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EXHIBIT 4.1
INDENTURE OF TRUST
MAIN PLACE FUNDING, LLC
ISSUER
AND
[ ]
________________________________
TRUSTEE
--------------
INDENTURE OF TRUST
DATED AS OF [____________], 1999
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$[ ]
___________________
MORTGAGE-BACKED BONDS, SERIES [_______] DUE [_____]
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.................................................3
Section 1.01. Definitions................................................................................3
Accountant......................................................................................4
Accountants' Letter.............................................................................4
Act.............................................................................................4
Adjustable-Rate Mortgage Loan...................................................................4
Affiliate.......................................................................................4
Approved Luxembourg Newspaper...................................................................4
Approved Servicer...............................................................................4
Authenticating Agent............................................................................4
Available Amount................................................................................4
Bank of America, FSB............................................................................4
Basic Maintenance Amount........................................................................5
Beneficial Owner................................................................................5
Board of Directors..............................................................................5
Board Resolution................................................................................5
Bond Register and Bond Registrar................................................................5
Bonds...........................................................................................5
Business Day....................................................................................5
Cash............................................................................................5
Clearing Agency.................................................................................5
Clearing Agency Participant.....................................................................5
Closing Date....................................................................................5
Collateral......................................................................................5
Collateral Report...............................................................................5
Collection Account..............................................................................6
Collection Period...............................................................................6
Commission......................................................................................6
Condominium Loan................................................................................6
Conventional Mortgage Loan......................................................................6
Corporate Trust Office of the Trustee...........................................................6
Corporation.....................................................................................6
Cure Date.......................................................................................6
Cure Valuation Date.............................................................................6
Custodian.......................................................................................6
Defaulted Interest..............................................................................6
Definitive Certificate..........................................................................6
Delinquent Mortgage Loan........................................................................6
delivery........................................................................................6
Deposit Security................................................................................7
Determination Date..............................................................................7
Discounted Value................................................................................7
Discount Factors................................................................................8
Distribution Account............................................................................9
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Eligible Account................................................................................9
Eligible Adjustable-Rate Mortgage Loans.........................................................9
Eligible Collateral............................................................................10
Eligible Conventional Fixed-Rate Mortgage Loans................................................10
Eligible Fixed-Rate Mortgage Loans.............................................................10
Eligible Investments...........................................................................11
Eligible Mortgage Loans........................................................................12
Eligible Mortgages.............................................................................12
Event of Default...............................................................................12
Exchange Act...................................................................................13
FDIC...........................................................................................13
FHA............................................................................................13
FHA Insured....................................................................................13
FHLMC..........................................................................................13
FHLMC Certificates.............................................................................13
Fixed-Rate Mortgage Loan.......................................................................13
FNMA...........................................................................................13
FNMA Certificates..............................................................................13
GNMA...........................................................................................13
GNMA Certificates..............................................................................13
Government Securities..........................................................................14
High Balance Loan..............................................................................14
Holder or Bondholder...........................................................................14
HUD............................................................................................14
Indenture......................................................................................14
Independent....................................................................................14
Initial Collateral.............................................................................14
Interest Payment Date..........................................................................14
Interest Period................................................................................14
Issue Date.....................................................................................14
Issuer.........................................................................................15
Jumbo Loan.....................................................................................15
Late Payment...................................................................................15
Latest Collateral Report.......................................................................15
LIBOR..........................................................................................15
LIBOR Business Day.............................................................................15
LIBOR Determination Date.......................................................................15
Lien of this Indenture or lien hereof..........................................................15
Liquidity Date.................................................................................15
Listing Agent..................................................................................15
Loan-to-Value Ratio............................................................................15
Market Value...................................................................................16
Market Value Rate..............................................................................17
Material Defect................................................................................18
Maximum Interest Rate..........................................................................18
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Mortgage Collateral............................................................................18
Mortgage Documentation.........................................................................18
Mortgage Loans.................................................................................18
Mortgage Notes.................................................................................18
Mortgaged Property.............................................................................19
Mortgages......................................................................................19
NationsBanc ▇▇▇▇▇▇▇▇▇▇.........................................................................19
NationsBanc Mortgage...........................................................................19
NationsBank, N.A...............................................................................19
New Eligible Collateral........................................................................19
The New York Times.............................................................................19
Non-Mortgage Collateral........................................................................19
Officers' Certificate..........................................................................19
Opinion of Counsel.............................................................................19
Order..........................................................................................19
Outstanding....................................................................................19
Over 80% Loan..................................................................................20
Paying Agent...................................................................................20
Permitted Index................................................................................20
Person.........................................................................................21
Pledged Property...............................................................................21
Predecessor Bond...............................................................................21
Prior Valuation Date...........................................................................21
Private Mortgage Insurance.....................................................................21
Rating Agency..................................................................................21
Redemption Date................................................................................21
Redemption Price...............................................................................21
Reference Banks................................................................................21
Regular Record Date............................................................................22
Regular Valuation Date.........................................................................22
Request or Order...............................................................................22
Required Interest Payment Amount...............................................................22
Reserve Fund...................................................................................22
Residential Real Estate........................................................................22
Responsible Officer............................................................................22
Reuters Page LIBO..............................................................................22
Selected Amount................................................................................22
Servicer.......................................................................................23
Servicer Remittance Date.......................................................................23
Servicing Agreement............................................................................23
Special Record Date............................................................................23
State..........................................................................................23
Stated Maturity................................................................................23
Subsidiary.....................................................................................23
Telerate Page 3750.............................................................................23
TIA............................................................................................23
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Trustee........................................................................................23
UCC............................................................................................23
VA.............................................................................................23
VA Guaranteed..................................................................................23
Vice President.................................................................................24
The Wall Street Journal........................................................................24
Section 1.02. Compliance Certificates and Opinions......................................................24
Section 1.03. Form of Documents Delivered to Trustee....................................................26
Section 1.04. Acts of Holders of Bonds..................................................................26
Section 1.05. Notices, Etc., to ▇▇▇▇▇▇▇ and the Issuer..................................................27
Section 1.06. Notices to Holders of Bonds; Waiver.......................................................27
Section 1.07. Effect of Headings and Table of Contents..................................................28
Section 1.08. Successors and Assigns....................................................................28
Section 1.09. Separability Clause.......................................................................28
Section 1.10. Benefits of Indenture.....................................................................28
Section 1.11. Governing Law.............................................................................28
Section 1.12. Legal Holidays............................................................................28
Section 1.13. Execution in Counterparts.................................................................29
Section 1.14. The Issuer's Obligations..................................................................29
Section 1.15. Conflict with Trust Indenture Act.........................................................29
ARTICLE II THE BONDS.............................................................................................29
Section 2.01. Form, Title and Terms of the Bonds........................................................29
Section 2.02. Denominations of Bonds....................................................................31
Section 2.03. Execution, Authentication, Delivery and Dating............................................31
Section 2.04. Book-Entry Requirements...................................................................31
Section 2.05. Definitive Certificates...................................................................32
Section 2.06. Notices to Clearing Agency................................................................33
Section 2.07. Temporary Bonds...........................................................................33
Section 2.08. Registration; Registration of Transfer and Exchange.......................................34
Section 2.09. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, Lost or Stolen Bonds................................................34
Section 2.10. Interest Payments; Interest Rights Preserved..............................................35
Section 2.11. Persons Deemed Owners.....................................................................36
Section 2.12. Cancellation..............................................................................36
ARTICLE III ADMINISTRATION OF ACCOUNTS AND PAYMENTS TO BONDHOLDER................................................37
Section 3.01. Establishment and Administration of Distribution Account and Reserve
Fund...........................................................................................37
Section 3.02. Collections and Allocations...............................................................37
Section 3.03. Payments to Bondholders...................................................................38
[Section 3.04. Determination of LIBOR...................................................................39
ARTICLE IV PROVISIONS AS TO COLLATERAL...........................................................................40
Section 4.01. Pledging of Collateral....................................................................40
Section 4.02. Disposition of Payments on Pledged Property...............................................42
Section 4.03. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and Modifications.......................................................42
Section 4.04. Rights of Trustee and the Issuer after Event of Default...................................44
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Section 4.05. Delivery of Initial Collateral and Reporting Requirements on Issuance of Bonds............44
Section 4.06. Collateral Reports........................................................................45
Section 4.07. Maintenance of Eligible Collateral........................................................46
Section 4.08. Withdrawal of Collateral Subject to Maintenance Requirements..............................47
Section 4.09. Additions to Eligible Collateral..........................................................48
Section 4.10. Sales of Bonds Reacquired by the Issuer and Affiliates....................................49
Section 4.11. Investment Company Act Limitation.........................................................49
Section 4.12. New Eligible Collateral...................................................................50
Section 4.13. Servicing of Mortgage Loans...............................................................51
ARTICLE V REMEDIES UPON DEFAULT..................................................................................52
Section 5.01. Events of Default.........................................................................52
Section 5.02. Acceleration of Maturity; Rescission and Annulment........................................53
Section 5.03. Trustee's Power in Regard to Pledged Property.............................................54
Section 5.04. Incidents of Sale of Pledged Property.....................................................56
Section 5.05. Judicial Proceedings......................................................................57
Section 5.06. Control by Holders of Bonds...............................................................58
Section 5.07. Waiver of Past Defaults...................................................................58
Section 5.08. Limitations on Suits by Holders...........................................................59
Section 5.09. Undertaking to Pay Court Costs............................................................59
Section 5.10. Application of Moneys Collected by Trustee................................................60
Section 5.11. Right to Receive Payment Not to Be Impaired...............................................61
Section 5.12. Notice of Defaults to Holders of Bonds....................................................61
Section 5.13. Bonds Held by the Issuer or Affiliate Not to Share in Distribution........................61
Section 5.14. Waiver of Appraisement, Valuation, Stay and Right to Marshalling..........................62
Section 5.15. Remedies Cumulative; Delay or Omission Not a Waiver.......................................62
ARTICLE VI THE TRUSTEE...........................................................................................62
Section 6.01. Certain Duties and Responsibilities.......................................................62
Section 6.02. Certain Rights of Trustee.................................................................64
Section 6.03. Not Responsible for Recitals..............................................................65
Section 6.04. May Hold Bonds............................................................................65
Section 6.05. Money Held in Trust.......................................................................65
Section 6.06. Compensation and Reimbursement............................................................65
Section 6.07. Corporate Trustee Required; Eligibility...................................................66
Section 6.08. Appointment of Custodian..................................................................67
Section 6.09. Resignation and Removal; Appointment of Successor.........................................67
Section 6.10. Acceptance of Appointment by Successor to Trustee.........................................68
Section 6.11. Merger, Conversion, Consolidation or Succession to Business...............................69
Section 6.12. Appointment of Co-Trustees................................................................69
Section 6.13. Authenticating Agent......................................................................70
Section 6.14. ▇▇▇▇▇▇ in Which Certain Collateral Held...................................................71
ARTICLE VII CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER,
LEASE OR ASSUMPTION.....................................................................................71
Section 7.01. The Issuer May Consolidate, Etc., Only on Certain Terms...................................71
Section 7.02. Successor Entity Substituted..............................................................72
ARTICLE VIII SUPPLEMENTAL INDENTURES.............................................................................72
Section 8.01. Supplemental Indentures Without Consent of Holders of Bonds...............................72
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Section 8.02. Supplemental Indentures With Consent of Holders of Bonds..................................73
Section 8.03. Execution of Supplemental Indentures......................................................74
Section 8.04. Effect of Supplemental Indentures.........................................................75
Section 8.05. Reference in Bonds to Supplemental Indenture..............................................75
Section 8.06. Notice of Supplemental Indenture..........................................................75
ARTICLE IX MEETINGS OF HOLDERS OF BONDS..........................................................................75
Section 9.01. Purposes for Which Meetings May Be Called.................................................75
Section 9.02. Call, Notice and Place of Meetings........................................................75
Section 9.03. Persons Entitled to Vote at Meetings......................................................76
Section 9.04. Quorum; Action............................................................................76
Section 9.05. Determination of Voting Rights; Conduct and Adjournment of Meetings.......................77
Section 9.06. Counting Votes and Recording Action of Meetings...........................................78
ARTICLE X COVENANTS..............................................................................................78
Section 10.01. Payment of Principal and Interest; Maintenance of Offices or Agencies....................78
Section 10.02. Paying Agent.............................................................................79
Section 10.03. Money for Bond Payments to Be Held in Trust..............................................79
Section 10.04. Warranty of Title and Authority to Pledge................................................81
Section 10.05. Protection of Lien.......................................................................81
Section 10.06. Filing; Opinion of Counsel...............................................................82
Section 10.07. Further Assurances.......................................................................83
Section 10.08. Advances by Trustee......................................................................83
Section 10.09. Restriction on Amendment of Certain Instruments..........................................83
Section 10.10. Maintenance of Books of Record and Account; Financial Statements of
the Issuer.....................................................................................83
Section 10.11. Statement as to Compliance and Audit of Collateral.......................................84
Section 10.12. Title Insurance..........................................................................84
Section 10.13. Fire and Extended Coverage Insurance.....................................................84
Section 10.14. Selection of Eligible Mortgage Loans.....................................................85
Section 10.15. Notice to Trustee of Change in Regulations...............................................85
Section 10.16. Notices and Copies of Supplemental Indentures, Collateral Reports and Accountants'
Letters to Rating Agencies.....................................................................85
Section 10.17. Covenants Regarding Issuer's Business....................................................85
Section 10.18. Treatment of Bonds as Debt for Tax Purposes..............................................86
ARTICLE XI REDEMPTION OF BONDS...................................................................................86
Section 11.01. Mandatory Redemption Due to Failure to Meet Basic Maintenance Amount.....................86
Section 11.02. Selection of Bonds to Be Redeemed........................................................87
Section 11.03. Notice of Redemption.....................................................................87
Section 11.04. Bonds Payable on Redemption Date.........................................................88
Section 11.05. Liquidation of Collateral in Respect of Redemption.......................................88
ARTICLE XII BONDHOLDERS' LISTS AND REPORTING REQUIREMENTS........................................................88
Section 12.01. Issuer To Furnish Trustee Names and Addresses of Bondholders.............................88
Section 12.02. Preservation of Information; Communications to Bondholders...............................89
Section 12.03. Reports by Trustee.......................................................................90
Section 12.04. Reports by Issuer........................................................................91
Section 12.05. Provisions of this Article Superseded By Trust Indenture Act.............................92
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Section 12.06. Luxembourg Reports and Notices..........................................................93
ARTICLE XIII SATISFACTION AND DISCHARGE..........................................................................93
Section 13.01. Satisfaction and Discharge of Indenture.................................................93
Section 13.02. Application of Trust....................................................................94
Section 13.03. Termination of Lien.....................................................................94
Section 13.04. Repayment of Moneys Held by Paying Agent................................................95
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EXHIBITS
EXHIBIT A INITIAL COLLATERAL
EXHIBIT B COLLATERAL REPORT
EXHIBIT C FORM OF OPINION OF COUNSEL
EXHIBIT D OFFICERS' CERTIFICATE REQUESTING WITHDRAWAL OR
SUBSTITUTION
EXHIBIT E FORM OF SERVICING AGREEMENT
EXHIBIT F FORM OF CUSTODIAL AGREEMENT
EXHIBIT G OFFICERS' CERTIFICATE REGARDING DEPOSIT SECURITIES
(FOR STATED MATURITY)
EXHIBIT H FORM OF BOND
EXHIBIT I FORM OF ACCOUNTANTS' LETTER
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INDENTURE OF TRUST (the "Indenture"), dated as of the [______] day of
[__________], 1999 between Main Place Funding, LLC, a Delaware limited
liability company (the "Issuer"), and [____________________________] (the
"Trustee"):
WITNESSETH:
WHEREAS, the Issuer has duly authorized the issue of a series of its
Mortgage-Backed Bonds, Series [______] Due [_______] (the "Bonds") in the
aggregate principal amount of $[_________________]; and
WHEREAS, the Issuer will pledge certain property (as described in this
Indenture) to secure all payments of principal of and interest on the Bonds and
to secure the performance of the covenants herein contained; and
WHEREAS, to provide the terms and conditions upon which the Bonds are
to be issued and delivered, the Issuer has duly authorized the execution of
this Indenture; and
WHEREAS, the Issuer represents that all acts and things necessary to
make the Bonds, when executed by the Issuer and authenticated by the Trustee or
the Authenticating Agent, valid, binding and legal obligations of the Issuer
and to constitute this Indenture a valid indenture in accordance with its
terms, have been done and performed; and the Issuer, in the exercise of the
legal right and power in it vested, is executing this Indenture and proposes to
execute, issue and deliver the Bonds.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Bonds
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of the respective Holders from time to time of the Bonds,
as follows:
GRANTING CLAUSES
To secure the payment of the principal of and interest on the Bonds
and the performance of the covenants contained therein and in this Indenture,
and in consideration of the premises and of the purchase of the Bonds, the
Issuer does hereby grant, bargain, sell, release, convey, assign, pledge,
transfer, mortgage and confirm unto the Trustee, and grant to the Trustee a
security interest in, all and singular of the following; provided, however,
that the failure of the Issuer to deliver to the Trustee (or, if the Trustee
has appointed a Custodian pursuant to Section 6.08, the Custodian) any of the
documents listed in clauses (a) through (d) of the first paragraph of Clause
Second below, or any defect in any such document so delivered, shall not impair
or in any way affect the Lien of this Indenture, or limit the security interest
granted in this Indenture by the Issuer to the Trustee, or render such security
interest unperfected if such security interest is perfected under applicable
law:
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CLAUSE FIRST
All Government Securities and Cash (including without limitation the
Cash further described in Clause Fourth of these Granting Clauses), each as
defined in Section 1.01, as shall be now or hereafter assigned and delivered to
the Trustee pursuant to the terms of this Indenture, including the provisions
of the definition of the term "delivery" in Section 1.01 (such Government
Securities and Cash, together with all the property referred to in the last
paragraph of this Clause First and in Clauses Second, Third, Fourth, Fifth and
Sixth of these Granting Clauses, are herein collectively referred to as the
"Pledged Property").
All Government Securities made subject to the Lien of this Indenture
shall be accompanied by an Officers' Certificate stating that such Government
Securities are "Government Securities" within the meaning of this Indenture.
In addition, any other payments with respect to, or proceeds of, such
Government Securities, to the extent provided in this Indenture.
CLAUSE SECOND
All Mortgage Loans, including those included in the Initial
Collateral, each as defined in Section 1.01, as shall be now or hereafter
actually assigned and delivered to the Trustee (or the Custodian) pursuant to
the terms of this Indenture. All Mortgage Loans made subject to the Lien of
this Indenture shall be delivered in accordance with the definition of
"delivery" in Section 1.01 and shall be accompanied by (a) (i) an assignment of
the related Mortgage, in blank in recordable form, showing a complete line of
title from the originator to the Trustee, except that in lieu of delivering an
assignment of each related Mortgage, the Issuer may instead deliver a blanket
assignment by county in recordable form and (ii) the documentation whereby the
indebtedness evidenced by the related Mortgage Notes has been assumed by any
Person other than the maker thereof; (b) with respect to each Mortgage Loan for
which the related Mortgaged Property is located in the State of
[________________], the original recorded Mortgage (or a copy thereof certified
by the applicable recording office in those jurisdictions where the original is
retained by the filing office) securing such Mortgage Loan; (c) in the case of
FHA Insured or VA Guaranteed Mortgage Loans, evidence that such Mortgage Loans
are FHA Insured or VA Guaranteed; and (d) an Officers' Certificate or other
evidence stating that such Mortgage Loans are Eligible Fixed-Rate Mortgage
Loans or Eligible Adjustable-Rate Mortgage Loans, as applicable, and, in the
aggregate, are Eligible Mortgage Loans. In addition, the benefits and proceeds
of all related title, casualty and flood insurance policies, the benefits and
proceeds of any related Private Mortgage Insurance, any related FHA insurance
or VA guarantees, and any other payments with respect to, or proceeds of, such
Mortgage Loans, to the extent provided in this Indenture.
In addition, any other payments with respect to, or proceeds of, such
Mortgage Loans, to the extent provided in this Indenture.
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CLAUSE THIRD
All such Deposit Securities, as defined in Section 1.01, as shall be
now or hereafter assigned and delivered to the Trustee pursuant to Section
10.03 and the provisions of the definition of the term "delivery" in Section
1.01.
In addition, any payments with respect to, or proceeds of, such
Deposit Securities, to the extent provided in this Indenture.
CLAUSE FOURTH
(a) All Cash held in the Collection Account from time to time
representing scheduled interest and principal payments, principal prepayments
and various other amounts with respect to the Eligible Mortgage Loans, (b) all
Cash held in the Reserve Fund and (c) all Cash held in the Distribution
Account.
In addition, any proceeds of such Cash, to the extent provided in this
Indenture.
CLAUSE FIFTH
All of Issuer's right, title and interest in, to and under the
Servicing Agreement.
CLAUSE SIXTH
Together with all other property at any time made subject to the Lien
of this Indenture pursuant to the provisions hereof; and the Trustee is hereby
authorized to receive the same as security hereunder.
TO HAVE AND TO HOLD the Pledged Property, unto the Trustee and its
successors and assigns;
BUT IN TRUST, NEVERTHELESS, for the equal and proportionate benefit
and security of the Holders of the Bonds;
AND IT IS HEREBY COVENANTED, DECLARED AND AGREED, by and between the
parties hereto, that all property referred to in the above Granting Clauses is
to be held and applied subject to the further covenants, conditions, uses and
trusts hereinafter set forth; and the Issuer, for itself and its successors,
hereby covenants and agrees to and with the Trustee and its successors in such
trust, for the benefit of the Holders of the Bonds as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. Definitions
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires, (a) the terms defined in
this Article One have the meanings assigned to them in this Article One and
include both the plural and the singular, (b) all accounting terms not
otherwise defined herein have the meanings assigned to them in accordance with
generally
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accepted accounting principles, (c) all references in this instrument to
designated "Articles," "Sections" and other subdivisions are to the designated
Articles, Sections and other subdivisions of this instrument, and (d) the words
"herein", "hereof" and "hereunder" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or other
subdivision"
"Accountant" means a Person qualified to pass upon accounting
questions, whether or not (unless herein required to be Independent) such
Person shall be an officer or employee of the Issuer or of an Affiliate of the
Issuer.
"Accountants' Letter" means a letter executed by the Independent
Accountants of the Issuer substantially in the form set forth in Exhibit I and
completed in the manner required by the applicable provisions of this
Indenture.
"Act" when used with respect to any Holder of a Bond has the meaning
set forth in Section 1.04.
"Adjustable-Rate Mortgage Loan" means a Mortgage Loan for which the
related Mortgage Note provides for the periodic adjustment of the rate of
interest thereon.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Approved Luxembourg Newspaper" means with respect to any notice or
other information required hereunder to be published in Luxembourg, the
Luxemburger Wort or another daily publication of comparable circulation in
Luxembourg that meets the requirements of the Luxembourg Stock Exchange for the
publication of such notice or other information.
"Approved Servicer" means an approved GNMA, FNMA or FHLMC
seller-servicer of Mortgage Loans which meets similar servicing standards to
the standards met by the Issuer or NationsBank, N.A.
"Authenticating Agent" means the agent of the Trustee which at the
time shall have been appointed and acting pursuant to Section 6.13 and may be
the Trustee or an Affiliate of the Trustee.
"Available Amount" means, with respect to a Servicer Remittance Date,
all amounts on deposit in the Collection Account that were received during the
preceding Collection Period (net of charges against or withdrawals from the
Collection Account pursuant to Section 2.11(i) through (iv) and (viii) of the
Servicing Agreement).
"Bank of America, FSB" means Bank of America, FSB, an affiliate of the
Issuer.
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"Basic Maintenance Amount" of the Bonds means, subject to Section
4.12, as of any date of valuation, the sum of (a) the aggregate principal
amount of the Bonds Outstanding on such date of valuation, plus (b) 90 days'
accrued interest at a rate of [___]% per annum on the then Outstanding Bonds.
"Beneficial Owner" means, with respect to any Bond until a Definitive
Certificate is issued therefor pursuant to Section 2.05, the Person who is the
beneficial owner of such Bond, as reflected on the books of the Clearing
Agency, or on the books of a Person maintaining an account with such Clearing
Agency (directly or as an indirect participant, in accordance with the rules of
such Clearing Agency), as the case may be.
"Board of Directors" means either the board of directors of the Issuer
or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Issuer to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee, as required under this Indenture.
"Bond Register" and "Bond Registrar" have the respective meanings
specified in Section 2.08.
"Bonds" has the meaning specified in the first recital of this
Indenture.
"Business Day" means any day other than (i) a Saturday, (ii) a Sunday
or (iii) a day that is either a legal holiday or a day on which banking
institutions are authorized or obligated by law or regulation to close in the
States in which the Servicer or Corporate Trust Office of the Trustee is
located (or, for purposes of remittances by the Servicer, any state in which
functions relating to the Collection Account are performed).
"Cash" means such coin or currency of the United States of America as
at the time shall be legal tender for payment of public and private debts.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with
the Clearing Agency.
"Closing Date" has the meaning specified in Section 4.05.
"Collateral" means Pledged Property.
"Collateral Report" means a report valuing the Collateral,
substantially in the form of Exhibit B hereto.
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"Collection Account" means the account established and designated as
such pursuant to Section [2.10] of the Servicing Agreement.
"Collection Period" means, with respect to a Servicer Remittance Date,
the calendar month preceding the month in which such Servicer Remittance Date
occurs.
"Commission" means the Securities and Exchange Commission.
"Condominium Loan" means a Mortgage Loan secured by a condominium unit
located in a building having no more than four stories.
"Conventional Mortgage Loan" means a Mortgage Loan which is neither
FHA Insured nor VA Guaranteed, nor otherwise guaranteed or insured by the
United States of America or any State or any agency or instrumentality of
either of them.
"Corporate Trust Office of the Trustee" means the principal office of
the Trustee at which at any particular time its corporate trust business shall
be administered, which office at the date of the original execution of this
Indenture is located at [_________________________________].
"Corporation" means any corporation, association, joint stock company,
financial institution, company, business trust or similar organization.
"Cure Date" means, with respect to any Regular Valuation Date on which
the Basic Maintenance Amount was not met, the date which is 10 calendar days
after receipt by the Issuer of the Collateral Report prepared by the Trustee
following such Regular Valuation Date.
"Cure Valuation Date" has the meaning specified in Section 4.07.
"Custodian" means, at any time, the Person then duly appointed and
acting as custodian pursuant to Section 6.08.
"Defaulted Interest" has the meaning specified in Section 2.10.
"Definitive Certificate" has the meaning specified in Section 2.04.
"Delinquent Mortgage Loan" means an Eligible Mortgage Loan on which
any scheduled payment of principal or interest is 30 days or more contractually
delinquent.
"delivery," when used with respect to Collateral, means:
(a) with respect to Mortgage Loans, subject to the
provisions of the last paragraph of Section 4.01(a), physical delivery
of the related Mortgage Notes to the Trustee (or, if the Trustee has
appointed a Custodian pursuant to Section 6.08, the Custodian),
together with the documents referred to in Granting Clause Second, and
that such Mortgage Notes have been endorsed in blank, without
recourse, to the Trustee and accompanied by proper instruments of
assignment in recordable form of the related
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Mortgages (which may be blanket assignments by county in recordable
form) and, with respect to each Mortgage Loan for which the related
Mortgaged Property is located in the State of [___________], the
original recorded Mortgage (or a copy thereof certified by the
applicable recording office in those jurisdictions where the original
is retained by the filing office), all without recourse, to the
Trustee, duly executed by the Issuer or any holder of such Mortgage
Loans or Mortgages;
(b) with respect to Government Securities that are not
book-entry securities and that are susceptible of physical delivery,
physical delivery thereof to the Trustee, together with the documents
referred to in Granting Clause First, and that such Government
Securities have been endorsed to the Trustee without recourse or are
accompanied by appropriate bond powers or assignments made out to the
Trustee, and duly executed by the Issuer or any holder thereof, with
instructions to the Trustee to cause the instrument to be registered
in the name of the Trustee, in order that all payments in respect of
such instruments be made to the Trustee;
(c) with respect to Government Securities that are
book-entry securities, proper notification or instructions for the
pledge of such instruments in the name of the Trustee, or in the name
of another appropriate custodial bank, other than the Issuer or any
Affiliate of the Issuer, for the account of the Trustee, in accordance
with applicable law, including applicable federal regulations and the
UCC, in order that all payments in respect of such instruments be made
to the Trustee, together with delivery to the Trustee of the documents
referred to in Granting Clause First; and
(d) with respect to Cash, physical delivery thereof to
the Trustee, together with delivery to the Trustee of the documents
referred to in Granting Clause First;
and with respect to all such instruments, accompanied by evidence that
appropriate financing statements have been filed in each jurisdiction where
financing statements are required to be filed.
Any pledge, assignment, or transfer to, or registration in the name
of, the Trustee, of any Collateral shall be made (and shall be stated to be
made) to the Trustee in its capacity as such pursuant to this Indenture for the
benefit of the Holders of the Bonds.
The terms "delivered" and "deliver" have meanings correlative to the
foregoing definition of "delivery."
"Deposit Security" means (a) Cash, and (b) Government Securities
(other than GNMA, FNMA or FHLMC Certificates), provided that such instruments
must have a remaining term to maturity of 30 days or less on the date they are
delivered to the Trustee and must actually mature on or before the date in
respect of which they were delivered to the Trustee.
"Determination Date" means a date not more than three Business Days
prior to the relevant date of valuation.
"Discounted Value" as of any date means:
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(a) with respect to the Eligible Collateral as a whole
(i) if such date is a date on which Eligible Collateral is being added
to the Pledged Property, the lower of (A) the sum of the Market Values
of each of the classes of Eligible Collateral included in the Pledged
Property, including any Eligible Collateral being added to the Lien of
this Indenture and excluding any Eligible Collateral being withdrawn
from the Lien of this Indenture, as of such date, multiplied by the
applicable Discount Factors appearing in Schedule A of the definition
of "Discount Factors" and (B) the sum of the Market Values of each of
the classes of Eligible Collateral included in the Pledged Property,
including any Eligible Collateral being added to the Lien of this
Indenture and excluding any Eligible Collateral being withdrawn from
the Lien of this Indenture, as of such date, multiplied by the
applicable Discount Factors appearing in Schedule B of the definition
of "Discount Factors," and (ii) if such date is a date on which
Eligible Collateral is not being added to the Pledged Property, the
lower of (A) the sum of the Market Values of each of the classes of
Eligible Collateral included in the Pledged Property, excluding any
Eligible Collateral being withdrawn from the Lien of this Indenture,
as of such date, multiplied by the applicable Discount Factors
appearing in Schedule A of the definition of "Discount Factors," and
(B) the sum of the Market Values of each of the classes of Eligible
Collateral included in the Pledged Property, excluding any Eligible
Collateral being withdrawn from the Lien of this Indenture, as of such
date, multiplied by the applicable Discount Factors appearing in
Schedule B of the definition of "Discount Factors"; and
(b) with respect to any portion of the Eligible
Collateral, the Market Value or Values of the class or classes of
Eligible Collateral included in such portion of Eligible Collateral,
as set forth in the Latest Collateral Report (which term shall
include, for purposes of this definition only, any Collateral Report
being prepared on such date which values such class or classes of
Eligible Collateral), multiplied by the applicable Discount Factor for
each such class of Eligible Collateral set forth in whichever of
Schedules A and B to the definition of "Discount Factors" was used in
the Latest Collateral Report to determine the Discounted Value of the
Eligible Collateral as a whole, pursuant to subsection (a) of this
definition.
"Discount Factors" means, subject to Section 4.12, for each type of
Eligible Collateral described below, the factor set forth in Schedules A and B
opposite such type of Eligible Collateral below:
SCHEDULE A SCHEDULE B
Cash
Direct obligations of the United States government
Maturity of 180 days or less
Maturity more than 180 days but less than one year
Maturity of one year
Maturity more than one year but less than or equal to two years
Maturity more than two years but less than or equal to three years
Maturity more than three years but less than or equal to four years
Maturity more than four years but less than or equal to five years
Maturity more than five years but less than or equal to six years
Maturity more than six years but less than or equal to seven years
Maturity more than seven years but less than or equal to ten years
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Maturity more than ten years but less than or equal to fifteen years
Maturity more than fifteen years but less than or equal to twenty
years
Maturity more than twenty years but less than or equal to thirty years
Eligible Fixed-Rate Mortgage Loans
15-Year Eligible Fixed-Rate Mortgage Loans
30-Year Eligible Fixed-Rate Mortgage Loans
Eligible Adjustable-Rate Mortgage Loans
GNMA Certificates
FHLMC Certificates or FNMA Certificates
If additional types of Eligible Fixed-Rate Mortgage Loans or Eligible
Adjustable-Rate Mortgage Loans are pledged under this Indenture, the Discount
Factors to be added to Schedule A or Schedule B shall be those provided to the
Trustee in writing by [Rating Agency] and [Rating Agency].
"Distribution Account" means the account established and designated as
such pursuant to Section 3.01.
"Eligible Account" means (a) one or more accounts that are maintained
with a depository institution, which may be the Trustee in all cases and which
may be an Affiliate of the Issuer in the case of the Collection Account only,
(i) whose long-term debt obligations (or, in the case of a depository
institution which is part of a holding company structure, the long-term debt
obligations of which holding company) at the time of deposit therein are rated
at least A (or the equivalent) by each of the Rating Agencies and (ii) the
deposits in which are fully insured by the FDIC through either the Bank
Insurance Fund or the Savings Association Insurance Fund (to the limit
established by the FDIC) and the uninsured deposits in which are otherwise
secured such that, as evidenced by an Opinion of Counsel delivered to the
Trustee, the Trustee, on behalf of the Bondholders has a claim with respect to
the funds in such accounts or a perfected first security interest against any
collateral securing such funds that is superior to claims of any other
depositors or creditors of the depository institution with which such accounts
are maintained, (b) a trust account or accounts maintained with the trust
department of a federal or state chartered depository institution or trust
company (including the Trustee) acting in its fiduciary capacity or (c) such
other account reviewed by the Rating Agencies, each of which shall have
furnished with respect to such account a written statement that such account
will not adversely affect the rating given by such Rating Agency to the Bonds.
"Eligible Adjustable-Rate Mortgage Loans" means, subject to Section
4.12, Adjustable-Rate Mortgage Loans evidencing whole loans, serviced by an
Affiliate of the Issuer, or by an Approved Servicer, which are Conventional
Mortgage Loans, are fully amortizing, and have an original term to maturity of
not more than 30 years and which, as of the date such Mortgage Loans are
pledged:
(i) bear a rate of interest, adjustable periodically,
but no more frequently than annually, of a specified gross margin of
between 1% and 5% above a Permitted Index;
(ii) have a remaining term to maturity of at least one
year;
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(iii) have an unpaid principal balance of at least $1,000
and not more than $1,000,000;
(iv) have a Loan-to-Value Ratio not greater than 95%,
[except that any Over 80% Loan must be insured by Private Mortgage
Insurance from an insurer which has been rated in one of the two
highest rating categories by at least one Rating Agency as to that
portion of the principal amount thereof exceeding the amounts
specified under FNMA and FHLMC guidelines (unless, by the terms of the
applicable Private Mortgage Insurance policy and Mortgage Loan, such
policy has been discharged due to principal amortization)];
(v) are secured by Eligible Mortgages;
(vi) are accompanied by appropriate Mortgage
Documentation;
(vii) are not Mortgage Loans as to which there is
currently a Late Payment;
(viii) may be convertible into Fixed-Rate Mortgage Loans;
provided, however, that any Adjustable-Rate Mortgage Loans which are
so converted may not be included in the Eligible Collateral unless
they are recharacterized as Eligible Fixed-Rate Mortgage Loans
pursuant to Section 4.01(d); and
(ix) comply with the aggregate limitations contained in
the definition of "Eligible Mortgage Loan" in this Indenture.
"Eligible Collateral" means, as of any date, Eligible Mortgage Loans,
Government Securities or Cash included in Pledged Property or any New Eligible
Collateral at the time permitted to be included in Pledged Property pursuant to
Section 4.12, or any combination of the foregoing; provided that no Eligible
Fixed-Rate Mortgage Loans or Eligible Adjustable-Rate Mortgage Loans may be
included in the Eligible Collateral unless at least 100 Eligible Mortgage Loans
are so included.
"Eligible Conventional Fixed-Rate Mortgage Loans" means Eligible
Fixed-Rate Mortgage Loans that are Conventional Mortgage Loans.
"Eligible Fixed-Rate Mortgage Loans" means, subject to Section 4.12,
Fixed-Rate Mortgage Loans evidencing whole loans, serviced by an Affiliate of
the Issuer, or by an Approved Servicer, including Conventional Mortgage Loans
and FHA Insured and VA Guaranteed Mortgage Loans, which are fully amortizing,
provide for monthly payments of principal and interest in substantially equal
installments for the contractual term of the Mortgage Loans, have an original
term to maturity of not more than 30 years and which, as of the date such
Mortgage Loans are pledged:
(i) have a remaining term to maturity of at least one
year;
(ii) have an unpaid principal balance of at least $1,000
but not more than $1,000,000;
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(iii) have a Loan-to-Value Ratio not greater than 95%,
[except that any Over 80% Loan must be insured by Private Mortgage
Insurance from an insurer rated in one of the two highest rating
categories by at least one Rating Agency as to that portion of the
principal amount thereof exceeding the amounts specified under FNMA
and FHLMC guidelines (unless, by the terms of the applicable Private
Mortgage Insurance Policy and Mortgage Loan, such policy has been
discharged due to principal amortization)];
(iv) are secured by Eligible Mortgages;
(v) are accompanied by appropriate Mortgage
Documentation;
(vi) are not Mortgage Loans as to which there is
currently a Late Payment;
(vii) as to FHA Insured or VA Guaranteed Mortgage Loans,
are secured by a Mortgage on a one- to four-family dwelling; and
(viii) comply with the aggregate limitations contained in
the definition of "Eligible Mortgage Loan" in this Indenture.
"Eligible Investments" means any one or more of the following
obligations or securities, regardless of whether issued by the Trustee, the
Custodian or any of their respective Affiliates and having at the time of
purchase, or at such other time as may be specified, the required ratings, if
any, provided for in this definition:
(i) direct obligations of, or guaranteed as to timely
payment of principal and interest by, the United States of America or
any agency or instrumentality thereof, provided that such obligations
are backed by the full faith and credit of the United States of
America;
(ii) direct senior obligations of, or guaranteed as to
timely payment of principal and interest by, FHLMC, FNMA or the
Federal Farm Credit System, FHLMC Certificates and FNMA Certificates,
provided that any such obligation or Certificate shall not include a
"stripped" security; or
(iii) general obligations of or obligations guaranteed by
any state of the United States of America or the District of Columbia
receiving the highest long-term debt rating available for such
securities by each Rating Agency, or such lower rating as will not
result in the downgrading or withdrawal of the rating then assigned to
the Bonds by such Rating Agency; or
(iv) investments in money market funds/funds rated Aaam;
[Describe other types of investments]
provided, however, that if such obligation or security is, at the time of such
investment, not rated by [Rating Agency], such obligation or security need only
be rated by [Rating Agency].
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"Eligible Mortgage Loans" means Eligible Adjustable-Rate Mortgage
Loans and Eligible Fixed-Rate Mortgage Loans that conform to the following
additional limitations:
(i) not more than 25% of the aggregate unpaid principal
balance of all Eligible Mortgage Loans included in the Eligible
Collateral may be Over 80% Loans and not more than 10% of the
aggregate unpaid principal balance of all Eligible Mortgage Loans
included in the Eligible Collateral may be composed of Eligible
Mortgage Loans with original Loan-to-Value Ratios in excess of 90%;
(ii) not more than 15% of the aggregate unpaid principal
balance of all Eligible Mortgage Loans included in the Eligible
Collateral may be High Balance Loans;
(iii) not more than 10% of the aggregate unpaid principal
balance of all Eligible Mortgage Loans included in the Eligible
Collateral may be Condominium Loans;
provided, however, that no investigation of compliance with clauses (i) through
(iii) above shall be required except (i) on the Closing Date with respect to
the Initial Collateral and (ii) at the time a Mortgage Loan is added to or
withdrawn from the Pledged Property (provided, that with respect to Mortgage
Loans substituted into the Pledged Property pursuant to the first sentence of
Section 4.08(a) or added to the Pledged Property pursuant to Section 4.09, such
investigation shall not be made at the time of such addition or substitution,
but instead such Mortgage Loans shall be included in the next Collateral Report
valuing the Eligible Collateral).
"Eligible Mortgages" means, subject to Section 4.12, Mortgages which
secure Eligible Mortgage Loans, and which: (a) create a valid first lien
(except for tax liens for taxes which are not delinquent at the time the
Mortgage becomes part of the Pledged Property, other matters to which like
properties are commonly subject which neither individually nor in the aggregate
materially interfere with the benefits of the security intended to be provided
by such Mortgages, and standard exceptions and exclusions in title insurance
policies) on Residential Real Estate; (b) are duly recorded in the office of
the proper recording officer in the State in which the real property described
in such Mortgages is located to reflect of record that the Issuer (or one of
its Affiliates) is the mortgagee or the beneficiary of the deed of trust; and
(c) are covered by (i) title insurance policies insuring (A) that the title to
the premises described in each such Mortgage is vested in the mortgagor or
grantor therein named, (B) against unmarketability of such title, and (C) that
such Mortgage is a first lien on said premises (except for the lien of general
and special taxes and assessments on the property in question which were not
delinquent at the date of the title insurance policy, other matters to which
like properties are commonly subject which neither individually nor in the
aggregate materially interfere with the benefits of the security intended to be
provided by such Mortgage, and the standard exceptions and exclusions in such
policies), and the amount payable to the mortgagee or the assignee of the
mortgagee under each such policy is at least as great as the outstanding
principal amount payable under the Mortgage Loan secured by such Mortgage, or
(ii) an Opinion of Counsel stating that such Mortgage constitutes a first lien
on the premises described in such Mortgage, which Opinion of Counsel may be
subject to the exceptions set forth in clause (i)(C) above.
"Event of Default" has the meaning set forth in Section 5.01.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"FDIC" means Federal Deposit Insurance Corporation, and includes any
successor thereto.
"FHA" means the Federal Housing Administration of HUD. The term "FHA"
shall also include such department or agency of the United States government as
shall succeed to the FHA in insuring notes secured by mortgages and deeds of
trust on residential real estate.
"FHA Insured" means, with respect to a Mortgage Loan, the Mortgage
Loan has been insured by the FHA or a written commitment to insure the Mortgage
Loan has been given by the FHA.
"FHLMC" means Freddie Mac, and includes any successor thereto.
"FHLMC Certificates" means single-class certificates issued by FHLMC
which represent undivided interests in specified pools of fully amortizing
Mortgage Loans, or participation interests in Mortgage Loans purchased by
FHLMC, substantially all of which Mortgage Loans are secured by first liens on
Residential Real Estate and which are guaranteed by FHLMC as to the timely
payment of scheduled interest (at the applicable pass-through rate) and the
ultimate collection by a holder of such certificates of all principal on the
underlying mortgage loans, to the extent of such holder's pro rata share
thereof, and in the case of certain FHLMC Certificates, the timely payment of
scheduled principal.
"Fixed-Rate Mortgage Loan" means a Mortgage Loan bearing a fixed rate
of interest related to the Mortgage Note.
"FNMA" means ▇▇▇▇▇▇ ▇▇▇, a government-sponsored private corporation
established and existing as such pursuant to Title VIII of the Housing and
Urban Development Act of 1968, and includes any successor thereto.
"FNMA Certificates" means single-class mortgage pass-through
certificates issued by FNMA which represent fractional undivided interests in
specified pools of fully amortizing (i.e., not balloon payment) Mortgage Loans
secured by first liens on Residential Real Estate, and which are guaranteed by
FNMA as to the timely payment of scheduled interest (at the applicable
pass-through rate) and principal.
"GNMA" means the Government National Mortgage Association administered
by HUD, and includes any successor thereto.
"GNMA Certificates" means single-class certificates representing
fractional undivided interests in specified pools of fully amortizing (i.e.,
not balloon payment) Mortgage Loans secured by first liens on Residential Real
Estate, such certificates being fully guaranteed as to principal and interest
by GNMA and, as such, backed by the full faith and credit of the United States
of America.
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"Government Securities" means (a) direct obligations of the United
States of America, provided that such direct obligations are entitled to the
full faith and credit of the United States of America, (b) GNMA Certificates,
(c) FHLMC Certificates, and (d) FNMA Certificates; provided, however, that no
Government Security may, by its terms, be a non-interest bearing security
unless it matures in less than one year.
"High Balance Loan" means a Mortgage Loan with an outstanding
principal balance in excess of $600,000.00.
"Holder" or "Bondholder," when used with respect to any Bond, means
the Person in whose name the Bond is registered in the Bond Register.
"HUD" means the United States Department of Housing and Urban
Development or such department or agency of the United States government as
shall succeed to the United States Department of Housing and Urban Development
in the administration of GNMA or the regulation of FNMA or FHLMC.
"Indenture" means this instrument as originally executed, as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered pursuant to the applicable terms hereof.
"Independent," when used with respect to any specified person other
than an Accountant, means such a Person who (i) is in fact independent, (ii)
does not have any direct financial interest or any material indirect financial
interest in the Issuer or in any Affiliate of the Issuer, and (iii) is not
connected with the Issuer or any Affiliate of the Issuer as an officer,
employee, promoter, underwriter, trustee, partner, director or Person
performing similar functions. "Independent" when used with respect to any
Accountant means such an Accountant, who may also be the accountant who audits
the books of the Issuer, who is independent with respect to the Issuer within
the meaning of the Code of Professional Ethics of the American Institute of
Certified Public Accountants. Whenever it is herein provided that any
Independent Person's opinion or certificate shall be furnished to the Trustee,
such Person shall be acceptable to the Trustee and such opinion or certificate
shall state that the signer has read this definition and that the signer is
Independent within the meaning hereof.
"Initial Collateral" means the Eligible Collateral initially made
subject to the Lien of this Indenture.
"Interest Payment Date" means the [_____] day of each
[___________________________] (or, if any such day is not a Business Day, the
next succeeding Business Day) while the Bonds are Outstanding, commencing
[_________], 1999.
"Interest Period" means, with respect to any Interest Payment Date,
the period from and including the preceding Interest Payment Date (or, in the
case of the initial Interest Payment Date, from and including the Closing Date)
and ending on and including the day prior to such Interest Payment Date.
"Issue Date" means the date of original issue of the Bonds.
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"Issuer" means the Person named as the "Issuer" in the first paragraph
of this Indenture, until a successor entity shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter the "Issuer" shall
mean such successor entity.
"Jumbo Loan" means a Conventional Mortgage Loan secured by a Mortgage
on a one- to four-family dwelling which has an original principal balance in
excess of the then applicable maximum amount established by FHLMC and FNMA for
mortgage loan purchases.
"Late Payment" means any scheduled payment of principal or interest on
a Mortgage Loan which is 30 days or more contractually delinquent past the end
of the month in which such payment was due, which payment for purposes of this
Indenture is deemed to be one installment delinquent such scheduled payment is
not 60 days or more contractually delinquent.
"Latest Collateral Report" means, as of any date, the then most recent
Collateral Report prepared by the Trustee and delivered to the Issuer pursuant
to Section 4.05(a), Section 4.06, Section 4.07(b), Section 4.07(d), Section
4.08(a) or Section 4.10(a).
["LIBOR" means, for any Interest Payment Date and Interest Period, the
London interbank offered rate for three-month United States dollar deposits
determined by the Trustee in accordance with Section 3.04.]
["LIBOR Business Day" means a day that is not a Saturday, a Sunday or
other day on which banking institutions in London, New York City or the state
in which the Corporate Trust Office of the Trustee is located are authorized or
required by law, regulation or executive order to be closed.]
["LIBOR Determination Date," with respect to any Interest Period
subsequent to the initial Interest Period, means the second LIBOR Business Day
immediately preceding the first day of such Interest Period.]
"Lien of this Indenture" or "lien hereof" means the security interest
granted by these presents, or by any concurrent or subsequent conveyance to the
Trustee (whether made by the Issuer or any other Person), or otherwise granted
or created.
"Liquidity Date" means the date which is 15 days prior to the Stated
Maturity.
"Listing Agent" means [Kredietbank S.A. Luxembourgeoise], and includes
any successor thereto.
"Loan-to-Value Ratio," with respect to any Eligible Mortgage Loan,
means the fraction, expressed as a percentage the numerator of which is the
original principal balance of such Eligible Mortgage Loan, and the denominator
of which is the lesser of (a) the appraised value of the related Mortgaged
Property at the time of origination of such Eligible Mortgage Loan or (b) the
sales price of the related Mortgaged Property; provided, however, that in the
case of an Eligible Mortgage Loan resulting from a refinancing, the denominator
shall be the appraised value of the related Mortgaged Property at the time of
such refinancing.
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"Market Value," for any Collateral Report valuing the Eligible
Collateral, means the amount determined with respect to specific Eligible
Collateral in the manner set forth below as of a Determination Date; provided,
however, that the Market Value of any security or instrument may not exceed the
unpaid principal amount of such security or instrument:
(a) as to Cash, the face value thereof;
(b) as to FHLMC Certificates, FNMA Certificates, GNMA
Certificates and as to other Government Securities (other than those
Government Securities having a remaining term to maturity of 90 days
or less), the aggregate principal amount of the mortgage loans
evidenced by each FHLMC, FNMA or GNMA Certificate (as shown by the
most recent report related to each such certificate received by the
Trustee prior to the applicable Determination Date) or the aggregate
principal amount of such other Government Securities multiplied by the
dollar value of the lower bid price per dollar of outstanding
principal amount for the same kind of certificate or security, having
as nearly as practicable the same interest rate and maturity, as
quoted to the Trustee by two nationally recognized securities dealers
selected by the Trustee and making a market in such certificates or
Bonds as of an applicable Determination Date, with at least one such
quotation in writing (which writing may be a printout of such
quotation received by the Trustee from any such dealer via Dow ▇▇▇▇▇
Telerate, Inc., Bloomberg Financial Markets or another nationally
recognized on-line computer service in accordance with standard
industry practice), or, if only one such bid price is available, such
aggregate principal amount multiplied by such bid price, which shall
be in writing, or if no such bid price is available, such aggregate
principal amount multiplied by the bid price per dollar of outstanding
principal amount that would result in the yield for the same type of
certificate or security having as nearly as practicable the same
interest rate and maturity, as published on an applicable
Determination Date in The Wall Street Journal or The New York Times
(if such yield is so published);
(c) as to Government Securities (other than FNMA, FHLMC
or GNMA Certificates) having a remaining term to maturity of 90 days
or less, the face amount thereof multiplied by the dollar value of the
lower of the bid prices per dollar of outstanding principal amount
obtained therefor by the Trustee as of the close of business on an
applicable Determination Date from two nationally recognized
securities dealers making a market therein, with at least one such
quotation in writing (which writing may be a printout of such
quotation received by the Trustee from any such dealer via Dow ▇▇▇▇▇
Telerate, Inc., Bloomberg Financial Markets or another nationally
recognized on-line computer service in accordance with standard
industry practice); and
(d) as to Eligible Mortgage Loans (all Eligible
Fixed- Rate Mortgage Loans to constitute one group for purposes of
this definition and all Eligible Adjustable-Rate Mortgage Loans to
constitute another group for purposes of this definition and, within
each such group, such Eligible Mortgage Loans to be subgrouped based
on the criteria set forth in the Servicing Agreement), the lower of
the market quotations for such Eligible Mortgage Loans obtained from
any two nationally recognized dealers in mortgage instruments selected
by the Trustee (which dealers shall have been provided by the
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Trustee with the information necessary to make such quotations,
including the weighted average interest rate and weighted average
maturity of the Eligible Mortgage Loans of the groups established by
the Trustee), determined as of the applicable Determination Date based
upon unpaid principal balances shown in the most recent report
prepared by or for the Trustee (which report shall contain information
as of a date no more than 30 days prior to such Determination Date)
or, if only one such quotation is available, then such quotation,
which shall be in writing (which writing may be a printout of such
quotation received by the Trustee from any such dealer via Dow ▇▇▇▇▇
Telerate, Inc., Bloomberg Financial Markets or another nationally
recognized on-line computer service in accordance with standard
industry practice); provided, however, that, if no such market
quotation is available, the Market Value of Eligible Mortgage Loans
shall be determined by discounting, at the Market Value Rate, the
remaining scheduled payments of principal of and interest on such
Eligible Mortgage Loans shown in the most recent report prepared by or
for the Issuer (which report shall contain information as of a date no
more than 30 days prior to the applicable Determination Date) in the
manner set forth in Annex A-1 to Schedule 1 to Exhibit B; provided,
further, that the Market Value of any Eligible Mortgage Loan on which
any scheduled payment of principal or interest is delinquent shall be
deemed for the purposes of this Indenture to be (i) 15% lower than the
Market Value determined above if such payment is delinquent past the
end of the month in which such payment was due, (ii) 50% lower than
the Market Value determined above if such payment is delinquent past
the end of month following the month in which such payment was due,
(iii) 75% lower than the Market Value determined above if the Late
Payment is delinquent past the end of the second month following the
month in which such payment was due and (iv) zero if the Late Payment
is delinquent past the end of the third month following the month in
which such payment was due.
The methodology for determining the Market Value of any item of Eligible
Collateral may be changed by the Issuer and the Trustee without the consent of
any Holders of Bonds pursuant to an indenture supplemental hereto making
appropriate provision for such change in methodology with the written
confirmation of [Rating Agency] and [Rating Agency] to the effect that such
change in methodology will not impair, or cause the Bonds to fail to retain,
the ratings then assigned to the Bonds by [Rating Agency] and [Rating Agency],
respectively.
"Market Value Rate" means:
(a) (i) as to Conventional Mortgage Loans (other
than Jumbo Loans), a rate (rounded to the nearest one-hundredth of one
percent) equivalent to the yields at which either FNMA or FHLMC, at
the election of the Trustee, committed itself to purchase Conventional
Mortgage Loans of such type for the shortest available delivery period
determined as of the applicable Determination Date; and
(ii) as to FHA Insured or VA Guaranteed Mortgage
Loans, a rate (rounded to the nearest one-hundredth of one
percent) equivalent to the yields at which FNMA committed
itself to purchase FHA Insured and VA Guaranteed Mortgage
Loans, as the case may be (or either if commitments for both
were not
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made), for the shortest available delivery period determined
as of the applicable Determination Date;
in the cases of (i) or (ii) above, as such FHLMC or FNMA yields are
reported by The Wall Street Journal, The New York Times or directly by
FNMA or FHLMC, and in each case less any servicing fee then allowed
sellers and included in gross yield quotations; or,
(b) in the event that such rates are not available as of
the applicable Determination Date, or with respect to Conventional
Mortgage Loans (including Jumbo Loans), in the event that, as of such
date, FNMA or FHLMC have ceased to conduct auctions or post rates with
respect to such Mortgage Loans and with respect to FHA Insured or VA
Guaranteed Mortgage Loans, in the event that, as of such date, FNMA
has ceased to post FHA-VA commitment rates, then a rate 0.50% greater
than the yield as of the applicable Determination Date (as quoted
directly by FNMA) for a FNMA Certificate with the same (or, if there
are none with the same then the next higher) coupon interest rate as
the weighted average coupon interest rate of the Eligible Mortgage
Loans included in the Pledged Property.
"Material Defect" has the meaning set forth in Section 4.01(a).
"Maximum Interest Rate" means [___]% per annum.
"Mortgage Collateral" means Eligible Mortgage Loans.
"Mortgage Documentation," with respect to any Mortgage Loan, means (a)
the promissory note or other evidence of indebtedness evidencing such Mortgage
Loan endorsed in blank; (b) (i) an assignment, in blank and in recordable form,
of all mortgages or deeds of trust securing such promissory note or other
evidence of indebtedness and, where applicable, assignments thereof showing a
complete line of title from the originator to the Trustee, except that in lieu
of delivering an assignment for each such mortgage or deed of trust, the Issuer
may instead deliver a blanket assignment by county in recordable form and (ii)
the documentation whereby the Mortgage Loan has been assumed by any Person
other than the maker thereof; (c) with respect to each Mortgage Loan for which
the related Mortgaged Property is located in the State of [_______] only, the
original recorded Mortgage (or a copy thereof certified by the applicable
recording office in those jurisdictions where the original is retained by the
filing office) securing such promissory note or other evidence of indebtedness;
and (d) in the case of an FHA Insured or VA Guaranteed Mortgage Loan, evidence
that such Mortgage Loan is FHA Insured or VA Guaranteed.
"Mortgage Loans" means loans, notes, or other evidences of
indebtedness secured by Mortgages and also means those instruments which were
at any given time, but thereafter ceased to be, Eligible Mortgage Loans,
whether by reason of default thereunder or under the Mortgages securing them or
otherwise.
"Mortgage Notes" means notes or other evidences of indebtedness
secured by mortgages and also means instruments which were at any given time,
but thereafter ceased to be, Eligible
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Mortgage Loans, whether by reason of default thereunder or under the Mortgages
securing them or otherwise.
"Mortgaged Property" means the property subject to a Mortgage, which
may include (i) one- to four-family detached residences, (ii) townhouses, (iii)
condominium units and (iv) units within planned unit developments.
"Mortgages" means mortgages, deeds of trust, deeds to secure debt or
similar security instruments encumbering real property and related
documentation and also means those instruments and related documentation which
were at any given time, but thereafter ceased to be, Eligible Mortgages.
"NationsBanc ▇▇▇▇▇▇▇▇▇▇" means NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC,
an affiliate of the Issuer.
"NationsBanc Mortgage" means NationsBanc Mortgage Corporation, an
Affiliate of the Issuer.
"NationsBank, N.A." means NationsBank, N.A., the indirect parent
corporation of the Issuer, or any successor thereto.
"New Eligible Collateral" has the meaning set forth in Section 4.12.
"The New York Times" means the newspaper of general circulation
published under that name in the Borough of Manhattan, City of New York, State
of New York.
"Non-Mortgage Collateral" means any Eligible Collateral other than
Mortgage Collateral.
"Officers' Certificate" means a certificate signed by any member of
the Board of Trustees of the Issuer and by the Trust's President or Secretary
and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Issuer, unless otherwise specified herein and who shall be
acceptable to the Trustee, and shall be delivered to the Trustee.
"Order" has the same meaning as "Request" herein.
"Outstanding," when used with respect to Bonds, as of the date of
determination, means all Bonds theretofore authenticated and delivered under
this Indenture, except:
(a) securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation or, pursuant to Section
2.12, delivered to another person which has delivered such Bonds to
the Trustee for cancellation;
(b) securities for whose payment or redemption either
Deposit Securities in the necessary amount have been delivered to the
Trustee or any Paying Agent in trust for the Holders of such Bonds or
arrangements acceptable to each Rating Agency have been
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made, in either case pursuant to Section 10.03; provided, however,
that if such Bonds are to be redeemed on a Redemption Date, notice of
such redemption has been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee has been made; and
(c) securities which have been paid pursuant to Section
2.09 or in exchange for or in lieu of which other Bonds have been
authenticated and delivered pursuant to this Indenture, other than any
such Bonds in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Bonds are held by a bona
fide purchaser in whose hands such Bonds are valid obligations of the
Issuer;
provided, however, that in determining whether the Holders of the requisite
principal amount of Bonds Outstanding are present at a meeting of Holders of
Bonds for quorum purposes or have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, (i) Bonds referred to in clause
(b) above shall be deemed to be Outstanding, and (ii) Bonds owned by the Issuer
or any Affiliate of the Issuer (other than NationsBanc ▇▇▇▇▇▇▇▇▇▇) shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such determination
as to the presence of a quorum or upon any such request, demand, authorization,
direction, notice, consent or waiver, only Bonds which the Trustee knows to be
so owned shall be so disregarded. Bonds so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Bonds and that the pledgee is not the Issuer or any Affiliate of the Issuer
(other than NationsBanc ▇▇▇▇▇▇▇▇▇▇). In addition to the foregoing, Bonds owned
by the Issuer or an Affiliate of the Issuer (other than NationsBanc ▇▇▇▇▇▇▇▇▇▇)
shall be disregarded and deemed not to be Outstanding for purposes of
determining the Basic Maintenance Amount, except that, in determining whether
the Trustee shall be protected in relying upon any such determination of Basic
Maintenance Amount, only Bonds which the Trustee knows to be so owned shall be
disregarded.
"Over 80% Loan" means a Mortgage Loan with a Loan-to-Value Ratio in
excess of 80%.
"Paying Agent" means any agency maintained pursuant to Section 10.02,
whether original or successor.
"Permitted Index" means each of the following:
(a) the average yields (as published by the Federal
Reserve Board) for U.S. Treasury Securities adjusted to a constant
maturity of one year;
(b) the "cost of funds" index published by the Eleventh
District Federal Home Loan Bank;
(c) the London interbank offered rates for Eurodollar
deposits of various maturities;
(d) the prime lending rate of [NationsBank, N.A.]; and
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(e) any other index acceptable to the Rating Agencies.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, trust,
incorporated organization or government or any agency or political subdivision
thereof.
"Pledged Property" has the meaning set forth in the Granting Clauses.
"Predecessor Bond" of any particular Bond means every previous Bond
evidencing all or a portion of the same indebtedness as that evidenced by such
particular Bond; and, for the purposes of this definition, any Bond
authenticated and delivered under Section 2.09 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Bond shall be deemed to evidence the same
indebtedness as the mutilated, destroyed, lost or stolen security.
"Prior Valuation Date" has the meaning set forth in Section 4.07.
"Private Mortgage Insurance" means a policy of mortgage guaranty
insurance issued by an insurer authorized to write such insurance in the State
in which the property secured by the mortgage or deed of trust is located,
securing the mortgage lender against default by the borrower under a note
secured by the mortgage or deed of trust.
"Rating Agency" means each of [Rating Agency] and [Rating Agency]. If
such agencies or successors thereto are no longer in existence, "Rating Agency"
will be such nationally recognized statistical rating agency or other
comparable Person designated by the Issuer, notice of which designation will be
given to the Trustee. References herein to the fourth highest rating category
of a Rating Agency will mean [Rating Agency] or better in the case of [Rating
Agency] and [Rating Agency] or better in the case of [Rating Agency].
References herein to the third highest rating category will mean A or better in
the case of [Rating Agency] and [Rating Agency] or better in the case of
[Rating Agency]. Reference herein to the second highest rating category of a
Rating Agency will mean [Rating Agency] or better in the case of [Rating
Agency] and [Rating Agency] or better in the case of [Rating Agency]. In the
case of any other Rating Agency, such rating categories will mean such fourth,
third or second highest rating category or better without regard to any plus or
minus or any numerical or other qualifier. For all purposes of this Indenture,
if any obligation or security is, at the time of such investment not rated by
[Rating Agency], such obligation or security need only be rated by [Rating
Agency].
"Redemption Date," when used with respect to any Bond to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price," when used with respect to any Bond or portion
thereof to be redeemed, means 100% of the principal amount of such Bond (or
portion thereof) to be redeemed plus interest accrued at the applicable rate on
such principal amount (or portion thereof) to the Redemption Date.
["Reference Banks" means four banks in the London interbank market
selected by the Trustee. Each Reference Bank shall be a leading bank engaged in
transactions in Eurodollar deposits in the international Eurocurrency market
with an established place of business in
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London, which does not control, is not controlled by or is not under common
control with the Issuer and which has been designated as a Reference Bank by
the Trustee and is able and willing to provide such quotations to the Trustee
on each LIBOR Determination Date. If any Reference Bank designated by the
Trustee fails to meet the qualifications of a Reference Bank, the Trustee will
use its best efforts to designate an alternative Reference Bank.]
"Regular Record Date" means the close of business on the third
Business Day immediately prior to the date any payment of interest on or
principal or redemption price of any Bond is due.
"Regular Valuation Date" means, subject to Section 8.01(7), the
___________________ calendar day of each month (or if any such calendar day is
not a Business Day, the next succeeding Business Day) for so long as any Bond
is Outstanding, commencing [___________], 1999.
"Request" or "Order" means a written request or order signed by the
Chairman of the Board, the Chief Executive Officer, the President, a Vice
President or the Controller and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary of the Issuer and delivered to the Trustee,
as required under this Indenture.
"Required Interest Payment Amount" has the meaning specified in
Section 3.03(a).
"Reserve Fund" means the account established and designated as such
pursuant to Section 3.01.
"Residential Real Estate" means residential real property located in
any State and improvements thereon (other than mobile homes) consisting of one-
to four-family dwelling units (including attached, town or row houses and
condominiums).
"Responsible Officer," when used with respect to the Trustee or the
Custodian, means any officer in the Corporate Trust Office of the Trustee or
the corporate trust office of the Custodian, including any vice president
whether or not designated by a number or words added before the title "vice
president," senior trust officer, trust officer, or any other officer of the
Trustee or the Custodian customarily performing functions similar to those
performed by the persons who at the time shall be such officers, respectively,
or to whom any corporate trust matter is referred because of his knowledge of
or familiarity with the particular subject.
["Reuters Page LIBO" means the display page designated as "Reuters
Monitor Money Rates Page LIBO" on the Reuters Monitor.]
"Selected Amount" means, (a) as of the Liquidity Date, an amount equal
to the aggregate principal amount of the Bonds, and the accrued interest
thereon, which would be due at the Stated Maturity if the Bonds Outstanding on
such Liquidity Date were Outstanding at the Stated Maturity; provided, however,
that (b) if, on or prior to such Liquidity Date, Deposit Securities have been
delivered to the Trustee in respect of a redemption of the Bonds on a
Redemption Date on or subsequent to such Liquidity Date but no later than the
Stated Maturity, then the amount
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described in clause (a) shall not include any accrued interest or any principal
which would be owed on any Bonds (or portion thereof) which are to be redeemed
on such Redemption Date.
"Servicer" means the Person designated as such in a Servicing
Agreement entered into pursuant to Section 4.13.
"Servicer Remittance Date" means the [______] day of any month (or, if
such day is not a Business Day, the first Business Day immediately preceding
such [______] day), commencing in the month following the month in which the
Closing Date occurs.
"Servicing Agreement" means an agreement entered into pursuant to
Section 4.13 and dated as of the Closing Date between the Issuer and a
Servicer, substantially in the form of Exhibit E hereto.
"Special Record Date" has the meaning set forth in Section 2.10.
"State" means any State of the United States, the District of Columbia
and the Commonwealth of Puerto Rico.
"Stated Maturity," when used with respect to any Bond, means
[_____________].
"Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly by the Issuer or by one
or more Subsidiaries of the Issuer, or by the Issuer and by one or more
Subsidiaries of the Issuer. For the purposes of this definition, "voting stock"
means stock which ordinarily has voting power for the election of directors,
whether at all times or only so long as no senior class of stock has such
voting power by reason of any contingency.
["Telerate Page 3750" means the display page designated "3750" on the
Dow ▇▇▇▇▇ Telerate Service (or such other page as may replace that page on that
service for the purpose of displaying comparable rates or prices).]
"TIA" means the Trust Indenture Act of 1939, as amended.
"Trustee" means the Person named as the Trustee in the first paragraph
of this Indenture unless a successor trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall
mean such successor Trustee.
"UCC" means the Uniform Commercial Code as in effect in the State of
New York.
"VA" means the Department of Veterans Affairs of the United States of
America. The term "VA" shall also include such department or agency of the
United States government as shall succeed to the VA in its present function of
issuing guarantees with respect to mortgages and deeds of trust on residential
real estate.
"VA Guaranteed" means guaranteed in part by the VA.
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"Vice President" means any vice president, whether or not designated
by a number or a word or words added before or after the title "vice
president."
"The Wall Street Journal" means the newspaper of general circulation
published under that name in the Borough of Manhattan, City of New York, State
of New York, or a successor thereto.
Section 1.02. Compliance Certificates and Opinions
(a) Upon any application or request by the Issuer to the Trustee
to take any action under any provision of this Indenture, the Issuer shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any
provision of this Indenture relating to such particular application or request,
no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each individual signing such
certificate or opinion has read or has caused to be read such covenant
or condition and the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such
individual, he had made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether
or not such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each
such individual, such condition or covenant has been complied with.
(b) Subject to Section 1.02(c) below:
(i) prior to the deposit of any property or securities
with the Trustee which is to be made the basis for (A) the
authentication and delivery of Bonds, (B) the withdrawal of cash
constituting a part of the Pledged Property or (C) the release of any
property or securities subject to the Lien of this Indenture, the
Issuer shall, in addition to any obligation imposed in Section 4.01(a)
hereof or elsewhere in this Indenture, furnish to the Trustee an
Officers' Certificate certifying or stating the opinion of each person
signing such certificate as to the fair value (within 90 days of such
deposit) to the Issuer of the property or securities to be so
deposited;
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(ii) whenever any property or securities are to be
released from the Lien of this Indenture, the Issuer shall also
furnish to the Trustee an Officers' Certificate certifying or stating
the opinion of each person signing such certificate as to the fair
value (within 90 days of such release) of the property or securities
proposed to be released and stating that in the opinion of such person
the proposed release will not impair the security under this Indenture
in contravention of the provisions hereof;
(iii) whenever the Issuer is required to furnish to the
Trustee an Officers' Certificate certifying or stating the opinion of
any signer thereof as to the matters described in clause (1) above,
the Issuer shall also deliver to the Trustee a certificate from an
Independent appraiser or other expert (which may be an Independent
Accountant) as to the same matters, if the fair value to the Issuer of
the property or securities to be so deposited and of all other such
property or securities made the basis of any such authentication and
delivery, withdrawal or release since the commencement of the then
current fiscal year of the Issuer, as set forth in the certificates
delivered pursuant to clause (1) above and this clause (3), is ten
percent or more of the aggregate principal amount of the Bonds at the
time Outstanding, and in the case of authentication and delivery of
Bonds, such certificate shall cover the fair value to the Issuer of
all other such property or securities so deposited since the
commencement of the current fiscal year as to which a certificate from
an Independent Accountant has not previously been furnished; but such
a certificate need not be furnished with respect to any property or
securities so deposited, if the fair value thereof to the Issuer as
set forth in the related Officers' Certificate is less than $25,000 or
less than one percent of the Bonds at the time Outstanding; and
(iv) whenever the Issuer is required to furnish to the
Trustee an Officers' Certificate certifying or stating the opinion of
any signer thereof as to the matters described in clause (2) above,
the Issuer shall also furnish to the Trustee a certificate from an
Independent appraiser or other expert (which may be an Independent
Accountant) as to the same matters if the fair value of the property
or securities and of all other property or securities released from
the Lien of this Indenture since the commencement of the then current
calendar year, as set forth in the certificates required by clause (2)
above and this clause (4), equals ten percent or more of the aggregate
principal amount of the Bonds at the time Outstanding, but such
certificate need not be furnished in the case of any release of
property or securities if the fair value thereof as set forth in the
related Officers' Certificate is less than $25,000 or less than one
percent of the aggregate principal amount of the Bonds at the time
Outstanding.
(c) The provisions of Section 1.02(b) are all intended to
facilitate compliance with the requirements of the TIA as in effect on the date
hereof, and shall be deemed superseded by any modifications or changes to such
requirements (to expand such requirements, to eliminate such requirements or
otherwise) effected by amendment to the TIA, by regulation, by rule or by
judicial or administrative decision. The provisions of Section 1.02(b) shall
not at any time impose upon any Person obligated under this Section any greater
reporting obligations with respect to the matters covered by Section 1.02(b)
than the reporting obligation with respect to such matters imposed upon such
Person by the TIA as in effect with respect to such time.
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Section 1.03. Form of Documents Delivered to Trustee
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents. Any
certificate or opinion of an officer of the Issuer may be based, insofar as it
relates to legal matters upon a certificate or opinion of, or representations
by, counsel, unless such officer knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
the matters upon which his or her certificate or opinion is based are
erroneous.
Any such Opinion of Counsel may be based upon certificates of public
officials and insofar as it relates to factual matters, certificates or
opinions of, or representations by an officer or officers of the Issuer. Any
Opinion of Counsel may be stated to be based on the opinion of other counsel,
in which event it shall be accompanied by a copy of such other opinion. Where
any Person is required to make, give or execute two or more applications,
requests, consents, certificates, statements, opinions or other instruments
under this Indenture, they may, but need not, be consolidated and form one
instrument.
Section 1.04. Acts of Holders of Bonds
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders of Bonds may be embodied in and evidenced by (i) one or more
instruments of substantially similar tenor signed by such Holders in person or
by agent or proxy duly appointed in writing, (ii) resolutions duly adopted by
Holders of Bonds voting in favor thereof, either in person or by proxies duly
appointed in writing, at any meeting of Holders of Bonds duly called and held
in accordance with the provisions of Article Nine as indicated by the record of
such meeting, or (iii) a combination of such instrument or instruments and any
such resolutions. Except as herein otherwise expressly provided, such action
shall become effective when such instruments and, if appropriate, a signed and
verified record of such meeting as provided in Section 9.06, are delivered to
the Trustee, and, where it is hereby expressly required, to the Issuer. Such
instruments and resolutions (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders of Bonds
signing such instruments or voting in favor of such resolutions. Proof of
execution of any such instrument or of a writing appointing any such agent or
proxy, or of the holding by any Person of a Bond, shall be sufficient for any
purpose of this Indenture and (subject to Section 6.01 hereof) conclusive in
favor of the Trustee and the Issuer, if made in the manner provided in this
Section 1.04.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the certificate of any notary public or
other officer authorized by law to take acknowledgments of deeds and similar
instruments, certifying that the individual signing such instrument or writing
acknowledged to him the execution thereof, or by an affidavit of a witness to
such execution sworn to before any such notary or other such officer. Such
certificate or
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affidavit shall also constitute sufficient proof of the authority of the Person
executing any such instrument or writing; provided, however, that the Person
executing such certificate or affidavit may not be the same Person as the
Person executing such instrument or writing.
(c) The principal amount and serial numbers of securities held by
any Person, and the date of such ▇▇▇▇▇▇'s holding of the same, shall be proved
by the Bond Register.
(d) The Trustee may accept such other proof (including, without
limitation, a signature guarantee) or require such additional proof of any
matter referred to in this Section 1.04 as it shall deem necessary.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Bond shall bind every future
Holder of the same Bond and the Holder of every Bond issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Issuer in reliance thereon, whether or not notation of such action is made upon
such Bond.
(f) The record of any meeting of Holders of Bonds shall be proved
in the manner provided in Section 9.06.
Section 1.05. Notices, Etc., to Trustee and the Issuer
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders of Bonds or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(a) the Trustee by any Holder of Bonds or by the Issuer shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if made, given, furnished or filed in writing to or with, the Trustee
at the Corporate Trust Office of the Trustee; or
(b) the Issuer by the Trustee or by any Holder of Bonds shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first class, and addressed to the Issuer,
at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Secretary, or at any other address previously furnished in writing
to the Trustee by the Issuer.
Any request, demand, authorization, direction, notice, consent or
waiver required or permitted under this Indenture shall be in the English
language.
Section 1.06. Notices to Holders of Bonds; Waiver
Except as otherwise expressly provided herein, where this Indenture
provides for notice to Holders of Bonds of any event, such notice shall be
sufficiently given to Holders of the Bonds if in writing and mailed,
first-class postage prepaid, to each Holder of a Bond affected by such event,
at the address of such Holder as it appears in the Bond Register, not earlier
than the earliest date and not later than the latest date prescribed for the
giving of such notice, and shall be deemed to have been given on the date of
such mailing.
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Neither the failure to mail such notice, nor any defect in any notice
so mailed, to any particular Holder of a Bond shall affect the sufficiency of
such notice with respect to other Holders of Bonds. Any notice to a Holder of a
Bond given as provided above shall be conclusively deemed to have been received
by such Holder whether or not actually received by such ▇▇▇▇▇▇. In case by
reason of the suspension of regular mail service or by reason of any other
cause it shall be impracticable to give such notice by mail, then such
notification to Holders of Bonds as shall be made with the approval of the
Trustee shall constitute a sufficient notification to such Holders for every
purpose hereunder.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
Section 1.07. Effect of Headings and Table of Contents
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 1.08. Successors and Assigns
All covenants and agreements in this Indenture by the Issuer shall
bind its successors and assigns, whether so expressed or not.
Section 1.09. Separability Clause
In case any provisions in this Indenture or the Bonds shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 1.10. Benefits of Indenture
Nothing in this Indenture or the Bonds, express or implied, shall give
to any Person, other than the parties hereto and their successors hereunder and
the Holders of the Bonds, any benefit or any legal or equitable right, remedy
or claim under this Indenture.
Section 1.11. Governing Law
This Indenture and each of the Bonds shall be construed in accordance
with and governed by the laws of the State of New York, without giving effect
to principles of conflicts of law.
Section 1.12. Legal Holidays
In any case where any Interest Payment Date, any Redemption Date or
the Stated Maturity shall not be a Business Day, payment of principal or
interest on the Bonds need not be made on such date but may be made on the next
succeeding Business Day, with the same force
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and effect as if made on the date such payment was due, and no interest shall
accrue for the period after such date.
In any case where any Liquidity Date is not a Business Day, any
delivery of Deposit Securities required to be made on such Liquidity Date need
not be made on such Liquidity Date but may be made on the next succeeding
Business Day.
Section 1.13. Execution in Counterparts
This Indenture may be executed by the parties hereto in any number of
counterparts, and by each of the parties hereto in separate counterparts, and
when so executed and delivered, each of such counterparts shall be deemed to be
an original, but all such counterparts shall together constitute one and the
same instrument.
Section 1.14. The Issuer's Obligations
No recourse may be taken, directly or indirectly, against any
shareholder, officer, member, managing member or employee of the Issuer (or of
any predecessor or successor of the Issuer) with respect to the Issuer's
obligations under this Indenture or any Officers' Certificate or other
certificate or other writing delivered in connection herewith.
Section 1.15. Conflict with Trust Indenture Act
If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required or deemed to be included in this Indenture
by any of the provisions of the TIA, such required or deemed to be included
provision shall control. Without limiting the foregoing, the provisions of
Section 1.02(b) and Article Twelve shall not at any time impose upon any Person
obligated thereunder any greater reporting obligation with respect to the
matters covered thereby than the reporting obligation with respect to such
matters imposed upon such Person by the TIA as in effect at such time.
ARTICLE II
THE BONDS
Section 2.01. Form, Title and Terms of the Bonds
The Bonds shall be in substantially the form set forth in Exhibit H,
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture, and may have such letters,
numbers or other marks of identification and such legends or endorsements
placed thereon as may be required to comply with any laws, regulations, rules
or requirements of any securities exchange on which the Bonds are listed or as
may, consistently herewith, be determined by the officers executing such Bonds,
as evidenced by such execution. Any portion of the text of any Bond may be set
forth on the reverse thereof to the extent permitted by applicable law and
applicable exchange regulations.
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The Trustee's certificate of authentication shall be in substantially
the form set forth in Exhibit H.
The aggregate principal amount of Bonds which may be authenticated and
delivered under this Indenture is limited to $[________________]; except for
Bonds authenticated and delivered upon registration of, transfer of, or in
exchange for, or in lieu of, other Bonds pursuant to Sections 2.07, 2.08, 2.09,
8.05 or 11.04.
The Bonds shall be known and designated as the "Mortgage-Backed Bonds,
Series [______] Due [______]" of the Issuer. The Stated Maturity of the Bonds
shall be [______], and they shall bear interest as set forth in the following
paragraph from the later of the Closing Date or the most recent Interest
Payment Date to which interest has been paid, payable in arrears on the
[______] day of each [___________________] (or, if any such day is not a
Business Day, on the next Business Day, commencing [____________] until the
principal thereof is paid or made available for payment.
Interest shall accrue on the Bonds during the initial Interest Period
at the rate of [________]% per annum. Interest shall accrue on the Bonds during
each Interest Period subsequent to the initial Interest Period at an adjustable
rate equal to [LIBOR] (determined for each Interest Period as set forth in
Section 3.04) plus [______]% per annum. Interest on the Bonds shall be computed
on the basis of the actual number of days in each Interest Period and a 360-day
year.
Interest on the Bonds shall be paid at the Corporate Trust Office of
the Trustee or at such other office or agency of the Issuer as the Issuer may
designate, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts, except
that interest may, at the option of the Issuer, be paid by check mailed to such
Person at such Person's address appearing in the Bond Register or, upon written
instructions from any such Person holding not less than $5,000,000 aggregate
principal amount of Bonds received by the Trustee not later than the Regular
Record Date or Special Record Date to which such payment of interest relates,
by wire transfer to a United States dollar account maintained by the payee at a
depository institution in the United States; provided, however, that such
depository institution shall have facilities therefor. Payment of principal of
each Bond at the Stated Maturity shall be made upon surrender of such Bond at
the Corporate Trust Office of the Trustee or at such other office or agency as
the Issuer may designate, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts.
To the extent the Issuer shall designate an office or agency other
than the Corporate Trust Office of the Trustee for the payment of principal or
interest, each Rating Agency shall have confirmed in writing to the Issuer that
such designation will not impair, or cause the Bonds to fail to retain, the
ratings then assigned to the Bonds by such Rating Agency.
The Bonds are subject to mandatory redemption in part, prior to their
Stated Maturity as provided in Article Eleven.
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Section 2.02. Denominations of Bonds
The Bonds shall be issuable in book-entry form in accordance with
Section 2.04, in denominations of [$100,000] and integral multiples of $1,000
in excess thereof.
Section 2.03. Execution, Authentication, Delivery and Dating
The Bonds shall be executed on behalf of the Issuer by any of the
members of the Board of Trustees of the Issuer. Any such signature may be
manual or facsimile.
Bonds bearing the manual or facsimile signatures of any member of the
Board of Trustees of the Issuer shall bind the Issuer, notwithstanding that any
such Person has ceased to be a member of such Board of Trustees prior to the
authentication and delivery of such securities or was not such a member of such
Board of Trustees at the date as of which such Bonds were dated.
At any time after the execution and delivery of this Indenture, the
Issuer may deliver Bonds executed by the Issuer to the Trustee or the
Authenticating Agent for authentication, together with an Order for the
authentication and delivery of such Bonds, and the Trustee or the
Authenticating Agent in accordance with such Order shall authenticate and
deliver such securities as is provided in this Indenture and not otherwise.
Each Bond shall be dated the date of its authentication.
No Bond shall be entitled to any benefit under this Indenture, or be
valid or obligatory for any purpose, unless there appears on such Bond a
certificate of authentication substantially in the form provided for in Exhibit
H hereto executed by the Trustee or the Authenticating Agent by manual
signature and such certificate upon any Bond shall be conclusive evidence, and
the only evidence, that such Bond has been duly authenticated and delivered
hereunder.
Section 2.04. Book-Entry Requirements
(a) Until such time as definitive, fully registered certificates
("Definitive Certificates") are issued pursuant to Section 2.05, each Bond
shall bear the following legend or such other legend as is required by the
applicable Clearing Agency:
"Unless this Bond is presented by an authorized representative of
[Name of Clearing Agency] to the Trustee or its agent for registration of
transfer, exchange or payment, and any Bond issued is registered in the name of
[Name of Clearing Agency] or such other name as requested by an authorized
representative of [Name of Clearing Agency] and any payment is made to [Name of
Clearing Agency], any transfer, pledge or other use hereof for value or
otherwise by or to any person is wrongful since the registered owner hereof,
[Name of Clearing Agency], has an interest herein."
(b) Upon original issuance, the Bonds shall be issued in the form
of one or more typewritten certificates, to be delivered to The Depository
Trust Company (or retained by the Trustee as agent for The Depository Trust
Company), the initial Clearing Agency, by, or on behalf of, the Issuer. Such
Bonds shall initially be registered on the Bond Register in the name of
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the nominee of the initial Clearing Agency, and no Beneficial Owner will
receive a definitive certificate representing such Beneficial Owner's interest
in the Bonds, except as provided in Section 2.05. Unless and until Definitive
Certificates have been issued to Beneficial Owners pursuant to Section 2.05:
(i) the provisions of this Section 2.04(b) shall be in
full force and effect;
(ii) the Issuer, the Servicer, the Bond Registrar and the
Trustee may deal with the Clearing Agency for all purposes (including
the making of distributions on the Bonds and the taking of actions by
the Bondholders) as the authorized representative of the Beneficial
Owners;
(iii) to the extent that the provisions of this Section
2.04(b) conflict with any other provisions of this Agreement, the
provisions of this Section 2.04(b) shall control;
(iv) the rights of Beneficial Owners shall be exercised
only through the Clearing Agency and shall be limited to those
established by law, the rules, regulations and procedures of the
Clearing Agency and agreements between such Beneficial Owners and the
Clearing Agency and/or the Clearing Agency Participants, and all
references in this Agreement to actions by Bondholders shall, with
respect to the Bonds, refer to actions taken by the Clearing Agency
upon instructions from the Clearing Agency Participants, and all
references in this Agreement to distributions, notices, reports and
statements to Bondholders shall, with respect to the Bonds, refer to
distributions, notices, reports and statements to the Clearing Agency
or its nominee, as registered holder of the Book-Entry Certificates,
as the case may be, for distribution to Beneficial Owners in
accordance with the procedures of the Clearing Agency; and
(v) the initial Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and
transmit distributions of principal and interest on the Bonds to the
Clearing Agency Participants, for distribution by such Clearing Agency
Participants to the Beneficial Owners or their nominees.
For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of, Holders of
Bonds evidencing specified voting interests, such direction or consent shall be
given by Beneficial Owners having the requisite voting interests, acting
through the Clearing Agency.
Unless and until Definitive Certificates have been issued to
Beneficial Owners pursuant to Section 2.05, copies of the reports or statements
referred to in Section 12.03 and 12.04 shall be available to Beneficial Owners
upon written request to the Trustee at the Corporate Trust Office of the
Trustee and, for as long as the Bonds are listed on the Luxembourg Stock
Exchange, the reports or statement shall be available at the office of the
Listing Agent in Luxembourg.
Section 2.05. Definitive Certificates
(a) If (i) the Issuer advises the Trustee in writing that the
Clearing Agency is no longer willing or able properly to discharge its
responsibilities as depository with respect to the
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Book-Entry Certificates or (ii) the Issuer, at its option, advises the Trustee
in writing that it elects to terminate the book-entry system through the
Clearing Agency, then the Trustee shall notify the Beneficial Owners, through
the Clearing Agency, of the occurrence of any such event and of the
availability of Definitive Certificates to Beneficial Owners requesting the
same. Upon surrender to the Trustee by the Clearing Agency of the Bonds held of
record by its nominee, accompanied by re-registration instructions and
directions to execute and authenticate new Bonds from the Issuer, the Trustee
shall execute and authenticate Definitive Certificates for delivery at the
Corporate Trust Office of the Trustee. The [Servicer] shall arrange for, and
will bear all costs of, the printing and issuance of such Definitive
Certificates. Neither the Issuer nor the Trustee shall be liable for any delay
in delivery of such instructions by the Clearing Agency and may conclusively
rely on, and shall be protected in relying on, such instructions.
(b) In the event Definitive Certificates are issued pursuant to
this Section 2.05, the Issuer shall appoint a paying and transfer agent in
Luxembourg at whose offices such Definitive Certificates may be presented for
payment and/or transfer for so long as they are Outstanding. Such paying and
transfer agent shall be appointed in accordance with Section 10.02 and shall be
maintained for so long as the Bonds remain listed on the Luxembourg Stock
Exchange. The Issuer shall give written notice to the Trustee of the location,
and of any change in the location, of such agent. In the event that the Issuer
shall fail to appoint and maintain such paying and transfer agent in
Luxembourg, the Trustee shall appoint such paying and transfer agent.
Section 2.06. Notices to Clearing Agency
Whenever notice or other communication to the Holders of Bonds is
required under this Agreement, unless and until Definitive Certificates shall
have been issued to Beneficial Owners pursuant to Section 2.05, the Trustee
shall give all such notices and communications specified herein to be given to
Holders of Bonds to the Clearing Agency.
Section 2.07. Temporary Bonds
Pending the preparation of Definitive Certificates in accordance with
Section 2.05, the Issuer may execute, and upon the Issuer's Order the Trustee
or other Authenticating Agent shall authenticate and deliver, temporary Bonds
which are printed, lithographed or typewritten, in any denomination,
substantially of the tenor of the Definitive Certificates in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Bonds may determine, as
evidenced by their execution of such Bonds.
If temporary Bonds are issued, the Issuer will cause Definitive
Certificates to be prepared without unreasonable delay. After the preparation
of Definitive Certificates, the temporary Bonds shall be exchangeable for
Definitive Certificates upon surrender of the temporary Bonds at the Corporate
Trust Office of the Trustee or at the office of the Authenticating Agent, if
other than the Trustee, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Bonds, the Issuer shall execute and
the Trustee or the Authenticating Agent shall authenticate and deliver in
exchange therefor a like aggregate principal amount of Definitive Certificates
of authorized denominations. Until so exchanged such temporary Bonds shall in
all respects be entitled to the same benefits under this Indenture as
Definitive Certificates.
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Section 2.08. Registration; Registration of Transfer and Exchange
The Issuer shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the "Bond Register") in which, subject to such reasonable
regulations as it may prescribe, the Issuer shall provide for the registration
both of Bonds and of transfers of Bonds. The Trustee is hereby appointed "Bond
Registrar" for the purpose of registering both Bonds and transfers of Bonds as
herein provided.
Upon surrender for registration of transfer of any Bond at the
Corporate Trust Office of the Trustee or at the office of any Authenticating
Agent, the Issuer shall execute, and the Trustee or the Authenticating Agent
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Bonds of any authorized denominations and of a
like aggregate principal amount, all as requested by the transferor.
At the option of the Holder, a Bond may be exchanged into one or more
Bonds of any authorized denomination and of a like aggregate principal amount,
upon surrender of the Bond to be exchanged at the Corporate Trust Office of the
Trustee or at the office of any Authenticating Agent. Whenever any Bonds are so
surrendered for exchange, the Issuer shall execute, and the Trustee or the
Authenticating Agent shall authenticate and deliver, the Bonds which the Holder
making the exchange is entitled to receive.
All Bonds issued upon any registration of transfer or exchange of
Bonds shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Bonds
surrendered upon such registration of transfer or exchange. The registration by
the Bond Registrar of the transfer of a Bond shall be deemed to be the written
acknowledgment by the Issuer of such transfer.
Every Bond presented or surrendered for registration or transfer shall
(if so required by the Issuer or the Bond Registrar) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Issuer and the Bond Registrar duly executed by the Holder thereof or his
attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Bonds, but the Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Bonds, other than exchanges
pursuant to Section 2.07, 8.05 or 11.04 not involving any registration of
transfer.
Section 2.09. Mutilated, Destroyed, Lost or Stolen Bonds
If any mutilated Bond is surrendered to the Trustee, the Issuer shall
execute, and the Trustee shall authenticate and deliver in exchange therefor, a
new Bond of like tenor and principal amount and bearing a number not
contemporaneously Outstanding.
If there be delivered to the Issuer and the Trustee
(1) evidence to their satisfaction of the destruction,
loss or theft of any Bond, and
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(2) such security or indemnity as may be required by
them to save each of them and any agent of each of them harmless,
then, in the absence of notice to the Issuer or the Trustee that such Bond has
been acquired by a bona fide purchaser, the Issuer shall execute, and upon its
request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Bond, a new Bond of like tenor and principal amount
bearing a number not contemporaneously Outstanding.
In case any such mutilated, destroyed, lost or stolen Bond has become
or is about to become due and payable, the Issuer in its discretion may,
instead of issuing a new Bond, direct the Trustee or Paying Agent to pay such
Bond on its due date.
Upon the issuance of any new Bond under this Section 2.09, the Issuer
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto.
Every new Bond issued pursuant to this Section 2.09 in lieu of any
destroyed, lost or stolen Bond shall constitute an original additional
contractual obligation of the Issuer whether or not the destroyed, lost or
stolen Bond, if any, shall be at any time enforceable by anyone, and such new
Bond shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Bonds duly issued hereunder.
The provisions of this Section 2.09 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Bonds.
Section 2.10. Interest Payments; Interest Rights Preserved
Interest on any Bond which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Bond (or one or more Predecessor Bonds) is registered at the close of
business on the Regular Record Date for such interest.
Any interest on any Bond which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Holder on the relevant
Regular Record Date by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Issuer, at its election in each case, as provided
in clause (1) or (2) below:
(1) the Issuer may elect to make payment of any
Defaulted Interest to the Persons in whose names the Bonds (or their
respective Predecessor Bonds) are registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest,
which shall be fixed in the following manner. The Issuer shall notify
the Trustee in writing of the amount of Defaulted Interest proposed to
be paid on each Bond and the date of the proposed payment, and at the
same time the Issuer shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the
Trustee for such
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deposit prior to the date of the proposed payment, such money when so
deposited to be held in trust for the benefit of the Persons entitled
to such Defaulted Interest as in this clause provided. Thereupon the
Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not less
than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Issuer of such
Special Record Date and, in the name and at the expense of the Issuer,
shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be mailed, first-class postage
prepaid, to each Holder of Bonds at the address of such Holder as it
appears in the Bond Register, not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so mailed,
such Defaulted Interest shall be paid to the Persons in whose names
the Bonds (or their respective Predecessor Bonds) are registered at
the close of business on such Special Record Date and shall no longer
be payable pursuant to the following clause (2).
(2) the Issuer may make payment of any Defaulted
Interest in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Bonds may be
listed, and upon such notice as may be required by such exchange, if,
after notice given by the Issuer to the Trustee of the proposed
payment pursuant to this clause, such manner of payment shall be
deemed practicable by the Trustee.
Notwithstanding the foregoing provisions of this Section 2.10, no
payment of Defaulted Interest pursuant to this Section 2.10 shall affect the
status of the failure to pay interest when such interest becomes due and
payable as an Event of Default under Section 5.01 hereof.
Subject to the foregoing provisions of this Section 2.10, each Bond
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Bond shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Bond.
Section 2.11. Persons Deemed Owners
Prior to due presentment for registration of transfer, the Issuer, the
Trustee and any agent of the Issuer or the Trustee (including the
Authenticating Agent) may treat the Person in whose name such ▇▇▇▇ is
registered as the owner of such ▇▇▇▇ for the purpose of receiving payment of
principal of and interest on such Bond and for all other purposes whatsoever,
whether or not such Bond be overdue, and neither the Issuer, the Trustee nor
any such agent of the Issuer or the Trustee shall be affected by notice to the
contrary.
Section 2.12. Cancellation
All Bonds surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any person other than the
Trustee, be delivered to the Trustee. All Bonds so delivered shall be canceled
by the Trustee and may not thereafter be reissued. The Trustee shall destroy
such canceled Bonds in accordance with its then current procedures.
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ARTICLE III
ADMINISTRATION OF ACCOUNTS AND PAYMENTS TO BONDHOLDER
Section 3.01. Establishment and Administration of Distribution
Account and Reserve Fund
(a) On or before the Closing Date, the Trustee, for the benefit
of Bondholders, shall establish and maintain, or cause to be established and
maintained, two separate accounts (the "Distribution Account" and the "Reserve
Fund"). Each of the Distribution Account and the Reserve Fund shall be an
Eligible Account in the name of the Trustee bearing a designation clearly
indicating that the funds deposited therein are held in trust for the benefit
of Bondholders.
(b) Funds on deposit in the Distribution Account and the Reserve
Fund shall at all times be invested in Eligible Investments at the written
direction of the Issuer; provided, however, that to the extent necessary to
make required payments on any Interest Payment Date and/or at Stated Maturity,
any such investment shall mature or become due and such funds shall be made
available for withdrawal on or prior to the related Interest Payment Date or
Stated Maturity, as the case may be.
(c) Amounts held in the Distribution Account and the Reserve Fund
from time to time will constitute a portion of the Pledged Property securing
the Bonds and Eligible Collateral for purposes of satisfying the Basic
Maintenance Amount. Subject to the requirements and limitations imposed by
Section 4.08, the Trustee shall release funds on deposit in the Reserve Fund to
the Issuer upon request.
(d) Any funds remaining on deposit in the Distribution Account or
the Reserve Fund following the satisfaction and discharge of this Indenture
pursuant to Article Thirteen hereof shall be remitted promptly to the Issuer.
(e) The Trustee shall have the right to withdraw from any account
funds deposited therein in error.
Section 3.02. Collections and Allocations
(a) All amounts received by the Trustee in respect of interest or
any other earnings on or proceeds of the portion of the Pledged Property other
than Eligible Mortgage Loans, shall be deposited upon receipt into the
Distribution Account.
(b) On each Servicer Remittance Date, upon receipt of the
Available Amount from the Servicer in accordance with the Servicing Agreement,
the Trustee will apply such funds in the following order of priority:
(i) first, for deposit into the Distribution Account, an amount
(first from the interest portion of the Available Amount and then from the
principal portion of the Available Amount) equal to the amount of interest
accrued or to accrue on the Bonds from and including the immediately prior
Interest Payment Date (or from and including the Closing Date in the case of
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the first Servicer Remittance Date) to and including the day prior to the next
succeeding Interest Payment Date less in each month other than March, June,
September and December any amounts deposited in the Distribution Account since
the immediately preceding Servicer Remittance Date and available for payment on
the Bonds, and in the case of Servicer Remittance Dates occurring in March,
June, September and December, the amount payable on the next Interest Payment
Date, less any amounts then on deposit in the Distribution Account and
available for payments on the Bonds; and
(ii) second, for deposit into the Reserve Fund, the remaining
portion of the Available Amount.
Section 3.03.00 Payments to Bondholders
(a) Until an Event of Default occurs, at which time the
provisions of Section 5.10 shall apply:
(i) On each Interest Payment Date, the Trustee shall (A)
withdraw from the Distribution Account, up to the full balance of
funds on deposit in the Distribution Account (which shall include any
amounts required to be transferred from the Reserve Fund pursuant to
Section 3.03(b) below), an amount equal to the amount of all interest
accrued during the related Interest Period on the Bonds Outstanding
with respect to such Interest Payment Date plus any Defaulted Interest
(the "Required Interest Payment Amount") and (B) pay to Bondholders
(or transfer to the Paying Agent for payment to Bondholders, if the
Trustee shall not then be the Paying Agent) such amount in accordance
with Section 2.10.
(ii) In addition, on any Redemption Date and at the
Stated Maturity, the Trustee shall withdraw sufficient amounts from
the Distribution Account (which shall include any amounts required to
be transferred from the Reserve Fund pursuant to Section 3.03(b)
below) to make required interest and principal payments on such date
pursuant to Article Eleven or Article Thirteen hereof, as applicable,
and distribute such amounts to Bondholders as of the immediately
preceding Regular Record Date.
(b) (i) If, on any Interest Payment Date, the amount on
deposit in the Distribution Account prior to giving effect to the withdrawal
and payment required by Section 3.03(a)(i) above is less than the Required
Interest Payment Amount, the Trustee shall withdraw from the Reserve Fund and
transfer to the Distribution Account, up to the full balance of funds on
deposit in the Reserve Fund, an amount equal to the difference between the
Required Interest Payment Amount and the amount then on deposit in the
Distribution Account.
(ii) In addition, if, on any Redemption Date or at the
Stated Maturity, the amount on deposit in the Distribution Account
prior to giving effect to the withdrawal and payment required by
Section 3.03(a)(ii) above is less than the amount required to be paid
in respect of interest and principal on such date, the Trustee shall
immediately withdraw from the Reserve Fund and transfer to the
Distribution Account, up to the full
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balance of funds on deposit in the Reserve Fund, an amount equal to
the difference between such required amount and the amount on deposit
in the Distribution Account.
[Section 3.04. Determination of LIBOR
(a) LIBOR for the initial Interest Period shall be [_______]% per
annum. On each LIBOR Determination Date, the Trustee shall determine LIBOR for
a period equal to the related Interest Period (commencing on the first day of
such period) as of 11:00 a.m. (London time) on such LIBOR Determination Date as
such quotation appears on Telerate Page 3750.
(b) If on any LIBOR Determination Date, such rate does not appear
on Telerate Page 3750, the Trustee shall determine LIBOR for a period equal to
the related Interest Period (commencing on the first day of such period) as of
11:00 a.m. (London Time) on such LIBOR Determination Date as such quotation
appears on Reuters Monitor Money Rates Page LIBO ("Reuters Page LIBO").
(c) If on any LIBOR Determination Date, such rate does not appear
on Reuters Page LIBO, the Trustee shall determine LIBOR on the basis of
quotations provided by the Reference Banks as of 11:00 a.m. (London time) on
such LIBOR Determination Date to prime banks in the London interbank market for
a period equal to the related Interest Period (commencing on the first day of
such period). LIBOR as determined by the Trustee shall be the arithmetic mean
of such quotations (rounded upwards, if necessary, to the nearest whole
multiple of 1/16%).
(d) If on any LIBOR Determination Date at least two of the
Reference Banks provide quotations, LIBOR shall be determined in accordance
with (c) above on the basis of the offered quotations of those Reference Banks
providing such quotations.
(e) If on the LIBOR Determination Date only one or none of the
Reference Banks provides such offered quotations, LIBOR shall be:
(i) the rate per annum (rounded upwards, if necessary,
to the nearest whole multiple of 1/16%) that the Trustee determines to
be the arithmetic mean of the offered quotations that four leading
banks in New York City selected by the Trustee are quoting at or about
11:00 a.m. (Eastern Time) on such LIBOR Determination Date for loans
in U.S. dollars to the Reference Banks for a period equal to the
related Interest Period (commencing on the first day of such Interest
Period) or those of them (being at least two in number) to which such
offered quotations are, in the opinion of the Trustee, being so
quoted; or
(ii) if the banks selected as aforesaid by the Trustee
are not quoting as described in the preceding clause (i), LIBOR for
such Interest Period shall be LIBOR as determined on the previous
LIBOR Determination Date or, with respect to the first LIBOR
Determination Date, [_______]% per annum.
(f) On each LIBOR Determination Date prior to 12:00 noon (Eastern
Time), the Trustee shall send to the Issuer by facsimile, notification of LIBOR
and the interest rate for the Bonds for the following Interest Period.
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(g) The establishment of LIBOR on each LIBOR Determination Date
for each Interest Period and the Trustee's calculation of the rate of interest
applicable to the Bonds for the related Interest Period shall (in the absence
of manifest error) be final and binding.]
ARTICLE IV
PROVISIONS AS TO COLLATERAL
Section 4.01. Pledging of Collateral
(a) The Issuer may at any time and from time to time pledge
Collateral with the Trustee by delivering the same to the Trustee (or, if
applicable, to the Custodian, in the case of Eligible Mortgage Loans) in the
manner described in Section 4.01(b) as to Pledged Property other than Deposit
Securities and Section 10.03 as to Deposit Securities delivered pursuant to
such Section. The following documents shall be delivered to the Trustee or the
Custodian, as applicable, in connection with any such pledge and delivery of
Collateral:
(i) a list identifying the Collateral;
(ii) a designation of whether the Collateral is Deposit
Securities delivered pursuant to Section 10.03 or Eligible Collateral;
(iii) the documents required by the Granting Clauses of
this Indenture;
(iv) such certificate as to the fair value of such
Collateral as may then be required by Section 1.02(b) of this
Indenture and Section 314(d) (and any other applicable provision) of
the TIA; and
(v) an Opinion of Counsel in the form of Exhibit C.
At the time of any delivery of Collateral to the Trustee or the
Custodian, the Trustee or the Custodian shall certify that all Collateral
specified on the accompanying list identifying the Collateral provided by the
Issuer has been received by the Trustee or the Custodian, as the case may be,
and that, subject to the provisions of the next succeeding paragraph of this
Section 4.01(a) with respect to Eligible Mortgage Loans, such Collateral is
accompanied by the documents required by the Granting Clauses. In addition, the
Trustee shall certify to the Issuer that it has received a certificate as to
the fair value of such Collateral (if then required by the TIA) and an Opinion
of Counsel in the form of Exhibit C.
With respect to Eligible Mortgage Loans, the Trustee agrees to cause
the Custodian to review the Mortgage Documentation delivered to the Custodian
no later than 90 days after the Closing Date or, if received by the Custodian
after the initial 90-day period, promptly after its delivery to the Custodian.
The Custodian will ascertain whether all required documents have been executed,
received and accompanied by evidence of recordation, and whether those
documents relate (determined, in the case of Mortgage Loans, on the basis of
the mortgagor name and loan number) to the Mortgage Loans it has received, as
identified in Exhibit A to this Indenture. In performing any such review, the
Custodian may conclusively rely on the purported due execution and genuineness
of any such document and on the purported genuineness of any
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signature thereon. If at any time during such review or thereafter the
Custodian finds a document or documents to be missing or defective in any
material respect (a "Material Defect"), the Custodian shall promptly notify the
Issuer of such Material Defect, whereupon the Issuer shall have a period of 180
days within which time to correct or cure any such defect; provided, however,
that (i) if such defect relates solely to the inability of the Issuer to
deliver the original Mortgage or intervening assignments thereof because the
originals of such documents have not been returned by the applicable
jurisdiction, the Issuer shall have a period of two years within which to
correct or cure such defect, but the Issuer shall nonetheless deliver such
original documents to the Custodian promptly upon receipt if received within
such period, and (ii) if the applicable jurisdiction retains the original
recorded Mortgage, assignment of Mortgage or intervening assignments of
Mortgage (as evidenced by a certification from the Issuer to such effect), or
if the original is not otherwise available, the Issuer shall be permitted to
deliver a photocopy of such documents containing an original certification by
the judicial or other governmental authority of the jurisdiction where the
Mortgage was recorded. During the applicable period within which the Issuer is
permitted to correct or cure any Material Defect as set forth above, the
related Mortgage Loan shall continue to constitute an Eligible Mortgage Loan
for all purposes of this Indenture. If such period shall expire without the
Issuer having corrected or cured such defect, then the related Mortgage Loan
shall no longer be an Eligible Mortgage Loan hereunder.
(b) (i) All Mortgage Loans pledged with the Trustee (and, in
the case of Mortgage Loans for which the related Mortgaged Property is located
in the State of __________________ the related Mortgages or certified copies
thereof) shall be delivered to the Trustee (or, if the Trustee has appointed a
Custodian pursuant to Section 6.08, the Custodian) in accordance with the
definition of "delivery" in Section 1.01 hereof.
All Mortgage Loans included in the Pledged Property shall be
accompanied by a certification (which may be in the form of a Collateral Report
of the Issuer) that such Mortgage Loans reflect the characteristics listed in
the definition of Eligible Fixed-Rate Mortgage Loans, if they are Fixed-Rate
Mortgage Loans, or the definition of Eligible Adjustable-Rate Mortgage Loans,
if they are Adjustable-Rate Mortgage Loans and constitute, in the aggregate
(together with any other Eligible Mortgage Loans then subject to the Lien of
this Indenture), Eligible Mortgage Loans.
[(ii) In the event that the Trustee shall receive notice
from the Issuer or any Bondholder that the rating by [Rating Agency]
or [Rating Agency] of [NationsBank, N.A.'s] long-term deposits has
fallen below BBB or Baa2 or of its short-term deposits has fallen
below F-2 or P-2, as the case may be, the Trustee shall promptly, or,
if the Trustee has appointed a Custodian pursuant to Section 6.08,
promptly direct the Custodian in writing to record, or cause to be
recorded, assignments of the Mortgages securing the Eligible Mortgage
Loans pledged to the Trustee. The Issuer hereby constitutes and
appoints the Trustee and any such Custodian as its attorney-in-fact,
with full power of substitution, to make or cause to be made such
recordings and to take, in the name and on behalf of the Issuer, all
actions necessary or advisable in the Trustee's or, if applicable, the
Custodian's sole discretion to effectuate such recordings, at the
expense of the Issuer, including without limitation to execute or
cause to be executed such documents in the
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name of the Issuer as shall be necessary or advisable in the Trustee's
or, if applicable, the Custodian's sole discretion to effectuate such
recordings.]
(iii) All Government Securities and other securities and
instruments delivered to the Trustee as Pledged Property pursuant to
any provision of this Indenture shall be delivered in accordance with
the definition of "delivery" in Section 1.01 hereof. The Issuer agrees
that it will, promptly following a request therefor by the Trustee,
execute and deliver to the Trustee any documentation reasonably
requested to effect registration of Government Securities and other
securities in the name of the Trustee, or to establish evidence of the
security interest of the Trustee therein.
(iv) The Issuer shall deliver promptly to the Trustee
such other documents, certificates and opinions as the Trustee may
reasonably request in connection with the subjection of any Pledged
Property (and payments with respect thereto to the extent provided in
this Indenture) to the Lien of this Indenture.
(c) The fact that any Pledged Property is reassigned without
recourse shall not alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on the Bonds.
(d) If, as of any date, any Eligible Adjustable-Rate Mortgage
Loans which were included in the Discounted Value of the Eligible Collateral as
of the Latest Collateral Report shall be converted into Fixed-Rate Mortgage
Loans, the Issuer shall, on the next Regular Valuation Date, recharacterize
such Mortgage Loans as Fixed-Rate Mortgage Loans and the Collateral Report
delivered to the Trustee pursuant to Section 4.06 with respect to such Regular
Valuation Date shall be prepared treating such Mortgage Loans as Fixed-Rate
Mortgage Loans.
Section 4.02. Disposition of Payments on Pledged Property
The Trustee shall be entitled to receive all payments on or in respect
of any Pledged Property, other than payments received with respect to Eligible
Mortgage Loans which shall be received by the Issuer or the Servicer pursuant
to the Servicing Agreement; provided, however, that if an Event of Default
shall have occurred and be continuing, the Trustee shall be entitled to receive
all payments. If the Issuer shall receive any payments (including prepayments
and payments as a result of default) on or in respect of Pledged Property, it
shall segregate such payments (net of any expenses of collection, sale or
foreclosure) from the other property of the Issuer, and shall promptly after
receipt of such payments deliver them in the form received to the Servicer, in
the case of any such payments related to Eligible Mortgage Loans prior to an
Event of Default, or to the Trustee, in the case of any other such payments
relating to any Pledged Property other than Eligible Mortgage Loans or such
payments related to Eligible Mortgage Loans after an Event of Default.
Section 4.03. Consents, Waivers and Modifications
(a) Unless and until an Event of Default shall have occurred and
be continuing, the Issuer shall have, without the consent of any Holder or the
Trustee, the exclusive right to service
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and administer (directly or through agents selected by the Issuer (including
the Servicer), in its sole discretion) the Mortgage Loans and Mortgages
included from time to time in Pledged Property, and except for the power to
cause the transfer, assignment, disposition or delivery thereof other than as
provided for herein, shall have full power and authority in respect of the
Pledged Property, including, without limitation, the right to give consents or
waivers upon and to make modifications in respect of all Mortgage Loans,
Mortgages, Government Securities and other securities included in such Pledged
Property, and from time to time upon the Issuer's Request the Trustee forthwith
shall make and deliver, or shall cause to be made and delivered to the Issuer
or to its nominees, powers of attorney to give consents or waivers in respect
of any such Mortgage Loans, Mortgages, Government Securities or other
securities which have been transferred into the name of or delivered to the
Trustee or its nominees. Without limiting the generality of the foregoing
provisions of this Section 4.03, unless and until any such Event of Default
shall have occurred and be continuing, the Issuer shall have the right to
consent to the sale or other transfer of any property of the obligor, maker,
mortgagor or grantor (or any person who has assumed the duties and obligations
of such obligor, maker, mortgagor or grantor) under any such Mortgage, to
authorize any assumption of a Mortgage Loan by any transferee of property
securing such Mortgage Loan, to execute any release of such property, or
discharge of such obligor, mortgagor or grantor (and any person who has assumed
the duties and obligations of such obligor, mortgagor or grantor), to effect
appropriate recordation and, in its sole discretion, to determine whether and
what, if any, action should be taken in the event of a default under such
Mortgage Loan, Mortgage, Government Security or other security, and the Trustee
shall execute any release, consent or other documentation requested by the
Issuer's Request to confirm any action taken by the Issuer pursuant to this
Section 4.03 or enable such action to be taken by the Issuer; provided,
however, that the Issuer shall not transfer Mortgage Loans or the related
Mortgages to a bona fide purchaser for value without notice prior to
notification to the borrowers of the existence of the assignments to the
Trustee of the Mortgage Loans or due recordation of assignments to the Trustee
of such Mortgages, and provided, further, that the Issuer shall not discharge
Mortgage Loans or the related Mortgages prior to such notification or
recordation, without, in each case, having obtained the consent of the Trustee,
which consent shall not be unreasonably withheld. Any Request by the Issuer
under this Section 4.03 shall be accompanied by an Officers' Certificate
stating that the action taken or requested is authorized by this Indenture,
that the execution of such release or consent is appropriate to confirm such
action, that no Event of Default has occurred and is continuing, and that
following such action the Discounted Value of the Eligible Collateral will
equal or exceed the Basic Maintenance Amount. Except as otherwise specifically
provided in this Indenture, so long as no Event of Default shall have occurred
and be continuing, the Trustee shall have no duties or responsibilities with
regard to any such Mortgage, Mortgage Loan, Mortgage Note, Government Security,
or other security or instrument included in the Pledged Property assigned to
them or the value of the property subject thereto.
(b) The Issuer covenants that it will give consents, and waivers,
make modifications and supplements, and take other action with respect to any
Mortgage Loan, Mortgage Note, Mortgage, Government Security, or other security
included in Pledged Property only (i) except as otherwise permitted by the
Servicing Agreement, on a case by case basis in the ordinary course of its
business and in a manner consistent with the treatment of securities and loans
of the same type
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in the investment and loan portfolios of [NationsBank, N.A.] (including the
servicing, adjustment and refinancing of Mortgage Loans and Mortgages), or (ii)
except as otherwise permitted by the Servicing Agreement, in a manner
consistent with [NationsBank, N.A.'s] treatment of all loans and securities of
the same type in its loan and securities portfolios generally if such consent,
waiver, modification, supplement or other action is to be other than on a case
by case basis, and (iii) in a manner consistent with the provisions and
purposes of this Indenture.
Section 4.04. Rights of Trustee and the Issuer after Event of
Default
Whenever in this Article Four it is provided that any right in respect
of the Bonds or of obligations or indebtedness forming part of the Pledged
Property may be exercised by the Issuer only until an Event of Default shall
have occurred and be continuing, such right may, nevertheless, be exercised by
the Issuer in case an Event of Default shall have occurred and be continuing if
and to the extent that the Trustee shall in writing consent to such exercise in
the specific instance, or more generally, in all instances, or otherwise on
such conditions as the Trustee may impose.
Section 4.05. Delivery of Initial Collateral and Reporting
Requirements on Issuance of Bonds
On or before the date of the closing of the sale of the Bonds, which
shall be [_______] (the "Closing Date") the Issuer shall deliver and pledge to
the Trustee, in accordance with the provisions of Section 4.01, the Initial
Collateral and shall deliver to the Trustee the following:
(a) a Collateral Report dated and containing information as of a
date not more than three Business Days prior to the date of such delivery
(except that such Collateral Report need not certify an amount of Bonds
Outstanding but shall state that such amount is assumed to be $[_________]);
(b) the Opinion of Counsel required pursuant to subsection (a) of
Section 4.01 which shall be dated such date of issuance and shall also state
that:
(i) the Bonds have been duly authorized, executed,
authenticated, issued and delivered and constitute the valid and
legally binding obligations of the Issuer and when duly authenticated
by or on behalf of the Trustee, will be entitled to the benefits
provided by this Indenture, subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium,
fraudulent conveyance or other similar laws affecting the rights of
creditors now or hereafter in effect and to equitable principles that
may limit the right to specific enforcement or remedies, and further
subject to 12 U.S.C. 1818(b)(6)(D) and similar bank regulatory powers
and to the application of principles of public policy;
(ii) the issuance and sale of the Bonds by the Issuer,
the compliance by the Issuer with all of the provisions of the Bonds
and this Indenture and the consummation of the transactions herein
contemplated will not, to the best of such counsel's knowledge,
conflict with or result in a breach of any of the terms or provisions
of, or constitute a
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default under, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument known to such counsel to which the
Issuer is a party or by which the Issuer is bound or to which any of
the property or assets of the Issuer is subject, which conflict,
breach or default would be materially adverse to the Issuer, nor will
such action result in any violation of the provisions of the
declaration of trust or by-laws of the Issuer, or to the best of such
counsel's knowledge, any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the
Issuer or any of its properties;
(iii) except for consents, permits and similar
authorizations required under the blue sky or state securities laws of
various jurisdictions, as to which no opinion is expressed, and except
also for such consents, permits and similar authorizations as have
been obtained, no consent, approval, authorization, order,
registration or qualification of or with any court or governmental
agency or body of the United States of America or any political
subdivision of the Federal government of the United States of America
is required for the issuance and sale of the Bonds or the consummation
of the other transactions contemplated by this Indenture; and
(iv) in the opinion of the Person giving such opinion
that the conditions precedent to the authentication and delivery of
the Bonds as set forth in this Indenture have been complied with;
(c) an Officers' Certificate stating that the conditions
precedent to the authentication and delivery of the Bonds as set forth in this
Indenture have been complied with; and
(d) an Accountants' Letter verifying the Collateral Report
delivered pursuant to Section 4.05(a).
Section 4.06. Collateral Reports
On or before the second Business Day after each Regular Valuation
Date, the Trustee shall deliver to the Issuer a Collateral Report, dated and
containing information as of the Determination Date relating to the Regular
Valuation Date to which such Collateral Report relates. In preparing any
Collateral Report, the Trustee shall be entitled to rely on information
received from the Servicer without any independent investigation. Commencing
with the Collateral Report delivered by the Trustee in connection with the
[____________] Regular Valuation Date and on a quarterly basis thereafter, a
firm of Independent Accountants selected by the Issuer shall select at random
one of the Collateral Reports delivered by the Trustee during the three-month
period ended on the last day of the preceding month and deliver an Accountants'
Letter to the Trustee and the Issuer with respect to such Collateral Report
prepared by the Trustee. If any letter of an Accountant delivered to the
Trustee pursuant to this Section 4.06 shows that an error was made in the
related Collateral Report, the calculation or determination made by such
Accountant shall be final and conclusive and shall be binding on the Issuer and
the Trustee.
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A copy of each Collateral Report and Accountants' Letter delivered
pursuant to this Section 4.06 shall be delivered concurrently by the Trustee to
[Rating Agency] and to [Rating Agency], but without any liability or
responsibility of the Trustee for any failure to do so.
Section 4.07. Maintenance of Eligible Collateral
(a) In the event that any Collateral Report delivered to the
Issuer pursuant to Section 4.06 shows that, as of the date reported upon in
such Collateral Report, the Discounted Value of Eligible Collateral is less
than the Basic Maintenance Amount, then, subject to Section 4.07(c), the
Issuer, by the Cure Date,
(i) shall deliver to the Trustee sufficient additional
Eligible Collateral, and/or
(ii) shall substitute sufficient Eligible Collateral,
and/or
(iii) shall repurchase and deliver to the Trustee for
cancellation sufficient Outstanding Bonds, so that, immediately after
such delivery of additional Eligible Collateral and/or such
substitution of Eligible Collateral and/or such repurchase and
cancellation of Outstanding Bonds, the Discounted Value of Eligible
Collateral included in the Pledged Property (determined, at the option
of the Issuer, either as of the Regular Valuation Date on which the
Basic Maintenance Amount was not met (the "Prior Valuation Date") or
as of a later date of valuation, but no later than the Cure Date (any
such date, the "Cure Valuation Date")) shall be at least equal to the
Basic Maintenance Amount as of the date on which such calculation is
being made (as adjusted to give effect to the addition or substitution
of Eligible Collateral and/or the repurchase of Bonds by the Issuer or
an Affiliate).
(b) Compliance with Section 4.07(a) shall be evidenced by
delivery of a Collateral Report to the Issuer which shall be dated as of a date
no later than the Cure Date and shall contain information as of the date
provided in Section 4.07(a) and an Accountants' Letter verifying such
Collateral Report.
(c) In the event that the Issuer is unable by the Cure Date to
cause the Discounted Value of Eligible Collateral to be at least equal to the
Basic Maintenance Amount by taking the actions provided in Section 4.07(a), the
Issuer shall, no later than 30 days after the Cure Date, redeem Outstanding
Bonds, subject to and in accordance with Article Eleven of this Indenture, so
that immediately after the Redemption Date for such redemption, the Discounted
Value of Eligible Collateral included in the Pledged Property (determined as of
the Regular Valuation Date or Cure Valuation Date (whichever is later)
immediately preceding the date on which the Trustee gives written notice of
redemption to the Holders) shall be at least equal to the Basic Maintenance
Amount as of the date on which such calculation is being made (as adjusted to
give effect to any addition of Eligible Collateral and/or substitution of
Eligible Collateral or repurchase of Outstanding Bonds and such redemption).
(d) Compliance with Section 4.07(c) shall be evidenced by
delivery to the Issuer of the Collateral Report described in Section 11.01(b).
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(e) The Issuer shall not be required to comply with the
provisions of Section 4.08 in order to add or substitute Eligible Collateral
pursuant to Section 4.07(a) or Section 4.07(c) if the addition or substitution
is concurrent with the delivery of evidence of compliance with Section 4.07(a)
or with Section 4.07(c), as the case may be, and, in the case of substitution,
the Issuer delivers to the Trustee a list identifying the Collateral to be
released from the Lien of this Indenture. Upon delivery of the Collateral
Report referred to in Section 4.07(b) evidencing compliance with Section
4.07(a) or delivery of the Collateral Report referred to in Section 4.07(d)
evidencing compliance with Section 4.07(c) and the list identifying the
Collateral to be released, the Trustee shall deliver to the Issuer the
Collateral to be released in a manner similar to the manner in which such
Collateral was delivered to the Trustee.
(f) The Issuer shall be required to comply with the provisions of
Section 4.01 to add or substitute Eligible Collateral pursuant to this Section
4.07.
Section 4.08. Withdrawal of Collateral Subject to Maintenance
Requirements
(a) The Trustee shall promptly release, reassign and deliver to
the Issuer the Eligible Collateral referred to in clause (ii) of this sentence
in a manner similar to the manner in which the Issuer delivered such Eligible
Collateral to the Trustee upon receipt of (i) an Officers' Certificate
substantially in the form set forth in Part A of Exhibit D, (ii) a detailed
list of the Eligible Collateral to be withdrawn and (iii) a detailed list of
the additional Eligible Collateral, if any, to be substituted for the Eligible
Collateral to be withdrawn. If, however, the certification in Part A of Exhibit
D cannot be made because (A) the Discounted Value of Eligible Collateral
included in the Pledged Property held by the Trustee shown in the Latest
Collateral Report plus the sum of (B) the Discounted Value of the additional
Eligible Collateral, if any, delivered for substitution (determined as of the
date of the Collateral Report) and (C) the Discounted Value of Eligible
Collateral added pursuant to this Section 4.08(a) subsequent to the date of the
Latest Collateral Report (determined as of the date of the Latest Collateral
Report) reduced by an amount equal to the sum of (x) the Discounted Value of
the Eligible Collateral requested to be withdrawn (determined as of the date of
the Latest Collateral Report), and (y) the Discounted Value of Eligible
Collateral withdrawn pursuant to this Section 4.08(a), subsequent to the date
of the Latest Collateral Report (determined as of the date of the Latest
Collateral Report), is less than the Basic Maintenance Amount as of the date of
the Latest Collateral Report, then no such release, reassignment, delivery or
transfer shall be made unless:
(i) the Issuer shall deliver to the Trustee additional
Eligible Collateral, if, and to the extent, required to permit (A) the
delivery by the Issuer of the Officers' Certificate referred to in
clause (ii) below and (B) the delivery by the Trustee of the
Collateral Report referred to in clause (iii) below;
(ii) the Issuer shall deliver to the Trustee an Officers'
Certificate in the form of Part B to Exhibit D to this Indenture,
dated and containing information as of the date of delivery thereof;
(iii) the Trustee shall deliver to the Issuer a Collateral
Report, which Collateral Report shall exclude such Eligible Collateral
proposed to be withdrawn, and include any
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Eligible Collateral to be substituted therefor, and shall show that
the Discounted Value of Eligible Collateral included in the Pledged
Property on the date of such Collateral Report (determined as of a
date of valuation no more than three Business Days prior to the date
of such Collateral Report) is at least equal to the Basic Maintenance
Amount as calculated in Part A of such Collateral Report.
(b) The additional Eligible Collateral pledged pursuant to
Section 4.08(a) shall be pledged in accordance with the provisions of Section
4.01. If the additional Eligible Collateral to be substituted for Eligible
Collateral which is being withdrawn pursuant to Section 4.08(a) is (i) Mortgage
Loans, unless such Mortgage Loans are being substituted for Mortgage Loans
having an identical Discounted Value, or (ii) Eligible Collateral of a type
which has not been valued in the Latest Collateral Report, such substitution
may be made only upon presentation of a Collateral Report, as described in
Section 4.08(a)(i)(B).
(c) Upon receipt of (i) a Request from the Issuer in the form of
an Officers' Certificate substantially in the form of Part C of Exhibit D
requesting withdrawal of Pledged Property which did not constitute Eligible
Collateral and was not included in the computation of Discounted Value of
Eligible Collateral set forth in the Latest Collateral Report, (ii) a list
identifying such Pledged Property to be withdrawn pursuant to this Section
4.08(c) and (iii) a certification in such Officers' Certificate that (A) the
Discounted Value of Eligible Collateral included in Pledged Property held by
the Trustee as of the date of the Latest Collateral Report was equal to or
exceeded the Basic Maintenance Amount, (B) the Discounted Value of the Eligible
Collateral, after giving effect to any withdrawals from and additions to
Eligible Collateral during the period from the date of the Latest Collateral
Report to the date of the requested withdrawal equals or exceeds the Basic
Maintenance Amount and (C) no Event of Default has occurred which is
continuing, the Trustee shall promptly release, reassign and redeliver such
Pledged Property (and any Mortgages serving as security therefor and the
instruments, documentation and other related property referred to in the
Granting Clauses) specified in said Officers' Certificate to the Issuer.
(d) Upon any withdrawal permitted pursuant to this Section 4.08,
the Trustee shall execute and deliver such instruments of transfer or
assignment as the Issuer shall reasonably request to vest in it any Pledged
Property withdrawn pursuant hereto in a manner similar to the manner in which
the Issuer delivered such Pledged Property to the Trustee.
(e) Any withdrawal of Pledged Property pursuant to this Section
4.08 shall be made in compliance with the TIA, including without limitation the
provision of a certificate of fair value in connection with such withdrawal in
accordance with Section 314(d) of the TIA.
(f) Notwithstanding anything in this Section 4.08 to the
contrary, (i) no Cash shall be released from the Collection Account except
pursuant to the Servicing Agreement and (ii) while an Event of Default shall
have occurred and be continuing, the Issuer may not make any withdrawal or
substitution of any Pledged Property.
Section 4.09. Additions to Eligible Collateral
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The Issuer may from time to time deliver to the Trustee additional
Eligible Collateral for inclusion in the Collateral, by pledging such
Collateral with the Trustee pursuant to the provisions of Section 4.01 hereof.
The Issuer shall not be required to deliver to the Trustee a Collateral Report
upon such delivery; but any such additional Eligible Collateral must be
accompanied by a list thereof and a designation of such property as Eligible
Collateral and an Opinion of Counsel in the form of Exhibit C, and shall be
included in the next Collateral Report delivered by the Trustee which values
the Eligible Collateral.
Section 4.10. Sales of Bonds Reacquired by the Issuer and Affiliates
(a) Prior to the sale or pledge by the Issuer or any Affiliate
thereof (other than NationsBanc ▇▇▇▇▇▇▇▇▇▇) of any Bond owned by the Issuer or
such Affiliate and the registration of transfer thereof by the Trustee pursuant
to Section 2.08:
(i) the Issuer shall deliver to the Trustee additional
Eligible Collateral which shall be pledged in accordance with Section
4.01, if, and to the extent, required to permit the delivery of the
Collateral Report referred to in clause (ii) below; and/or
(ii) the Trustee shall deliver to the Issuer a Collateral
Report dated and containing information as of a date no more than five
days prior to the date of such proposed sale or pledge, which
Collateral Report shall show that if the Bonds being sold were deemed
to be Outstanding as of the date of such Collateral Report, the
Discounted Value of Eligible Collateral, including any additional
Eligible Collateral referred to in clause (i) of this Section 4.10(a),
(determined, at the option of the Issuer, using Market Values as set
forth in the Latest Collateral Report, or as of any date subsequent to
the date thereof, and on or prior to the date of such Collateral
Report) included in the Pledged Property as of such date would
nevertheless be at least equal to the Basic Maintenance Amount as
calculated in Part A of such Collateral Report.
(b) In the event that a sale or pledge of any Bond owned by the
Issuer or any Affiliate thereof (other than NationsBanc ▇▇▇▇▇▇▇▇▇▇) is to be
effected between the date on which Deposit Securities are required to be
deposited pursuant to Section 10.03 and the related due date of principal of or
interest on the Bonds, the Issuer shall deposit with the Trustee Deposit
Securities sufficient to meet the Issuer's obligations pursuant to Section
10.03 with respect to the Bonds being sold, such deposit to be accompanied by
an Officers' Certificate Regarding Deposit Securities substantially in the form
of Exhibit G-1 and an Opinion of Counsel in the form of Exhibit C.
(c) Notwithstanding anything in this Section 4.10 to the
contrary, while an Event of Default shall have occurred and be continuing, the
Issuer shall not sell any Bond.
Section 4.11. Investment Company Act Limitation
Notwithstanding any other provision of this Indenture, in no event
will the Issuer acquire or hold assets, conduct its business, or pledge, add
to, withdraw from or substitute Pledged
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Property, in a manner so as to require registration under the Investment
Company Act of 1940, as amended.
Section 4.12. New Eligible Collateral
(a) The characteristics of, and the percentage or other
limitations on the permissible amounts of, Mortgage Loans and Mortgages
required in order to make such Mortgage Loans and Mortgages Eligible Mortgage
Loans and Eligible Mortgages, the characteristics of certificates issued by
FHLMC, FNMA or GNMA required in order to make such certificates FHLMC
Certificates, FNMA Certificates and GNMA Certificates (other than the
single-class nature thereof), and the characteristics of securities issued by
the United States government required in order to make such securities
Government Securities, the Discount Factors applicable to such securities or
instruments, and the definition of "Basic Maintenance Amount" have been
determined by reference to the collateral characteristics and percentage or
other limitations and Discount Factors and the definition of "Basic Maintenance
Amount" which, among other considerations, are necessary to obtain with respect
to the Bonds at the time of their initial issuance the highest available rating
from [Rating Agency] and [Rating Agency]. It is expressly hereby agreed by the
Issuer and the Trustee that the definitions of Eligible Mortgage Loans and
Eligible Mortgages shall be, and shall be deemed to be, amended to include
within such respective definitions, Mortgage Loans and Mortgages with different
characteristics and the definitions of FHLMC Certificate, FNMA Certificate and
GNMA Certificate shall be, and shall be deemed to be, amended to include within
such respective definitions certificates with different characteristics, and
the definition of Government Securities shall be, and shall be deemed to be,
amended to include within such definition securities issued by the United
States government with different characteristics (referred to in this Indenture
as "New Eligible Collateral"), and all such definitions shall be deemed to be
amended so as to increase any such percentage limitations, or to change any
such other limitations, and the definition of Discount Factors shall be and
shall be deemed to be, amended to include within such definition reduced
Discount Factors, and the definition of "Basic Maintenance Amount" shall be,
and shall be deemed to be, amended, if at the time of any such amendment the
inclusion in the Eligible Collateral of New Eligible Collateral, or of Eligible
Collateral having such amended percentage or other limitations or reduced
Discount Factors, or the use of such amended definition:
(i) is permitted by then applicable law and regulations;
and
(ii) (A) is approved by and (B) will not impair, or cause
the Bonds to fail to retain, the ratings assigned to the Bonds by
[Rating Agency] and [Rating Agency].
(b) Prior to the inclusion of any such New Eligible Collateral in
the Eligible Collateral or the increase or change of any such percentage or
other limitation, or the decrease of any such Discount Factor, or any such
amendment of the definition of "Basic Maintenance Amount," the Issuer and the
Trustee shall enter into an indenture supplemental hereto making appropriate
provision for the inclusion and valuation of such New Eligible Collateral or
for such increase or change in a percentage or other limitation, or such
decrease of any Discount Factor, or such amendment and the Issuer shall deliver
to the Trustee:
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(i) an Opinion of Counsel to the effect that such New
Eligible Collateral is permitted to be included in the Eligible
Collateral, or that such increase or change in a percentage or other
limitation, or such reduction of a Discount Factor or such amendment
is permitted by then applicable law and regulation;
(ii) an Officers' Certificate stating that the inclusion
of such New Eligible Collateral in the Eligible Collateral or such
increase or change in a percentage or other limitation or such
reduction of a Discount Factor or such amendment will be effected in
compliance with subsection (a)(ii) of this Section 4.12;
(iii) written confirmation from [Rating Agency] and
[Rating Agency] as to the matters with respect to such New Eligible
Collateral or such increase or change in a percentage or other
limitation or such reduced Discount Factor or such amendment set forth
in subsection (a)(ii) of this Section 4.12; and
(iv) such additional confirmation, if any, as the Trustee
may require to determine that such New Eligible Collateral or such
increase or change, or such reduction, or such amendment will be in
compliance with this Section 4.12.
(c) If any New Eligible Collateral shall be included in the
Eligible Collateral, or any such percentage or other limitation shall be so
increased or changed, or any Discount Factor shall be reduced, or the
definition of "Basic Maintenance Amount" shall be amended, the forms of
Collateral Report and Accountants' Letter as set forth in Exhibits B and I
hereof, respectively, shall be expanded and modified by the Issuer in the
manner and detail required to enable the Accountants and the Trustee, subject
to Section 6.01, to determine compliance with the provisions of this Indenture.
Section 4.13. Servicing of Mortgage Loans
(a) On or before the Closing Date, an agreement relating to the
servicing of the portion of the Pledged Property consisting of Mortgage Loans
shall be entered into between the Issuer and any Person, which may be an
Affiliate of the Issuer (the "Servicer"), which agreement shall be
substantially in the form of Exhibit E hereto; provided, however, that no
Person shall become Servicer hereunder unless such Person is an Approved
Servicer of Mortgage Loans.
(b) For so long as any Bonds are Outstanding, the Issuer
covenants and agrees that it shall not permit the amendment or other
modification of the Servicing Agreement without the consent of the Holders of
not less than 51% in principal amount of the Bonds Outstanding; provided,
however, that the Servicing Agreement may be amended from time to time by the
Servicer and the Trustee without the consent of any of the Bondholders, (i) to
cure any ambiguity or mistake, (ii) to correct or supplement any provisions
therein which may be inconsistent with any other provisions herein or therein,
(iii) to modify, eliminate or add to any of its provisions to such extent as
shall be necessary or helpful to comply or maintain compliance with applicable
law, (iv) to conform to evolving industry standards regarding the servicing of
residential mortgage loans generally, (v) to change the timing and/or nature of
deposits into the Collection Account, the Distribution Account or the Reserve
Fund, provided that (a) such change shall not,
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as evidenced by an Opinion of Counsel, adversely affect in any material respect
the interests of any Bondholder and (b) such change shall not adversely affect
the then-current rating of the Bonds as evidenced by written confirmation from
each Rating Agency to such effect and (vi) to make any other provisions with
respect to matters or questions arising under the Servicing Agreement which
shall not be materially inconsistent with the provisions of this Agreement,
provided that such action shall not, as evidenced by an Opinion of Counsel,
adversely affect in any material respect the interests of any Bondholder.
(c) For so long as any Bonds are Outstanding, each of the Issuer
and the Trustee covenant and agree to enforce the Servicing Agreement for the
benefit of Bondholders.
ARTICLE V
REMEDIES UPON DEFAULT
Section 5.01. Events of Default
"Event of Default" means each one of the events specified below (in
each case irrespective of the reasons for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law, or
pursuant to judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(a) failure by the Issuer to deliver Deposit Securities to the
Trustee or to make other arrangements that will not impair, or cause the Bonds
to fail to retain, the ratings assigned to the Bonds by each Rating Agency to
provide for the payment of the principal of the Bonds, when such principal
becomes due and payable at Stated Maturity, in the manner required by Section
10.03;
(b) default in the payment of any interest on the Bonds by the
Issuer when such interest becomes due and payable, whether on any Interest
Payment Date, the Stated Maturity, or any Redemption Date, or upon acceleration
of the principal of the Bonds, or otherwise, and continuation of such default
for a period of five days;
(c) default in the payment of the principal of the Bonds by the
Issuer when such principal becomes due and payable, whether at Stated Maturity,
on any Redemption Date, by declaration of acceleration or otherwise;
(d) material breach or inaccuracy of any representation or
warranty of the Issuer hereunder or in any Officers' Certificate and
continuance of such default for a period of 30 days after notice thereof, which
notice shall state that it is a notice of default hereunder, to the Issuer by
the Trustee or to the Issuer and the Trustee by the Holders of at least 10% in
principal amount of the Bonds Outstanding;
(e) material default in the performance or observance by the
Issuer of any other covenant or condition to be performed or observed by the
Issuer in this Indenture and continuance of such default for a period of 30
days after notice thereof, which notice shall state
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that it is a notice of default hereunder, to the Issuer by the Trustee or to
the Issuer and the Trustee by the Holders of at least 10% in principal amount
of the Bonds Outstanding;
(f) the entry of a decree or order by a court having jurisdiction
in the premises adjudging the Issuer as bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Issuer under any bankruptcy, insolvency or
other applicable law, or appointing a receiver, liquidator, assignee, trustee,
conservator, sequestrator (or other similar official) of the Issuer or of any
substantial part of the Issuer's property, or ordering the winding up or
liquidation of the Issuer's affairs, and the continuance of any such decree or
order unstayed and in effect for a period of 60 consecutive days; or
(g) the institution by the Issuer of proceedings to be
adjudicated a bankrupt or insolvent, or the Issuer's consent to the institution
of bankruptcy or insolvency proceedings against it, or the filing by the Issuer
of a petition or answer or consent seeking reorganization or relief under any
bankruptcy, insolvency or other applicable law, or the consent by the Issuer to
the filing of any such petition or to the appointment of a receiver,
liquidator, assignee, trustee, conservator, sequestrator (or other similar
official) of the Issuer or of any substantial part of the Issuer's property, or
the making by the Issuer of an assignment for the benefit of creditors, or the
admission by the Issuer in writing of its inability to pay its debts generally
as they become due, or the taking of limited liability company action by the
Issuer in furtherance of any such action.
Section 5.02. Acceleration of Maturity; Rescission and Annulment
If an Event of Default described in clause (a), (b) or (c) of Section
5.01 occurs, the entire principal amount of the Bonds shall automatically
become due and payable immediately and the Trustee shall demand payment thereof
within two Business Days after it has knowledge of such Event of Default
pursuant to Section 6.01(e). If an Event of Default described in clause (d),
(e), (f) or (g) of Section 5.01 occurs and is continuing, then and in every
such case, unless the principal of the Bonds shall have already become due and
payable, the Trustee or the Holders of not less than 25% in principal amount of
the Bonds Outstanding may declare the entire principal amount of the Bonds to
be due and payable immediately, by a notice in writing to the Issuer (and to
the Trustee if given by the Holders), and upon any such declaration such
principal shall become immediately due and payable.
At any time after acceleration and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in
this Article Five provided, such acceleration and its consequences may be
rescinded and annulled (i) by written notice to the Issuer and the Trustee
given by the Holders of 66-2/3% (notwithstanding and excluding any provision of
the TIA permitting a lesser percentage) in principal amount of the Bonds
Outstanding, or (ii) by written notice to the Issuer given by the Trustee, if
declaration of such acceleration has not been made by the Holders of Bonds, if
in either of the foregoing cases:
(a) The Issuer has paid or deposited with the Trustee a sum
sufficient to pay
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(i) all overdue interest (through the date of payment
thereof) on all Bonds Outstanding,
(ii) the principal of any Bonds Outstanding which have
become due otherwise than by such acceleration and interest thereon at
the rate borne by the Bonds,
(iii) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate borne by the Bonds
from the date such overdue interest was due to the date of payment
thereof, and
(iv) all sums paid or advanced by the Trustee hereunder
and the reasonable compensation, expenses, disbursements and advances
of the Trustee and its agents and counsel; and
(b) all Events of Default, other than the non-payment of the
principal of and interest on Bonds which have become due solely by reason of
such acceleration, shall have been cured or waived as provided in this
Indenture.
No such rescission or annulment shall affect any subsequent default or
impair any right consequent thereon.
Section 5.03. Trustee's Power in Regard to Pledged Property
(a) If an Event of Default shall have occurred, then, subject to
the provisions of subsection (b) of this Section and Sections 5.07 and 6.01,
the Trustee, by such officer or agent as it may appoint, may, subject to the
provisions of applicable law, take one or more of the following actions:
(i) sell, to the extent permitted by law, without
recourse, for cash or credit, or for other property, for immediate or
future delivery, and for such price or prices and on such terms as the
Trustee in its discretion may determine, the Pledged Property;
(ii) proceed by one or more suits, actions or proceedings
at law or in equity or otherwise, or by any other appropriate remedy,
to enjoin any sale or disposition of Collateral by the Issuer or any
Person claiming under or by assignment from the Issuer or otherwise,
or to enforce payment of the Bonds or the Collateral or to realize on
any collateral security for such Collateral, or to foreclose under
this Indenture or to sell the Collateral under a judgment or decree of
a court or courts of competent jurisdiction, or by the enforcement of
any such other appropriate legal or equitable remedy as the Trustee,
being advised by counsel, shall deem effectual to protect and enforce
any of its rights or powers or any of the rights or powers of the
Holders of the Bonds;
(iii) register in the name of the Trustee, in accordance
with applicable regulations of the United States government, rules of
GNMA, FNMA and FHLMC and other applicable laws or procedures, or file
or record in the name of the Trustee any assignments to the Trustee
of, any GNMA Certificates, FNMA Certificates, FHLMC Certificates,
Government Securities, Mortgage Loans and Mortgage Notes included in
the
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Collateral and not previously so registered or recorded; file or
record in the name of the Trustee any assignments of the Mortgages
securing the Eligible Mortgage Loans included in the Pledged Property
not previously recorded (and in such event file all required notices
thereof with the FHA and VA), notify the mortgagors or trustors under
such Mortgages, and the servicing companies servicing such Mortgages,
if any, of the Trustee's interest, and direct all such persons to make
payments directly to the Trustee under the Mortgage Loans secured by
such Mortgages, transfer into its name all other Collateral pledged to
the Trustee, require all payments on and proceeds of the Collateral to
be paid directly to it and accept all payments on and other proceeds
of the Collateral, take collections and otherwise take all actions
necessary and appropriate in the name and stead of the Issuer in
regard to the Collateral including, without limitation, arranging for
the delivery of title insurance or opinions of counsel as to title and
any fire and extended coverage insurance on the properties subject to
Eligible Mortgages included therein (it being understood that the
Trustee, in the absence of an Event of Default, shall have no
obligation to take any such action, and no liability for failure to
take any such action); all such filings, recordings, and notifications
shall be deemed to have been made solely to facilitate the taking of
control of any proceeds of the Collateral and shall not constitute a
foreclosure by the Trustee or the election of any remedy limiting the
right to recover unpaid indebtedness on the Bonds after any sale of
the Collateral; and for that purpose and if an Event of Default
occurs, the Trustee is hereby irrevocably appointed the true and
lawful attorney of the Issuer having in particular and without
limitation the authority to endorse its name on all checks and other
instruments representing proceeds of such Collateral, and the Issuer
hereby ratifies and confirms all that its said attorney, or its
substitute or substitutes, shall lawfully do by virtue hereof; or
(iv) otherwise exercise, in general, all rights and
remedies of a secured party under the Uniform Commercial Code as
enacted in the State or States where the Pledged Property is located.
(b) Notwithstanding the otherwise optional nature of Section 5.03
(a), if an Event of Default shall have occurred, subject to the provisions of
Sections 5.07 and 6.01, the Trustee shall take such action as may be necessary
to (in accordance with applicable laws and regulations) register, file or
record in the name of the Trustee the assignments of the Mortgages securing the
Eligible Mortgage Loans included in the Collateral if such assignments have not
previously been so recorded.
(c) If an Event of Default shall have occurred and the payment of
principal of the Bonds shall have been accelerated pursuant to Section 5.02,
subject to the provisions of Section 5.03(a) and Sections 5.07 and 6.01, the
Trustee, by such officer or agent as it may appoint, shall exercise such of its
rights, powers and remedies under this Indenture as it may in its discretion
deem most effectual to enter into contractual commitments to sell or complete
the sale of the Pledged Property by such means as the Trustee in its discretion
deems most effective, and to pay to the Holders, out of the Pledged Property
and any net proceeds thereof, all amounts due in respect of the Bonds within 15
days (or, if Mortgage Collateral is included in the Eligible Collateral, within
30 days) after the date on which payment of principal of the Bonds shall have
been accelerated in consequence of an Event of Default having occurred.
Notwithstanding the
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foregoing, any action taken by the Trustee shall not, in the judgment of the
Trustee, be adverse to the best interests of the Holders, and also the various
time periods set forth in this Section 5.03(c) may be exceeded in the event
that (A) trading in securities generally on the American Stock Exchange or the
New York Stock Exchange shall have been suspended or minimum prices shall have
been established on either such exchange, or (B) a banking moratorium shall
have been declared either by Federal or New York authorities, or (C) there
shall have occurred any outbreak or material escalation of hostilities or other
calamity or crisis the effect of which on the financial markets of the United
States of America is such as to make it, in the judgment of the Trustee,
impracticable to sell or otherwise dispose of all or any portion of the Pledged
Property.
Section 5.04. Incidents of Sale of Pledged Property
Upon any sale of all or any part of the Pledged Property made either
under the power of sale given under this Indenture or under judgment or decree
in any judicial proceedings for foreclosure or otherwise for the enforcement of
this Indenture, the following shall be applicable:
(a) the Trustee is hereby irrevocably appointed the true and
lawful attorney of the Issuer, in its name and stead, to make all necessary
deeds, bills of sale and instruments of assignment, transfer or conveyance of
the Pledged Property thus sold; and for that purpose the Trustee may execute
all such documents and instruments and may substitute one or more Persons with
like power; and the Issuer hereby ratifies and confirms all that its said
attorney, or such substitute or substitutes, shall lawfully do by virtue
hereof;
(b) if so requested by the Trustee or by any purchaser, the
Issuer shall ratify and confirm any such sale or transfer, without recourse, by
executing and delivering to the Trustee or to such purchaser or purchasers all
proper deeds, bills of sale, instruments of assignment, conveyances or
transfers and releases as may be designated in any such request;
(c) the Trustee or the Holder of any Bond may bid for and
purchase any of the Pledged Property and, upon compliance with the terms of
sale, may hold, retain, possess and dispose of such Pledged Property in his or
her or its own absolute right without further accountability;
(d) the receipt of the Trustee or of the officer making such sale
under judicial proceedings shall be a sufficient discharge to any purchaser for
his or her purchase money, and, after paying such purchase money and receiving
such receipt, such purchaser or his or her personal representatives or assigns
shall not be obliged to see to the application of such purchase money, or be in
any way answerable for any loss, misapplication or non-application thereof;
(e) any such sale shall operate to divest the Issuer of all
right, title, interest, claim and demand whatsoever, either at law or in equity
or otherwise, in and to the Pledged Property so sold and shall be a perpetual
bar both at law and in equity or otherwise against the Issuer, and its
successors and assigns, and any and all persons claiming or who may claim the
Pledged Property sold or any part thereof from, through or under the Issuer,
and its successors and assigns;
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(f) the principal of and accrued interest on the Bonds, if not
previously due, shall immediately become and be due and payable; and
(g) any moneys collected by the Trustee upon any sale made either
under the power of sale given by this Indenture or under judgment or decree in
any judicial proceedings for foreclosure or otherwise for the enforcement of
this Indenture shall be applied as provided in Section 5.10.
Section 5.05. Judicial Proceedings
(a) If an Event of Default shall have occurred, the Trustee in
its own name, and as trustee of an express trust, shall be entitled and
empowered to institute any suits, actions or proceedings at law, in equity or
otherwise to recover judgment against the Issuer on the Bonds for the whole
amount due and paid, and may prosecute any such claim or proceeding to judgment
or final decree, and may enforce any such judgment or final decree against the
Issuer and collect the moneys adjudged or decreed to be payable in any manner
provided by law, whether before or after or during the pendency of any
proceedings for the enforcement of the Lien of this Indenture, of any of the
Trustee's rights under this Indenture, or of any of the rights of the Holders
of the Bonds under this Indenture, and such power of the Trustee shall not be
affected by any sale hereunder or by the exercise of any other right, power or
remedy for the enforcement of the provisions of this Indenture or for the
foreclosure of the lien hereof.
(b) In the case of a sale of Pledged Property and of the
application of the proceeds of such sale to the payment of the principal of
and/or interest on the Bonds, the Trustee in its own name, and as trustee of an
express trust, shall be entitled and empowered, by any appropriate means,
legal, equitable or otherwise, to enforce payment of, and to receive all
amounts then remaining due and unpaid upon, the Bonds, for the benefit of the
Trustee and the Holders of the Bonds.
(c) Except as required by applicable law or the terms of such
judgment or final decree, no recovery of any judgment or final decree by the
Trustee or the Holder of any Bond, and no levy of any execution under any such
judgment upon any of the Pledged Property, or upon any other property, shall in
any manner or to any extent affect the Lien of this Indenture upon any of the
Pledged Property, or any rights, powers or remedies of the Trustee, or any
liens, rights, powers or remedies of the Holders of the Bonds, but all such
liens, rights, powers and remedies shall continue unimpaired as before.
(d) The Trustee in its own name, or as trustee of an express
trust, or as attorney-in-fact for the Holders of the Bonds, or in any one or
more of such capacities (irrespective of whether the principal of the Bonds
shall then be due and payable as expressed in the Bonds or by acceleration
thereof or otherwise and irrespective of whether the Trustee shall have made any
demand on the Issuer for the payment of overdue principal or interest), shall be
entitled and empowered, by intervention or otherwise, to file and prove a claim
for the whole amount of principal and interest owing in respect of the Bonds and
to file such other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee and of the Holders of the Bonds (whether such
claims be based upon the provisions of the Bonds or of this Indenture)
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allowed in any equity receivership, insolvency, bankruptcy, liquidation,
readjustment, reorganization or any other judicial proceedings relative to the
Issuer, the creditors of the Issuer, the Pledged Property, or any other
property of the Issuer and any receiver, assignee, trustee, liquidator or
sequestrator (or other similar official) in any such judicial proceeding is
hereby authorized to make such payments to the Trustee, and to pay to the
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel; provided,
however, that nothing contained in this Indenture shall be deemed to give to
the Trustee any right to accept or consent to any plan of reorganization or
otherwise by action of any character in any such proceeding to waive or change
in any way any rights of the Trustee or any Holder of a Bond. Any moneys
collected by the Trustee under this Section 5.05 shall be applied as provided
in Section 5.10.
(e) All rights of action and claims under this Indenture or the
Bonds may be enforced by the Trustee without possession of the Bonds or the
production thereof at the trial or other proceedings relative thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Trustee and the Holders of the Bonds.
(f) In case the Trustee or the Holder of any Bond shall have
proceeded to enforce any right or remedy under this Indenture by suit,
foreclosure or otherwise and such proceedings shall have been discontinued or
abandoned for any reason, or shall have been determined adversely to the
Trustee or any such Holder, then, in every such case, the Issuer, the Trustee
and the Holders of Bonds shall be restored without further act to their
respective former positions and rights hereunder and thereunder, and all
rights, remedies and powers of the Trustee and such Holders shall continue as
though no such proceedings had been taken.
Section 5.06. Control by Holders of Bonds
The Holders of a majority in principal amount of the Bonds Outstanding
(or such lesser amount as shall have acted at a meeting pursuant to Article
Nine) shall have the right to direct the Trustee as to the time, method and
place of conducting proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee, provided that:
(a) such direction shall not be in conflict with any rule of law
or with this Indenture;
(b) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction;
(c) such direction is not unduly prejudicial to the rights of
other Holders; and
(d) such direction would not involve the Trustee in any personal
liability.
Section 5.07. Waiver of Past Defaults
The Holders of not less than 66-2/3% (notwithstanding and excluding
any provision of the TIA permitting a lesser percentage) in principal amount of
the Outstanding Bonds (or such
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lesser amount as shall have acted at a meeting pursuant to the provisions of
this Indenture) may on behalf of the Holders of all Outstanding Bonds waive any
past default hereunder and its consequences, except a default: (1) which
constitutes an Event of Default under Section 5.01(a), 5.01(b) or 5.01(c); or
(2) in respect of a covenant or provision hereof which under Article Eight
cannot be modified or amended without consent of the Holder of each Bond
thereby affected. Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon. In
addition, the Trustee shall take such action as the Trustee shall determine to
be reasonably necessary to restore the Issuer and the Trustee to their
respective positions prior to the taking by the Trustee of any action pursuant
to this Article Five in respect of such default.
Section 5.08. Limitations on Suits by Holders
(a) Subject to Section 5.11 hereof, a Holder of a Bond shall not
have the right to institute any suit, action or proceeding at law or in equity
or otherwise with respect to this Indenture, for the appointment of a receiver
or for the enforcement of any other remedy under or upon this Indenture,
unless:
(i) such Holder previously shall have given written
notice to the Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% in principal amount
of the Bonds Outstanding shall have requested the Trustee in writing
to institute such action, suit or proceeding and shall have offered to
the Trustee indemnity as provided in Section 6.02(e);
(iii) the Trustee shall have refused or neglected to
institute any such action, suit or proceeding for 60 days immediately
following receipt of such notice, request and offer of indemnity; and
(iv) no direction inconsistent with such written request
shall have been given to the Trustee during such 60-day period by the
Holders of a majority in principal amount of the Bonds Outstanding (or
such lesser amount as shall have acted at a meeting pursuant to
Article Nine).
(b) It is understood and intended that no one or more of the
Holders of Bonds shall have any right in any manner whatever hereunder or under
the Bonds to (i) obtain or seek to obtain priority over or preference to any
other such Holder, (ii) enforce any right under this Indenture unless the right
of enforcement is specifically provided herein, or (iii) surrender, impair,
waive, affect, disturb or prejudice the Lien of this Indenture on any property
subject thereto or the rights of the Trustee and of the Holders of the Bonds
thereunder in each case except in the manner in this Indenture provided.
Section 5.09. Undertaking to Pay Court Costs
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All parties to this Indenture agree, and each Holder of a Bond by his
or her acceptance thereof, shall be deemed to have agreed, that any court may
in its discretion require, in any suit, action or proceeding for the
enforcement of any right or remedy under this Indenture, or in any suit, action
or proceeding against the Trustee for any action taken or omitted by it in its
capacity hereunder, the filing by any party litigant in such suit, action or
proceeding of an undertaking to pay the costs of such suit, action or
proceeding, and that such court may, in its discretion, assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in such
suit, action or proceeding, having due regard to the merits and good faith of
the claims or defenses made by such party litigant; provided, however, that the
provisions of this Section 5.09 shall not apply to (a) any suit, action or
proceeding instituted by the Trustee, (b) any suit, action or proceeding
instituted by any Holder of Bonds or group of Holders of Bonds holding in the
aggregate more than 10% in aggregate principal amount of securities Outstanding
or (c) any suit, action or proceeding instituted by any Holder of a Bond for
the enforcement of the payment of the principal of or interest on any Bond on
or after the due date expressed therein (or, in the case of redemption, on or
after the date fixed for redemption).
Section 5.10. Application of Moneys Collected by Trustee
Any moneys collected or to be applied by the Trustee pursuant to this
Article Five, including, without limitation, moneys collected pursuant to
Section 5.03(c), shall be deposited in the Distribution Account and applied in
the following order from time to time on the date or dates fixed by the Trustee
which, in the event the principal of the Bonds shall not have become due, shall
be on each Interest Payment Date in the manner provided in Section 3.03 and, in
case of the distribution of such moneys on account of principal, upon notice to
the Bondholders of the time and place to present Bonds and presentation of the
several Bonds and the notation thereon of the payment, if only partially paid,
and upon surrender thereof, if fully paid:
FIRST: to the payment of costs and expenses of the sale of or
other realization upon (including reasonable compensation for
servicing of Eligible Mortgage Loans, provided, however, that the
monthly amount of such servicing fees, not including any initial
set-up or organizational expenses, shall not exceed the greater of the
monthly servicing fees then allowed sellers by FNMA or FHLMC) the
Pledged Property and the costs and expenses of the enforcement of any
remedies hereunder, and all expenses, liabilities and advances
incurred or made by the Trustee in connection with any such sale,
other realization or enforcement of remedies arising out of an Event
of Default hereunder, including reasonable compensation to the Trustee
for extraordinary time spent by its officers, employees, agents or
attorneys directly in connection with any such sale, other realization
or enforcement of remedies arising out of an Event of Default
hereunder;
SECOND: in case the principal of the Bonds shall not have
become due, to the payment of interest on the Bonds at the applicable
rate or rates calculated as set forth in Section 2.01, in the order of
the maturity of the installments of such interest, with interest (to
the extent that such interest has been collected by the Trustee and to
the extent that payment of such interest shall be legally enforceable)
upon the overdue installments of interest from the date due to the
date of payment thereof, at the same rate or rates as the
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rate of interest specified in the Bonds for the applicable Interest
Period, such payments to be made ratably to the Persons entitled
thereto without discrimination or preference;
THIRD: in case the principal of the Bonds shall have become
due, by acceleration or otherwise, to the payment of the whole amount
then owing and unpaid upon the Bonds for principal and interest (at
the applicable rate or rates calculated as set forth in Section 2.01)
with interest upon the overdue principal and (to the extent that such
interest has been collected by the Trustee and to the extent that
payment of such interest shall be legally enforceable) upon overdue
installments of interest from the date due to the date of payment
thereof at the same rate or rates as the rate of interest specified in
the Bonds for the applicable Interest Period; and in case such moneys
shall be insufficient to pay in full the whole amount so due and
unpaid upon the Bonds, then to the payment of such principal and
interest, without preference or priority of principal over interest,
or interest over principal, or of any installment of interest over any
other installment of interest, or of any Bond over any other Bond,
ratably to the aggregate of such principal and accrued and unpaid
interest;
FOURTH: to the payment of the regular reasonable compensation
of the Trustee for its services hereunder, including reasonable
compensation for the fees and expenses of its agents, attorneys and
counsel; and
FIFTH: any surplus then remaining shall be paid to the
Issuer, its successors or assigns, or to whomsoever may be lawfully
entitled to receive the same, or as a court of competent jurisdiction
may direct.
Section 5.11. Right to Receive Payment Not to Be Impaired
Anything in this Indenture to the contrary notwithstanding, the right
(which shall be absolute and unconditional) of any Holder of a Bond to receive
payment of the principal of and interest on the Bond held by such Holder, on or
after the respective due dates expressed in such Bond or, in case of redemption
on or after the date fixed for redemption or to institute suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
Section 5.12. Notice of Defaults to Holders of Bonds
The Trustee shall, within 30 days after the occurrence of any default
becomes known to it, give the Holders of Bonds notice of all defaults known to
the Trustee in accordance with Section 1.06, unless all such defaults known to
the Trustee shall have been cured before the giving of such notice. The Trustee
shall give the Servicer and each Rating Agency notice of any such default at
the same time as the Holders of the Bonds are given such notice, provided,
however, that there shall be no liability of the Trustee for failure to do so.
This Section 5.12 is intended to supersede and exclude the optional provisions
contemplated by Section 315(b) of the TIA.
Section 5.13. Bonds Held by the Issuer or Affiliate Not to Share in
Distribution
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Any Bonds owned or held by, or for the account or benefit of, the
Issuer or any Affiliate of the Issuer (other than NationsBanc ▇▇▇▇▇▇▇▇▇▇) shall
not be entitled to share in any payment or distribution provided for in this
Article Five until after all other Bonds and all expenses have been paid in
full.
Section 5.14. Waiver of Appraisement, Valuation, Stay and Right to
Marshalling
To the extent it may lawfully do so, the Issuer for itself and for any
Person who may claim through or under it hereby:
(a) agrees that neither it nor any such Person will set up,
plead, claim or in any manner whatsoever take advantage of or benefit from, any
appraisement, valuation, stay, extension or redemption laws, now or hereafter
in force in any jurisdiction, which may delay, prevent or otherwise hinder (i)
the performance or enforcement of, or foreclosure under, this Indenture, (ii)
the sale of any of the Pledged Property or (iii) the putting of the purchaser
or purchasers thereof into possession of such property immediately after the
sale thereof;
(b) waives and releases all rights to have the Pledged Property
marshalled upon any foreclosure, sale or other enforcement of this Indenture;
and
(c) consents and agrees that, subject to the terms of this
Indenture, the Pledged Property may at any such sale be sold by the Trustee,
either in whole or in part.
Section 5.15. Remedies Cumulative; Delay or Omission Not a Waiver
To the extent permitted by law, every right, power or remedy given
hereunder to the Trustee or to the Holders of Bonds shall not be exclusive of
any other remedy or remedies, and every such right, power or remedy shall be
cumulative and in addition to every other right, power or remedy given
hereunder or now or hereafter given by statute, law, equity or otherwise. No
course of dealing between the Issuer and the Trustee, or any delay or omission
of the Trustee or of the Holder of any Bond to exercise any right, remedy or
power accruing upon any Event of Default shall impair any right, remedy or
power or shall be construed to be a waiver of any such Event of Default or of
any right, power or remedy of the Trustee or of the Holder of any Bond, or
acquiescence therein, and every right, remedy and power given by this Article
Five to the Trustee or to the Holder of any Bond may be exercised from time to
time and as often as may be deemed expedient by the Trustee or by any such
Holder.
ARTICLE VI
THE TRUSTEE
Section 6.01. Certain Duties and Responsibilities
(a) Except during the continuance of an Event of Default known to
the Trustee:
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(i) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture for
it and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to it and conforming to the requirements of this
Indenture; provided, that, in the case of any such certificates or
opinions which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine
the same to determine whether or not they substantially conform to the
requirements of this Indenture, as to form and conclusion, but not as
to substance and content.
(b) In case an Event of Default known to the Trustee has occurred
and is continuing, the Trustee shall exercise such of the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own bad faith or negligent action, its own
negligent failure to act, or its own willful misconduct, except that
(i) this Section 6.01(c) shall not be construed to limit
the effect of Section 6.01(a);
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall
be proved that the Trustee was negligent in ascertaining the pertinent
facts;
(iii) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of a majority in principal amount of
the Bonds Outstanding (or such lesser amount as shall have acted at a
meeting pursuant to Article Nine) relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred upon the Trustee
under this Indenture; and
(iv) no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably
assured to it.
(d) Whether or not therein expressly so provided, every provision
of this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section 6.01.
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(e) For all purposes of this Indenture, the Trustee shall not be
held liable or otherwise responsible for the exercise of any rights or remedies
available to it or required of it relating to an Event of Default unless the
Trustee knows that an Event of Default has occurred, and the Trustee shall not
be deemed to have knowledge of any Event of Default other than an Event of
Default described in clause (a), (b), (c) or (d) of Section 5.01, unless a
Responsible Officer in the Corporate Trust Office of the Trustee who is aware
that it is Trustee hereunder has actual knowledge thereof.
Section 6.02. Certain Rights of Trustee
Except as otherwise provided in Section 6.01:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Issuer mentioned herein shall
be sufficiently evidenced by a Request or Order and any resolution of the Board
of Directors of the Issuer may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee may (unless other
evidence be herein specifically prescribed) in the absence of bad faith on its
part, request and rely upon an Officers' Certificate or an Opinion of Counsel;
(d) the Trustee may consult with counsel and the written advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall not be under any obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of the Holders of Bonds pursuant to this Indenture, unless such
Holders are authorized or permitted by this Indenture to make such request and
shall have offered reasonable security or indemnity against the costs, expenses
and liabilities which might be incurred by the Trustee in compliance with such
request or direction;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture or other paper document, but the Trustee, in its individual
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit, and, if it shall determine to make such further
inquiry or investigation, it shall be entitled to examine the books, records
and premises of the Issuer, personally or by agent or attorney during the
Issuer's normal business hours, upon reasonable notice to the Issuer, in such a
manner that the business operations of the Issuer are not unduly disrupted; and
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(g) the Trustee may execute any of the trusts or powers hereunder
or perform any of its duties hereunder either directly or by or through agents
or attorneys, and the Trustee will not be responsible for any negligence or
misconduct on the part of any agent or attorney appointed by it hereunder,
provided that the Trustee exercised due care in selecting such agent or
attorney.
Section 6.03. Not Responsible for Recitals
The recitals of the Issuer contained herein and in the Bonds shall be
taken as the statements of the Issuer and the Trustee assumes no responsibility
for their correctness or for the accuracy or completeness of any of the
information herein or therein contained. The Trustee makes no representations
as to the validity or sufficiency of this Indenture (including the efficacy of
the liens created hereunder), the Bonds or the Collateral. The Trustee shall
not be responsible for the use or application by the Issuer of the proceeds of
the Bonds.
Section 6.04. May Hold Bonds
The Trustee, the Custodian, any Paying Agent, and any Bond Registrar,
in its individual or any other capacity, may become the owner or pledgee of
Bonds and may otherwise deal with the Issuer with the same rights it would have
if it were not Trustee, Custodian, Paying Agent or Bond Registrar.
Section 6.05. Money Held in Trust
Any money held by the Trustee in trust hereunder need not be
segregated from other trust funds held by it except to the extent required by
law, but shall be separately identified on the records of account maintained by
the Trustee and the Trustee shall not be under any liability for interest on
any money received by it hereunder; provided that this Section 6.05 shall not
affect the Trustee's responsibility to reinvest payments on Pledged Property
pursuant to Section 3.01.
Section 6.06. Compensation and Reimbursement
(a) The Issuer agrees:
(i) to pay to the Trustee from time to time reasonable
compensation (taking into account the services performed by any
separate or co-trustee appointed pursuant to Section 6.12) for all
services rendered by it hereunder (which compensation shall be set
forth in a separate letter agreement between the Issuer and the
Trustee and shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(ii) except as otherwise expressly provided herein, to
reimburse the Trustee upon request for all reasonable expenses,
disbursements and advances incurred or made by it in accordance with
any provision of this Indenture (including the reasonable compensation
and the expenses and disbursements of its agents and counsel), except
any such expense, disbursement or advance as may be attributable to
its negligence, bad faith or willful misconduct; and
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(iii) to indemnify the Trustee for, and to hold it
harmless against, any loss, liability or expense incurred without
negligence, bad faith or willful misconduct on its part, arising out
of or in connection with the acceptance or administration of this
trust, including the costs and expenses of defending against any claim
or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
(b) As security for the performance of the obligations of the
Issuer under this Section 6.06, the Trustee shall have a lien upon all property
and funds held or collected by the Trustee as such; provided, however, that
such lien of the Trustee shall be subordinate to the Lien of this Indenture in
favor of the Holders, except for the principal amount of any funds advanced by
the Trustee pursuant to Section 10.08 or any expenses, liabilities or advances
incurred by the Trustee relating to, or reasonable compensation to the Trustee
for extraordinary time spent by its officers, employees, agents or attorneys
directly in connection with, the sale of or other realization upon the Pledged
Property in connection with the occurrence of an Event of Default hereunder,
including reasonable compensation for any servicing of Mortgage Loans pursuant
to Section 5.03(a)(iii), with respect to which such lien of the Trustee shall
be senior to the Lien of this Indenture in favor of the Holders.
(c) In the event that the Issuer has not paid or caused to be
paid when due to the Trustee any amount owed to the Trustee pursuant to this
Section 6.06, then, if such nonpayment shall continue for ten days after
written notice thereof has been given to the Issuer by the Trustee, the Trustee
may withdraw such amount from the Reserve Fund; provided, however, that the
right of the Trustee to make such withdrawal pursuant to this Section 6.06(c)
shall be subject in all respects to the prior application of amounts on deposit
in the Reserve Fund pursuant to Section 3.03 on any Interest Payment Date,
Redemption Date or at Stated Maturity.
Section 6.07. Corporate Trustee Required; Eligibility
(a) There shall at all times be a Trustee hereunder which shall
be a bank or a corporation organized and doing business under the laws of the
United States of America, any State thereof or the District of Columbia,
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000, or shall be a member of a
bank holding system, the aggregate combined capital and surplus of which is at
least $50,000,000, provided that the Trustee's separate capital and surplus
shall at all times be at least the amount specified in Section 310(a)(2) of the
TIA, and subject to supervision or examination by Federal or State authority.
If such entity publishes reports of condition at least annually, pursuant to
law or to the requirements of said supervising or examining authority, then for
the purposes of this Section 6.07, the combined capital and surplus of such
entity shall be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section
6.07, it shall resign immediately in the manner and with the effect hereinafter
specified in this Article Six.
(b) All Mortgage Loans, Mortgage Notes, Mortgages and related
documentation shall be delivered to and held by the Trustee (directly or on
behalf of the Trustee by the Custodian).
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(c) The Trustee (or a subsidiary thereof able to act in the
premises) shall be eligible to act as a "Servicer" for mortgages sold to FNMA
and GNMA, as set forth in the FNMA Home Mortgage Servicing Contract Supplement,
and as a "Servicer" for mortgages sold to FHLMC, as set forth in the FHLMC
Servicers' Guide. In addition, if the Pledged Property includes FHA Insured
Mortgage Loans and if the FHA requires that a mortgagee under a FHA Insured
Mortgage Loan be an "Approved Mortgagee" as currently defined in regulations
promulgated by it or as such definition may be hereafter amended or meet such
other qualifications to hold and be entitled to the benefits of FHA insurance
of a Mortgage Loan, then the Trustee shall be such an "Approved Mortgagee" or
meet such other qualifications or in the event of any subsequent change in the
requirements to be an "Approved Mortgagee" or in such other qualifications then
the Trustee shall meet such requirements or so qualify on or before the date by
which the Trustee is required to meet such requirements or so qualify. Should
the Trustee fail at any time to meet any of such requirements, it shall
immediately notify the Issuer of such failure, and the Trustee shall deliver
the Mortgage Loans, if any, held by it to a successor Trustee appointed
pursuant to this Section 6.09 or to a co-trustee meeting such requirements and
appointed pursuant to Section 6.12.
Section 6.08. Appointment of Custodian
The Trustee may at any time appoint a Person as custodian (the
"Custodian") to hold the Mortgage Collateral pledged hereunder by entering into
an agreement substantially in the form of Exhibit F hereto with such Person;
provided, however, that no Person other than an Affiliate of the Trustee shall
be appointed as Custodian hereunder without the prior written consent of the
Issuer, which consent shall not be unreasonably withheld; and provided,
further, that the Issuer hereby consents to the appointment of
[____________________] as Custodian. In addition, no other Person shall be
appointed Custodian unless the Trustee shall have received written confirmation
from each Rating Agency that such appointment will not impair, or cause the
Bonds to fail to retain, the rating then assigned to the Bonds by such Rating
Agency.
Section 6.09. Resignation and Removal; Appointment of Successor
(a) No resignation or removal of the Trustee and no appointment
of a successor Trustee pursuant to this Article Six shall become effective
except in accordance with Section 6.10.
(b) The Trustee may resign at any time by giving written notice
thereof to the Issuer; provided, however, that such resignation or removal
shall not become effective until a successor Trustee shall have been appointed
and accepted such appointment in accordance with this Article Six. If an
instrument of acceptance by a successor Trustee shall not have been delivered
to the Trustee 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.
(c) The Trustee may be removed at any time by Act of the Holders
of a majority in principal amount of the Bonds Outstanding (or such lesser
amount as shall have acted at a meeting pursuant to Article Nine) delivered to
the Trustee and the Issuer.
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(d) If at any time:
(i) the Trustee shall cease to be eligible under Section
6.07 (unless, in the case described in Section 6.07(c), a co-trustee
is appointed meeting the requirements of such section) and shall fail
to resign after written request therefor by the Issuer or by the
Holders of a majority in principal amount of the Bonds then
Outstanding, or
(ii) 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, in any case, (A) the Issuer may remove the Trustee or (B)
subject to Section 5.09, the Holders of a majority in principal amount of the
Bonds then Outstanding may, on behalf of themselves and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor thereto.
(e) If the Trustee shall resign, be removed, or become incapable
of acting, or if a vacancy shall occur in the office of the Trustee for any
cause, the Issuer shall promptly appoint a successor thereto. If, within one
year after such resignation, removal or incapability, or the occurrence of such
vacancy, the Issuer has not appointed a successor Trustee, then a successor
Trustee shall be appointed by Act of the Holders of a majority in principal
amount of the Bonds Outstanding (or such lesser amount as shall have acted at a
meeting pursuant to Article Nine) delivered to the Issuer, the Trustee and the
retiring Trustee, and the successor Trustee so appointed by the Holders shall,
forthwith upon its acceptance of such appointment, become the successor Trustee
and supersede the successor Trustee appointed by the Issuer. If no successor
Trustee shall have been so appointed by the Issuer or the Holders of Bonds and
shall have accepted appointment in the manner provided in Section 6.10, any
Holder of a Bond who has been a bona fide Holder of a security for at least six
months may, subject to Section 5.09, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(f) The Issuer shall give notice of each resignation and each
removal of the Trustee and each appointment of a Successor Trustee to the
Holders of Bonds Outstanding in the manner provided in Section 1.06. Each
notice shall include the name of the successor Trustee and the address of its
corporate trust office.
Section 6.10. Acceptance of Appointment by Successor to Trustee
(a) Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Issuer and the retiring Trustee an instrument
accepting such appointment. Upon such acceptance of its appointment hereunder
by the successor Trustee, the retiring Trustee shall duly assign, transfer and
deliver to such successor Trustee all properties and money held by such
retiring Trustee hereunder, subject nevertheless to its lien, if any, provided
in Section 6.06, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the
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rights, powers and trusts of the retiring Trustee hereunder, but, on request of
the Issuer or the successor Trustee, the retiring Trustee shall, upon payment
of its charges in connection therewith and of all amounts owing to it under
Section 6.06, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee hereunder.
Upon request of any such successor Trustee, the Issuer shall execute any and
all instruments for more fully and certainly vesting in and confirming to such
successor Trustee all such rights, powers and trusts.
(b) No successor Trustee shall be permitted to accept its
appointment unless, at the time of such acceptance, such successor Trustee
shall be eligible under this Article Six.
Section 6.11. Merger, Conversion, Consolidation or Succession to
Business
Any corporation or other entity into which the Trustee may be merged
or converted or with which it may be consolidated, or any entity resulting from
any merger, conversion or consolidation to which the Trustee shall be a party,
or any entity succeeding to all or substantially all of the corporate trust
business of the Trustee shall be the successor of the Trustee hereunder,
provided that such entity shall be eligible under this Article Six, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto. In case any Bonds shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion
or consolidation to such authenticating Trustee may adopt such authentication
and deliver the Bonds so authenticated with the same effect as if such
successor Trustee had itself authenticated such Bonds.
Section 6.12. Appointment of Co-Trustees
(a) It is the intent of this Indenture that there shall be no
violation of any law of any State denying or restricting the right of banking
corporations or associations to transact business as trustee in such State. It
is recognized that in case of litigation under this Indenture, and in
particular in case of enforcement upon the occurrence of an Event of Default,
or in the case of the circumstances described in the last sentence of Section
6.07(c) or in case the Trustee deems that by reason of any present or future
law of any State it may not exercise any of the powers, rights or remedies
herein granted to it or hold title to the properties, in trust, as herein
granted, or take any other action which may be desirable or necessary in
connection therewith, it may be necessary that the Issuer or the Trustee
appoint an individual or institution as a separate or co-trustee for such
purpose. The following provisions of this Section 6.12 are adopted to these
ends.
(b) The Trustee may not appoint an individual or institution as
co-trustee or as a separate trustee, unless it receives the written consent of
the Issuer to such appointment, which consent shall not be withheld
unreasonably. No co-trustee or separate trustee may be an Affiliate of the
Issuer or of any of the Issuer's Affiliates. No co-trustee may act as a paying
agent for the Bonds, nor may any co-trustee make withdrawals from the
Distribution Account or the Reserve Fund unless each Rating Agency shall have
confirmed to the Trustee in writing that such actions by such co-trustee will
not impair, or cause the Bonds to fail to retain, the rating then assigned to
the Bonds by such Rating Agency.
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(c) In the event that the Issuer or the Trustee appoints an
additional individual or institution as such separate or co-trustee (i) each
and every remedy, power, right, claim, demand, of action, immunity, estate,
title, interest and lien expressed or intended by this Indenture to be
exercised by or vested in or conveyed to the Trustee with respect thereto shall
be exercisable by and vest in such separate or co-trustee, but only to the
extent necessary to enable such separate or co-trustee to exercise such powers,
rights and remedies and (ii) every covenant and obligation necessary to the
exercise of such rights, powers and remedies by such separate or co-trustee
shall run to and be enforceable by either of them, and such separate or
co-trustee shall have the same rights to reasonable compensation for the
services rendered by it, to indemnification, and as to reliance, as would be
available under this Indenture under similar circumstances to the Trustee;
provided, however, that such rights shall in each case be subject to the same
limitations thereon as would be applicable to the corresponding rights of the
Trustee under similar circumstances. The Issuer or the Trustee shall have the
right to terminate the appointment of any such additional co-trustee hereunder.
(d) In case any such separate trustee or additional co-trustee,
or a successor to either, shall die, become incapable of acting, resign or be
removed, all the estates, properties, rights, powers, trusts, duties and
obligations of such separate trustee or additional co-trustee that would
otherwise be vested in or be the obligation of the Trustee, so far as permitted
by law, shall vest in and be exercised by the Trustee until the appointment of
a new trustee or successor to such separate trustee or co-trustee.
(e) Promptly after the appointment of a co-trustee, the Issuer
shall give notice of such appointment to the Holders of Bonds in the manner
provided in Section 1.06. Such notice shall include the name of the co-trustee
and the address of its corporate trust office.
Section 6.13. Authenticating Agent
The Trustee may appoint, with the consent of the Issuer, an
Authenticating Agent for the Bonds to act as its agent on its behalf and
subject to its direction in connection with the authentication of the Bonds as
set forth in Article Three. Such Authenticating Agent shall at all times be a
bank or a corporation organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia authorized
under such laws to act as Authenticating Agent and perform the functions
contemplated hereby, being subject to supervision or examination by federal or
state authority. Any Authenticating Agent, other than the Authenticating Agent
initially appointed in the next succeeding paragraph shall have a combined
capital and surplus of at least $50,000,000. If such successor Authenticating
Agent 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 6.13, the combined capital and surplus of such
successor Authenticating Agent shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. Upon
any such appointment of an Authenticating Agent, the Trustee shall give notice
thereof to the Holders of the Bonds as provided in Section 1.06.
The Trustee hereby initially appoints the Trustee as Authenticating
Agent for the Bonds, and the Issuer hereby consents to such appointment.
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Any corporation or other entity into which any Authenticating Agent
may be merged or converted or with which it may be consolidated, or any entity
resulting from any merger, conversion or consolidation to which any
Authenticating Agent shall be party, or any entity succeeding to the corporate
agency business of any Authenticating Agent, shall continue to be the
Authenticating Agent without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Issuer. The Trustee may at any
time terminate the agency of any Authenticating Agent by giving written notice
of termination to such Authenticating Agent and to the Issuer. Upon receiving
such a notice of resignation or upon such termination, or if at any time any
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 6.13, the Trustee promptly shall appoint a successor
Authenticating Agent, shall give written notice of such appointment to the
Issuer and shall give notice to all Holders of Bonds in accordance with Section
1.06. No resignation or removal of the Authenticating Agent and no appointment
of a successor Authenticating Agent shall become effective until the acceptance
of appointment by the successor Authenticating Agent. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers, duties and responsibilities of its
predecessor hereunder, with the like effect as if originally named as
Authenticating Agent herein. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section 6.13.
The Trustee agrees to pay to the Authenticating Agent, from time to
time reasonable compensation for its services, and the Trustee shall be
entitled to be reimbursed for such payments subject to the provisions of
Section 6.06. The Authenticating Agent shall have no responsibility or
liability for any action taken by it as such at the direction of the Trustee
except for negligence, bad faith or willful misconduct on its part.
Section 6.14. Manner in Which Certain Collateral Held
All book-entry securities assigned and delivered under this Indenture
shall be maintained in an appropriate book-entry account at the Federal Reserve
Bank of Minneapolis. All such securities registered in the name of the Trustee
or its nominee or deposited for the Trustee's account at the Federal Reserve
Bank of Minneapolis shall be identified on the books and records of the Trustee
as trust property held for the benefit of the Holders under this Indenture.
ARTICLE VII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER,
LEASE OR ASSUMPTION
Section 7.01. The Issuer May Consolidate, Etc., Only on Certain Terms
The Issuer shall not consolidate with or merge into any other entity
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, unless:
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(a) the entity formed by such consolidation or into which the
Issuer is merged or the Person which acquires by conveyance or transfer, or
which leases, the properties and assets of the Issuer substantially as an
entirety shall be a Person organized and existing under the laws of the United
States of America, any State thereof or the District of Columbia and shall
expressly assume, by an indenture supplemental hereto, executed and delivered
to the Trustee in form satisfactory to it, the obligations of the Issuer in
respect of the Bonds and the Collateral and every covenant of this Indenture on
the part of the Issuer to be performed or observed;
(b) the successor entity shall, by such supplemental indenture,
confirm that the Collateral shall secure its obligations under the Bonds and
this Indenture;
(c) immediately after giving effect to such transaction no Event
of Default, and no event which after notice or lapse of time or both, would
become an Event of Default, shall have occurred and be continuing;
(d) the Issuer shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, conveyance, transfer or lease and, if a supplemental indenture is
required in connection with such transaction, such supplemental indenture
comply with this Article Seven and that all conditions precedent herein
provided for relating to such transaction have been complied with; and
(e) the Trustee shall have notified the Rating Agencies and
obtained written confirmation from each Rating Agency that such merger,
conveyance, transfer, lease or assumption will not impair, or cause the Bonds
to fail to retain, the rating then assigned to the Bonds by such Rating Agency.
Section 7.02. Successor Entity Substituted
Upon any consolidation or merger, or any conveyance, transfer or lease
of the properties and assets of the Issuer substantially as an entirety, in
accordance with Section 7.01, the successor entity formed by such consolidation
or into which the Issuer is merged or to which such conveyance, transfer or
lease is made shall succeed to, be substituted for and may exercise every right
and power of the Issuer under this Indenture with the same effect as if such
successor entity had been named as the Issuer herein, and thereafter the
predecessor entity shall be relieved of all obligations and covenants under
this Indenture and under the Bonds.
ARTICLE VIII
SUPPLEMENTAL INDENTURES
Section 8.01. Supplemental Indentures Without Consent of Holders of
Bonds
Without the consent of any Holders of Bonds, the Issuer and the
Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes:
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(a) to evidence the succession of another entity to the Issuer
and the assumption by any such successor of the covenants of the Issuer herein
and in the Bonds;
(b) to add to the covenants of the Issuer for the benefit of the
Holders of Bonds, or to surrender any right or power herein conferred upon the
Issuer;
(c) to secure the Bonds in any manner which is in addition to the
manner in which the Bonds are secured by this Indenture and the Collateral;
(d) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision herein,
or to make any other provisions with respect to matters or questions arising
under this Indenture; provided, however, that such action pursuant to this
clause (4) shall not adversely affect the interests of the Holders of Bonds in
any material respect;
(e) to make appropriate provision for (i) in accordance with
Section 4.12, for any New Eligible Collateral permitted to be included in
Pledged Property, (ii) any change in the characteristics of, or percentage
limitations set forth herein on, Mortgage Loans and Mortgages, (iii) any
reduction in the Discount Factors or (iv) change in the definition of Basic
Maintenance Amount permitted to be made, pursuant to such Section 4.12;
(f) to modify, eliminate or add to provisions of this Indenture
to such extent as shall be necessary to continue to qualify this Indenture
(including any supplemental indenture) under the TIA, or under any similar
federal statute hereafter enacted, and to add to the Indenture such other
provisions as may be expressly permitted by the TIA, excluding, however, the
provisions referred to in Section 316(a)(2) of the TIA as in effect at the date
as of which this Indenture was executed or any corresponding provision in any
similar federal statute hereafter enacted;
(g) to increase the frequency of the Regular Valuation Dates; or
(h) to change the methodology used in calculating the Market
Value of Eligible Collateral;
provided, however, that no supplemental indenture pursuant to this
Section 8.01 shall be effective unless and until the Trustee shall have
provided 30 days prior written notice to the Rating Agencies of such
supplemental indenture, and provided further, that no supplemental indenture
pursuant to clause (7) or (8) of this Section 8.01 shall be effective unless
such supplemental indenture will not impair, or cause the Bonds to fail to
retain, the ratings then assigned to the Bonds by [Rating Agency] and [Rating
Agency], as confirmed in writing by [Rating Agency] and [Rating Agency].
Section 8.02. Supplemental Indentures With Consent of Holders of
Bonds
With the consent of the Holders of at least 66-2/3% in principal
amount of the Outstanding Bonds (or such lesser amount as shall have acted at a
meeting pursuant to the provisions of Article Nine), by Act of said Holders
delivered to the Issuer and the Trustee, the Issuer and the Trustee may enter
into an indenture or indentures supplemental hereto for the
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purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of modifying in any manner the
rights of the Holders of the Bonds under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Bond affected thereby,
(a) change the time of payment of the principal of any Bond from
the time when such principal is due, whether at Stated Maturity, on any
Redemption Date, by acceleration, or otherwise, or change the time of payment
of any installment of interest on any Bond from the time when such interest is
due, whether at Stated Maturity, upon any Interest Payment Date, on any
Redemption Date, upon acceleration of the principal of the Bonds, or otherwise,
or reduce the principal amount thereof or the interest thereon, or change the
coin or currency in which any Bond or the interest thereon is payable, or
impair the right to institute suit for the enforcement of any such payment on
or after the due date thereof;
(b) reduce the requirements of Section 9.04 for quorum or voting;
(c) change the obligation of the Issuer to maintain an office or
agency in the city in which the Corporate Trust Office of the Trustee is
located pursuant to Section 10.02;
(d) reduce the percentage in principal amount of the Bonds
Outstanding the consent of whose Holders is required for any such supplemental
indenture or otherwise modify any of the provisions of this Section 8.02,
except to provide that certain other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each Outstanding Bond
affected thereby, or reduce the percentage of Bonds the Holders of which are
required to take any other action authorized to be taken by or on behalf of the
Holders of any specified aggregate principal amount of Bonds under any
provision hereof, including, without limitation, Section 5.07, or under
applicable law; or
(e) permit the creation of any lien other than the Lien of this
Indenture with respect to any of the Collateral or terminate the Lien of this
Indenture on any Collateral (except as permitted by, and pursuant to, the
provisions of this Indenture) or deprive the Bonds of the security afforded by
the Lien of this Indenture and the Collateral.
It shall not be necessary for any Act of Holders of Bonds under this
Section 8.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
Section 8.03. Execution of Supplemental Indentures
In executing, or accepting the additional trusts created by, any
supplemental indentures permitted by this Article Eight or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and, subject to Section 6.01, shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects its own rights, duties or immunities under this Indenture or otherwise.
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Section 8.04. Effect of Supplemental Indentures
Upon the execution of any supplemental indenture under this Article
Eight, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Bonds theretofore or thereafter executed and delivered
hereunder shall be bound thereby.
Section 8.05. Reference in Bonds to Supplemental Indenture
Bonds authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article Eight may bear a notation in
form approved by the Trustee as to any matter provided for in such supplemental
indenture. New Bonds so modified as to conform, in a form satisfactory to the
Trustee, to any such supplemental indenture may be prepared and executed by the
Issuer and delivered in exchange for Outstanding Bonds.
Section 8.06. Notice of Supplemental Indenture
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of Section 8.02, the Issuer
shall provide notice to the Holders of Bonds and each Rating Agency, setting
forth in general terms the substance of such supplemental indenture, in the
manner provided in Section 1.06. Any failure of the Issuer to provide such
notice, or any defect therein, shall not in any way impair or affect the
validity of any such supplemental indenture.
ARTICLE IX
MEETINGS OF HOLDERS OF BONDS
Section 9.01. Purposes for Which Meetings May Be Called
A meeting of Holders of Bonds may be called at any time and from time
to time pursuant to this Article Nine to make, give or take any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be made, given or taken by Holders of Bonds.
Section 9.02. Call, Notice and Place of Meetings
(a) The Trustee may at any time call a meeting of Holders of
Bonds for any purpose specified in Section 9.01, to be held on a Business Day
at such time and at such place in the city in which the Corporate Trust Office
of the Trustee is located or in such other place as the Trustee shall
determine. Notice of every meeting of Holders of Bonds, setting forth the time
and the place of such meeting and in general terms the action proposed to be
taken at such meeting, shall be given, in the manner provided in Section 1.06,
not less than 10 nor more than 60 days prior to the date fixed for the meeting.
The Trustee may fix, in advance, a date as the record date for determining the
Holders entitled to notice of and the Holders entitled to vote at any such
meeting not less than 20 nor more than 70 days prior to the date fixed for such
meeting.
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(b) In case at any time the Issuer or the Holders of at least 10%
in principal amount of the Bonds Outstanding shall have requested the Trustee
to call a meeting of the Holders of Bonds for any purpose specified in Section
9.01, by written request setting forth in reasonable detail the action proposed
to be taken at the meeting and the proposed date of such meeting (which shall
be a Business Day not less than 20 nor more than 65 days from the date such
request is delivered to the Trustee), and the Trustee shall not have given
notice of such meeting within 10 days after receipt of such request or shall
not thereafter proceed to cause the meeting to be held as provided herein, then
the Issuer or the Holders of Bonds Outstanding in the amount above specified,
as the case may be, may determine the time and the place in the city in which
the Corporate Trust Office of the Trustee is located, or in such other place,
for such meeting and may call such meeting for such purposes by giving notice
thereof as provided in Section 9.02(a).
Section 9.03. Persons Entitled to Vote at Meetings
To be entitled to vote at any meeting of Holders of Bonds, a Person
shall be (1) a Holder of one or more Bonds Outstanding on the record date, or
(2) a Person appointed by an instrument in writing as proxy for a Holder or
Holders of one or more Bonds Outstanding by such Holder or Holders on the
record date. The only Persons who shall be entitled to be present or to speak
at any meeting of Holders shall be the Persons entitled to vote at such meeting
and their counsel, any representatives of the Trustee and its counsel and any
representatives of the Issuer and its counsel.
Section 9.04. Quorum; Action
The Persons entitled to vote a majority in principal amount of the
Bonds Outstanding shall constitute a quorum for the taking of any action at a
meeting of Holders of Bonds. In the absence of any quorum within 30 minutes of
the time appointed for any such meeting, the meeting shall, if convened at the
request of the Holders of Bonds, be dissolved. In any other case, the meeting
may be adjourned for a period of not less than 10 days as determined by the
chairman of the meeting, who is to be elected pursuant to Section 9.05 hereof,
prior to the adjournment of such meeting. In the absence of a quorum at the
reconvening of any such adjourned meeting, such reconvened meeting may be
further adjourned for a period of not less than 10 days as determined by the
chairman of the meeting, who is to be elected pursuant to Section 9.05 hereof,
prior to the adjournment of such reconvened meeting. Notice of the reconvening
of any adjourned meeting shall be given as provided in Section 9.02(a), except
that such notice shall be given not less than five days prior to the date on
which the meeting is scheduled to be reconvened. Notice of the reconvening of
an adjourned meeting shall state expressly the percentage of the principal
amount of the Bonds Outstanding which shall constitute a quorum.
Subject to the foregoing, at the reconvening of any meeting adjourned
for a lack of a quorum the Persons entitled to vote 25% in principal amount of
the Bonds Outstanding at the time shall constitute a quorum for the taking of
any action set forth in the notice of the original meeting.
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At a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid, any resolution and all matters (except a matter
as to which the vote or Act of the Holders of a greater percent of the
principal amount of Bonds Outstanding is required by this Indenture including,
without limitation, Section 8.02 hereof) shall be effectively passed and
decided if passed or decided by the Persons entitled to vote 66-2/3% in
principal amount of Bonds Outstanding represented and voting at such meeting.
Any resolution passed or decision taken at any meeting of Holders of
Bonds duly held in accordance with this Section 9.04 shall be binding on all
the Holders of Bonds, whether or not present or represented at the meeting.
Section 9.05. Determination of Voting Rights; Conduct and
Adjournment of Meetings
(a) Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any
meeting of Holders of Bonds in regard to proof of the holding of Bonds and of
the appointment of proxies and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies, certificates
and other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall deem appropriate. Except as otherwise
permitted or required by any such regulations, the holding of Bonds shall be
proved in the manner specified in Section 1.04 and the appointment of any proxy
shall be proved in the manner specified in Section 1.04 or by having the
signature of the person executing the proxy witnessed or guaranteed by any
trust company, bank or banker. Such regulations may provide that written
instruments appointing proxies, regular on their face, may be presumed valid
and genuine without the proof specified in Section 1.04 or other proof.
(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Issuer or the Holders of Bonds as provided in Section 9.02(b), in which
case the Issuer or the Holders of Bonds calling the meeting, as the case may
be, shall in like manner appoint a temporary chairman. A permanent chairman and
a permanent secretary of the meeting shall be elected by vote of the Persons
entitled to vote a majority in principal amount of the Bonds Outstanding
represented at the meeting.
(c) At any meeting each Person entitled to vote at such meeting
shall be entitled to one vote for each $1,000 principal amount of Bonds held or
represented by such Person; provided, however, that no vote shall be cast or
counted at any meeting in respect of any ▇▇▇▇ challenged as not Outstanding and
ruled by the chairman of the meeting to be not Outstanding. The chairman of the
meeting shall have no right to vote, except as a Holder of a Bond or proxy.
(d) Any meeting of Holders of Bonds duly called pursuant to
Section 9.02 at which a quorum is present may be adjourned from time to time by
Persons entitled to vote a majority in principal amount of the Bonds
Outstanding represented at the meeting; and the meeting may be held as so
adjourned without further notice.
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Section 9.06. Counting Votes and Recording Action of Meetings
The vote upon any resolution submitted to any meeting of Holders of
Bonds shall be by written ballots on which shall be subscribed the signatures
of the Holders of Bonds or of their representatives by proxy and the principal
amounts and identifying numbers of the Bonds Outstanding held or represented by
them. The permanent chairman of the meeting shall appoint two inspectors of
votes who shall count all votes cast at the meeting for or against any
resolution and who shall make and file with the secretary of the meeting their
verified written reports in duplicate of all votes cast at the meeting. A
record, at least in duplicate, of the proceedings of each meeting of Holders of
Bonds shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 9.02 and, if
applicable, Section 9.04. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Issuer and another to the Trustee to be
preserved by the Trustee, the last to have attached thereto the ballots voted
at the meeting. Any records so signed and verified shall be conclusive evidence
of the matters therein stated.
ARTICLE X
COVENANTS
Section 10.01. Payment of Principal and Interest; Maintenance of
Offices or Agencies
The Issuer will duly and punctually pay the principal of and interest
on the Bonds at the rate or rates, at the respective times and in the manner
provided in the Bonds and in this Indenture, and will make provision for such
payments in accordance with Section 10.03. The final payment of principal on
any Bond shall be payable only upon presentation and surrender of such ▇▇▇▇.
The Issuer will maintain an office or agency in the city in which the
Corporate Trust Office of the Trustee is located where Bonds may be presented
or surrendered for payment of interest or principal, transfer or exchange and
where notices and demands to or upon the Issuer in respect of the Bonds and
this Indenture may be served. The Issuer will give prompt written notice to the
Trustee of the location, and of any change in the location, of each such office
or agency. If at any time the Issuer shall fail to maintain any such office or
agency or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Issuer hereby appoints the
Trustee its agent to receive all such presentations, surrenders, notices and
demands.
The Issuer hereby appoints the Corporate Trust Office of the Trustee
as the office where notices and demands to or upon the Issuer in respect of the
Bonds and this Indenture shall be served and the Trustee as the initial Paying
Agent.
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Section 10.02. Paying Agent
The Trustee hereby accepts appointment as Paying Agent. The Trustee
may appoint one or more other Paying Agents or successor Paying Agents.
Each Paying Agent, immediately upon such appointment, shall signify
its acceptance of the duties and obligations imposed upon it by this Agreement
by written instrument of acceptance deposited with the Trustee.
Each such Paying Agent other than the Trustee shall execute and
deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Indenture, that such Paying
Agent will:
(a) allocate all sums received for payments to the Holders of
Bonds for which it is acting as Paying Agent on each Payment Date among such
Holders in the proportion specified by the Trustee; and
(b) hold all sums held by it for the payment of amounts due with
respect to the Bonds in trust for the benefit of the Holders entitled thereto
until such sums shall be paid to such Holders or otherwise disposed of as
herein provided and pay such sums to such Persons as herein provided.
Any Paying Agent other than the Trustee may at any time resign and be
discharged of the duties and obligations created by this Agreement by giving at
least sixty (60) days written notice to the Trustee. Any such Paying Agent may
be removed at any time by an instrument filed with such Paying Agent signed by
the Trustee.
In the event of the resignation or removal of any Paying Agent other
than the Trustee, such Paying Agent shall pay over, assign and deliver any
moneys held by it as Paying Agent to its successor, or if there be no
successor, to the Trustee.
Upon the appointment, removal or notice of resignation of any Paying
Agent, the Trustee shall notify the Holders of Bonds in accordance with Section
1.06.
Section 10.03. Money for Bond Payments to Be Held in Trust
(a) Not later than the Liquidity Date, the Issuer shall either
(i) deliver to the Trustee an aggregate principal amount of Deposit Securities
such that after such delivery, principal and interest payable on or before the
Stated Maturity in respect of such Deposit Securities, plus the amount of Cash
that will otherwise be available in the Distribution Account and the Reserve
Fund on such date, shall at least equal the Selected Amount on such Liquidity
Date, together with an Officers' Certificate Regarding Deposit Securities in
the form of Exhibit G-1 and an Opinion of Counsel in the form of Exhibit C or
(ii) make other arrangements acceptable to each Rating Agency (as evidenced by
written confirmation from each Rating Agency) to deposit on the Business Day
preceding the Stated Maturity an amount of Cash, together with the amount of
Cash that will otherwise be available in the Distribution Account and the
Reserve Fund on the Stated Maturity, at least equal to the Selected Amount and
notify the Trustee of such
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arrangements. Notwithstanding the foregoing, if, as of the 45th day preceding
the Stated Maturity, the rating by [Rating Agency] or [Rating Agency] of the
long- term unsecured debt of [Bank America Corporation] has fallen below BBB or
Baa2, as the case may be, then no later than 30 days before the Stated
Maturity, the Issuer must deliver Deposit Securities to the Trustee as
described in clause (i) of the preceding sentence. If the Issuer shall fail to
take any of the actions described in either of the preceding two sentences,
whichever is applicable, within the prescribed period, the Trustee shall
liquidate Collateral, as promptly as possible, to the extent necessary to
enable the Issuer to pay an amount equal to the Selected Amount at the Stated
Maturity.
(b) Any delivery of Deposit Securities made pursuant to this
Section 10.03 shall be held in the Distribution Account for the benefit of the
Persons entitled to such principal or interest and shall be irrevocable once
made until the principal or interest becoming due has been duly and punctually
paid or otherwise provided for. In the event that the amount of funds made
available for the payment of principal and interest the Stated Maturity by the
prior delivery of Deposit Securities pursuant to this Section 10.03 shall
exceed the amount of principal and interest which is payable on the Stated
Maturity, the difference between such amounts shall be paid to the Issuer by
the Trustee within three Business Days after the Stated Maturity. In the event
that the amount of funds thus made available is insufficient for such purpose
for any reason, the Issuer shall nevertheless be obligated to make or otherwise
provide for the payment of principal and interest on the Stated Maturity in
full.
(c) In the event that any Paying Agent other than the Trustee has
been appointed by the Issuer, the Issuer shall deliver the Deposit Securities
as and when required by Section 10.03(a) to such Paying Agent. The Issuer will
cause any Paying Agent other than the Trustee to execute and deliver to the
Trustee an instrument in which such Paying Agent shall agree with the Trustee,
subject to the provisions of this Section 10.03, that such Paying Agent will:
(i) hold all sums held by it for the payment of the
principal of or redemption price of or interest on Bonds in trust for
the benefit of the Persons entitled thereto until such sums shall be
paid to such Persons or otherwise disposed of as herein provided;
(ii) give the Trustee notice of any default by the Issuer
in the making of any payment of principal or interest or of the
failure of the Issuer to deliver Deposit Securities on the Liquidity
Date or such other date as may be required by Section 10.03(a)(ii);
and
(iii) at any time during the continuance of an Event of
Default, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such Paying Agent.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, direct
any such Paying Agent to pay to the Trustee all sums held in trust by such
Paying Agent, such sums to be held by the Trustee upon the same trusts as those
upon which such sums were held by such Paying Agent; and, upon such payment by
any such Paying Agent to the Trustee, such Paying Agent shall be released from
all further liability with respect to such money.
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(d) Any Cash delivered by the Issuer to the Trustee pursuant to
Section 10.03(a) shall be invested by the Trustee as directed by an Issuer's
Request in other Deposit Securities having a maturity date at least one
Business Day prior to the date on which the applicable payment in respect of
the Bonds is due and payable. All of the interest and principal payable on
Deposit Securities shall be paid directly to the Trustee, and all Deposit
Securities shall have a maturity date at least one Business Day prior to the
date on which the relevant payment in respect of the Bonds is due and payable.
(e) If any payment of the principal of or interest on any Bond
remains unclaimed for two years after such principal or interest has become due
and payable, the proceeds of any Deposit Securities delivered to the Trustee or
any Paying Agent in trust for the payment of such principal or interest shall
be paid to the Issuer on Request; and the Holder of such Bond shall hereafter,
as an unsecured general creditor, look only to the Issuer for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such
trust money, and all liability of the Issuer as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment or redelivery, may at the
expense of the Issuer cause notice to be given as provided in Section 1.06 that
such payment remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such notice, any unclaimed
balance of such Deposit Securities then remaining will be repaid or redelivered
to the Issuer.
Section 10.04. Warranty of Title and Authority to Pledge
The Issuer warrants and agrees that all of the Collateral now or
hereafter subjected to the Lien of this Indenture is or will be, as the case
may be, owned by the Issuer and pledged by it hereunder free and clear of any
mortgage, pledge, security interest, lien, charge or encumbrance, except the
Lien of this Indenture, and that it has and will have full power and lawful
authority to pledge such Collateral and to assign, transfer and deliver such
Collateral in the manner and form aforesaid or to cause such Collateral so to
be pledged and such Collateral so to be assigned, transferred and delivered.
The Issuer hereby does and will forever warrant and defend the title of the
Trustee to the Collateral, whether now or hereafter pledged or assigned by the
Issuer, for the benefit of the Holders of Bonds against the lawful claims and
demands of all Persons whomsoever.
Section 10.05. Protection of Lien
(a) The Issuer will do all things and take all actions necessary
to keep the Lien of this Indenture a first, prior and perfected lien upon the
Collateral on behalf of the Holders of Bonds and protect its title to the
Collateral against loss by reason of any foreclosure or other proceeding to
enforce any lien prior to or pari passu with the Lien of this Indenture, other
than the limited prior lien granted to the Trustee pursuant to Section 6.06.
(b) The Issuer will:
(i) duly and promptly pay and discharge, or cause to be
paid and discharged, before they become delinquent, all taxes,
assessments, governmental and other charges
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lawfully levied, assessed or imposed upon or against any of the
Collateral including the income or profits therefrom and the interests
of the Trustee and Holders in such Collateral or in any Mortgages
securing Mortgage Loans included in the Collateral;
(ii) duly observe and conform in all material respects to
all valid requirements of any governmental authority imposed upon the
Issuer relative to any of the Collateral, and all covenants, terms and
conditions under or upon which any part thereof is held;
(iii) cause to be paid and discharged all lawful claims
(including, without limitation, income taxes) which, if unpaid, might
become a lien or charge upon the Collateral; and
(iv) collect or cause to be collected all payments due on
the Collateral, take or cause to be taken appropriate action in
connection with defaults thereunder and otherwise service or cause to
be serviced such Collateral, all in accordance with the Issuer's
customary practices.
Nothing contained in this Section 10.05 shall require the payment of
any such tax, assessment, claim, lien or charge or the compliance with any such
requirement (i) so long as the validity, application or amount thereof shall be
contested in good faith, or (ii) with respect to any of the real property
covered by any Mortgage.
Section 10.06. Filing; Opinion of Counsel
The Issuer will cause all financing and continuation statements, if
any, with respect to this Indenture and all supplemental indentures to be kept
recorded and filed in such manner and in such places, if any, as may in the
opinion of counsel for the Issuer be required by law in order to preserve and
protect the rights of the Holders of the Bonds and the Trustee and will pay all
taxes and fees incidental thereto. The Issuer will furnish to the Trustee
concurrently with the execution and delivery of each supplemental indenture, an
Opinion of Counsel:
(a) that in the opinion of such counsel the Issuer has effected
all such filings as are necessary to make effective the lien intended to be
created hereby and thereby, and reciting the details of such action, or that in
the opinion of such counsel no such action is necessary to make effective such
lien; and
(b) that any other action required by this Indenture to be taken
so as to make such lien effective has been taken, and reciting the details of
such action, or that in the opinion of such counsel no such other action is
necessary to make such lien effective.
The Issuer will also cause all Collateral assigned to the Trustee to
be kept recorded and filed in such manner and in such places as may in the
opinion of counsel for the Issuer be required by law in order to protect and
preserve the rights of the Trustee and the Issuer.
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Section 10.07. Further Assurances
The Issuer will execute and deliver, or cause to be executed and
delivered, all such additional instruments and do, or cause to be done, all
such additional acts as (a) may be necessary or proper, consistent with the
Granting Clauses hereof, to carry out the purposes of this Indenture and to
make subject to the lien hereof any property intended so to be subject, (b) may
be necessary or proper to transfer and deliver to any successor trustee the
estate, powers, instruments and funds held in trust hereunder and to confirm
the Lien of this Indenture or the priority thereof, or (c) the Trustee may
reasonably request for any of the foregoing purposes. The Issuer will also
cause to be filed, registered or recorded any instruments of conveyance,
transfer, assignment or further assurance in all offices in which such filing,
registering or recording is necessary to the validity thereof or to give notice
thereof. The Issuer hereby authorizes the Trustee to file all such financing
statements and continuation statements as the Trustee may deem necessary or
advisable to make or keep effective the Lien of this Indenture or the priority
thereof but the Trustee shall have absolutely no obligation to make any such
filings.
Section 10.08. Advances by Trustee
If the Issuer shall fail to perform any of its covenants contained in
this Indenture, the Trustee may (but shall not be obligated to) make advances
to perform the same on behalf of the Issuer, and the Issuer will repay upon
demand all sums so advanced, with interest from the date such advances are made
to the date such advances are repaid by the Issuer at the rate of interest
borne by the Bonds. The principal amount of all sums so advanced, but not the
interest thereon, shall be secured by this Indenture and have priority to the
Bonds. No such advance shall be deemed to relieve the Issuer from any default
or Event of Default hereunder.
Section 10.09. Restriction on Amendment of Certain Instruments
The Issuer will not enter into any agreement providing for, or consent
to, any modification, alteration, supplement or amendment of any Collateral,
except as provided in this Indenture. To the extent so permitted, the Issuer
may waive compliance with provisions in any Government Securities, Mortgage
Loans, Mortgage Notes, Mortgages, Deposit Securities or other securities
included in the Pledged Property, either before or after the time when such
compliance was required, but no such waiver shall extend to or affect such
provisions except to the extent expressly waived.
Section 10.10. Maintenance of Books of Record and Account;
Financial Statements of the Issuer
(a) The Issuer will keep proper books of record and account in
which full and correct entries will be made of its transactions pursuant hereto
in accordance with generally accepted accounting principles. The Issuer will
permit the Trustee and its agents, auditors, attorneys and counsel, at all
reasonable times, to examine all of the books of record and account of the
Issuer and to take copies and extracts therefrom in such manner that the
business operations of the Issuer are not unduly disrupted, and will from time
to time furnish, or cause to be furnished, to the Trustee such information and
statements as the Trustee may reasonably request, all as may be
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reasonably necessary for the purpose of determining performance or observance
by the Issuer of the covenants, conditions and obligations contained in this
Indenture.
(b) The Issuer will deliver to the Trustee within 120 days after
the expiration of each fiscal year of the Issuer, a consolidated statement of
operations for such fiscal year and a consolidated statement of condition of
the Issuer as of the last day of such fiscal year. Such consolidated statements
of operations and condition shall set forth in reasonable detail the results of
operations for the period ended, and the financial condition of the Issuer as
at the date thereof, and shall be accompanied by the report or opinion of the
Independent Accountants who have audited the books of the Issuer for such
fiscal year.
Section 10.11. Statement as to Compliance and Audit of Collateral
(a) The Issuer will deliver to the Trustee within 120 days after
the end of each fiscal year of the Issuer, an Officers' Certificate stating
that:
(i) a review of the activities of the Issuer and of the
performance by the Issuer under this Indenture during such year has
been made under such Officers' supervision, and
(ii) to the best of such Officers' knowledge, based on
such review, the Issuer has fulfilled all its obligations under this
Indenture throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known
to them and the nature and status thereof.
(▇) ▇▇▇▇▇▇▇▇▇ upon any officer of the Issuer obtaining
information causing him or her to believe there exists a default in the
performance, or breach, of any covenant of the Issuer contained in this Article
Ten, the Issuer will deliver to the Trustee an Officers' Certificate specifying
the nature, status and period of existence thereof.
Section 10.12. Title Insurance
The Issuer agrees that unless an Opinion of Counsel to the effect set
forth in subclause (ii) of clause (d) of the second paragraph of Clause Second
of the Granting Clauses hereof is delivered to the Trustee, the Mortgages will
be insured by title insurance as described in the Officers' Certificate
delivered pursuant to clause (d) of the second paragraph of Clause Second of
the Granting Clauses hereof, and that the terms of each policy of such title
insurance will provide that any assignee (including the Trustee) of the
Mortgage covered by such policy will automatically be an insured thereunder. If
an Event of Default shall have occurred and be continuing, the Issuer, upon the
request of the Trustee, shall deliver or cause to be delivered to the Trustee
all mortgage title insurance policies that relate to Mortgage Loans included in
the Pledged Property.
Section 10.13. Fire and Extended Coverage Insurance
The Issuer agrees to use its best efforts to cause to be maintained in
regard to each property covered by a Mortgage insurance against loss or damage
by fire and the risks embraced
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within the term "extended coverage" in an amount not less than the maximum
insurable value of the improvements securing the related Mortgage Loan or the
principal balance owing on such Mortgage Loan, whichever is less. All insurance
relating to Mortgage Loans shall be payable to the Issuer as its interest may
appear. Any proceeds of such insurance received by the Issuer after an Event of
Default shall have occurred and be continuing shall be received and held by the
Issuer in trust and paid to the Trustee.
Section 10.14. Selection of Eligible Mortgage Loans
In selecting Eligible Fixed-Rate Mortgage Loans for inclusion in the
Eligible Collateral, the Issuer will use its best efforts to include Eligible
Fixed-Rate Mortgage Loans secured by Eligible Mortgages with a geographical
dispersion representative, to the extent possible, of the entire portfolio of
Eligible Fixed-Rate Mortgages originated and serviced by NationsBanc Mortgage.
In selecting Eligible Adjustable-Rate Mortgage Loans for inclusion in the
Eligible Collateral, the Issuer will use its best efforts to include Eligible
Adjustable-Rate Mortgage Loans secured by Eligible Mortgages with a
geographical dispersion representative, to the extent possible, of the entire
portfolio of Eligible Adjustable-Rate Mortgages originated and serviced by
NationsBanc Mortgage.
Section 10.15. Notice to Trustee of Change in Regulations
The Issuer will notify the Trustee within 60 days of any law,
regulation, rule or order instituted that could affect the ability of the
Issuer to pledge additional Collateral.
Section 10.16. Notices and Copies of Supplemental Indentures,
Collateral Reports and Accountants' Letters to
Rating Agencies
The Trustee shall give each Rating Agency notice of the following
events: (1) failure of the Trustee to obtain two bid prices for any Collateral
as to which the definition of Market Value specifies that such bid prices be
obtained and (2) mandatory redemption of the Bonds; provided, however, that
there shall be no liability of the Trustee for failure to do so.
The Trustee shall also provide each Rating Agency with a copy of each
Supplemental Indenture and each Collateral Report and Accountants' Letter
delivered pursuant to this Indenture; provided, however, that there shall be no
liability of the Trustee for failure to do so.
Section 10.17. Covenants Regarding Issuer's Business
For so long as any Bonds are Outstanding, the Issuer will not engage
in any business other than (i) issuing and selling the Bonds and the separate
series of similar securities under separate indentures similar to this
Indenture as contemplated by Issuer's Registration Statement on Form S-3,
declared effective by the Commission on September 28, 1994, as amended, or
subsequent similar registration statements filed by the Issuer, and acquiring,
owning, holding and pledging the related pledged property in connection
therewith, (ii) issuing and selling certain subordinated indebtedness and (iii)
engaging in other activities which are necessary, suitable or convenient to
accomplish the foregoing or are incidental thereto or connected therewith.
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Section 10.18. Treatment of Bonds as Debt for Tax Purposes
The Issuer has entered into the Indenture and the Bonds are issued
with the intention that, for federal, state and local income and franchise tax
purposes, the Bonds will qualify as indebtedness of the Issuer secured by the
Trust Estate. Each Bondholder, by acceptance of a Bond (and each Beneficial
Owner by acceptance of a beneficial interest in a Bond), agrees to treat the
Bonds for federal, state and local income and franchise tax purposes as
indebtedness of the Issuer.
ARTICLE XI
REDEMPTION OF BONDS
Section 11.01. Mandatory Redemption Due to Failure to Meet Basic
Maintenance Amount
(a) The Bonds are subject to mandatory redemption in part in
accordance with this Section 11.01 and the other sections of this Article
Eleven in the event that the Discounted Value of the Eligible Collateral
included in Pledged Property, as determined by the Trustee pursuant to Section
4.06 with respect to any Regular Valuation Date, is less than the Basic
Maintenance Amount and the Issuer is unable by the Cure Date, to pledge
additional Eligible Collateral and/or substitute Eligible Collateral and/or
deliver to the Trustee for cancellation thereof Bonds repurchased by the Issuer
or by one of its Affiliates in a principal amount sufficient to render the
Discounted Value of the Eligible Collateral included in Pledged Property at
least equal to the Basic Maintenance Amount. Notwithstanding the foregoing, if
the report prepared by the Trustee with respect to any Regular Valuation Date
immediately following the Cure Date and prior to the date on which the Trustee
gives notice of redemption to the Holders shows that the Discounted Value of
the Eligible Collateral is at least equal to the Basic Maintenance Amount as of
such Regular Valuation Date, the Issuer shall not be required to make a
mandatory redemption of the Bonds.
Any such mandatory partial redemption shall require the redemption of
Bonds in an aggregate principal amount that is the smallest principal amount
(rounded to the next higher integral multiple of $1,000) of the Bonds necessary
in order (i) to bring the Discounted Value of the Eligible Collateral included
in Pledged Property (determined as of the Regular Valuation Date immediately
preceding the date on which the Trustee gives written notice of redemption to
the Holders) to the Basic Maintenance Amount as of the date on which such
calculation is being made (as adjusted to give effect to such redemption),
after giving effect to (A) the pledge of additional Eligible Collateral, (B)
the delivery to the Trustee for cancellation of Bonds repurchased by the Issuer
or an Affiliate, and (C) such redemption and (ii) to permit the delivery of the
Collateral Report by the Trustee as required by Section 11.01(b). Any such
mandatory redemption shall be made at the Redemption Price, on a Redemption
Date within 30 days after the applicable Cure Date, which Redemption Date shall
be selected by the Trustee after consultation with the Issuer.
(b) On each Redemption Date with respect to a redemption pursuant
to this Section 11.01, the Issuer shall deliver to the Trustee a Collateral
Report, dated as of such Redemption
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Date, which Collateral Report shall show that after giving effect to the
redemption of Bonds pursuant to this Article Eleven, and to any other actions
taken by the Issuer pursuant to Section 11.01, the Discounted Value of the
Eligible Collateral included in the Pledged Property (determined at the option
of the Issuer as of the prior Valuation Date or the Cure Valuation Date) is
equal to or greater than the Basic Maintenance Amount as of the Prior Valuation
Date (as adjusted to give effect to such redemption).
Section 11.02. Selection of Bonds to Be Redeemed
Selection of the Bonds to be redeemed shall be made in such manner as
the Trustee deems fair and reasonable, the particular Bonds to be redeemed to
be selected by the Trustee not more than 12 or less than 7 days prior to the
Redemption Date in the case of a redemption pursuant to Section 11.01, from the
Outstanding Bonds not previously called for redemption by lot or pro rata or by
such other methods as the Trustee shall deem fair and appropriate; provided,
that the Trustee shall select Bonds for redemption in such manner that no
single Bond to be Outstanding following redemption shall be in a denomination
of less than $100,000. The Trustee shall notify the Issuer in writing of the
Bonds selected for redemption and, in the case of any Bonds selected for
partial redemption, the principal amount to be redeemed, on the same day on
which the Holders of the Bonds are so notified.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Bonds shall relate, in
the case of any Bond redeemed or to be redeemed only in part, to the portion of
the principal of such Bond which has been or is to be redeemed.
Section 11.03. Notice of Redemption
Notice of redemption shall be given in the manner provided in Section
1.06 to the Holders of Bonds to be redeemed. Notice of redemption pursuant to
Section 11.01 shall be given not more than 10 nor less than 5 days prior to the
Redemption Date.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) that on the Redemption Date the Redemption Price will become
due and payable upon each such Bond to be redeemed, and that interest thereon
shall cease to accrue on and after said date;
(d) the place where such Bonds are to be surrendered for payment
of the Redemption Price; and
(e) the identification (and the respective principal amounts) of
the Bonds to be redeemed.
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Notice of redemption of Bonds shall be given by the Issuer or, at the
Issuer's Request, by the Trustee in the name of and at the expense of the
Issuer.
Section 11.04. Bonds Payable on Redemption Date
(a) Notice of redemption having been given as aforesaid, each of
the Bonds called for redemption shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified upon surrender of any such
Bond in accordance with said notice. From and after the Redemption Date (unless
the Issuer shall default in the payment of the Redemption Price), the principal
amount of the Bonds called for redemption shall cease to bear interest and,
except as set forth in Section 11.04(b), the only right of the Holders of such
Bonds shall be to receive payment of the Redemption Price.
(b) The Issuer shall execute and the Trustee shall authenticate
and deliver to the Holder of any Bond that is to be redeemed in part only a new
Bond or Bonds, as requested by such Holder, in authorized denomination and in
an aggregate principal amount equal to and in exchange for the unredeemed
portion, if any, of the Bond surrendered for redemption. Such new Bond or Bonds
shall continue to bear interest at the interest rate borne by the Bonds, until
the principal thereof shall be paid.
(c) If any Bond called for redemption shall not be paid upon
surrender thereof for redemption, the principal thereof shall, until paid, bear
interest from the Redemption Date at the rate borne by the Bond.
Section 11.05. Liquidation of Collateral in Respect of Redemption
Immediately after receiving notice of any redemption pursuant to
Section 11.01, the Trustee shall liquidate Collateral, as promptly as possible,
to the extent necessary to enable the Issuer to pay on the Redemption Date the
aggregate Redemption Price of all of the Bonds required to be redeemed on such
Redemption Date; provided, that the Trustee will not do so if concurrently with
such notice the Issuer delivers Deposit Securities to the Trustee in an amount
sufficient to provide for full payment of the Redemption Price of the Bonds
required to be redeemed.
ARTICLE XII
BONDHOLDERS' LISTS AND REPORTING REQUIREMENTS
The following provisions of this Article Twelve are all subject to
Section 12.05.
Section 12.01. Issuer To Furnish Trustee Names and Addresses of
Bondholders
The Issuer will furnish or cause to be furnished to the Trustee (a)
not more than five days after each Regular Record Date with respect to the
Bonds, a list, in such form as the Trustee may reasonably require, of the names
and addresses of the Holders of the Bonds as of such Regular Record Date and
(b) at such other times as the Trustee may request in writing, within 30 days
after receipt by the Issuer of any such request, a list of similar form and
content as of a date not
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more than 10 days prior to the time such list is furnished; provided, however,
that so long as the Trustee is the Bond Registrar, no such list shall be
required to be furnished.
Section 12.02. Preservation of Information; Communications to
Bondholders
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Holders of Bonds
contained in the most recent list furnished to the Trustee as provided in
Section 12.01 hereof and the names and addresses of Holders of Bonds received
by the Trustee in its capacity as Bond Registrar. The Trustee may destroy any
list furnished to it as provided in such Section 12.01 upon receipt of a new
list so furnished.
(b) If three or more Holders of Bonds ("applicants") apply in
writing to the Trustee, and furnish to the Trustee reasonable proof that each
such applicant has owned a Bond for a period of at least six months preceding
the date of such application and such application states that the applicants
desire to communicate with other Holders of Bonds or with the Holders of all
Bonds with respect to their rights under this Indenture or under such Bonds and
is accompanied by a copy of the form of proxy or other communication which such
applicants propose to transmit, then the Trustee shall, within five Business
Days after the receipt of such application, at its election, either:
(i) afford such applicants access to the information
preserved at the time by the Trustee in accordance with Subsection (a)
of this Section, or
(ii) inform such applicants as to the approximate number
of Holders of Bonds whose names and addresses appear in the
information preserved at the time by the Trustee in accordance with
Subsection (a) of this Section, and as to the approximate cost of
mailing to such Bondholders the form of proxy or other communication,
if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Bondholder whose name and address appear in the
information preserved at the time by the Trustee in accordance with Subsection
(a) of this Section, a copy of the form of proxy or other communication which
is specified in such request, with reasonable promptness after a tender to the
Trustee of the material to be mailed and of payment, or provision for the
payment, of the reasonable expenses of mailing, unless within five days after
such tender, the Trustee shall mail to such applicants and file with the
Commission, together with a copy of the material to be mailed, a written
statement to the effect that, in the opinion of the Trustee, such mailing would
be contrary to the best interests of the Holders of Bonds or would be in
violation of applicable law. Such written statement shall specify the basis of
such opinion. If the Commission, after opportunity for a hearing upon the
objections specified in the written statement so filed, shall enter an order
refusing to sustain any of such objections or if, after the entry of an order
sustaining one or more of such objections, the Commission shall find, after
notice and opportunity for hearing, that all the objections so sustained have
been met and shall enter an order so declaring, the Trustee shall mail copies
of such material to all such Bondholders with reasonable promptness after the
entry
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of such order and the renewal of such tender; otherwise the Trustee shall be
relieved of any obligation or duty to such applicants respecting their
application.
(c) Every Holder of Bonds, by receiving and holding the same,
agrees with the Issuer and the Trustee that neither the Issuer nor the Trustee
shall be held accountable by reason of the disclosure of any such information
as to the names and addresses of the Holders of Bonds in accordance with
Subsection (b) of this Section 12.02, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under Subsection (b)
of this Section 12.02.
Section 12.03. Reports by Trustee
(a) Within 60 days after December 31 of each year commencing with
December 31, 1999, the Trustee shall transmit by mail to the Bondholders, as
their names and addresses then appear in the Bond Register, a brief report
dated as of December 31 ("reporting date") with respect to each of the
following events; provided, however, that if no such event has occurred within
the previous twelve months (or within the period since the Closing Date, in the
case of the first such report) no report need be transmitted:
(i) any change to its eligibility and its qualifications
under Section 6.07 hereof, including a report with respect to the
creation of or any material change to a relationship specified in
paragraph (1) through (10) of Section 310(b) of the TIA, or in lieu
thereof, if to the best of its knowledge it has continued to be
eligible and qualified under said Sections, a written Statement to
such effect;
(ii) the character and amount of any advances (and if the
Trustee elects so to state, the circumstances surrounding the making
thereof) made by the Trustee (as such) which remain unpaid on the
reporting date, and for the reimbursement of which it claims or may
claim a lien or charge, prior to that of the Bonds, on the Pledged
Property or on any property or funds held or collected by it as
Trustee, except that the Trustee shall not be required (but may elect)
to report such advances if such advances so remaining unpaid aggregate
not more than 1/2 of 1% of the principal amount of the Bonds
Outstanding on the reporting date;
(iii) the amount, interest rate and maturity date of all
other indebtedness owing by the Issuer (or by any other obligor on the
Bonds) to the Trustee in its individual capacity on the reporting
date, with a brief description of any property held as collateral
security therefor, except an indebtedness based upon a creditor
relationship arising in any manner described in Section 311(b) of the
TIA;
(iv) any change to the property and funds, if any,
physically in the possession of the Trustee as such on the reporting
date;
(v) any release, or release and substitution, of
property subject to the Lien of this Indenture (and the consideration
therefor, if any) which the Trustee has not previously reported; and
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(vi) any action taken by the Trustee in the performance
of its duties hereunder which it has not previously reported and which
in its opinion materially affects the Bonds or the Pledged Property.
(b) The Trustee shall transmit by mail to all Bondholders, as
their names and addresses appear in the Bond Register a brief report with
respect to (i) the release, or release and substitution, of property subject to
the Lien of this Indenture (and consideration therefor if any) unless the fair
value of such property is less than 10% of the principal amount of the Bonds
Outstanding at the time of such release, or such release and substitution, such
report to be transmitted within 90 days of such time, and (ii) the character
and amount of any advances (and if the Trustee elects so to state, the
circumstances surrounding the making thereof) made by the Trustee (as such)
since the date of the last report transmitted pursuant to Subsection (a) of
this Section 12.03 (or if no such report has yet be so transmitted, since the
Closing Date) for the reimbursement of which it claims or may claim a lien or
charge, prior to that of the Bonds, on property or funds held or collected by
it as Trustee, and which it has not previously reported pursuant to this
Subsection, except that the Trustee shall not be required (but may elect) to
report such advances if such advances remaining unpaid at any time aggregate
10% or less of the principal amount of the Bonds Outstanding at such time, such
report to be transmitted within 90 days of such time. For purposes of this
Section 12.03(b) and for purposes of Section 1.02(b) hereof, the term "fair
value," as that term may relate to the Collateral, shall be deemed to mean the
Discounted Value of such Collateral at the time of determination.
(c) A copy of each such report shall, at the time of such
transmission to Bondholders, be filed by the Trustee with each securities
exchange upon which the Bonds are listed, and also with the Commission. The
Issuer will notify the Trustee when the Bonds are listed on any securities
exchange.
(d) The Trustee shall report to the Issuer with respect to the
balance in the Distribution Account and the Reserve Fund, the identities of the
investments included therein, and the aggregate principal amount of Outstanding
Bonds as the Issuer may from time to time request.
Section 12.04. Reports by Issuer
(a) The Issuer shall:
(i) file with the Trustee, within 15 days after the
Issuer is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may
from time to time by rules and regulations prescribe) which the Issuer
may be required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act; or, if the Issuer is not required to file
information, documents or reports pursuant to either of said sections,
then it will file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the
Commission, such of the supplementary and periodic information,
documents and reports which may be required pursuant to Section 13 of
the Exchange Act in respect of a
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security listed and registered on a national securities exchange as
may be prescribed from time to time in such rules and regulations;
(ii) file with the Trustee and the Commission in
accordance with rules and regulations prescribed from time to time by
the Commission, such additional information, documents and reports
with respect to compliance by the Issuer with the conditions and
covenants of this Indenture as may be required from time to time by
such rules and regulations;
(iii) transmit by mail to all Bondholders as their names
and addresses appear in the Bond Register, or in the list of
Bondholders most recently provided to the Trustee by the Issuer under
Section 12.01 hereof, within 30 days after the filing thereof with the
Trustee, such summaries of any information, documents and reports
required to be filed by the Issuer pursuant to clauses (1) and (2) of
this Section as may be required by rules and regulations prescribed
from time to time by the Commission;
(iv) transmit by mail to all Holders of Bonds, as their
names and addresses appear in the Bond Register, within 120 days after
the end of each fiscal year of the Issuer commencing with the fiscal
year ending [______], (i) an audited balance sheet of the Issuer as of
the last day of the preceding fiscal year and (ii) a statement setting
forth the aggregate Discounted Value of all Eligible Collateral
securing the Bonds on the last day of the preceding fiscal year; and
(v) deliver or cause to be delivered to the Trustee, on
or before [______] of each year, commencing with [_________], an
Opinion of Counsel either stating that in the opinion of such counsel
such action has been taken with respect to the recording, filing,
re-recording and re-filing of this Indenture as is necessary to
maintain the Lien of the Indenture, and reciting the details of such
action, or stating that in the opinion of such counsel no action is
necessary to maintain such lien until [__________] in the following
year.
(b) The fiscal year of the Issuer shall end on December 31 of
each year. The Issuer shall promptly notify the Trustee of any change in the
Issuer's fiscal year.
Section 12.05. Provisions of this Article Superseded By Trust
Indenture Act
The Provisions of this Article Twelve are all intended to facilitate
compliance with the requirements of the TIA as in effect on the date hereof,
and shall be deemed superseded by any modifications or changes to such
requirements (to expand such requirements to eliminate such requirements or
otherwise) effected by amendment to the TIA, by regulation, by rule or by
judicial or administrative decision. The provisions of this Article Twelve
shall not at any time impose upon any Person obligated under this Article
Twelve any greater reporting obligation with respect to the matters covered by
this Article Twelve than the reporting obligation with respect to such matters
imposed upon such Person by the TIA as in effect with respect to such time.
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Section 12.06. Luxembourg Reports and Notices
So long as the Bonds shall be listed on the Luxembourg Stock Exchange
or an application for such a listing shall be pending:
(a) Promptly after the determination of the interest rate on the
Bonds applicable to each Interest Period pursuant to Section 2.01 (and in no
event later than the first day of such Interest Period), the Trustee shall give
notice of such interest rate, the related Interest Payment Date and the amount
of interest payable on the Bonds on such Interest Payment Date to the Listing
Agent and the Luxembourg Stock Exchange.
(b) The Issuer shall provide to the Listing Agent a copy of (i)
its declaration of trust and by-laws, and any amendments to such documents,
(ii) any report filed by the Issuer with the Commission, and (iii) the
quarterly and annual financial statements of [BankAmerica Corporation]
(commencing with such statements for the period ending [_____________] and the
period ending [_______________], respectively).
(c) The Issuer or the Trustee, as applicable, shall cause to be
given to the Listing Agent a copy of any notice by or on behalf of such Person
to Bondholders under this Indenture.
(d) Upon request to the Trustee, the Trustee shall cause to be
given to the Listing Agent a copy of the Trustee's periodic Valuation Date
reports, together with any letters from a firm of independent accountants.
ARTICLE XIII
SATISFACTION AND DISCHARGE
Section 13.01. Satisfaction and Discharge of Indenture
(a) This Indenture shall cease to be of further effect (except as
to any surviving rights of registration of transfer or exchange of Bonds herein
expressly provided for) and the Trustee shall, on demand of and at the expense
of the Issuer, execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(i) either
(1) all Bonds theretofore authenticated and delivered (other than
(A) Bonds which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 2.09, and (B) Bonds for whose payment
Deposit Securities have theretofore been delivered in trust or segregated and
held in trust by the Trustee as provided in Section 10.03) have been delivered
to the Trustee for cancellation; or
(2) all such Bonds not theretofore delivered to the Trustee for
cancellation
(A) have become due and payable, or
(B) will become due and payable at their Stated Maturity within
six months,
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and the Issuer, in the case of (2)(A) or (B) above, has deposited or
caused to be delivered to the Trustee in trust an amount of Deposit Securities
(which, in the case of (2)(B) above, shall be limited to Cash and/or
non-callable Government Securities within the meaning of clause (b) of the
definition of "Deposit Securities") sufficient to pay and discharge the entire
indebtedness on the Bonds not theretofore delivered to the Trustee for
cancellation, for (x) in the case of Bonds described by (2)(A), principal and
interest to the date of such deposit at the applicable rate or rates calculated
in accordance with Section 2.01 or (y) in the case of Bonds described by
(2)(B), principal and interest to the Stated Maturity at the Maximum Interest
Rate, unless such Bonds will become due and payable at their Stated Maturity
within 30 days, in which case at the rate calculated in accordance with Section
2.01;
(ii) The Issuer has paid or caused to be paid all other
sums payable hereunder by the Issuer; and
(iii) The Issuer has delivered to the Trustee an Officers'
Certificate substantially in the form of Exhibit G-1 or G-2 (with
appropriate modifications) and an Opinion of Counsel, each stating
that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Issuer to the Trustee under Section 6.06 shall survive and,
if Deposit Securities shall have been delivered to the Trustee pursuant to
subclause (B) of Clause (2) of this Section 13.01, the obligations of the
Trustee under Section 13.02 and the last paragraph of Section 10.03 shall
survive.
(b) The Trustee shall give notice of the satisfaction and
discharge of this Indenture to each Rating Agency.
Section 13.02. Application of Trust
Subject to the provisions of Section 13.04, all Deposit Securities
delivered to the Trustee pursuant to Section 13.01 shall be segregated from
other trust funds and held in a separate trust and the cash payable in respect
thereof shall be applied by it, in accordance with the provisions of the Bonds
and this Indenture, to the payment, to the Persons entitled thereto, of the
principal and interest for whose payment Deposit Securities have been delivered
to the Trustee; but such Deposit Securities need not be segregated except to
the extent required by law, but shall be separately identified on the records
of accounts maintained by the Trustee. Any cash delivered by the Issuer to the
Trustee pursuant to this Article Thirteen, or otherwise held by the Trustee in
respect of this Article Thirteen shall be invested by the Trustee as directed
by the Issuer's Request in other Deposit Securities (which, in the case of Cash
delivered to the Trustee pursuant to Section 13.01(a)(i)(2)(B), shall be
limited to non-callable Government Securities within the meaning of clause (b)
of the definition of "Deposit Securities") having a maturity on or prior to the
date on which the payment in respect of the Bonds is due and payable.
Section 13.03. Termination of Lien
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If this Indenture is discharged in accordance with this Article
Thirteen, the Lien of this Indenture in respect of the Pledged Property shall
cease, and become null and void (except the rights, obligations and immunities
of the Trustee hereunder), and the Trustee, on demand of and at the cost and
expense of the Issuer, shall, in a manner similar to the manner in which the
Issuer delivered such Pledged Property to the Trustee, execute and deliver such
instruments of assignment, transfer, release, discharge, termination and
satisfaction as may be reasonably requested by the Issuer in order to remove
the Lien of this Indenture from the Pledged Property and to evidence properly
such action, and forthwith the estate, right, title and interest of the Trustee
in and to the Pledged Property, any Bonds, cash and other personal property
held by it under this Indenture as a part of the Pledged Property shall
thereupon cease, and become null and void, and the Trustee shall, in a manner
similar to the manner in which the Issuer delivered such Pledged Property to
the Trustee in such case transfer, deliver and pay the same to the Issuer or
upon the Issuer's Order.
Section 13.04. Repayment of Moneys Held by Paying Agent
In connection with the satisfaction and discharge of this Indenture,
all moneys then held by any Paying Agent (other than moneys payable in respect
of Deposit Securities delivered to the Trustee pursuant to Section 13.01) shall
upon demand of the Issuer or the Trustee be paid to the Trustee and thereupon
such Paying Agent shall be released from all further liability with respect to
such moneys.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the day and year first above written.
MAIN PLACE FUNDING, LLC
By:
---------------------------
Name:
Title:
[TRUSTEE],
as Trustee
By:
---------------------------
Name:
Title:
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Exhibit A
INITIAL COLLATERAL
Mortgage Loans*
* A detailed list of such Initial Collateral has not been included herein.
All of the Mortgage Loans included in the Initial Collateral and being
delivered to the Trustee are Eligible Mortgage Loans, as defined in
the Indenture. All of the Initial Collateral is Eligible Collateral.
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Exhibit B
COLLATERAL REPORT
Dated as of ____________, 19__
[Each of][T]he undersigned, an officer of [[Trustee] (the "Trustee")]
[Main Place Funding, LLC (the "Issuer")](1) in connection with the Indenture of
Trust, dated as of April __, 1999 (the "Indenture"), between the Issuer and the
Trustee, does hereby certify: that [he][she] is a[n] [Responsible Officer of
the Trustee][Officer of the Issuer] holding the office(s) set forth beneath
such officer's signature below, that such officer is duly authorized to execute
this certificate on behalf of the [Trustee][Issuer]; that such officer has read
the covenants or conditions of the Indenture in connection with which this
certificate is being delivered; that such officer has made such examination or
investigation of the books, records, business and affairs of the
[Trustee][Issuer] as is necessary to permit such officer to express an informed
opinion concerning whether such covenants or conditions have been complied
with; that such covenants and conditions have been complied with, and that the
information contained in this certificate is accurate and correct.
Terms used herein which are defined in the Indenture have the meanings
assigned to them in the Indenture.
The attached detailed listing of the Eligible Collateral (including
any Eligible Collateral being added to the Collateral concurrently herewith and
any Eligible Collateral which has been added to the Collateral since the date
of the immediately preceding Collateral Report, but excluding any Eligible
Collateral being withdrawn from the Collateral concurrently herewith) is true,
complete and correct as of _____________, ____.
The attached Schedule 1 is true, complete and correct as of
__________, ____, based upon information as of the related Determination Date
and upon the detailed listing.
With respect to the Bonds and the Collateral therefor:
(i) the aggregate principal amount of Bonds Outstanding as
of the most recent Regular Valuation Date is $_________ (insert
"$_________" upon initial issuance) after giving effect to all
redemptions, repayments and repurchases of Bonds, and $________ of
Bonds for whose payment or redemption in full Deposit Bonds have been
delivered to the Trustee;
(ii) except as stated herein, so far as is known to the
undersigned, no Event of Default under the Indenture, and no event
which, with notice or lapse of time or both, would become such an
Event of Default, has occurred and is continuing;
(iii) (a) none of the Eligible Mortgage Loans reflected on
Schedule 1 or on the attached detailed listing is an Eligible Mortgage
Loan as to which any scheduled payment of principal or interest
thereon is currently a Late Payment; or
--------
(1) The initial Collateral Report will be delivered on the Closing Date
by the Issuer. Each Subsequent Collateral Report will be delivered by the
Trustee.
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(b) the aggregate unpaid principal balance of Eligible
Mortgage Loans included in the Pledged Property as to which any
scheduled payment of principal or interest thereon is
1. delinquent past the end of the month in which such
payment was due is $___________;
2. delinquent past the end of the month following the
month in which such payment was due is $__________;
and
3. delinquent past the end of the second month
following the month in which such payment was due is
$________.(2)
(iv) (a) no additional Collateral is concurrently being added
to the Pledged Property or has been added to the Pledged Property
since the date of the immediately preceding Collateral Report; or
(b) any additional Collateral which is concurrently being
added to the Pledged Property or which has been added to the Pledged
Property since the date of the immediately preceding Collateral Report
constitutes Eligible Collateral, except for Collateral set forth in
(vi);
(v) the value of Collateral which is concurrently being added
to the Pledged Property or which has been added to the Pledged
Property since the date of the immediately preceding Collateral Report
but does not constitute Eligible Collateral is $_________;(3)
(vi) the following information, which, except as otherwise
indicated, is derived from the detailed listing annexed hereto and
forming part of this certificate, is true, correct and complete:
A. BASIC MAINTENANCE AMOUNT
1. The Discounted Value of the Eligible Collateral as shown in Schedule 1
attached hereto, is..........................................................................$
2. The Basic Maintenance Amount (Item A.2(d), plus Item A.2(e)) is..............................$
(a) aggregate amount of Bonds Issued.......................................................$
(b) aggregate amount of Bonds redeemed and repurchased (including those held by
Affiliates of the Issuer other than NationsBanc ▇▇▇▇▇▇▇▇▇▇)............................$
(c) aggregate amount of Bonds for whose payment or redemption in full Deposit
Bonds in the necessary amount have been delivered to the Trustee.......................$
----------------
(2) The sum of the amounts shown in (iii)(b)(1)-(3) is herein called
the Delinquent Loan Balance.
(3) Insert "N/A" if no additional Eligible Collateral is being added
to Eligible Collateral or no additional Collateral is being added to the
Pledged Property, as the case may be.
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(d) aggregate amount of Bonds Outstanding (Item A.2(a), minus Items A.2(b) and
A.2(c)) is.............................................................................$
(e) an amount equal to 90 days' interest at the Maximum Interest Rate on the
aggregate principal amount of Bonds Outstanding on the date as of
which this Certificate is being prepared (the "Certificate Date")......................$
3. The amount by which the Discounted Value of Eligible Collateral shown in Item A.1.
exceeds (is less than) the Basic Maintenance Amount shown in Item A.2........................$
B. PERCENTAGE LIMITATIONS ON ELIGIBLE MORTGAGE LOANS INCLUDED IN THE ELIGIBLE COLLATERAL(4)
1. The aggregate unpaid principal balance of all Eligible Mortgage Loans included in the
computation of the Discounted Value of Eligible Collateral on Schedule 1
hereto is....................................................................................$(5)
2. The aggregate unpaid principal balance of Eligible Mortgage
Loans included in the computation of the Discounted Value of
Eligible Collateral on Schedule 1 hereto that are
(a) Over 80% Loans is......................................................................$(6)
(b) High Balance Loans is..................................................................$(7)
(c) Condominium Loans is...................................................................$(8)
3. The amount by which 25% of the Aggregate Loan Balance exceeds (is less than) the Over
80% Loan Balance is..........................................................................$
4. The amount by which 15% of the Aggregate Loan Balance exceeds (is less than) the High
Balance Loan Balance is......................................................................$
5. The amount by which 10% of the Aggregate Loan Balance exceeds (is less than) the
Condominium Loan Balance is..................................................................$
6. The amount by which 35% of the Aggregate Loan Balance exceeds (is less than) the sum of
---------------
(4) Sections B, C, D and E are required to be included in a Collateral
Report only if such Collateral Report is being delivered pursuant to Section
4.06 or 4.07 of the Indenture on the Closing Date in respect of the Initial
Collateral, or on the date as of which an Eligible Mortgage Loan is being added
to or substituted into the Eligible Collateral except in the case of
substitution pursuant to the first sentence of Section 4.08(a) of the Indenture
or addition pursuant to Section 4.09 of the Indenture. Item 1 of Section E may
be omitted from any Collateral Report delivered by the Trustee.
(5) This amount is herein called the "Aggregate Loan Balance."
(6) This amount is herein called the "Over 80% Loan Balance."
(7) This amount is herein called the "High Balance Loan Balance."
(8) This amount is herein called the "Condominium Loan Balance."
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(a) the Over 80% Loan Balance,
(b) the High Balance Loan Balance, and
(c) the Condominium Loan Balance is........................................................$
C. REQUIRED CHARACTERISTICS OF ELIGIBLE FIXED-RATE MORTGAGE LOANS INCLUDED
IN ELIGIBLE COLLATERAL AT THE TIME OF PLEDGE
1. Each Eligible Fixed-Rate Mortgage Loan had an original term to
maturity of not more than 30 years and had a remaining term to
maturity of at least one year.
2. Each Eligible Fixed-Rate Mortgage Loan had a Loan-to-Value Ratio not
greater than 95%.
3. Each Eligible Fixed-Rate Mortgage Loan was secured by an Eligible
Mortgage.
4. No Eligible Fixed-Rate Mortgage Loan was an Eligible Fixed-Rate
Mortgage Loan as to which there was a Late Payment.
5. Each Eligible Fixed-Rate Mortgage Loan that is an FHA Insured or VA
Guaranteed Mortgage Loan is secured by a Mortgage on a one-to-four
family dwelling.
6. Each Eligible Fixed-Rate Mortgage Loan had an unpaid principal balance
of at least $1,000 but not more than $1,000,000.
D. REQUIRED CHARACTERISTICS OF ELIGIBLE ADJUSTABLE-RATE MORTGAGE LOANS
INCLUDED IN ELIGIBLE COLLATERAL AT THE TIME OF PLEDGE
1. Each Eligible Adjustable-Rate Mortgage Loan provided for a rate of
interest, adjustable periodically, but no more frequently than
semi-annually, of a specified gross margin of between 1% and 5% above
a Permitted Index.
2. Each Eligible Adjustable-Rate Mortgage Loan had an original term to
maturity of not more than 30 years and had a remaining term to
maturity of at least one year.
3. Each Eligible Adjustable-Rate Mortgage Loan had an unpaid principal
balance of at least $1,000 but not more than $1,000,000.
4. Each Eligible Adjustable-Rate Mortgage Loan had a Loan-to-Value Ratio
not greater than 95%.
5. Each Eligible Adjustable-Rate Mortgage Loan was secured by an Eligible
Mortgage.
6. No Eligible Adjustable-Rate Mortgage Loan that was a Mortgage Loan as
to which there was currently a Late Payment.
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E. LIMITATIONS ON ALL ELIGIBLE MORTGAGE LOANS AT THE TIME OF PLEDGE AND EACH
ADDITION OR WITHDRAWAL OF COLLATERAL
1. In selecting Eligible Fixed-Rate Mortgage Loans and in selecting
Eligible Adjustable-Rate Mortgage Loans for inclusion in the Pledged
Property, the Issuer has used its best efforts to include Mortgage
Loans of each type secured by Eligible Mortgages with a geographical
dispersion representative, to the extent possible, of the entire
portfolio of Mortgage Loans of such type originated and serviced by
NationsBanc Mortgage for NationsBank, N.A. or any of its bank
affiliates.(9)
2. Each Eligible Mortgage Loan is accompanied by appropriate
documentation.
3. [No Eligible Mortgage Loan is secured by a Mortgage on a mobile home.]
4. The Pledged Property consists of at least 100 Eligible Mortgage Loans.
5. No more than __% of the aggregate unpaid principal balance of all
Eligible Mortgage Loans may be composed of High Balance Loans.
6. No more than __% of the aggregate unpaid principal balance of all
Eligible Mortgage Loans may be composed of over 80% Loans, of which no
more than 10% of the aggregate unpaid principal balance of all
Eligible Mortgage Loans may be composed of Eligible Mortgage Loans
with the Loan-to-Value Ratios in excess of 90%.
7. No more than __% of the aggregate unpaid principal balance of all
Eligible Mortgage Loans may be Condominium Loans. 8. The sum of the
High Balance Loans, Over 80% Loans and Condominium Loans may not
exceed __% of the aggregate unpaid principal balance of all Eligible
Mortgage Loans.
9. Each Over 80% Loan is insured by Private Mortgage Insurance from an
insurer which has been rated in one of the two highest rating
categories by at least one Rating Agency as to that portion of the
principal balance thereof exceeding 75% of the mortgaged property
(determined according to the definition of "Loan-to-Value Ratio")
unless, by the terms of the applicable mortgage and Over 80% Loan,
such policy has been discharged due to principal amortization.
10. No Eligible Mortgage Loan may be described by more than one of the
definitions of "Over 80% Loan," "High Balance Loan" or "Condominium
Loan."
---------------
(9) Item 1 need not be included in any Collateral Report delivered by the
Trustee.
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IN WITNESS WHEREOF, [each of] the undersigned has signed this
Collateral Report on behalf of the [Trustee][Issuer] this day of , 19 .
[Trustee][Issuer]
By:_____________________________
Title:
By:_____________________________
Title:
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Exhibit C
OPINION OF COUNSEL*
The Opinion of Counsel shall be dated the date of the Officers'
Certificate that it accompanies and shall in substance state that:
(1) The Pledged Property with respect to which such Opinion of
Counsel is being given, other than the Eligible Mortgage Loans and
related Eligible Mortgages, has been duly and validly assigned,
delivered and pledged by the Issuer under the Indenture, and the
Indenture together with such assignment, delivery and pledge creates as
security for the Bonds a valid and perfected first priority security
interest in such Pledged Property (other than the Mortgage Loans and
related Eligible Mortgages included therein) and the proceeds thereof
(other than proceeds which do not constitute money or a physical
instrument within the meaning of the applicable Uniform Commercial Code
or which are not being held in the continuous possession of the
Trustee), subject to the Trustee's limited prior lien to secure certain
obligations of the Issuer to the Trustee in its capacity as such under
the terms of the Indenture, upon delivery of such Pledged Property,
other than uncertificated securities, to the Trustee, and upon
registration in the Trustee's name of uncertificated Government
Securities included in such Pledged Property, in accordance with the
provisions of the Indenture; and, assuming any portion of such Pledged
Property which is money or instruments is and will remain in the
Trustee's possession and any portion of such Pledged Property which is
uncertificated will remain registered in the Trustee's name, no further
action is required to create, preserve or perfect such security
interest.
(2) Either (a) assuming each Eligible Mortgage Loan being
added to the Pledged Property has been duly and validly assigned and
delivered by the Issuer under the Indenture, the Indenture, together
with such assignment and delivery, creates, as security for the Bonds,
a valid and perfected first priority security interest in each such
Eligible Mortgage Loan and the Proceeds (as defined in Section 9-306 of
the UCC (as defined below)) thereof (other than (i) proceeds that do
not constitute an instrument or money within the meaning of the
applicable Uniform Commercial Code or that are not being held in the
continuous possession of the Trustee and (ii) payments of principal and
interest payable to the Servicer prior to their delivery to the
Trustee; provided that, upon the occurrence of an Event of Default and
assuming compliance with the provisions of the Indenture requiring
payments of principal and interest on the Eligible Mortgage Loans to be
made to the Trustee, a valid and perfected first priority security
interest will be created in such payments of principal and interest,
other than proceeds which do not constitute an instrument or money
within the meaning of the applicable Uniform
---------------
* Modify appropriately to cover only the Collateral being pledged with
the Trustee.
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Commercial Code or are not being held in the continuous possession of
the Trustee) upon delivery of the Eligible Mortgage Loan in accordance
with the provisions of the Indenture (subject to the Trustee's limited
prior lien to secure certain obligations of the Issuer to the Trustee
in its capacity as such under the terms of the Indenture),
notwithstanding the fact that the assignments of the Eligible Mortgages
have not been recorded in the name of the Trustee, as long as (i)
possession of such Eligible Mortgage Loans is continuously maintained
by the Trustee, (ii) the Issuer does not transfer to a bona fide
purchaser for value without notice (a) the Eligible Mortgage Loans
prior to notification to the borrowers of the existence of the
assignments to the Trustee of such Eligible Mortgage Loans or (b) the
related Eligible Mortgages prior to due recordation of assignments to
the Trustee of such Eligible Mortgages, (iii) the Issuer does not
discharge the Eligible Mortgage Loans or the related Eligible Mortgages
prior to such notification or recordation and (iv) the Issuer and the
Trustee do not fail to comply with the requirements of the applicable
Uniform Commercial Code with respect to maintaining a perfected
security interest in such Eligible Mortgage Loans and Eligible
Mortgages; or
(a) assuming each Eligible Mortgage Loan and related Eligible Mortgage
being added to the Pledged Property has been duly and validly assigned
and delivered by the Issuer under the Indenture and the assignment of
the Eligible Mortgage has been duly recorded in the name of the Trustee
in the appropriate recording office, the Indenture, together with such
assignment of the Eligible Mortgage and the recording thereof in the
name of the Trustee, creates, as security for the Bonds, a valid and
perfected first priority security interest in each such Eligible
Mortgage Loan and related Eligible Mortgage upon delivery to the
Trustee of the Eligible Mortgage Loan and the due recordation of the
Eligible Mortgage in accordance with provisions of the Indenture
(subject to the Trustee's limited prior lien to secure certain
obligations of the Issuer to the Trustee in its capacity as such under
the terms of the Indenture), as long as (i) the Trustee does not (a)
relinquish possession of such Mortgage Loan or (b) execute and permit
the recordation in the name of another person of an assignment of an
Eligible Mortgage previously recorded in the name of the Trustee, (ii)
the Issuer does not transfer to a bona fide purchaser for value without
notice (a) the Eligible Mortgage Loans prior to notification to the
borrowers of the existence of the assignments to the Trustee of such
Eligible Mortgage Loans or (b) the related Eligible Mortgages prior to
due recordation of assignments to the Trustee of such Eligible
Mortgages, (iii) the Issuer does not discharge the Eligible Mortgage
Loans or the related Eligible Mortgages prior to such notification or
recordation and (iv) the Issuer and the Trustee do not fail to comply
with the requirements of applicable law, including the Uniform
Commercial Code, with respect to maintaining a perfected security
interest in such Eligible Mortgage Loans and Eligible Mortgages.
For purposes of the opinion in paragraph (2), it may be assumed without
independent check or verification that (a) immediately prior to the
grant, attachment and perfection of the security interest therein in
favor of the Trustee, the Issuer owned good title to, and was the sole
owner and holder of, each Eligible Mortgage and Eligible Mortgage Loan
free and clear of any and all liens, pledges, offsets, defenses,
counterclaims, charges or security interests of any nature and had full
right and authority, subject to no interest or participation of, or
agreement with, any other party, to sell and assign the same, (b) each
Eligible Mortgage Loan has been duly endorsed to the Trustee or in
blank as provided in
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the Indenture, (c) no Eligible Mortgage Loan was overdue or had been
dishonored or subject to the circumstances described in Section 3-304
or Section 8-304 of the Uniform Commercial Code in effect in the State
of New York (the "UCC"), (d) no Eligible Mortgage Loan is subject to a
third party's security interest that could be perfected without
possession pursuant to Section 9-304 of the UCC, or constitutes
proceeds of any property subject to a third party's security interest,
(e) the Trustee took the Eligible Mortgage Loans for value, in good
faith and without notice or knowledge (i) of any adverse claims, liens
or encumbrances, (ii) that any Eligible Mortgage Loan was overdue or
had been dishonored or subject to the circumstances described in
Section 3-304 or Section 8-304 of the UCC, or (iii) of any defense
against or claim to the Eligible Mortgage Loans on the part of any
entity, (f) the Eligible Mortgage Loans continuously remain in the
possession of the Trustee and (g) the Trustee received actual
possession of the original Mortgage Loans and no duplicate originals
exist.
The Opinion of Counsel need not express an opinion as to (a) the
continuation of a security interest in the Eligible Mortgages and
Eligible Mortgage Loans, including, without limitation, if the Trustee
relinquishes possession of such Eligible Mortgage Loans, or if the
Issuer discharges or releases the Eligible Mortgages and Eligible
Mortgage Loans before the recording of the instruments of assignment in
the appropriate recording office, (b) title to the Mortgaged Property
or the applicable originator's lien with respect to such property or as
to the priority of such lien or as to the enforceability of any remedy
that may be dependent on that title or such lien, (c) the Trustee's
security interest in the Eligible Mortgages relating to the Eligible
Mortgage Loans, except to the extent that such opinion is given under
paragraph 2(b), (d) the validity of the mortgagor's title to real
property underlying the related Eligible Mortgage or the lien of the
Eligible Mortgage thereon, or as to the enforceability of any remedy
that may be dependent on such title or lien, (e) the enforceability of
the Eligible Mortgage Loans against the original obligors thereunder
and (f) the priority of any security interest against any liens, claims
or other interests that arise by operation of law and do not require
filing or similar action in order to take priority over perfected
security interests, and against any claim or lien in favor of the
United States or any agency or instrumentality thereof (including,
without limitation, liens arising under the Federal tax laws or the
Employee Retirement Income Bond Act of 1974, as amended).
The Opinion of Counsel may note that Section 552 of the Bankruptcy Code
limits the extent to which property acquired by a debtor after the
commencement of a case under the Bankruptcy Code may be subject to an
agreement entered into by the debtor before the commencement of such
case, and Section 547 of the Bankruptcy Code may render a security
interest in property voidable to the extent it serves as collateral for
an antecedent debt, subject to the exceptions provided therein.
In addition, to the extent that Mortgage Documentation or portions
thereof are held by a Custodian on behalf of the Trustee, the Opinion
of Counsel may be modified to reflect such fact.
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(3) Such financing statements with respect to such Pledged
Property and the proceeds thereof as may be necessary to perfect a
security interest therein have been properly filed in all appropriate
places.
(4) ▇▇▇▇▇▇ (a) the authorization or approval of or consent to
the pledge and assignment of such Pledged Property and the proceeds
thereof, to the Trustee by each Federal, State or other governmental or
regulatory agency at the time having jurisdiction in the premises has
been duly obtained, attaching the certificate or other official
document evidencing the same, or (b) no such authorization, approval or
consent is required.
(5) The grant to the Trustee of a security interest in such
Pledged Property and the proceeds thereof, will not violate any
provision of the charter or by-laws of the Issuer or any law,
administrative regulation or court decree applicable to the Issuer and
known to such counsel or result in the beach of, or constitute a
material default under, any material agreement, indenture or other
instrument known to such counsel to which the Issuer is a party or by
which it is bound.
(In rendering such opinion, counsel rendering such opinion may rely upon an
Officers' Certificate of the Issuer (without independent check or verification)
as to (a) the accuracy of the description of the Pledged Property with respect
to which such Opinion of Counsel is given and the conformity thereof to the
definitions contained in the Indenture, (b) the ownership by the Issuer of such
Pledged Property free and clear of any lien, claim, charge or interest of any
kind of any third party, (c) the delivery (as such term is defined in Section
1.01 of the Indenture) to the Trustee of such Pledged Property, including, in
the case of Mortgage Loans included in Pledged Property, the delivery of the
Eligible Mortgages and accompanying documents to the extent required by the
Indenture, (d) the form of endorsement approved by such Counsel having been
made on each of the Mortgage Loans, (e) the assignments of the Eligible
Mortgages and the bond powers or other form of assignment, if any, in each case
as delivered to the Trustee, pertaining to the Eligible Mortgages, Government
Bonds and Deposit Bonds, as the case may be, included in Pledged Property, (f)
the registration of Pledged Property which is uncertificated in the name of the
Trustee and (g) as to other factual matters.
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Exhibit D
OFFICERS' CERTIFICATE
REQUESTING WITHDRAWAL OR SUBSTITUTION
DATED , 1999
The undersigned, officers of Main Place Funding, LLC (the "Issuer")
pursuant to Section 4.08 of the Indenture of Trust dated as of April , 1999 (the
"Indenture") between the Issuer and [Trustee] (the "Trustee"), do hereby
certify: that we are officers of the Issuer holding the offices set forth
beneath our respective signatures below; that we are duly authorized to execute
this certificate on behalf of the Issuer; that we have read the covenants or
conditions of the Indenture in connection with which this certificate is being
delivered; that we have made such examination or investigation of the books,
records, business and affairs of the Issuer as is necessary to permit us to
express an informed opinion concerning whether such covenants or conditions have
been complied with; that such covenants and conditions have been complied with;
that the information contained in this certificate is accurate and correct; and
that with respect to the Pledged Property identified on the attached Withdrawal
Schedule, [such Pledged Property is requested to be withdrawn pursuant to
Section 4.08] [the Issuer is substituting the Pledged Property on the attached
Substitution Schedules for such Pledged Property and such Pledged Property is
requested to be withdrawn pursuant to Section 4.08].(1)
The Issuer hereby requests that the Trustee re-endorse, reassign and
redeliver to the Issuer all of the Collateral to be withdrawn in a manner
similar to the manner in which the Issuer delivered such Collateral to the
Trustee.
A. WITHDRAWAL OR SUBSTITUTION OF ELIGIBLE COLLATERAL PURSUANT TO
SECTION 4.08(A) OF THE INDENTURE, USING THE DISCOUNTED VALUE
OF THE ELIGIBLE COLLATERAL PROPOSED TO BE WITHDRAWN FROM THE
LATEST COLLATERAL REPORT AND THE DISCOUNTED VALUE OF THE
ELIGIBLE COLLATERAL FOLLOWING THE PROPOSED WITHDRAWAL OR
SUBSTITUTION FROM THE LATEST COLLATERAL REPORT (AFTER GIVING
EFFECT TO WITHDRAWALS FROM AND ADDITIONS TO ELIGIBLE
COLLATERAL DURING THE PERIOD FROM THE DATE OF THE LATEST
COLLATERAL REPORT THROUGH THE DATE OF THIS CERTIFICATE):
AS SHOWN BY THE COMPUTATIONS SET FORTH BELOW, ITEM 8
IS GREATER THAN OR EQUAL TO ITEM 9, AND THE ELIGIBLE
COLLATERAL IDENTIFIED ON THE ATTACHED WITHDRAWAL
SCHEDULE (AND REFERRED TO IN ITEM 3 BELOW) MAY BE
WITHDRAWN.
---------------
(1) Complete only the applicable sections of this Officers' Certificate.
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1. Discounted Value of the Eligible Collateral as shown in
Item A.1. of the Latest Collateral Report (dated
__________)............................................$
2. Discounted Value (as shown on the Latest Collateral
Report(2)) of the Eligible Collateral withdrawn pursuant to
Section 4.08(a) of the Indenture since the date of the
Latest Collateral
Report.................................................$
3. Discounted Value (as shown on the Latest Collateral Report)
of the Eligible Collateral proposed to be withdrawn
pursuant to Section 4.08(a) of the Indenture and shown on
the attached Withdrawal Schedule.......................$
4. Item 2 plus Item 3.....................................$
5. Discounted Value of additional Eligible Collateral, if any,
delivered pursuant to Section 4.08(a) of the Indenture
since the date of the Latest Collateral Report:
a) Market Value of such additional Eligible Collateral
using bid prices or other applicable Market Values
on Annex A-1 to the Latest Collateral Report for
similar types of Eligible Collateral............$
b) Discount Factor for such type of Eligible
Collateral......................................$
c) Multiply Item 5(a) by Item 5(b).................$
(If Eligible Collateral referred to in Item 5
includes more than one type of Eligible Collateral,
perform the calculation set forth in Item 5(c)
separately for each type of Eligible Collateral. Add
the results of such separate calculations and insert
the resulting sum in the blank beside Item 5(c)).
---------------
(2) If the Eligible Collateral described in Item 2 or Item 3 was included
in the Latest Collateral Report, use the Discounted Value for such Eligible
Collateral set forth in Schedule 1 to the Latest Collateral Report. If the
Eligible Collateral described in Item 2 or Item 3 was added to Eligible
Collateral since the date of the Latest Collateral Report, calculate the
Discounted Value of such Eligible Collateral in the same way as Discounted Value
of additional Eligible Collateral is calculated in Item 5.
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6. Discounted Value of the Eligible Collateral, if any, shown
on the attached Substitution Schedule and proposed to be
added pursuant to Section 4.08(a), in substitution for the
Eligible Collateral proposed to be withdrawn,(3),(4)...$
7. Item 5 plus Item 6.....................................$
8. Item 1 plus Item 7 minus Item 4........................$
9. Basic Maintenance Amount as shown in Item A.2 of the Latest
Collateral Report......................................$
B. Withdrawal or substitution of Eligible Collateral pursuant to
Section 4.08(a) of the Indenture based upon Collateral Report
dated as of the date of this certificate.
AS SHOWN ON SUCH COLLATERAL REPORT THE DISCOUNTED VALUE OF
THE ELIGIBLE COLLATERAL (WHICH EXCLUDES THE ELIGIBLE
COLLATERAL IDENTIFIED ON THE ATTACHED WITHDRAWAL SCHEDULE
AND INCLUDES THE ELIGIBLE COLLATERAL IDENTIFIED ON THE
ATTACHED SUBSTITUTION SCHEDULE, IF ANY) IS EQUAL TO OR
EXCEEDS THE BASIC MAINTENANCE AMOUNT SHOWN IN ITEM A.2 OF
SUCH COLLATERAL REPORT AND THE ELIGIBLE COLLATERAL
IDENTIFIED ON THE ATTACHED WITHDRAWAL SCHEDULE MAY BE
WITHDRAWN.
C. Withdrawal pursuant to Section 4.08(c) of the Indenture of Pledged
Property not included in the computation of the Discounted Value
of the Eligible Collateral for the Latest Collateral Report:
THE DISCOUNTED VALUE OF THE ELIGIBLE COLLATERAL AS SHOWN IN
ITEM A.1 OF THE LATEST COLLATERAL REPORT EQUALED OR
EXCEEDED THE BASIC MAINTENANCE AMOUNT IN ITEM A.2 THEREOF;
THE PLEDGED PROPERTY IDENTIFIED ON THE ATTACHED WITHDRAWAL
SCHEDULE DOES NOT CONSTITUTE ELIGIBLE COLLATERAL AND WAS
NOT INCLUDED IN THE COMPUTATION OF SUCH DISCOUNTED VALUE;
THE DISCOUNTED VALUE OF THE ELIGIBLE COLLATERAL AS OF THE
DATE OF THE LATEST COLLATERAL REPORT, AFTER GIVING EFFECT
TO ANY WITHDRAWALS FROM AND ADDITIONS TO ELIGIBLE
COLLATERAL DURING THE PERIOD FROM THE DATE OF SUCH
COLLATERAL REPORT TO THE DATE OF THIS CERTIFICATE EQUALS OR
EXCEEDS THE BASIC MAINTENANCE AMOUNT(5) AND NO
---------------
(3) Calculate using the formula set forth in Item 5.
(4) This Officers' Certificate may not be used to substitute Eligible
Collateral if the Eligible Collateral proposed to be substituted is not a type
of Eligible Collateral which was valued in the Latest Collateral Report.
(5) If withdrawals or additions have been made, set forth computation (as
described in Part A) of remaining Discounted Value of Eligible Collateral.
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EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING.
CONSEQUENTLY, THE ISSUER IS ENTITLED TO WITHDRAW THE
PLEDGED PROPERTY IDENTIFIED ON THE ATTACHED WITHDRAWAL
SCHEDULE.
Terms used herein which are defined in the Indenture have the meanings
assigned to them in the Indenture.
IN WITNESS WHEREOF, we have hereunto signed our names on behalf of the
Issuer this day of , 1999.
MAIN PLACE FUNDING, LLC
By___________________________
Title:
By___________________________
Title:
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REASSIGNMENT AND REDELIVERY OF PLEDGED PROPERTY
[Trustee] (the "Trustee"), under the Indenture of Trust dated as of
[__________] (the "Indenture") between the Trustee and Main Place Funding, LLC
("the Issuer"), has received an Officers' Certificate requesting reassignment
and delivery dated , 19 .
The Trustee hereby reassigns and redelivers to the Issuer the Pledged
Property identified on the attached Withdrawal Schedule. All Pledged Property
which was endorsed to the Trustee is being re-endorsed to the Issuer. All
assignments and bond powers or other forms of assignment are being returned to
the Issuer. All property registered in the name of the Trustee is being
re-registered in the name of the Issuer.
The Trustee has notified or instructed the appropriate depository
institutions or financial intermediaries of the transfer to the Issuer of all
book-entry securities included in the Pledged Property identified on the
attached Withdrawal Schedule and an executed copy of such notification or
instruction is attached hereto.
The Trustee has delivered to the appropriate organization with which
demand deposits or certificates of deposit included in Pledged Property
identified on the attached Withdrawal Schedule are maintained, notice to
transfer such deposits to the Issuer, and an executed copy of such notification
is attached hereto.
Such reassignment and delivery constitutes a full release and discharge
of all security interests and any other interests of the Trustee in such Pledged
Property and is being accomplished in a manner similar to the manner in which
such Pledged Property was delivered to the Trustee.
The Trustee has marked its records of the Pledged Property to reflect
the above reassignment and redelivery to the Issuer.
Dated:
[Trustee]
By:__________________________
Responsible Officer
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Exhibit E
[SEE EXHIBIT 10.1 OF FORM S-3 REGISTRATION STATEMENT (NO. 333-
74817) OF MAIN PLACE FUNDING, LLC FILED ON MARCH 22, 1999]
E-1
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Exhibit F
[RESERVED FOR FORM OF CUSTODIAL AGREEMENT]
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Exhibit G
OFFICERS' CERTIFICATE REGARDING DEPOSIT SECURITIES
DELIVERED IN CONNECTION WITH THE STATED MATURITY
DATED __________, 19__
The undersigned, officers of Main Place Funding, LLC ("the Issuer"), in
connection with the Indenture of Trust, dated as of April ____ 1999 (the
"Indenture") between the Issuer and [Trustee], as Trustee, do hereby certify:
that we are officers of the Issuer holding the offices set forth beneath our
respective signatures below; that we are duly authorized to execute this
Officers' Certificate ("Certificate") on behalf of the Issuer; that we have read
the covenants and conditions of the Indenture in connection with which this
Certificate is being delivered; that we have made such examination or
investigation of the books, records, business and affairs of the Issuer as
necessary to permit us to express an informed opinion concerning whether such
covenants or conditions have been complied with; that such covenants and
conditions have been complied with; and that the following information contained
in this Certificate is accurate and correct.
Terms used herein, which are defined in the Indenture, have the
meanings assigned to them in the Indenture. The attached detailed listing of the
Deposit Securities is true, complete and correct, based on the principal amounts
of such Deposit Securities as of __________, 19__.
1. All the securities set forth on the attached listing being
delivered to the Trustee herewith constitute Deposit Securities in
accordance with the definition contained in Section 1.01 of the
Indenture.
2. No Deposit Securities has a maturity date later than the
Stated Maturity.
3. The aggregate amount of principal and interest payable on
or prior to the Stated Maturity in respect of all Deposit Securities
being delivered to the Trustee concurrently herewith is $__________.
4. The aggregate amount of Cash in the Distribution Account
and the Reserve Fund available for payment of principal and interest in
respect of the Bonds Outstanding at the Stated Maturity is $__________.
5. (a) The total amount of interest and principal payable on
the Stated Maturity in respect of Bonds Outstanding on the date hereof
is $__________;
(b) The total amount of interest and principal
payable on the Stated Maturity on Bonds Outstanding on the
date hereof as to which Deposit Securities have been delivered
to the Trustee in respect of the redemption thereof on or
prior to the Stated Maturity is $__________; and
(c) (a) minus (b) equals $__________ (the Selected
Amount).
6. The aggregate amount of principal and interest payable on
or prior to the Stated Maturity on the Deposit Securities held by the
Trustee is required to be $__________ (the amount set forth in Item
5(c) minus the amount set forth in Item 4).
7. The amount set forth in Item 3 [exceeds] [is less than] the
amount set forth in Item 6 by $_________.
G-1
125
IN WITNESS WHEREOF, we have hereunto signed our names behalf of the
Issuer this __ day of April, 1999.
MAIN PLACE FUNDING, LLC
By __________________________
Title:
By __________________________
Title:
G-2
126
Exhibit H
[FORM OF BOND]
[FORM OF FACE]
[UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE TRUSTEE OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY BOND ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.]
MAIN PLACE FUNDING, LLC
Mortgage-Backed Bond, Series 1999-1, Due ____
Bond No.: ______________
CUSIP No.: _____________ $........
Main Place Funding, LLC, a Delaware limited liability company (herein
called the "Issuer," which term includes any successor entity under the
Indenture referred to on the reverse hereof), for value received, hereby
promises to pay to __________, or registered assigns, the principal sum of
__________ dollars on __________ (the "Stated Maturity"), unless earlier
redeemed pursuant to the provisions for redemption referred to on the reverse
hereof, and to pay interest thereon, from April ___ 1999 or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
quarterly in arrears on the 25th day of each March, June, September and December
or, if such day is not a Business Day, the next Business Day ("Interest Payment
Dates"), commencing _______, 1999. Interest shall accrue on this Bond during
each Interest Period at a floating rate equal to LIBOR (determined for each
Interest Period as set forth in Section 3.04 of the Indenture) plus __% per
annum. Interest on this Bond shall be computed on the basis of the actual number
of days in each Interest Period and a 360-day year until the principal hereof is
paid or made available for payment. The interest so payable and punctually paid
or duly provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Bond (or one or more
Predecessor Bonds) is registered at the close of business on the Regular Record
Date for such interest, which shall be the third Business Day preceding such
Interest Payment Date. Except as otherwise provided in the Indenture, any such
interest not so punctually paid or duly provided for shall forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Person in whose name this Bond (or one or more Predecessor Bonds) is registered
at the close of business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to
the Holders of the Bonds not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the Bonds may be listed,
and upon such notice as may be required by such securities exchange, all as more
fully provided in the Indenture.
H-1
127
Payment of interest shall be made at the Corporate Trust Office of the
Trustee or at such other office or agency of the Issuer as the Issuer may
designate in such coin or currency of the United States of America as at the
time of payment shall be legal tender for the payment of public and private
debts, except that interest may, at the option of the Issuer, be paid by check
mailed to the Person entitled thereto at such Person's address appearing in the
Bond Register or, upon written instructions from any such person holding not
less than $5,000,000 aggregate principal amount of Bonds received by the Trustee
not later than the Regular Record Date or Special Record Date to which such
payment of interest relates, by wire transfer to a United States dollar account
maintained by the payee at a depository institution in the United States;
provided that such depository institution shall have facilities therefor.
Payment of principal of each Bond at the Stated Maturity shall be made upon
surrender of such Bond at the Corporate Trust Office of the Trustee or at such
other office or agency of the Issuer as the Issuer may designate in such coin or
currency of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts.
Reference is hereby made to the further provisions of this Bond set
forth on the reverse hereof (including, without limitation, the provisions for
mandatory redemption of this Bond, which further provisions shall for all
purposes have the same effect as if set forth at this place).
Unless the certificate of authentication hereon has been executed by or
on behalf of the Trustee by manual signature, this Bond shall not be entitled to
any benefit under the Indenture or be valid or obligatory for any purpose.
H-2
128
IN WITNESS WHEREOF, the Issuer has caused this Bond to be duly executed
in its name by the manual or facsimile signature of its President or any Vice
President.
Dated:
MAIN PLACE FUNDING, LLC
By __________________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Bonds referred to in the within-mentioned Indenture.
[TRUSTEE],
as Trustee
By __________________________
Authorized Officer
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129
[FORM OF REVERSE]
This Bond is one of a duly authorized issue of securities of the Issuer
designated as its Mortgage-Backed Bonds, Series 1999-1. Due _____ (herein called
the "Bonds"), limited (except as otherwise provided in the Indenture) in
aggregate principal amount to $______________ and to be issued under an
Indenture of Trust (herein called the "Indenture"), dated as of April __, 1999
between the Issuer and [Trustee], as Trustee (herein called the "Trustee," which
term includes any successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Issuer, the Trustee, and the Holders of the Bonds and of the terms upon
which the Bonds are, and are to be, authenticated and delivered. All terms used
in this Bond which are defined in the Indenture shall have the meanings assigned
to them in the Indenture.
The Bonds are not subject to redemption at the option of the Issuer
prior to the Stated Maturity. The Bonds are subject to mandatory redemption, in
part, upon not more than 10 nor less than 5 days' prior notice given as
described in the Indenture in the event that the Discounted Value of the
Eligible Collateral included in Pledged Property as shown on any Collateral
Report prepared by the Trustee with respect to a Regular Valuation Date is less
than the Basic Maintenance Amount and the Issuer is unable, within 10 days after
the receipt by the Issuer of the Collateral Report following the Regular
Valuation Date on which the Basic Maintenance Amount was not met (the "Cure
Date"), to pledge additional Eligible Collateral and/or substitute Eligible
Collateral and/or deliver to the Trustee for cancellation thereof Bonds
repurchased by the Issuer in a principal amount sufficient to render the
Discounted Value of the Eligible Collateral at least equal to the Basic
Maintenance Amount. Notwithstanding the foregoing, if the Collateral Report
prepared by the Trustee with respect to any Regular Valuation Date following the
Cure Date and prior to the date on which the Trustee gives notice of redemption
to the Bondholders shows that the Discounted Value of the Eligible Collateral is
at least equal to the Basic Maintenance Amount as of such Regular Valuation Date
and the Trustee has not yet given notice of redemption to Bondholders, the
Issuer will no longer be required to make a mandatory redemption of the Bonds.
Any such mandatory redemption shall require the redemption of Bonds in an
aggregate principal amount which is the smallest principal amount of the Bonds
(rounded to the next higher integral multiple of $1,000) necessary to make the
Discounted Value of the Eligible Collateral at least equal to the Basic
Maintenance Amount (calculated in each case as of the Regular Valuation Date
immediately preceding the date on which the Trustee gives notice of redemption
to Bondholders); provided that the Trustee shall select Bonds for redemption in
such manner that no single Bond to be Outstanding following redemption shall be
in a denomination of less than $100,000. Any mandatory redemption shall be at a
price (the "Redemption Price") equal to 100% of the principal amount of the
Bonds to be redeemed together with interest accrued thereon to the date fixed
for such redemption (each such date, a "Redemption Date"). Any such mandatory
redemption shall be made within 30 days after the applicable Cure Date.
After notice of any redemption has been given, the principal amount to
be redeemed of any Bond called for redemption shall be due and payable on the
Redemption Date specified in such notice upon surrender of such Bond at the
office or agency of the Issuer specified in such notice. After such Redemption
Date, the principal amount to be redeemed of any Bond called for redemption
shall cease to bear interest, and the only right of the Holder of such Bond as
to such principal amount shall be to receive payment of the Redemption Price. If
any Bond is not redeemed in full, the Issuer shall give to the Holder thereof a
new Bond evidencing the unpaid principal balance of such Bond which has not been
redeemed. Such new Bond shall continue to bear interest on the principal amount
thereof.
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130
In any case where an Interest Payment Date, any Redemption Date or the
Stated Maturity of this Bond shall not be a Business Day, then (notwithstanding
any other provision of this Bond or of the Indenture), payment of interest or
principal or of the Redemption Price need not be made on such date, but may be
made on the next succeeding Business Day with the same force and effect as if
made on the Interest Payment Date, Redemption Date or Stated Maturity, and no
interest shall accrue with respect to such payment from and after such Interest
Payment Date, Redemption Date or Stated Maturity, as the case may be, to the
next succeeding Business Day.
If an Event of Default shall occur, the principal of all the Bonds may
automatically become or may be declared due and payable in the manner and with
the effect provided in the Indenture and in the case of certain Events of
Default the Trustee is required to demand payment of all of the Bonds within two
Business Days after it has knowledge that any such Event of Default has
occurred.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Bonds under the Indenture at any
time by the Issuer and the Trustee with the consent of the Holders of at least
66-2/3% of the principal amount of the Bonds at the time Outstanding (or such
lesser amount as shall have acted at a meeting pursuant to the provisions of the
Indenture). The Indenture also contains provisions permitting the Holders of
specified percentages of the principal amount of the Bonds at the time
Outstanding, on behalf of the Holders of all the Bonds, to waive compliance by
the Issuer with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Bond shall be conclusive and binding upon such Holder and upon
all future Holders of this Bond and of any Bond issued upon registration of
transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Bond or such other Bond (to
the extent permitted by applicable law). The Indenture also permits certain
amendments, waivers and consents by the Trustee without the consent of the
Holders of the Bonds.
No reference herein to the Indenture and no provision of this Bond or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Bond at
the times, places and rates, and in the coin or currency herein prescribed.
The Bonds are authorized and issuable only as registered Bonds without
coupons in minimum denominations of $100,000 and in integral multiples of $1,000
in excess thereof, except as otherwise provided in the Indenture. As provided
in, and subject to, the provisions of the Indenture, the Bonds are exchangeable
for other Bonds of a different authorized denomination or denominations, as
requested by the Holder surrendering the same; provided, however, that the
Issuer shall not be required to issue any Bond of a denomination less than
$100,000.
Prior to due presentment for registration of transfer, the Issuer and
the Trustee, and any agent of the Issuer or the Trustee, shall treat the Person
in whose name a Bond is registered as the owner thereof for all purposes,
whether or not the Bond be overdue, and neither the Issuer, the Trustee, nor any
such agent shall be affected by notice to the contrary.
The Issuer is required by the Indenture to pledge to the Trustee and
maintain Collateral (as described in the Indenture) as security for the payment
of principal of and interest on all Outstanding Bonds and certain other
obligations of the Issuer under the Indenture.
The Indenture and the Bonds shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to
principles of conflicts of law.
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Exhibit I
[FORM OF ACCOUNTANTS' LETTER]
An Accountants' Letter, as required to be delivered pursuant to the
Indenture, prepared by the Independent Accountants of the Issuer at the time
acting, shall be addressed to the Issuer and the Trustee, and shall be
substantially to the effect that:
(i) such Independent Accountants have read the Collateral
Report to which their letter relates, together with the schedule and
annexes referred to therein, and have obtained from the Issuer or the
Trustee, as applicable, the detailed listing of the Eligible Collateral
referred to therein;
(ii) such Independent Accountants have compared the unpaid
balances of Eligible Collateral shown on Annex A-1 of the Collateral
Report with the total of the unpaid principal balances for the Eligible
Collateral shown on the detailed listing (in the event that Item (v)(b)
of the Collateral Report is a positive number, such Independent
Accountants shall verify that the difference, if any, in unpaid
principal balances between the amounts shown on Annex A-1 and such
detailed listing is such positive number);
(iii) such Independent Accountants have obtained from the
Issuer or the Trustee, as applicable, (a) copies of the written bid
prices or bid price (if two bid prices cannot be obtained) used in
Annex A-1 to Schedule 1 in each case in which the definition of "Market
Value" in Section 1.01 of the Indenture requires a quotation to be in
writing and have examined such written quotation, and/or (b) an
Officers' Certificate or a certificate of a Responsible Officer of the
Trustee, as applicable, of the Issuer or the Trustee, as applicable, as
to the bid prices used in Annex A-1 to Schedule 1 in each case in which
the definition of "Market Value" in Section 1.01 of the Indenture
permits a quotation not to be in writing and have examined such
Officers' Certificate or such certificate, as applicable, and the
identity of the bidder and the amount of each quotation is specified
below.
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Eligible Mortgage Loans [specify sources]
Government Securities [specify sources and type]
In the absence of the requirement for market quotations in the
definition of "Market Value" in Section 1.01 of the Indenture, or if none were
available, the Independent Accountants shall verify that the Issuer's or the
Trustee's, as applicable, procedures for determining Market Value are in
accordance with the provisions of the appropriate conditions contained in
Section 1.01 of the Indenture;
(iv) such Independent Accountants have compared the procedures
utilized by the Issuer or the Trustee, as applicable, in determining
the Discounted Value of the Eligible Collateral as set forth in the
Schedules and Annexes of the Collateral Report with the procedures set
forth in the definition of "Discounted Value," "Discount Factors" and
"Market Value" contained in Section 1.01 of the Indenture and found
them to be in agreement;
(v) using the information included in the Collateral Report,
including the bid price quotations referred to in (iii) above, such
Independent Accountants have verified the mathematical accuracy of the
calculations set forth in Annex A-1 thereto;
(vi) (1)using only the loan characteristics information
included in the Detailed Listing of Eligible Mortgage Loans included in
the computation of the Discounted Value of Eligible Collateral, such
Independent Accountants recalculated that: (A)
--------
1 No investigation of compliance with the requirements set forth in
clause (vi) above, which reflect the requirements of the definition of "Eligible
Mortgage Loans," shall be required except (i) on the Closing Date with respect
to the Initial Collateral and (ii) at the time a Fixed-Rate Mortgage Loan is
added to or substituted into the Pledged Property (provided, that with respect
to Mortgage Loans substituted into the Pledged Property pursuant to the first
sentence of Section 4.08(a) or added to the Pledged Property pursuant to Section
4.09, such investigation shall not be made at the time of such addition or
substitution, but instead such Mortgage Loans shall be included in the next
Collateral Report valuing the Eligible Collateral).
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(A) Not more than __% of the aggregate unpaid
principal balance of all Eligible Mortgage Loans included in
the Eligible Collateral are Over 80% Loans;
(B) Not more than __% of the aggregate unpaid
principal balance of all Eligible Mortgage Loans included in
the Eligible Collateral are composed of High Balance Loans;
(C) Not more than __% of the aggregate unpaid
principal balance of all Eligible Mortgage Loans in the
Pledged Property are Condominium Loans;
(D) The aggregate unpaid principal balances of
Eligible Mortgage Loans that are (1) High Balance Loans, (2)
Over 80% Loans or (3) Condominium Loans does not exceed __% of
the aggregate unpaid principal balance of all Eligible
Mortgage Loans included in the Eligible Collateral; and
(E) No Eligible Mortgage Loan is described by more
than one of subclauses (1), (2) and (3) in the preceding
clause (D).
(vii) such Independent Accountants have read the definition of
"Independent" in Section 1.01 of the Indenture and confirm that they
are Independent with respect to the Issuer within the meaning of that
definition.
Exceptions coming to the attention of the Independent Accountants shall
be set for the in this letter.
Each such letter may be appropriately modified and each such letter may
omit any item referred to that is not relevant to the Collateral Report to which
is pertains.
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Each such letter may state that such Independent Accountants have made
no independent verification of the accuracy or appropriateness of the
description or groupings of the Eligible Collateral, the weighted average coupon
interest rate, the weighted average maturity, the assumed life, the Market Value
Rate, the price that results from a published yield for a comparable security or
the unpaid principal balances of the Eligible Collateral. Each such letter may
further state that procedures specified therein were limited to a comparison of
numbers, or of a verification of the mathematical accuracy of specified
computations applicable to numbers appearing in the Collateral Report or in the
Schedules or Annexes thereto and that the conclusions expressed therein were
based on information set forth therein with respect to Discounted Value or
Market Value, that the specified procedures do not constitute an examination in
accordance with generally accepted auditing standards and were not designed nor
is it intended that such procedures would enable such Independent Accountants to
determine that the methods followed in the preparation of such Schedules and
Annexes thereto would correctly determine an appropriate "Market Value" of the
Eligible Collateral and that therefore such Independent Accountants express no
opinion as to the information set forth in such Collateral Report or in the
Schedules or Annexes thereto make no representations as to the sufficiency of
such procedures.
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