1
EXHIBIT 2.1
================================================================================
TRUST INDENTURE
BETWEEN
PMC JOINT VENTURE, L.P. 2000,
A DELAWARE LIMITED PARTNERSHIP
AND
BNY MIDWEST TRUST COMPANY,
AS TRUSTEE
----------
DATED AS OF DECEMBER 15, 2000
----------
$74,504,808
PMC JOINT VENTURE, L.P. 2000
LOAN-BACKED FIXED RATE NOTES
================================================================================
2
TABLE OF CONTENTS
(This Table of Contents is for convenience of reference only and is not a part
of the Trust Indenture.)
Page
----
GRANTING CLAUSES ................................................................................................1
ARTICLE I DEFINITIONS.............................................................................3
ARTICLE II THE NOTES
2.1 AUTHORIZED AMOUNT OF NOTES..............................................................3
2.2 ISSUANCE OF NOTES; DENOMINATIONS; FORM OF NOTES.........................................3
2.4 EXECUTION...............................................................................4
2.5 AUTHENTICATION..........................................................................4
2.6 DELIVERY OF NOTES AND RECEIPT OF LOANS..................................................4
2.7 PAYMENTS OF PRINCIPAL OF AND INTEREST ON NOTES..........................................8
2.8 MUTILATED, LOST, STOLEN OR DESTROYED NOTES..............................................9
2.9 REGISTRATION AND EXCHANGE OF NOTES; PERSONS TREATED AS HOLDERS; RESTRICTIONS ON
TRANSFERS OF NOTES......................................................................9
2.10 DESTRUCTION OF NOTES...................................................................11
ARTICLE III REPRESENTATIONS AND WARRANTIES; SUBSTITUTION OF LOANS..................................11
3.1 REPRESENTATIONS AND WARRANTIES OF ISSUER...............................................11
3.2 REPRESENTATIONS AND WARRANTIES WITH RESPECT TO LOANS...................................12
3.3 REPURCHASE AND SUBSTITUTION OF LOANS...................................................17
3.4 RELEASE AND EXCHANGE OF LOANS..........................................................18
ARTICLE IV REDEMPTION PROVISIONS..................................................................19
4.1 OPTIONAL REDEMPTION OF THE NOTES.......................................................19
4.2 NOTICE OF REDEMPTION...................................................................19
4.3 REDEMPTION PAYMENTS....................................................................20
4.4 CANCELLATION...........................................................................20
i
3
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
ARTICLE V COVENANTS OF ISSUER....................................................................20
5.1 PAYMENT OF PRINCIPAL AND INTEREST......................................................20
5.2 PERFORMANCE OF COVENANTS...............................................................20
5.3 INSTRUMENTS OF FURTHER ASSURANCE.......................................................20
5.4 RECORDING AND FILING...................................................................20
5.5 EXISTENCE..............................................................................21
5.6 ACCESS TO RECORDS; DISCUSSIONS WITH OFFICERS...........................................21
5.7 NOTICE OF MATERIAL EVENTS..............................................................21
5.8 MAINTENANCE OF LICENSES; RATING........................................................22
5.9 USE OF FUNDS...........................................................................22
5.10 NEGATIVE COVENANTS OF THE ISSUER.......................................................22
5.11 OPINIONS AS TO LOANS AND TRUST ESTATE..................................................23
5.12 MAINTENANCE OF OFFICE..................................................................24
5.13 RESTRICTIONS ON ISSUER'S ACTIONS.......................................................24
5.14 INSURANCE COVERAGE.....................................................................26
5.15 FINANCIAL STATEMENTS AND ACCOUNTANTS' REPORTS..........................................26
ARTICLE VI REVENUES AND ACCOUNTS..................................................................26
6.1 CREATION OF ACCOUNTS...................................................................26
6.2 DEPOSITS TO THE COLLECTION ACCOUNT.....................................................27
6.3 DEPOSITS IN SPREAD ACCOUNT; PERMITTED WITHDRAWALS FROM SPREAD ACCOUNT..................27
6.4 DISTRIBUTIONS..........................................................................28
6.5 MONEYS TO BE HELD IN TRUST.............................................................29
6.6 AMOUNTS REMAINING IN FUNDS AND ACCOUNTS................................................30
6.7 ACCOUNTS AND REPORTS...................................................................30
6.8 TAX REPORTING..........................................................................30
ARTICLE VII INVESTMENT OF MONEYS...................................................................30
ARTICLE VIII DISCHARGE OF INDENTURE.................................................................31
ii
4
PAGE
----
ARTICLE IX DEFAULT PROVISION AND REMEDIES OF TRUSTEE AND NOTEHOLDERS..............................32
9.1 EVENTS OF DEFAULT......................................................................32
9.2 REMEDIES; RIGHTS OF NOTEHOLDERS........................................................33
9.3 RIGHT OF NOTEHOLDERS TO DIRECT PROCEEDINGS.............................................34
9.4 APPOINTMENT OF RECEIVERS...............................................................34
9.5 APPLICATION OF MONEYS..................................................................34
9.6 REMEDIES VESTED IN TRUSTEE.............................................................35
9.7 RIGHTS AND REMEDIES OF NOTEHOLDERS.....................................................35
9.8 TERMINATION OF PROCEEDINGS.............................................................36
9.9 WAIVERS OF EVENTS OF DEFAULT...........................................................36
ARTICLE X TRUSTEE................................................................................37
10.1 ACCEPTANCE OF THE TRUSTS...............................................................37
10.2 FEES, CHARGES AND EXPENSES OF TRUSTEE..................................................40
10.3 NOTICE TO NOTEHOLDERS IF DEFAULT OCCURS................................................40
10.4 INTERVENTION BY TRUSTEE................................................................40
10.5 MERGER OR CONSOLIDATION OF TRUSTEE.....................................................40
10.6 RESIGNATION BY TRUSTEE.................................................................41
10.7 REMOVAL OF TRUSTEE.....................................................................41
10.8 APPOINTMENT OF SUCCESSOR TRUSTEE; TEMPORARY TRUSTEE....................................41
10.9 CONCERNING ANY SUCCESSOR TRUSTEE.......................................................41
10.10 DESIGNATION AND SUCCESSION OF PAYING AGENTS............................................42
10.11 APPOINTMENT OF CO-TRUSTEE..............................................................42
ARTICLE XI SUPPLEMENTAL INDENTURES................................................................43
11.1 SUPPLEMENTAL INDENTURES; CONSENT OF NOTEHOLDERS........................................43
11.2 NOTICE OF SUPPLEMENTAL INDENTURES......................................................45
11.3 AMENDMENTS TO TRANSACTION DOCUMENTS....................................................45
11.4 TRUSTEE'S ACTIONS REQUIRE CONSENT OF INITIAL PURCHASER.................................45
ARTICLE XII MISCELLANEOUS..........................................................................45
12.1 CONSENTS, ETC., OF NOTEHOLDERS.........................................................45
iii
5
PAGE
----
12.2 LIMITATION OF RIGHTS...................................................................46
12.3 SEVERABILITY...........................................................................46
12.4 NOTICES................................................................................46
12.5 PAYMENTS DUE ON SATURDAYS, SUNDAYS AND HOLIDAYS........................................46
12.6 COUNTERPARTS...........................................................................46
12.7 APPLICABLE PROVISIONS OF LAW...........................................................47
12.8 CAPTIONS...............................................................................47
EXHIBIT A FORM OF NOTE
EXHIBIT B LOAN SCHEDULE
EXHIBIT C FORM OF MONTHLY TRUSTEE REPORT
EXHIBIT D-1 FORM OF TRANSFEREE'S LETTER
EXHIBIT D-2 FORM OF TRANSFEREE'S LETTER
EXHIBIT E FORM OF RELEASE OF LIENS
iv
6
TRUST INDENTURE
THIS TRUST INDENTURE (this "INDENTURE") is made and entered into as of
December 15, 2000 by and between PMC JOINT VENTURE, L.P. 2000, a Delaware
limited partnership (the "ISSUER"), and BNY MIDWEST TRUST COMPANY, a Illinois
state banking corporation, as trustee (the "TRUSTEE"), who did declare that they
have made and entered into, and do hereby make, enter into and effect, a Trust
Indenture under the following terms and conditions,
WITNESSETH:
WHEREAS, pursuant to its Limited Partnership Agreement and the
applicable provisions of Delaware law, the Issuer is authorized to issue notes
secured as provided herein and to enter into any agreements made in connection
therewith; and
WHEREAS, the Issuer is hereby issuing its Loan-Backed Fixed Rate Notes
(collectively, the "NOTES") and will use the proceeds from the sale of the Notes
to effect a pro rata distribution to its partners and deposit funds into the
Spread Account (as defined herein); and
WHEREAS, the Issuer has authorized the issuance of the Notes pursuant
to and secured by this Indenture and the execution of this Indenture to secure
the Notes by a pledge of the Loans (as defined herein) and moneys held by the
Trustee; and
WHEREAS, upon satisfaction of certain requirements contained herein and
simultaneously with the authentication and delivery of the Notes, the Issuer
will deliver and pledge the Loans to the Trustee to secure the obligations of
the Issuer under the Notes and hereunder, and the Trustee is instructed to
accept the deposit of the Loans from the Issuer, fund the Spread Account and to
release the net proceeds of the Notes to the Issuer.
NOW, THEREFORE, THIS TRUST INDENTURE
WITNESSETH:
GRANTING CLAUSES
The Issuer, in consideration of the premises and the acceptance by the
Trustee of the trusts hereby created and of the purchase and acceptance of the
Notes by the Holders thereof, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, to secure the payment
of the principal of and interest, when due, on the Notes according to their
tenor and effect and to secure the performance and observance by the Issuer of
all the covenants expressed or implied herein and in the Notes, does hereby
irrevocably pledge, set over and grant a security interest (which security
interest is hereby represented and warranted by the Issuer to be a first
priority perfected security interest) in and unto the Trustee, and its
successors in trust and assigns forever, for the securing of the performance of
the obligations of the Issuer hereinafter set forth, all right, title and
interest of the Issuer in, to and under:
7
(a) the Loans, the Related Assets and any REO Property,
including all payments with respect thereto (other than the Prepayment
Penalties) and escrow deposits and fees, if any, and any interest,
profits and other income derived from the investment thereof and any
and all insurance policies and Loan Files related thereto;
(b) any moneys or investments held or entitled to be held by
the Trustee under this Indenture, including, without limitation, moneys
held in the Collection Account and the Spread Account, any investments
therein and the security entitlements to all financial assets credited
thereto from time to time, and the interest, profits and other income
derived from the investment thereof;
(c) all right, title and interest of the Issuer in, to and
under the Servicing Agreement, the Contribution Agreement and the other
Transaction Documents, including all extensions and renewals of their
terms, if any, including, but without limiting the generality of the
foregoing, the present and continuing right to make claim for, collect
and receive any income, revenues, receipts, issues, profits, insurance
proceeds and other sums of money payable to or receivable by the Issuer
under the Servicing Agreement, the Contribution Agreement or the other
Transaction Documents, whether payable pursuant to the Servicing
Agreement, the Contribution Agreement or the other Transaction
Documents, or otherwise, to bring actions and proceedings under the
Servicing Agreement, the Contribution Agreement or the other
Transaction Documents or for the enforcement thereof, and to do any and
all things which the Issuer is or may become entitled to do under the
Servicing Agreement, the Contribution Agreement or the other
Transaction Documents;
(d) any and all other real or personal property of every name
and nature from time to time hereafter by delivery or by writing of any
kind conveyed, mortgaged, pledged, assigned or transferred as and for
additional security hereunder by the Issuer, or by anyone on its behalf
or with its written consent, to the Trustee which is hereby authorized
to receive any and all such property at any and all times and to hold
and apply the same subject to the terms hereof; and
(e) all proceeds of the above, and any proceeds thereof.
TO HAVE AND TO HOLD all and singular the Trust Estate, whether now
owned or hereafter acquired, unto the Trustee and its respective successors in
trust and assigns forever;
IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth for
the equal and proportionate benefit and security of all present and future
Holders of the Notes without preference of any Note over any other, and for
enforcement of the payment of the Notes in accordance with their terms, and all
other sums payable hereunder or on the Notes and for the performance of and
compliance with the obligations, covenants and conditions of this Indenture, as
if all the Notes at any time outstanding had been authenticated, executed and
delivered simultaneously with the execution and delivery of this Indenture, all
as herein set forth;
PROVIDED, HOWEVER, that if the Issuer, its successors or assigns shall
indefeasibly pay, or cause to be paid, the principal of and interest on the
Notes due or to become due thereon,
TRUST INDENTURE - Page 2
8
at the times and in the manner mentioned in the Notes according to the true
intent and meaning thereof, and shall cause the payments to be made as required
under Article V hereof, or shall provide, as permitted hereby, for the payment
thereof by depositing with the Trustee the entire amount due or to become due
thereon, and shall keep, perform and observe all the covenants and conditions
pursuant to the terms of this Indenture to be kept, performed and observed by
it, and shall pay or cause to be paid to the Trustee and any paying agent all
sums of money due or to become due in accordance with the terms and provisions
hereof, then upon such final payments this Indenture and the rights hereby and
thereby granted shall cease, determine and be void; otherwise this Indenture is
to be and remain in full force and effect;
AND PROVIDED, FURTHER, the Trustee agrees to accept receipt of the
Loans and the Trustee Loan Files, and declares that it holds and will hold for
the benefit of the Noteholders such documents and the other documents
constituting a part of the Loans and the Trustee Loan Files delivered to it as
the Trustee upon the terms stated herein.
THIS TRUST INDENTURE FURTHER WITNESSETH, and it is expressly declared,
that all Notes issued and secured hereunder are to be issued, authenticated and
delivered, and all said property, rights and interests, including, without
limitation, the amounts hereby assigned and pledged, are to be dealt with and
disposed of, under, upon and subject to the terms, conditions, stipulations,
covenants, agreements, trusts, uses and purposes hereinafter expressed, and the
Issuer has agreed and covenanted, and does hereby agree and covenant, with the
Trustee and with the respective Holders, from time to time or at any time, of
the Notes, or any part thereof, as follows:
ARTICLE I
DEFINITIONS
All capitalized terms used herein and not otherwise defined herein
shall have the same meanings as set forth in Schedule 1 attached hereto.
ARTICLE II
THE NOTES
2.1 AUTHORIZED AMOUNT OF NOTES. No Notes may be issued under the
provisions of this Indenture, except in accordance with this Article. Except as
provided in Sections 2.8 and 2.9 hereof, the total principal amount of Notes
that may be issued is hereby expressly limited to $74,504,808.
2.2 ISSUANCE OF NOTES; DENOMINATIONS; FORM OF NOTES. (a) The Notes
shall be designated the "PMC Joint Venture, L.P. 2000 Loan-Backed Fixed Rate
Notes" and shall be issued in an initial aggregate principal amount equal to
$74,504,808.
The Notes shall mature on the Maturity Date, and shall accrue interest
during each Interest Accrual Period at the Applicable Remittance Rate. The Notes
shall also accrue interest on the unpaid principal and, to the extent permitted
by applicable law, accrued interest to the
TRUST INDENTURE - Page 3
9
extent that such amount has not been distributed to the Noteholders when due at
the Default Rate. The Notes shall be non-recourse to the Issuer's partners and
neither the Trustee nor the Noteholders shall have any right to enforce the
payment or performance of the Issuer's obligations under this Indenture and the
Notes against the partners of the Issuer or their respective assets.
(b) The Notes will be issued as registered Notes without
coupons. The Notes will be issuable in minimum denominations of $250,000 and
integral multiples of $1,000 in excess thereof. One (1) Note may be issued in an
additional amount equal to the remainder of the aggregate stated principal
balance of the Notes on the Closing Date.
(c) The Notes issued under this Indenture shall be
substantially in the form set forth in Exhibit A hereto with such variations,
omissions and insertions as are permitted or required thereby and hereby.
2.3 [INTENTIONALLY OMITTED.]
2.4 EXECUTION. The Notes shall be executed on behalf of the Issuer with
the signature of any Authorized Officer of the General Partner and attested by
the signature of the Secretary or Assistant Secretary of the General Partner. In
case any officer of the General Partner of the Issuer whose signature shall
appear on the Notes shall cease to be such officer before the delivery of such
Notes, such signature shall nevertheless be valid and sufficient for all
purposes, the same as if he had remained in office until delivery.
The Notes are negotiable instruments (subject to compliance with
applicable Securities Laws) and shall be solely the obligations of the Issuer.
2.5 AUTHENTICATION. No Note shall be valid or obligatory for any
purpose or entitled to any security or benefit under this Indenture unless and
until a certificate of authentication on such Note shall have been duly executed
by the Trustee by manual signature, which execution shall be at the written
direction of the Issuer, and such executed certificate of the Trustee upon any
such Note shall be conclusive evidence that such Note has been authenticated and
delivered under this Indenture. The Trustee's certificate of authentication on
any Note shall be deemed to have been executed by it if signed by an Authorized
Officer or signatory of the Trustee, but it shall not be necessary that the same
officer or signatory sign the certificate of authentication on all of the Notes
issued hereunder. Except as provided in Section 2.9(d), all Notes shall be dated
the date of their authentication.
2.6 DELIVERY OF NOTES AND RECEIPT OF LOANS. (a) After the execution and
delivery of this Indenture, the Issuer shall execute and deliver to the Trustee,
and the Trustee shall authenticate, the Notes and deliver the Notes to the
Initial Purchaser, for the purchase price specified by the Issuer, as
hereinafter in this Section provided.
Simultaneously with or prior to the delivery by the Trustee of all of
the Notes and the disbursement of a portion of the net proceeds of the issuance
of the Notes, there shall be received by the Trustee:
TRUST INDENTURE - Page 4
10
(i) A copy, duly certified by the General Partner of the Issuer,
of each of the resolutions of the board of directors of the General Partner and
the Issuer authorizing the issuance of the Notes and the execution and delivery
of this Indenture;
(ii) An original executed counterpart of each Transaction
Document;
(iii) A request and authorization to the Trustee on behalf of the
Issuer and signed by the General Partner of the Issuer to authenticate and
deliver such series of Notes to the purchasers therein identified upon payment
to the Trustee, but for the account of the Issuer, of a sum specified in such
request and authorization. The proceeds of such payment shall be paid over to
the Trustee and deposited as required by such request and authorization in the
various funds specified in, and pursuant to Article VI hereof;
(iv) An Opinion of Counsel, satisfactory in form and scope to the
Initial Purchaser, that the Notes constitute debt of the Issuer for federal
income tax purposes;
(v) The documents with respect to the Loans described in the Loan
Schedule in accordance with paragraph (b) below;
(vi) A letter from ▇▇▇▇▇'▇, indicating that the Notes have been
rated at least "Aaa";
(vii) Certified copies of resolutions, organizational documents,
bylaws and incumbency certificates for PMC, PMCT, the Issuer and the General
Partner of the Issuer;
(viii) Opinions of Issuer's counsel, satisfactory in form and
scope to the Initial Purchaser, addressed to, among others, the Trustee and the
Noteholders to the effect that, among other things, and based upon the
qualifications, assumptions and reasoning stated therein:
(A) The contribution and assignment of the Loans (and
related rights) by PMC and PMCT to the Issuer (1) constitute a "true
sale" and will result in the Loans not being deemed property of PMC's
or PMCT's estate pursuant to Section 541 of the Bankruptcy Code (and
based upon lien search reports, there is no public record of any prior
UCC financing statements covering such Loans, other than by entities
which have executed a UCC termination statement or other appropriate
agreement(s) indicating the release of their security interests, or any
notice of any federal tax lien), and (2) based upon lien search
reports, the Trustee has a valid first priority perfected security
interest in such Loans and the Related Assets as security for the Notes
(and based upon lien search reports, there is no public record of any
prior UCC financing statements covering such Loans, other than by
entities which have executed a UCC termination statement or other
appropriate agreement(s) indicating the release of their security
interests, or any notice of any federal tax lien); and
(B) in the event of a bankruptcy of PMC, PMCT or the
General Partner of the Issuer, the assets and liabilities of the Issuer
would not be substantively consolidated with the assets and liabilities
of PMC, PMCT or the General Partner, as applicable.
TRUST INDENTURE - Page 5
11
(ix) Copies of properly prepared and executed financing
statements in sufficient form for filing, naming (A) PMC or PMCT, as the case
may be, as seller, the Issuer as purchaser, and the Trustee as assignee of the
purchaser to reflect the conveyance of the Loans to the Issuer, and (B) the
Issuer as debtor and the Trustee as secured party, covering the Issuer's
interest in the Trust Estate, as may be necessary or desirable to perfect the
security interest of the Trustee (for the benefit of the Noteholders) in the
Issuer's interest in the Trust Estate and copies of properly prepared and
executed releases in sufficient form for filing, indicating the release of any
security interest by any third party in such assets; and
(x) Copies of UCC and tax and judgment lien search reports
against PMC and PMCT.
Any of the foregoing statements which are not, as of the Closing Date,
properly filed in the appropriate office as necessary to evidence the conveyance
of the Loans to the Issuer or perfect the security interest of the Trustee (for
the benefit of the Noteholders) in the Issuer's interest in the Trust Estate or
to effect the release of any security interest held by any third party in such
assets shall be mailed on the Closing Date by overnight mail to the
jurisdictions in which such statements are to be filed.
(b) In connection with the transfer and assignment of the
Loans to the Trustee, the Issuer does hereby deliver to, and deposit
with, or cause to be delivered to and deposited with, the Trustee the
following documents or instruments with respect to each Loan so
transferred and assigned (hereinafter referred to as the "TRUSTEE LOAN
FILE"):
(i) the original Underlying Note showing a complete chain
of endorsement from the originator to the current holder (if other than the
originator) and endorsed by the originator or current holder by means of an
allonge as follows: "Pay to the order of BNY Midwest Trust Company, as Trustee
under the Trust Indenture, dated as of December 15, 2000, for the benefit of the
holders of PMC Joint Venture, L.P. 2000 Loan-Backed Fixed Rate Notes, without
recourse";
(ii) either: (A) the original Mortgage with evidence of
recording thereon, (B) with respect to a Loan for which the original Mortgage
was not returned after recordation, a copy of the Mortgage certified by the
appropriate recording officer to be true and accurate, or (C) with respect to a
Loan for which the original Mortgage has been sent to the appropriate public
official for recording and with respect to which a certified copy of the
Mortgage is not available from such public official, a copy of the Mortgage
certified as a true copy by an Authorized Officer of the Issuer;
(iii) either: (A) the original executed assignments of the
Mortgage (which may be in the form of a blanket assignment in which case the
Issuer shall execute and deliver to the Trustee within six (6) months of the
Closing Date an original assignment of each Mortgage), showing a complete chain
of assignment from the originator to the current assignee (if other than the
originator) and acceptable for recording in the jurisdiction in which the
applicable Mortgaged Property is located, and from the originator or current
assignee in the following form: "BNY Midwest Trust Company, as the Trustee under
the Trust Indenture, dated as of December 15, 2000" or (B) copies of such
assignments certified as true copies by an
TRUST INDENTURE - Page 6
12
Authorized Officer of the Issuer where the original of such assignment has been
transmitted for recording, which such certification may be in the form of one or
more blanket certificates;
(iv) the original of each assumption, modification,
written assurance or substitution agreement, if any;
(v) either (i) originals of any title insurance policies
relating to the Mortgaged Properties or (ii) copies of any title insurance
policies certified as true by PMC or PMCT, as applicable;
(vi) for all Loans, a blanket assignment of all collateral
securing the Loan, including without limitation, all rights under applicable
guarantees and insurance policies;
(vii) for all Loans, an irrevocable power of attorney from
PMC or PMCT, as applicable to the Trustee, delegable by the Trustee to the
Servicer and any successor servicer, to execute, deliver, file or record and
otherwise deal with the collateral for the Loans in accordance with the
Contribution Agreement and to prepare, execute and file or record UCC financing
statements and notices to insurers; and
(viii) for all Loans, a blanket UCC-1 financing statement
describing the Loans and identifying by type all collateral for the Loans in the
Loan Pool and naming the Trustee as Secured Party and the Issuer as Debtor, such
UCC-1 to be filed promptly following the Closing Date in the office of the
Secretary of State of Texas.
The Issuer will cause to be recorded or filed each assignment of a Loan
to the Trustee in the appropriate public office for real property records within
six (6) months after the Closing Date to protect the Trustee's interest in the
Loans against sale, further assignments, satisfaction or discharge by the
Servicer, PMC, PMCT, the Issuer or any third party. The Issuer shall confirm the
recordation or filing of the assignments of the Loans in writing to the Trustee
and the Noteholders within thirty (30) days following such six (6) month period.
For Loans which have been prepaid in full after the Cut-Off Date and
prior to the Closing Date, the Issuer, in lieu of delivering the above
documents, and with respect to all Monthly Payments received after the Cut-Off
Date, herewith delivers to the Trustee an Officers' Certificate to the effect
that all amounts received in connection with such payments which are required to
be deposited in the Lockbox Account have been so delivered to the Trustee and
indicating the amount of any payment received with respect to each such Loan.
With respect to Loans for which the original Mortgage and related
assignment have been sent to the appropriate public official for recording, the
Issuer shall provide the original Mortgage and related assignments to the
Trustee promptly upon receipt from the public official after recording. Within
six (6) months after the Closing Date, the Trustee shall certify that all such
original Mortgages and related assignments have been received and, if not,
shall, upon prior written consent of the Initial Purchaser, demand repurchase of
the related Loan pursuant to Section 3.3.
(c) The Trustee, by execution and delivery hereof, subject to
the next preceding paragraph and the last paragraph of this Section,
acknowledges receipt of the
TRUST INDENTURE - Page 7
13
documents and other property referred to in and required to be
delivered pursuant to this Section 2.6 and declares that the Trustee
holds and will hold all other property to be received pursuant to this
Indenture, in trust, for the benefit of all Holders.
The Trustee further acknowledges that it has also received a
certificate from the Supervisory Servicer, a copy of which has been provided to
the Rating Agency, to the effect that, as to each Loan listed in the Loan
Schedule, (i) all documents constituting part of such Trustee Loan File required
to be delivered to the Trustee pursuant to this Indenture have been delivered to
the Trustee, (ii) such documents have been reviewed by it as to form and appear
to have been properly executed and regular on their face, purport to be recorded
or filed (as applicable), have not been torn, mutilated or otherwise defaced and
relate to such Loan and (iii) based on its examination and only as to the
foregoing, the information set forth in the Loan Schedule accurately reflects
information set forth in the Trustee Loan File, except for exceptions detailed
on the exhibit attached to such list. In performing such review, the Supervisory
Servicer may rely upon the purported genuineness and due execution of any such
document and on the purported genuineness of any signature thereon. If at any
time the Trustee finds any document or documents constituting a part of a
Trustee Loan File to be defective, or to be unrelated to the Loans identified on
the Loan Schedule, the Trustee shall promptly so notify the Noteholders, the
Issuer, the Servicer, the Rating Agency, PMCT and PMC, and the Trustee, as
assignee under the Contribution Agreement, shall make written demand upon PMC or
PMCT, as applicable, to comply with its obligation under Section 8 of the
Contribution Agreement and shall send copies of such written demand to the
Noteholders, the Issuer, the Servicer and the Rating Agency. If PMC or PMCT, as
applicable, fails to comply with such obligation, the Trustee will give prompt
written notice to the Noteholders, the Supervisory Servicer and the Rating
Agency and the Trustee shall take such reasonable action as the Required
Noteholders direct in writing, at the expense of the Servicer if the Servicer is
an Affiliate of the Issuer.
2.7 PAYMENTS OF PRINCIPAL OF AND INTEREST ON NOTES. (a) The person in
whose name any Note is registered as of a Record Date with respect to a Payment
Date shall be entitled to receive the interest and principal payable on such
Payment Date notwithstanding the cancellation of such Note upon any registration
of transfer or exchange thereof subsequent to such Record Date and prior to such
Payment Date.
(b) The Notes shall bear interest from and including the Closing
Date. In all cases, interest shall be calculated on the basis of a 30-day month
and a 360-day year. Interest accrued on the Notes during an Interest Accrual
Period will be due and payable on the related Payment Date.
Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture upon transfer of or exchange for or in lieu of
any other Note shall carry the rights to interest due and unpaid, and to become
due, which were carried by such other Note.
(c) Principal payments on the Notes shall be made on each Payment
Date as provided in Section 6.3 hereof. Principal payments on the Notes shall be
applied pro rata to all Notes.
TRUST INDENTURE - Page 8
14
(d) Payments to each Holder shall be made by check mailed to such
Holder's address as it appears on the Note Register on the relevant Record Date
(or, in the case of any Holder of Notes having an aggregate initial principal
amount of not less than $1,000,000, by wire transfer of immediately available
funds to the account of such Noteholder and without presentation of the Note or
the making of any notations thereon, if such Noteholder shall have given the
Trustee appropriate written notice of such account, and changes (if any) to such
instructions at least five (5) Business Days prior to the Record Date
immediately preceding the Payment Date).
2.8 MUTILATED, LOST, STOLEN OR DESTROYED NOTES. In the event any Note
is mutilated, lost, stolen or destroyed, upon receipt by the Trustee of evidence
reasonably satisfactory to it of the ownership of the Note and in the absence of
notice to the Trustee that such Note has been acquired by a bona fide purchaser,
the Issuer shall execute and the Trustee shall authenticate and deliver a new
Note executed in the same manner as the Note being replaced, in the same
principal amount as the unpaid principal amount of such Note and dated the date
to which interest shall have been paid on such Note or, if no interest shall
have yet been so paid, dated the date of such Note, provided that, in the case
of any mutilated Note, such mutilated Note shall first be surrendered to the
Trustee, and, in the case of any lost, stolen or destroyed Note, there shall be
first furnished to the Trustee and the Issuer evidence of such loss, theft or
destruction reasonably satisfactory to the Trustee, together with any indemnity
satisfactory to each of them. Further, in the case of a past due or a matured,
lost, stolen or destroyed Note, the Trustee shall pay the face amount of such
past due or matured Note upon delivery to the Trustee of evidence of such loss,
theft or destruction reasonably satisfactory to the Trustee, together with any
indemnity satisfactory to each of them. Upon the execution of any new Note under
this Section 2.8, the Trustee may require the Holder to pay a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee)
connected therewith. Any new Note issued pursuant to this Section 2.8 shall
constitute complete and indefeasible evidence of ownership of the Note, as if
originally issued, whether or not the lost, stolen or destroyed Note shall be
found at any time.
2.9 REGISTRATION AND EXCHANGE OF NOTES; PERSONS TREATED AS HOLDERS;
RESTRICTIONS ON TRANSFERS OF NOTES. (a) The Issuer shall cause books for the
registration and for the transfer of the Notes as provided in this Indenture to
be kept by the Trustee, who is hereby appointed as the initial Registrar. The
Trustee hereby accepts its appointment as initial Registrar and shall maintain
the Note Register. The Registrar may resign or be discharged or removed and a
new successor appointed in accordance with the procedures and requirements set
forth in Article X hereof with respect to the resignation, discharge or removal
of the Trustee and the appointment of a successor Trustee. The Registrar may
appoint, by a written instrument delivered to the Issuer, the Trustee, the
Supervisory Servicer, the Noteholders, the Servicer and the Holders, any other
bank or trust company to act as co-registrar under such conditions as the
Registrar may prescribe, provided that the Registrar shall not be relieved of
any of its duties or responsibilities hereunder by reason of such appointment.
The ownership of Notes shall be proved by the Note Register. The Trustee will
keep on file at the Corporate Trust Office of the Trustee a list of names and
addresses of the owners of all Notes as shown on the Register maintained by the
Trustee as Registrar.
TRUST INDENTURE - Page 9
15
At reasonable times and under reasonable regulations established by the
Trustee, the Note Register may be inspected and copied by the Issuer, the
Supervisory Servicer or any Holder (or a designated representative thereof).
(b) Prior to presentation of any Note for registration of
transfer, the Issuer and the Trustee shall treat the Person in whose name such
Note is registered as the owner and holder of such Note for all purposes
whatsoever, whether or not such Note shall be overdue, and the Issuer and the
Trustee or their agents shall not be affected by notice to the contrary.
(c) No transfer or sale of any Note shall be made unless
the registration requirements of the Securities Act of 1933, as amended (the
"ACT"), and any applicable state securities laws are complied with, or such
transfer or sale is exempt from the registration requirements under said Act and
laws. In the event that a transfer of any Note is to be made, the Trustee shall
require the Holder of such Note to deliver, at its expense, a certificate in the
form of Exhibit D-1 or Exhibit D-2 hereto, as the case may be, or a certificate
otherwise reasonably acceptable to and in form and substance reasonably
satisfactory to the Trustee that such transfer is being made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from said
Act and laws or is being made pursuant to said Act and laws. If a certificate is
not in the form of either Exhibit D-1 or Exhibit D-2 hereto, the Trustee may
request an Opinion of Counsel (which counsel may be in-house counsel of the
transferor or transferee) to establish compliance with such Act or laws. The
Opinion of Counsel shall not be an expense of the Trustee or the Issuer. Neither
the Issuer nor the Trustee is under an obligation to register any such Note
under said Act or any other Securities Law. Any Noteholder desiring to effect a
transfer under this Section 2.9(c) shall indemnify the Trustee, the Servicer and
the Issuer against any liability that may result if the transfer is not exempt
from the registration requirements under the Act or applicable state securities
laws or if the transfer is not conducted in accordance with such laws. In the
event that any Note is transferred to a transferee which is using funds to
purchase the Note which such funds constitute assets of one or more employee
benefit plans, such transferee shall advise the Issuer in writing of such source
of funds and the Issuer shall advise such transferee in writing whether the
Issuer is or is not a party in interest with respect to any employee benefit
plan disclosed to the Issuer by such transferee. As used in this Section, the
terms "party-in-interest" and "employee benefit plan" shall have the respective
meanings assigned to them in ERISA.
(d) The holder of any Note, at its option, may in person
or by duly authorized attorney surrender the same for exchange at the Corporate
Trust Office and promptly thereafter and at the Issuer's expense, except as
provided in Section 2.9(e), receive in exchange therefor a new Note or Notes,
each in the denomination requested by such Holder (but not less than $250,000,
or, if such Holder shall be a Holder of less than $250,000 in aggregate
principal amount of Notes, such lesser amount), dated the date to which interest
shall have been paid on the Note so surrendered or, if no interest shall have
yet been so paid, dated the date of the Note so surrendered and registered in
the name of such Person or Persons as shall have been designated in writing by
such Holder or its attorney for the same principal amount as the then unpaid
principal amount of the Note so surrendered. Upon surrender for transfer of any
Note at the Corporate Trust Office of the Trustee, the Trustee shall
authenticate and deliver (upon satisfaction of the conditions stated above) in
the name of the transferee or transferees a new Note or Notes of authorized
denomination for the aggregate principal amount entitled to be
TRUST INDENTURE - Page 10
16
received by such transferee or transferees. Notes to be exchanged shall be
surrendered at the Corporate Trust Office of the Trustee and the Trustee shall
authenticate and deliver in exchange therefor the Note or Notes which the
Noteholder making the exchange shall be entitled to receive (upon satisfaction
of the conditions stated above).
(e) All Notes presented for transfer, exchange,
registration, discharge from registration, redemption or payment (if so required
by the Issuer or the Trustee) shall be accompanied by a written instrument or
instruments of transfer or authorization for exchange, in form (and with
guaranty of signature) reasonably satisfactory to the Issuer and the Trustee,
duly executed by the registered Holder or by his duly authorized attorney.
Notes shall be transferred or exchanged without cost to the Noteholder,
except for any stamp or other tax or governmental charge required to be paid
with respect to such transfer or exchange.
(f) New Notes delivered upon any transfer or exchange
shall be valid obligations of the Issuer, evidencing the same debt as the Notes
surrendered, shall be secured by this Indenture and shall be entitled to all of
the security and benefits hereof to the same extent as the Notes surrendered.
2.10 DESTRUCTION OF NOTES. If any Outstanding Note shall be delivered
to the Trustee for cancellation pursuant to this Indenture, upon payment of the
final principal amount and interest with respect to the Note represented
thereby, or for replacement pursuant to Section 2.8 hereof or transfer or
exchange pursuant to Section 2.9 hereof, such Note shall be canceled and
destroyed by the Trustee and counterparts of a certificate of destruction
evidencing such destruction shall be furnished by the Trustee to the Issuer.
ARTICLE III
REPRESENTATIONS AND WARRANTIES;
SUBSTITUTION OF LOANS
3.1 REPRESENTATIONS AND WARRANTIES OF ISSUER. The Issuer represents and
warrants to the Trustee for the benefit of the Noteholders as follows:
(a) the Issuer is a limited partnership duly organized,
validly existing and in good standing under the laws of the State of
Delaware and has full power to own its property, to carry on its
business as presently conducted, to enter into and perform its
obligations under this Indenture and the other Transaction Documents,
and to create the trusts created pursuant hereto;
(b) the execution and delivery by the Issuer of the
Transaction Documents have been duly authorized by all necessary action
on the part of the Issuer;
(c) neither the execution and delivery of the Transaction
Documents by the Issuer, nor the consummation of the transactions
herein or therein contemplated, nor compliance by the Issuer with the
provisions hereof or thereof, will conflict with or result in a breach
of, or constitute a default under, any of the provisions of the
partnership
TRUST INDENTURE - Page 11
17
agreement of the Issuer or conflict with, result in a breach or
violation of or constitute a default under, the terms of any indenture
or other agreement or instrument to which the Issuer is a party or by
which the Issuer is bound, or any statute, order or regulation
applicable to the Issuer of any court, regulatory body, administrative
agency or governmental body having jurisdiction over the Issuer;
(d) the execution, delivery and performance by the Issuer of
the Transaction Documents and the consummation of the transactions
contemplated hereby do not require the consent or approval of, the
giving of notice to, the registration with, or the taking of any other
action in respect of, any state, federal or other governmental
authority or agency, except for such consents or approvals which have
been obtained on or before the Closing Date;
(e) each Transaction Document has been duly executed and
delivered by the Issuer and, assuming due authorization, execution and
delivery by the other parties thereto, constitutes a legal, valid and
binding obligation of the Issuer enforceable against it in accordance
with its terms (subject to applicable bankruptcy and insolvency laws
and other similar laws affecting the enforcement of the rights of
creditors generally and general principles of equity);
(f) there are no actions, suits or proceedings pending or, to
the knowledge of the Issuer, threatened or likely to be asserted
against or affecting the Issuer, before or by any court, administrative
agency, arbitrator or governmental body (i) with respect to any of the
transactions contemplated by the Transaction Documents or (ii) with
respect to any other matter which, in the reasonable judgment of the
Issuer will be determined adversely to the Issuer and will, if
determined adversely to the Issuer, materially and adversely affect it
or its business, assets, operations or condition, financial or
otherwise, or materially and adversely affect its ability to perform
its obligations under the Transaction Documents. The Issuer is not in
default with respect to any order of any court, administrative agency,
arbitrator or governmental body so as to materially and adversely
affect the transactions contemplated by the Transaction Documents;
(g) as of the Closing Date, the Issuer had good title to, and
was the sole owner of, each Loan and any other asset included in the
Trust Estate free and clear of all Liens, and, immediately upon the
transfer and assignment herein contemplated and taking possession of
the Trustee Loan File, the Trustee shall have a first priority
perfected security interest in the Trust Estate free and clear of all
Liens; and
(h) the Issuer acquired title to the Loans in good faith,
without notice of any adverse claim.
3.2 REPRESENTATIONS AND WARRANTIES WITH RESPECT TO LOANS. (a) The
Issuer hereby represents and warrants to the Trustee for the benefit of the
Noteholders as of the date hereof with respect to each Loan as follows:
(i) Immediately prior to the collateral assignment of the
Loan to the Trustee, the Issuer had good title to, and was the sole owner of,
the Loan free and clear of all
TRUST INDENTURE - Page 12
18
Liens. Except for the Issuer, no Person other than PMC or PMCT, as the case may
be, and the Trustee has any interest in the Mortgage, whether as mortgagee,
assignee, pledgee or otherwise. Immediately upon the collateral assignment of
the Loan and taking possession thereof, the Trustee will have a first priority
perfected security interest in each Loan, free and clear of all Liens.
(ii) The Loan was originated in the United States, in a
state where PMC or PMCT, as the case may be, is qualified to transact such
business, in the ordinary course of its business, except to the extent that any
failure to be so qualified would not adversely affect the Loan or the Mortgage
or the transfer thereof or the enforceability of the Obligor's obligations
thereunder. PMC or PMCT, as the case may be, acquired title to the Loans in good
faith, without notice of any adverse claim.
(iii) The Loan has not been originated in, nor is such
Loan subject to the laws of, any jurisdiction under which the transfer and
assignment of such Loan to the Issuer would be unlawful, void or voidable.
(iv) The information set forth in the Loan Schedule is
true and correct in all material respects.
(v) The terms of the Underlying Note and the Mortgage have
not been impaired, waived, altered or modified in any respect, except by written
instruments, executed in accordance with the customary credit policies of PMC or
PMCT, as the case may be, which are reflected on the Loan Schedule. No Obligor
has been released, in whole or in part, except pursuant to the terms of an
assumption agreement which is part of the related Loan File and the terms of
which are reflected in the Loan Schedule.
(vi) The Underlying Note and the related Mortgage are not
subject to any right of rescission, setoff, abatement, diminution, counterclaim
or defense, including the defense of usury, nor will the operation of any of the
terms of the Underlying Note or the Mortgage, or the exercise of any right
thereunder in accordance with the terms thereof, render the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
setoff, abatement, diminution, counterclaim or defense, including the defense of
usury, and no such right of rescission, setoff, abatement, diminution,
counterclaim or defense has been asserted with respect thereto.
(vii) The Mortgage has not been satisfied, canceled or
subordinated, in whole or in part, or rescinded, and except as reflected on the
Loan Schedule, the Mortgaged Property has not been released from the lien of the
Mortgage, in whole or in part, nor has any instrument been executed that would
effect any such release, cancellation, subordination or rescission.
(viii) The Underlying Note and the Mortgage delivered to
the Trustee are genuine originals (except where certified copies of the Mortgage
have been delivered in accordance with this Indenture) and each is the legal,
valid and binding obligation of the maker thereof, enforceable in accordance
with its terms.
TRUST INDENTURE - Page 13
19
(ix) There has been no fraud, dishonesty,
misrepresentation or negligence on the part of the Issuer, the Independent
Directors or the General Partner or, to the Issuer's knowledge, on the part of
the originator, PMC, PMCT or the Obligor in connection with the origination of
any Loan or in connection with the transfer and assignment of such Loan to the
Issuer.
(x) As of the Closing Date, there was no material default,
breach, violation or event of acceleration existing under the Mortgage or the
Underlying Note and no event which, with the passage of time or with notice and
the expiration of any grace or cure period, would constitute such a default,
breach, violation or event of acceleration, and since the Cut-off Date the
Issuer had not waived any such default, breach, violation or event of
acceleration.
(xi) The Mortgage and the Underlying Note comply with all
requirements of applicable federal, state and local laws and regulations. The
origination and servicing of the Loan and the assignment of the Loan comply with
any and all applicable requirements of any applicable federal, state or local
law, including, without limitation, usury, truth-in-lending, real estate
settlement procedures, consumer credit protection, equal credit opportunity and
disclosure laws. To the Issuer's knowledge, each Mortgaged Property is in
compliance in all material respects with all applicable laws, zoning ordinances,
rules, covenants and restrictions affecting the construction, occupancy, use and
operation of such Mortgaged Property. To the Issuer's knowledge, all
inspections, licenses and certificates required, including certificates of
occupancy, whether by law, ordinance, regulation or insurance standards to be
made or issued with regard to the Mortgaged Property, have been obtained and are
in full force and effect.
(xii) Each Loan was originated or purchased in accordance
with PMCT's or PMC's standard mortgage, underwriting, origination and lending
procedures. No adverse selection criteria were utilized by PMC, PMCT or the
Issuer in selecting the Loans for inclusion in this transaction.
(xiii) Except as described on the Loan Schedule, no Loan
is a 30-Day Delinquent Loan.
(xiv) The Issuer has not advanced funds or induced,
solicited or knowingly received any advance of funds from a party other than the
owner of the Mortgaged Property subject to the Mortgage, directly or indirectly,
for the payment of any amount required by the Loan.
(xv) To the Issuer's knowledge, there are no delinquent
taxes, ground rents, water charges, sewer rents, assessments (including
assessments payable in future installments) or other outstanding charges
affecting the related Mortgaged Property.
(xvi) The Mortgaged Property is located in the state
indicated on the Loan Schedule, and, except as reflected on the Loan Schedule,
consists of a single parcel of real property. The Mortgaged Property is in good
repair, is free of damage and waste that would materially and adversely affect
its value and such Mortgaged Property has not been materially
TRUST INDENTURE - Page 14
20
damaged by fire, wind or other cause, which damage has not been fully repaired
or for which insurance proceeds have not been received or are not expected to be
received in an amount sufficient to pay for such repairs.
(xvii) The Mortgage is a valid, subsisting and enforceable
first lien on the Mortgaged Property, including all buildings on the Mortgaged
Property and all fixtures related thereto, and all additions, alterations and
replacements made at any time with respect to the foregoing, except as reflected
on the Loan Schedule. Such lien is subject only to (1) the lien of current real
property taxes and assessments not yet due and payable, (2) covenants,
conditions and restrictions, rights-of-way, easements and other matters of the
public record as of the date of recording, none of which individually or in the
aggregate materially interfere with the benefits of the security intended to be
provided by the Mortgage or the operation and use of the related Mortgaged
Property, and (3) other matters to which like properties are commonly subject
which do not materially interfere with the benefits of the security intended to
be provided by the Mortgage or the use, enjoyment, value or marketability of the
related Mortgaged Property. Any security agreement, chattel mortgage or
equivalent document related to and delivered in connection with the Loan
establishes and creates a valid, subsisting and enforceable first lien and first
priority security interest on the property described therein, except as
reflected on the Loan Schedule. Except as reflected on the Loan Schedule, the
Underlying Note is not secured by any collateral except the lien of the
corresponding Mortgage and the security interest of any applicable security
agreement or chattel mortgage referred to in this paragraph.
(xviii) The Mortgage contains provisions for the
acceleration of the payment of the unpaid principal balance of the Loan in the
event the related Mortgaged Property is sold without the prior written consent
of the Mortgagee thereunder.
(xix) The Issuer has no knowledge of any mechanics' or
similar liens or claims which have been filed for work, labor or material (or
any rights outstanding that under applicable law could give rise to such lien)
affecting the Mortgaged Property which are or may be liens prior to, or equal or
on parity with, the lien of the Mortgage.
(xx) The proceeds of the Loan have been fully disbursed
and there is no requirement for future advances thereunder, and any and all
requirements as to completion of any on-site or off-site improvements and as to
disbursements of any escrow funds therefor have been complied with.
(xxi) There is no proceeding pending for the total or
partial condemnation of the Mortgaged Property.
(xxii) The Mortgage contains customary provisions such as
to render the rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the security
provided thereby, including, (1) in the case of a Mortgage designated as a deed
of trust, by trustee's sale and (2) otherwise by judicial foreclosure or power
of sale. To the Issuer's knowledge, there is no homestead or other exemption
available to the Obligor which would interfere with the right to sell the
Mortgaged Property at a trustee's sale or the right to foreclose the Mortgage.
TRUST INDENTURE - Page 15
21
(xxiii) In the event the Mortgage constitutes a deed of
trust, a trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in the Mortgage, and no
fees or expenses are or will become payable by the Issuer or its assignees to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Obligor.
(xxiv) The Loan is an Eligible Loan as of the Closing
Date.
(xxv) The form of endorsement of each Underlying Note
satisfies the requirement, if any, of endorsement in order to transfer all
right, title and interest of the party so endorsing, as noteholder or assignee
thereof, in and to that Underlying Note, and each form of assignment is in
recordable form and is sufficient to effect the assignment of and to transfer to
the assignee thereof, all right, title and interest under each Mortgage to which
that assignment relates.
(xxvi) Each document required under Section 2.6(b) hereof
to be delivered to the Trustee on behalf of the Issuer for each Loan meets the
requirements of Section 2.6(b) and has been or will be, on or before the Closing
Date, delivered to the Trustee.
(xxvii) A Phase I environmental report was prepared with
respect to each Mortgaged Property, other than the Mortgaged Properties
indicated in the Loan Schedule, prior to the date of this Agreement. To the
Issuer's knowledge, each Mortgaged Property was, as of its date of origination
of the Underlying Note and as of the Closing Date in material compliance with
all applicable environmental laws and regulations.
(xxviii) All escrow deposits, if any, and other payments
relating to each Loan have been delivered to the Servicer or its agent, and all
amounts required to be deposited by the Issuer or the related Obligor have been
deposited and there are no deficiencies with regard thereto.
(xxix) The lien of each Mortgage is insured by an ALTA
lender's title insurance policy (or a binding commitment) or its equivalent, as
adopted in the applicable jurisdiction. Except as reflected on the Loan
Schedule, the policy (or such binding commitment) insures PMC or PMCT, as
applicable, its successors and assigns, as to the first priority lien of the
Mortgage in the original principal amount after all advances of principal,
subject only to permitted encumbrances, none of which, individually or in the
aggregate should interfere with the current use of the Mortgaged Property or
materially detract from the benefit of the first priority lien of the Mortgage.
PMC or PMCT, as applicable (including its successors and assigns) is the sole
named insured of the policy (or such binding commitment), and the policy (or
such binding commitment) is assignable to the Issuer without the consent of or
any notification to the insurer. No claims have been made under such policy (or
such binding commitment), and PMC or PMCT, as applicable has no knowledge of any
matter that would impair or diminish the coverage of such policy.
(xxx) Each Mortgaged Property is covered by insurance
policies providing coverage against loss or damage sustained by (1) fire and
extended perils included within the classification "All Risk of Physical Loss"
in an amount sufficient to prevent the
TRUST INDENTURE - Page 16
22
Obligor from being deemed a co-insurer, and to provide coverage of replacement
or actual cost, consistent with industry standards; and the policies contain a
standard mortgagee clause naming the mortgagee and its successors as mortgagees
and loss payees; (2) flood insurance (if any portion of the Mortgaged Property
is located in an area identified by the Federal Emergency Management Agency as
having special hazards); and (3) comprehensive general liability insurance in
amounts as are generally required by commercial mortgage lenders. The insurance
policies contain clauses providing they are not terminable and may not be
reduced without 10 days prior written notice to the mortgagee, and all premiums
due and payable through the Closing Date have been made. No notice of
termination or cancellation with respect to any such policies has been received
by PMC or PMCT, as applicable, which remains effective.
(xxxi) To the Issuer's knowledge, the Obligor has good
title to the Mortgaged Property.
(xxxii) The Issuer acknowledges that the Trustee, as
assignee of the Issuer with respect to the Contribution Agreement, may enforce
any right or remedy thereunder, including any right or remedy with respect to
breaches of the representations and warranties thereunder.
3.3 REPURCHASE AND SUBSTITUTION OF LOANS. (a) Upon discovery by either
the Issuer, the Servicer, the Trustee or the Supervisory Servicer of a breach of
any of the representations and warranties made by PMC or PMCT, as the case may
be, pursuant to the Contribution Agreement or made by the Issuer pursuant to
Section 3.2 hereof, the party discovering such breach shall give prompt written
notice to the others, to the Noteholders, to the Rating Agency and to PMC or
PMCT, as the case may be, and the Trustee, upon such discovery or receipt of
such notice, shall make written demand upon the Issuer with respect to a breach
of any of the representations or warranties contained in Section 3.2 hereof to
comply with this Section 3.3 or upon PMC or PMCT, as the case may be, to comply
with Section 8 or Section 13, as applicable, of the Contribution Agreement.
Within thirty (30) days of its discovery or its receipt of notice of any breach
or defect the Issuer, PMC or PMCT, as the case may be, shall, at its option, (i)
promptly cure such defect or breach in all material respects, (ii) purchase the
affected Loan at a price equal to the Takeout Price, upon the Initial
Purchaser's consent, or (iii) if such defect or breach occurs within two (2)
years of the Closing Date, deliver to the Trustee, upon the Initial Purchaser's
consent, in exchange for the affected Loan, a Substitute Loan, together with any
related Asset Substitution Shortfall. If the breach or defect has not been cured
or a Substitute Loan so delivered to the Trustee within thirty (30) days after
such discovery or receipt of notice, the Issuer, PMC or PMCT, as the case may
be, must purchase the Defective Loan within one (1) Business Day for an amount
equal to the Takeout Price.
(b) In the event a Loan becomes a Charged-Off Loan, PMC or
PMCT, as the case may be, may purchase the Charged-Off Loan at a price
equal to the Takeout Price or cause or permit the Charged-Off Loan to
be released from the lien of this Indenture in accordance with Section
3.4(a)(iii) hereof.
(c) [Intentionally Omitted]
TRUST INDENTURE - Page 17
23
(d) If PMC or PMCT, as the case may be, pursuant to
Section 8 of the Contribution Agreement, or the Issuer, PMC or PMCT, as the case
may be, pursuant to paragraph (a) above, elects to cause one or more Substitute
Loans to be delivered to the Trustee in substitution for any one or more of the
original Loans, any required documentation must be delivered pursuant to
paragraph (e) below. A Substitute Loan must (i) be an Eligible Loan; (ii)
contractually require interest payments to be made each month in an aggregate
amount at least equal to that of the Deleted Mortgage Loan; and (iii) have
characteristics such that, as of the substitution date (instead of as of the
Closing Date), each of the representations and warranties set forth in Section
3.2(a) and Sections 3.1(g) and (h) hereof is true and correct in all material
respects with respect to the Substitute Loan. If the Substitute Loan has an
outstanding Loan Principal Balance (after application of the Monthly Payment due
in the month of substitution) which is less than the Takeout Price of the
Deleted Mortgage Loan(s) (an "ASSET SUBSTITUTION SHORTFALL"), the Person
delivering the Substitute Loan(s) must deposit immediately available funds in
the amount of any such Asset Substitution Shortfall in the Collection Account on
the substitution date. In the case of a substitution pursuant to Section 3.3(a),
the Asset Substitution Shortfall shall include the amounts described in clauses
(ii), (iii) and (iv) of the definition of Takeout Price.
(e) In connection with any such substitution, on the
substitution date, PMC, PMCT or the Issuer, as the case may be, shall deliver to
the Trustee (i) each Substitute Loan to be delivered on such date and (ii) the
amount of any Asset Substitution Shortfall relating to the Substitute Loan. In
addition, on the substitution date, PMC, PMCT or the Issuer, as the case may be,
shall deliver the related Trustee Loan File to the Trustee and the Servicer Loan
File to the Servicer with respect to each Substitute Loan.
(f) Upon such purchase or substitution, the Trustee shall
deliver to the Person purchasing the Loans or delivering the Substitute Loans,
the related Deleted Mortgage Loans and shall amend the Loan Schedule to reflect
the deletion of the Deleted Mortgage Loans and, if applicable, the addition of
the Substitute Loans and shall release the Deleted Mortgage Loans from the lien
of this Indenture by executing and delivering to such Person the release in the
form of Exhibit E attached hereto.
(g) Pursuant to the Servicing Agreement, the applicable
Servicer shall prepare any instruments necessary for transfers pursuant to this
Section.
(h) Substitute Loans may not be delivered (and Defective
Loans may not be purchased) pursuant to this Section 3.3 on any date which is a
Determination Date.
3.4 RELEASE AND EXCHANGE OF LOANS. (a) The Trustee shall not release
and discharge any Loan from the lien of this Indenture until the principal of
and interest on the Notes shall have been paid or duly provided for under this
Indenture except as follows:
(i) in accordance with the provisions of Section 3.3
hereof;
(ii) upon any Servicer's request provided that the
conditions to release have been met pursuant to Sections 3.10 and 4.4 of the
Servicing Agreement; and
TRUST INDENTURE - Page 18
24
(iii) on each Payment Date, the Trustee shall release all
Charged-Off Loans from the lien of this Indenture and deliver to the Issuer the
deleted Charged-Off Loans; provided, however, that the Trustee shall release any
Charged-Off Loan from the lien of this Indenture only if (x) there exists no
Funds Retention Event, (y) all outstanding amounts due and payable with respect
to the Charged-Off Loan have been paid to the Noteholders as Required Principal
Payments or the Takeout Price has been paid for the Charged-Off Loan or a
Substitute Loan has been substituted for the Charged-Off Loan, and (z) the
amount on deposit in the Spread Account after giving effect to such proposed
release is at least equal to the Specified Spread Account Requirement.
(b) The Trustee shall release a Loan from the lien of
this Indenture by executing and delivering a release in the form of Exhibit E
hereto, to the Issuer with respect to such Loan. Upon release from the lien of
this Indenture, the Issuer simultaneously shall distribute to its partners, or
otherwise dispose of, any Loan released pursuant to this Section 3.4. Upon
release from the lien of this Indenture, the Trustee shall amend the Loan
Schedule to reflect the deletion of the Loans.
(c) Neither the Issuer nor the Trustee shall, without the
consent of the Holders of 100% of the principal amount of the Notes Outstanding,
sell or otherwise dispose of the Loans as a whole after the Closing Date.
ARTICLE IV
REDEMPTION PROVISIONS
4.1 OPTIONAL REDEMPTION OF THE NOTES. The Notes are subject to
redemption in whole, but not in part, at the option of the Issuer on any Payment
Date on or after the date on which the Outstanding Note Amount is less than 10%
of the Outstanding Note Amount on the Closing Date, at a redemption price equal
to 100% of the Outstanding Note Amount plus accrued and unpaid interest thereon
at the Applicable Remittance Rate to the redemption date.
4.2 NOTICE OF REDEMPTION. When the Trustee shall receive written notice
from the Issuer of its election to redeem the Notes in accordance with Section
4.1 hereof, the Trustee shall, subject to Section 4.3 hereof and in accordance
with the provisions of this Indenture, give notice of the redemption of the
Notes not less than twenty (20) nor more than sixty (60) days prior to the date
fixed for redemption by certified mail, registered mail or overnight delivery to
the Holders of the Notes at the last address for each appearing on the Note
Register, in the name of the Issuer, which notice shall specify the following:
(a) the complete official name of the Notes, (b) the private placement number
(if any) of the Notes, (c) the date of such notice, (d) the issuance date for
the Notes, (e) the redemption price, the Remittance Rate and Maturity Date of
the Notes, (f) the redemption date, (g) the place or places where amounts due
upon such redemption will be payable, (h) that on the redemption date there
shall become due and payable upon each Note to be redeemed the amount of the
principal, together with interest accrued to the redemption date and (i) the
redemption agent name and address with a contact person and telephone number.
Notice having been so given by the Trustee, the redemption price and unpaid
interest accrued to the redemption date shall be due and payable on the
specified redemption date. The registered owner of $1,000,000 or more in
original principal amount of Notes may
TRUST INDENTURE - Page 19
25
specify in writing to the Trustee one additional address to which such notice of
redemption shall be sent. Failure to give such notice by mail to any Noteholder,
or any defect therein, shall not affect the validity of any proceedings for the
redemption of other Notes.
Upon the giving of notice and the payment of funds for redemption
pursuant to Section 4.3, the Trustee is hereby authorized and directed to apply
such funds to the payment of the Notes, together with accrued interest thereon
to the redemption date.
4.3 REDEMPTION PAYMENTS. If the Trustee is required to redeem the Notes
pursuant to Section 4.1, and subject to and in accordance with the terms of this
Article, the Trustee shall give notice of the redemption in the manner
prescribed by Section 4.2 hereof; provided, however, that no such notice of
redemption shall be given until the Trustee holds, on the date notice is given
pursuant to this Indenture, Available Moneys in the amount necessary to pay, on
the redemption date, the principal of and interest on the Notes called for
redemption.
The Trustee shall apply moneys held in the Collection Account for the
redemption of Notes, and upon such redemption such Notes shall be canceled.
4.4 CANCELLATION. All Notes which have been redeemed, paid or retired
or received by the Trustee for exchange shall not be reissued but shall be
canceled and destroyed by the Trustee in accordance with Article II hereof.
ARTICLE V
COVENANTS OF ISSUER
5.1 PAYMENT OF PRINCIPAL AND INTEREST. The Issuer covenants that it
will promptly pay the principal of and interest on every Note issued under this
Indenture at the place, on the dates and in the manner provided herein and in
said Notes according to the true intent and meaning thereof.
5.2 PERFORMANCE OF COVENANTS. The Issuer covenants that it will
faithfully perform at all times any and all covenants, undertakings,
stipulations and provisions contained in the Transaction Documents, in any and
every Note executed, authenticated and delivered hereunder and in all of its
proceedings pertaining hereto and comply with all material requirements of any
law, rule or regulation applicable to it.
5.3 INSTRUMENTS OF FURTHER ASSURANCE. The Issuer agrees that the
Trustee may defend its rights to the payments and other amounts due under the
Loans for the benefit of the Holders against the claims and demands of all
persons whomsoever. The Issuer covenants that it will do, execute, acknowledge
and deliver, or cause to be done, executed, acknowledged and delivered, such
indentures supplemental hereto and such further acts, instruments and transfers
as the Trustee may reasonably require for the better assuring, transferring,
pledging, assigning and confirming unto the Trustee all and singular the rights
assigned hereby and the amounts pledged hereby to the payment of the principal
of and interest on the Notes.
5.4 RECORDING AND FILING. The Issuer will cause all financing
statements related to this Indenture and the Contribution Agreement, and such
other documents as may, in the Opinion
TRUST INDENTURE - Page 20
26
of Independent Counsel reasonably acceptable to the Trustee, be necessary to be
kept and filed in such manner and in such places as may be required by law in
order to preserve and protect fully the security of the Holders and the rights
of the Trustee hereunder.
5.5 EXISTENCE. The Issuer will take and fulfill, or cause to be taken
and fulfilled, all actions and conditions necessary to preserve and keep in full
force and effect its existence, rights and privileges as a limited partnership
and will not liquidate or dissolve, and it will take and fulfill, or cause to be
taken and fulfilled, all actions and conditions necessary to qualify, and to
preserve and keep in full force and effect its qualification, to do business as
a foreign limited partnership in each jurisdiction in which the conduct of its
business or the ownership or leasing of its properties requires such
qualification, except to the extent that any failure to so qualify, or to so
preserve and keep in full force and effect such qualification, would not have a
material and adverse effect on the business, earnings, prospects, properties or
condition (financial or other) of the Issuer. The Issuer shall conduct its
business in accordance with the terms of its partnership agreement.
5.6 ACCESS TO RECORDS; DISCUSSIONS WITH OFFICERS. The Issuer shall,
upon the request of the Trustee, a Noteholder, the Supervisory Servicer or the
Rating Agency, permit the Trustee, the Noteholders, the Supervisory Servicer,
the Rating Agency or their designees or authorized agents:
(a) to inspect the books and records of the Issuer as they may
relate to the Notes, the Loans and the obligations of the Issuer under
the Transaction Documents; and
(b) to discuss the affairs, finances and accounts of the
Issuer with the General Partner.
Such inspections and discussions shall be conducted during normal business hours
and shall not unreasonably disrupt the business of the Issuer, PMCT or PMC. Such
inspections shall be at the expense of the inspecting party, or the party
requesting the Trustee to conduct such inspection, unless an Event of Default
shall have occurred and then be continuing in which case, any such inspection
shall be at the expense of the Issuer. The books and records of the Issuer will
be maintained at the address of the Issuer designated herein for receipt of
notices, unless the Issuer shall otherwise advise the Trustee and the
Noteholders in writing.
5.7 NOTICE OF MATERIAL EVENTS. The Issuer shall promptly and, in any
event, within five Business Days after the occurrence thereof, inform the
Trustee, the Noteholders, the Supervisory Servicer and the Rating Agency in
writing of the occurrence of any of the following:
(a) the submission of any claim or the initiation of any legal
process, litigation or administrative or judicial investigation against
the Issuer;
(b) any change in the location of the Issuer's principal
office or any change in the location of the Issuer's books and records;
(c) the occurrence of any Event of Default, any "event of
default" under any other Transaction Document or the occurrence of any
event or condition which with the
TRUST INDENTURE - Page 21
27
giving of notice or lapse of time or both would constitute an Event of
Default or "event of default" under any other Transaction Document;
(d) the commencement or threat of any proceedings instituted
by or against the Issuer in any federal, state or local court or before
any governmental body or agency, or before any arbitration board, or
the promulgation of any proceeding or any proposed or final rule which,
if adversely determined, would result in a material adverse change with
respect to the Issuer;
(e) the commencement of any proceedings by or against the
Issuer under any applicable bankruptcy, reorganization, liquidation,
rehabilitation, insolvency or other similar law now or hereafter in
effect or of any proceeding in which a receiver, liquidator,
conservator, trustee or similar official shall have been, or may be,
appointed or requested for the Issuer or any of its assets.
(f) any merger, consolidation or sale of substantially all of
the assets of PMC, PMCT (except any merger or consolidation between PMC
and PMCT or where PMC or PMCT, as applicable, is the surviving entity)
or the Issuer;
(g) any amendment or other modification of this Indenture, the
Servicing Agreement or any of the other Transaction Documents; or
(h) the final payment in full of the Notes.
5.8 MAINTENANCE OF LICENSES; RATING. The Issuer shall maintain all
licenses, permits, charters and registrations which are material to the conduct
of its business. The Issuer shall at all times while the Notes are outstanding
cause the Rating Agency to maintain an ongoing monitoring rating with respect to
the Notes.
5.9 USE OF FUNDS. Except for the distribution of the proceeds (other
than amounts utilized to fund the Spread Account) from the sale of the Notes pro
rata to its partners and the distribution of funds and other assets released
from the lien of this Indenture pursuant to its partnership agreement which are
contemplated and expressly permitted hereby, the Issuer shall apply its funds
only towards the payment of amounts due under the Notes and towards the other
sums payable by the Issuer under the Transaction Documents.
5.10 NEGATIVE COVENANTS OF THE ISSUER. The Issuer hereby agrees that as
long as any Notes remain outstanding:
(a) No Amendments to Organization Documents. The Issuer shall
not amend, supplement or otherwise modify Section 2.3 of its
partnership agreement (or permit any of the foregoing). The Issuer
shall not amend, supplement or otherwise modify Sections 2.2, 8.1 or
9.1 or Articles V or VI of its partnership agreement without the prior
written consent of the Required Noteholders.
(b) Limitation on Indebtedness. The Issuer shall not create,
incur or suffer to exist any indebtedness other than the Notes.
TRUST INDENTURE - Page 22
28
(c) No Subsidiaries. The Issuer shall not form, or cause to be
formed, any subsidiaries.
(d) Restrictions on Liens. The Issuer shall not (i) create,
incur or suffer to exist, or agree to create, incur or suffer to exist,
or consent to cause or permit in the future (upon the happening of a
contingency or otherwise) the creation, incurrence or existence of any
Lien on the Loans or on any of its assets except for Liens in favor of
the Trustee or (ii) sign or file under the Uniform Commercial Code of
any jurisdiction any financing statement which names the Issuer as a
debtor, or sign any security agreement authorizing any secured party
thereunder to file such financing statement, except in each case any
such instrument solely securing the rights and preserving the Lien of
the Trustee.
(e) No Impairment of Rights. The Issuer shall not (i) take any
action, or fail to take any action, if such action or failure to take
action may interfere with the enforcement of any material rights,
benefits or obligations of the Trustee under the Transaction Documents;
(ii) waive or alter any rights with respect to the Loans (or any
agreement or instrument relating thereto); (iii) take any action, or
fail to take any action, if such action or failure to take action may
interfere with the enforcement of any rights with respect to the Loans;
or (iv) fail to pay any tax, assessment, charge or fee with respect to
the Loans, or fail to defend any action, if such failure to pay or
defend may adversely affect the priority or enforceability of the
Trustee's first priority lien on or perfected security interest in the
Loans or the Issuer's right, title or interest in the Loans.
(f) Limitation on Mergers, Etc. The Issuer shall not
consolidate with or merge with or into any Person or transfer all or
any material amount of its assets to any Person or liquidate or
dissolve unless (i) the Issuer shall have provided prior written notice
thereof to the Noteholders, together with an officer's certificate and
an opinion of counsel to the effect that such consolidation, merger or
transfer complies with the terms of the Transaction Documents and the
Issuer's partnership agreement, and (ii) the Required Noteholders have
consented thereto in writing. The Issuer shall not permit the General
Partner, PMCT or PMC to sell, transfer, assign or otherwise dispose of
or convey its partnership interest in the Issuer.
(g) No Waiver, Amendments, Etc. The Issuer shall not waive,
modify or amend, or consent to any waiver, modification or amendment
of, any of the provisions of any of the Transaction Documents, except
as expressly permitted thereby.
(h) Restriction on Actions Under Partnership Agreement. The
Issuer shall not take any of the actions set forth in Section 2.3 of
its partnership agreement.
(i) No Action Making Issuer a Taxable Mortgage Pool. The
Issuer shall not take any action or fail to take any action that would
cause the Issuer to be treated as a "taxable mortgage pool" as defined
in Section 7701(i) of the Code.
5.11 OPINIONS AS TO LOANS AND TRUST ESTATE. (a) On the Closing Date,
the Issuer shall furnish to the Trustee and the Initial Purchaser an Opinion of
Independent Counsel either stating that, in the opinion of such counsel, such
actions have been taken as are necessary to perfect and
TRUST INDENTURE - Page 23
29
make effective the lien and first priority perfected security interest of (i)
the Issuer with respect to PMCT's and PMC's interest in the Loans in the event
the contribution of the Loans to the Issuer by PMC or PMCT pursuant to the
Contribution Agreement is recharacterized as a secured lending transaction, and
(ii) this Indenture with respect to the Trust Estate and reciting the details of
such action, or stating that, in the opinion of such counsel, no such action is
necessary to make such liens and security interests effective. Such Opinion of
Counsel shall also describe the recording, filing, re-recording and refiling of
this Indenture, any supplemental indentures and any other requisite documents
and the execution and filing of any financing statements and continuation
statements and the taking of any other action that will, in the opinion of such
counsel, be required to maintain such liens and first priority perfected
security interests.
(b) The Issuer shall furnish to the Trustee and the
Initial Purchaser an Opinion of Counsel on or before March 30 of each calendar
year, commencing March 30, 2001, either stating that, in the opinion of such
counsel, such actions have been taken as are necessary to maintain the liens and
first priority perfected security interests of the Issuer in the Loans (to the
extent the contribution of the Loans to the Issuer by PMC or PMCT pursuant to
the Contribution Agreement is recharacterized as a secured lending transaction)
and of the Trustee created by this Indenture with respect to the Trust Estate
and reciting the details of such action or stating that, in the opinion of such
counsel, no such action is necessary to maintain such liens and security
interests. Such Opinion of Counsel shall also describe the recording, filing,
re-recording and refiling of this Indenture, any supplemental indentures and any
other requisite documents and the execution and filing of any financing
statements and continuation statements and the taking of any other action that
will, in the opinion of such counsel, be required to maintain such liens and
first priority perfected security interests of this Indenture and the
Contribution Agreement until March 30 in the following calendar year.
5.12 MAINTENANCE OF OFFICE. The Issuer will maintain at its office
located at its address shown in the definition of "Notice Address" an office
where notices, presentations and demands in respect of this Indenture and the
Notes may be given to and made upon it; provided, however, that it may, upon
fifteen (15) Business Days' prior written notice to the Noteholders and the
Trustee, move such office to any other location within the boundaries of the
continental United States of America.
5.13 RESTRICTIONS ON ISSUER'S ACTIONS. The Issuer covenants and agrees,
until the cancellation and discharge of the lien of this Indenture, to take any
and all actions to ensure that the Issuer will be recognized as a Person
separate from each of its Affiliates and that its assets and liabilities will
not be commingled with the assets and liabilities of any of its Affiliates. In
furtherance and not in limitation of the foregoing, the Issuer covenants and
agrees that:
(a) Until the cancellation and discharge of the lien of this
Indenture, at least two (2) of the managers of the General Partner will
be persons who are not and have not been during the two (2) years
preceding such appointment (i) an officer, director, partner, manager,
employee or stockholder of any Affiliate of the Issuer, (ii) affiliated
with a significant customer or supplier of the Issuer or any of its
Affiliates, or (iii) a spouse, parent, sibling or child of any person
described in clauses (i) or (ii) (each such manager, an "INDEPENDENT
MANAGER").
TRUST INDENTURE - Page 24
30
(b) Funds and other assets of the Issuer shall be separately
identified and segregated. All of the Issuer's assets shall at all
times be held by or on behalf of the Issuer, and, if held by another
entity, shall at all times be kept identifiable (in accordance with
customary usages) as assets owned by the Issuer. The Issuer shall
maintain its own separate bank accounts, payroll and books of account.
In no event shall any of the Issuer's assets be held on its behalf by
any Affiliate.
(c) The Issuer shall pay from its assets all obligations of
any kind incurred by the Issuer (other than organizational expenses).
(d) All financial statements, accounting records and other
corporate documents of the Issuer shall be maintained at its office
separate from those of any Affiliate or any other Person.
(e) The Issuer shall observe all customary formalities
regarding its existence as a limited partnership.
(f) The audited annual, consolidated balance sheets and income
statements of PMC and PMCT and the unaudited annual balance sheet and
income statement of the Issuer shall disclose, in accordance with and
to the extent required under generally accepted accounting principles,
any transactions between the Issuer and any Affiliate.
(g) All business transactions, other than those contemplated
by this Indenture, entered into by the Issuer with any Affiliate shall
be on terms and conditions that are not more or less favorable to the
Issuer than the terms and conditions that would be expected to have
been obtained, under similar circumstances, from unaffiliated persons.
In addition, all such transactions shall be approved by the Independent
Directors. The Issuer shall not guarantee any liabilities or
obligations of any Affiliate, nor shall it assume any indebtedness or
other liabilities or obligations of any Affiliate.
(h) The Issuer shall at all times hold itself out to the
public (including any Affiliate's creditors) as a separate and distinct
entity operating under the Issuer's own name and the Issuer shall act
solely on its own name and through its own authorized partners,
officers and agents.
(i) The Issuer shall pay out of its own funds fees, if any,
for its directors and salaries, if any, of its officers and employees,
and shall promptly reimburse any Affiliate for any service provided to
the Issuer by such Affiliate (other than the Servicers pursuant to the
terms of the Servicing Agreement).
(j) Notwithstanding any other provision of the Issuer's
partnership agreement and any provision of law that otherwise so
empowers the Issuer, the Issuer shall not:
(i) engage in any business or activity other than as set
forth in the Issuer's agreement of limited partnership;
(ii) without the approval of a majority of the Managers of
the General Partner, including all of the Independent Managers and only upon the
Issuer's insolvency,
TRUST INDENTURE - Page 25
31
institute proceedings to be adjudicated a bankrupt or insolvent, or consent to
the institution of bankruptcy or insolvency proceedings against it, or file a
petition seeking or consent to reorganization or relief under any applicable
federal or state law relating to bankruptcy, or consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Issuer or a substantial part of its property, or make any
assignment for the benefit of creditors, or admit in writing its inability to
pay its debts generally as they become due, or take any corporate action in
furtherance of any such action;
(iii) liquidate, in whole or in part; or
(iv) acquire, by redemption or otherwise, any of its
partnership interests during the period in which any Notes are outstanding.
5.14 INSURANCE COVERAGE. In the event the Trust Estate shall include
REO Property, the Issuer will notify the Trustee and the Noteholders in writing
no later than five (5) Business Days prior to the acquisition of such REO
Property and the Servicer will maintain liability and casualty insurance with
respect to the Mortgaged Property in accordance with the terms of the Servicing
Agreement.
5.15 FINANCIAL STATEMENTS AND ACCOUNTANTS' REPORTS. The Issuer shall
furnish or cause to be furnished to the Trustee, the Noteholders and the Rating
Agency:
(i) Annual Financial Statements. As soon as available, and
in any event within one hundred twenty (120) days after the close of each fiscal
year of the Issuer, the Issuer's financial statements as of the end of such
fiscal year; and
(ii) Accountants' Reports. Promptly upon receipt thereof,
copies of any reports submitted to the Issuer by its independent accountants, if
any, in connection with any examination of the financial statements of the
Issuer.
(iii) In addition to the foregoing, the Issuer shall
furnish or cause to be furnished to any Noteholder or any prospective purchaser
of the Notes, upon the written request of any Noteholder, any additional
information required by Rule 144A(d)(4) under the Act.
ARTICLE VI
REVENUES AND ACCOUNTS
6.1 CREATION OF ACCOUNTS. On the Closing Date, the Trustee shall
establish the Collection Account and the Spread Account as non-interest bearing
trust accounts in its corporate trust department if the Trustee is a depository
institution that is not rated at least "P-1" or the equivalent by the Rating
Agency. The Collection Account shall be entitled "Collection Account--BNY
Midwest Trust Company, as Trustee, in trust for registered Holders of
$74,504,808 PMC Joint Venture, L.P. 2000 Loan-Backed Fixed Rate Notes" and the
Spread Account shall be entitled "Spread Account--BNY Midwest Trust Company, as
Trustee, in trust for registered Holders of $74,504,808 PMC Joint Venture, L.P.
2000 Loan-Backed Fixed Rate Notes." If the Trustee is a depository institution
rated at least "P-1" or the equivalent by the Rating Agency, the Collection
Account and the Spread Account may be established as deposit
TRUST INDENTURE - Page 26
32
accounts. All amounts credited to the Collection Account or the Spread Account
shall be held by the Trustee in trust for the Holders of the Notes until
distribution of any such amounts is authorized under this Indenture. All
distributions, payments and withdrawals from the Collection Account and the
Spread Account shall be determined in accordance with the related Determination
Date Report.
6.2 DEPOSITS TO THE COLLECTION ACCOUNT. There shall be deposited into
the Collection Account:
(a) so long as the Notes are Outstanding, on each Business
Day, all Collections deposited to the Lockbox Account;
(b) on the date of receipt thereof, any Takeout Price or Asset
Substitution Shortfall received pursuant to Section 3.3 hereof;
(c) on the date of receipt thereof, all income from investment
or reinvestment of amounts held in the Collection Account;
(d) on the relevant Payment Date, any amounts transferred from
the Spread Account pursuant to Section 6.3; and
(e) on the date of receipt thereof, any other amounts received
by the Trustee with respect to the Loans or the trusts created hereby.
6.3 DEPOSITS IN SPREAD ACCOUNT; PERMITTED WITHDRAWALS FROM SPREAD
ACCOUNT. (a) The Trustee shall, promptly upon receipt, deposit in the Spread
Account:
(i) on the Closing Date, the Initial Deposit; and
(ii) on each Payment Date, from amounts then on deposit in
the Collection Account, the amount required to be deposited into the Spread
Account pursuant to Section 6.4(b) until the amount on deposit therein equals
the then applicable Specified Spread Account Requirement.
(b) Amounts on deposit in the Spread Account shall be
withdrawn by the Trustee in the manner set forth in subclause (c) below
on each Payment Date in the following order of priority:
(i) to deposit in the Collection Account an amount by
which (a) the Interest Distribution Amount, the Principal Distribution Amount
and the Carry Forward Amount, if any, exceed (b) the Available Funds for such
Payment Date (but excluding from such definition of Available Funds, amounts in
the Spread Account); and
(ii) to the extent that the amount then on deposit in the
Spread Account after giving effect to any required transfers from the Spread
Account to the Collection Account on such Payment Date pursuant to clause (i)
above then exceeds the Specified Spread Account Requirement as of such Payment
Date (such excess, a "SPREAD ACCOUNT EXCESS"), an amount equal to such Spread
Account Excess shall be deposited in the Collection Account prior to the
TRUST INDENTURE - Page 27
33
making of any distributions to the Servicers in reimbursement of Servicing
Expenses on such Payment Date;
and also, in no particular order of priority:
(iii) to invest amounts on deposit in the Spread Account in
Eligible Investments pursuant to Article VII;
(iv) to withdraw any amount not required to be deposited in the
Spread Account or deposited therein in error; and
(v) to clear and terminate the Spread Account upon the
termination of this Indenture in accordance with the terms hereof.
(c) Any amounts which are required to be withdrawn from the Spread
Account pursuant to paragraph (b) above shall be withdrawn from the Spread
Account in the following order of priority: (i) first, from any uninvested funds
therein, and second, from the proceeds of the liquidation of any investments
therein pursuant to Article VII.
6.4 DISTRIBUTIONS. (a) The rights of the Noteholders to receive
payments of principal and interest on the Notes shall be as set forth in this
Indenture.
(b) On each Payment Date, based on information contained in the
related Determination Date Report, the Trustee shall withdraw the amounts then
on deposit in the Collection Account which shall include amounts, if any,
deposited therein from the Spread Account and make distributions thereof in the
following order of priority:
(i) First, to the Trustee, the Servicers, and the Supervisory
Servicer, if any, for payment of the Trustee's Fee, the Servicing Fee, and the
Supervisory Servicing Fee, if any;
(ii) Second, to the Noteholders, in an amount up to the Regular
Interest Distribution Amount;
(iii) Third, to the Noteholders, in an amount up to the sum of
(a) the Principal Distribution Amount and (b) the Carry Forward Amount, if any;
(iv) Fourth, provided no Redemption Trigger Event then exists,
to the Issuer, in an amount up to the Retained Distribution Amount; provided,
however, in the event that a Redemption Trigger Event then exists, any amount
that would have otherwise been paid to the Issuer on such Payment Date pursuant
to this clause 6.4(b)(iv) shall be paid to the Noteholders and applied to the
outstanding principal balance of the Notes until the Notes are repaid in full;
(v) Fifth, to the Spread Account, any remainder unless and
until the amount therein equals the Specified Spread Account Requirement;
TRUST INDENTURE - Page 28
34
(vi) Sixth, to the Noteholder, in an amount up to the
difference of (1) the Interest Distribution Amount minus (2) the Regular
Interest Distribution Amount; and the interest accrued for the related Interest
Accrual Period at .25% per annum on the Aggregate Note Principal Balance
outstanding immediately prior to such Payment Date shall then be applied to the
outstanding Aggregate Note Principal Balance;
(vii) Seventh, to the Servicers, in reimbursement of Servicing
Expenses paid by the Servicers pursuant to Section 3.8 of the Servicing
Agreement and to the Trustee, Supervisory Servicer, Registrar and Paying Agent
in reimbursement of expenses incurred pursuant to the Transaction Documents;
(viii) Eighth, provided no Funds Retention Event then exists,
to the Issuer, in an amount sufficient to pay the administrative and operating
expenses of the Issuer, including without limitation, any unpaid expenses and
other amounts owed by the Issuer to the Trustee and Supervisory Servicer and
other administrative costs of maintaining the Trust Estate; provided, however,
in the event that a Funds Retention Event then exists, any remaining amount that
would have otherwise been paid to the Issuer on such Payment Date pursuant to
this clause 6.4(b)(viii) shall be retained in the Collection Account; and
(ix) Ninth, provided no Funds Retention Event or Redemption
Trigger Event then exists, to the Issuer any remaining amounts, together with
any permitted release from the Spread Account free and clear of the lien of this
Indenture; provided, however, in the event that a Funds Retention Event then
exists, any remaining amount that would have otherwise been paid to the Issuer
on such Payment Date pursuant to this clause 6.4(b)(ix) shall be retained in the
Collection Account; and provided further, notwithstanding the foregoing, in the
event a Redemption Trigger Event then exists, any remaining amount that would
have otherwise been paid to the Issuer on such Payment Date pursuant to this
clause 6.4(b)(ix) shall be paid to the Noteholders and applied to the
outstanding principal balance of the Notes until the Notes are repaid in full.
(c) All distributions made to the Noteholders will be made on a pro
rata basis among the Noteholders of record on the next preceding Record Date
based on each such Noteholder's percentage of the Aggregate Note Principal
Balance represented by its respective Notes, and shall be made by wire transfer
of immediately available funds to the account of such Noteholder at a bank or
other entity having appropriate facilities therefor.
6.5 MONEYS TO BE HELD IN TRUST. All moneys required to be deposited
with or paid to the Trustee for the account of any fund or account established
under any provision of this Indenture shall be held by the Trustee in trust and
not commingled with the funds or accounts of any other Person, and notice of the
redemption of which has been duly given, shall, while held by the Trustee,
constitute part of the Trust Estate and be subject to the security interest
created hereby. Any moneys erroneously deposited in any fund or account
established under this Indenture shall be promptly returned to the Issuer and
shall not constitute part of the Trust Estate or be subject to the security
interest granted hereby.
TRUST INDENTURE - Page 29
35
6.6 AMOUNTS REMAINING IN FUNDS AND ACCOUNTS. Any amounts remaining in
any Fund or Account after full payment of the Notes, and all other amounts
required to be paid hereunder, shall be released to the Issuer.
6.7 ACCOUNTS AND REPORTS. The Trustee, on behalf of the Issuer, shall
keep, or cause to be kept, proper books of record and account in which complete
and accurate entries shall be made of all its transactions relating to the Notes
and all funds and accounts established by or pursuant to this Indenture, which
shall at all reasonable times during regular business hours, be subject to the
inspection of the Issuer or of the Holders of an aggregate of not less than ten
percent in principal amount of Notes Outstanding or their representatives duly
authorized in writing.
By the fifteenth (15th) day of each month, the Trustee shall furnish to
the Issuer, the Rating Agency and the Noteholders monthly statements in the form
attached hereto as Exhibit C (the "MONTHLY TRUSTEE REPORT") showing the
beginning and ending balances of and deposits to and withdrawals from and assets
held in the Collection Account and the Spread Account as of the close of
business on the last day of the preceding month. The Trustee shall also provide
such other information regarding the Trust Estate and the Issuer as may be
reasonably requested by the Rating Agency or any Noteholders to the extent the
Trustee can obtain such information without unreasonable effort or expense.
6.8 TAX REPORTING. The Issuer shall be responsible for the preparation
and filing with the appropriate governmental agency of all tax returns and
reports ("TAX RETURNS") with respect to the Issuer. The Issuer shall cause a
copy of the completed and signed Tax Return (and a copy of any check delivered
in connection therewith in payment of any tax due) to be delivered to the
Trustee, at least five (5) Business Days prior to the required filing date,
after any additional time granted pursuant to any properly filed extensions. The
Trustee shall have no responsibility to verify the accuracy of the information
in any such Tax Return, may rely on the information included therein and shall
not have any liability for any inaccuracy or misstatement in such Tax Return.
ARTICLE VII
INVESTMENT OF MONEYS
Any moneys held as part of any fund or account shall be invested and
reinvested in Eligible Investments by the Trustee at the written direction of
the Servicers; provided, however, in the event that the Servicers at any time
fail to give or confirm such direction to the Trustee, the Servicers shall be
deemed to have directed the Trustee in writing to invest any moneys held as part
of any fund or account and not already invested in Eligible Investments, in a
money market fund meeting the requirements of clause (vi) of the definition of
"Eligible Investments." With respect to each investment made by the Trustee, the
Trustee shall make such investment in its name as Trustee and take such action
as shall be required from time to time to accomplish the transfer to the Trustee
the ownership thereof and all income thereon and all proceeds thereof, in good
faith and free and clear of any adverse claim. All such investments shall at all
times be a part of the fund or account from whence the moneys used to acquire
such investments shall have come, and all income and profits on such investments
shall be first used to offset any investment
TRUST INDENTURE - Page 30
36
losses in such fund, and then shall be credited as provided in Article VI. All
Eligible Investments shall mature no later than the day prior to the next
Payment Date, provided that any investments in money market funds may mature on
the applicable Payment Date. The Trustee shall sell and reduce to cash a
sufficient amount of such investments in the respective fund or account whenever
the cash balance therein is insufficient to pay the amounts contemplated to be
paid therefrom. The Trustee shall have no liability or responsibility for the
selection of investments or for any loss resulting from any investment made in
accordance with the provisions of this Article VII. The Trustee shall have no
liability with respect to losses incurred as a result of the liquidation of any
investment prior to its stated maturity or the failure of the Servicer to
provide timely written investment directions. The Trustee shall not be liable
for any investment made in accordance with the directions of the Servicer or for
keeping the funds fully invested at all times, provided that the Trustee invests
funds in a non-negligent manner in accordance with this Article VII and the
Servicer's directions.
ARTICLE VIII
DISCHARGE OF INDENTURE
If the Issuer shall (i) pay or cause to be paid to the Holders of the
Notes all outstanding principal and accrued and unpaid interest due thereon at
the times and in the manner stipulated therein, and shall pay or cause to be
paid to the Trustee all sums of moneys due according to the provisions hereof
(including the Trustee's reasonable fees and expenses and those of its
attorneys) and the Notes, and (ii) deliver to the Trustee an Officer's
Certificate and Opinion of Counsel stating that all conditions precedent under
the Indenture relating to the discharge of the Indenture have been complied
with, then these presents and the estate and rights hereby granted shall cease,
determine and be void, whereupon the Trustee shall cancel and discharge the lien
of this Indenture, and execute and deliver to the Issuer such instruments in
writing as shall be requisite to cancel and discharge the lien hereof, and
release, assign and deliver unto the Issuer any and all of the estate, right,
title and interest in and to any and all rights assigned or pledged to the
Trustee or otherwise subject to the lien of this Indenture, including, but not
limited to, all moneys, securities and other property held in the Trust Estate.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Issuer to the Trustee under Section 9.2 hereof, the
obligations of the Trustee and each Paying Agent to the Issuer and to the
Holders of Notes under Section 10.10 hereof, the obligations of the Trustee to
the Holders of Notes under this Article VIII and the provisions of Article II
hereof with respect to lost, stolen, destroyed and mutilated Notes, registration
of transfers and exchanges of Notes, and rights to receive payments of principal
of the Notes and accrued and unpaid interest thereon shall survive.
TRUST INDENTURE - Page 31
37
ARTICLE IX
DEFAULT PROVISIONS AND REMEDIES OF
TRUSTEE AND NOTEHOLDERS
9.1 EVENTS OF DEFAULT. The happening of any one or more of the
following events shall constitute an "Event of Default":
(a) default in the due and punctual payment of the entire
amount of any interest due and payable on any Note which continues
unremedied for five (5) Business Days;
(b) default in the due and punctual payment of (i) the
Principal Distribution Amount on any Payment Date which continues
unremedied for five (5) Business Days or (ii) the entire remaining
principal upon the redemption of the Notes pursuant to Section 4.1 or
at the Maturity Date;
(c) default in the performance or observance of any of the
covenants in Section 5.10 or 5.13;
(d) default in the performance or observance of any of the
covenants, agreements or conditions on the part of the Issuer contained
in this Indenture or in the Notes and not described in another
paragraph of this Section 9.1, which failure shall continue for a
period of thirty (30) days after the earlier to occur of the date on
which the Issuer obtained actual knowledge of such failure or the date
written notice of such failure, requiring the same to be remedied,
shall have been received by the Issuer from the Trustee or any Holder,
provided that, if such failure shall be of a nature that it cannot be
cured within thirty (30) days, such failure shall not constitute an
Event of Default hereunder if within such 30-day period the Issuer
shall have given notice to the Trustee and the Noteholders of the Notes
of corrective action it proposes to take, which corrective action is
agreed in writing by the Trustee and the Required Noteholders to be
satisfactory and the Issuer shall thereafter pursue such corrective
action diligently until such default is cured but in no event longer
than ninety (90) days;
(e) any representation or warranty made by the Issuer under
this Indenture, or any representation or warranty made by the Issuer or
any Affiliate of the Issuer in any Transaction Document or in any
certificate or report furnished under this Indenture or any Transaction
Document, shall prove to be untrue or incorrect in any material respect
and such breach is not cured in all material respects within thirty
(30) days after the date written notice of such inaccuracy, requiring
it to be remedied, is given to the Issuer by the Trustee or any Holder;
(f) (i) the Issuer shall have asserted that any of the
Transaction Documents to which it is a party are not valid and binding
on the parties thereto; or (ii) any court, governmental authority or
agency having jurisdiction over any of the parties to any of the
Transaction Documents or any property thereof shall find or rule that
any material provision of any of the Transaction Documents is not valid
and binding on the parties thereto;
(g) the General Partner or the Issuer shall fail to pay its
debts generally as they come due, or shall admit in writing its
inability to pay its debts generally, or shall make a general
assignment for the benefit of creditors, or shall institute any
proceeding seeking
TRUST INDENTURE - Page 32
38
to adjudicate the General Partner or the Issuer insolvent or seeking a
liquidation, or shall take advantage of any insolvency act, or shall
commence a case or other proceeding naming the Issuer as debtor under
the United States Bankruptcy Code or similar law, domestic or foreign,
or a case or other proceeding shall be commenced against the General
Partner or the Issuer under the United States Bankruptcy Code or
similar law, domestic or foreign, or any proceeding shall be instituted
against the General Partner or the Issuer seeking liquidation of the
General Partner's or the Issuer's assets and the General Partner or the
Issuer, as applicable, shall fail to take appropriate action resulting
in the withdrawal or dismissal of such proceeding within ninety (90)
days or there shall be appointed or the General Partner or the Issuer
shall consent to, or acquiesce in, the appointment of a receiver,
liquidator, conservator, trustee or similar official in respect of the
General Partner or the Issuer or the whole or any substantial part of
its properties or assets or the General Partner or the Issuer shall
take any corporate action in furtherance of any of the foregoing;
(h) the existence of any Event of Default by PMC or PMCT under
the Contribution Agreement, any Servicer Default under the Servicing
Agreement if the Servicer is PMC and/or PMCT or an Affiliate of PMC,
PMCT or the Issuer, and any Supervisory Servicer Default under the
Supervisory Servicer Agreement if the Supervisory Servicer is PMC, PMCT
or an Affiliate of PMC, PMCT or the Issuer; or
(i) the occurrence of an "event of default" under any
other of the Transaction Documents (other than an "event of default" by
the Supervisory Servicer or a Servicer Default if the Servicer is not
an Affiliate of the Issuer), after the satisfaction of any applicable
notice provisions and the expiration of any applicable cure periods.
The Trustee shall give written notice to the Noteholders of the Notes
and the Rating Agency of any Event of Default within five Business Days after
the Trustee has actual knowledge of such Event of Default.
9.2 REMEDIES; RIGHTS OF NOTEHOLDERS. Upon the occurrence of an Event of
Default, the Trustee, upon the request of the Required Noteholders shall, pursue
any available remedy at law or in equity to enforce the payment of the principal
of and interest on the Notes then outstanding and all other amounts due and
owing under the Transaction Documents, including enforcement of any rights of
the Issuer under the Transaction Documents, Loans and any documents or
instruments related thereto.
If an Event of Default described in Section 9.1(g) occurs, the
principal of all the Notes, all accrued and unpaid interest thereon shall become
immediately due and payable. The Trustee shall provide notice in writing of such
Event of Default to the Noteholders, the Servicer and the Supervisory Servicer.
If an Event of Default occurs and is continuing and if the Required
Noteholders have requested the Trustee to accelerate the Notes, the Trustee
shall declare the principal of all the Notes to be immediately due and payable,
by a notice in writing to the Issuer, the Noteholders of the Notes, the Servicer
and the Supervisory Servicer (and to the Trustee if given by the
TRUST INDENTURE - Page 33
39
Noteholders), and upon any such declaration such principal and accrued and
unpaid interest shall become immediately due and payable.
If an Event of Default shall have occurred, and if indemnified as
provided in Section 10.1(p) hereof, the Trustee shall, if directed in writing by
the Required Noteholders, be obligated to exercise one or more of the rights and
powers conferred by this Article IX, as the Trustee shall be directed by the
Required Noteholders.
No remedy by the terms of this Indenture conferred upon or reserved to
the Trustee (or to the Noteholders) is intended to be exclusive of any other
remedy, but each and every such remedy shall be cumulative and shall be in
addition to any other remedy given to the Trustee or to the Noteholders of the
Notes hereunder or now or hereafter existing at law or in equity or by statute.
No delay or omission to exercise any right or power accruing upon any
Event of Default shall impair any such right or power or shall be construed to
be a waiver of any such Event of Default or acquiescence therein; and every such
right and power may be exercised from time to time as often as may be deemed
expedient.
No waiver of any Event of Default hereunder, whether by the Trustee or
by the Noteholders, shall extend to or shall affect any subsequent Event of
Default or shall impair any rights or remedies consequent thereon.
9.3 RIGHT OF NOTEHOLDERS TO DIRECT PROCEEDINGS. Anything in this
Indenture to the contrary notwithstanding, the Required Noteholders shall have
the right, at any time, by an instrument or instruments in writing executed and
delivered to the Trustee, to direct the method and place of conducting all
proceedings to be taken in connection with the enforcement of the terms and
conditions of this Indenture, or for the appointment of a receiver or any other
proceedings hereunder or thereunder; provided that such direction shall not be
otherwise than in accordance with the provisions of law and of this Indenture.
9.4 APPOINTMENT OF RECEIVERS. Upon the occurrence of an Event of
Default, and upon the filing of a suit or other commencement of judicial
proceedings to enforce the rights of the Trustee and of the Noteholders under
this Indenture, the Trustee shall be entitled, as a matter of right, to the
appointment of a receiver or receivers of the Trust Estate and of the revenues,
issues, earnings, income, products and profits thereof, pending such
proceedings, with such powers as the court making such appointment shall confer.
9.5 APPLICATION OF MONEYS. All moneys received by the Trustee pursuant
to any right given or action taken under the provisions of this Article shall,
after payment of any fees and expenses, including any extraordinary fees and
expenses, due and payable to the Trustee and the Supervisory Servicer hereunder
or under the Servicing Agreement or the Supervisory Servicing Agreement, be
deposited in the Collection Account and all moneys in the Collection Account
(other than moneys held for redemption of the Notes duly called for redemption)
shall be applied as follows:
TRUST INDENTURE - Page 34
40
FIRST--To the payment to the Persons entitled thereto of all
interest then due on the Notes, in the order of the maturity of such interest,
with interest on unpaid principal and, to the extent permitted by applicable
law, accrued interest at the Default Rate to the extent such amount has not been
distributed to the Noteholders when due, and, if the amount available shall not
be sufficient to pay in full said amount, then to the payment ratably, according
to the amounts due to the Persons entitled thereto, without any discrimination
or privilege;
SECOND-- To the payment to the Persons entitled thereto of any
unpaid principal of the Notes which shall have become due in order of maturity
and, if the amount available shall not be sufficient to pay in full such
principal due on any particular date, then to the payment ratably, according to
the amount of principal due on such date, to the Persons entitled thereto
without any discrimination or privilege;
THIRD--To be held for the payment to the Persons entitled
thereto as the same shall become due.
Whenever moneys are to be applied pursuant to the provisions of this
Section, such moneys shall be applied at such times, and from time to time, as
the Trustee shall determine, having due regard for the amount of such moneys
available for application and the likelihood of additional moneys becoming
available for such application in the future. Whenever the Trustee shall apply
such funds, it shall fix the date upon which such application is to be made. The
Trustee shall give such notice as it may deem appropriate of the deposit with it
of any such moneys and of the fixing of any such date.
Whenever all principal of and interest on all Notes and all other
amounts due and owing hereunder and under the Notes have been paid under the
provisions of this Section, any balance remaining in the Collection Account and
the Spread Account shall be released to the Issuer.
9.6 REMEDIES VESTED IN TRUSTEE. All rights of action (including the
right to file proof of claims) under this Indenture or under any of the Notes
may be enforced by the Trustee without the possession of any of the Notes or the
production thereof in any trial or other proceeding related thereto and any such
suit or proceeding instituted by the Trustee shall be brought in its name as the
Trustee without the necessity of joining as plaintiffs or defendants any Holder
of the Notes, and any recovery of judgment shall be for the equal and ratable
benefit of the Holders of the Outstanding Notes.
9.7 RIGHTS AND REMEDIES OF NOTEHOLDERS. No Holder of any Note shall
have any right to institute any suit, action or proceeding at law or in equity
for the enforcement of this Indenture or for the execution of any trust hereof
or for the appointment of a receiver or any other remedy hereunder or
thereunder, unless (a) an Event of Default has occurred of which the Trustee has
been notified by such Holder as provided in Section 10.1(l) hereof, or of which
by said subsection it is deemed to have notice, (b) the Holders of not less than
25% of the Outstanding Note Amount shall have given written notice to the
Trustee and shall have offered it reasonable opportunity either to proceed to
exercise the powers herein before granted or to institute such action, suit or
proceeding in their own name or names, (c) Noteholders have offered to the
Trustee indemnity as provided in Section 10.1(p) hereof, and (d) the Trustee
shall thereafter fail or refuse to exercise the powers herein before granted
within thirty (30) days
TRUST INDENTURE - Page 35
41
thereafter, or to institute such action, suit or proceeding in its own name; and
such notification, request and offer of indemnity are hereby declared in every
case at the option of the Trustee to be conditions precedent to the execution of
the powers and trusts of this Indenture, and to any action or cause of action
for the enforcement of this Indenture, or for the appointment of a receiver or
for any other remedy hereunder or thereunder; it being understood and intended
that no one or more Holders of the Notes shall have any right in any manner
whatsoever to affect, disturb or prejudice the lien of this Indenture by its,
his or their action or to enforce any right hereunder except in the manner
herein provided, and that all proceedings at law or in equity shall be
instituted, had and maintained in the manner herein provided and for the equal
and ratable benefit of the Holders of all Notes Outstanding. However, nothing
contained in this Indenture shall affect or impair the right of any Noteholders
to enforce the payment of the principal of and interest on any Note at and after
the Maturity Date thereof, or the obligation of the Issuer to pay the principal
of and interest on each of the Notes issued hereunder to the respective Holders
thereof at the time, place, from the source and in the manner in the Notes
expressed.
9.8 TERMINATION OF PROCEEDINGS. In case the Trustee shall have
proceeded to enforce any right under this Indenture by the appointment of a
receiver or otherwise, and such proceedings shall have been discontinued or
abandoned for any reason, or shall have been determined adversely, then and in
every such case the Issuer, the Trustee and the Noteholders shall be restored to
their former positions and rights hereunder and thereunder, respectively, with
regard to the property herein subject to this Indenture, and all rights,
remedies and powers of the Trustee shall continue as if no such proceedings had
been taken.
9.9 WAIVERS OF EVENTS OF DEFAULT. The Trustee may waive with the
written consent of the Initial Purchaser any Event of Default that has been
remedied and any Event of Default (and its consequences) relating to a default
in the performance or observance of any covenant, agreement or condition
contained in the Indenture, or a breach of a representation or warranty made by
the Issuer in the Indenture or in any certificate or report furnished under the
Indenture, or the occurrence of any "event of default" under the contracts and
related documents governing the transfer and servicing of the Loans and other
matters relating to the issuance of the Notes. The Trustee may waive any other
Event of Default that has occurred and is continuing only upon the written
request of the Required Noteholders; provided, however, that there shall not be
waived (x) any Event of Default in the payment of the principal of any
outstanding Notes when due or (y) any default in the payment when due of the
interest on any such Notes unless, prior to such waiver or rescission, all
arrears of interest or all arrears of payments of principal when due, with
interest on overdue principal and, to the extent permitted by applicable law,
interest at the Default Rate, and all expenses of the Trustee in connection with
such Event of Default shall have been paid or provided for, and in case of any
such waiver or rescission, or in case any proceedings taken by the Trustee on
account of any such Event of Default shall have been discontinued or abandoned
or determined adversely, then and in every such case the Issuer, the Trustee and
the Noteholders shall be restored to their former positions and rights
hereunder, respectively, but no such waiver or rescission shall extend to any
subsequent or other Event of Default or impair any right consequent thereon. Any
waivers made by the Trustee pursuant to this Section shall be in writing and
shall specify the nature of the Event of Default and the effective date of the
waiver and the Trustee shall send a copy of all such waivers to the Noteholders
and the Rating Agency.
TRUST INDENTURE - Page 36
42
ARTICLE X
TRUSTEE
10.1 ACCEPTANCE OF THE TRUSTS. The Trustee hereby accepts the trusts
imposed upon it by this Indenture, and agrees to perform said trusts and to
continue to perform, provided that the Trustee may, in accordance with Section
10.6 hereof, exercise its right to resign from the trusts created hereby; and
provided further that the acceptance by the Trustee of the trusts imposed under
this Indenture and the agreement to perform said trusts are subject to the
following express terms and conditions:
(a) The Trustee agrees to accept receipt, subject to review as
stated herein, of the Loans and other assets in the Trust Estate and
declares that it holds and will hold the Loans and other assets in the
Trust Estate in trust for the benefit of the Noteholders.
(b) The Trustee, prior to the occurrence of an Event of
Default and after the curing of all Events of Default which may have
occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture, and no implied duties shall
be read into this Indenture against the Trustee. In case an Event of
Default has occurred (which has not been cured or waived), 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 man would exercise or use under the circumstances in the
conduct of his own affairs.
(c) The Trustee shall not be liable for its acts or omissions
in carrying out its duties hereunder, except for its own negligence or
willful misconduct. 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.
(d) 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
directions of the Required Noteholders 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.
(e) 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.
(f) The Trustee may execute any of the trusts or powers
hereunder and perform any of its duties hereunder either directly or by
or through agents or attorneys or a custodian or nominee and the
Trustee shall not be responsible for any misconduct or negligence on
the part of any such party appointed in good faith with due care by it
hereunder. The Trustee may consult with counsel, including Issuer's
counsel, concerning all matters of trusts hereof and the duties
hereunder, and may in all cases pay such
TRUST INDENTURE - Page 37
43
reasonable compensation to all such attorneys, agents, receivers and
employees as may reasonably be employed in connection with the trusts
hereof. The Trustee may act or refrain from acting upon the opinion or
advice of any attorneys approved by the Trustee in the exercise of
reasonable care. The Trustee shall not be responsible for any loss or
damage resulting from any action or inaction in good faith in reliance
upon such opinion or advice.
(g) The recitals contained herein and in the Notes, other than
the certificate of authentication, shall be taken as statements of the
Issuer, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representation as to the validity or
sufficiency of this Indenture or of the Notes or of any Loans or
related document. The Trustee shall not be accountable for the use or
application by the Issuer of any of the proceeds of any of the Notes,
or for the use or application of any funds deposited in or withdrawn
from the Collection Account or the Spread Account or any other account
by or on behalf of the Issuer. The Trustee shall not be responsible for
the accuracy or content of any resolution, certificate, statement,
opinion, report, document, order or other instrument furnished by the
Issuer and accepted by the Trustee in good faith, pursuant to this
Indenture. The Trustee shall have no duty to monitor the performance of
the Issuer and Servicers, nor shall it have any liability in connection
with the malfeasance or nonfeasance by the Issuer and Servicers. The
Trustee shall have no liability in connection with compliance by the
Issuer and Servicers with statutory or regulatory requirements related
to the Indenture and the Notes.
(h) The Trustee shall not be accountable for the use of any
Notes authenticated or delivered hereunder. The Trustee may in good
faith buy, sell, own and hold any of the Notes and may join in any
action which any Holder of Notes may be entitled to take with like
effect as if the Trustee were not a party to this Indenture. The
Trustee may also engage in or be interested in any financial or other
transaction with the Issuer or any Holder, provided that if the Trustee
determines that any such relationship is in conflict with its duties
under this Indenture, it shall eliminate the conflict or resign as the
Trustee.
(i) The Trustee may rely and shall be protected in acting or
refraining from acting to the extent such action or inaction is
directed by any notice, request, consent, certificate, order,
affidavit, letter, telegram or other paper or document believed to be
genuine and correct and to have been signed or sent by the proper
person or persons. Any action taken by the Trustee pursuant to this
Indenture upon the request or authority or consent of any person who at
the time of making such request or giving such authority or consent is
the Holder of any Note, shall be conclusive and binding upon all future
Holders of the same Note and upon Notes issued in exchange therefor or
in place thereof.
(j) As to the existence or nonexistence of any fact or as to
the sufficiency or validity of any instrument, paper or proceeding, the
Trustee shall be entitled to rely upon a certificate signed by an
Authorized Officer of the Issuer as sufficient evidence of the facts
therein contained and prior to the occurrence of an Event of Default of
which the Trustee has been notified as provided in subsection (l) of
this Section, or of which by said subsection it is deemed to have
notice, shall also be at liberty to accept a similar
TRUST INDENTURE - Page 38
44
certificate to the effect that any particular dealing, transaction or
action is necessary or expedient, but may, at its discretion, secure
such further evidence deemed necessary or advisable, but shall in no
case be bound to secure the same. The Trustee may accept a certificate
of an Authorized Officer of the Issuer to the effect that a resolution
in the form therein set forth has been adopted by the Issuer as
conclusive evidence that such resolution has been duly adopted, and is
in full force and effect.
(k) The permissive right of the Trustee to do things
enumerated in this Indenture shall not be construed as a duty and it
shall not be answerable for other than its negligence or willful
misconduct.
(l) The Trustee shall not be required to take or be charged
with notice or be deemed to have notice of any Event of Default
hereunder, except any Event of Default described in Sections 9.1(a) and
(b) or the failure of the Issuer to file with the Trustee any document
required by this Indenture, or of the Servicers to file with the
Trustee any document required by the Servicing Agreement to be so filed
subsequent to the issuance of the Notes, unless the Trustee shall be
specifically notified in writing of such Event of Default by the
Issuer, the Servicers, the Supervisory Servicer or any Holder, and all
notices or other instruments required by this Indenture to be delivered
to the Trustee must, in order to be effective, be delivered at the
Corporate Trust Office of the Trustee, and, in the absence of such
delivery, the Trustee may conclusively assume there is no Event of
Default except as aforesaid.
(m) At any and all reasonable times the Trustee, and its duly
authorized agents, attorneys, experts, engineers, accountants and
representatives, shall have the right fully to inspect any and all of
the property herein conveyed, including all books, papers and records
of the Issuer and the Servicers pertaining to the revenues and receipts
under the Loans and the Underlying Notes, and to take such notes from
and in regard thereto as may be desired.
(n) The Trustee shall not be required to give any bond or
surety in respect of the execution of the said trusts and powers or
otherwise in respect of the premises.
(o) Notwithstanding anything elsewhere in this Indenture
contained, the Trustee shall have the right, but shall not be required,
to demand, in respect of the authentication of any Notes, the
withdrawal of any cash, or any action whatsoever within the purview of
this Indenture, any showings, certificates, opinions, appraisals or
other information, or corporate action or evidence thereof, in addition
to that by the terms hereof required as a condition of such action by
the Trustee deemed desirable for the purpose of establishing the right
of the Issuer to the authentication of any Notes, the withdrawal of any
cash, or the taking of any other action by the Trustee.
(p) Before taking the action referred to in Article IX hereof,
the Trustee may require that a satisfactory indemnity bond be furnished
for the reimbursement of all expenses to which the Trustee may be put
and to protect it against all liability, except liability which is
adjudicated to have resulted from its negligence or willful misconduct
by reason of any action so taken.
TRUST INDENTURE - Page 39
45
(q) All moneys received by the Trustee or any Paying Agent
shall, until used or applied or invested as herein provided, be held in
trust for the purposes for which they were received and shall be
segregated from other funds and accounts and not commingled with any
other funds.
10.2 FEES, CHARGES AND EXPENSES OF TRUSTEE. The Trustee shall be
entitled to payment and reimbursement for the Trustee's Fee and all reasonable
counsel fees and other out-of-pocket expenses reasonably incurred by the Trustee
to third parties in connection with such services from moneys available therefor
in accordance with the priority set forth in Section 6.4 hereof and the Trustee
shall have the first lien with right of payment prior to payment on any Note
upon the Trust Estate for the amount of the Trustee's Fee. The Trustee shall
have no claims against the Trust Estate for amounts owed to it hereunder other
than as specified above. The Issuer agrees to indemnify and hold the Trustee and
its officers, directors, agents and employees harmless from any loss, claim,
demand, liability or expense (including, without limitation, fees and expenses
of its attorneys) arising from or related to the acceptance of and performance
of its duties under this Indenture which do not result from the Trustee's
negligence or willful misconduct. This Section 10.2 shall survive the
termination of this Indenture or resignation or removal of the Trustee. Such
indemnity shall not be payable from the Trust Estate, except as provided in
Section 6.4, and the Trustee shall not institute any legal action, including a
bankruptcy proceeding against the Issuer to enforce such indemnity while the
Notes are outstanding.
10.3 NOTICE TO NOTEHOLDERS IF DEFAULT OCCURS. If an Event of Default
occurs of which the Trustee is by Section 10.1(l) hereof required to take notice
or if notice of an Event of Default be given as in Section 10.1(l) hereof
provided, then the Trustee shall promptly, and in any event, within three
Business Days, give written notice thereof by overnight mail to the Holders of
all Notes Outstanding, shown by the list of Noteholders required by Section 2.9
hereof to be kept at the office of the Trustee.
10.4 INTERVENTION BY TRUSTEE. In any judicial proceeding concerning the
issuance or the payment of the Notes to which the Issuer is a party and which in
the opinion of the Trustee and its counsel has a substantial bearing on the
interests of the Holders of the Notes, the Trustee may intervene on behalf of
Noteholders and shall do so if requested in writing by the owners of at least
25% of the Outstanding Note Amount, subject to receipt of satisfactory indemnity
as contemplated by Section 10.1(p).
10.5 MERGER OR CONSOLIDATION OF TRUSTEE. Any corporation or association
into which the Trustee may be converted or merged, or with which it may be
consolidated, or to which it may sell or transfer its trust business and assets
as a whole or substantially as a whole, or any corporation or association
resulting from any such conversion, sale, merger, consolidation or transfer to
which it is a party, ipso facto, shall be and become successor Trustee hereunder
and vested with all of the title to the Trust Estate and all the trusts, powers,
discretions, immunities, privileges and all other matters as was its
predecessor, without the execution or filing of any instrument or any further
act, deed or conveyance on the part of any of the parties hereto, anything
herein to the contrary notwithstanding; provided such successor Trustee accepts
the duties and responsibilities hereunder and is eligible pursuant to Section
10.9.
TRUST INDENTURE - Page 40
46
10.6 RESIGNATION BY TRUSTEE. The Trustee and any successor Trustee may
at any time resign from the trusts hereby created by giving sixty (60) days'
written notice by registered or certified mail to the Issuer, the Servicers, the
Supervisory Servicer, the Noteholders, the Rating Agency and by first-class mail
(postage prepaid) to the Holders of the Notes and such resignation shall take
effect upon the appointment of a successor Trustee by the Issuer pursuant to
Section 10.8 and in accordance with Section 10.9 hereof. Upon receiving such
notice of resignation, the Issuer shall promptly appoint a successor Trustee
approved by the Servicers and the Supervisory Servicer. If no successor Trustee
shall have been so appointed and have accepted appointment within sixty (60)
days of the mailing of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribed, appoint a successor Trustee.
10.7 REMOVAL OF TRUSTEE. The Trustee may be removed at any time, by the
Issuer, provided no Event of Default then exists and is continuing, by an
instrument or concurrent instruments in writing delivered to the Trustee, the
Supervisory Servicer, the Rating Agency, and the Noteholders.
10.8 APPOINTMENT OF SUCCESSOR TRUSTEE; TEMPORARY TRUSTEE. In case the
Trustee hereunder shall resign or be removed, or be dissolved, or shall be in
course of dissolution or liquidation, or otherwise become incapable of acting
hereunder, or in case it shall be taken under the control of any public officer
or officers, or of a receiver appointed by a court, a successor may be appointed
by the Issuer by an instrument in writing signed by the Issuer and a copy of
which shall be delivered personally or sent by registered mail to the
Noteholders. Nevertheless, in case of such vacancy, the Issuer by resolution may
appoint a temporary Trustee to fill such vacancy until a successor Trustee shall
be appointed in the manner above provided; and any such temporary Trustee so
appointed by the Issuer shall immediately and without further act be superseded
by the Trustee so appointed. Notice of the appointment of a successor Trustee
shall be given in the same manner as provided by Section 10.6 hereof with
respect to the resignation of a Trustee; provided in each case any successor
Trustee shall meet the eligibility requirements of Section 10.9.
10.9 CONCERNING ANY SUCCESSOR TRUSTEE. Every successor Trustee
appointed hereunder shall execute, acknowledge and deliver to its or his
predecessor and also to the Issuer, the Servicers, the Supervisory Servicer, the
Noteholders and the Rating Agency an instrument in writing accepting such
appointment hereunder, and thereupon such successor, without any further act,
deed or conveyance, shall become fully vested with all the estates, properties,
rights, powers, trusts, duties and obligations of its predecessors; but such
predecessor shall, nevertheless, on the written request of the Issuer, or of its
successor, execute and deliver an instrument transferring to such successor
Trustee all the estates, properties, rights, powers and trusts of such
predecessor hereunder; and every predecessor Trustee shall deliver all
securities and moneys held by it as the Trustee hereunder to its or his
successor, including, but not limited to, a transfer of the Loans and the
Trustee Loan Files. Should any instrument in writing from the Issuer be required
by any successor Trustee for more fully and certainly vesting in such successor
the estate, rights, powers and duties hereby vested or intended to be vested in
the predecessor, any and all such instruments in writing shall, on request, be
executed, acknowledged and delivered by the Issuer. The resignation of any
Trustee and the instrument or
TRUST INDENTURE - Page 41
47
instruments removing any Trustee and appointing a successor hereunder, together
with all other instruments provided for in this Article, shall be filed or
recorded by the successor Trustee in each recording office where this Indenture
shall have been filed or recorded. Any successor Trustee shall be required to
(i) have corporate trust powers, (ii) have not less than $100,000,000 in capital
and surplus, (iii) be a member of the Federal Deposit Insurance Corporation, and
(iv) have a long-term unsecured debt rating from the Rating Agency of at least
"A" if the Initial Purchaser is then a Noteholder or otherwise, at least "Baa3".
10.10 DESIGNATION AND SUCCESSION OF PAYING AGENTS. The Paying Agent for
the Notes shall be the Trustee. Any bank or trust company with or into which any
Paying Agent may be merged or consolidated, or to which the assets and business
of such Paying Agent may be sold, shall be deemed the successor of such Paying
Agent for the purposes of this Indenture. If the position of Paying Agent shall
become vacant for any reason, the Issuer shall, within thirty (30) days
thereafter, appoint a bank or trust company having corporate trust powers and
having a long-term unsecured debt rating from the Rating Agency of at least
"Baa3" to fill such vacancy; provided, however, that if the Issuer shall fail to
appoint such Paying Agent within said period, the Trustee shall make such
appointment, subject to the foregoing eligibility requirements. Other Paying
Agents or fiscal agents may be appointed pursuant by the Issuer if in its
discretion additional Paying Agents or fiscal agents are deemed advisable.
The Paying Agents shall enjoy the same protective provisions in the
performance of their duties hereunder as are specified in Section 10.1 hereof
with respect to the Trustee insofar as such provisions may be applicable.
Notice of the appointment of additional Paying Agents or fiscal agents
shall be given in the same manner as provided by Section 10.8 hereof with
respect to the appointment of a successor Trustee.
10.11 APPOINTMENT OF CO-TRUSTEE. It is the purpose of this Indenture
that there shall be no violation of any law of any jurisdiction denying or
restricting the right of banking corporations or associations to transact
business as the Trustee in such jurisdiction. It is recognized that, in case of
litigation under this Indenture, the Loans and, in particular, in case of the
enforcement thereof on default, or in case the Trustee deems that by reason of
any present or future law of any jurisdiction it may not exercise any of the
powers, rights or remedies herein granted to the Trustee 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
Trustee appoint an additional individual or institution as a separate or
Co-Trustee.
Therefore, the Trustee shall have the right to appoint one or more
persons to act as its Co-Trustee or Co-Trustees, jointly with the Trustee, of
all or any part of the Trust Estate, and to vest in such person or persons, in
such capacity, such title to the Trust Estate, or any part thereof, and, subject
to the other provisions of this Section 10.11, such powers, duties, obligation,
rights and trusts as the Trustee may consider necessary or desirable.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the Co-Trustees, as effectively as if given
to each of them. Every instrument appointing any Co-Trustee, upon its acceptance
of the trusts conferred, shall be vested with the
TRUST INDENTURE - Page 42
48
estates or property specified in its instrument or appointment, either jointly
with the Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Every such instrument shall be filed with the
Trustee.
Any Co-Trustee may, at any time, constitute the Trustee, its agent or
attorney-in-fact, with full power and authority, to the extent not prohibited by
law, to do any lawful act under or in respect of this Agreement on its behalf
and in its name. If any Co-Trustee shall die, become incapable of acting, resign
or be removed, all of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Trustee, to the extent permitted by law, without
the appointment of a new or successor Trustee. No Co-Trustee shall be required
to satisfy the eligibility requirements for a successor Trustee set forth in
Section 10.9 hereunder and no notice to the Noteholders of the appointment of a
Co-Trustee shall be required.
In the event that the Trustee appoints an additional individual or
institution as a separate or Co-Trustee, each and every remedy, power, right,
claim, demand, cause 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 every
covenant and obligation necessary to the exercise thereof by such separate or
Co-Trustee shall run to and be enforceable by either of them.
Should any instrument in writing from the Issuer be required by the
separate or Co-Trustee so appointed by the Trustee for more fully and certainly
vesting in and confirming to him or it such properties, rights, powers, trusts,
duties and obligations, any and all such instruments in writing shall, on
request, be executed, acknowledged and delivered by the Issuer. In case any
separate or 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 or Co-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 or Co-Trustee.
ARTICLE XI
SUPPLEMENTAL INDENTURES
11.1 SUPPLEMENTAL INDENTURES; CONSENT OF NOTEHOLDERS. (a) The Issuer
and the Trustee may, with notice to all of the Noteholders and the Rating
Agency, enter into an indenture or indentures supplemental to this Indenture for
the following purposes:
(1) To specify and determine any matters and things relative to
the Notes which are not contrary to or inconsistent with this Indenture and
which shall not materially adversely affect the interests of the Noteholders;
(2) To cure any defect, omission, conflict, or ambiguity in this
Indenture or between the terms and provisions hereof and any other document
executed or delivered in connection herewith;
TRUST INDENTURE - Page 43
49
(3) To grant to or confer upon the Trustee for the benefit of the
Noteholders any additional rights, remedies, powers, authority, or security
which may lawfully be granted or conferred and which are not contrary to or
inconsistent with this Indenture as theretofore in effect;
(4) To add to the covenants and agreements of the Issuer in this
Indenture other covenants and agreements to be observed by the Issuer which are
not contrary to or inconsistent with this Indenture as theretofore in effect;
(5) To add to the limitations and restrictions in this Indenture
other limitations and restrictions to be observed by the Issuer which are not
contrary to or inconsistent with this Indenture as theretofore in effect;
(6) To confirm, as further assurance, any pledge under, and the
subjection to any claim, lien or pledge created or to be created by this
Indenture of the revenues arising from the pledge of any moneys, securities,
funds or other parts of the Trust Estate;
(7) To amend or modify any provisions of this Indenture required
by the Rating Agency to maintain the rating of the Notes; or
(8) To amend or modify any provisions of this Indenture, so long
as such amendment or modification does not materially adversely affect the
interests of the Noteholders (which may be evidenced by an Opinion of Counsel
delivered to the Trustee).
(b) The Issuer and the Trustee may, with the consent of the
Required Noteholders and notice to all of the Noteholders and the Rating Agency,
enter into an indenture or indentures supplemental to this Indenture for
purposes other than those specified in Section 11.1(a); provided, however, that
nothing contained in this Section shall permit, or be construed as permitting,
without the consent of the Holders of all Notes Outstanding, any change of the
Maturity Date or other due date of the principal of or any installment of the
interest on any Note issued hereunder, or a reduction in the principal amount of
any Note or the Applicable Remittance Rate or Default Rate thereon, or a
privilege or priority of any Note or Notes over any other Note or Notes, a
reduction in the Outstanding Note Amount required for consent to such
supplemental indenture or for any waiver of compliance with the provisions of
this Indenture or Events of Default and their consequences, any modification of
this Section 11.1(b) or Section 11.1(c) or any modification of this Indenture
that would cause the Rating Agency to downgrade the rating of the Notes unless
the Noteholders have unanimously consented to such modification and downgrade.
(c) With respect to each supplemental indenture, the Trustee shall
be provided a certificate of an Authorized Officer of the Issuer and, if
requested by the Trustee, an Opinion of Counsel to the effect that the
supplemental indenture is duly authorized under this Article XI and all
conditions to its entry have been satisfied, and the Trustee shall be fully
protected in its execution and delivery of the supplemental indenture in
reliance on such certificate and, if requested, by the Trustee, such opinion. If
at any time the Issuer shall request the Trustee to enter into any such
supplemental indenture for any of the purposes of Section 11.1(b), the Trustee
shall, upon being satisfactorily indemnified with respect to expenses, cause
notice of the
TRUST INDENTURE - Page 44
50
proposed execution of such supplemental indenture to be mailed by registered or
certified mail to each Holder of a Note as shown on the list of Noteholders
required by Section 2.9 hereof. Such notice shall briefly set forth the nature
of the proposed supplemental indenture and shall include a copy of the proposed
supplemental indenture. If, within sixty (60) days or such longer period as
shall be prescribed by the Issuer following the final distribution of such
notice, the Required Noteholders at the time of the execution of any such
supplemental indenture shall have consented to and approved the execution
thereof as herein provided (other than where a unanimous consent is required as
described above), no owner of any Note shall have any right to object to any of
the terms and provisions contained herein, or the operation thereof, or in any
manner to question the propriety of the execution thereof, or to enjoin or
restrain the Trustee or the Issuer from executing the same or from taking any
action pursuant to the provisions thereof. Upon the execution of any
supplemental indenture as in this Section permitted and provided, this Indenture
shall be and be deemed to be modified and amended in accordance therewith.
11.2 NOTICE OF SUPPLEMENTAL INDENTURES. The Trustee shall provide a
copy of any Supplemental Indenture executed to each of the Servicers, the
Supervisory Servicer, the Noteholders and the Rating Agency.
11.3 AMENDMENTS TO TRANSACTION DOCUMENTS. The Trustee may not enter
into or consent to an amendment to any other Transaction Document, except as
expressly permitted therein, without the consent of the Required Noteholders.
11.4 TRUSTEE'S ACTIONS REQUIRE CONSENT OF INITIAL PURCHASER.
Notwithstanding anything contained herein to the contrary, for so long as the
Initial Purchaser is the Holder of all of the Notes Outstanding, the Trustee may
not enter into any consent, waiver or amendment required by this Indenture to be
entered into by the Trustee without the prior consent of The Northwestern Mutual
Life Insurance Company. In the event the Initial Purchaser is not the Holder of
all of the Notes Outstanding, all of the provisions herein and in the other
Transaction Documents specifically requiring the consent of the "Initial
Purchaser" shall be null and void and shall have no effect. In the event the
Initial Purchaser is not a Holder of any Notes, all provisions set forth herein
requiring that notices be given to the Initial Purchaser shall be null and void
and shall have no effect.
ARTICLE XII
MISCELLANEOUS
12.1 CONSENTS, ETC., OF NOTEHOLDERS. Any consent, request, direction,
approval, objection or other instrument required by this Indenture to be signed
and executed by the Noteholders may be in any number of concurrent writings of
similar tenor and may be signed or executed by such Noteholders in person or by
agent thereof appointed in writing. Proof of the execution of any such consent,
request, direction, approval, objection or other instrument or of the writing
appointing any such agent and of the ownership of Notes, if made in the
following manner, shall be sufficient for any of the purposes of this Indenture,
and shall be conclusive in favor of the Trustee and any Paying Agent with regard
to any action taken by it under such request or other instrument, namely:
TRUST INDENTURE - Page 45
51
(a) The fact and date of the execution by any person of any
such writing may be proved by the certificate of any officer in any
jurisdiction who by law has power to take acknowledgments within such
jurisdiction that the person signing such writing acknowledged before
him the execution thereof, or by an affidavit of any witness to such
execution.
(b) The fact of ownership of Notes and the amount or amounts,
numbers and other identification of Notes, and the date of holding the
same shall be proved by the registration books of the Issuer maintained
by the Trustee pursuant to Section 2.9 hereof.
12.2 LIMITATION OF RIGHTS. With the exception of rights herein
expressly conferred, nothing expressed or mentioned in or to be implied from
this Indenture or the Notes is intended or shall be construed to give to any
Person other than the parties hereto, and the Holders of the Notes, any legal or
equitable right, remedy or claim under or in respect to this Indenture or any
covenants, conditions and provisions herein contained; this Indenture and all of
the covenants, conditions and provisions hereof being intended to be and being
for the sole and exclusive benefit of the parties hereto and the Holders of the
Notes as herein provided.
12.3 SEVERABILITY. If any one or more of the covenants, agreements,
provisions or terms of this Indenture shall be held invalid for any reason
whatsoever, then such covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or terms of this
Indenture and shall in no way affect the validity or enforceability of the other
covenants, agreements, provisions or terms of this Indenture. The parties hereto
further agree that the holding by any court of competent jurisdiction that any
remedy pursued by the Trustee hereunder is unavailable or unenforceable shall
not affect in any way the ability of the Trustee to pursue any other remedy
available to it.
12.4 NOTICES. Any notice, request, complaint, demand, communication or
other paper shall be in writing and sufficiently given if addressed to the
appropriate Notice Address and delivered by hand delivery or sent by nationally
recognized express courier, or mailed by registered mail, postage prepaid, or
transmitted by telecopy and shall be effective upon receipt, except when
telecopied, in which case, any such communication shall be effective upon
telecopy against receipt of answer back or written confirmation thereof. The
Issuer and the Trustee may, by notice given hereunder, designate any further or
different addresses to which subsequent notices, certificates or other
communications shall be sent.
12.5 PAYMENTS DUE ON SATURDAYS, SUNDAYS AND HOLIDAYS. In any case where
the due date of interest on or principal of the Notes or the date fixed for
redemption of any Note shall be other than a Business Day, then payment of
interest or principal may be made on the next Business Day with the same force
and effect as if made on the due date or the date fixed for redemption.
12.6 COUNTERPARTS. This Indenture may be simultaneously executed in
several counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
TRUST INDENTURE - Page 46
52
12.7 APPLICABLE PROVISIONS OF LAW. THIS INDENTURE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
12.8 CAPTIONS. The captions or headings in this Indenture are for
convenience only and in no way define, limit or describe the scope or intent of
any provisions or Sections of this Indenture.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
TRUST INDENTURE - Page 47
53
IN WITNESS WHEREOF, the Issuer has caused this Indenture to be executed
on its behalf by its General Partner and the Trustee, to evidence its acceptance
of the trusts created hereunder, has caused this Indenture to be executed as of
the date first written above.
PMC JOINT VENTURE, L.P. 2000
By: PMC Joint Venture LLC 2000,
its General Partner
By:
--------------------------------------------
▇▇▇ ▇. ▇▇▇▇▇, Executive Vice President
BNY MIDWEST TRUST COMPANY,
as Trustee
By:
--------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇, Assistant Vice President
TRUST INDENTURE - Page 48
54
EXHIBIT A
TO TRUST INDENTURE
FORM OF NOTE
THIS NOTE WAS OFFERED PURSUANT TO EXEMPTIONS FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND STATE SECURITIES LAWS,
AND HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES AUTHORITY. NO TRANSFER OR SALE OF THIS NOTE SHALL BE MADE
UNLESS SUCH TRANSFER OR SALE COMPLIES WITH THE REGISTRATION REQUIREMENTS OF THE
1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR IS EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES
LAW. IN THE EVENT THAT THE TRANSFER OF THIS NOTE IS TO BE MADE, BNY MIDWEST
TRUST COMPANY (THE "TRUSTEE") SHALL REQUIRE A CERTIFICATE AND, IF REQUIRED BY
SECTION 2.9(c) OF THE INDENTURE, MAY REQUIRE AN OPINION OF INDEPENDENT COUNSEL,
ACCEPTABLE TO AND IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE TRUSTEE,
THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION, DESCRIBING THE
APPLICABLE EXEMPTION AND THE BASIS THEREFOR, FROM SAID ACT AND LAWS OR IS BEING
MADE PURSUANT TO SAID ACT AND LAWS.
No.: __________ $[ ]
PMC JOINT VENTURE, L.P. 2000
LOAN-BACKED FIXED RATE NOTES
PRIVATE PLACEMENT
MATURITY DATE ISSUE DATE NOTE RATE NUMBER
------------- ---------- --------- -----------------
October 1, 2021 December 19, 2000 7.28% 69365 AA 0
REGISTERED HOLDER:
PRINCIPAL SUM: $[ ]
PMC JOINT VENTURE, L.P. 2000, a Delaware limited partnership (herein
called the "ISSUER"), for value received, hereby promises to pay to the
registered owner identified above or registered assigns (the "HOLDER" or
"NOTEHOLDER"), on or before the Maturity Date set forth above (subject to any
right of prior payment hereinafter mentioned), the principal sum identified
above in lawful money of the United States of America, and to pay interest
thereon in like
EXHIBIT A
FORM OF NOTE - Page 1
55
money, until payment of such principal sum, as set forth herein. Pursuant to the
terms of the Trust Indenture dated as of December 15, 2000 (as the same may be
amended and supplemented, the "INDENTURE") between the Issuer and BNY Midwest
Trust Company, as Trustee (the "TRUSTEE"), the Issuer shall pay the Holder on
the fifteenth day of each month, commencing on January 15, 2001 or the date this
Note is due upon acceleration and ending on the Maturity Date set forth above
(each such date herein called a "PAYMENT DATE"), the Principal Distribution
Amount (as defined in the Indenture) and accrued interest. To the extent not
otherwise defined herein, all capitalized terms shall have the meanings set
forth in the Indenture. Prior to the occurrence of a Redemption Trigger Event
(including the date thereof), this Note will bear interest at a per annum rate
equal to 7.28%. Following the occurrence of a Redemption Trigger Event, this
Note will bear interest at a per annum rate equal to the Post Optional
Redemption Remittance Rate (as defined in the Indenture). The term "INTEREST
ACCRUAL PERIOD" means, with respect to a Payment Date, the period from and
including the immediately prior Payment Date to but excluding the Payment Date
first referred to in this definition (or, in the case of the first Payment Date,
from and including the Closing Date to but excluding the first Payment Date).
Principal and interest payments will be made on each Payment Date from funds on
deposit under the Indenture.
Payments to the Holder shall be made by wire transfer of immediately
available funds to the account of such Noteholder and without presentation of
the Note or the making of any notations thereon.
This Note is one of a duly authorized issue of notes of the Issuer
designated as PMC Joint Venture, L.P. 2000 Loan-Backed Fixed Rate Notes (herein
called the "NOTES"), in the initial aggregate principal amount of $74,504,808
issued under and secured by the Indenture. Reference is hereby made to the
Indenture and all indentures supplemental thereto for a description of the
rights thereunder of the owners of the Notes, of the nature and extent of the
security, of the rights, duties and immunities of the Trustee and of the rights
and obligations of the Issuer thereunder, to all of the provisions of which
Indenture the holder of this Note, by acceptance hereof, assents and agrees.
The Issuer hereby certifies that all of the conditions, things and acts
required to exist, to have happened and to have been performed precedent to and
in the issuance of this Note do exist, have happened and have been performed in
due time, form and manner as required by the applicable laws.
This Note shall not be entitled to any benefit under the Indenture, or
become valid or obligatory for any purpose, until the certificate of
authentication hereon endorsed shall have been signed by the Trustee.
The Notes are issuable only as fully registered Notes without coupons.
Subject to the limitations and upon payment of the charges, if any, provided in
the Indenture, Notes may be exchanged at the principal corporate trust office of
the Trustee for a like aggregate principal amount of Notes of the same series of
other authorized denominations.
EXHIBIT A
FORM OF NOTE - Page 2
56
The owner of this Note shall have no right to enforce the provisions of
the Indenture or to institute action to enforce the covenants therein, or to
take any action with respect to any Event of Default under the Indenture, or to
institute, appear in or defend any suit or other proceeding with respect
thereto, except as provided in the Indenture.
The Notes are subject to redemption on any Payment Date on or after the
date on which the then Outstanding Note Amount is less than 10% of the
Outstanding Note Amount on the Closing Date, in whole, but not in part, at the
option of the Issuer at a redemption price equal to 100% of the Outstanding Note
Amount plus accrued and unpaid interest thereon to the date of redemption at the
then Applicable Remittance Rate.
If an Event of Default shall occur and be continuing with respect to
the Notes, and if the Required Noteholders have requested the Trustee to
accelerate the Notes, the Trustee shall declare the outstanding principal of all
the Notes, accrued and unpaid interest thereon to be immediately due and
payable, by a notice in writing to the Issuer, the Noteholders, the Servicers
and the Supervisory Servicer, and upon any such declaration such principal and
interest shall become immediately due and payable. Under certain circumstances
specified in the Indenture, such amounts shall immediately become due and
payable without any such declaration. The Trustee may sell the Trust Estate or
retain the Trust Estate intact, in either case in the manner and with the effect
provided in the Indenture.
The Indenture permits the amendment thereof and the modification of the
rights and obligations of the Issuer and the rights of Holders of the Notes
under the Indenture at any time by the Issuer with the consent of the Required
Noteholders (as defined in the Indenture) and in certain instances only with the
consent of all Noteholders. The Indenture also contains provisions permitting
Holders of specified percentages in aggregate outstanding principal amount, on
behalf of Holders of all the Notes, to waive compliance by the Issuer with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note (or any one or more predecessor Notes) shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note issued
upon the 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 Note.
The Indenture contains provisions permitting the Issuer and the Trustee
to execute supplemental indentures adding provisions to, or changing or
eliminating any of the provisions of, the Indenture, subject to the limitations
set forth in the Indenture.
The term "ISSUER" as used in this Note includes any successor to the
Issuer under the Indenture. This Note is nonrecourse to the Issuer's partners.
This Note is transferable by the registered owner hereof, in person, or
by its attorney duly authorized in writing, at the Corporate Trust Office of the
Trustee, but only in the manner, subject to the limitations and upon payment of
the charges provided in the Indenture, and upon surrender and cancellation of
this Note. Upon such transfer a new fully registered Note or Notes, of the same
series and of authorized denomination or denominations, for the same aggregate
EXHIBIT A
FORM OF NOTE - Page 3
57
principal amount, will be issued to the transferee in exchange herefor. The
Issuer and the Trustee may treat the registered owner hereof as the absolute
owner hereof for all purposes, and the Issuer and the Trustee shall not be
affected by any notice to the contrary.
The Notes are non-recourse obligations of the Issuer and neither the
Trustee nor the Noteholders shall have any rights to enforce the payment or
performance of the Issuer's obligations hereunder or under the Transaction
Documents against the partners of the Issuer or their respective assets. No
officer, agent or employee of the Issuer or of any Affiliate of the Issuer,
shall in any event be subject to any personal liability for any payments or
other amounts due in respect of the Notes or in respect of any obligations of
the parties under any of the Transaction Documents.
IN WITNESS WHEREOF, PMC JOINT VENTURE, L.P. 2000 has caused this Note
to be executed in its name by the manual or facsimile signature of the
President, any Executive Vice President or the Chief Financial Officer of its
General Partner and attested by the manual or facsimile signature of the
Secretary or Assistant Secretary of its General Partner, all as of the Issue
Date set forth above.
PMC JOINT VENTURE, L.P. 2000
By: PMC Joint Venture LLC 2000,
its General Partner
By:
--------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chief Financial Officer
Attest:
By:
-----------------------------------
▇▇▇ ▇. ▇▇▇▇▇, Assistant Secretary
EXHIBIT A
FORM OF NOTE - Page 4
58
CERTIFICATE OF AUTHENTICATION
This is one of the Notes described in the within-mentioned Indenture
and has been authenticated on this date: December 19, 2000.
BNY MIDWEST TRUST COMPANY,
as Trustee
By:
----------------------------------------
Authorized Signatory
EXHIBIT A
FORM OF NOTE - Page 5
59
[FORM OF ASSIGNMENT]
For value received, the undersigned do(es) hereby sell, assign and
transfer unto ________________________________ the within Note and do(es) hereby
irrevocably constitute and appoint ____________________________ attorney, to
transfer the same on the books of the Trustee, with full power of substitution
in the premises.
Dated:
-------------------------- ---------------------------------------
(Signature)
Social Security Number,
Taxpayer Identification
Number or other Identifying
Number of Assignee:
----------------------------
Notice: The signature(s) to this Assignment must correspond with the
name(s) as written on the face of the within Note in every particular, without
alteration or enlargement or any change whatsoever.
EXHIBIT A
FORM OF NOTE - Page 6
60
EXHIBIT B
TO
TRUST INDENTURE
LOAN SCHEDULE
EXHIBIT B
LOAN SCHEDULE - Page 1
61
EXHIBIT C
TO
TRUST INDENTURE
FORM OF MONTHLY TRUSTEE REPORT
EXHIBIT C
FORM OF MONTHLY TRUSTEE REPORT - Page 1
62
EXHIBIT D-1
TO
TRUST INDENTURE
FORM OF TRANSFEREE'S LETTER
[TRANSFEREE'S LETTERHEAD]
[DATE]
Ladies and Gentlemen:
The undersigned purchaser (the "PURCHASER") understands that the
purchase of the above-referenced Notes may be made only by institutions which
are "Accredited Investors" under Regulation D, as promulgated under the
Securities act of 1933, as amended (the "SECURITIES ACT"), which includes banks,
savings and loan associations, registered brokers and dealers, insurance
companies, investment companies and organizations described in Section 501(c)(3)
of the Internal Revenue Code of 1986, as amended (the "CODE"), corporations,
business trusts and partnerships, not formed for the specific purpose of
acquiring the Notes offered, with total assets in excess of $5,000,000. The
undersigned represents on behalf of the Purchaser that the Purchaser is an
"Accredited Investor" within the meaning of such definition. The Purchaser is
urged to review carefully the responses, representations and warranties it is
making herein.
Representations and Warranties
The Purchaser makes the following representations and warranties in
order to permit PMC Joint Venture, L.P. 2000 (the "ISSUER"), PMC Capital, Inc.
("PMC"), PMC Commercial Trust ("PMCT") and Banc One Capital Markets, Inc. (the
"PLACEMENT AGENT") to determine the Purchaser's suitability as a purchaser of
Notes and to determine that the exemption from registration relied upon by the
Issuer under Section 4(2) of the Securities Act is available to it.
1. The Purchaser understands that the Notes have not been, and
throughout their term will not be, registered or qualified under the Securities
Act or the securities law of any state and may by resold (which resale is not
currently contemplated) only if registered pursuant to the provisions of the
Securities Act or if an exemption from registration under the Securities and
other applicable state securities laws are available, that none of the Issuer,
the Trustee or the Sellers is required to register the Notes under the
Securities Act or any applicable state securities laws and that any transfer
must comply with Section 2.9 of the Trust Indenture, dated as of December 15,
2000 (the "INDENTURE"), between the Issuer and the Trustee.
2. The Purchaser will comply with all applicable federal and state
securities laws in connection with any subsequent resale of the Notes.
3. The Purchaser is an "accredited investor" within the meaning of Rule
501(a) under the Securities Act and a sophisticated institutional investor and
has knowledge and experience in financial and business matters (and, in
particular, in such matters related to
EXHIBIT D-1
FORM OF TRANSFEREE'S LETTER - Page 1
63
securities similar to the Notes) and is capable of evaluating the merits and
risks of its investment in the Notes and is able to bear the economic risk of
such investment. The Purchaser has been given such information concerning the
Notes, the Issuer, the Servicers and the Trustee as it has requested.
4. The Purchaser is acquiring the Notes as principal for its own
account (or for the account of one or more other sophisticated institutional
investors for which it is acting as duly authorized fiduciary or agent) for the
purpose of investment and not with a view to or for sale in connection with any
distribution thereof, subject nevertheless to any requirement of law that the
disposition of the Purchaser's property shall at all times be and remain within
its control.
5. Neither the Purchaser nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of any Notes, any interest in
any Notes or any other similar security of the Issuer to, or solicited any offer
to buy or accept a transfer, pledge or other disposition of any Notes, any
interest in any Notes or any other similar security of the Issuer with, any
person in any manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other actions which would
constitute a distribution of the Notes under the Securities Act or which would
render the disposition of any Notes a violation of Section 5 of the Securities
Act or any state securities law, require registration or qualification pursuant
thereto, or require registration of the Issuer under the 1940 Act nor will it
act, nor has it authorized or will it authorize any person to act in such manner
with respect to the Notes.
6. The Purchaser has reviewed the Summary of Terms with respect to the
Notes dated December 2000, (the "SUMMARY OF TERMS"), and the agreements and
other materials referred to therein, and has had the opportunity to ask
questions and receive answers concerning the terms and conditions of the
transaction contemplated by the Summary of Terms and to obtain additional
information necessary to verify the accuracy and completeness of any information
furnished to the Purchaser or to which the Purchaser had access.
7. [The Purchaser will not acquire the Notes with the assets of any
"employee benefit plan" as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") which is subject to Title I of
ERISA or any "plan" as defined in Section 4975 of the Code] [No nonexempt
"prohibited transaction" under Section 406 of the Employee Retirement Income
Security Act of 1974, as amended, or Section 4975 of the Code will occur in
connection with our acquisition or holding of the Notes.]1
8. The Purchaser understands that the Notes will bear a legend
substantially as set forth in the form of Note included as Exhibit A to the
Indenture.
9. The Purchaser understands that there is no market, nor is there any
assurance that a market will develop, for the Notes and that neither the Issuer
nor any other Person has any obligation to make or facilitate any such market
(or to otherwise repurchase the Notes from the Purchaser) under any
circumstances.
----------
(1) Purchaser required to select applicable sentence.
EXHIBIT D-1
FORM OF TRANSFEREE'S LETTER - Page 2
64
10. The Purchaser has consulted with its own legal counsel, independent
accountants and financial advisors to the extent it deems necessary regarding
the tax consequences to it of ownership of the Notes, and is not purchasing the
Notes in reliance on any representations of the Issuer, the Sellers, the
Placement Agent or any other Person or its counsel with respect to tax matters
except for the tax opinion delivered pursuant to Section 2.6(a)(iv).
11. The Purchaser agrees that it will obtain from any subsequent
purchaser of the Notes substantially the same representations, warranties and
agreements contained in the foregoing paragraphs 1 through 10 and in this
paragraph 11.
Capitalized terms used herein that are not otherwise defined shall have
the meanings ascribed thereto in the Indenture or the Summary of Terms, as the
case may be.
The representations and warranties contained herein shall be binding
upon the successors of the undersigned.
Executed at , this day of , .
----------------- ---- ------------ -------
Purchaser's Name (Print)
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
--------------------------------------------
Address of Purchaser
--------------------------------------------
Purchaser's Taxpayer Identification Number
EXHIBIT D-1
FORM OF TRANSFEREE'S LETTER - Page 3
65
EXHIBIT D-2
TO
TRUST INDENTURE
FORM OF TRANSFEREE'S LETTER
[TRANSFEREE'S LETTERHEAD]
[DATE]
Ladies and Gentlemen:
The undersigned purchaser (the "PURCHASER") is today purchasing in a
private resale from _____________________ (the "TRANSFEROR") $_____________
aggregate principal amount of the above-captioned Notes, issued pursuant to the
Indenture, dated as of December ____, 2000 (the "INDENTURE"), between PMC Joint
Venture, L.P. 2000 (the "ISSUER") and BNY Midwest Trust Company, as trustee (the
"TRUSTEE").
In connection with the purchase of the Notes, the Purchaser hereby
represents and warrants to each of you as follows:
1. The Purchaser understands that the Notes have not been registered
under the Securities Act of 1933, as amended (the "SECURITIES ACT"), or the
securities laws of any state.
2. The Purchaser is acquiring the Notes for its own account only for
investment and not for any other person, and not with a view to, or for resale
in connection with, a distribution that would constitute a violation of the
Securities Act or any state securities laws (subject to the understanding that
disposition of the Purchaser's property will remain at all times within its
control). The Purchaser is not an affiliate of PMC Capital, Inc. ("PMC"), PMC
Commercial Trust ("PMCT"), the Issuer, the Trustee, any custodian of the Notes
or any of their respective affiliates.
3. The Purchaser agrees that the Notes must be held indefinitely by it
unless (i) the Notes are subsequently registered under the Securities Act or
(ii) an exemption from the registration requirements of the Securities Act is
available.
4. The Purchaser agrees that if at some time it wishes to dispose of or
exchange any of the Notes, it will not transfer or exchange any of the Notes
unless such transfer or exchange is in accordance with the provisions of Section
2.9 of the Indenture.
5. The Purchaser is a "qualified institutional buyer" as defined in
Rule 144A of the Securities Act and has completed and is delivering herewith
either of the forms of certification to that effect attached as Annexes hereto,
it is aware that the sale to it is being made in reliance on Rule 144A, it is
acquiring the Notes for its own account or for the account of a qualified
institutional buyer and it understands that such Notes may be resold, pledged or
transferred only (i) to a person who the Sellers reasonably believe is a
qualified institutional buyer that purchasers
EXHIBIT D-2
FORM OF TRANSFEREE'S LETTER - Page 1
66
for its own account or for the account of a qualified institutional buyer to
whom notice is given that the resale, pledge or transfer is being made in
reliance on Rule 144A or (ii) pursuant to another exemption from registration
under the Securities Act and applicable state securities laws.
6. Neither the Purchaser nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of any Notes, any interest in
any Notes or any other similar security of the Issuer to, or solicited any offer
to buy or accept a transfer, pledge or other disposition of any Notes, any
interest in any Notes or any other similar security of the Issuer with, any
person in any manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action, which would
constitute a distribution of the Notes under the Securities Act or which would
render the disposition of any Notes a violation of Section 5 of the Securities
Act or which would render the disposition of any Note a violation of Section 5
of the Securities Act or any state securities law, require registration or
qualification pursuant thereto, or require registration of the Issuer, the
Sellers or the Transferor as an "investment company" under the Investment
Company Act of 1940, as amended, nor will it act, nor has it authorized or will
it authorize any person to act in such manner with respect to the Notes.
7. [The Purchaser will not acquire the Notes with the assets of any
"employee benefit plan" as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") which is subject to Title I of
ERISA or any "plan" as defined in Section 4975 of the Code.] [No nonexempt
"prohibited transaction" under Section 406 of the Employee Retirement Income
Security Act of 1974, as amended, or Section 4975 of the Code will occur in
connection with our acquisition or holding of the Notes.] (1)
8. The Purchaser understands that there is no market, nor is there any
assurance that a market will develop, for the Notes and that neither the Issuer,
PMC, PMCT nor the Transferor has any obligation to make or facilitate any such
market (or to otherwise repurchase the Notes from the Purchaser) under any
circumstances.
9. The Purchaser has consulted with its own legal counsel, independent
accountants and financial advisors to the extent it deems necessary regarding
the tax consequences to it of ownership of the Notes, is aware that its taxable
income with respect to the Notes in any accounting period may not correspond to
the cash flow (if any) from the Notes for such period, and is not purchasing the
Notes in reliance on any representations of the Issuer, PMC, PMCT, or their
counsel with respect to tax matters except for the tax opinion delivered
pursuant to Section 2.6(a)(iv).
10. The Purchaser has reviewed the Summary of Terms with respect to the
Notes dated December 2000, (the "SUMMARY OF TERMS"), and the agreements and
other materials referred to therein, and has had the opportunity to ask
questions and receive answers concerning the terms and conditions of the
transaction contemplated by the Summary of Terms and to obtain
----------
(1) Purchaser required to select applicable sentence.
EXHIBIT D-2
FORM OF TRANSFEREE'S LETTER - Page 2
67
additional information necessary to verify the accuracy and completeness of any
information furnished to the Purchaser or to which the Purchaser had access.
11. The Purchaser understands that the Notes will bear a legend
substantially as set forth in the form of Note included as Exhibit A, as the
case may be, to the Indenture.
12. The Purchaser hereby further agrees to be bound by all the terms
and conditions of the Notes as provided in the Indenture.
13. If the Purchaser sells any of the Notes, the Purchaser will obtain
from any subsequent purchaser substantially the same representations contained
in this Representation Letter.
Capitalized term used herein that are not otherwise defined shall have
the meanings ascribed thereto in the Indenture or the Summary of Terms, as the
case may be.
The representations and warranties contained herein shall be binding
upon the successors of the undersigned.
Executed at , this day of , .
------------------- ---- ------------ ------
--------------------------------------------
Purchaser's Name (Print)
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
--------------------------------------------
Address of Purchaser
--------------------------------------------
Purchaser's Taxpayer Identification Number
EXHIBIT D-2
FORM OF TRANSFEREE'S LETTER - Page 3
68
ANNEX 1
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[FOR TRANSFEREES OTHER THAN REGISTERED INVESTMENT COMPANIES]
The undersigned (the "PURCHASER") hereby certifies as follows to the
addressees of the Rule 144A Representation Letter to which this certification is
attached with respect to the Notes described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Purchaser.
2. In connection with purchases by the Purchaser, the Purchaser is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("RULE 144A") because (i) the Purchaser owned
and/or invested on a discretionary basis $__________(1) in securities (except
for the excluded securities referred to below) as of the end of the Purchaser's
most recent fiscal year (such amount being calculated in accordance with Rule
144A) and (ii) the Purchaser satisfies the criteria in the category marked
below.
Corporation etc. The Purchaser is a corporation (other than a
---- bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
Bank. The Purchaser (a) is a national bank or banking
---- institution organized under the laws of any State, territory
or the District of Columbia, the business of which is
substantially confined to banking and is supervised by the
State or territorial banking commission or similar official or
is a foreign bank or equivalent institution, and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which are
attached hereto.
Savings and Loan. The Purchaser (a) is a savings and loan
---- association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which are
attached hereto.
----------
(1) Purchaser must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Purchaser is a dealer, and, in that
case, Purchaser must own and/or invest on a discretionary basis at
least $10,000,000 in securities unless such dealer is acting in a
riskless principal transaction on behalf of a qualified institutional
buyer.
EXHIBIT D-2
FORM OF TRANSFEREE'S LETTER - Page 4
69
Dealer. The Purchaser is a dealer registered pursuant to
---- Section 15 of the Securities Exchange Act of 1934 acting other
than in a riskless principal transaction on behalf of a
qualified institutional buyer.
Dealer (Riskless Principal Transaction). The Purchaser is a
---- dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934 acting in a riskless principal
transaction on behalf of a qualified institutional buyer.
Insurance Company. The Purchaser is an insurance company whose
---- primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State,
territory or the District of Columbia.
State or Local Plan. The Purchaser is a plan established and
---- maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
ERISA Plan. The Purchaser is an employee benefit plan within
---- the meaning of Title I of the Employee Retirement Income
Security Act of 1974.
Investment Advisor. The Purchaser is an investment advisor
---- registered under the Investment Advisors Act of 1940.
Small Business Investment Company. The Purchaser is a small
---- business investment company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958.
Business Development Company. The Purchaser is a business
---- development company as defined in Section 202(a) (22) of the
Investment Advisors Act of 1940.
Trust Fund. The Purchaser is a trust fund whose trustee is a
---- bank or trust company and whose participants are exclusively
State or Local Plans or ERISA Plans as defined above, and no
participant of the Purchaser is an individual retirement
account or an H.R. 10 (▇▇▇▇▇) plan.
3. The term "SECURITIES" as used herein does not include (i) securities
of issuers that are affiliated with the Purchaser, (ii) securities that are part
of an unsold allotment to or subscription by the Purchaser, if the Purchaser is
a dealer, (iii) bank deposit notes and certificates of deposit, (iv) loan
participations, (v) repurchase agreements, (vi) securities owned but subject to
a repurchase agreement and (vii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Purchaser, the Purchaser used
the cost of such securities to the Purchaser and did not include any of the
securities referred to in the preceding paragraph,
EXHIBIT D-2
FORM OF TRANSFEREE'S LETTER - Page 5
70
except (i) where the Purchaser reported its securities holdings in its financial
statements on the basis of their market value, and (ii) no current information
with respect to the cost of those securities has been published. If clause (ii)
in the preceding sentence applies, the securities may be valued at market.
Further, in determining such aggregate amount, the Purchaser may have included
securities owned by subsidiaries of the Purchaser, but only if such subsidiaries
are consolidated with the Purchaser in its financial statements prepared in
accordance with generally accepted accounting principles and if the investments
of such subsidiaries are managed under the Purchaser's direction. However, such
securities were not included if the Purchaser is a majority owned, consolidated
subsidiary of another enterprise and the Purchaser is not itself a reporting
company under the Securities Exchange Act of 1934, as amended.
5. The Purchaser acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Notes are
relying and will continue to rely on the statements made herein because one or
more sales to the Purchaser may be in reliance on Rule 144A.
6. Until the date of purchase of the Notes, the Purchaser will notify
each of the parties to which this certification is made of any changes in the
information and conclusions herein. Until such notice is given, the Purchaser's
purchase of the Notes will constitute a reaffirmation of this certification as
of the date of such purchase. In addition if the Purchaser is a bank or savings
and loan as provided above, the Purchaser agrees that it will furnish to such
parties updated annual financial statements promptly after they become
available.
------------------------------------------
Name of Purchaser or Adviser
By:
---------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
-------------------------------------
EXHIBIT D-2
FORM OF TRANSFEREE'S LETTER - Page 6
71
ANNEX 2
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[FOR TRANSFEREES THAT ARE REGISTERED INVESTMENT COMPANIES]
The undersigned (the "PURCHASER") hereby certifies as follows to the
addressees of the Rule 144A Representation Letter which this certification is
attached with respect to the Transferor Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Purchaser or, if the Purchaser
is a "qualified institutional buyer" as that term is defined in Rule 144A under
the Securities Act of 1933, as amended ("RULE 144A") because the Purchaser is
part of a Family of Investment Companies (as defined below), is such an officer
of the Adviser.
2. In connection with purchases by the Purchaser, the Purchaser is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Purchaser is an investment company registered under the Investment Company Act
of 1940, as amended and (ii) as marked below, the Purchaser alone, or the
Purchaser's Family of Investment Companies, owned at least $100,000,000 in
securities (other than the excluded securities referred to below) as of the end
of the Purchaser's most recent fiscal year. For purposes of determining the
amount of securities owned by the Purchaser or the Purchaser's Family of
Investment Companies, the cost of such securities was used, except (i) where the
Purchaser or the Purchaser's Family of Investment Companies reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market.
The Purchaser owned $__________ in securities (other than the
---- excluded securities referred to below) as of the end of the
Purchaser's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
The Purchaser is part of a Family of Investment Companies
---- which owned in the aggregate $__________ in securities (other
than the excluded securities referred to below) as of the end
of the Purchaser's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "SECURITIES" as used herein does not include (i) securities
of issuers that are affiliated with the Purchaser or are part of the Purchaser's
Family of Investment Companies, (ii) bank deposit notes and certificates of
deposit, (iii) loan participations, (iv) repurchase
EXHIBIT D-2
FORM OF TRANSFEREE'S LETTER - Page 7
72
agreements, (v) securities owned but subject to a repurchase agreement and (vi)
currency, interest rate and commodity swaps.
5. The Purchaser is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Representation Letter to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Purchaser will be in reliance on
Rule 144A. In addition, the Purchaser will only purchase for the Purchaser's own
account.
6. Until the date of purchase of the Notes, the undersigned will notify
the parties to which this certification is made of any changes in the
information and conclusions herein. Until such notice is given, the Purchaser's
purchase of the Notes will constitute a reaffirmation of this certification by
the undersigned as of the date of such purchase.
------------------------------------------
Name of Purchaser or Adviser
By:
---------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
-------------------------------------
IF AN ADVISER:
------------------------------------------
Name of Purchaser
Date:
-------------------------------------
EXHIBIT D-2
FORM OF TRANSFEREE'S LETTER - Page 8
73
EXHIBIT E
TO
TRUST INDENTURE
FORM OF RELEASE OF LIENS
THE STATE OF )
-------- )
COUNTY OF )
-----------
THAT BNY MIDWEST TRUST COMPANY, as Trustee (the "TRUSTEE") under the
Trust Indenture dated as of December 15, 2000 between PMC Joint Venture, L.P.
2000 and the Trustee, with its principal corporate trust office located in
Chicago, Illinois, the legal and equitable owner and holder of the promissory
notes, more particularly described in the Deeds of Trust or Mortgages referred
to in Exhibit "A" attached hereto and made a part hereof for all purposes (the
"NOTES"), for and in consideration of the full and final payment of all
indebtedness secured by the aforesaid liens, the receipt of which is hereby
acknowledged, has released and discharged, and by these presents hereby releases
and discharges, the above described property from all liens held by the
undersigned securing said Notes.
EXECUTED this day of , 2000.
------- ------------
BNY MIDWEST TRUST COMPANY,
as Trustee
By:
---------------------------------------
Name:
----------------------------------
Title:
---------------------------------
THE STATE OF )
-------- )
COUNTY OF )
-----------
This instrument was acknowledged before me on _______________________,
_____, by _________________________________ of ______________________, on behalf
of said company.
Notary Public in and for the State of
--------
My Commission Expires:
------------------------------ ---------------------------------------------
Printed Name
EXHIBIT E
FORM OF RELEASE OF LIENS - Page 1