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EXHIBIT 99.26
TRUST AGREEMENT
between
XXXXXXXXXX
as Seller
and
XXXXXXXXXX
and
XXXXXXXXXX
as Trustees
Dated as of July 1, 1992
$31,900,000
Mortgage Pass-Through Certificates
(Kmart Corporation Power Center - Utica, Michigan Project)
Series 1992
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TRUST AGREEMENT
THIS TRUST AGREEMENT dated as of July 1, 1992, is executed by and
between XXXXXXXXXX, a Nevada corporation, as seller (together with its
permitted successors, in such capacity, "Seller"), and XXXXXXXXXX, a national
banking association validly organized and existing under the laws of the United
States, as trustee (together with its permitted successors and assigns in such
capacity, "Trustee"), and XXXXXXXXXX, as trustee (together with permitted
successors and assigns in such capacity, the "Individual Trustee")(the Trustee
and the Individual Trustee, collectively, the "Trustees").
PREFACE
Each Certificate evidences a beneficial ownership interest in the
Trust Fund, the assets of which include, among other things, a Mortgage Loan,
and the Certificates are equally and ratably secured by and paid in accordance
with the Mortgage and Mortgage Note, respectively (as such term is defined
herein).
Each Certificate is paid principal and/or interest, as set forth on
the Debt Service schedule on such Certificate (collectively, part of the
Certificate Distribution), on a semiannual basis referred to herein as the
Remittance Dates (being the same dates as the Due Dates). Payments under the
Mortgage Note are received semiannually on the Due Date. The Certificate
Distribution is calculated on the 10th day (or if such 10th day is not a
Business Day, the Business Day immediately following such 10th day) of the
month of the related Remittance Date (as each such term is defined herein).
In consideration of the premises and the mutual agreements hereinafter
set forth, the Seller and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Whenever used herein, the following words and phrases, unless the
context otherwise requires, shall have the following meanings:
"Agreement": This Trust Agreement and all amendments hereof and
supplements hereto.
"Appraisal": An appraisal or certification as to value made by the
Seller. If an appraisal is done on the Mortgaged Property, it shall be signed
prior to the approval of the Mortgage Loan by a qualified appraiser (a
certified MAI appraiser
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or member of Society of Real Estate Appraisers (SRA)), duly appointed by the
Seller, who at the time of such appraisal had no interest, direct or indirect,
in the Mortgaged Property or in any loan made on the security thereof, and
whose compensation was not affected by the approval or disapproval of the
Mortgage Loan.
"Assignment" or "Assignment of Mortgage": An assignment of the
Mortgage, notice of transfer or equivalent instrument, in recordable form,
sufficient under the laws of the jurisdiction where the Mortgaged Property is
located to reflect of record the assignment of the Mortgage to the Trustees.
"Borrower": XXXXXXXXXX, a special purpose
limited partnership formed under the laws of the State of Michigan, its
successors and assigns.
"Business Day": Any day other than (i) Saturday or Sunday, or (ii) a
day on which banking institutions in the city in which the principal corporate
trust offices of the Trustee are located are authorized or obligated by law or
executive order to be closed, or (b) for purposes of Section 4,01(e), a day on
which banks in New York are required by law to be closed or are customarily
closed.
"Called Principal": With respect to the Mortgage Loan, the principal
of the Mortgage Loan that is to be paid or prepaid or accelerated in any way
pursuant to Section 2 of the Loan Agreement or is declared to be immediately
due and payable pursuant to Section 9.2 of the Loan Agreement, as the context
requires.
"Cash Liquidation": Recovery of all cash proceeds by the Trustee with
respect to the termination of the Mortgage Loan following an Event of Default,
including Insurance Proceeds, condemnation awards and other payments or
recoveries (whether made at one time or over a period of time) which the
Trustees deem to be finally recoverable, in connection with the sale or
assignment of the Mortgage Loan, trustee's sale, foreclosure sale or otherwise,
but only if title to the Mortgaged Property was not acquired by foreclosure or
deed in lieu of foreclosure by the Trustees pursuant to Section 5.07.
"Certificate": Any one of the Certificates evidencing a beneficial
ownership interest in the Mortgage Loan, executed by the Seller and
authenticated by the Trustee, substantially in the form set forth in Exhibit
4.01(a)1. hereto. Each Certificate is equally and ratably secured by and paid
in accordance with the Mortgage, Mortgage Note and the Security (as defined in
the Loan Agreement), respectively.
"Certificate Account": The trust account or accounts created and
maintained pursuant to Section 5.03.
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"Certificate Balance": The initial aggregate principal amount of the
Certificates less all Certificate Distributions in excess of the payments of
interest thereon at the Remittance Rate, or, with respect to any particular
Certificate, the balance thereof determined by multiplying the applicable
Certificateholder's Percentage Interest by the aggregate Certificate Balance.
"Certificate Distribution": On any Remittance Date, the aggregate
amount of Debt Service required to be distributed on such date with respect to
the Certificates, such amount being equal to the sum of (A) for the Mortgage
Loan as of the related Due Date, the amount actually received before the
Determination Date by the Trustee from the Mortgagor with respect to the
Mortgage Payment (including amounts described in Section 5.03(vii)), plus any
amount provided therefor in the Debt Service Reserve Account, (B) any Principal
Prepayment received during the related Principal Prepayment Period on the
Mortgage Loan if the Mortgage Loan was the subject of a Principal Prepayment
during such Principal Prepayment Period, (C) if the Mortgage Loan became a
Liquidated Mortgage Loan during the related Principal Prepayment Period, the
lesser of (a) the principal balance of the Mortgage Loan as of the first day of
such Prepayment Period, before giving effect to any scheduled payment of
principal due on such day or (b) the aggregate Net Liquidation Proceeds
received with respect to the Mortgage Loan, and (D) if there has been any
shortfall in the payment of the Certificate Distribution to a Certificateholder
for any reason, the amount of any such shortfall remaining unpaid as of the
applicable remittance Date and any amounts in the nature of late payment
charges received with respect to the Mortgage Loan.
"Certificate Register": The register maintained pursuant to Section
4.02.
"Certificate Schedule": The Certificate Schedule attached hereto as
Exhibit D.2. setting forth the following information for each Certificate: (i)
Certificate Number; (ii) the Certificate Balance as of the date of the
Certificate Schedule; (iii) the Debt Service on such Certificate: (iv) the
maturity date; (v) Remittance Rate; and (vi) the Percentage Interest.
"Certificateholder" or "Holder": The person in whose name a
Certificate is registered in the Certificate Register, except that, solely for
the purposes of giving any consent, direction, waiver, request or demand
pursuant to this Agreement, any Certificate registered in the name of Kmart,
the Borrower or Seller or any affiliate of any such party shall be deemed not
to be outstanding and the undivided Percentage Interest evidenced thereby shall
not be taken into account in determining whether the requisite amount of
Percentage Interests necessary to effect any such consent, direction, waiver,
request or demand has been obtained. The Trustees shall be able to conclusively
rely on a
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certificate of the Seller, Kmart or Borrower, as the case may be, in
determining which Certificates are registered to an affiliate thereof.
"Closing Date": July 24, 1992.
"Code": The Internal Revenue Code of 1986, as amended.
"Conversion Date": The date on which the Borrower shall satisfy the
preconditions set forth in Section 5.2 of the Loan Agreement to the
commencement of the Occupancy Term of the Loan (as defined in the Loan
Agreement), as determined by the Holders of not less than 66 2/3% of the
Percentage Interests of the Certificates. Trustee shall make available to the
Certificateholders, at Borrower's expense as provided in the Loan Agreement,
any materials evidencing satisfaction of the conditions in such Section 5.2
that may be provided by Borrower to the Trustee.
"Corporate Trust Office": The principal office of the Trustee in the
State of California at which at any particular time its corporate trust
business shall be administered, which office at the date of execution of this
instrument is located at XXXXXXXXXX.
"Debt Service": The interest and/or principal paid on the Remittance
Dates.
"Debt Service Reserve Account": An account by that name created by
Section 5.05 hereof.
"Determination Date": The 10th day (or if such 10th day is not a
Business Day, the Business Day immediately following such 10th day) of the
month of the related Remittance Date.
"Discounted Prepayment Value": With respect to any amount of Called
Principal of the Mortgage Loan, the amount obtained by discounting all
remaining Scheduled Payments with respect to such Called Principal from their
respective scheduled due dates to the Settlement Date (or Purchase Date in the
circumstances described in Section 4.01(e) hereof) with respect to such Called
Principal, in accordance with accepted financial practice and at a discount
factor (applied on a semiannual basis) equal to the Reinvestment Yield. The
Trustee shall be provided with a certificate evidencing the calculation of such
amount by either the Seller or Holders of Certificates evidencing Percentage
Interests in the aggregate not less than 66 2/3% at any time requested by the
Trustee.
"Due Date": With respect to the Mortgage Loan, the 15th day of the
month on which each Mortgage Payment is due on the Mortgage Loan, exclusive of
any days of grace.
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"Due Period": With respect to any remittance Date, the period
commencing on the day immediately following the previous Due Date and ending on
the current Due Date.
"Eligible Investments": One or more of the following:
(i) obligations of the United States or any agency or
instrumentality thereof, provided such obligations are backed by the
full faith and credit of the United States;
(ii) general obligations of or obligations guaranteed by any
state of the United States or the District of Columbia receiving the
highest long-term debt rating of Standard & Poor's or Moody's, or such
lower rating as will not result in the downgrading or withdrawal of
the rating then assigned to any security evidencing a beneficial
ownership interest in the Certificates by the Rating Agency;
(iii) commercial or finance company paper which is then rated
in the highest commercial or finance company paper rating category of
Standard & Poor's and Moody's, or such lower category as will not
result in the downgrading or withdrawal of the rating then assigned to
any security evidencing a beneficial ownership interest in the
Certificates by the Rating Agency;
(iv) certificates of deposit, demand or time deposits,
federal funds or bankers' acceptances issued by any depository
institution or trust company incorporated under the laws of the United
States or of any state thereof (including the Trustee) and subject to
supervision and examination by federal or state banking authorities,
provided that the commercial paper or long-term unsecured debt
obligations of such depository institution or trust company (or in the
case of the principal depository institution in a holding company
system, the commercial paper or long-term unsecured debt obligations
of such holding company) are then rated in the highest rating category
for such securities by Standard & Poor's and Moody's, or such lower
category as will not result in the downgrading or withdrawal of the
rating then assigned to any security evidencing a beneficial ownership
interest in the Certificates by the Rating Agency;
(v) demand or time deposits or certificates of deposit issued
by any foreign or domestic bank or trust company (including the
Trustee), savings and loan association or savings bank and fully
insured;
(vi) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation the
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commercial paper or long-term unsecured debt obligations of which are
then rated in the highest rating category for such securities by
Standard & Poor's and Moody's or such lower category as will not
result in the downgrading or withdrawal of the rating then assigned to
the Certificates by the Rating Agency;
(vii) repurchase obligations with respect to any security
described in (i) and (ii), above, or any other security issued or
guaranteed by an agency or instrumentality of the United States, in
either case entered into with a depository institution of trust
company (acting as principal) described in (iv) above;
(viii) securities (other than stripped bonds or stripped
coupons) bearing the interest or sold at a discount issued by any
corporation incorporated under the laws of the United States or any
state thereof which, at the time of such investment, are then rated in
the highest rating category of Standard & Poor's and Moody's, or in
such lower rating category as will not result in the downgrading or
withdrawal of the rating then assigned to any security evidencing a
beneficial ownership interest in the Certificates by the Rating
Agency;
(ix) FNMA or FHLMC Guaranteed Mortgage Pass-Through
Certificates,
(x) taxable government money market portfolios restricted to
obligations with maturities of one year or less, issued or guaranteed
by the full faith and credit of the United States which, at the time
of such investment, are then rated in the highest rating category of
Standard & Poor's and Moody's; and
(xi) such other investments bearing interest or sold at a
discount acceptable to the Rating Agency as will not result in the
downgrading or withdrawal of the rating then assigned to any security
evidencing a beneficial ownership interest in the Certificates by the
Rating Agency as confirmed in writing by the Rating Agency, provided,
however, that no instrument shall be an Eligible Investment if such
instrument evidences a right to receive only interest payments with
respect to the obligations underlying such instrument and, provided
further, that no eligible Investment shall be an instrument entitled
to receive interest only payments or principal only payments and
provided further, that the "highest rating category" as used in this
definition shall mean (A) a rating which would be assigned by Standard
& Poor's, as of the date first above written, equivalent to or higher
than a (i) "AA" rating with respect to long- term Eligible
Investments, (ii) "A1+" with respect to short-term Eligible
Investments, and
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(iii) "AAm" or "AAmG" with respect to money-market securities; and
(B) a rating which would be assigned by Moody's, as of the date first
above written, equivalent to or higher than an (i) "Aa2" rating with
respect to long-term Eligible Investments, and (ii) "P1" with respect
to short-term Eligible Investments, and (iii) "Am" with respect to
money-market securities.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"Event of Default": Any event of default described in Section 8.01.
"Extraordinary Expense Advances": All reasonable and necessary "out
of pocket" costs and expenses incurred in the performance by the Trustees
(including the reasonable fees and disbursements of counsel) or either of them
of their obligations, including, but not limited to, the cost of (i) the
preservation, restoration and protection of the Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of the Mortgaged Property if the Mortgaged Property
is acquired in satisfaction of the Mortgage, and (iv) compliance with the
obligations under Section 5.07.
"FDIC": The Federal Deposit Insurance Corporation or any successor
organization.
"Individual Trustee": means XXXXXXXXXX and permitted successor
hereunder.
"Insurance Proceeds": Proceeds paid by any insurer pursuant to any
insurance policy, including self-insurance proceeds paid by Kmart or any of its
subsidiaries, covering the Mortgaged Property.
"Kmart": Kmart Corporation, a Michigan corporation.
"Landlord": The Borrower as the Landlord under the terms of the
Leases.
"Late Collections": With respect to the Mortgage Loan, all amounts
received during any Due Period, whether as payments of Mortgage Payments or
otherwise, which represent payments or collection of Mortgage Payments due but
delinquent for a previous Due Period and not previously recovered or recovered
as Liquidation Proceeds, condemnation proceeds or Insurance Proceeds.
"Lease Guaranties": The Lease Guaranties by Kmart of the Leases dated
as of July 1, 1992 and attached as exhibits to the Loan Agreement.
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"Lease Guaranty Default": With respect to any one or more of the
Leases and Lease Guaranties, the failure of (i) the Tenant under any such Lease
to pay any rental due under such Lease, and (ii) Kmart to pay any such rental
under the related Lease Guaranty within thirty (30) days after notice to Kmart
by Seller of the Tenant's failure to do so.
"Leases": Collectively, the Leases pursuant to which the Landlord
leased the Mortgaged Property to the Tenants as identified in the Loan
Agreement.
"Liquidated Mortgage Loan": The Mortgage Loan after an Event of
Default when the Trustees have reasonably determined that all amounts which
they expect to recover from or on account of the Mortgage Loan have been
recovered.
"Liquidation Expenses": Expenses which are incurred by the Trustees
in connection with the liquidation of the Mortgage Loan after an event of
Default, such expenses including, without limitation, legal fees and expenses,
any unreimbursed amount expended by the Trustees pursuant to Section 5.07 (to
the extent such amount is reimbursable under the terms of Section 5.07)
respecting the Mortgage Loan and any related and unreimbursed expenditures for
real estate property taxes or for property restoration or preservation.
"Liquidation Proceeds": Cash Liquidation received by the trustees in
connection with the liquidation of the Mortgage Loan, if defaulted, whether
through the sale or assignment of the Mortgage Loan, trustee's sale,
foreclosure sale or otherwise, or the sale of the Mortgaged Property if the
Mortgaged Property is acquired in satisfaction of the mortgage Loan other than
amounts required to be paid to the mortgagor pursuant to law or the terms of
the Mortgage Note.
"Loan Agreement": The Loan agreement dated as of July 1, 1992, by and
between Seller and Borrower pursuant to the terms and conditions of which the
Mortgage Loan shall be made.
"Make-Whole Premium": With respect to any amount of Called Principal
of the Mortgage Loan, a premium equal to the sum of (x) the excess (which shall
in no event be less than zero), if any, of the Discounted Prepayment Value of
the Called Principal of such Mortgage Loan over the sum of (i) such Called
Principal plus (ii) interest accrued thereon as of the Settlement Date (or in
the circumstances described in Section 4.01(e) hereof, the Purchase Date) with
respect to such Called Principal, and (y) an amount equal to the product of the
Called Principal and 104.402%. The Make-Whole Premium shall in no event be less
than zero. The Trustee shall be provided with a certificate evidencing the
calculation of such amount by the Seller or Holders of Certificates evidencing
Percentage Interests in the aggregate not less than 66 2/3% at any time
requested by the Trustee.
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"Minimum Investment Grade": A rating of at least Baa3, in the case of
a rating by Moody's, and a rating of at least BBB-, in the case of a rating by
S&P, or the then equivalent of such rating by Moody's or S&P or, to the extent
applicable, by another Rating Agency.
"Moody's": ▇▇▇▇▇'▇ Investors Service, Inc. or successors thereto.
"Mortgage": The mortgage, deed of trust or other instrument creating a
first lien or a first priority ownership interest in an estate in fee simple in
real property and a first priority security interest in personal property
included therewith securing the Mortgage Note.
"Mortgage File": The items referred to in Exhibit D.3. annexed hereto
pertaining to the Mortgage Loan.
"Mortgage File Documents": All of the documents contained in the
Mortgage File.
"Mortgage Loan": The loan evidenced by the Loan Agreement, Mortgage
Note and the Mortgage, sold and assigned by the Seller to the Trustee and which
is the subject of this Agreement, is included in the Trust and is identified on
the Mortgage Loan Schedule annexed hereto as Exhibit D.1..
"Mortgage Loan Schedule": The schedule attached hereto as Exhibit D.1.
setting forth the following information for the Mortgage Loan: (i) the
Mortgagor's name; (ii) the street address of the Mortgaged Property including
county and zip code; (iii) the maturity date; (iv) the mortgage rate; (v) the
first Due Date; (vi) a schedule setting forth the Mortgage Payment; and (vii)
the original principal balance of the Mortgage Loan.
"Mortgage Note": The Collateralized Promissory Note or other evidence
of the indebtedness of Mortgagor secured by the Mortgage.
"Mortgage Payment": The scheduled payment of principal and/or interest
on the Mortgage Loan. Specifically with respect to interest, the amounts due on
each June 15 and December 15, commencing December 15, 1992, and with respect to
principal, the amounts due on each June 15, commencing June 15, 1993 (before
any adjustment to such payment by reason of any bankruptcy or similar
proceeding or any moratorium or similar waiver or grace period).
"Mortgaged Property": The real and personal property securing the
Mortgage Note and the improvements to be constructed with the proceeds of the
Mortgage Loan.
"Mortgagor": The Borrower, as obligor on the Mortgage Note.
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"NAIC": National Association of Insurance Commissioners, its
successors and assigns or the Securities Valuation Office (SVO) thereof which
provides insurance companies with uniform prices and quality ratings.
"Net Liquidation Proceeds": As to the Liquidated Mortgage Loan,
Liquidation Proceeds net of Liquidation Expenses.
"Note Put Agreement": The Note Put Agreement dated as of July 1, 1992,
by and between Kmart and Seller.
"Officer's Certificate": A certificate signed by the Chairman of the
Board, the Chief Executive Officer, the President or a Vice President, the
Treasurer or the Secretary or one of the Assistant Treasurers or Assistant
Secretaries or any other duly authorized officer of the Seller and delivered to
the Trustees as required by this Agreement.
"Opinion of Counsel": A written opinion of an attorney at law admitted
to practice in any state of the United States or the District of Columbia, or a
law firm (such attorney or law firm herein referred to as "Counsel"), who may,
except as otherwise expressly provided in this Agreement, be in-house counsel
for the Seller, which counsel shall be reasonably acceptable to the Trustee.
"Paying Agent": The Person designated as the Paying Agent pursuant to
Section 4.05.
"Percentage Interest": The percentage interest (which may be expressed
as a fraction) evidenced by one or more Certificates in the aggregate
distributions required to be made in respect of the Certificates.
"Person": Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Placement Agent": XXXXXXXXXX.
"Principal Prepayment": Any payment or other recovery of principal on
the Mortgage Loan including Insurance Proceeds and condemnation awards to the
extent required to be deposited in the Certificate Account (other than
Liquidation Proceeds and monthly receipts of amounts referred to in Section
5.02(a)) which is received in advance of its scheduled Due Date, and which is
not accompanied by an amount of interest representing scheduled interest due.
"Principal Prepayment Period": With respect to any Remittance Date,
the preceding Due Period.
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"Project": The Power Center to be constructed by the Borrower in
Utica, Michigan with the proceeds of the Mortgage Loan.
"Project Completion": The "date of occupancy by Tenant" as defined
in Article 10 of each Lease.
"Purchase Agreement for Certificates": The agreements so named
between the Placement Agent and the applicants to purchase Certificates.
"Purchase Date": The Business Day first occurring thirty (30)
days after notice is given to Kmart of the election to exercise the Put.
"Purchase Price": The Make-Whole Premium calculated with respect to
the Purchase Date.
"Put": Exercise of the right to require Kmart to purchase the
Mortgage Note in accordance with Section 2.3 of the Note Put Agreement.
"Rating Agency":
(i) With respect to the Certificates shall mean NAIC; if NAIC or
a successor is no longer in existence, "Rating Agency" shall be such
statistical credit rating agency, or other comparable Person, designated by the
Seller, notice of which designation shall be given to the Trustee; references
herein to the two highest rating categories of a Rating Agency shall mean AA
or better, in the case of Standard & Poor's and in the case of any other
Rating Agency shall mean such ratings without any plus or minus; and
(ii) With respect to the redemption provisions of Section 4.01,
shall mean Moody's and S&P and, if either Moody's or S&P (but not both)
ceases to rate the indebtedness or corporations generally, or unsubordinated,
senior, unsecured indebtedness of Kmart in particular, then another comparable
rating agency of recognized national standing in the United States designated
by notice in writing to the Trustee from the Seller or Holders of
Certificates evidencing Percentage Interests aggregating not less than 66 2/3%.
A "Rating Decline":
(i) The ratings assigned to unsubordinated,
senior, unsecured indebtedness of Kmart on such date by
either Moody's or S&P: (a) declines to a rating below the
Minimum Investment Grade, or (b) further declines, in the
event then rated below the Minimum Investment Grade; or
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(ii) (a) Unsubordinated, senior, unsecured indebtedness of
Kmart ceases to be rated by either Moody's or S&P (other than by
reason of such Rating Agency ceasing to rate the indebtedness of
corporations generally) at such time as the rating then assigned by
the remaining such Rating Agency shall be below Minimum Investment
Grade or (b) unsubordinated, senior, unsecured indebtedness of Kmart
ceases to be rated by either Moody's or S&P at such time as the
rating then assigned by the remaining such Rating Agency shall be at
least the Minimum Investment Grade and the Kmart is unable to have
such debt rated by another Rating Agency within 90 days thereafter; or
(iii) Unsubordinated, senior, unsecured indebtedness of
Kmart ceases to be rated by both Moody's and S&P for any reason
(except if, through no fault of Kmart, both Moody's and S&P are
unable to provide a rating due to a business failure or interruption
affecting both Moody's and S&P).
For purposes of determining whether a Rating Decline shall have occurred under
clause (i) of this definition, the rating initially assigned by any Rating
Agency engaged by Kmart pursuant to clause (ii) to replace any rating
withdrawn or otherwise terminated by Moody's or S&P shall be compared to the
last rating assigned by Moody's or S&P, as the case may be, to determine if
the circumstances described in (i)(a) or (b) exist.
"Record Date": The close of business on the first (1st) day of the
month of the related Remittance Date.
"Redemption Price": The Make-Whole Premium calculated with respect to
the Settlement Date.
"Regulations": The Treasury Regulations, including temporary and
final regulations promulgated under the provisions of the Internal Revenue
Code of 1986, as amended.
"Reinvestment Yield": Means, with respect to the Called Principal
of the Mortgage Loan, the sum of (x) the yield to maturity implied by the
following: (i) the yields reported, as of 10:00 a.m. (New York City time) on
the third Business Day preceding the Settlement Date (or Purchase Date in the
circumstances described in Section 4.01(e)) with respect to such Called
Principal, on the display designated as "Page 678" on the Telerate Service (or
such other display as may replace Page 678 on the Telerate Service) for
actively traded U.S. Treasury securities having a maturity equal (as near as
practicable) to the Remaining Average Life of the Called Principal being
paid or prepaid as of such Settlement Date (or Purchase Date in the
circumstances described in Section 4.01(e)), or (ii) if such yields shall not
be reported as of such time or the yields reported as of such time shall not
be ascertainable, the Treasury
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Constant Maturity Series yields reported, for the latest day for which such
yields shall have been so reported as of the third Business Day preceding the
Settlement Date (or Purchase Date in the circumstances described in Section
4.01(e)) with respect to such Called Principal, in Federal Reserve Statistical
Release H.15 (519) (or any comparable successor publication) for actively
traded U.S. Treasury securities having a constant maturity equal (as near as
practicable) to the Remaining Average Life of the Called Principal being
paid or prepaid as of such Settlement Date (or Purchase Date in the
circumstances described in Section 4.01(e)); such implied yield shall be
determined, if necessary, by (a) converting U.S. Treasury ▇▇▇▇ quotations to
bond-equivalent yields in accordance with accepted financial practice and (b)
interpolating linearly between reported yields; and (y) fifty (50) basis
points. The Trustee shall be provided with a certificate evidencing the
calculation of Reinvestment Yield by the Seller or Holders of Certificates
evidencing Percentage Interests aggregating not less than 66 2/3% at any time
requested by the Trustee.
"Remaining Average Life": Means, with respect to any amount of Called
Principal of the Mortgage Loan, the number of years (calculated to the
nearest one-twelfth year) obtained by dividing (i) such Called Principal into
(ii) the sum of the products obtained by multiplying (a) each Remaining
Scheduled Payment of such Called Principal (but not of interest thereon) by
(b) the number of years (calculated to the nearest one-twelfth year) which
will elapse between the Settlement Date (or Purchase Date in the
circumstances provided in Section 4.01(e)) with respect to such Called
Principal and the scheduled due date of such Remaining Scheduled Payment.
The Trustee shall be provided with a certificate evidencing the calculation
of Remaining Dollar-Years by the Seller or Holders of Certificates
evidencing Percentage Interests aggregating not less than 66 2/3% at any time
requested by the Trustee.
"Remaining Scheduled Payments": With respect to any amount of
Called Principal of the Mortgage Loan, all payments of such Called
Principal and interest thereon that would be due on or after the Settlement
Date (or Purchase Date in the circumstances described in Section 4.01(e))
with respect to such Called Principal if no payment of such Called Principal
were made prior to its expressed maturity date. The Trustee shall be
provided with a schedule setting forth Remaining Scheduled Payments by the
Seller or Holders of Certificates evidencing Percentage Interests
aggregating not less than 66 2/3% at any time requested by the Trustee.
"Remittance Date": With respect to the Certificates, an interest
payment date of December 15, 1992, and each December 15 and June 15
thereafter until June 15, 2013, or the payment of the unpaid principal balance
in full.
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"Remittance Rate": The annual fixed rate of interest payable to a
Certificateholder. The Remittance Rate shall equal the rate per annum set forth
in the Certificate Schedule. Any remittance of interest at such rate shall be
based upon the applicable Certificate Balance and twelve calendar months of 30
days and a year of 360 days.
"Responsible Officer": When used with respect to the Trustee,
includes the Chairman of the Board of Directors, the President, Vice
President, every Assistant Vice President, the Cashier, every Assistant
Cashier, every Trust Officer or any other officer of the Trustee
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.
"Seller": XXXXXXXXXX or its successors in interest.
"Settlement Date": Means, with respect to the Called Principal, the
date on which such Called Principal is to be paid or prepaid in any way
pursuant to Section 2 of the Loan Agreement or is declared to be immediately
due and payable pursuant to Section 9.2 of the Loan Agreement, as the context
requires.
"Standard & Poor's" or "S&P": Standard & Poor's Corporation or any
successor thereto.
"Subordination Agreements": The several Consent and Agreements each
dated as of July 1, 1992, entered into by the Seller, as lender, the Landlord
and each Tenant, respectively.
"Tenants": The Tenants identified in the Loan Agreement which will
occupy the Mortgaged Premises in accordance with the Leases.
"Transfer Affidavit": A Transfer Affidavit required pursuant to
Section 4.02(d)(i).
"Triggering Event": The exercise by Seller or its successors or
assigns of the Put following (i) a Rating Decline provided in Section 2.4 of
the Loan Agreement and the failure of Borrower to redeem the Mortgage Note,
in strict accordance with the terms of such Section 2.4 of the Loan
Agreement, or (ii) a failure of Project Completion to occur prior to the
expiration of the Pre-Occupancy Term of the Loan, or (iii) a Lease Guaranty
Default. A Triggering Event entitles Seller and its successors and assigns to
require Kmart thereupon to purchase the Mortgage Note.
"Trust": The trust created pursuant to this Agreement.
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"Trust Fund": The corpus of the trust created by this Agreement, to
the extent described herein, consisting of the Mortgage Loan and all Mortgage
File Documents assigned to the Trust by Seller, such assets as shall from
time to time be indentified as deposited in the Certificate Account
(including the investment of funds therein), the Debt Service Reserve Account,
property which secured the Mortgage Loan and which has been acquired by
foreclosure or deed in lieu of foreclosure, the proceeds of insurance,
condemnation awards and all other amounts receivable under the Mortgage and
all proceeds of the foregoing.
"Trustee": XXXXXXXXXX, and its permitted successors hereunder.
"Trustee's Fee": The amount of the annual fee paid to the Trustee
pursuant to this Agreement, as set forth in the fee agreement to be delivered
by the Trustee, in substantially the form attached hereto as an Exhibit,
payable (except as otherwise provided herein) from the interest earnings on
amounts held by the Trustee in the Certificate Account hereunder. Such fee
shall be payable annually on the Closing Date from proceeds of the
Certificates and thereafter on each June 15 commencing June 15, 1994, during
the term of this Agreement. Such fee shall constitute all compensation due
for the services rendered under this Agreement, except for the payment of
certain additional amounts for extraordinary services by the
Certificateholders as otherwise provided in this Agreement.
[End of Article I]
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ARTICLE II
CONVEYANCE OF MORTGAGE LOAN; TRUST FUND
Section 2.01. Conveyance of Mortgage Loan. The Seller, as grantor,
does hereby sell, transfer, assign, set over and convey to the Trustees without
recourse (except as provided herein), in trust intending to establish the
Trust, all the right, title and interest of the Seller in and to the Mortgage
Loan, including all interest and principal received by the Seller on or with
respect to the Mortgage Loan.
In connection with such sale and assignment, the Seller does hereby
deliver to, and deposit with, the Trustee the documents constituting the
Mortgage File.
If the Seller cannot deliver the Mortgage for the Mortgage Loan with
evidence of recording thereon concurrently with the execution and delivery of
this Agreement solely because of a delay caused by the public recording office
where the Mortgage has been delivered for recordation, the Seller shall deliver
or cause to be delivered to the Trustee an Officer's Certificate, with a
photocopy of the Mortgage attached thereto, stating that the Mortgage has been
delivered to the appropriate public recording official for recordation. The
Seller shall promptly deliver or cause to be delivered to the Trustee, within
90 days of the Closing Date, the Mortgage with evidence of recording indicated
thereon upon receipt thereof from the public recording official.
The seller shall promptly cause to be recorded in the appropriate
public office for real property records the Assignment. Seller shall also cause
any publication of notice thereof or other filing thereof as may be required.
While the Assignment is being recorded, the Seller shall leave with the Trustee
a photocopy of the Assignment. If the Assignment is returned unrecorded to the
Seller because of any defect therein, the Seller shall cause such defect to be
cured and the Assignment to be recorded in accordance with this paragraph.
Within 90 days of the Closing Date, the Seller shall deliver or cause to be
delivered to the Trustee an Officer's Certificate stating that the Assignment
has been duly recorded in the appropriate public offices for real property
records and shall deliver or cause to be delivered the Assignment with evidence
of recording thereon. Seller shall pay or caused to be paid all filing,
registration and recording taxes and fees incident thereto and all expenses,
taxes and other governmental charges incident to or in connection with the
preparation, execution, delivery or acknowledgment of such instruments.
Any document constituting part of the Mortgage File held by the Seller
or on its behalf by any third party shall be held as custodian for the Trustee
and the Certificateholders. The parties hereto intend that the conveyance of
the Seller's right,
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title and interest in and to the Mortgage Loan and other items of the Trust
Estate pursuant to this Agreement shall constitute a purchase and sale and not
a pledge of security for a loan. In the event that such conveyance is deemed to
be a loan, the parties hereto intend that the Seller shall be deemed to have
granted the Trustee a first priority security interest in all of the Seller's
right, title and interest in, to and under the Mortgage Loan and other items of
the Trust Estate. If the trust created by this Agreement terminates prior to
the satisfaction of the claims of any Person in 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. Acceptance by Trustee. The Trustee acknowledges
receipt of the documents referred to in Section 2.01, subject to any exceptions
noted in a certificate of the Seller delivered on the Closing Date, and
declares that it holds and will hold such documents and any other documents
constituting a part of the Mortgage File delivered to it in trust for the use
and benefit of all present and future certificateholders. The Trustee agrees,
for the benefit of Certificateholders, to review each of the documents
described in Section 2.01 delivered to it within 45 days after the Closing Date
to ascertain that all required documents have been executed and received, and
that such documents relate to the Mortgage Loan identified in the Mortgage Loan
Schedule, as supplemented, that have been conveyed to it. If the Trustee finds
any document or documents constituting a part of the documents described in
Section 2.01 to be missing, mutilated, damaged, defaced, incomplete, improperly
dated, clearly forged, otherwise physically altered or otherwise defective in
any material respect, the Trustee shall promptly (and in any event within no
more than five Business Days after such discovery) so notify the Seller. In
addition, the Trustee shall also notify the Seller, if in examining such
documents, or through any other means, the trustee had notice or knowledge (a)
of any adverse claim, lien or encumbrance against the Mortgage Loan or
Mortgaged Property, (b) that the Mortgage Note was overdue or had been
dishonored, (c) of evidence on the face of the Mortgage Note or Mortgage of any
security interest or other right or interest therein, or (d) of any defence
against or claim to the Mortgage Note by any party. The Seller shall use its
best efforts to correct such omission or other irregularity referred to above
within 90 days from the date of the Closing Date. The Trustee shall review the
documents referred to in section 2.01 only for the purpose set forth in this
Section 2.02, and the Trustee shall be under no duty or obligation to inspect,
review or examine any such documents, instruments, certificates or other papers
to determine that they are genuine, enforceable or appropriate for the
represented purpose or that they have actually been recorded or that they are
other than what they purport to be on their face.
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Within 90 days of the Closing Date, the Trustee shall deliver to the
Seller and the Certificateholders the Trustee's certification attached hereto
as Exhibit 2.02.1.
Section 2.03. Trust Fund. The Trustee acknowledges that it holds the
Trust Fund created pursuant to this Agreement in trust for the use and benefit
of all present and future Certificateholders.
Section 2.04. Execution and Authentication of Certificates. The
Trustees acknowledge the assignment to them of the Mortgage Loan and the
delivery of the documents specified in Section 2.01 to Trustee, and,
concurrently with such delivery, the Trustee has caused to be authenticated and
delivered to or upon the order of the Seller, in exchange for the proceeds paid
therefor by the Certificateholders, Certificates in authorized denominations
evidencing ownership of the entire Trust Fund.
[End of Article II]
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Section 3.01. Representations and Warranties of Seller. The Seller
represents and warrants to, and covenants with, the Trustee and the
Certificateholders that as of the Closing Date:
(i) Seller is duly organized, validly existing and in good standing
as a corporation under the laws of the State of Nevada and is qualified to
transact business in and is in good standing under the laws of the state
in which the Mortgaged Property is located or is otherwise exempt under
applicable law from such qualification and no demand for such
qualification has been made upon Seller by any such state;
(ii) Seller has the full power and authority to execute, deliver
and perform, and to enter into and consummate all transactions
contemplated by this Agreement, has duly authorized the execution,
delivery and performance of this Agreement, has duly executed and
delivered this Agreement, and this Agreement constitutes a legal, valid
and binding obligation of Seller, enforceable against it in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights in general;
(iii) The Certificates have been duly authorized by all necessary
action on the part of Seller and, when duly executed and delivered by
authorized officers of Seller and duly authenticated by the Trustee, will
be validly issued and outstanding, entitled to the benefits of this
Agreement, enforceable in accordance with their terms, and evidence the
entire ownership interest in the Trust Fund;
(iv) Neither the execution and delivery of this Agreement or the
Certificates, the consummation of the transactions contemplated hereby,
nor the fulfillment of or compliance with the terms and conditions of this
Agreement will conflict with or result in a breach of any of the terms,
conditions or provisions of Seller's articles of incorporation or bylaws
or any legal restriction or any agreement or instrument to which Seller is
now a party or by which it is bound, or constitute a default or result in
an acceleration under any of the foregoing, or result in the violation of
any law, rule, regulation, order, judgment or decree to which Seller or
its property is subject;
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(v) At the date hereof, Seller does not believe, nor does it have
any reason or cause to believe, that it cannot perform each and every
covenant and agreement of or by Seller contained in this Agreement;
(vi) There is no litigation pending or, to Seller's knowledge,
threatened, which, if determined adversely to Seller, would adversely
affect the execution, delivery or enforceability of this Agreement or the
Certificates, or, in Seller's reasonable judgment, which is likely to have
a material adverse effect on the financial condition of Seller;
(vii) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Seller of or compliance by Seller with this Agreement, the
issuance of the Certificates, or the consummation of the transactions
contemplated by this Agreement;
(viii) The transfer, assignment and conveyance of the Mortgage Note
and the Mortgage by Seller pursuant to this Agreement are not subject to
the bulk transfer or any similar statutory provisions in effect in any
applicable jurisdiction;
(ix) Neither this Agreement nor any written statement, report or
other document furnished or to be furnished by Seller pursuant to this
Agreement or in connection with the transactions contemplated hereby,
including the sale or placement of the Certificates, contains any untrue
statement of material fact or omits to state a material fact necessary to
make the statements contains therein not misleading;
(x) With respect to the Mortgage Loan:
(a) The information set forth in the Mortgage Loan
Schedule is true and correct in all material respects;
(b) As of the Closing Date, the Mortgage Loan is not
delinquent in payment; Seller has not advanced funds, or actively
induced, solicited or knowingly received any advance of funds from a
party other than the owner of the Mortgaged Property or a Tenant
under the Leases or Kmart under the Lease Guaranties subject to the
Mortgage, directly or indirectly, for the payment of any amount
required by the Mortgage Loan; there is no requirement for future
advances; and all costs, expenses and fees in connection with the
making, closing or recording of the Mortgage Loan have been paid;
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(c) There are no delinquent taxes or, to the best of Seller's
knowledge, other outstanding charges affecting the Mortgaged
Property;
(d) The terms of the Mortgage File Documents have not been
impaired, waived, altered or modified in any respect, except by
written instruments; the substance of such waiver, alteration or
modification is reflected on the Mortgage Loan Schedule. No
instrument of waiver, alteration or modification has been executed,
and no Mortgagor has been released, in whole or in part;
(e) To the best of Seller's knowledge, the Mortgage Note and
the Mortgage are not subject to any right of rescission, set-off,
counterclaim or defense, including the defense of usury, nor will
the operation of any of the terms of the Mortgage Note and the
Mortgage, or the exercise of any right thereunder, render the
Mortgage unenforceable, in whole or in part, or subject to any right
of rescission, set-off, counterclaim or defense, including the
defense of usury and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect thereto;
(f) The Mortgaged Property is not located in a flood plain.
All buildings upon the Mortgaged Property are insured by a
reasonably acceptable insurer (or self-insured as permitted under
the Mortgage) against loss by fire and hazards of extended coverage.
All such Standard Hazard Policies contain a standard mortgagee
clause naming Trustees their successors and assigns as mortgagee and
all premiums due thereon have been paid. The Mortgage obligates the
Mortgagor thereunder or the Tenants to maintain all such insurance
at Mortgagor's cost and expense (or be self-insured as permitted
under the Mortgage), and on the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to maintain such insurance at
Mortgagor's cost and expense and to seek reimbursement therefor from
the Mortgagor;
(g) To the best of Seller's knowledge, any and all
requirements of any federal, state or local law applicable to the
Mortgage Loan have been complied with;
(h) The Mortgage has not been satisfied, cancelled or
subordinated, in whole, or rescinded, and the Mortgaged Property has
not been released from the lien of the Mortgage, in whole or in
part, nor has any instrument been executed that would
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effect any such release, cancellation, subordination or rescission;
(i) The Mortgaged Property is located in the State of Michigan
as indicated on the Mortgage Loan Schedule;
(j) The Mortgage lien is insured by a lenders extended
coverage policy of title insurance as a first lien on the Mortgaged
Property, and the improvements to be constructed thereon, including
all buildings to be constructed on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air
conditioning systems to be affixed to such buildings, and all
additions, alterations and replacements made at any time with
respect to the foregoing, securing the Mortgage Note's original
principal balance of the Mortgage Loan. Such lien is subject only
to (1) the Leases, (2) the lien of current real property taxes and
assessments which are not delinquent, (3) covenants, conditions and
restrictions, rights of way, easements and other matters of the
public record as of the date of recording which are acceptable to
mortgage lending institutions generally, which are specifically
referred to in the lender's title insurance policy delivered to the
originator of the Mortgage Loan and either (A) which are referred to
or otherwise considered in the appraisal made for the originator of
the Mortgage Loan or the certification of the Seller as to value,
or (B) which do not adversely affect the appraised value of the
Mortgaged Property as set forth in such appraisal, and (4) 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 the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property. Any security
agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and
creates a valid, subsisting and enforceable first lien and first
priority security interest on the property described therein;
(k) The Mortgage Note and the Mortgage are genuine and each is
the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms subject to bankruptcy,
insolvency and other laws of general application affecting the
rights of creditors generally;
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(l) All parties which have had any interest in the Mortgage,
whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest,
were) (1) in compliance with any and all applicable licensing
requirements of the laws of the state wherein the Mortgaged Property
is located, and (2)(A) organized under the laws of such state, or
(B) qualified to do business in such state or (C) federal savings
banks, federal savings and loan associations, national banks or a
Federal Home Loan Bank having principal offices in such state, or
(D) not doing business in such state or (E) not required to qualify
to do business in such state;
(m) The Mortgage Loan is covered by an ALTA extended coverage
lender's title insurance policy or other generally acceptable form
of policy or insurance, issued by a title insurer qualified to do
business in the jurisdiction where the Mortgaged Property is
located, insuring (subject to the exceptions contained in (j)(1)
and (2) above) Seller, its successors and assigns, as to the first
priority lien of the Mortgage in the original principal amount of
the Mortgage Loan. After the transfer of the Mortgage Loan to the
Trustees pursuant to Section 2.01, the Trustees will be the sole
insured of such lender's title insurance policy, and such lender's
title insurance policy is in full force and effect. No claims have
been made under such lender's title insurance policy, and no prior
holder of the Mortgage, including the Trustees, has done, by act or
omission, anything which would impair the coverage of such lender's
title insurance policy;
(n) There is no default, breach, violation or event of
acceleration existing under the Mortgage or the Mortgage Note or any
other Mortgage File Documents, and no event which, with the passage
of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event
permitting acceleration of the Mortgage Loan; and Seller has not
waived any default, breach, violation or event permitting
acceleration;
(o) There are no mechanics' or similar liens or claims which
have been filed for work, labor or material (and, to the best of
Seller's knowledge, no rights are outstanding that under law could
give rise to such lien not insured over by lender's title insurance
policy) affecting the Mortgaged
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Property which are or may be liens prior to, or equal or coordinate
with, the lien of the Mortgage;
(p) All improvements which were considered in determining the
Appraisal of the Mortgaged Property lay wholly within the boundaries
and building restriction lines of the Mortgaged Property and, to the
best of Seller's knowledge, no improvements on adjoining properties
encroach upon the Mortgaged Property;
(q) The Mortgage Loan was originated by Seller. The Mortgage
Note is payable in semiannual installments of interest and
commencing June 15, 1993 is payable in annual installments of
principal and requires a Mortgage Payment which is sufficient to
amortize the original principal balance over a term to June 15, 2013
and to pay interest at the interest rate specified in the Mortgage
Note; provided, that Mortgage Payments due under the Mortgage Note
are due and payable on the first day of the month in which a Due
Date occurs;
(r) The Mortgage contains provisions for the acceleration of
the payment of the unpaid principal balance of the Mortgage Loan in
the event the related Mortgaged Property is sold without the prior
consent of the mortgagee thereunder but provides that the Mortgage
may be assumed or taken subject to by the buyer of the Mortgaged
Property without consent in certain conditions;
(s) The Mortgaged property is free of damage and waste and
there is no proceeding pending or, to the best of Seller's
knowledge, threatened for the total or partial condemnation thereof;
(t) The Mortgage contains customary and enforceable provisions
such as to render the rights and remedies of the holder thereof
adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including by judicial
foreclosure. To the best of Seller's knowledge, there is no
exemption available to the Mortgagor which would interfere with the
right to sell the Mortgaged Property at a trustee's sale or the
right to foreclose the Mortgage subject, in each case, to applicable
federal and state laws and judicial precedents with respect to
bankruptcy and rights of redemption;
(u) All parties to the Mortgage Note and the Mortgage had the
legal capacity to enter into the Mortgage Loan and to execute and
deliver the
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Mortgage Note and the Mortgage. The Mortgage Note and the Mortgage
have been duly and properly executed by such parties;
(v) The proceeds of the Mortgage Loan will be disbursed in
accordance with the Loan Agreement;
(w) Immediately before the transfer to the Trustees, the
Mortgage Note and the Mortgage were not subject to an assignment or
pledge, and Seller had good title thereto and was the sole owner
thereof and had full right to transfer and sell the Mortgage Loan to
the Trustees free and clear of any encumbrance, equity, lien,
pledge, charge, claim or security interest. Immediately upon the
transfer thereof pursuant to Section 2.01, the Trustees, on behalf
of the Certificateholders, will have good indefeasible title to, and
will be sole owner of, the Mortgage Loan, free and clear of any
encumbrance, equity, lien, pledge, charge, claim or security; and
(x) The Mortgage File contains an Appraisal of the Mortgaged
Property.
[End of Article III]
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ARTICLE IV
THE CERTIFICATES
Section 4.01 The Certificates.
(a) Form and Terms. The Certificates shall be substantially in the
form annexed hereto as Exhibit 4.01.a.1 with such changes as the Seller deems
appropriate, and shall, on original issuance, be executed by the Seller and
authenticated by the Trustee upon receipt by the Trustee of the documents
specified in Section 2.01, delivered to or upon the order of the Seller. Each
Certificate shall be issuable in the respective principal amounts (aggregating
$31,900,000), bearing interest and having the other terms as are set forth in
the Certificate Schedule.
Certificates shall not be subject to redemption except as provided
herein.
(b) Optional Prepayment Redemption. Upon compliance with Section 2.3
of the Loan Agreement, the Borrower shall have the option at any time and from
time to time of prepaying the Mortgage note, either in whole or in part (but if
in part, then in units of U.S. $1,000,000 or integral multiples of $100,000 in
excess thereof). The Certificates shall be subject to redemption from the
proceeds of such prepayment irrevocably deposited with the Trustee on the
related Settlement Date, in whole or in part, pro rata, at a price equal to the
Redemption Price.
(c) Rating Decline Redemption. Under the circumstances set forth in
Section 2.4 of the Loan Agreement, the Borrower may be required to prepay the
Mortgage Note, in whole but not in part, at the Redemption Price. As provided
in the Loan Agreement, within seven days after the first date on which any
Rating Decline has occurred, the Borrower is required to mail notice to the
Trustee and to Kmart, which notice shall: (1) state that a Rating Decline has
occurred, (2) describe any action that caused such a Rating Decline, and the
date of the occurrence thereof, (3) set forth the Borrower's offer to redeem
the Mortgage Note, (4) state the Settlement Date (which shall be not more than
thirty (30) days from the date such notice is required to be mailed), the
Redemption Price and manner of calculation thereof; and (5) state the party to
whom the Mortgage Note shall be surrendered on or before the Settlement Date.
The Certificates shall be subject to redemption in whole on the Settlement Date
with respect thereto at a price equal to the Redemption Price from the proceeds
of the Mortgage Note prepayment.
(d) Other Redemption. The Certificates may be redeemed in whole or
in part at the Redemption Price from and to the extent of other Principal
Prepayments of the Mortgage Note, (i) in the event of failure of the Borrower
to satisfy the conditions
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to the Conversion Date under the Loan Agreement, not later than five (5)
Business Days following expiration of the Pre-Occupancy Term (as it may have
been extended pursuant to the Loan Agreement) (the related Settlement Date),
and (ii) in the event of receipt of proceeds of insurance, condemnation or
other award relating to all or a portion of the Mortgaged Property, in which
event the Trustee shall apply such amounts to the payment of the Redemption
Price on a Settlement Date which shall be no later than 45 days from the
occurrence of the casualty or 15 days from receipt by Trustee of the proceeds
of condemnation.
As provided in the Loan Agreement, the Borrower may request an
extension of up to one year of the Pre-Occupancy Term by providing copies of
all materials required under the Loan Agreement for such extension to the
Trustee shall promptly, upon receipt of such materials, send notice of such
request to the Certificateholders and make such materials available to the
Certificateholders (at the expense of Borrower as provided in the Loan
Agreement). If Holders of Certificates evidencing not less than 66 2/3% of
Percentage Interests shall so direct, the Trustee shall give notice to the
Borrower of any permitted extension of the Conversion Date.
(e) Redemption Following Triggering Event. Pursuant to the Note Put
Agreement, in the event of any Triggering Event the Trustee, as holder of the
Mortgage Note, shall have the right to exercise the Put as directed herein,
which requires Kmart to purchase the Mortgage Note in whole (but not in part)
on the Purchase Date at the Purchase Price. Upon receipt by the Trustee of
notice of any Triggering Event, the Trustee shall notify the
Certificateholders, and upon the direction of the Holders of not less than 66
2/3% of Percentage Interests and receipt of indemnification satisfactory to it
in accordance with Section 9.02(iii), the Trustee shall exercise the Put right.
In the event the Holders shall so direct the Trustee to exercise the Put, the
Trustee shall cause a notice to be mailed to Kmart, which notice shall state:
(1) the occurrence of a Triggering Event, (2) the Purchase Date, (3) the
estimated Purchase Price, (4) the manner in which the Purchase Price has been
determined, and (5) that, upon the direction of the Holders of the requisite
Percentage Interests, the holder of the Mortgage Note elects to have Kmart
purchase the Mortgage Note on the Purchase Date. The Certificates shall be
subject to redemption from the proceeds of the Mortgage Note Purchase Price, at
such Purchase Price, on the Purchase Date. In the event the Holders do not so
direct the Trustee to exercise the Put right, the Trustee shall not exercise
the Put right.
Notwithstanding any provision of this Agreement, the failure to redeem
Certificates pursuant to Sections 4.01(c) or (d) due to the failure of the
Borrower to prepay the Mortgage Note so as to cause a Triggering Event will not
constitute an
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Event of Default as long as a redemption of the Certificates shall take place
in accordance with this Section 4.01(e).
(f) Notice of Redemption. Notice of redemption pursuant to Section
4.01(b) shall be given by sending such notice, by first-class mail, postage
prepaid, not less than 30 days nor more than 60 days prior to the applicable
Settlement Date. Notice of redemption pursuant to any other provision hereof
shall be given within one Business Day following receipt of notice of the facts
giving rise to such redemption by the Trustee. All notices of redemption shall
be mailed to the registered owners of each Certificate to be redeemed at the
address shown on the Certificate Register. Neither the failure of any
registered owner to receive a notice mailed nor any defect in any notice so
mailed shall affect the validity of the proceedings for such redemption. All
Certificates or units thereof so called for redemption will cease to accrue
interest on the specified Settlement Date provided funds for their redemption
are on deposit at the principal corporate trust office of the Trustee at that
time.
(g) Execution and Authentication. The Certificates shall be executed
on behalf of the Seller by the manual or facsimile signature of an authorized
officer of the Seller. The Certificates shall be authenticated by manual
signature on behalf of the Trustee by a Responsible Officer. Certificates
bearing the manual or facsimile signatures of individuals who were at any time
the proper authorized officers of the Seller shall bind the Seller,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificate or did not
hold such offices at the date of such Certificates. No Certificate shall be
entitled to any benefit under this Agreement, or be valid for any purpose,
unless there appears on such Certificate a manual authentication by a
Responsible Officer of the Trustee and such authentication upon 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.
(h) Rights of Holders to Payments. The rights of the
Certificateholders to receive payments with respect to the Trust Fund in
respect of the Certificates, and all ownership interests of the
Certificateholders in such payments, shall be as set forth in this Agreement.
Section 4.02. Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall cause to be kept at its Corporate Trust Office,
or at the office of its designated agent, a Certificate Register in which,
subject to such reasonable regulations as it may prescribe which shall not
conflict with the provisions of this Agreement, the Trustee shall provide for
the
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registration of Certificates and of transfers and exchanges of Certificates as
herein provided. The Trustee shall be the Certificate Registrar.
(b) Upon surrender for registration of transfer of any Certificate at
any office or agency of the Trustee maintained for such purpose, the Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, a Certificate or Certificates of a like tenor and dated the date
of authentication by the Trustee.
(c) Trustee shall not be required to register any attempted transfer
of a Certificate unless, prior to said transfer, Trustee and Seller have been
provided with evidence reasonably satisfactory to them as to compliance with
(or an exemption from) the registration requirements of the Securities Act of
1933, as amended (the "Securities Act"), and with registration (or exemption
therefrom) and any other applicable provisions of state securities laws. So
long as the Certificates are not registered under the Securities Act, each
Certificate shall contain a statement to the following effect:
THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED, ASSIGNED, TRANSFERRED,
FRACTIONALIZED OR HYPOTHECATED UNLESS IN COMPLIANCE WITH THE PROVISIONS OF
SECTION 4.02 OF THE AGREEMENT.
Trustee has no obligation to any Holder to register the Certificates
under, or to effect compliance with any exemption under, the Act.
The Holder of a Certificate desiring to effect transfer shall, and
does hereby agree to, indemnify the Trustee and the Seller 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. The system of transfer of
Certificates established hereunder is intended to satisfy the requirements of
Section 163(f) of the Code and the Regulations promulgated thereunder.
(d) No transfer of a Certificate shall be made unless the Trustee
shall have received either (i) a Transfer Affidavit from the transferee of such
Certificate, reasonably acceptable to and in form and substance reasonably
satisfactory to the Trustee and the Seller, to the effect that such transferee
is not an employee benefit plan subject to Section 406 of ERISA, nor a person
acting on behalf of any such plan, which Transfer Affidavit shall not be an
expense of the Trustee or the Seller, or (ii) in the case of any such
Certificate presented for registration in the name of an employee benefit plan
subject to ERISA and Section 4975 of the Code (or comparable provisions of any
subsequent enactments), or a trustee of any such plan, an Opinion of Counsel
reasonably satisfactory to the Trustee and the Seller to the effect that the
purchase or holding of such Certificate will not result in the assets of the
Trust Fund being deemed to be "plan assets" and subject to the prohibited
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transaction provisions of ERISA and the Code and will not subject the Trustee
or the Seller to any obligation in addition to those undertaken in this
Agreement, which Opinion of Counsel shall not be an expense of the Trustee or
the Seller.
(e) At the option of the Certificateholder, a Certificate may be
exchanged for another Certificate or Certificates of a like tenor, upon
surrender of the Certificate to be exchanged at any office or agency of the
Trustee maintained for such purpose. Whenever the Certificate is so
surrendered for exchange, the Seller shall execute, and the Trustee shall
authenticate and deliver, the Certificate which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or
surrendered for transfer or exchange shall (if so required by the Trustee) be
duly endorsed by, or be accompanied by a written instrument of transfer in the
form reasonably satisfactory to the Trustee duly executed, by the Holder
thereof or his attorney duly authorized in writing.
(f) No service charge shall be made to the Holder for, or in
connection with, any transfer or exchange of the Certificate, but the Trustee
may require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of the
Certificate.
(g) All Certificates surrendered for transfer and exchange shall be
destroyed by the Trustee.
(h) Notwithstanding any other provision of this Agreement, no
transfer of a Certificate may be made to Kmart, Borrower or Seller, or any
affiliate of any such party, without the prior written consent of all
Certificateholders.
Section 4.03. Mutilated, Destroyed, Lost or Stolen Certificates. If
(i) any mutilated Certificate is surrendered to the Trustee or the Trustee
receives evidence to its reasonable satisfaction of the destruction, loss or
theft of any Certificate, and (ii) there is delivered to the Trustee such
security or indemnity as may be required by it to save it harmless, then, in
the absence of notice to the Trustee that such Certificate has been acquired by
a bona fide purchaser, the Trustee shall authenticate and deliver, in exchange
for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a
new Certificate of like tenor. Upon the issuance of any new Certificate under
this Section, the Trustee may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto
and any other expenses connected therewith. Any replacement Certificate issued
pursuant to this Section shall constitute complete and indefeasible evidence of
ownership of the undivided interest of the Certificateholder in the Trust Fund,
as if originally issued, whether or not the mutilated, destroyed, lost or
stolen Certificate shall be found at any time.
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Section 4.04. Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Seller and the Trustee may treat
the Person in whose name any Certificate is registered as the owner of such
Certificate and the undivided interest in the Trust Fund evidenced thereby for
the purpose of receiving remittances pursuant to Section 6.01 and for all other
purposes whatsoever, and neither the Seller nor the Trustee shall be affected
by notice to the contrary.
Section 4.05. Appointment of Paying Agent. The Trustee shall serve
as Paying Agent for the purpose of making distributions to Certificateholders
pursuant to Section 6.01.
[End of Article IV]
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ARTICLE V
TRUSTEE'S DUTIES WITH RESPECT TO MORTGAGE LOAN;
ESTABLISHMENT OF ACCOUNTS
Section 5.01. Calculation of Distributions. The Trustee shall
calculate the Certificate Distributions, make distributions on each Remittance
Date as set forth in Section 6.01 and have full power and authority to do any
and all things which it may deem necessary or desirable in connection with such
duties.
Section 5.02. Receipt of Lease Payments; Collection of Mortgage Loan
Payments.
(a) The Trustee acknowledges that, pursuant to the Subordination
Agreements, unless and until otherwise notified by Seller, the Trustee will be
paid directly by the Tenants all annual rental and other amounts payable by
Tenants under the Leases, to be deposited by the Trustee in the Certificate
Account as described below and invested in Eligible Investments as directed in
writing by Borrower and applied, together with such investment earnings, as a
credit to the Mortgage Loan Payments when due. In the event the Trustee shall
not have received at least twenty-four hours' notice as to any such investment
direction upon the maturity of an existing investment, the Trustee shall be
authorized to invest maturing amounts in Eligible Investments described in
subparagraph (x) of the definition thereof until further directed in writing as
to investments of such amounts. Investment earnings and losses shall be
charged to the moneys in the Certificate Account, and the Trustee shall have no
responsibility for any loss on any Eligible Investments.
(b) Continuously from the date hereof until the principal and
interest on the Mortgage Loan are paid in full, the Trustee will use reasonable
best efforts to collect all payments due under the Mortgage Loan when the same
shall become due and payable. On each June 15 during the term of this
Agreement, the Mortgagor shall provide the Trustee with a certificate to the
effect that Mortgagor shall provide the Trustee with a certificate to the
effect that Mortgagor is in compliance with the terms of the Loan Agreement and
the Mortgage Note.
Section 5.03. Establishment of Certificate Account; Deposits in
Certificate Account. With respect to the Mortgage Loan, the Trustee shall
cause to be segregated and held all funds collected and received pursuant to
the Mortgage Loan separate and apart from any of its own funds and general
assets and shall cause to be established and maintained a Certificate Account
for the benefit of the Certificateholders, in the form of a trust account
titled "Mortgage Pass-Through Certificates, (Kmart Corporation Power Center -
Utica, Michigan Project) Series 1992 in trust for the benefit of the
Certificateholders." The Trustee
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from time to time, at the direction of the Borrower, shall invest moneys in the
Certificate Account in Eligible Investments, which shall mature not later than
the Remittance Date next following the date of such investment 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. In the event the Trustee shall not have
received at least twenty-four hours' notice as to any such investment direction
upon the maturity of an existing investment, the Trustee shall be authorized to
invest maturing amounts in Eligible Investments described in subparagraph (x)
of the definition thereof until further directed in writing as to investments
of such amounts. Investment earnings and losses shall be charged to the moneys
in the Certificate Account, and the Trustee shall have no responsibility for
any loss on any Eligible Investments.
The Trustee shall cause to be deposited in the Certificate Account on
a daily basis and maintained and administered hereunder:
(i) All scheduled payments due on account of principal on the
Mortgage Loan, and all Principal Prepayments collected and any amounts
in the nature of late payment charges with respect thereto;
(ii) All payments on account of interest on the Mortgage Loan
(minus any Trustee Fees to which the Trustee is entitled);
(iii) All Net Liquidation Proceeds;
(iv) All Insurance Proceeds received by the Trustee under any
title, hazard or other insurance policy;
(v) All awards or settlements in respect of condemnation
proceedings affecting the Mortgaged Property which are not released to
the Borrower in accordance with the terms of the documents contained
in the Mortgage File;
(vi) All Extraordinary Expense Advances made by the Trustee;
(vii) All revenues from the Mortgaged Property acquired by
the Trustee by foreclosure or deed in lieu of foreclosure net of any
Extraordinary Expense Advances with respect to the Mortgaged Property;
(viii) All payments under the Leases and Lease Guaranties as
described in Section 5.02(a);
(ix) The initial deposit on the date of issuance of the
Certificates of $7,000 from the proceeds of the Certificates; and
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(x) Any amounts required to be deposited therein in
accordance with any other provisions of this Agreement.
The foregoing requirements for deposit in the Certificate Account shall be
exclusive. However, the Trustee may, but is not required to, deposit in the
Certificate Account the Trustee Fee.
Section 5.04. Permitted Withdrawals From the Certificate Account.
The Trustee may, from time to time, cause the withdrawal of funds from the
Certificate Account for the following purposes:
(i) to make payments to the Certificateholders in the amounts
and in the manner provided for in Section 6.01;
(ii) (a) to pay the fees and expenses incurred by the entity
retained pursuant to Section 6.02 to prepare tax returns and reports;
and (b) to reimburse the Trustee for unpaid Trustee Fees and
unreimbursed Extraordinary Expense Advances and to reimburse itself or
the Seller for any expenses, costs and liabilities for which it is
entitled to reimbursement under Section 6.03 or 7.03; prior to an
Event of Default the Trustee's right to reimburse itself (other than
with respect to the Trustee Fees) or make payments to the Seller
pursuant to this clause (ii) with respect to the Mortgage Loan is
limited to reimbursement or payments from related Liquidation
Proceeds, condemnation proceeds and amounts representing insurance
proceeds; however, subsequent to an Event of Default the Trustee shall
have a prior lien on all moneys in the Certificate Account for payment
or reimbursement of its Trustee Fees and Extraordinary Expense
Advances and other amounts owed it under any provision of this Trust
Agreement;
(iii) to disburse to Borrower: (a) any amounts in the
Certificate Account which represent rental and other amounts paid by
Tenants under the Leases prior to August 1, 1993, in excess of the
amounts, if any, needed to provide for the payment of amounts
described in clause (ii), upon requisition therefor by Borrower but
not more frequently than monthly; and (b) without requisition, any
amounts remaining in the Certificate Account immediately following
each Remittance Date on which principal payments are made (i.e. each
June 15) after paying or providing for the payment or withdrawal of
amounts described in clauses (i), (ii) and (iv);
(iv) if there shall be deposited in the Certificate Account
any amount not required to be deposited therein, to withdraw such
amount from the
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Certificate Account, any provision herein to the contrary
notwithstanding; and
(v) to clear and terminate the Certificate Account upon the
termination of this Agreement.
Section 5.05. Debt Service Reserve Account. The Debt Service Reserve
Account is hereby created and established with the Trustee. This Account shall
be maintained by the Trustee as a separate and distinct trust fund or account
pledged to the Certificateholders to be held, managed, invested, disbursed and
administered as provided below.
The Trustee shall credit to the Debt Service Reserve Account on the
Closing Date from amounts transferred to it by the Seller the amount indicated
on Exhibit 6.1 of the Loan Agreement. All amounts received as earnings on or
income from any investments or reinvestments of amounts in Eligible Investments
(made at the direction of the Seller in the same manner provided in Section
5.03 with respect to the Certificate Account) in the Debt Service Reserve
Account shall be credited to the Certificate Account once the applicable Debt
Service Reserve Account requirement of $3,423,000.00 (or after December 15,
1992, $2,367,242.92) is met.
The Trustee shall draw upon the Debt Service Reserve Account on each
Remittance Date to fund the interest and principal components of the Mortgage
Payments made or accrued on and prior to June 15, 1993 in accordance with the
following schedule:
Interest Principal
-------- ---------
December 15, 1992 $1,055,757.08 - 0 -
June 15, 1993 $1,347,775.00 $840,000
The Trustee shall not be required to maintain the Debt Service Account
subsequent to June 15, 1993, and notwithstanding any other provision of this
Agreement any amounts remaining on deposit therein on such date shall be
transferred to the Certificate Account and retained therein for application to
the Mortgage Payment due on December 15, 1993.
Section 5.06. Enforcement of Due-on-Sale Clause, Assumption
Agreements.
(a) If the Mortgaged Property shall be conveyed by the Borrower, the
Trustees shall enforce any due-on-sale clause contained in the Mortgage Note or
Mortgage, to the extent permitted therein and by applicable law and
governmental regulations and upon receipt of an Opinion of Counsel delivered to
the Trustee in connection with such conveyance that the due-on-sale clause is
enforceable.
(b) In any case in which the Mortgaged Property is to be conveyed to
a Person by the Mortgagor, and such Person is to
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enter into an assumption agreement or modification agreement or
supplement to the Mortgage Note or Mortgage which requires the signature of the
Trustees, or if an instrument of release signed by the Trustees is required
releasing the Mortgagor from liability on the Mortgage Loan, the Seller shall
deliver or cause to be delivered to the Trustees for signature the assumption
agreement with the Person to whom the Mortgaged Property is to be conveyed and
such modification agreement or supplement to the Mortgage Note or Mortgage or
any other Mortgage File Documents or other instruments as are reasonable or
necessary to carry out the terms of the Mortgage Note or Mortgage or any other
Mortgage File Documents or otherwise to comply with any applicable laws
regarding assumptions or the transfer of the Mortgaged Property to such Person.
The Seller shall also deliver or cause to be delivered to the Trustees with the
foregoing documents a letter explaining the nature of such documents and the
reason or reasons why the Trustees' signatures are required. With such letter
the Seller shall deliver to the Trustees an Officer's Certificate, together
with an Opinion of Counsel as to the legal matters described below, certifying
that: (i) a Responsible Officer has examined and approved such documents as to
form and substance, (ii) the Trustees' execution and delivery thereof will not
conflict with or violate any terms of this Agreement or cause the unpaid
balance and interest on the Mortgage Loan to be uncollectible in whole or in
part, (iii) any required consents of insurers under any insurance policies
required by the Mortgage have been obtained and (iv) subsequent to the closing
of the transaction involving the assumption or transfer (A) the Mortgage Loan
will continue to be secured by a first mortgage lien pursuant to the terms of
the Mortgage, (B) such transaction will not adversely affect the coverage under
any required insurance policies required under the Mortgage, (C) the Mortgage
Loan will fully amortize over the remaining term thereof, (D) the determination
of the interest rate on the Mortgage Loan will not be altered nor will the term
of the Mortgage Loan be increased and (E) if the seller/transferor of the
Mortgaged Property is to be released from liability on the Mortgage Loan, such
release will not (based on the Seller's good faith determination) adversely
affect the collectibility of the Mortgage Loan or the rating on the
Certificates issued by the Rating Agency and that all taxes have been paid and
that there are no adverse tax consequences of the transfer. Upon receipt of
such certificate, the Trustees shall execute any necessary instruments for such
assumption or substitution of liability. Upon the closing of the transactions
contemplated by such documents, the Seller shall cause the originals of the
assumption agreement, the release (if any), or the modification or supplement
to the Mortgage Note or Mortgage or any other Mortgage File Documents to be
delivered to the Trustees and deposited with the Mortgage File for the Mortgage
Loan. Any fee collected by the Seller for entering into an assumption or
substitution of liability agreement with respect to the Mortgage Loan will be
retained by the Seller.
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Section 5.07. Realization Upon Defaulted Mortgage Loan. On behalf of
the Trust, the Trustees shall use their best efforts to foreclose upon or
otherwise comparably convert the ownership of the Mortgaged Property securing
the Mortgage Loan as comes into and continues in default and as to which no
satisfactory arrangement can be made for collection of delinquent payments
pursuant to Section 5.02; shall manage, conserve, protect and operate the
Mortgaged Property for the purposes of its prompt disposition and sale; and
shall dispose of the Mortgaged Property on such terms and conditions as they
deem in the best interests of the Certificateholders after the Trustees have
received indemnity for their costs, expenses and liabilities with respect
thereto to their reasonable satisfaction from the Certificateholders in
accordance with Section 9.02(iii). Notwithstanding the foregoing, if either
Trustee has actual knowledge or reasonably believes that all or any part of the
Mortgaged Property is affected by hazardous or toxic wastes or substances, the
Trustees need not cause the Trust to acquire title to the Mortgaged Property in
a foreclosure or similar proceeding. In connection with such activities, the
Trustees shall follow such practices and procedures as they shall deem
necessary or advisable, as shall be normal and usual in their trustee
activities, and, in particular, the Trustees shall be furnished with such
certificates of appropriate public officials and agencies, a history of the
Mortgaged Property and its uses, other evidence reasonably satisfactory to the
Trustees showing that the Mortgaged Property conforms to existing environmental
laws, regulations, and rules and that no conditions exist in, on or beneath the
surface of the Mortgaged Property that are or might become hazardous materials,
and including but not limited to a Phase I environmental report from a company
reasonably satisfactory to Trustees, showing that there has been no storage,
disposal, or release of any oil, fuels, gases, chemicals, trash, garbage, or
other solid wastes or hazardous materials which report shall be based upon a
complete and thorough on-site inspection of the Mortgaged Property, including
but not limited to investigations of the soil, surface water and groundwater,
to confirm the absence of any hazardous materials on or beneath the surface of
the Mortgaged Property or adjacent lands. The foregoing is subject to the
proviso that the Trustees shall not be required to expend their own funds in
connection with any foreclosure or towards the restoration of the Mortgaged
Property unless they shall determine that such (i) restoration or foreclosure
will increase the proceeds of liquidation of the Mortgage Loan to
Certificateholders after reimbursement to themselves for such expenses and (ii)
expenses will be recoverable to them either through Liquidation Proceeds
(respecting which they shall have priority for purposes of withdrawals from the
Certificate Account pursuant to Section 5.04) or revenues from the Mortgaged
Property.
Section 5.08. Trustee Compensation. The Trustee, as compensation for
its activities hereunder, shall be entitled to receive on the Closing Date and
each June 15 (commencing June 15,
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1994) during the term of this Agreement the amounts provided for as the Trustee
Fee and the Trustees shall be entitled to receive reimbursement for
Extraordinary Expense Advances and reimbursement for certain expenses, all as
specified by clause (ii) of Section 5.04. As so specified, from and after the
occurrence of any Event of Default, the Trustees shall have a prior lien on the
Trust Fund for such amounts.
The Trustees shall be required to pay all expenses incurred by them in
connection with their activities hereunder, and shall not be entitled to
reimbursement therefor except as specifically provided in Section 5.04.
Section 5.09. Rights of the Seller. The Trustees shall afford the
Seller, upon reasonable notice and during normal business hours, access to all
records maintained by the Trustees in respect of their rights and obligations
hereunder and access to officers of the Trustees responsible for such
obligations. Upon request and at the expense of the Seller, the Trustee shall
furnish the Seller with its most recent financial statements and such other
information as the Trustee possesses regarding its business, property and
condition, financial or otherwise.
[End of Article V]
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ARTICLE VI
PAYMENTS TO THE CERTIFICATEHOLDERS
Section 6.01. Distributions.
(a) On each Remittance Date, the Trustee shall cause to be
distributed from funds in the Certificate Account, the following amounts:
(i) to the Trustee, the Trustee Fee and any other amounts
owed to the Trustee under this Agreement and to the entity retained
pursuant to Section 6.02 to prepare tax returns and reports amounts
owed to it; and
(ii) to each Certificateholders, the Certificate
Distribution.
(b) All distributions made to Certificateholders on each Remittance
Date shall be made to the Certificateholders of record on the Record Date
(other than as provided in this Agreement or in the form of Certificate
respecting the final distribution), by wire transfer in immediately available
funds to the account of such Holder at a bank or other financial or depository
institution having appropriate facilities therefor, notice of which shall have
been given to the Trustee in writing by the Record Date prior to such
Remittance Date. Following final distribution in retirement of the
Certificates, Certificateholders shall promptly surrender the Certificates at
the Corporate Trust Office or such other agency of the Trustee specified in the
final distribution notice to the Certificateholders. If on any Determination
Date, the Trustee determines that the Mortgage Loan is not outstanding and
there are no other funds or assets in the Trust Fund other than the funds in
the Certificate Account, the Trustee shall promptly send the final distribution
notice to each Certificateholder and make the final distribution in accordance
with Section 10.02.
Section 6.02. Statements to the Certificateholders. Not later than
each Remittance Date, the Trustee will cause to be sent to each
Certificateholder and the Seller a statement setting forth the following
information with respect to each Certificate (which information may be
aggregated for all Certificates held by the same Holder), after giving effect
to the distributions to be made pursuant to Section 6.01 on or as of such
Remittance Date:
(i) the amount of such distribution allocable to
principal, separately identifying the aggregate amount of any
Principal Prepayments and Net Liquidation Proceeds included therein;
(ii) the amount of such distribution allocable to
interest and any other amounts in the nature of late payment charges;
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(iii) the amount of any payment by the Trustee pursuant to
Section 7.03;
(iv) the amount of Extraordinary Expense Advances paid by the
Trustee; and
(v) if applicable, whether the Mortgage Loan is delinquent.
The Seller (or Holders of Certificates evidencing Percentage Interests
aggregating not less than 66 2/3%) shall appoint an organization which
regularly engages in the preparation and filing of such documents on a
continuous basis for profit and which represents itself to be expert in such
matters), as required by applicable law, which shall cause to be prepared and
which shall file, any and all tax returns, information statements or other
filings required to be delivered to any governmental taxing authority or to the
Certificateholders pursuant to any applicable law with respect to the Trust
Fund and the transactions contemplated hereby; provided, however, (i) that any
reasonable fees of the organization appointed as provided above shall be paid
from the Certificate Account and (ii) the Trustee shall cooperate in good faith
in providing any necessary information which it possesses regarding the Trust
Fund and the Certificates to such organization. Notice of any such appointment
shall be given to the Trustee by the party making such appointment at the time
of such appointment.
Section 6.03. Advances by the Trustee.
(a) Trustee may from time to time make such Extraordinary Expense
Advances as Trustee in its sole discretion deems advisable, provided, however,
that it is satisfied as to the availability to it of direct and immediate
reimbursement and that the repayment thereof to Trustee shall not impair the
payment of any Certificate Distribution.
(b) In order to make an Extraordinary Expense Advance the Trustee
shall deposit in the Certificate Account an amount equal to the Advance. Any
moneys being held for future distribution to Certificateholders in the
Certificate Account shall not be so used.
[End of Article VI]
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ARTICLE VII
THE SELLER
Section 7.01. Indemnification; Third Party Claims. Subject to the
limitations of Section 9.01 with respect to the Trustees, the Seller agrees to
indemnify the Trustees and hold the Trustees harmless against any and all
claims, losses, penalties, fines, forfeitures, legal fees and related costs,
judgments, and any other costs, fees and expenses that the Trustees may sustain
in any way related to their failure to perform their duties in strict
compliance with the terms of this Agreement, other than any failure arising
from the gross negligence or willful misconduct of the Trustee. The Seller
shall immediately notify the Trustees if a claim is made by a third party with
respect to this Agreement or the Mortgage Loan, assume (with the consent of
the Trustees) the defense of any such claim and pay all expenses in connection
therewith, including counsel fees and expenses, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against it or the Trustees
in respect of such claim.
Section 7.02. Maintaining Corporate Existence of the Seller. The
Seller will keep in full effect its existence, rights and franchises as a
corporation, and will obtain and preserve its qualification to do business as a
foreign corporation in the jurisdiction in which such qualification is or shall
be necessary to protect the validity and enforceability of this Agreement, the
Certificates or the Mortgage Loan and to perform its duties under this
Agreement.
Section 7.03. Limitation on Liability of the Seller. Neither the
Seller nor any of the directors, officers, employees or agents of the Seller
shall be under any liability to the Trustees or the Certificateholders for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Seller or any such person against any
breach of warranties or representations made herein, or failure to perform its
obligations in strict compliance with any standard of care set forth in this
Agreement, or any liability which would otherwise be imposed by reason of any
willful misfeasance, bad faith or negligence in the performance of its duties
or by reason of reckless disregard of obligations and duties hereunder. The
Seller and any director, officer, employee or agent of the Seller may rely in
good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder.
The Seller shall not be under any obligation to appear in, prosecute
or defend any legal action which is not incidental to its duties in accordance
with this Agreement and which in its opinion may involve it in any expense or
liability; provided, however, that the Seller may in its discretion undertake
any such
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action which it may deem necessary or desirable in respect to this Agreement
and the rights and duties of the parties hereto and the interests of the
Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be expenses, costs and
liabilities payable from the Certificate Account and the Seller shall be
entitled to be reimbursed therefor out of the Certificate Account as provided
by Section 5.04(ii).
Section 7.04. Seller May Resign. The Seller may resign from the
obligations and duties hereby impose on it with respect to its role as Seller;
provided that such resignation shall not be effective unless and until a
successor shall be appointed, which successor shall be a wholly-owned
subsidiary of Seller which shall assume all duties of the Seller hereunder; and
provided, further, that this provision shall not relieve the Seller from any
breach of its warrants and representations made in Section 3.01 herein;
however, such liability shall be limited as set forth in Section 7.03. The
indemnity of the Trustees provided by Seller pursuant to Section 7.01 hereof
shall survive Seller's resignation and the appointment of any successor
wholly-owned subsidiary pursuant to this Section.
[End of Article VII]
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ARTICLE VIII
DEFAULT
Section 8.01. Events of Default. The (a) nonpayment to any
Certificateholder of any payment required to be made under the terms of this
Agreement, which continues unremedied for a period of five days, or (b)
occurrence of any event constituting an Event of Default under the Loan
Agreement or any other Mortgage File Documents, shall constitute an Event of
Default under this Agreement. If an Event of Default shall occur and be
continuing, then, and in each and every case, so long as the Event of Default
shall not have been remedied, the Trustees may, and at the written direction of
the Holders of Certificates of Percentage Interests aggregating not less than 66
2/3%, the Trustees shall exercise any rights and remedies that they may have at
law or equity to damages, including injunctive relief and specific performance.
The Trustees 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 holders of Certificates unless such Certificateholders
have offered to the Trustees reasonable security or indemnity against the
costs, expenses and liabilities which the Trustees may incur. Following any
Event of Default under this Agreement, the Trustees shall have a first priority
lien for payment or reimbursement from the Trust Fund of their fees and
expenses incurred in the performance of their duties hereunder. After making
provision for payment of such amounts, the Trustees shall apply the proceeds
recovered in the enforcement of the rights and remedies under this Agreement in
accordance with the terms of this Agreement, including, but not limited to, the
definition of Certificate Distribution and Section 10.01.
Section 8.02. Waiver of Defaults. The Trustees may, and at the
direction of the Holders of Certificates of Percentage Interests aggregating
not less than 66 2/3% the Trustee shall, waive any default hereunder and its
consequences, except that a default in the making of any required distribution
on any of the Certificates may only be waived 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. Notification to Certificateholders. Within 30 days
after acquiring actual knowledge of 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.
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Section 8.04. Rights of Certificateholders to Direct Proceedings.
Anything in this Agreement to the contrary notwithstanding, the Holders of
Percentage Interests aggregating not less than 66 2/3% shall have the right, at
any time during the continuance of an Event of Default, by an instrument or
instruments in writing executed and delivered to the Trustee, to direct the
time, place and method of conducting all proceedings to be taken in connection
with the enforcement of the terms and conditions of this Agreement; provided,
however that such direction shall not be otherwise than in accordance with the
provisions of law and this Agreement and provided that such Holders shall have
provided to the Trustees the reasonable security or indemnity pursuant to
Section 9.02(iii) against the costs, expenses and liabilities which the
Trustees may incur in connection with such proceedings.
[End of Article VIII]
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ARTICLE XI
CONCERNING THE TRUSTEES
Section 9.01. Duties of Trustees. The Trustees, prior to the
occurrence of an Event of Default and after the curing of all Events of Default
which may have occurred, undertakes to perform such duties and only such duties
as are specifically set forth in this Agreement, including without limitation
the duties set forth in Sections 5.01 and 6.02. The Trustees shall act in all
instances in accordance with the requirements set forth in the Mortgage Loan
documents and shall employ procedures (including collection procedures) and
exercise that degree of prudence and care that a prudent and reasonable trustee
would apply. In case an Event of Default has occurred (which has not been
cured), the Trustees shall exercise such of the rights and powers vested in
them 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 such man's own affairs. No permissive rights of the Trustees shall
be construed as a mandatory duty of the Trustees.
The Trustees, upon receipt of any resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustees which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement and if they are deemed to be
deficient, Trustee shall request cure of any such deficiency within a
reasonable period of time for such cure. If such deficiency is not cured to
the satisfaction of Trustee, the Trustee may treat the requirement pursuant to
which such instrument is furnished as not having been satisfied.
No provision of this Agreement shall be construed to relieve the
Trustees from liability for their own negligent action, their own negligent
failure to act or their own misconduct; provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after
the curing of all such Events of Default which may have occurred, the
duties and obligations of the Trustees shall be determined solely by
the express provisions of this Agreement, the Trustees 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 Trustees
and, in the absence of bad faith on the part of the Trustees, the
Trustees may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustees and conforming to
the requirements of this Agreement;
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(ii) The Trustees shall not be personally liable for an error
of judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustees
were negligent in ascertaining the pertinent facts; and
(iii) The Trustees shall not be personally liable with
respect to any action taken, suffered or omitted to be taken by them
in good faith in accordance with the direction of holders of
Certificates evidencing Percentage Interests aggregating not less than
66 2/3% as to the time, method and place of conducting any proceeding
for any remedy available to the Trustees, or exercising any trust or
power conferred upon the Trustees, under this Agreement.
The Trustees shall not be required to expend or risk their own funds
or otherwise incur financial liability in the performance of any of their
duties hereunder, or in the exercise of any of their rights or powers, if there
is reasonable grounds for believing that the repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
them.
Section 9.02. Certain Matters Affecting the Trustees. Except as
otherwise provided in Section 9.01:
(i) The Trustees may rely, 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 reasonably believed by them
to be genuine and to have been signed or presented by the proper party
or parties;
(ii) The Trustees may consult with counsel and any advice
obtained from counsel or Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or
suffered or omitted by them hereunder in good faith and in accordance
with such advice or Opinion of Counsel;
(iii) The Trustees shall be under no obligation to exercise
any of the trusts or powers vested in them 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 Trustees
reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby; the right of
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the Trustees to perform any discretionary act enumerated in this
Agreement shall not be construed as a duty, and the Trustees shall not
be answerable for other than their negligence or willful misconduct in
the performance of any such act; nothing contained herein shall,
however, relieve the Trustees of the obligation, upon the occurrence
of an Event of Default known to a Responsible Officer of the Trustee
(which has not been cured), to exercise such of the rights and powers
vested in them by this Agreement, and to use the same degree of care
and skill in their exercise as a prudent man would exercise or use
under the circumstances in the conduct of such man's own affairs;
(iv) The Trustees shall not be personally liable for any
action taken, suffered or omitted by them in good faith and believed
by them to be authorized or within the discretion or rights or powers
conferred upon them by this Agreement;
(v) Except with respect to notice of deficient or missing
documents or of breaches of representations and warranties of the
Trustee described in Section 2.02, prior to the occurrence of an Event
of Default hereunder and after the curing of all Events of Default
which may have occurred, the Trustees shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document, unless
requested in writing so to do by Holders of Certificates evidencing
Percentage Interests aggregating not less than 66 2/3%; provided,
however, that if the payment within a reasonable time to the Trustees
of the costs, expenses or liabilities likely to be incurred by them in
the making of such investigation is, in the opinion of the Trustees,
not reasonably assured to the Trustees by the security afforded to
them by the terms of this Agreement, the Trustees may require
reasonable indemnity against such expense or liability as a condition
to such proceeding. The reasonable expense of every such examination
shall be paid from the Certificate Account pursuant to Section 5.04,
if an Event of Default shall have occurred and is continuing, and
otherwise by the Certificateholder requesting the investigation; and
(vi) The Trustees may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys.
Section 9.03. Trustees Not Liable for Certificates or Mortgage Loan.
The recitals contained herein and in the Certificates (other than the Trustee's
authentication of the
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Certificates) shall be taken as the statements of the Seller, and the Trustees
assume no responsibility for their correctness. The Trustees make no
representations or warranties as to the validity or sufficiency of this
Agreement or of the Certificates (except that the Certificates shall be duly
and validly authenticated by the Trustee) or of the Mortgage Loan or related
document. The Trustees shall not be accountable for the use or application by
the Seller of any of the Certificates or of the proceeds of such Certificates,
or for the use or application of any funds paid to the Seller with respect to
the Mortgage Loan or deposited in or withdrawn from the Certificate Account by
the Seller.
Section 9.04. Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of
Certificates with the same rights it would have if it were not Trustee.
Section 9.05. Seller to Pay Trustees' Fees and Expenses. The Seller
covenants and agrees to pay to the Trustees from time to time, and the Trustees
shall 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 them in the execution of the trust hereby
created and in the exercise and performance of any of the powers and duties
hereunder of the Trustees, and the Seller will indemnify, pay or reimburse the
Trustees upon their request for all reasonable expenses, disbursements and
advances incurred or made by the Trustees in accordance with any of the
provisions of this Agreement (including the reasonable compensation and the
expenses and disbursements of their counsel and of all persons not regularly in
their employ) except any such expense, disbursement or advance as may arise from
their negligence or bad faith.
Section 9.06. Action by Individual Trustee. The Individual Trustee
shall act as and be such upon the following terms and conditions:
(a) Subject to the provisions of Section 9.14, all rights,
powers, duties and obligations conferred or imposed upon the Trustees
shall be conferred or imposed solely upon and solely exercised and
performed by the Trustee except as expressly provided otherwise in
this Agreement and except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed,
the Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations shall
be exercised and performed by the Individual Trustee;
(b) No power granted by this Agreement to, or which this
Agreement provides may be exercised by, the Individual Trustee shall
be exercised by the Individual Trustee except jointly with, or with
the consent in
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writing of, the Trustee, anything contained to the contrary
notwithstanding; and
(c) The Individual Trustee may at any time by an instrument
in writing, constitute the Trustee or its successor in trust hereunder
his agent or attorney-in-fact, with full power and authority, to the
extent which may be permitted by law, to do any and all acts and
things and exercise any and all discretion which he is authorized or
permitted to do or exercise, for and in his behalf and in his name.
Section 9.07. Eligibility Requirements for Trustee. The Trustee
hereunder shall at all times be a corporation having its principal
office in a state and city acceptable to the Holders of Certificates evidencing
Percentage Interests aggregating not less than 66 2/3% and organized and doing
business under the laws of such state or the United States of America,
authorized under such laws to exercise corporate trust powers, having (or, in
the case of a corporation included in a bank holding company system, the
related banking holding company shall have) a combined capital and surplus of
at least $50,000,000 in the case of XXXXXXXXXX and of at least $100,000,000
in the case of any successor trustee and subject to supervision or examination
by federal or state authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 9.08.
Section 9.08. Resignation and Removal of the Trustee. The Trustee
may at any time resign and be discharged from the trusts hereby created by
giving written notice thereof to the Seller and the Certificateholders. Upon
receiving such notice of resignation, the Holders of Certificates evidencing
Percentage Interests aggregating not less than 66 2/3% 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 9.07 and shall fail to resign after written
request therefor by the Holders of
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Certificates evidencing Percentage Interests aggregating not less than 66 2/3%,
or if at any time the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Holders of Certificates evidencing
Percentage Interests aggregating not less than 66 2/3% 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.
The Holders of Certificates evidencing Percentage Interests
aggregating not less than 66 2/3% may at any time remove the Trustee and
appoint a successor trustee by written instrument or instruments, in
triplicate, signed by such Holders or their attorneys-in-fact duly authorized,
one complete set of which instruments shall be delivered to the Seller, one
complete set to the Trustee so removed and one complete set to the successor
trustee so appointed.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall
become effective only upon acceptance of appointment by the successor trustee
as provided in Section 9.09.
Section 9.09. Successor Trustee. Any successor trustee appointed as
provided in Section 9.08 shall execute, acknowledge and deliver to the Seller,
the Certificateholders and to its predecessor trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee shall
become effective and such trustee, without any further act, deed or conveyance,
shall become fully vested with all rights, powers, duties and obligations of
its predecessor trustee hereunder, with like effect as if originally named as
trustee herein. The predecessor trustee shall deliver to the successor trustee
the Mortgage File and related documents and statements held by it hereunder,
and the Seller and the predecessor trustee shall execute and deliver such
instruments and do such other things as may be reasonably be required for more
fully and certainly vesting and confirming in the successor trustee all such
rights, powers, duties and obligations.
No successor trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 9.07.
Upon acceptance of appointment by a successor trustee as provided in
this Section, the successor trustee shall mail notice
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of the succession of such trustee hereunder to all Holders of Certificates at
their addresses as shown in the Certificate Register.
Section 9.10. 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 that such corporation shall be eligible under the
provisions of Section 9.07, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 9.11. Resignation of Individual Trustee. The Individual
Trustee or any of his successors may resign, and may be discharged of the
trusts created by this Agreement by giving written notice thereof to the Seller
and to the Trustee.
Such resignation shall take effect immediately upon the acceptance of
appointment by a Person succeeding to the office of the Individual Trustee
appointed by the resigning Trustee or by the Holders of Certificates evidencing
Percentage Interests aggregating not less than 66 2/3%, as provided in Section
9.13.
Section 9.12. Removal of Individual Trustee. The Individual Trustee
or any of his successors may be removed at any time by the Holders of
Certificates evidencing Percentage Interests aggregating not less than 66 2/3%
or by the Trustee, by delivery of a notice of such removal to the Individual
Trustee, to the Seller, and in the case of removal by the Certificateholders,
to the Trustee, signed by such holders or the Trustee, as the case may be, and
such removal shall be effective upon the date specified in such notice, and the
Individual Trustee's duties and obligations hereunder shall thereupon cease,
except as specified in Section 9.14 hereof.
Section 9.13. Appointment of Successor to Individual Trustee. If at
any time the Individual Trustee or any of his successors shall die, resign or
be removed or otherwise become incapable of acting, or if for any reason the
office of Individual Trustee shall become vacant, a successor to the Individual
Trustee shall forthwith be appointed by the Trustee or, in the event that the
Trustee shall fail to make such appointment within 60 days after the
occurrence of such death, resignation, removal, incapacity or vacancy, by the
Holders of Certificates evidencing Percentage Interests aggregating not less
than 66-2/3% by an instrument signed by the Trustee or by such
Certificateholders.
Section 9.14. Succession of Successor to Individual Trustee. Any
Person appointed as a successor to the Individual Trustee shall execute,
acknowledge and deliver to his
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predecessor, to the Trustee and to the Seller, an instrument accepting such
appointment hereunder, and thereupon such Person without any further act, deed
or conveyance shall become vested with all estates, properties, rights, powers,
duties and trusts of his predecessor in the trusts hereunder with like effect
as if originally named as Individual Trustee herein; but nevertheless, on the
written request of the Seller or Holders of Certificates evidencing Percentage
Interests aggregating not less than 66 2/3% or of the Trustee or of the
Individual Trustee, the predecessor shall execute and deliver an instrument
transferring to the Individual Trustee, upon the trusts expressed in this
Agreement, all the estates, properties, rights, powers and trusts granted to
him by this Agreement and shall duly assign, transfer, deliver and pay over to
the Individual Trustee any property and money subject to the lien of this
Agreement held by such predecessor. Should any instrument in writing from the
Seller or from Holders of Certificates evidencing Percentage Interests
aggregating not less than 66 2/3% or from the Trustee be required by any Person
who becomes the Individual Trustee for more fully and certainly vesting in and
confirming to such Individual Trustee such estates, properties, rights, powers
and trusts, then, on request, any and all such instruments in writing shall be
made, executed, acknowledged and delivered by the Seller and/or the Trustee.
Any Individual Trustee which has resigned or been removed shall
nevertheless retain all rights of indemnity, including any lien upon the
Mortgaged Property afforded to him for fees and expenses under Section 9.05.
[End of Article IX]
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ARTICLE X
TERMINATION
Section 10.01. Termination. The respective obligations and
responsibilities of the Seller and the Trustees under this Agreement (except
the duty to pay the Trustees' fees and expenses and to provide indemnification
under the terms of this Agreement) shall, so long as such termination does not
result in the imposition of a tax on the Trust Fund, terminate upon the first
to occur of the final payment, prepayment in full or other liquidation (or any
advance with respect thereto) of the Mortgage Loan or the disposition of all
property acquired upon foreclosure or deed in lieu of foreclosure of the
Mortgage Loan or the disposition of the Mortgage Loan and the remittance of all
funds due hereunder; provided, however, that in no event shall the trust
created hereby continue beyond the expiration of 21 years from the death of the
last survivor of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late ambassador of
the United States to the Court of St. ▇▇▇▇▇, living on the date hereof.
Section 10.02. Notice; Final Distribution.
(a) Notice of any termination pursuant to Section 10.01
(except prepayment or other disposition in accordance with Section 4.01 for
which 15 days notice cannot be given), specifying the Remittance Date upon
which all Certificateholders may surrender their Certificates to the Trustee
for payment and cancellation, shall be given promptly by the Trustee by letter
to Certificateholders mailed no later than 15 days prior to such Remittance
Date specifying (i) the Remittance Date upon which final payment on the
Certificates will be made, and (ii) the amount of any such final payment.
After giving such notice, the Trustee shall not register the transfer or
exchange of any Certificates. The Trustee shall cause to be distributed to
Certificateholders an amount equal to the amount otherwise distributable on
such Remittance Date.
(b) If all of the Certificateholders shall not surrender
their Certificates for cancellation within three months after the time
specified in the above-mentioned written notice, the Trustee shall give a
second written notice to the remaining Certificateholders to surrender their
Certificates for cancellation.
[End of Article X]
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ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. 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.
Section 11.02. Limitation 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
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust Fund, nor
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
expressly 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 person 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 of any
provision 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 Trustees a written notice of default
and of the continuance thereof, as hereinbefore provided, and unless also the
Holders of Certificates evidencing in the aggregate not less than 66 2/3% of
the Percentage Interests shall have made written request upon the Trustees to
institute such action, suit or proceeding in the Trustees' own name as Trustees
hereunder and shall have offered to the Trustees such reasonable indemnity as
they may require against the costs, expenses and liabilities to be incurred
therein or thereby, and the Trustees, for 60 days after their receipt of such
notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and
intended, and being expressly covenanted by each Certificateholder with every
other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such
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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 Certificateholders, as the
case may be. For the protection and enforcement of the provisions of this
Section, each and every Certificateholder and the Trustees shall be entitled to
such relief as can be given either at law or in equity.
Section 11.03. Amendment. This Agreement may be amended from
time to time by the Seller and the Trustees with the consent of the Holders of
Certificates evidencing in the aggregate not less than 66 2/3% of the
Percentage Interests 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 received on the Mortgage Loan which are
required to be distributed on any Certificate without the consent of the Holder
of such Certificate or (ii) 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.
Promptly after the execution of any such amendment the Trustee
shall furnish written notification of the substance of such amendment to each
Certificateholder.
The manner of obtaining the consents of Certificateholders and of
evidencing the authorization of the execution thereof by Certificateholders
shall be subject to such reasonable regulations as the Trustee may prescribe,
which shall not conflict with the provisions of this Agreement.
Section 11.04. Solicitation of Certificateholders. The Trustee
will not solicit, request or negotiate for or with respect to any direction or
proposed waiver or amendment of any of the provisions of this Agreement or the
Certificates, unless each Holder of the Certificates (irrespective of the
amount of Certificates then owned by it) shall be informed thereof by the
Trustee and shall be afforded the opportunity of considering the same and shall
be supplied by the Trustee with sufficient information to enable it to make an
informed decision with respect thereto. Executed or true and correct copies of
any waiver effected pursuant to the provisions of this Section shall be
delivered by the Trustee to each Holder of outstanding Certificates forthwith
following the date on which the same shall have been executed and delivered by
the Holder or Holders of the requisite percentage of outstanding Certificates.
The Trustee will not, directly or indirectly, pay or cause to be paid any
remuneration, whether by way of supplemental or additional interest, fee or
otherwise, to any Holder of the Certificates as consideration for or as an
inducement to the entering into by any
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Holder of the Certificates of any waiver or amendment of any of the terms
and provisions of this Agreement unless such remuneration is concurrently paid,
on the same terms, ratably to the Holders of all of the Certificates then
outstanding.
Under any provisions of this Agreement that relate to consent,
waiver, direction, request or demand of or by Certificateholders, each and
every Certificateholder shall be entitled to give or make any such consent,
waiver, direction, request or demand without request or demand for such action
by the Trustee.
In the event any such direction or similar action is so received
by the Trustee under any provision hereof from the Certificateholders of
requisite Percentage Interests, the Trustee shall follow the direction of such
Certificateholders and shall ignore any direction as to such matter that
Trustee may receive from Seller.
Section 11.05. Duration of Agreement. This Agreement shall
continue in existence and effect until terminated as herein provided.
Section 11.06. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAW, OTHER THAN WITH RESPECT TO CONFLICTS OF LAWS, OF
THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 11.07. Notices. All demands, notices and communications
under this Agreement shall be in writing and shall be deemed to have been duly
given if personally delivered at or mailed by first class or registered mail,
postage prepaid, to (i) in the case of the Seller, XXXXXXXXXX, XXXXXXXXXX,
Attention: XXXXXXXXXX, and (ii) in the case of the Trustee, XXXXXXXXXX,
XXXXXXXXXX, Attention: Corporate Trust, and in the case of the Individual
Trustee, XXXXXXXXXX, or (iii) in the case of any of the foregoing Persons, such
other addresses as such Persons furnish to the other Persons. Any notice
required or permitted to be mailed to a Certificateholder shall be given by
registered mail, postage prepaid, or by express delivery service, at the
address of such Certificateholder as shown in the Certificate Register.
Section 11.08. Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original but all of which together
shall constitute one and the same agreement.
[End of Article XI]
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IN WITNESS WHEREOF, Seller and the Trustees have caused their
names to be signed hereto by their respective officers thereunto duly
authorized as of the day and year first above written.
XXXXXXXXXX, as Seller
By XXXXXXXXXX
-------------------------
Name XXXXXXXXXX
-------------------------
Title Vice President
-------------------------
XXXXXXXXXX, as Trustee
By /s/
-------------------------
Name XXXXXXXXXX
-------------------------
Title Assistant Vice President
-------------------------
XXXXXXXXXX, as
Individual Trustee
By XXXXXXXXXX
-------------------------
Name XXXXXXXXXX
-------------------------
Title
-------------------------
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STATE OF CALIFORNIA
---------------------- ss.
CITY OF LOS ANGELES
----------------------
On the 24th day of July 1992 before me, a Notary Public in and for
said State, personally appeared XXXXXXXXXX, known to me (or proved to me
on the basis of satisfactory evidence) to be the person who executed the within
instrument as V.P. on behalf of XXXXXXXXXX, and acknowledged to me that such
corporation executed the within instrument pursuant to its ByLaws' or a
resolution of the Board of Directors.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
(NOTARIAL SEAL] XXXXXXXXXX
My commission expires: ------------------------------
2-27-95 Notary Public
---------
OFFICIAL SEAL
XXXXXXXXXX
Notary Public-California
LOS ANGELES COUNTY
My Commisslon Expires
February 27, ▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇
----------- ss.
CITY OF Los Angeles
-----------
On the 24th day of July 1992 before me, a Notary Public in and for said
State, personally appeared XXXXXXXXXX, known to me (or proved to me on the
basis of satisfactory evidence) to be the person who 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.
(NOTARIAL SEAL] XXXXXXXXXX
My commission expires: -----------------
2-27-95 Notary Public
-------
OFFICIAL SEAL
XXXXXXXXXX
Notary Public-California
LOS ANGELES COUNTY
My Commisslon Expires
February 27, 1995
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STATE OF CALIFORNIA )
-------------- ) ss.
CITY OF LOS ANGELES )
-----------
On the 24th day of July 1992 before me, a Notary Public in and for
said State, personally appeared XXXXXXXXXX personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person who executed the
within instrument as to be an A.V.P. on behalf of XXXXXXXXXX, and acknowledged
to me that such corporation executed the within instrument pursuant to its
ByLaws or a resolution of the Board of Directors.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
(NOTARIAL SEAL] ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
My commission expires: -----------------------------
2-27-95 Notary Public
-------
OFFICIAL SEAL
XXXXXXXXXX
Notary Public-California
LOS ANGELES COUNTY
My Commisslon Expires
February 27. 1995
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[Exhibits Intentionally Omitted]