMENDED (THE "CODE").
[THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE
U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS
CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS [_________], 19[__].
ASSUMING THAT THE MORTGAGE LOANS PREPAY AT [____]% OF THE STANDARD PREPAYMENT
ASSUMPTION (AS DESCRIBED IN THE PROSPECTUS SUPPLEMENT), [AND ASSUMING A CONSTANT
PASS-THROUGH RATE EQUAL TO THE INITIAL PASS-THROUGH RATE,] THIS CERTIFICATE HAS
BEEN ISSUED WITH NO MORE THAN $[_____] OF OID PER $1,000 OF INITIAL CERTIFICATE
PRINCIPAL BALANCE, THE YIELD TO MATURITY IS [___]% AND THE AMOUNT OF OID
ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NOT MORE THAN $[______] PER $1,000
OF INITIAL CERTIFICATE PRINCIPAL BALANCE, COMPUTED USING THE APPROXIMATE METHOD.
NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL PREPAY AT A RATE BASED ON
THE STANDARD PREPAYMENT ASSUMPTION OR AT ANY OTHER RATE OR AS TO THE CONSTANCY
OF THE PASS-THROUGH RATE.]
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE TO ANY
PERSON, UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO
SECTION 6.02(b) OF THE AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
SERVICER, THE CONTRACT SELLER AND THE TRUSTEE THAT THE PURCHASE OF THIS
CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION
UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE
Exhibit B-11-1
<PAGE>
SERVICER, THE CONTRACT SELLER OR THE TRUSTEE TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
THIS CLASS M CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR
CERTIFICATES AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
Certificate No. : M-[__]
Date of Pooling and Servicing Agreement : [______________]
Cut-off Date : [______________]
First Distribution Date : [______________]
Initial Certificate Balance of
this Certificate ("Denomination") : $[_____________]
Initial Certificate Balance of all
Class M Certificates : $[_____________]
Pass-Through Rate : [____]% (subject to a maximum rate
equal to the weighted average of
the Net Contract Rates of the
Contracts in the Contract Pool)
Month of Last Scheduled
Distribution Date : [______________]
CUSIP : [______________]
GREENPOINT CREDIT CORP. MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE PASS-THROUGH CERTIFICATES
SERIES 199[]-[]
evidencing a percentage interest in any distributions allocable to the
Class M Certificates with respect to a Trust Fund consisting primarily of a
pool of fixed-rate conventional manufactured housing contracts (the
"Contracts") formed and sold by
GreenPoint Credit Corp., as Contract Seller (the "Contract Seller")
which manufactured housing contracts were originated or acquired by GreenPoint
Credit Corp. ("GreenPoint"), and are initially serviced by GreenPoint (the
"Servicer").
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Balance at any time may be less than
the Certificate Balance as set forth herein. Neither this Certificate nor the
Contracts are insured or guaranteed by the Contract
Exhibit B-11-2
<PAGE>
Seller, the Servicer or the Trustee referred to below or any of their respective
Affiliates or by any governmental agency or instrumentality.
This certifies that [Cede & Co.] is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the denomination of
this Certificate by the aggregate of the denominations of all Class M
Certificates) in certain monthly distributions with respect to a Trust Fund
consisting of the Contracts deposited by the Contract Seller. The Trust Fund
was created pursuant to a Pooling and Servicing Agreement, dated as of
[______________] (the "Agreement"), between the Contract Seller, the Servicer,
and [______________], as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
10/th/ day of each month or, if such 10/th/ day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the applicable Record Date
in an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the Class M Distribution Amount on such Distribution Date
pursuant to Section 5.02 of the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day preceding such Distribution Date.
Distributions to the Holder of this Class M Certificate shall be applied first
to interest and then to principal.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall hold Class M
Certificates evidencing a Percentage Interest aggregating 10% or more or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the Corporate Trust Office or such other
location specified in the notice to Certificateholders of such final
distribution.
No transfer of this Class M Certificate will be made unless the Trustee has
received either (i) an Opinion of Counsel acceptable to and in form and
substance satisfactory to the Trustee, the Contract Seller and the Servicer with
respect to the permissibility of such transfer under the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and Section 4975 of the
Internal Revenue Code (the "Code") and stating, among other things, that the
transferee's acquisition of Class M Certificate will not constitute or result in
a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975
of the Code and will not subject the Servicer, the Contract Seller or the
Trustee to any obligation or liability in addition to those undertaken in the
Agreement or (ii) a representation letter, in the form as described by the
Agreement, stating either (a) that the transferee is not an employee benefit or
other plan subject to the prohibited transaction provisions of ERISA or Section
4975 of the Code (a "Plan"), or any
Exhibit B-11-3
<PAGE>
other person (including an investment manager, a named fiduciary or a trustee of
any Plan) acting, directly or indirectly, on behalf of or purchasing any
Certificate with "plan assets" of any Plan, or (b) that the transferee is an
insurance company, the source of funds to be used by it to purchase the
Certificate is an "insurance company general account" (within the meaning of
Department of Labor Prohibited Transaction Class Exemption ("PTCE") 95-60), and
the purchase is being made in reliance upon the availability of the exemptive
relief afforded under Sections I and III of PTCE 95-60.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the Agreement
or be valid for any purpose unless the certificate of authentication hereon has
been manually executed by an authorized officer of the Trustee.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: [______________].
[______________],
not in its individual capacity, but solely as Trustee
By ____________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class M Certificates
referred to in the within-named Agreement
[______________],
not in its individual capacity, but solely as Trustee
By ____________________________________
Authorized Signatory
Exhibit B-11-4
<PAGE>
EXHIBIT B-12
CLASS B-1 CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
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 OF
1986, AS AMENDED (THE "CODE").
[THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE
U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS
CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS [_________], 19[__].
ASSUMING THAT THE MORTGAGE LOANS PREPAY AT [____]% OF THE STANDARD PREPAYMENT
ASSUMPTION (AS DESCRIBED IN THE PROSPECTUS SUPPLEMENT), [AND ASSUMING A CONSTANT
PASS-THROUGH RATE EQUAL TO THE INITIAL PASS-THROUGH RATE,] THIS CERTIFICATE HAS
BEEN ISSUED WITH NO MORE THAN $[_____] OF OID PER $1,000 OF INITIAL CERTIFICATE
PRINCIPAL BALANCE, THE YIELD TO MATURITY IS [___]% AND THE AMOUNT OF OID
ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NOT MORE THAN $[______] PER $1,000
OF INITIAL CERTIFICATE PRINCIPAL BALANCE, COMPUTED USING THE APPROXIMATE METHOD.
NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL PREPAY AT A RATE BASED ON
THE STANDARD PREPAYMENT ASSUMPTION OR AT ANY OTHER RATE OR AS TO THE CONSTANCY
OF THE PASS-THROUGH RATE.]
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE TO ANY
PERSON, UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO
SECTION 6.02(b) OF THE AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
SERVICER, THE CONTRACT SELLER AND THE TRUSTEE THAT THE PURCHASE OF THIS
CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION
UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE
Exhibit B-12-1
<PAGE>
SERVICER, THE CONTRACT SELLER OR THE TRUSTEE TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
THIS CLASS B-1 CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR
CERTIFICATES AND THE CLASS M CERTIFICATES AS DESCRIBED IN THE AGREEMENT REFERRED
TO HEREIN.
Certificate No. : B-1-[__]
Date of Pooling and Servicing Agreement : [______________]
Cut-off Date : [______________]
First Distribution Date : [______________]
Initial Certificate Balance of
this Certificate ("Denomination") : $[_____________]
Initial Certificate Balance of all
Class B-1 Certificates : $[_____________]
Pass-Through Rate : [____]% (subject to a maximum
rate equal to the weighted
average of the Net Contract Rates
of the Contracts in the Pool)
Month of Last Scheduled
Distribution Date : February, 2022
CUSIP : 06606FAM3
GREENPOINT CREDIT CORP. MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE PASS-THROUGH CERTIFICATES
SERIES 199[]-[]
evidencing a percentage interest in any distributions allocable to the
Class B-1 Certificates with respect to a Trust Fund consisting primarily of
a pool of fixed-rate conventional manufactured housing contracts (the
"Contracts") formed and sold by
GreenPoint Credit Corp., as Contract Seller (the "Contract Seller")
which manufactured housing contracts were originated or acquired by GreenPoint
Credit Corp. ("GreenPoint"), and are initially serviced by GreenPoint (the
"Servicer").
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Balance at any time may be less than
the Certificate Balance as set forth herein. Neither this Certificate nor the
Contracts are insured or guaranteed by the Contract
Exhibit B-12-2
<PAGE>
Seller, the Servicer or the Trustee referred to below or any of their respective
Affiliates or by any governmental agency or instrumentality.
This certifies that [Cede & Co.] is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the denomination of
this Certificate by the aggregate of the denominations of all Class B-1
Certificates) in certain monthly distributions with respect to a Trust Fund
consisting of the Contracts deposited by the Contract Seller. The Trust Fund
was created pursuant to a Pooling and Servicing Agreement, dated as of
[______________] (the "Agreement"), between the Contract Seller, the Servicer,
and [______________], as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
10/th/ day of each month or, if such 10/th/ day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the applicable Record Date
in an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the Class B-1 Distribution Amount on such Distribution Date
pursuant to Section 5.02 of the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day preceding such Distribution Date.
Distributions to the Holder of this Class B-1 Certificate shall be applied first
to interest and then to principal.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall hold Class B-1
Certificates evidencing a Percentage Interest aggregating 10% or more or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the Corporate Trust Office or such other
location specified in the notice to Certificateholders of such final
distribution.
No transfer of this Class B-1 Certificate will be made unless the Trustee
has received either (i) an Opinion of Counsel acceptable to and in form and
substance satisfactory to the Trustee, the Contract Seller and the Servicer with
respect to the permissibility of such transfer under the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and Section 4975 of the
Internal Revenue Code (the "Code") and stating, among other things, that the
transferee's acquisition of Class B-1 Certificate will not constitute or result
in a non-exempt prohibited transaction under Section 406 of ERISA or Section
4975 of the Code and will not subject the Servicer, the Contract Seller or the
Trustee to any obligation or liability in addition to those undertaken in the
Agreement or (ii) a representation letter, in the form as described by the
Agreement, stating either (a) that the transferee is not an employee benefit or
other plan subject
Exhibit B-12-3
<PAGE>
to the prohibited transaction provisions of ERISA or Section 4975 of the Code (a
"Plan"), or any other person (including an investment manager, a named fiduciary
or a trustee of any Plan) acting, directly or indirectly, on behalf of or
purchasing any Certificate with "plan assets" of any Plan, or (b) that the
transferee is an insurance company, the source of funds to be used by it to
purchase the Certificate is an "insurance company general account" (within the
meaning of Department of Labor Prohibited Transaction Class Exemption ("PTCE")
95-60), and the purchase is being made in reliance upon the availability of the
exemptive relief afforded under Sections I and III of PTCE 95-60.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the Agreement
or be valid for any purpose unless the certificate of authentication hereon has
been manually executed by an authorized officer of the Trustee.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: [______________].
[______________],
not in its individual capacity, but solely as
Trustee
By
___________________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class B-1 Certificates
referred to in the within-named Agreement
[______________],
not in its individual capacity, but solely as Trustee
By _________________________________________________
Authorized Signatory
Exhibit B-12-4
<PAGE>
EXHIBIT B-[4]
CLASS B-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 OF
1986, AS AMENDED (THE "CODE").
[THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE
U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS
CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS [_________], 19[__].
ASSUMING THAT THE MORTGAGE LOANS PREPAY AT [____]% OF THE STANDARD PREPAYMENT
ASSUMPTION (AS DESCRIBED IN THE PROSPECTUS SUPPLEMENT), [AND ASSUMING A CONSTANT
PASS-THROUGH RATE EQUAL TO THE INITIAL PASS-THROUGH RATE,] THIS CERTIFICATE HAS
BEEN ISSUED WITH NO MORE THAN $[_____] OF OID PER $1,000 OF INITIAL CERTIFICATE
PRINCIPAL BALANCE, THE YIELD TO MATURITY IS [___]% AND THE AMOUNT OF OID
ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NOT MORE THAN $[______] PER $1,000
OF INITIAL CERTIFICATE PRINCIPAL BALANCE, COMPUTED USING THE APPROXIMATE METHOD.
NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL PREPAY AT A RATE BASED ON
THE STANDARD PREPAYMENT ASSUMPTION OR AT ANY OTHER RATE OR AS TO THE CONSTANCY
OF THE PASS-THROUGH RATE.]
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE TO ANY
PERSON, UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO
SECTION 6.02(b) OF THE AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
SERVICER, THE CONTRACT SELLER AND THE TRUSTEE THAT THE PURCHASE OF THIS
CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION
UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE
SERVICER, THE CONTRACT SELLER OR THE TRUSTEE TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT") OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS IN A TRANSACTION WHICH IS EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 6.02 OF THE AGREEMENT.
Exhibit B-13-1
<PAGE>
THIS CLASS B-2 CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR
CERTIFICATES AND THE CLASS M CERTIFICATES AS DESCRIBED IN THE AGREEMENT REFERRED
TO HEREIN.
Certificate No. : B-2-[__]
Date of Pooling and Servicing Agreement : [______________]
Cut-off Date : [______________]
First Distribution Date : [______________]
Initial Certificate Balance of
this Certificate ("Denomination") : $[_____________]
Initial Certificate Balance of all
Class B-2 Certificates : $[_____________]
Pass-Through Rate : [____]% (subject to a maximum
rate equal to the weighted
average of the Net Contract
Rates of the Contracts in the
Contract Pool)
Month of Last Scheduled
Distribution Date : [______________]
CUSIP : [______________]
GREENPOINT CREDIT CORP. MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE PASS-THROUGH CERTIFICATES
SERIES 199[]-[]
evidencing a percentage interest in any distributions allocable to the
Class B-2 Certificates with respect to a Trust Fund consisting primarily of
a pool of fixed-rate conventional manufactured housing contracts (the
"Contracts") formed and sold by
GreenPoint Credit Corp., as Contract Seller (the "Contract Seller")
which manufactured housing contracts were originated or acquired by GreenPoint
Credit Corp. ("GreenPoint"), and are initially serviced by GreenPoint (the
"Servicer").
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Balance at any time may be less than
the Certificate Balance as set forth herein. Neither this Certificate nor the
Contracts are insured or guaranteed by the Contract
Exhibit B-13-2
<PAGE>
Seller, the Servicer or the Trustee referred to below or any of their respective
Affiliates or by any governmental agency or instrumentality.
This certifies that [___________] is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the denomination of
this Certificate by the aggregate of the denominations of all Class B-2
Certificates) in certain monthly distributions with respect to a Trust Fund
consisting of the Contracts deposited by the Contract Seller. The Trust Fund
was created pursuant to a Pooling and Servicing Agreement, dated as of
[______________] (the "Agreement"), between the Contract Seller, the Servicer,
and [______________], as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
10/th/ day of each month or, if such 10/th/ day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the applicable Record Date
in an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the Class B-2 Distribution Amount on such Distribution Date
pursuant to Section 5.02 of the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day preceding such Distribution Date.
Distributions to the Holder of this Class B-2 Certificate shall be applied first
to interest and then to principal.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall hold Class B-2
Certificates evidencing a Percentage Interest aggregating 10% or more or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the Corporate Trust Office or such other
location specified in the notice to Certificateholders of such final
distribution.
No transfer of this Class B-2 Certificate will be made unless the Trustee
has received either (i) an Opinion of Counsel acceptable to and in form and
substance satisfactory to the Trustee, the Contract Seller and the Servicer with
respect to the permissibility of such transfer under the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and Section 4975 of the
Internal Revenue Code (the "Code") and stating, among other things, that the
transferee's acquisition of Class B-2 Certificate will not constitute or result
in a non-exempt prohibited transaction under Section 406 of ERISA or Section
4975 of the Code and will not subject the Servicer, the Contract Seller or the
Trustee to any obligation or liability in addition to those undertaken in the
Agreement or (ii) a representation letter, in the form as described by the
Agreement, stating either (a) that the transferee is not an employee benefit or
other plan subject
Exhibit B-13-3
<PAGE>
to the prohibited transaction provisions of ERISA or Section 4975 of the Code (a
"Plan"), or any other person (including an investment manager, a named fiduciary
or a trustee of any Plan) acting, directly or indirectly, on behalf of or
purchasing any Certificate with "plan assets" of any Plan, or (b) that the
transferee is an insurance company, the source of funds to be used by it to
purchase the Certificate is an "insurance company general account" (within the
meaning of Department of Labor Prohibited Transaction Class Exemption ("PTCE")
95-60), and the purchase is being made in reliance upon the availability of the
exemptive relief afforded under Sections I and III of PTCE 95-60.
No transfer of a Class B-2 Certificate shall be made unless such transfer
is exempt from the registration requirements of the Securities Act of 1933, as
amended, (the "Act"), or is made in accordance with said Act. In the event that
such a transfer is to be made, the prospective transferee of such Certificate
shall be required to provide the Trustee, the Contract Seller and the Servicer
with an investment letter substantially in the form described by the Agreement,
as required under Section 6.02 of the Agreement. The Holder hereof desiring to
effect such transfer shall, and does hereby agree to, indemnify the Trustee, the
Contract Seller, the Servicer and the Certificate Registrar acting on behalf of
the Trustee against any liability that may result if the transfer is not so
exempt or is not made in accordance with the Act or any similar state laws.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the Agreement
or be valid for any purpose unless the certificate of authentication hereon has
been manually executed by an authorized officer of the Trustee.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: [______________].
[______________],
not in its individual capacity, but solely as
Trustee
By
__________________________________________
Authorized Signatory
Exhibit B-13-4
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Class B-2 Certificates
referred to in the within-named Agreement
[______________],
not in its individual capacity, but solely as Trustee
By___________________________________________________
Authorized Signatory
Exhibit B-13-5
<PAGE>
EXHIBIT C
FORM OF REVERSE OF CERTIFICATES
GREENPOINT CREDIT CORP. MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE PASS-THROUGH CERTIFICATES
SERIES 199[]-[]
This Certificate is one of a duly authorized issue of Certificates
designated as GreenPoint Credit Corp. Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificates, Series 199[]-[] issued in [six]
Classes (Class [A-1], Class [A-IO], Class M, Class B-l, Class B-2 and Class R,
herein collectively called the "Certificates"), and representing a beneficial
ownership interest, as described in the Agreement, in (i) the related Contracts,
(ii) the distributions thereon on or after the Cut-off Date (to the extent
described herein), (iii) the related Certificate Account and such assets as are
deposited therein from time to time and any investments thereof, together, in
each case, with any and all income, proceeds and payments with respect thereto,
and (iv) the Reserve Account.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Certificate Account and
the funds, if any, on deposit in the Reserve Account for payment hereunder and
that the Trustee is not liable to the Certificateholders for any amount payable
under this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Contract Seller, the Servicer and the Trustee with the consent of the
Holders of a Majority In Interest of each Class of Regular Certificates affected
by such amendment. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof,
in certain limited circumstances, without the consent of the Holders of any of
the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the Corporate Trust Office or the office or agency
maintained by the Trustee in New York, New York, accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same
Exhibit C-1
<PAGE>
aggregate Percentage Interest in the Trust Fund will be issued to the designated
transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Contract Seller and the Trustee and any agent of the Contract
Seller or the Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither of the Contract
Seller, the Trustee, nor any such agent shall be affected by any notice to the
contrary.
On any Distribution Date on which the Pool Scheduled Principal Balance
is less than or equal to 10% of the Cut-off Date Pool Principal Balance, the
Servicer will have the option to repurchase, upon giving notice mailed no later
than the 10th day of the month next preceding the month of the exercise of such
option, all Outstanding Contracts at a price equal to the greater of (a) the sum
of (x) 100% of the Scheduled Principal Balance of each Contract (other than any
Contract as to which the related Manufactured Home has been acquired and not yet
disposed of and whose fair market value is included pursuant to Clause (y)
below) as of the final Distribution Date, and (y) the fair market value of such
acquired property (as determined by the Servicer 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 10.01 of the
Agreement), and (b) the aggregate fair market value (as determined by the
Servicer as of the close of business on such third Business Day) of all the
assets in the Trust Fund, plus, in the case of both clause (a) and clause (b),
an amount sufficient to (i) reimburse any Class [A-1] Unpaid Interest Shortfall,
Class A-2 Unpaid Interest Shortfall, Class A-3 Unpaid Interest Shortfall, Class
A-4 Unpaid Interest Shortfall, Class A-5 Unpaid Interest Shortfall, Class A-6
Unpaid Interest Shortfall, Class A-7 Unpaid Interest Shortfall, Class A-8 Unpaid
Interest Shortfall, Class A-9 Unpaid Interest Shortfall, the Class [A-IO] Unpaid
Interest Shortfall, Class M Unpaid Interest Shortfall, Class B-1 Unpaid Interest
Shortfall, and any Class B-2 Unpaid Interest Shortfall and (ii) pay one month's
interest due on 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, Class A-9, Class [A-IO], Class M, Class B-1 and
Class B-2 Certificates at the applicable Pass-Through Rates on such Classes'
unpaid Certificate Balances; provided, that in no event shall the purchase price
of such Contracts be less than the Minimum Termination Amount.
On any Distribution Date on which the Pool Scheduled Principal Balance
is less than or equal to 10% of the Cut-off Date Pool Principal Balance, the
Servicer may request that the Trustee conduct an auction (a "Termination
Auction") by soliciting bids for the purchase of all Contracts remaining in the
Trust Fund, and in any event, if the Servicer has not exercised the
Exhibit C-2
<PAGE>
option described in the preceding paragraph within ninety days following the
Distribution Date as of which the Pool Scheduled Principal Balance is less than
10% of the Cut-off Date Pool Scheduled Principal Balance, the Trustee shall
conduct such termination auction. In the event that satisfactory bids are
received as described in the Agreement, the net sale proceeds will be
distributed to Certificateholders, in the same order of priority as collections
received in respect of the Contracts. A satisfactory bid is one in which the
purchase price of the Contracts then outstanding is at least equal to the
Minimum Termination Amount (as hereinafter defined). Such a bid must be made in
accordance with certain auction procedures set forth in the Agreement, which
include a requirement that the Trustee receive good faith bids for such
Contracts from at least two prospective purchasers (at least one of whom is not
the Contract Seller or an affiliate thereof) that are considered by the Trustee,
in its sole discretion, to be (i) competitive participants in the market for
manufactured housing installment sale contracts or installment loan agreements
and (ii) willing and able purchasers of such Contracts. As of any time after the
Pool Scheduled. Principal Balance is less than 10% of the Cut-off Date Pool
Scheduled Principal Balance, the "Minimum Termination Amount" is an amount equal
to the respective Certificate Balances of all Classes of Certificates that
remain outstanding as of such time, together with any shortfall in interest due
on such Certificates in respect of prior Distribution Dates and one month's
interest at the applicable Pass-Through Rates on such Certificate Balances. A
sale and consequent termination of the Trust Fund pursuant to a Termination
Auction must constitute a "qualified liquidation" of the Trust Fund under
Section 860F of the Code, including the requirement that the qualified
liquidation takes place over a period not to exceed 90 days. If satisfactory
bids are not received, the Trustee shall decline to sell the Contracts and shall
not be under any obligation to solicit any further bids or otherwise negotiate
any further sale of the Contracts.
Any repurchase pursuant to a Termination Auction or by the Servicer
will be made at the price specified in the Agreement. In the event that no such
early termination occurs, the obligations and responsibilities created by the
Agreement will terminate upon the later of the final payment or other
liquidation of the last Contract remaining in the Trust Fund and the disposition
of all REO Property in respect thereof and the distribution to
Certificateholders of all amounts required to be distributed pursuant to the
Agreement. In no event, however, will the trust created by the Agreement
continue beyond the expiration of 21 years from the death of the last survivor
of the descendants living at the date of the Agreement of the certain person
named in the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
Exhibit C-3
<PAGE>
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
[________________________________________________________________]
Dated:
_________________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to [________________________], for the account of
[__________________] account number [______________], or, if mailed by check, to
[__________________________]. Applicable statements should be mailed to
[__________________________].
This information is provided by [_____________], the assignee named above, or
[____________________], as its agent.
Exhibit C -4
<PAGE>
EXHIBIT D
CLASS R CERTIFICATE
THE CLASS R CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT BEAR INTEREST AND
WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED 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 OF
1986, AS AMENDED (THE "CODE").
NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST HEREIN MAY BE MADE TO ANY
PERSON, UNLESS THE TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO
SECTION 6.02(b) OF THE AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
SERVICER, THE CONTRACT SELLER AND THE TRUSTEE THAT THE PURCHASE OF THIS
CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION
UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE
SERVICER, THE CONTRACT SELLER OR THE TRUSTEE TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT") OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS IN A TRANSACTION WHICH IS EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 6.02 OF THE AGREEMENT. NEITHER THIS
CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED TO A "DISQUALIFIED
ORGANIZATION" AS DEFINED IN SECTION 860(e)(5) OF THE CODE.
THE HOLDERS OF THE CLASS R CERTIFICATES, BY PURCHASING SUCH CLASS R
CERTIFICATES, SHALL BE DEEMED TO CONSENT (1) TO THE APPOINTMENT OF THE SERVICER
AS THE TAX MATTERS PERSON FOR THE TRUST FUND OR, IF THE SERVICER DETERMINES, IN
ITS SOLE DISCRETION, THAT IT CANNOT ACT IN SUCH CAPACITY, TO THE APPOINTMENT OF
THE HOLDER HOLDING THE LARGEST PERCENTAGE INTEREST IN THE OUTSTANDING CLASS R
CERTIFICATES AS THE TAX MATTERS PERSON FOR THE TRUST FUND. IF THE HOLDER OF THE
LARGEST PERCENTAGE INTEREST IN THE OUTSTANDING CLASS R CERTIFICATES IS APPOINTED
AS THE TAX MATTERS PERSON, SUCH HOLDER SHALL BE DEEMED TO CONSENT, WITH RESPECT
TO ITS CAPACITY AS TAX MATTERS PERSON, TO THE APPOINTMENT OF THE SERVICER AS ITS
ATTORNEY-IN-FACT AND AGENT.
Exhibit D-1
<PAGE>
THE HOLDERS OF THE CLASS R CERTIFICATES, BY PURCHASING SUCH CLASS R
CERTIFICATES, SHALL BE FURTHER DEEMED TO AGREE TO EXECUTE ANY DOCUMENTS REQUIRED
TO GIVE EFFECT TO THE FOREGOING PROVISIONS, AS SET FORTH MORE FULLY IN THE
AGREEMENT.
THIS CLASS R CERTIFICATE IS SUBORDINATE IN RIGHT OF PAYMENT TO THE SENIOR
CERTIFICATES, THE CLASS M CERTIFICATES, THE CLASS B-1 CERTIFICATES AND THE CLASS
B-2 CERTIFICATES AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
Certificate No. : R-[__]
Date of Pooling and
Servicing Agreement : [______________]
Cut-off Date : [______________]
First Distribution Date : [______________]
Percentage Interest
Evidenced by this [____]%
Class R Certificate
Month of Last Scheduled
Distribution Date : [______________]
GREENPOINT CREDIT CORP. MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE PASS-THROUGH CERTIFICATES
SERIES 199[]-[]
evidencing a percentage interest in any distributions allocable to the
Class R Certificates with respect to a Trust Fund consisting primarily of a
pool of fixed-rate conventional manufactured housing contracts (the
"Contracts") formed and sold by
GreenPoint Credit Corp., as Contract Seller (the "Contract Seller")
which manufactured housing contracts were originated or acquired by GreenPoint
Credit Corp. ("GreenPoint"), and are initially serviced by GreenPoint (the
"Servicer").
Neither this Certificate nor the Contracts are insured or guaranteed by the
Contract Seller, the Servicer or the Trustee referred to below or any of their
respective Affiliates or by any governmental agency or instrumentality.
This certifies that [___________] is the registered owner of the Percentage
Interest evidenced by this Certificate in certain monthly distributions with
respect to a Trust Fund
Exhibit D-2
<PAGE>
consisting of the Contracts deposited by the Contract Seller. The Trust Fund was
created pursuant to a Pooling and Servicing Agreement, dated as of
[________________] (the "Agreement"), between the Contract Seller, the Servicer,
and [_________________] as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
The Trustee will cause to be distributed to the Class R Certificateholder
the amounts to which such Holder is entitled pursuant to the terms of the
Agreement. Such distributions will be made by check mailed to the address of
the Person entitled thereto, as such address shall appear on the Certificate
Register or by wire or other transfer of immediately available funds if such
Person has given the Trustee written instructions at least ten days prior to the
related Distribution Date. Notwithstanding the above, the final distribution on
this Class R Certificate will be made only upon presentation and surrender of
this Class R Certificate at the Corporate Trust Office or the office or agency
maintained by the Trustee for such purpose.
No transfer of this Class R Certificate will be made unless the Trustee has
received either (i) an Opinion of Counsel acceptable to and in form and
substance satisfactory to the Trustee, the Contract Seller and the Servicer with
respect to the permissibility of such transfer under the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and Section 4975 of the
Internal Revenue Code (the "Code") and stating, among other things, that the
transferee's acquisition of Class R Certificate will not constitute or result in
a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975
of the Code and will not subject the Servicer, the Contract Seller or the
Trustee to any obligation or liability in addition to those undertaken in the
Agreement or (ii) a representation letter, in the form as described by the
Agreement, stating that the transferee is not an employee benefit or other plan
subject to the prohibited transaction provisions of ERISA or Section 4975 of the
Code (a "Plan"), or any other person (including an investment manager, a named
fiduciary or a trustee of any Plan) acting, directly or indirectly, on behalf of
or purchasing any Certificate with "plan assets" of any Plan.
No transfer of a Class R Certificate shall be made unless such transfer is
exempt from the registration requirements of the Securities Act of 1933, as
amended, (the "Act"), or is made in accordance with said Act. In the event that
such a transfer is to be made, the prospective transferee of such Certificate
shall be required to provide the Trustee, the Contract Seller and the Servicer
with an investment letter substantially in the form described by the Agreement,
as required under Section 6.02 of the Agreement. The Holder hereof desiring to
effect such transfer shall, and does hereby agree to, indemnify the Trustee, the
Contract Seller, the Servicer and the Certificate Registrar acting on behalf of
the Trustee against any liability that may result if the transfer is not so
exempt or is not made in accordance with the Act or any similar state laws.
Each Holder of this Class R Certificate will be deemed to have agreed to be
bound by the restrictions of Section 6.02 of the Agreement, including but not
limited to the restrictions that (i) each person holding or acquiring any
Ownership Interest in this Class R Certificate must be a Permitted Transferee,
(ii) no Ownership Interest in this Class R Certificate may be transferred
Exhibit D-3
<PAGE>
without delivery to the Trustee of (a) a transfer affidavit of the proposed
transferee and (b) a transfer certificate of the transferor, each of such
documents to be in the form described in the Agreement, (iii) each person
holding or acquiring any Ownership Interest in this Class R Certificate must
agree to require a transfer affidavit and to deliver a transfer certificate to
the Trustee as required pursuant to the Agreement, (iv) each person holding or
acquiring an Ownership Interest in this Class R Certificate must agree not to
transfer an Ownership Interest in this Class R Certificate if it has actual
knowledge that the proposed transferee is not a Permitted Transferee and (v) any
attempted or purported transfer of any Ownership Interest in this Class R
Certificate in violation of such restrictions will be absolutely null and void
and will vest no rights in the purported transferee.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the Agreement
or be valid for any purpose unless the certificate of authentication hereon has
been manually executed by an authorized officer of the Trustee.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: [______________].
[______________],
not in its individual capacity, but solely as
trustee
By
__________________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class R Certificates
referred to in the within-named Agreement
[______________],
not in its individual capacity, but solely as Trustee
By __________________________________________________
Authorized Signatory
Exhibit D-4
<PAGE>
EXHIBIT E
FORM OF CERTIFICATE REGARDING
SUBSTITUTION OF ELIGIBLE SUBSTITUTE CONTRACT
The undersigned certify that they are [title] and [title],
respectively of GreenPoint Credit Corp. (the "Contract Seller"), and that as
such they are duly authorized to execute and deliver this certificate on behalf
of the Contract Seller pursuant to Section 3.05(b) of the Pooling and Servicing
Agreement (the "Agreement") dated as of [______________] between the Contract
Seller, GreenPoint Credit Corp. (the "Servicer") and [______________] as Trustee
(all capitalized terms used herein without definition having the respective
meanings specified in the Agreement), and further certify that:
1. The Contracts on the attached schedule are to be substituted on
the date hereof pursuant to Section 3.05(b) of the Agreement and each such
Contract is an Eligible Substitute Contract.
2. The Contract File for each such Contract being substituted for a
Replaced Contract is in the custody of the Servicer and each such Contract has
been stamped in accordance with Section 3.02(x) of the Agreement.
3. The UCC-1 financing statement in respect of the Contracts to be
substituted, in the form required by Section 3.05(b)(ii) of the Agreement, has
been filed with the appropriate office in California.
4. There has been deposited in the Certificate Account each amount
listed on the schedule attached hereto as the amount by which the remaining
principal balance of each Replaced Contract exceeds the remaining principal
balance as of the beginning of the month of substitution of each Contract being
substituted therefor.
IN WITNESS WHEREOF, I have affixed hereunto my signature this
_______, day of ____ 199__.
[GREENPOINT CREDIT CORP.]
By ____________________________________________
[Name][________________________________________]
[Title][_______________________________________]
By ____________________________________________
[Name][________________________________________]
[Title][_______________________________________]
Exhibit E-1
<PAGE>
EXHIBIT F
[FORM OF CERTIFICATE OF SERVICING OFFICER]
The undersigned certifies that he is a [title] of [Servicer], a
[______] corporation (the "Servicer"), and that as such he is duly authorized
to execute and deliver this certificate on behalf of the Servicer pursuant to
Section 5.05 of the Pooling and Servicing Agreement (the "Agreement") dated as
of [______________] between GreenPoint Credit Corp., as Servicer and Contract
Seller and [______________], as trustee (all capitalized terms used herein
without definition having the respective meanings specified in the Agreement),
and further certifies that:
1. To the best of such officer's knowledge, the Monthly Report for
the period from [________] to [_______] attached to this certificate is
complete and accurate in accordance with the requirements of Sections 5.04 and
5.05 of the Agreement; and
2. As of the date hereof, such officer is not aware of the
occurrence of an Event of Default or of an event that, with notice or lapse of
time or both, would become an Event of Default.
IN WITNESS WHEREOF, I have affixed hereunto my signature this_______
day of ____________,_______.
[SERVICER]
By ________________________________
[Name][____________________________]
[Title][___________________________]
Exhibit F-1
<PAGE>
EXHIBIT G-1
TRANSFER AFFIDAVIT
STATE OF )
)ss
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. That he/she is [Title of Officer] of [Name of Owner] (record or
beneficial owner of the GreenPoint Credit Corp. Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificates, Series 199[]-[], Class R (the
"Owner")), a [savings institution][corporation] duly organized and existing
under the laws of [the State of ____________][the United States], on behalf of
which he/she makes this affidavit and agreement.
2. That the Owner (i) is not and will not be a "disqualified
organization" as of [date of transfer] within the meaning of Section 860E(e)(5)
of the Internal Revenue Code of 1986, as amended (the "Code"), (ii) will
endeavor to remain other than a disqualified organization for so long as it
retains its ownership interest in the Class R Certificates, and (iii) is
acquiring the Class R Certificates for its own account or for the account of
another Owner from which it has received an affidavit and agreement in
substantially the same form as this affidavit and agreement. (For this purpose,
a "disqualified organization" means the United States, any state or political
subdivision thereof, any agency or instrumentality of any of the foregoing
(other than an instrumentality all of the activities of which are subject to tax
and, except for the Federal Home Loan Mortgage Corporation, a majority of whose
board of directors is not selected by any agency or instrumentality of such
foreign government or organization, any rural electric or telephone cooperative,
or any organization (other than certain farmers' cooperatives) that is generally
exempt from federal income tax unless such organization is subject to the tax on
unrelated business taxable income).
3. That the Owner is aware (i) of the tax that would be imposed on
transfers of Class R Certificates to disqualified organizations under the Code,
that applies to all transfers of Class R Certificates after March 31, 1988; (ii)
that such tax would be on the transferor, or, if such transfer is through an
agent (which person includes a broker, nominee or middleman) for a disqualified
organization, on the agent; (iii) that the person otherwise liable for the tax
shall be relieved of liability for the tax if the transferee furnishes to such
person an affidavit that the transferee is not a disqualified organization and,
at the time of transfer, such person does not have actual knowledge that the
affidavit is false; and (iv) that the Class R Certificates may be "noneconomic
residual interests" within the meaning of Treasury regulations promulgated
pursuant to the Code and that the transferor of a noneconomic residual interest
will remain liable for any taxes due with respect to the income on such residual
interest, unless no significant purpose of the transfer was to impede the
assessment or collection of tax.
Exhibit G-1-1
<PAGE>
4. That the Owner is aware of the tax imposed on a "pass-through
entity" holding Class R Certificates if at any time during the taxable year of
the pass-through entity a disqualified organization is the record holder of an
interest in such entity. (For this purpose, a "pass through entity" includes a
regulated investment company, a real estate investment trust or common trust
fund, a partnership, trust or estate, and certain cooperatives.)
5. The Owner is not an employee benefit plan or other plan subject
to the prohibited transaction provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or Section 4975 of the Code, or an
investment manager, named fiduciary or a trustee of any such plan, or any other
Person acting, directly or indirectly, on behalf of or purchasing any
Certificate with "plan assets" of any such plan.
6. That the Owner is aware that the Trustee will not register the
transfer of any Class R Certificates unless the transferee, or the transferee's
agent, delivers to it an affidavit and agreement, among other things, in
substantially the same form as this affidavit and agreement. The Owner
expressly agrees that it will not consummate any such transfer if it knows or
believes that any of the representations contained in such affidavit and
agreement are false.
7. That the Owner has reviewed the restrictions set forth on the
face of the Class R Certificates and the provisions of Section 6.02(c) of the
Pooling and Servicing Agreement (the "Agreement") under which the Class R
Certificates were issued (in particular, clause (iii)(A) and (iii)(B) of Section
6.02(c) which authorize the Trustee to deliver payments to a person other than
the Owner and negotiate a mandatory sale by the Trustee in the event the Owner
holds such Certificates in violation of Section 6.02(c)). The Owner expressly
agrees to be bound by and to comply with such restrictions and provisions.
8. That the Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to constitute
a reasonable arrangement to ensure that the Class R Certificates will only be
owned, directly or indirectly, by an Owner that is not a disqualified
organization.
9. The Owner's Taxpayer Identification Number is [____________].
10. This affidavit and agreement relates only to the Class R
Certificates held by the Owner and not to any other holder of the Class R
Certificates. The Owner understands that the liabilities described herein
relate only to the Class R Certificates.
11. That no purpose of the Owner relating to the transfer of any of
the Class R Certificates by the Owner is or will be to impede the assessment or
collections of any tax.
12. That the Owner has no present knowledge or expectation that it
will be unable to pay any United States taxes owed by it so long as any of the
Certificates remain outstanding. In this regard, the Owner hereby represents to
and for the benefit of the person from whom it acquired the Class R Certificate
that the Owner intends to pay taxes associated with
Exhibit G-1-2
<PAGE>
holding such Class R Certificate as they become due, fully understanding that it
may incur tax liabilities in excess of any cash flows generated by the Class R
Certificate.
13. That the Owner has no present knowledge or expectation that it
will become insolvent or subject to a bankruptcy proceeding for so long as any
of the Class R Certificates remain outstanding.
14. The Owner is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States state thereof (including the District of Columbia),
or an estate or trust whose income from sources without the United States is
includible in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or business within the
United States.
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this ______day of____,19____.
[NAME OF TRANSFEREE]
By:___________________________________
Name:
Title:
[Corporate Seal]
ATTEST:
___________________________________
[Assistant] Secretary
Personally appeared before me the above-named_______, known or proved
to me to be the same person who executed the foregoing instrument and to be the
of the Transferee, and acknowledged that he executed the same as his free act
and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this_________day of_______,19__.
__________________________________
NOTARY PUBLIC
My Commission expires the __ day
of ________, 19__.
Exhibit G-1-3
<PAGE>
EXHIBIT G-2
FORM OF TRANSFEROR CERTIFICATE
FOR CLASS R CERTIFICATES
GreenPoint Credit Corp. Date:
10089 Willow Creek Road
San Diego, CA 92131-1690
[______________],
as Trustee
[_________________]
[_________________]
Re: GreenPoint Credit Corp. Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificates, Series 199[_]-[_]
---------------------------------------------------------------
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
[________](the "Transferor") to [_________](the "Buyer") of
$[___________]Initial Certificate Principal Balance of GreenPoint Credit Corp.
Manufactured Housing Contract Senior/Subordinate Pass-Through Certificates,
Series 199[]-[], Class R (the "Certificates"), issued pursuant to Section
6.02(c) of the Pooling and Servicing Agreement (the "Agreement"), dated as of
[______________] among GreenPoint Credit Corp. (the "Contract Seller") and (the
"Servicer"), and [_________________] (the "Trustee"). All terms used herein and
not otherwise defined shall have the meanings set forth in the Agreement. The
Transferor hereby certifies, represents and warrants to, and covenants with, the
Contract Seller and the Trustee that:
1. No purpose of the Transferor relating to the transfer of the
Certificate by the Transferor to the Buyer is or will be to impede the
assessment or collection of any tax.
2. The Transferor understands that the Buyer has delivered to the
Trustee and the Servicer a transfer affidavit and agreement in the form attached
to the Agreement as Exhibit G-1. The Transferor does not know or believe that
any representation contained therein is false.
3. The Transferor has at the time of the transfer conducted a
reasonable investigation of the financial condition of the Buyer as contemplated
by Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result of that
investigation, the Transferor has determined that the Buyer has historically
paid its debts as they become due and has found no significant evidence to
indicate that the Buyer will not continue to pay its debts as they become due in
the future. The Transferor understands that the transfer of a Class R
Certificate may not be respected for United States income tax purposes (and the
Transferor may continue to be liable for United States income taxes associated
therewith) unless the Transferor has conducted such an investigation.
Exhibit G-2-1
<PAGE>
4. The Transferor has no actual knowledge that the proposed Buyer is
not both a United States Person and a Permitted Transferee.
5. The Transferor further certifies that (a) we understand that such
Certificates have not been registered under the Securities Act of 1933, as
amended (the "Act"), and are being disposed of by us in a transaction that is
exempt from the registration requirements of the Act, (b) neither the Transferor
nor anyone acting on its behalf has (i) offered, pledged, sold, disposed of or
otherwise transferred any Certificate, any interest in any Certificate or any
other similar security from any person in any manner, (ii) solicited any offer
to buy or to accept a pledge, disposition or other transfer of any Certificate,
any interest in any Certificate or any other similar security from any person in
any manner, (iii) otherwise approached or negotiated with respect to any
Certificate, any interest in any Certificate or any other similar security from
any person in any manner, (iv) made any general solicitation by means of general
advertising or in any other manner, or (v) taken any other action, that (as to
any of (i) through (v) above) would constitute a distribution of the
Certificates under the Act, that would render the disposition of any Certificate
a violation of Section 5 of the Act or any state securities law, or that would
require registration or qualification pursuant thereto, or (c) to the extent
such transfer is pursuant to Rule 144A under the Act, we have not offered the
Certificates to anyone other than a "qualified institutional buyer" as defined
in Rule 144A and the Act. The Transferor will not act, in any manner set forth
in the foregoing sentence with respect to any Certificate. The Transferor has
not and will not sell or otherwise transfer any of the Certificates, except in
compliance with the provisions of the Agreement.
Very truly yours,
[__________________________________]
Name of Transferor
By:________________________________
Name:
Title:
Exhibit G-2-2
<PAGE>
EXHIBIT H
FORM OF TRANSFEROR CERTIFICATE
FOR CLASS B-2 CERTIFICATES
GreenPoint Credit Corp. Date:
10089 Willow Creek Road
San Diego, CA 92131-1690
[______________],
as Trustee
[_________________]
[_________________]
Re: GreenPoint Credit Corp. Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificates, Series 199[]-[]
-------------------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the Class B-2 Certificate[s], we (the
"Transferor") certify that (a) we understand that such Certificates have not
been registered under the Securities Act of 1933, as amended (the "Act"), and
are being disposed of by us in a transaction that is exempt from the
registration requirements of the Act, (b) neither the Transferor nor anyone
acting on its behalf has (i) offered, pledged, sold, disposed of or otherwise
transferred any Certificate, any interest in any Certificate or any other
similar security from any person in any manner, (ii) solicited any offer to buy
or to accept a pledge, disposition or other transfer of any Certificate, any
interest in any Certificate or any other similar security from any person in any
manner, (iii) otherwise approached or negotiated with respect to any
Certificate, any interest in any Certificate or any other similar security from
any person in any manner, (iv) made any general solicitation by means of general
advertising or in any other manner, or (v) taken any other action, that (as to
any of (i) through (v) above) would constitute a distribution of the
Certificates under the Act, that would render the disposition of any Certificate
a violation of Section 5 of the Act or any state securities law, or that would
require registration or qualification pursuant thereto, or (c) to the extent
such transfer is pursuant to Rule 144A under the Act, we have not offered the
Certificates to anyone other than a "qualified institutional buyer" as defined
in Rule 144A and the Act. The Transferor will not act, in any manner set forth
in the foregoing sentence with respect to any Certificate. The Transferor has
not and will not sell or otherwise transfer any of the Certificates, except in
compliance with the provisions of the Pooling and Servicing Agreement (the
"Agreement") dated as of [______________] among GreenPoint Credit Corp. (the
"Contract Seller") and (the "Servicer"), and [_________________] (the
"Trustee").
Exhibit H-1
<PAGE>
Very truly yours,
[______________________________]
Name of Transferor
By:____________________________
Name:
Title:
Exhibit H-2
<PAGE>
EXHIBIT I
FORM OF DEPOSITORY AGREEMENT
[______________], 19[__]
To: [__________________
__________________
__________________
(the "Depository")
As Servicer under the Pooling and Servicing Agreement, dated as of
[______________], we hereby authorize and request you to establish an account,
as a Custodial Account, to be designated as "GreenPoint Credit Corp. as
servicer, in trust for the [Buyer and various Mortgagors], [Fixed Rate Mortgage
Loans]." All deposits in the account shall be subject to withdrawal therefrom by
order signed by the Servicer. You may refuse any deposit which would result in
violation of the requirement that the account be fully insured as described
below. This letter is submitted to you in duplicate. Please execute and return
one original to us.
GREENPOINT CREDIT CORP.
By:_______________________________
Name:[____________________________]
Title:[___________________________]
Date: [___________________________]
Exhibit I-1
<PAGE>
The undersigned, as Depository, hereby certifies that the above-described
account has been established under Account Number [______] at the office of the
Depository indicated above, and agrees to honor withdrawals on such account as
provided above. The full amount deposited at any time in the account will be
insured by the Federal Deposit Insurance Corporation through the Bank Insurance
Fund ("BIF") or the Savings Association Insurance Fund ("SAIF").
[_______________________________]
Depository
By:______________________________
Name:[___________________________]
Title:[__________________________]
Date: [__________________________]
Exhibit I-2
<PAGE>
EXHIBIT J
FORM OF INVESTMENT LETTER AND
FORM OF ERISA REPRESENTATIONS
Date:
GreenPoint Credit Corp.
10089 Willow Creek Road
San Diego, CA 92131-1690
[______________],
as Trustee
[_________________]
[_________________]
Re: GreenPoint Credit Corp. Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificates, Series 199[]-[]
Ladies and Gentlemen:
[__________](the "Buyer") intends to purchase from [__________](the
"Transferor") $[___] Initial Certificate Principal Balance of GreenPoint Credit
Corp. Manufactured Housing Contract Senior/Subordinate Pass-Through
Certificates, Series 199[]-[], Class [___](the "Certificates"), issued pursuant
to the Pooling and Servicing Agreement (the "Agreement"), dated as of
[______________] among GreenPoint Credit Corp. (the "Contract Seller") and (the
"Servicer") and [_________________] (the "Trustee"). All terms used herein and
not otherwise defined shall have the meanings set forth in the Agreement. The
Buyer hereby certifies, represents and warrants to, and covenants with, the
Contract Seller and the Trustee that:
1. We understand that (a) the Certificates have not been and will
not be registered or qualified under the Securities Act of 1933, as amended
(the "Act") or any state securities law, (b) the Contract Seller is not
required to so register or qualify the Certificates, (c) the Certificates
may be resold only if registered and qualified pursuant to the provisions
of the Act or any state securities law, or if an exemption from such
registration and qualification is available, (d) the Agreement contains
restrictions regarding the transfer of the Certificates and (e) the
Certificates will bear a legend to the foregoing effect.
2. We are acquiring the Certificates for our own account for
investment only and not with a view to or for sale in connection with any
distribution thereof in any manner that would violate the Act or any
applicable state securities laws.
3. We are (a) a substantial, sophisticated institutional investor
having such knowledge and experience in financial and business matters,
and, in particular, in such matters related to securities similar to the
Certificates, such that we are capable of
Exhibit J-1
<PAGE>
evaluating the merits and risks of investment in the Certificates, (b) able
to bear the economic risks of such an investment and (c) an "accredited
investor" within the meaning if Rule 501(a) promulgated pursuant to the
Act.
4. We have not and will not nor have we authorized or will authorize
any person to (a) offer, pledge, sell, dispose of or otherwise transfer any
Certificate, any interest in any Certificate or any other similar security
from any person in any manner, (b) solicit any offer to buy or to accept a
pledge, disposition or other transfer of any Certificate, any interest in
any Certificate or any other similar security from any person in any
manner, (c) otherwise approach or negotiate with respect to any
Certificate, any interest in any Certificate or any other similar security
from any person in any manner, (d) make any general solicitation by means
of general advertising or in any other manner, or (e) take any other
action, that (as to any of (a) through (e) above) would constitute a
distribution of the Certificates under the Act, that would render the
disposition of any Certificate a violation of Section 5 of the Act or any
state securities law, or that would require registration or qualification
pursuant thereto. We will not sell or otherwise transfer any of the
Certificates, except in compliance with the provisions Agreement.
5. We
(a) (1) are not an employee benefit or other plan subject to the
prohibited transaction provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or Section 4975 of the Internal
Revenue Code of 1986, as amended (the "Code") (a "Plan"), or any other
person (including an investment manager, a named fiduciary or a trustee of
any Plan) acting, directly or indirectly, on behalf of or purchasing any
Certificate with "plan assets" of any Plan within the meaning of the
Department of Labor ("DOL") regulation at 29 C.F.R. (S)2510.3-101, or (2)
(as to the Class M, B-1 or B-2 Certificates) are an insurance company, the
source of funds to be used by it to purchase the Certificates is an
"insurance company general account" (within the meaning of DOL Prohibited
Transaction Class Exemption ("PTCE") 95-60), and the purchase is eligible
for the exemptive relief afforded under Sections I and III of PTCE 95-60,
and
(b) understand that registration of transfer of any Certificates
to any Plan, or to any Person acting on behalf of or purchasing any such
Certificate with "plan assets" of any Plan, may not be made unless such
Plan or Person, including the Buyer, (1) delivers an Opinion of Counsel,
addressed and satisfactory to the Trustee, the Contract Seller and the
Servicer, to the effect that the purchase and holding of the Certificates
by, on behalf of or with "plan assets" of such Plan is permissible under
applicable law, will not constitute or result in any non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code, and
will not subject the Contract Seller, the Servicer or the Trustee to any
obligation or liability (including liabilities under ERISA or Section 4975
of the Code) in addition to those undertaken in the Agreement, or (2) (as
to the Class M, B-1 or B-2 Certificates) makes the certification set forth
in clause (2) of paragraph 5(a) above.
Exhibit J-2
<PAGE>
6. We are not a non-United States person.
Very truly yours,
[________________________________________]
Name of Buyer
By:______________________________________
Name:
Title:
Exhibit J-3
<PAGE>
EXHIBIT K
FORM OF RULE 144A LETTER
Date:
GreenPoint Credit Corp.
10089 Willow Creek Road
San Diego, CA 92131-1690
[______________],
as Trustee
[_________________]
[_________________]
Re: GreenPoint Credit Corp. Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificates, Series 199[_]-[_]
Ladies and Gentlemen:
The undersigned purchaser ( the "Buyer") warrants and represents to,
and covenants with the Contract Seller, the Trustee and the Servicer pursuant to
Section 6.02 of the Pooling and Servicing Agreement (the "Agreement"), dated as
of [______________] among GreenPoint Credit Corp. (the "Contract Seller") and
(the "Servicer") and [_________________] (the "Trustee") as follows:
1. We understand that (a) the Rule 144A Securities have not been and
will not be registered or qualified under the Act or any state securities
law, (b) the Contract Seller is not required to so register or qualify the
Rule 144A Securities, (c) the Rule 144A Securities may be resold only if
registered and qualified pursuant to the provisions of the Act or any state
securities law, or if an exemption from such registration and qualification
is available, (d) the Agreement contains restrictions regarding the
transfer of the Rule 144A Securities and (e) the Rule 144A Securities will
bear a legend to the foregoing effect.
2. We are a "qualified institutional buyer" as that term is defined
in Rule 144A under the Act and have completed either of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2. We are
aware that the sale to us is being made in reliance on Rule 144A. We are
acquiring the Rule 144A Securities for our own account or the accounts of
other qualified institutional buyers, understand that such Rule 144A
Securities may be resold, pledged or transferred only (I) to a person
reasonably believed to be a qualified institutional buyer that purchases
for its own account or for the account of a qualified institutional buyer
to whom notice is given that the resale, pledge or transfer is being made
in reliance on Rule 144A, or (ii) pursuant to another exemption from
registration under the Act.
Exhibit K-1
<PAGE>
3. We are (a) a substantial, sophisticated institutional investor
having such knowledge and experience in financial and business matters,
and, in particular, in such matters related to securities similar to the
Rule 144A Securities, such that we are capable of evaluating the merits and
risks of investment in the Rule 144A Securities, (b) able to bear the
economic risks of such an investment and (c) an "accredited investor"
within the meaning if Rule 501(a) promulgated pursuant to the Act.
4. We have not and will not nor have we authorized or will
authorize any person to (a) offer, pledge, sell, dispose of or otherwise
transfer any Rule 144A Securities, any interest in any Rule 144A Securities
or any other similar security from any person in any manner, (b) solicit
any offer to buy or to accept a pledge, disposition or other transfer of
any Rule 144A Securities, any interest in any Rule 144A Securities or any
other similar security from any person in any manner, (c) otherwise
approach or negotiate with respect to any Rule 144A Securities, any
interest in any Rule 144A Securities or any other similar security from any
person in any manner, (d) make any general solicitation by means of general
advertising or in any other manner, or (e) take any other action, that (as
to any of (a) through (e) above) would constitute a distribution of the
Rule 144A Securities under the Act, that would render the disposition of
any Rule 144A Securities a violation of Section 5 of the Act or any state
securities law, or that would require registration or qualification
pursuant thereto. We will not sell or otherwise transfer any of the Rule
144A Securities, except in compliance with the provisions Agreement.
5. We
(a) (1) are not an employee benefit or other plan subject to the
prohibited transaction provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or Section 4975 of the Internal
Revenue Code of 1986, as amended (the "Code") (a "Plan"), or any other
person (including an investment manager, a named fiduciary or a trustee of
any Plan) acting, directly or indirectly, on behalf of or purchasing any
Rule 144A Securities with "plan assets" of any Plan within the meaning of
the Department of Labor ("DOL") regulation at 29 C.F.R. (S)2510.3-101, or
(2) (as to the Class M, B-1 or B-2 Certificates) are an insurance company,
the source of funds to be used by it to purchase the Rule 144A Securities
is an "insurance company general account" (within the meaning of DOL
Prohibited Transaction Class Exemption ("PTCE") 95-60), and the purchase is
eligible for the exemptive relief afforded under Sections I and III of PTCE
95-60, and
(b) understand that registration of transfer of any Rule 144A
Securities to any Plan, or to any Person acting on behalf of or purchasing
any such Rule 144A Securities with "plan assets" of any Plan, may not be
made unless such Plan or Person, including the Buyer, (1) delivers an
Opinion of Counsel, addressed and satisfactory to the Trustee, the Contract
Seller and the Servicer, to the effect that the purchase and holding of the
Rule 144A Securities by, on behalf of or with "plan assets" of such Plan is
permissible under applicable law, will not constitute or result in any non-
exempt
Exhibit K-2
<PAGE>
prohibited transaction under Section 406 of ERISA or Section 4975 of
the Code, and will not subject the Contract Seller, the Servicer or the
Trustee to any obligation or liability (including liabilities under ERISA
or Section 4975 of the Code) in addition to those undertaken in the
Agreement, or (2) (as to the Class M, B-1 or B-2 Certificates) makes the
certification set forth in clause (2) of paragraph 5(a) above.
6. We are not a non-United States person.
This document may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same document.
________________________________________ _______________________________
Print Name of Seller Print Name of Buyer
By: __________________________________ By: _________________________
Name: Name:
Title: Title:
Taxpayer Identification: Taxpayer Identification:
No. __________________________________ No. _________________________
Date: __________________________________ Date: _________________________
Exhibit K-3
<PAGE>
ANNEX 1 TO EXHIBIT K
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Buyers Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Letter to which this certification relates with
respect to the Rule 144A Securities described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under
the Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer
owned and/or invested on a discretionary basis $ [ ]/1/ in securities
(except for the excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated in accordance
with Rule 144A and (ii) the Buyer satisfies the criteria in the category
marked below.
___ Corporation, etc. The Buyer is a corporation (other than a bank,
-----------------
savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
___ Bank. The Buyer (a) is a national bank or banking institution
-----
organized under the laws of any State, territory or the District
of Columbia, the business of which is substantially confined to
banking and is supervised by the State or territorial banking
commission or similar official or is a foreign bank or equivalent
institution, and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan
-----------------
association, building and loan association, cooperative bank,
homestead association or similar institution, which is supervised
and examined by a State or Federal authority having supervision
over any such institutions or is a foreign savings and loan
association or equivalent institution and (b) has an audited net
worth of at least $25,000,000 as demonstrated in its latest
annual financial statements, a copy of which is attached hereto.
___________________
/1/ Buyer must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Buyer is a dealer, and, in that case,
Buyer must own and/or invest on a discretionary basis at least $10,000,000
in securities.
Exhibit K-4
<PAGE>
___ Broker-dealer. The Buyer is a dealer registered pursuant to
--------------
Section 15 of the Securities Exchange Act of 1934.
___ Insurance Company. The Buyer is an insurance company whose
------------------
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State,
territory or the District of Columbia.
___ State or Local Plan. The Buyer is a plan established and
--------------------
maintained by a State, its political subdivisions, or any agency
or instrumentality of the State or its political subdivisions,
for the benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the
-----------
meaning of Title I of the Employee Retirement Income Security Act
of 1974.
___ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
___ Small Business Investment Company. The Buyer is a small business
----------------------------------
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958.
___ Business Development Company. The Buyer is a business
-----------------------------
development company as defined in Section 202(a)(22) of the
Investment Advisors Act of 1940.
___ Trust Fund. The Buyer is a trust fund whose trustee is a bank or
-----------
trust company and whose participants are exclusively State or
Local Plans or ERISA Plans as defined above, and no participant
of the Buyer is an individual retirement account or an H.R. 10
(Keogh) plan.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities
that are part of an unsold allotment to or subscription by the Buyer, if
the Buyer is a dealer, (iii) bank deposit notes and certificates of
deposit, (iv) loan participations, (v) repurchase agreements, (vi)
securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used
the cost of such securities to the Buyer and did not include any of the
securities referred to in the preceding paragraph, except (i) where the
Buyer reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect
to the cost of those securities has been published. If clause (ii) in the
preceding sentence applies, the securities may be valued at market.
Further, in
Exhibit K-5
<PAGE>
determining such aggregate amount, the Buyer may have included securities
owned by subsidiaries of the Buyer, but only if such subsidiaries are
consolidated with the Buyer in its financial statements prepared in
accordance with generally accepted accounting principles and if the
investments of such subsidiaries are managed under the Buyer's direction.
However, such securities were not included if the Buyer is a majority-
owned, consolidated subsidiary of another enterprise and the Buyer is not
itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements made
herein because one or more sales to the Buyer may be in reliance on Rule
144A.
_____ _____ Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer
agrees that, in connection with any purchase of securities sold to the
Buyer for the account of a third party (including any separate account) in
reliance on Rule 144A, the Buyer will only purchase for the account of a
third party that at the time is a "qualified institutional buyer" within
the meaning of Rule 144A. In addition, the Buyer agrees that the Buyer
will not purchase securities for a third party unless the Buyer has
obtained a current representation letter from such third party or taken
other appropriate steps contemplated by Rule 144A to conclude that such
third party independently meets the definition of "qualified institutional
buyer" set forth in Rule 144A.
7. Until the date of purchase of the Rule 144A Securities, the
Buyer will notify each of the parties to which this certification is made
of any changes in the information and conclusions herein. Until such
notice is given, the Buyer's purchase of the Certificates will constitute a
reaffirmation of this certification as of the date of such purchase. In
addition, if the Buyer is a bank or savings and loan is provided above, the
Buyer agrees that it will furnish to such parties updated annual financial
statements promptly after they become available.
[________________________________________]
Name of Buyer
By: _____________________________________
Name:
Title:
Date: ___________________________________
Exhibit K-6
<PAGE>
ANNEX 2 TO EXHIBIT K
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Buyers That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Letter to which this certification relates with
respect to the Rule 144A Securities described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
___ The Buyer owned $[ ] in securities (other than the excluded
securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
___ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $[ ] in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means
------------------------------
two or more registered investment companies (or series thereof) that have the
same investment adviser or investment advisers (the "Adviser") that are
affiliated (by virtue of being majority-owned subsidiaries of the same parent or
because one investment adviser is a majority-owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) bank deposit notes and certificates
of deposit, (iii) loan participations, (iv) repurchase
Exhibit K-7
<PAGE>
agreements, (v) securities owned but subject to a repurchase agreement and (vi)
currency, interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned
will notify the parties listed in the Rule 144A Transferee Certificate to which
this certification relates of any changes in the information and conclusions
herein. Until such notice is given, the Buyer's purchase of the Certificates
will constitute a reaffirmation of this certification by the undersigned as of
the date of such purchase.
[__________________________________________]
Name of Buyer or Adviser
By: _______________________________________
Name:
Title:
IF AN ADVISER:
[__________________________________________]
Name of Buyer
Date: _____________________________________
Exhibit K-8
<PAGE>
EXHIBIT L
TERMINATION AUCTION PROCEDURES
------------------------------
The following sets forth the auction procedures to be followed in
connection with a sale effected pursuant to Section 10.0 l(b) of the Pooling and
Servicing Agreement (the "Agreement"), dated as of [______________], between
GreenPoint Credit Corp. (the "Contract Seller") and (the "Servicer") and
[______________] (the "Trustee"). Capitalized terms used herein that are not
otherwise defined shall have the meanings described thereto in the Agreement.
I. Pre-Auction Process
-------------------
(a) Upon receiving notice of the Auction Date, the Advisor will initiate
its general Termination Auction procedures consisting of the
following' (i) with the assistance of the Servicer, prepare a general
solicitation package along with a confidentiality agreement; (ii)
develop a list of qualified bidders, in a commercially reasonable
manner; (iii) initiate contact with all qualified bidders; (vi) send a
confidentiality agreement to all qualified bidders; (v) upon receipt
of a signed confidentiality agreement, send solicitation packages to
all interested bidders on behalf of the Trustee; and (vi) notify the
Servicer of all potential bidders and anticipated timetable.
(b) The general solicitation package will include' (i) the prospectus
supplement and prospectus from the initial public offering of any of
the Certificates; (ii) a copy of all monthly servicing reports or a
copy of all annual servicing reports and the prior year's monthly
servicing reports; (iii) a form of a Sale and Servicing Agreement
prepared by the Trustee and the Servicer (or prepared by the Advisor
and approved by the Trustee and the Servicer); (iv) a description of
the minimum purchase price required to cause the Trustee to sell the
Contracts as set forth in Section 10.01 (a) of the Agreement; (v) a
formal bidsheet; (vi) a detailed timetable; and (vii) a preliminary
data tape of the Pool Scheduled Principal Balance as of a recent
Distribution Date reflecting the same data attributes used to create
the Cut-off Date tables for the prospectus supplement dated
[______________], 199[__] relating to the public offering of certain
of the Certificates. None of the Trustee, the Servicer or the
Contract Seller shall be required to produce an updated prospectus or
prospectus supplement, and the auction procedures shall be carried out
in a manner that does not constitute a public offering of securities.
(c) The Trustee, with the assistance of the Servicer and the Advisor, will
maintain an auction package beginning at the time of closing of the
transaction, which will contain the documents listed under clauses
(i)-(ii) of the preceding paragraph. If the Advisor is unable to
perform its role as advisor to the Trustee, the Servicer acting in
its capacity under the Agreement will select a successor Advisor and
inform the Trustee of its actions.
Exhibit L-1
<PAGE>
(d) The Advisor will send solicitation packages to all bidders at least 15
Business Days before the Auction Date. Bidders will be required to
submit any due diligence questions in writing to the Advisor for
determination of their relevancy, no later than 10 Business Days
before the Auction Date. The Servicer and the Advisor will be
required to satisfy all relevant questions at least five Business Days
prior to the Auction Date and distribute the questions and answers to
all bidders.
II. Auction Process
---------------
(a) The Advisor, any underwriter, or any Certificate Owner will be allowed
to bid in the Auction, but will not be required to do so.
(b) The Servicer will also be allowed to bid in the Termination Auction if
it deems appropriate, but will not be required to do so.
(c) On the Auction Date, all bids will be due by facsimile to the offices
of the Trustee by 1:00 p.m. New York City time, with the winning
bidder to be notified by 2:00 p.m. New York City time. All acceptable
bids (as described in Section 10.01 (b) of the Agreement) will be due
on a conforming basis on the bid sheet contained in the solicitation
package.
(d) If the Trustee receives fewer than two market value bids from
participants in the market for manufactured housing installment sales
contracts and installment loan contracts willing and able to purchase
the Contracts, the Trustee shall decline to consummate the sale.
(e) Upon notification to the winning bidder, a good faith deposit equal to
one percent (1%) of the Pool Scheduled Principal Balance will be
required to be wired to the Trustee upon acceptance of the bid. This
deposit, along with any interest income attributable to it, will be
credited to the purchase price but will not be refundable. The
trustee will establish a separate account for the acceptance of the
good faith deposit, until such time as the account is fully funded and
all monies are transferred into the Collection Account, such time not
to be later than one Business Day before the related Distribution Date
(as described above).
(f) The winning bidder will receive on the Auction Date a copy of the
draft Sale and Servicing Agreement and Servicer's Representations and
Warranties (which shall be substantially identical to the
representations and warranties set forth in Section 3.01 of the
Agreement).
(g) The Advisor will provide to the Trustee a letter concluding whether or
not the winning bid is a fair market value bid. The Advisor will also
provide such letter if it is the winning bidder. In the case where
the Advisor or the Servicer is the winning bidder it will provide for
market comparables and valuations in its letter.
Exhibit L-2
<PAGE>
(h) The Auction will stipulate the Servicer be retained to service the
Contracts sold pursuant to the terms of the Sale and Servicing
Agreement.
(i) The Auction will stipulate that such sale and consequent termination
of the Trust Fund must constitute a "qualified liquidation" of the
Trust Fund under Section 860F of the Code, including the requirement
that such liquidation take place over a period not to exceed 90 days.
The Trustee may, in its discretion, require that the purchaser of the
Contracts provide the Trustee with an Opinion of Counsel to that
effect.
Exhibit L-3
