EXHIBIT 10.10
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MASTER CUSTODIAL AGREEMENT
between
BANKERS TRUST COMPANY,
as Note Custodian
and
ORINDA MANAGEMENT COMPANY
as Depositor
Dated March 14, 1997
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
CUSTODY ACCOUNTS AND CUSTODY RECEIPTS
Section 2.01. Creation of Custody Accounts................................. 4
Section 2.02. Custody Receipts............................................. 5
Section 2.03. Delivery of Custody Receipts................................. 6
Section 2.04. Mutilated, Lost, Stolen or Destroyed Custody Receipts........ 7
Section 2.05. Registration and Transfer of Ownership;
Persons Treated as Owners.................................... 8
Section 2.06. Deposits With Depositories................................... 12
SECTION 2.07. Payment on Custody Receipts.................................. 14
ARTICLE III
ADMINISTRATION AND CUSTODY ACCOUNTS
Section 3.01. Payments in Respect of the Underlying Securities............. 15
Section 3.02. Redemptions; Notices; Consents to Amendments
to Issuance Agreements...................................... 16
Section 3.03. Statements to Owners......................................... 17
Section 3.04. Defaults..................................................... 18
Section 3.05. Unclaimed Monies............................................. 20
Section 3.06. Obligation of Owners With Respect to Certain
Taxes and Filings.......................................... 20
Section 3.07. Transfers of Related Underlying Securities by
Note Custodian............................................. 20
Section 3.08. Termination of Custody Accounts.............................. 20
ARTICLE IV
THE NOTE CUSTODIAN
Section 4.01. Standard of Liability........................................ 21
Section 4.02. Resignation and Removal of the Note
Custodian; Appointment of Successor........................ 23
Section 4.03. Charges and Expenses......................................... 24
Section 4.04. Limitation of Liability...................................... 24
Section 4.05. Non-Petition................................................. 25
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ARTICLE V
MISCELLANEOUS
Section 5.01. Amendments, Etc............................................. 25
Section 5.02. Counterparts................................................ 26
Section 5.03. Exclusive Benefit of Parties; Effective Date................ 26
Section 5.04. Invalidity of Provisions.................................... 26
Section 5.05. Notices..................................................... 26
Section 5.06. Business Day................................................ 27
Section 5.07. Term of Agreement........................................... 27
Section 5.08. Governing Law............................................... 27
Section 5.09. Headings.................................................... 27
APPENDIX A - Definitions
EXHIBIT 1 - Form of Class A Custody Receipt
EXHIBIT 2 - Form of Class A-IO Custody Receipt
EXHIBIT 3 - Form of Investment Letter
Annex 1 - Form of Terms Agreement
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MASTER CUSTODIAL AGREEMENT
PRELIMINARY STATEMENT
MASTER CUSTODIAL AGREEMENT dated March 14, 1997, between BANKERS TRUST
COMPANY, a New York banking corporation, as custodian for the Owners from time
to time of Custody Receipts (the "Note Custodian"), and Orinda Management
Company, as depositor (the "Depositor"), for the benefit of the Owners from time
to time of Custody Receipts. (Capitalized terms used herein and not otherwise
defined shall have the meanings provided in Article I hereof.)
WHEREAS, the Note Custodian and the Depositor desire to enter into this
Custodial Agreement to provide for the issuance of one or more Series of Custody
Receipts, each Series of Custody Receipts to be composed of Class A Custody
Receipts and Class A-IO Custody Receipts evidencing the Underlying Securities
indicated on the related Custody Receipts Register on the terms and conditions
set forth herein and in the related Terms Agree ment; and
WHEREAS, the parties hereto desire to establish the terms and conditions
pursuant to which the Underlying Securities are to be deposited with, and held
in custody by, the Note Custodian, the terms and conditions for the issuance,
transfer and exchange of Custody Receipts and the terms for the payment of
certain fees and expenses associated with this Custodial Agreement;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
hereto do hereby agree, for the benefit of the Owners from time to time of
Custody Receipts, as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used herein and not defined in this Article I are used
with the definitions assigned thereto in Appendix A to the related Terms
Agreement which is incorporated herein and made a part hereof.
"Authorized Denomination" means, with respect to a Series of Custody
Receipts, the Authorized Denomination set forth in the related Terms Agreement.
"Authorized Officer" means with respect to the Note Custodian, any officer
assigned to the Corporate Trust Office, including any managing director, vice
president, assistant vice president, assistant treasurer, assistant secretary or
any other officer of the Note Custodian customarily performing functions
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similar to those performed by any of the above designated officers and having
direct responsibility for the administration of this Agreement, and also, with
respect to a particular matter, any other officer, to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"Beneficial Owner" means, with respect to a Custody Receipt that is a Book-
Entry Custody Receipt, the person or entity who is the beneficial owner of such
Book-Entry Custody Receipt.
"Book-Entry Custody Receipt" means any beneficial interest in the Custody
Receipts, ownership and transfers of which shall be made through book entries by
the Depository as described in Section 2.06(c) hereof.
"Class A Distribution Amount" means, as to the Class A Custody Receipts and
any Payment Date, an amount equal to the sum of (i) the related Scheduled
Principal Amount, (ii) the Class A Custody Receipt Interest Distribution and
(iii) the Class A Custody Receipt Yield Maintenance Amount, to the extent
received with respect to such Payment Date.
"Custody Account" means, with respect to a Series of Custody Receipts, the
account relating to such Series established and maintained pursuant to Section
2.01 of this Custodial Agreement.
"Definitive Custody Receipts" has the meaning set forth in Section 2.06(c).
"Depository" means, with respect to a Series of Custody Receipts which are
Book-Entry Custody Receipts or any Underlying Securities which are issued in
book-entry form, the securities depository with which the Related Underlying
Securities or one or both classes of such Series of Custody Receipts are
deposited, which depository shall be registered under Section 17A of the
Securities Exchange Act of 1934.
"Depository Agreement" means, with respect to a Series of Book-Entry
Custody Receipts, the letter of representations relat ing to such Series among
the Depositor, the Note Custodian and the Depository substantially in the form
attached to the related Terms Agreement.
"Depository Participant" means a broker, dealer, bank, other financial
institution or other person or entity for whom from time to time a Depository
effects book-entry transfers and pledges of Custody Receipts deposited with such
Depository.
"Fee Letter" means the side letter between the Depositor and the Note
Custodian dated March 14, 1997 regarding the amounts payable to the Note
Custodian in respect of its fees and expenses
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under this Custodial Agreement, as amended from time to time by written
agreement of the parties hereto.
"Issuance Agreement" means, with respect to a Series of Custody Receipts,
the agreement pursuant to which the related Underlying Securities were issued
and which is specified in the related Terms Agreement.
"Issuer" means, with respect to a Series of Custody Receipts, the Issuer of
the related Underlying Securities, if any, specified in the related Terms
Agreement.
"Mail" means mail by first-class postage to specified Owners of a Series of
Custody Receipts at their addresses set forth in the Related Custody Receipts
Register.
"Note Custodian's Principal Office" means the principal office of the Note
Custodian at which at any particular time its corporate trust business shall be
administered which office at the date of the execution of this Agreement is
located at Four ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate
Trust and Agency Group - Structured Finance Team or at any other time at such
other address as the Note Custodian may designate from time to time by notice to
the Depositor.
"Notice of Transfer or Exchange" means the Notice of Transfer or Exchange
printed on a Custody Receipt.
"Payment Date" means, with respect to the Underlying Securities of a Series
of Custody Receipts, any Payment Date set forth in the related Terms Agreement.
"Series" means all Custody Receipts issued and outstanding from time to
time that represent the Underlying Securities of the same issue deposited at the
same time with the Note Custodian pursuant to Section 2.03 of this Custodial
Agreement.
"Servicer" means, with respect to a Series of Custody Receipts, the person
or entity as specified in the related Terms Agreement.
"Terms Agreement" means, with respect to a Series of Custody Receipts, the
Terms Agreement, substantially in the form set forth in Annex I hereto,
delivered by the Depositor to the Note Custodian pursuant to this Custodial
Agreement and accepted by the Note Custodian in connection with the issuance of
such Series of Custody Receipts.
"Transfer Limitations" means, with respect to a Series of Custody Receipts,
the Transfer Limitations set forth in the related Terms Agreement.
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"Trustee" means, with respect to a Series of Custody Receipts, the bank or
trust company serving as trustee or indenture trustee with respect to the
Underlying Securities, as specified in the related Terms Agreement.
"Underlying Securities" means, with respect to a Series of Custody
Receipts, the Underlying Securities specified in the related Terms Agreement.
"Voting Rights" means, with respect to the Class A Custody Receipts 90% and
with respect to the Class A-IO Custody Receipt 10% and such Voting Rights with
respect to each Custody Receipt of a Class means the pro rata share of the
percentage allocated to the related Class of Custody Receipts based on the
Initial Custody Receipt Balance or the Initial Aggregate Class A-IO Custody
Receipt Notional Amount, as the case may be.
ARTICLE II
CUSTODY ACCOUNTS AND CUSTODY RECEIPTS
Section 2.01. Creation of Custody Accounts. The Note Custodian shall
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establish and maintain, with respect to each Series of Custody Receipts, a
separate Custody Account in the corporate trust office of the Note Custodian to
be designated "[Name of Related Underlying Securities (as specified in the
related Terms Agreement) --Custody Receipts Series [ ]] --Custody Account." The
Note Custodian shall purchase the Underlying Securities from the Depositor,
without recourse, in return for the Custody Receipts. The Note Custodian shall
deposit into such Custody Account the related Underlying Securities, and any
monies received in connection therewith. Each Custody Account shall at all
times be maintained as a custodial account for the benefit of the related
Owners, separated and segregated on the books of the Note Custodian from all
other accounts, funds and property in the possession of the bank or trust
company acting as Note Custodian, including any other Custody Account. The
related Underlying Securities and any monies held in a related Custody Account
shall not at any time be commingled on the books of the Note Custodian with any
other assets or property held by the Note Custodian, including the assets or
property of any other Custody Account. The Note Custodian shall maintain
separate records in connection with any monies which it may hold, in such
Custody Account or otherwise, in connection with the Related Underlying
Securities. To the extent practicable, the Note Custodian shall arrange for
distributions on the related Underlying Securities to be made in immediately
available funds to the Note Custodian, by wire transfer or otherwise, pursuant
to the payment provisions of each Issuance Agreement. Each Custody Account
shall be maintained at all times with an Eligible Institution. If the Note
Custodian ceases to be an Eligible Institution, the Custody Account shall
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be transferred to an Eligible Institution within five Business Days.
It is the express intent of the parties hereto that the conveyance of the
Underlying Securities and any monies received in connection therewith to the
Note Custodian, by the Depositor be, and be construed as, an absolute sale of
the Underlying Securities and related property. It is, further, not the
intention of the parties that such conveyance be deemed a pledge of the
Underlying Securities and related property by the Depositor to the Note
Custodian to secure a debt or other obligation of the Depositor. However, in
the event that, notwithstanding the intent of the parties, the Underlying
Securities or any related property is held to be the property of the Depositor,
or if for any other reason this Agreement is held or deemed to create a security
interest in the Underlying Securities or any related property, then:
(1) this Agreement shall be deemed to be a security agreement; and
(2) the conveyance provided for hereunder shall be deemed to be a grant by
the Depositor to the Note Custodian, of a security interest in all of
the Depositor's right, title, and interest, whether now owned or
hereafter acquired, in and to the Underlying Securities, any monies
received in connection therewith and any proceeds thereof.
The Depositor shall, to the extent consistent with this Agreement, take such
reasonable actions as may be necessary to ensure that, if this Agreement were
deemed to create a security interest in the property described above, such
security interest would be deemed to be a perfected security interest of first
priority under applicable law and will be maintained as such throughout the term
of this Agreement. The Depositor shall file all filings necessary to maintain
the effectiveness of any original filings necessary under the Uniform Commercial
Code as in effect in any jurisdiction to perfect such security interest in such
property. In connection herewith, the Note Custodian shall have all of the
rights and remedies of a secured party and creditor under the Uniform Commercial
Code as in force in the relevant jurisdiction.
Section 2.02. Custody Receipts. The Note Custodian shall issue one or
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more Series of Custody Receipts in Authorized Denominations from time to time as
hereinafter provided, each such Series to be composed of Class A Custody
Receipts and Class A-IO Custody Receipts evidencing a beneficial ownership
interest in the related Underlying Securities for such Custody Receipts (as set
forth in such Custody Receipt and in the related Custody Receipt Register) on
the terms and conditions set forth herein and in the related Terms Agreement.
Class A Custody Receipts
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shall be substantially in the form set forth in Exhibit 1 hereto, unless
otherwise agreed to by the parties hereto in connection with a particular Series
of Custody Receipts, in which case they shall be substantially in the form set
forth in Schedule A to the related Terms Agreement, and shall be assigned
consecutive registration numbers. The Class A-IO Custody Receipts shall be
substantially in the form set forth in Exhibit 2 hereto unless otherwise agreed
to by the parties hereto in connection with a particular Series of Custody
Receipts, in which case they shall be substantially in the form set forth in
Exhibit B to the related Terms Agreement, and shall be assigned consecutive
registration numbers. Each Custody Receipt shall be executed by the Note
Custodian by the manual signature of an Authorized Officer and no Custody
Receipt shall be entitled to any benefits under this Custodial Agreement, or be
valid or obligatory for any purpose, unless so executed by the Note Custodian.
In case any Authorized Officer whose signature shall appear on any Custody
Receipt shall cease to be an Authorized Officer, such signature shall
nevertheless be valid and sufficient for all purposes as if such person had
remained in office. The Custody Receipts shall not evidence any financial
obligation of the Depositor or the Note Custodian except that the Note Custodian
shall be required, as provided in Section 3.01 hereof, to distribute in the
amount specified in the related Terms Agreement all payments received in respect
of the related Underlying Securities deposited hereunder to the Custody Receipts
evidencing such Underlying Securities without making any deduction whatsoever,
other than as expressly provided in this Custodial Agreement.
Section 2.03. Delivery of Custody Receipts. Unless other wise specified
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in the related Terms Agreement, the Note Custodian shall deliver, at the
direction of the Depositor, to the Owners thereof the initial Custody Receipts
of a Series, registered in the names and in the denominations specified in
writing by the Depositor at least three Business Days prior to such delivery,
upon receipt by the Note Custodian of the following:
(a) original executed counterparts of the related Terms Agreement;
(b) in the case of related Underlying Securities issued in
certificated form, the related Underlying Securities in the aggregate
outstanding principal amount specified in the related Terms Agreement,
registered in the name of the Note Custodian (or its nominee or its agent's
nominee) or endorsed by the registered owner thereof for transfer to the
Note Custodian (or its nominee or its agent's nominee) or in blank, and all
documents necessary to effect the registra tion of the related Underlying
Securities (as specified in the related Issuance Agreement) in the name of
the Note Custodian;
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(c) a list of the names, addresses and United States taxpayer
identification numbers (or, if a United States taxpayer identification
number is not appropriate, a copy of Form W-8 or such other appropriate
federal tax identifica tion as the Note Custodian may reasonably request)
of the persons in whose names, and the denominations in which, such Custody
Receipts are to be registered; and
(d) a copy of the related Issuance Agreement.
The Note Custodian may accept the form of the related Issuance Agreement
delivered to it by the Depositor as being a true and correct copy of such
Issuance Agreement and shall not be deemed to have knowledge of, and need not
give effect to, any amendment unless a copy of such amendment is delivered to
it.
The initial Custody Receipts of a Series to be executed and delivered by
the Note Custodian as provided in this Section 2.03 shall be delivered to or
upon the written order of the Depositor in The City of New York (or such other
city in the United States of America as may be specified by the Depositor and
agreed upon by the Note Custodian) at a location specified by the Depositor and
agreed upon by the Note Custodian. Such delivery shall be made on the date that
the related Underlying Securities are received by the Note Custodian as provided
in paragraph (b) of this Section 2.03. If the Depositor shall so request
reasonably in advance, the Note Custodian shall make such Custody Receipts
available to the Depositor or the person designated by the Depositor for
inspection on the Business Day preceding the date of any such delivery, at a
location in The City of New York (or such other city specified above) specified
by the Depositor and agreed upon by the Note Custodian. The Depositor shall
provide the Note Custodian, on (and in the numbers specified in) the Note
Custodian's reasonable request, Custody Receipt forms to facili ▇▇▇▇ issuance
and transfer of Custody Receipts and permit any temporary Custody Receipts
issued to be exchanged for permanent Custody Receipts.
Any temporary Custody Receipts that may be issued shall be exchangeable for
definitive Custody Receipts upon surrender of the temporary Custody Receipts at
the Note Custodian's Principal Office without charge to the Owner and after any
waiting period that may be applicable. Any tax or governmental charge that may
be imposed in connection with any such exchange shall be borne by the Owner.
Upon surrender for cancellation of any one or more temporary Custody Receipts,
the Note Custodian shall execute and deliver in exchange therefor definitive
Custody Receipts of like denominations. Until so exchanged, the temporary
Custody Receipts shall in all respects be entitled to the same benefits under
this Agreement as definitive Custody Receipts.
Section 2.04. Mutilated, Lost, Stolen or Destroyed Custody Receipts. In
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the event a Custody Receipt is mutilated, lost,
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stolen or destroyed, the Note Custodian shall cancel such Custody Receipt, if
possible, and execute and deliver in lieu thereof a new Custody Receipt of the
same Series, Class and denomination, provided that:
(a) in the case of any mutilated Custody Receipt, such mutilated
Custody Receipt shall be first surrendered to the Note Custodian; and
(b) in the case of any lost, stolen or destroyed Custody Receipt,
there shall first be delivered to the Note Custodian evidence of such loss,
theft or destruction satis factory to the Note Custodian and the
Depositor, together with indemnity satisfactory to each of them, and
neither the Depositor nor the Note Custodian shall have received written
notice that such Custody Receipt has been acquired by a bona fide purchaser
for value.
All replacement Custody Receipts issued pursuant to this Section shall be
entitled to the full benefits hereunder, whether or not, in the case of clause
(b), any lost, stolen or destroyed Custody Receipt shall be found at any time.
The Note Custodian shall be entitled to customary compensation from the Owner
for its expenses, including any tax or governmental charge that may be payable
by it, in connection with any such replacement of Custody Receipts.
Section 2.05. Registration and Transfer of Ownership; Persons Treated as
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Owners.
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(a) The Note Custodian shall maintain a Custody Receipts Register for
each Series of Custody Receipts at the Note Custodian's Principal Office to
provide for the registration of such Custody Receipts and the registration
of transfers of such Custody Receipts entitled to be registered or
transferred as herein provided. A copy of the Custody Receipts Register
for both classes of any Series of Custody Receipts shall be provided by the
Note Custodian to the Depositor (or its designee), to a designated
representative of Owners of Custody Receipts of such Series evidencing more
than 25% of the Initial Custody Receipt Balance or of the Initial Aggregate
Class A-IO Custody Receipt Notional Amount at the expense of and upon
written request by the Depositor or such Owners, as the case may be. The
Note Custodian shall maintain on the Custody Receipts Register for any
Series of Custody Receipts, with respect to each such Custody Receipt, (i)
the name, address and, unless not required to be maintained under
applicable laws and regulations, United States taxpayer identification
number of the Owner of such Custody Receipt, (ii) the registration number
of such Custody Receipt and (iii) the Custody Receipt Balance or the
Custody Receipt Notional Amount.
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(b) The initial issuance of the Custody Receipts of a Series shall be
recorded on the related Custody Receipts Register in such names as the
Depositor shall specify upon satisfaction of the conditions set forth in
Section 2.05(g) and as provided in Section 2.03 hereof. Thereafter, regis
tration of transfer of such Custody Receipts may be made only on the
Related Custody Receipts Register upon satisfac tion of the conditions set
forth in Section 2.05(g). Upon (i) surrender for registration of transfer
of any Custody Receipt to the Note Custodian at the Note Custodian's
Principal Office, with the Notice of Transfer or Exchange for such Custody
Receipt fully completed, (ii) receipt by the Note Custodian of a
certificate of the proposed transferee in the form annexed to the related
Terms Agreement that it has fully complied, in respect of such transfer,
with any Transfer Limitations applicable to Custody Receipts of such Series
and (iii) receipt by the Note Custodian of a written agreement on the part
of such transferee that it agrees to indemnify the Note Custodian for any
expenses or liability that may result from such transfer, the Note
Custodian shall (A) execute and deliver to the transferee or transferees
named in such Notice at the Note Custodian's Principal Office a new Custody
Receipt or Receipts of the same Series and Class in Authorized Denomi
nations, evidencing Initial Custody Receipt Balance or Initial Aggregate
Class A-IO Custody Receipt Notional Amount, as the case may be, or portion
thereof of the surrendered Custody Receipt so transferred, registered in
the name or names of such transferee or transferees and (B) execute and
deliver to the Owner of the surrendered Custody Receipt at the Note
Custodian's Principal Office a new Custody Receipt or Receipts of the same
Series and Class in Authorized Denominations evidencing the portion of
Initial Custody Receipt Balance or Initial Aggregate Class A-IO Custody
Receipt Notional Amount of the surrendered Custody Receipt not so
transferred. Each Custody Receipt issued upon such a registration of
transfer shall bear a registra tion number not assigned previously.
(c) A Custody Receipt or Receipts may be exchanged for a Custody
Receipt or Receipts of the same Series and Class evidencing in the
aggregate the same Initial Custody Receipt Balance or Initial Aggregate
Class A-IO Custody Receipt Notional Amount, but having different
denominations, upon surrender of such Custody Receipt or Receipts to the
Note Custodian at the Note Custodian's Principal Office with the Notice
of Transfer or Exchange for such Custody Receipt fully completed. The Note
Custodian shall execute and deliver to the Owner of the exchanged Custody
Receipt, at the Note Custodian's Principal Office, a Custody Receipt or
Receipts of the same Series and Class, denominated in Authorized
Denominations registered in the name of such
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Owner and bearing registration numbers not assigned previously.
(d) The Note Custodian may require payment by the Owner of a Custody
Receipt of a sum sufficient to cover any tax, governmental fee or other
governmental charge that may be imposed in connection with any registration
of a transfer or exchange of such Custody Receipt, and may require that
such taxes, fees or other charges be paid prior to the issuance of a new
Custody Receipt, and shall have no obligation to issue such new Custody
Receipt in the absence of such payment. The Note Custodian may, but shall
not be required to, issue or register the transfer of any Custody Receipt
during any period when the related Trustee would not be required to issue
or register the transfer of any related Underlying Security pursuant to the
terms of the related Issuance Agreement.
(e) The Note Custodian may treat the person in whose name a Custody
Receipt is registered as the absolute owner thereof, for all purposes
whatsoever, and shall not be bound or affected by any notice to the
contrary, other than an order of a court having jurisdiction in the
premises.
(f) Whenever any Custody Receipt shall be delivered to the Note
Custodian for registration of transfer, exchange or final payment, upon
such registration of transfer, exchange or payment, the Note Custodian
shall cancel such Custody Receipt, and shall maintain a record of such
cancellation, in accordance with its standard procedures.
(g) If so specified in the related Terms Agreement
(i) Each Class A Custody Receipt and Class A-IO Custody Receipt
is required to bear the following legend:
"THIS [CLASS A CUSTODY RECEIPT/CLASS A-IO CUSTODY RECEIPT] HAS
NOT BEEN REGISTERED UNDER THE SECURI TIES ACT OF 1933, AS
AMENDED ("1933 ACT"), OR THE SECURITIES LAWS OR "BLUE SKY" LAWS
OF ANY STATE AND HAS BEEN SOLD IN RELIANCE UPON AN EXEMPTION
PROVIDED IN THE 1933 ACT AND APPLICABLE STATE SECURITIES AND BLUE
SKY LAWS. THIS [CLASS A CUSTODY RECEIPT/CLASS A-IO CUSTODY
RECEIPT] MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF (EACH A "TRANSFER") UNLESS REGISTERED UNDER
THE 1933 ACT AND APPLICABLE STATE SECURITIES AND BLUE SKY LAWS OR
UNLESS AN EXEMP TION FROM SUCH REGISTRATION IS AVAILABLE AND THE
DEPOSITOR OR THE NOTE CUSTODIAN MAY, AS CONTEMPLATED IN THE
MASTER CUSTODIAL AGREEMENT,
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REQUIRE AN OPINION OF COUNSEL TO SUCH EFFECT PRIOR TO EFFECTING
ANY SUCH TRANSFER."
(ii) No Class A Custody Receipt and Class A-IO Custody Receipt
(or any interest therein) may be Trans ferred (including, without
limitation, by pledge or hypothecation) except in accordance with the
following restrictions:
(a) no sale, assignment, pledge, hypothecation, transfer (each a
"Transfer") of a Class A Custody Receipt or of a Class A-IO Custody
Receipt or any beneficial interest therein will be made to any Person
unless such Transfer is exempt from the registration requirements of
the 1933 Act and any applicable state securities law or is made in
accordance with the 1933 Act and state laws. In the event of any such
Transfer, (i) unless such transfer is made in reliance upon Rule 144A
under the 1933 Act, the Note Custodian, the Issuer, the Indenture
Trustee, the Servicer and the Depositor shall require a written
Opinion of Counsel (which may be in-house counsel) acceptable to and
in form and substance reasonably satisfactory to the Note Custodian,
the Issuer, the Trustee, the Servicer, the Depositor and the Credit
Enhancer that such transfer may be made pursuant to an exemption,
describing the applicable exemption and the basis therefor, from the
1933 Act or is being made pursuant to the 1933 Act, which Opinion of
Counsel shall not be an expense of the Note Custodian, the Issuer, the
Trustee, the Servicer or the Depositor and (ii) the Note Custodian
shall require the transferee to execute an Investment Letter (in
substantially the form attached hereto as Exhibit 3) acceptable to and
in form and substance reasonably satisfactory to the Note Custodian,
the Issuer, the Trustee, the Servicer and the Depositor certifying to
the Note Custodian, the Issuer, the Trustee, the Servicer and the
Depositor the facts surrounding such transfer, which investment letter
shall not be an expense of the Note Custodian, the Issuer, the
Trustee, the Servicer and the Depositor;
(b) the Holder of a Class A Custody Receipt or of a Class A-IO
Custody Receipt desiring to effect a Transfer of a Class A Custody
Receipt or of a Class A-IO Custody Receipt shall indemnify the Note
Custodian, the Issuer, the Trustee, the Servicer and the Depositor
against any liability that may result if the Transfer is not so exempt
or is not made in accor dance with such federal and state laws; and
(c) the Class A Custody Receipts and Class A-IO Custody Receipts
may not be Transferred, directly or
14
indirectly, to any Person unless such transferee certifies in an
Officer's Certificate to the Issuer, the Depositor, the Note Custodian
and the Trustee (and in a form reasonably acceptable to the Issuer,
the Depositor and Trustee) that such Person is either (x) an
"accredited investor" within the meaning of Rule 501(a)(1), (2), (3)
and (7) under the 1933 Act (each an "institutional accredited
investor"), (y) a Qualified Institutional Buyer as defined in Rule
144A under the 1933 Act, or (z) a Person (other than the Rating
Agencies) involved in the organization and operation of the Issuer or
an affiliate, as defined in Rule 405 under the 1933 Act, of such
Person within the meaning of Rule 3a-7 under the 1940 Act, and, if
requested by the Issuer or the Trustee, the transferee delivers an
Opinion of Counsel to such effect.
(iii) All Opinions of Counsel required in connec tion with any
Transfer shall be by counsel reasonably acceptable to the Issuer, the
Trustee and the Credit Enhancer. None of the Note Custodian, the
Issuer or the Indenture Trustee is obligated to register the Custody
Receipts or the related Underlying Securities under the 1933 Act or
any other securities law. Any Transfer in violation of the provision
hereof will be void ab initio.
Section 2.06. Deposits With Depositories.
--------------------------
(a) Notwithstanding anything in this Custodial Agree ment to the
contrary, to the extent Underlying Securities are eligible for deposit with
a Depository, the Note Custodian may take delivery of the related
Underlying Securities by transfer of such Underlying Securities to its
account (or the account of its nominee or the nominee of its agent) with
such Depository and may maintain such Underlying Securities on deposit with
such Depository.
(b) In the event the related Terms Agreement provides that one or both
Classes of Custody Receipts will be Book Entry Custody Receipts, then such
Class of Custody Receipts shall, upon original issuance, be issued in the
form of one or more typewritten certificates representing such Class of
Book-Entry Custody Receipts and shall be delivered to the Depository by, or
on behalf of, the Depositor. The Book-Entry Custody Receipts shall
initially be registered on the Custody Receipts Register in the name of the
Depository or its nominee, and no Beneficial Owner of a Book-Entry Custody
Receipt will receive a definitive certificate representing such Beneficial
Owner's interest in a Book-Entry Custody Receipt except as provided in
subsections (c) and (d) below. Unless and until definitive, fully
registered Custody Receipts ("Definitive Custody Receipts") have been
issued to
15
Beneficial Owners of Custody Receipts pursuant to subsections (c)and
(d) below:
(i) the provisions of this Section 2.06(b) shall be in full force
and effect;
(ii) the Depositor and the Note Custodian may deal with the
Depository which is the registered holder of the Custody Receipts for
all purposes (including the making of distributions on the Custody
Receipts) as the authorized representative of the Beneficial Owners of
Custody Receipts;
(iii) to the extent that the provisions of this Section 2.06(b)
conflict with any other provisions of this Custodial Agreement, the
provisions of this Section 2.06(b) shall control;
(iv) the rights of Beneficial Owners of Custody Receipts shall be
exercised only through the Depository which is the registered holder
of the Custody Receipts and the Depository Participants and shall be
limited to those established by law and agreement between such
Beneficial Owners of Custody Receipts and the Deposi tory and/or the
Depository Participants. Pursuant to the Depository Agreement, unless
and until Definitive Custody Receipts are issued pursuant to
subsection (c) below, the initial Depository will make book-entry
transfers among the Depository Participants and receive and transmit
distributions on the Custody Receipts to such Depository Participants;
and
(v) Whenever a notice, report or other communica tion to the
Beneficial Owners of Custody Receipts is required under this Custodial
Agreement, unless and until Definitive Custody Receipts shall have
been issued to Beneficial Owners of Custody Receipts pur suant to
subsection (c) below, the Note Custodian shall give all such notices
and communications specified herein to be given to Beneficial Owners
of Custody Receipts to the Depository which is the registered holder
of the Custody Receipts.
(c) In the event that:
(i) (A) the Depositor advises the Note Custodian in writing that
the Depository which is the registered holder of the Custody Receipts
is no longer willing or able to discharge properly its
responsibilities as Depository, and (B) the Depositor is unable to
locate a qualified successor; or
16
(ii) the Depositor, at its option, advises the Note Custodian in
writing that it elects to terminate the book-entry system through the
Depository; or
(iii) after the occurrence of a default by the Servicer under the
Servicing Agreement or an Event of Default under the Indenture,
Beneficial Owners representing at least a majority of the aggregate
outstanding principal amount of the Custody Receipts advise the
Depository in writing that the continuation of a book-entry system
through the Depository is no longer in the best interests of the
Beneficial Owners;
the Note Custodian shall notify all Beneficial Owners, through the Depository
which is the registered holder of the Custody Receipts, of the occurrence of any
such event and of the avail ability of Definitive Custody Receipts to
Beneficial Owners of Custody Receipts requesting the same. Upon surrender to
the Note Custodian of the Custody Receipts by the Depository, accompanied by
registration instructions from the Depository which is the registered holder of
the Custody Receipts, the Note Custodian shall issue the Definitive Custody
Receipts which shall be issued in Authorized Denominations. Neither the
Depositor nor the Note Custodian shall be liable for any delay in delivery of
such instructions and may conclusively rely on, and shall be protected in fully
relying on, such instructions. The Depositor shall arrange for, and will bear
the costs of, printing, issuance and delivery of any Definitive Custody
Receipts.
(d) Custody Receipts purchased by, or beneficial interests in Book-
Entry Custody Receipts transferred to, institutional accredited investors
will be evidenced by Definitive Custody Receipts, registered in the name of
the purchaser thereof or any nominee of such purchaser. Definitive Custody
Receipts will be issued to a Beneficial Owner (or its nominee) at any time
(subject to the rules and procedures of DTC) upon the request to the
Custodian by such Beneficial Owner that its interest in a Book-Entry
Custody Receipt be exchanged for a Definitive Custody Receipt or Custody
Receipts.
SECTION 2.07 Payment on Custody Receipts. So long as the Note Custodian
---------------------------
is the registered holder of the Class A Notes, the Note Custodian shall, on each
Payment Date, make the following payment to Holders of Custody Receipts to the
extent of Custody Receipt Available Funds for such Payment Date in the following
order of priority:
(i) to the Holders of Class A Custody Receipts and Class A-IO, Custody
Receipts the Class A Custody Receipt Interest Distribution and the Class A-IO
Custody Receipt Interest Distribution, respectively (any shortfall being
allocated between
17
each such Class of Custody Receipts based on the total amount each such Class
would otherwise have been entitled to);
(ii) to the Holders of the Class A Custody Receipts, any Unpaid
Principal Shortfall due and payable in respect of the Class A Custody Receipts;
(iii) to the Holders of the Class A Custody Receipts, an amount up to
the Scheduled Principal Amount until the Aggregate Outstanding Principal Amount
of the Class A Custody Receipts is reduced to zero;
(iv) pro rata in proportion to the aggregate amount scheduled to be
distributed to each class pursuant to this clause, (A) to the Holders of Class A
Custody Receipts, all accrued and unpaid Class A Custody Receipt Yield
Maintenance Amounts, if any, payable to the Holders of the Class A Custody
Receipts as of any Payment Date prior to the current Payment Date and unpaid as
of the current Payment Date and (B) to the Holders of Class A-IO Custody
Receipt, all accrued and unpaid Class A-IO Custody Receipts Yield Maintenance
Amounts, if any, payable to the Holders of the Class A-IO Custody Receipts as of
any Payment Date prior to the current Payment Date and unpaid as of the current
Payment Date, but only to the extent such Class A Custody Receipt Yield
Maintenance Amounts and Class A-IO Custody Receipt Yield Maintenance Amounts
have been collected; and
(v) pro rata in proportion to the aggregate amount scheduled to be
distributed to each class pursuant to this clause, (A) to the Holders of Class A
Custody Receipts, any Class A Custody Receipt Yield Maintenance Amounts, if any,
payable as a result of the prepayment of a Loan or Loans or the acceleration of
a Defaulted Loan or Defaulted Loans in the related Prepayment Period and, (B) to
the Holders of the Class A-IO Custody Receipts, any Class A-IO Custody Receipt
Yield Maintenance Amounts, if any, payable as a result of the prepayment of a
Loan or Loans or the acceleration of a Defaulted Loan or Defaulted Loans in the
related Due Period, but only to the extent such Class A Custody Receipt Yield
Maintenance Amounts and Class A-IO Custody Receipt Yield Maintenance Amounts
have been collected.
ARTICLE III
ADMINISTRATION AND CUSTODY ACCOUNTS
Section 3.01. Payments in Respect of the Underlying Securities.
------------------------------------------------
(a) Unless otherwise provided in the related Terms Agreement, the Note
Custodian shall remit to the Owners of Class A Custody Receipts on the
Record Date preceding any Payment Date, other than the final Payment Date,
the Class A
18
Distribution Amount with respect to such Payment Date, on each Payment
Date. The Note Custodian shall remit to the Owners of Class A-IO Custody
Receipts on the Record Date preceding any Payment Date, other than the
final Payment Date, the Class A-IO Custody Receipt Interest Distribution
and the Class A-IO Custody Receipt Yield Maintenance Amount (to the extent
received) with respect to such Payment Date. The Class A Distribution
Amount, the Class A-IO Custody Receipt Interest Distribution and the Class
A-IO Custody Receipt Yield Maintenance Amount shall be paid to Owners of
Custody Receipts of the related class pro rata based on the Initial Custody
Receipt Balance or Initial Aggregate Class A-IO Custody Receipt Notional
Amount of the Custody Receipts held by such Owners.
(b) The Note Custodian (or its agent) shall duly present (or cause to
be presented) each related Underlying Security for payment on or prior to
its final Payment Date in accordance with the provisions of the related
Underlying Security and the related Issuance Agreement. Upon receipt of
such payment, the Note Custodian shall, on the Business Day following
receipt of such payment, remit to the Owners of Class A Custody Receipts
and Class A-IO Custody Receipts, on the date set by the related Issuance
Agreement (initially, as set forth in the related Terms Agreement) as the
date for determining the person to whom such payment shall be paid, the
final Class A Distribution Amount, the final Class A-IO Custody Receipt
Interest Distribution Amount and the final Class A-IO Custody Receipt Yield
Maintenance Amount (to the extent received) with respect such Payment Date
for such Class of Custody Receipts. The final Class A Distribution Amount,
the final Class A-IO Custody Receipt Interest Distribution and the final
Class A-IO Custody Receipt Yield Maintenance Amount shall be paid to Owners
of Custody Receipts of the related class pro rata based on the Initial
Custody Receipt Balance or Initial Aggregate Class A-IO Custody Receipt
Notional Amount of the Custody Receipts held by such Owners.
(c) Payments to an Owner pursuant to Sections 3.01(a) and 3.01(b)
shall be made by bank check payable in currency of the United States of
America sent by Mail to such Owner at the address shown on the related
Custody Receipt Register or by such other method as may be requested in
writing by an Owner and consented to by the Note Custodian; provided that
payments with respect to Custody Receipts on deposit with a Depository will
be made in accordance with the procedures of such Depository.
Notwithstanding the preceding sentence, in the event that the related
Issuance Agreement requires (initially, as set forth in the related Terms
Agreement) the presentment of the related Underlying Securities as a condi
tion to receipt of any payment (including a redemption pay ment
contemplated by Section 3.02 hereof) then, likewise,
19
any payment received by the Note Custodian upon such presentment shall be
remitted, in accordance with the terms of this Custodial Agreement, by the
Note Custodian to the Owners of the Class A Custody Receipts and the Owners
of the Class A-IO Custody Receipts evidencing such Underlying Securities
upon presentation of such Custody Receipt at the Note Custodian's Principal
Office.
(d) Neither the Depositor nor the Note Custodian shall have any
obligation to advance its own funds to make any payment to any Owner.
Section 3.02. Redemptions; Notices; Consents to Amendments to Issuance
--------------------------------------------------------
Agreements.
----------
(a) Upon receipt of any notice of redemption of a related Underlying
Security, the Note Custodian shall promptly forward a copy of such notice
by Mail to the Owners of the Class A Custody Receipts and the Owners of the
Class A-IO Custody Receipts evidencing such Underlying Security. Upon
receipt of any such notice, the Note Custodian (or its agent) shall present
the Underlying Security so called for redemption on or prior to the date of
such redemption to the related Trustee on behalf of such Owners for
redemption in accordance with the terms of such notice and, if applicable,
the related Issuance Agreement. The redemption price received by the Note
Custodian shall be paid to such Owners in accordance with the provisions of
Section 3.01 hereof.
(b) Upon receipt from a Trustee of any other notice with respect to a
related Underlying Security, the Note Custodian shall promptly transmit a
copy of such notice by Mail to the Owners of the Class A Custody Receipts
evidencing such Underlying Security and the Owners of the Class A-IO
Custody Receipts evidencing such Underlying Security. For such purpose,
the Note Custodian shall consider the date of the receipt of any such
notice as the record date for the purpose of determining the Owners of
record to whom such notices shall be transmitted. In the event such notice
requests or requires any vote, action or consent by the holder of any
related Underlying Security, the Note Custodian shall no later than the
Business Day following receipt of such notice, Mail to the Owners of the
Class A Custody Receipts and Owners of Class A-IO Custody Receipts
evidencing such Underlying Security a letter of direction with respect to
such vote, action or consent, returnable to the Note Custodian, and subject
to Section 3.02(c), the Note Custodian shall vote such Underlying Security
in accordance with such letters of direction proportionately based on the
Voting Rights of the related Owners. The Note Custodian shall not vote,
take any action or consent except in accordance with such letters of
direction. Any record date established by such notice for
20
purposes specified in such notice shall be the record date for the purpose
of determining the Owners of record for such purposes. If no record date is
established by the Related Trustee, the date such notice is received by the
Note Custodian shall be the record date.
(c) Notwithstanding Section 3.02(b), without the consent of all of the
Owners of the Class A-IO Custody Receipts of any Series, neither the Note
Custodian nor the Owners of the Class A Custody Receipts of such Series
shall vote or consent to any amendments to the related Issuance Agreement
or any other actions which would reduce the amount of or change the timing
of or currency of any amounts to be paid to Owners of Class A-IO Custody
Receipts of such Series.
(d) The Note Custodian shall promptly transmit by hand or telecopy to
the Depositor a copy of any notice received from a Trustee with respect to
any Underlying Securities.
Section 3.03. Statements to Owners. (a) With each distri bution on the
--------------------
Custody Receipts of any Series the Note Custodian shall prepare and forward by
Mail (together with a copy of any report relating to a Payment Date received by
the Note Custodian from the related Trustee pursuant to the related Issuance
Agreement) a statement to the Rating Agencies and each Owner of Custody Receipts
of such Series stating:
(i) the Class A Distribution Amount, the Scheduled Principal Amount
and the Class A Custody Receipt Interest Distribution distributable with
respect to the related Payment Date to the Owner of a Class A Custody
Receipt of such Series in the denomination of $100,000;
(ii) the Class A-IO Custody Receipt Interest Distribu tion and any
Class A-IO Custody Receipt Yield Maintenance Amount distributable with
respect to the related Payment Date to the Owner of a Class A-IO Custody
Receipt of such Series in the notional amount of $100,000;
(iii) the aggregate outstanding principal balance of the related
Underlying Securities evidenced by the Custody Receipts of such Series
after giving effect to the Scheduled Principal Amount distributed thereon
on the related Payment Date.
(b) The Note Custodian shall prepare and file all federal, state and local
tax and information returns and reports required to be filed with respect to the
custody arrangement created pursuant to the Custodial Agreement and, in
connection with any such filing, shall assume that such arrangement constitutes
a device to facilitate the creation of "stripped coupons" from the Underlying
Securities within the meaning of section 1286 of the
21
Code. Consistent with the above treatment, the Custodian shall, within a
reasonable time after the end of each calendar year, furnish to each Owner such
information which is necessary, or required by federal, state and local tax law,
to enable such Owners to prepare their tax returns and properly account for
their allocable share of income from the Underlying Securities.
Section 3.04. Defaults.
--------
(a) The Note Custodian is not authorized hereunder to proceed against
any Servicer or any Trustee in the event of a default under the related
Issuance Agreement and has no power or obligation hereunder to assert any
of the rights and privileges of the related Owners.
(b) In the event of any default in payment by an Issuer or Trustee, as
the case may be, or any Servicer default or similar event with respect to
an Issuer, a Trustee or a Servicer, as the case may be, each related Owner
will have the right to direct the Note Custodian to take specific actions
on behalf of such Owner pursuant to Section 3.04(c) hereof. Such Owner
will not be required to act in concert with the Note Custodian (unless such
Owner so directs) or other related Owners. The Note Custodian shall take
such actions as reasonably directed by the Owners in accordance with their
respective Voting Rights. The issuance of a Custody Receipt of a Series
and Class shall not in any manner: (i) alter, modify or increase the rights
of the Owner of such Custody Receipt with respect to the related Underlying
Securities evidenced by such Custody Receipt (provided that payments in
respect of such related Underlying Securities shall be paid to such Owner
as provided herein), (ii) grant to any Owners of Custody Receipts of any
other Series or Class rights with respect to such Custody Receipt or the
related Underlying Securities evidenced thereby or (iii) grant to such
Owner, through ownership of such Custody Receipt, any rights with respect
to any other Custody Receipt or the related Underlying Securities evidenced
thereby. The parties hereto understand and the agree that the Owners of
Custody Receipts of a Series are the beneficial owners of the related
Underlying Securities evidenced thereby on the terms and conditions set
forth herein and in the related Terms Agreement (but shall have no interest
in any Underlying Securities evidenced by Custody Receipts of another
series) and that the Note Custodian shall hold Underlying Securities as
custodian for the Owners of Custody Receipts evidencing such Underlying
Securities.
(c) Notwithstanding anything in this Section 3.04 to the contrary, the
Note Custodian, shall have no obligation to undertake to perform any
ministerial acts unless it has received from the Owners requesting such
action indemnity
22
satisfactory to it against all costs, losses, liabilities and expenses
(including legal fees and expenses) and such requests have been confirmed
in writing.
(d) The Note Custodian shall have no obligation to notify the
Depositor or any Owner of any default in payment by an Issuer or Trustee,
as the case may be, or any Servicer default or similar event with respect
to an Issuer, a Trustee or a Servicer, and shall not be deemed to have
knowledge thereof unless an Authorized Officer of the Note Custodian has
actual knowledge thereof or is informed thereof in writing.
(e) In the event that the Note Custodian fails to distribute the Class
A Distribution Amount, the Class A-IO Custody Receipt Interest Distribution
or the Class A-IO Yield Maintenance Amount within 3 days following receipt
of the full amount required to be distributed on the related Underlying
Securities, Owners of Custody Receipts evidencing more than 50% of Voting
Rights may terminate the Note Custodian as custodian hereunder. The
provisions of Section 4.02 hereof relating to appointment of a successor
custodian in the event of a removal of the Note Custodian by the Owners of
Custody Receipts shall apply in the event of a termination of the Note
Custodian pursuant to this Section 3.04(e).
Section 3.05. Unclaimed Monies. In the event any monies to be paid to an
----------------
Owner of a Custody Receipt in respect of the final payment thereof remains
unclaimed, the Note Custodian shall segregate and hold such monies in a
subaccount within the related Custody Account, without liability for interest
thereon, for the account of the Owner entitled thereto. Such monies shall not
be invested by the Note Custodian, but shall be held in trust for the benefit of
such Owner. All such monies that remain in any such subaccount on the date that
is two (2) years and eleven (11) months after the date on which such monies were
originally due, and as to which such Owner has not indicated an interest as
evidenced by a memorandum on file with the Note Custodian, shall be disbursed to
the Depositor and such Owner shall thereafter look only to the Depositor for
payment.
Section 3.06. Obligation of Owners With Respect to Certain Taxes and
------------------------------------------------------
Filings. If any tax or other governmental charge shall become payable by or on
-------
behalf of the Note Custodian, including any tax or charge required to be
withheld from any payment to or by the Note Custodian under the provisions of
any applicable law or regulation, with respect to any Custody Receipt or any
related Underlying Security, such tax or charge shall be payable by the Owner of
such Custody Receipt (in the case of any tax or charge with respect to such
Custody Receipt) or by the Owners of the related Class A and Class A-IO Custody
Receipts in proportion to their respective share of the interest payable on such
related
23
Underlying Security (in the case of any tax or charge with respect to such
related Underlying Security) and may, following written notice from the Note
Custodian to such Owner, be withheld by the Note Custodian.
Section 3.07. Transfers of Related Underlying Securities by Note
--------------------------------------------------
Custodian. The Note Custodian shall hold the related Underlying Securities in
---------
custody only and shall not assign, transfer, pledge, set off or otherwise
dispose of any Underlying Security or any interest therein except as
specifically provided hereunder or as required by an order of a court having
jurisdiction in the premises.
Section 3.08. Termination of Custody Accounts. The Note Custodian shall
-------------------------------
maintain in a Custody Account each related Under lying Security until payment
of all amounts in respect of such related Underlying Security in full, on its
expected final pay ment date or earlier redemption. The Note Custodian hereby
disclaims any equitable or beneficial interest in the Underlying Securities. No
Underlying Security will be available to the Note Custodian for its own use or
profit, nor will any Underlying Security be deemed part of the general assets of
the Note Custodian or be reflected as an asset of the Note Custodian on any
balance sheet or similar document prepared by the Note Custodian in its
individual capacity. The Underlying Securities will not be subject to any
right, charge, security interest, lien or claim of any kind in favor of the Note
Custodian.
ARTICLE IV
THE NOTE CUSTODIAN
Section 4.01. Standard of Liability.
---------------------
(a) The Note Custodian shall not be liable under this Custodial
Agreement other than by reason of bad faith or gross negligence in the
performance of such duties as are specifically set forth in this Custodial
Agreement. The Note Custodian shall not be liable for any damages
resulting from any distribution from a related Custody Account to an Owner
at the address of record of such Owner in the related Custody Receipts
Register. The Note Custodian shall not be liable for any action taken or
inaction by it in reliance upon the written opinion of its legal counsel or
the written advice of its accountants. The Note Custodian may request and
conclusively rely and shall be fully protected in acting in reliance upon
any written notice, request, direction or other document reasonably
believed by it to be genuine and to have been signed or presented by the
proper party or parties.
24
(b) The Depositor agrees to indemnify the Note Custodian and any of
its agents, officers, directors or employees for, and to hold them harmless
against any cost, loss, liability or expense, including legal fees and
expenses incurred without their own gross negligence or bad faith, arising,
directly or indirectly, out of, relating to, or in connection with the
acceptance, administration or performance of their duties, or the duties of
the Note Custodian, as well as the costs and expenses of defending
themselves against any action, suit, or other proceeding involving any
claim or liability arising directly or indirectly, out of, relating to or
in connection with the exercise or performance of any of their powers or
duties hereunder. Notwithstanding any provisions of this Agreement to the
contrary, the obligations of the Depositor to indemnify the Note Custodian
and its agents, officers, directors and employees under this Section 4.01
shall survive the resignation or removal of the Note Custodian or the
termination of this Custodial Agreement.
(c) The Note Custodian shall have no duties or responsibilities other
than those expressly set forth herein. No implied duties or obligations
shall be read into this Custodial Agreement against the Note Custodian.
The Note Custodian shall be under no liability to any party hereto, or to
any Owner, by reason of any failure on the part of the Depositor or any
maker, guarantor, endorser or other signatory of any document or
instrument, including any Underlying Security, or any other person to
perform such person's obligations under any such document or instrument.
Except for amendments to this Custodial Agreement referred to below, and
except for instructions, notices or demands to the Note Custodian under
this Custodial Agreement, the Note Custodian shall not be obligated to
recognize any agreement between the Depositor and any Owner, or between any
Owner and any other person or entity, notwithstanding that references
thereto may be made hard; and whether or not it has knowledge thereof.
(d) In the absence of gross negligence or bad faith on the part of the
Note Custodian, the Note Custodian may rely conclusively and shall be fully
protected in acting upon any order, notice, demand, certificate, opinion of
counsel (including counsel chosen by the Note Custodian), statement,
instrument, report or other paper or document (not only as to its due
execution and the validity and effectiveness of its provisions, but also as
to the truth, completeness and acceptability of any information therein
contained) which is believed by the Note Custodian to be genuine and,
without independent investigation, to be correct and to be signed or
presented by the proper person or persons.
25
(e) The Note Custodian shall not be responsible for the sufficiency or
accuracy, the form or the execution, valid ity, value or genuineness of
any document or property received or held by it hereunder, including
without limita tion any Underlying Securities, or the authority of the
Depositor in executing this Custodial Agreement.
(f) ANY ACTION OR PROCEEDING ALLEGING ANY BREACH BY THE NOTE CUSTODIAN
OF ITS DUTIES UNDER THIS CUSTODIAL AGREEMENT SHALL BE PROSECUTED ONLY IN A
STATE OR FEDERAL COURT LOCATED IN THE STATE OF NEW YORK, COUNTY OF NEW
YORK. THE NOTE CUSTODIAN SHALL HAVE THE RIGHT AT ANY TIME TO SEEK
INSTRUCTIONS FROM ANY COURT OF COMPETENT JURISDICTION.
(g) No provision of this Custodial Agreement shall require the Note
Custodian 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 its rights and powers hereunder, and the Note Custodian shall
not be required to take any action which, in the Note Custodian's sole and
absolute judgment, could involve it in expense or liability unless
furnished with security and indemnity which the Note Custodian deems, in
its sole and absolute discretion, to be satisfactory.
(h) The Note Custodian does not have any equitable or beneficial
interest in the Underlying Securities deposited with it hereunder but is
serving as custodian only and having only possession and legal title
thereof. The Note Custodian makes no representation as to the validity,
value, genuineness or collectibility of any Underlying Security or other
document or instrument held by or delivered to it. The Note Custodian shall
not be called upon to advise any Owner as to the wisdom in selling or
retaining or taking or refraining from taking any action with respect to
any Underlying Security or other property deposited hereunder.
(i) The Note Custodian shall be deemed to have exercised reasonable
care in the custody and preservation of the Underlying Securities in its
possession if the Underlying Securities are accorded treatment
substantially equal to that which a prudent person accords its own
property, it being understood that, except as expressly provided herein,
the Note Custodian shall not have responsibility for (i) ascertaining or
taking action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relative to any Underlying Security, whether or
not the Note Custodian has or is deemed to have knowledge of such matter,
or (ii) taking any necessary steps to preserve rights against any parties
with respect to any Underlying Securities.
26
Section 4.02. Resignation and Removal of the Note Custodian; Appointment
----------------------------------------------------------
of Successor.
------------
(a) The Note Custodian may resign with respect to all of its duties
hereunder at any time by written notice thereof delivered to the Depositor and
given by Mail to each Owner, such resigna tion to take effect upon the
appointment of a successor Note Custodian and its acceptance of such appointment
as hereinafter provided. Upon 30 days' written notice to the Note Custodian,
either the Depositor or the Owners of Custody Receipts of a Series evidencing
Voting Rights at least 66-2/3% of the Voting Rights allocated to the Class A
Custody Receipts and to the Class A-IO Custody Receipts of a Series may remove
the Note Custodian with respect to such Series of Custody Receipts, in which
event the Depositor may appoint a successor Note Custodian with respect to such
Series of Custody Receipts meeting the qualifications set forth in the next
succeeding paragraph. In the event of such removal or resignation, the Note
Custodian shall pay over to its successor Note Custodian any fees or charges
previously paid to the Note Custodian with respect to such Series of Custody
Receipts in respect of duties not yet performed under this Custodial Agreement
which remain to be performed by a successor Note Custodian. No resignation or
removal of the Note Custodian shall be effective until the appointment of a
successor Note Custodian and its acceptance of such appointment as hereinafter
provided.
(b) In case at any time the Note Custodian acting hereunder shall resign or
be removed in respect of any Series of Custody Receipts, the Depositor shall,
within 90 days after the delivery of the notice of resignation, appoint a
successor Note Custodian in respect of such Series of Custody Receipts. Any
successor Note Custodian shall be (i) a bank or trust company having its
principal office in the United States of America and having a combined capital
and surplus of at least $50,000,000 and (ii) an Eligible Institution whose long-
term unsecured debt or bank deposits are rated at least Baa3 (or the equivalent)
by Duff & ▇▇▇▇▇▇, ▇▇▇▇▇'▇ and S&P and, if not rated by Duff & ▇▇▇▇▇▇, by ▇▇▇▇▇'▇
and S&P. If no successor Note Custodian has been appointed within such 90 days,
the resigning Note Custodian may petition any court of competent jurisdiction
for the appointment of a successor Note Custodian.
(c) In the event of removal or resignation of the Note Custodian in respect
of any Series of Custody Receipts, the fees of a successor Note Custodian shall
be borne by the Depositor in accordance with the Fee Letter (except if the Note
Custodian is removed by the Owners (other than the Credit Enhancer in which case
such fees shall be borne by the Depositor), in which case the fees of a
successor Note Custodian are required to be borne by the Owners voting in favor
of removing the Note Custodian). Any successor Note Custodian shall execute and
deliver to its
27
predecessor and to the Depositor an instrument in writing accepting its
appointment hereunder, and thereupon such successor Note Custodian, without any
further act or deed, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor and for all purposes shall be the Note
Custodian under this Custodial Agreement with respect to such Series of Custody
Receipts, and such predecessor, upon payment of all sums due it and on the
written request of the Depositor shall execute and deliver an instrument
transferring to such successor all rights, obligations and powers of such
predecessor hereunder with respect to such Series of Custody Receipts, and shall
duly assign, transfer and deliver all right, title and interest in the related
Custody Account and all records relating thereto to such successor. Any
successor Note Custodian with respect to a Series of Custody Receipts shall
promptly give notice of its appointment to the related Owners by Mail.
(d) Any corporation into or with which the Note Custodian may be merged,
consolidated or converted or any transferee of all or substantially all of the
Note Custodian's corporate trust business shall be the successor of such Note
Custodian without the execution or filing of any document or any further act.
Section 4.03. Charges and Expenses. Except as expressly provided in this
--------------------
Custodial Agreement, no charges or expenses of the Note Custodian or any other
person shall be payable by or withheld from any Owner. The Depositor shall be
responsible for the fees and expenses of the Note Custodian as provided in the
Fee Letter.
Section 4.04. Limitation of Liability. It is expressly understood and
-----------------------
agreed by the parties hereto that (a) this Agreement is executed and delivered
by Bankers Trust Company, not individually or personally but solely as Note
Custodian, in the exercise of the powers and authority conferred and vested in
it and (b) under no circumstances shall Bankers Trust Company be personally
liable for the payment of any indebtedness or expenses of the Depositor or be
liable for the breach or failure of any obligation, representation, warranty or
covenant made or undertaken by the Depositor under this Agreement.
Section 4.05. Non-Petition. None of the Note Custodian or any Owner of
------------
Custody Receipts shall, prior to the date that is one year and one day after the
payment in full of all Custody Receipts, petition or otherwise invoke the
process of any court or government authority for the purpose of commencing or
sustaining a case against the Depositor under any Bankruptcy Law or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Depositor or any substantial part of the property of
either, or ordering the winding up or liquidation of the affairs of the
Depositor.
28
ARTICLE V
MISCELLANEOUS
Section 5.01. Amendments, Etc. Without notice to or con sent of any
---------------
Owners, any provisions of this Custodial Agreement may be amended (i) to cure
any formal defect, omission, incon sistency or ambiguity in this Custodial
Agreement, (ii) to add to the covenants and agreements of the Note Custodian or
the Depositor or to surrender any right or power herein conferred upon the Note
Custodian or the Depositor, (iii) to effectuate the assignment of the Note
Custodian's rights and duties hereunder to a qualified successor as provided
herein, or (iv) to modify, alter, amend or supplement this Custodial Agreement
in any other respect not inconsistent herewith which, in the opinion of counsel
acceptable to the Note Custodian, is not adverse to the Note Custodian or any of
the Owners. Except for amendments made pursuant to clause (i), (ii), (iii) or
(iv) above, no amendment affecting the Owners of Custody Receipts of any class
of any Series may be made to this Custodial Agreement without the consent of
Owners of Custody Receipts of such class evidencing at least 66-2/3% of the
Voting Rights allocated to such class, pro vided that no amendment may be made
which would (i) reduce the Voting Rights or the amount or change timing or
currency of any payments to be made to the Owners of any Class of Custody
Receipts without the consent of each Owner affected thereby or (ii) modify any
of the provisions of this Section 5.01 except to provide that certain other
provisions of this Custodial Agreement cannot be modified without the consent of
any Owner affected thereby. No amendment or waiver of any provision of this
Custodial Agreement nor consent to any departure herefrom shall in any event be
effective unless the same shall be in writing and signed by the Note Custodian
and the Depositor, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided,
however, that the Note Custodian shall have no duty to sign any amendment,
waiver or consent which affects its rights and powers under this Agreement. In
connection with any amendment pursuant to this Section, the Note Custodian shall
send to the Rating Agencies a copy of each proposed amendment prior to its
adoption and a copy of each executed amendment.
Section 5.02. Counterparts. This Custodial Agreement may be executed in
------------
any number of counterparts by the parties hereto on separate counterparts, each
of which, when so executed and delivered, shall be deemed an original, but all
such counterparts shall together constitute one and the same instrument. Copies
of this Custodial Agreement shall be filed with the Note Custodian and shall be
open to inspection at reasonable times during business hours at the Note
Custodian's Principal Office by any Owner upon prior written notice.
29
Section 5.03. Exclusive Benefit of Parties; Effective Date. This
--------------------------------------------
Custodial Agreement is for the exclusive benefit of the Note Custodian, the
Depositor and the Owners of the Custody Receipts from time to time, and their
respective successors hereunder, and shall not be deemed to give any legal or
equitable right, remedy or claim to any other person whatsoever. The Owners
shall be the beneficiaries of this Custodial Agreement and, pursuant to the
terms of the Custody Receipts, shall acknowledge and accept all of the terms and
conditions and agree to be bound by all of the provisions hereof and of the
Custody Receipts by acceptance of delivery of the Custody Receipts without the
necessity of any written acknowledgement or signature. This Custodial Agreement
shall become effective as to the Note Custodian upon execution of this Custodial
Agreement.
Section 5.04. Invalidity of Provisions. In case any one or more of the
------------------------
provisions contained in this Custodial Agreement or in the Custody Receipts
should be or become invalid, illegal or unenforceable in any respect, the
validity, legality and enforce ability of the remaining provisions contained
herein or therein shall in no way be affected, prejudiced or disturbed thereby.
Section 5.05. Notices. Notices given owners shall be given by Mail and
-------
shall be effective two Business Days following the date postmarked. All other
communications shall be mailed or delivered as follows:
(a) To the Depositor: ORINDA MANAGEMENT COMPANY
▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
(b) To the Note Custodian: BANKERS TRUST COMPANY
Four ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust
and Agency Group - Structured Finance Team
or as to each party at such other address as shall be designated by such party
in a written notice to the other parties.
Any communication so addressed and mailed or delivered to the Depositor or
the Note Custodian shall be deemed to be given when received, and any notice
sent by telecopy shall be deemed to be given when receipt of such transmission
is acknowledged, and any communication delivered in person shall be deemed to be
given when receipted for or actually received by an authorized officer of the
recipient.
Section 5.06. Business Day. In any case where the date on which any
------------
action is required to be taken hereunder shall not be a
30
Business Day, then such action shall be taken on the next succeeding Business
Day with the same force and effect as if made on the date that such action is
otherwise required to be taken hereunder.
Section 5.07. Term of Agreement. Whenever the Underlying Securities of a
-----------------
Series have been paid in full on an expected final payment date or earlier
redemption and the Owners of the Class A and Class A-IO Custody Receipts of such
Series have received all the amounts to which they are entitled, this Agree
ment shall terminate with respect to such Series.
The bankruptcy, death or other incapacity of any or all Owners of Class A
or Class A-IO Custody Receipts shall not operate to terminate this Custodial
Agreement, nor entitle any such Owner's legal representatives or heirs to claim
an account ing or to take any action or proceeding in any court for a partition
or winding up of the custodial arrangement created by this Custodial Agreement,
nor otherwise affect the rights, obligations and liabilities of the parties
hereto or any of the Owners of the Class A or Class A-IO Custody Receipts.
Section 5.08. Governing Law. THIS CUSTODIAL AGREEMENT AND THE CUSTODY
-------------
RECEIPTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.
Section 5.09. Headings. The headings of articles and sections in this
--------
Custodial Agreement have been inserted and the table of contents has been
provided for convenience only and are not to be regarded as a part of this
Custodial Agreement or to have any bearing upon the meaning or interpretation of
any provision contained herein.
31
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Master Custodial Agreement, all as of the day and year first above mentioned.
ORINDA MANAGEMENT COMPANY,
as Depositor
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
BANKERS TRUST COMPANY,
not in its individual capacity,
but solely as Note Custodian
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
32
APPENDIX A
DEFINITIONS
The definitions contained herein are incorporated into and made a part of
the Private Placement Memorandum, the Indenture, the Custodial Agreement and the
Servicing Agreement each as defined below.
Acceleration Date shall mean the date on which occurs the acceleration of
-----------------
the maturity of the Notes pursuant to Section 7.2 of the Indenture.
Account shall mean any account or fund, and any subaccount thereof,
-------
established under Article V of the Indenture.
Accounting Date shall mean with respect to a Payment Date the fifth
---------------
Business Day preceding such Payment Date.
Accrual Period shall mean with respect to any Payment Date, the period from
--------------
and including the first day of the calendar month preceding the month in which
such Payment Date occurs through and including the last day of such month.
Affiliate shall mean with respect to any Person, any other Person directly
---------
or indirectly controlling, controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control," when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
Aggregate Notional Amount shall mean as of any date of determination with
-------------------------
respect to the Class A-IO Custody Receipts, the Initial Aggregate Notional
Amount of the Class A-IO Custody Receipts, less any payment of principal paid to
the Class A-2 Notes prior to such date of determination.
Aggregate Outstanding Principal Amount shall mean as of any date of
--------------------------------------
determination, (i) with respect to the Notes, the Initial Aggregate Principal
Amount of all Notes less any payment of principal on such Notes prior to such
date of determination, (ii) with respect to any class of Notes, the Initial
Aggregate Principal Amount of all Notes of such class, less any payment of
principal on such Notes prior to such date of determination and (iii) with
respect to the Loans, the aggregate Loan Balances of all Loans at such date of
determination.
Assigned Assets shall mean the Loans and related Loan Collateral, together
---------------
with all interest accrued thereon from and including the Cut Off Date to but not
including the Closing Date
(but not including Pre-Cut Off Date Loan Payments) and all escrow deposits
relating thereto.
Assignment of Leasehold Mortgage shall mean with respect to each Leasehold
--------------------------------
Mortgage, the one or more executed original assignments in recordable form
evidencing the assignment of the related Leasehold Mortgage from the Seller to
the Issuer and from the Issuer to the Indenture Trustee for the benefit of the
Noteholders and the Credit Enhancer.
▇▇▇▇▇▇▇▇ shall mean ▇▇▇▇▇▇▇▇ Capital Incorporated, a Delaware corporation.
--------
▇▇▇▇▇▇▇▇ Loan Sale and Purchase Agreement shall mean the Loan Sale and
-----------------------------------------
Purchase Agreement, dated March 14, 1997 between ▇▇▇▇▇▇▇▇, as seller, and the
Managing Member, as purchaser, with respect to the Loans, as the same may be
amended or supplemented from time to time.
Authorized Officer (i) in the case of the Issuer, shall mean the Managing
------------------
Member, (ii) in the case of the Servicing Advisor or the Managing Member, shall
mean any Vice President or more senior officer, (iii) in the case of the
Servicer, shall mean any officer assigned to the Corporate Trust Office,
including any managing director, vice president, assistant vice president,
assistant treasurer, assistant secretary or any other officer of the Servicer
customarily performing functions similar to those performed by any of the above
designated officers and having direct responsibility for the administration of
the Servicing Agreement, and also, with respect to a particular matter, any
other officer, to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject, (iv) in the case of
any Prospective Owner or any transferor or prospective transferee of Class C
Notes, shall mean any Vice President or more senior officer, and (v) in the case
of the Indenture Trustee, shall mean a trust officer or other officer in the
Corporate Trust Department of the Indenture Trustee customarily performing
functions similar to those of a trust officer.
Available Funds shall mean with respect to a Payment Date, (i) any and all
---------------
amounts held in the Collection Account (other than with respect to Loan
prepayments or payments made in respect of Defaulted Loans) on the related
Accounting Date which were due in the related Due Period or any prior Due
Period, (ii) with respect to any Loan prepayment (or repurchase) or payment made
in respect of a Defaulted Loan received during the related Due Period or any
prior Due Period (to the extent not distributed on the related Payment Date),
the Prepayment Amount relating thereto (in the case of a Defaulted Loan, to the
extent actually received), and (iii) any and all Insured Payments received by
the Indenture Trustee on or before 12:00 noon on such Payment Date and held in
the Collection Account or for deposit in the
Collection Account or distribution in accordance with the Indenture; provided,
however, that Available Funds shall not include any Early Payments held in the
Collection Amount.
Bankruptcy Law shall mean any bankruptcy, reorganization, compromise,
--------------
arrangement, insolvency, readjustment of debt, dissolution, or liquidation or
similar law, whether now or hereafter in effect.
Basic Documents shall mean the Limited Liability Company Agreement, the
---------------
Certificate of Formation, the Indenture, the Servicing Agreement, the Custodial
Agreement and other documents and certificates delivered in connection with any
of the above.
Borrower shall mean the party executing a Promissory Note to evidence its
--------
obligations thereunder, and its successors and assigns.
Business Day shall mean any day that is not a Saturday, Sunday or a day on
------------
which banking institutions located in the City of New York, New York, in
Wilmington, Delaware or in the city and state where the principal offices of
each of the Indenture Trustee and the Servicer are located, are authorized or
obligated by law or executive order to be closed.
Cash Equivalent Investments means, at any time:
---------------------------
(a) any evidence of direct indebtedness, maturing not more than one
year after such time, issued or guaranteed by the United States government;
(b) commercial paper, maturing not more than nine months from the date
of issue, which is issued by a corporation organized under the laws of any
state of the United States and rated at least A-1/P-1 (or the equivalent)
by Duff & ▇▇▇▇▇▇, ▇▇▇▇▇'▇ and S&P and, if not rated by Duff & ▇▇▇▇▇▇, by
▇▇▇▇▇'▇ and S&P;
(c) any certificate of deposit or bankers acceptance, maturing not
more than one year after such time, which is issued by (i) a commercial
banking institution that is a member of the Federal Reserve System and has
a combined capital and surplus and undivided profits of not less than
$500,000,000 that has a long-term debt rating of at least A+ (or the
equivalent) by Duff & ▇▇▇▇▇▇, ▇▇▇▇▇'▇ and S&P and, if not rated by Duff &
▇▇▇▇▇▇, by ▇▇▇▇▇'▇ and S&P, or (ii) a commercial banking institution that
is organized in a jurisdiction outside the United States and has a combined
capital and surplus and undivided profits of not less than $500,000,000
that has a long-term debt rating of at least A+ (or the equivalent) by Duff
& ▇▇▇▇▇▇, ▇▇▇▇▇'▇ and S&P and, if not rated by Duff & ▇▇▇▇▇▇, by ▇▇▇▇▇'▇
and S&P; or
(d) any money market mutual fund having a rating in the highest
investment category from Duff & ▇▇▇▇▇▇, ▇▇▇▇▇'▇ and S&P and, if not rated
by Duff & ▇▇▇▇▇▇, by ▇▇▇▇▇'▇ and S&P at the time of the purchase of such
money market fund, including any funds for which the Servicer may be a
manager.
Class A Custody Receipt shall mean each Class A Custody Receipt issued
-----------------------
pursuant to Article II of the Custodial Agreement.
Class A Custody Receipt Interest Distribution shall mean with respect to
---------------------------------------------
the Class A Custody Receipts on any Payment Date, the sum of (a) the amount of
interest accrued during the related Accrual Period at the Class A Custody
Receipt Interest Rate on the sum of (i) the Custody Receipt Balance of the Class
A Custody Receipts on the Business Day immediately prior to such Payment Date
and (ii) any previously accrued and unpaid interest at the Class A Custody
Receipt Interest Rate for prior Payment Dates, and (b) any previously accrued
and unpaid interest at the Class A Custody Receipt Interest Rate for prior
Payment Dates.
Class A Custody Receipt Interest Rate shall mean a rate equal to 7.200% per
-------------------------------------
annum.
Class A Custody Receipt Yield Maintenance Amount shall mean with respect to
------------------------------------------------
each Payment Date the present value, using the Reinvestment Yield as a discount
rate, of a series of monthly interest cash flows from the immediately succeeding
Payment Date to the Expected Maturity of the Class A Notes calculated using as a
balance the lesser of (a) the sum of (i) the amount of the Loan Reduction Amount
(other than with respect to any scheduled Principal Payments) allocated to the
Class A-1 Notes and (ii) the amount of the Loan Reduction Amount (other than
with respect to any scheduled Principal Payments) allocated to the Class A-2
Notes, or (b) the Outstanding Custody Receipt Balance, each immediately prior to
such Payment Date, and using as a coupon the excess of the Class A Custody
Receipt Interest Rate over the Reinvestment Yield (compounding monthly).
Class A Note Rate shall mean a rate equal to weighted average of the Class
------------------
A-1 Note Rate and the Class A-2 Note Rate weighted on the basis of the Aggregate
Outstanding Principal Amount of the Class A-1 Notes and the Aggregate
Outstanding Principal Amount of the Class A-2 Notes, respectively.
Class A Notes shall mean the Class A-1 Notes and the Class A-2 Notes.
-------------
Class A-1 Interest Distribution shall mean with respect to the Class A-1
-------------------------------
Notes on any Payment Date, the sum of (a) the amount of interest accrued during
the related Accrual Period at the Class A-1 Note Rate on the sum of (i) the
Aggregate Outstanding Principal Amount of the Class A-1 Notes on the Business
Day immediately prior to such Payment Date and (ii) any
previously accrued and unpaid interest at the Class A-1 Note Rate for prior
Payment Dates, and (b) any previously accrued and unpaid interest at the
Class A-1 Note Rate for prior Payment Dates.
Class A-1 Note shall mean each Class A-1 Note issued pursuant to Article II
--------------
of the Indenture.
Class A-1 Note Rate shall mean a rate equal to 7.200% per annum.
-------------------
Class A-1 Scheduled Principal Amount shall mean for any Payment Date the
------------------------------------
aggregate of the Class A-1 Scheduled Principal Portions for such Payment Date.
Class A-1 Scheduled Principal Portion shall mean for any Payment Date and
-------------------------------------
Loan, the portion of the related Loan Reduction Amount for such Payment Date and
Loan determined by multiplying the reduction in principal balance as a result of
such Loan Reduction Amount by a fraction the numerator of which is the Class A-2
Note Rate minus the Net Rate for such Loan less the Insurance Premium Rate and
the denominator of which is the Class A-2 Note Rate minus the Class A-1 Note
Rate; provided that the Class A-1 Scheduled Principal Portion shall be 100% if
the Class A-1 Notes remain outstanding and the Class A-2 Notes have been paid in
full.
Class A-1 Yield Maintenance Amount shall mean with respect to each
----------------------------------
Payment Date the present value, using the Reinvestment Yield as a discount rate,
of a series of monthly interest cash flows from the immediately succeeding
Payment Date to the Expected Maturity of the Class A Notes calculated (i) using
as a balance the lesser of (a) the Loan Reduction Amount (other than with
respect to any scheduled Principal Payment for such Payment Date) allocated to
the Class A-1 Notes or (b) the Outstanding Aggregate Principal Amount of the
Class A-1 Notes, each immediately prior to such Payment Date and (ii) using as a
coupon the excess of the Class A-1 Note Rate over the Reinvestment Yield
(compounding monthly).
Class A-2 Interest Distribution shall mean with respect to the Class A-2
-------------------------------
Notes on any Payment Date, the sum of (a) the amount of interest accrued during
the related Accrual Period at the Class A-2 Note Rate on the sum of (i) the
Aggregate Outstanding Principal Amount of the Class A-2 Notes on the Business
Day immediately prior to such Payment Date and (ii) any previously accrued and
unpaid interest at the Class A-2 Note Rate for prior Payment Dates, and (b) any
previously accrued and unpaid interest at the Class A-2 Note Rate for prior
Payment Dates.
Class A-2 Note shall mean each Class A-2 Note issued pursuant to Article II
--------------
of the Indenture.
Class A-2 Note Rate shall mean a rate equal to 12.200% per annum.
-------------------
Class A-2 Scheduled Principal Amount shall mean for any Payment Date the
------------------------------------
aggregate of the Class A-2 Scheduled Principal Portions for such Payment Date.
Class A-2 Scheduled Principal Portion shall mean for any Payment Date and
-------------------------------------
Loan, the portion of the related Loan Reduction Amount for such Payment Date and
Loan determined by multiplying the reduction in principal balance as a result of
such Loan Reduction Amount by a fraction the numerator of which is the Net Rate
for such Loan less the Insurance Premium Rate minus the Class A-1 Note Rate and
the denominator of which is the Class A-2 Note Rate minus the Class A-1 Note
Rate; provided that the Class A-2 Scheduled Principal Portion shall be 100% if
the Class A-2 Notes remain outstanding and the Class A-1 Notes have paid in
full.
Class A-2 Yield Maintenance Amount shall mean with respect to each
----------------------------------
Payment Date the present value, using the Reinvestment Yield as a discount rate,
of a series of monthly interest cash flows from the immediately succeeding
Payment Date to the Expected Maturity of the Class A Notes calculated (i) using
as a balance the lesser of (a) the Loan Reduction Amount (other than with
respect to any scheduled Principal Payment for such Payment Date) allocated to
the Class A-2 Notes or (b) the Outstanding Aggregate Principal Amount of the
Class A-2 Notes, each immediately prior to such Payment Date and (ii) using as a
coupon the excess of the Class A-2 Note Rate over the Reinvestment Yield
(compounding monthly).
Class A-IO Custody Receipt shall mean each Class A-IO Custody Receipt
--------------------------
issued pursuant to Article II of the Custodial Agreement.
Class A-IO Custody Receipt Interest Distribution shall mean with respect to
------------------------------------------------
the Class A-IO Custody Receipts, the sum of (a) the amount of interest accrued
during the related Accrual Period at the Class A-IO Custody Receipt Interest
Rate on the sum of (i) the Aggregate Notional Amount of the Class A-IO Custody
Receipts on the Business Day immediately prior to such Payment Date and (ii) any
previously accrued and unpaid interest at the Class A-IO Custody Receipt
Interest Rate for prior Payment Dates, and (b) any previously accrued and unpaid
interest at the Class A-IO Custody Receipt Interest Rate for prior Payment
Dates.
Class A-IO Custody Receipt Interest Rate shall mean 5.000%.
----------------------------------------
Class A-IO Custody Receipt Yield Maintenance Amount shall mean with
---------------------------------------------------
respect to each Payment Date the present value, using the Reinvestment Yield as
a discount rate, of a series of monthly interest cash flows from the immediately
succeeding Payment Date
to the Expected Maturity of the Class A Notes calculated (i) using as a balance
the lesser of (a) the Loan Reduction Amount (other than with respect to any
scheduled Principal Payment) allocated to Class A-2 Notes or (b) the Aggregate
Notional Amount, each immediately prior to such Payment Date and (ii) using as a
coupon the Class A-IO Custody Receipt Interest Rate.
Class B Interest Distribution shall mean with respect to the Class B Notes
-----------------------------
on any Payment Date, the sum of (a) the amount of interest accrued during the
related Accrual Period at the Class B Note Rate on the sum of (i) the Aggregate
Outstanding Principal Amount of the Class B Notes on the Business Day
immediately prior to such Payment Date and (ii) any previously accrued and
unpaid interest at the Class B Note Rate for prior Payment Dates, and (b) any
previously accrued and unpaid interest at the Class B Note Rate for prior
Payment Dates.
Class B Note shall mean each Class B Note issued pursuant to Article II of
------------
the Indenture.
Class B Note Rate shall mean with respect to any Accrual Period, a per
-----------------
annum rate equal to 8.400% but in no event greater than the Weighted Average Net
Rate.
Class C Interest Distribution shall mean with respect to the Class C Notes
-----------------------------
on any Payment Date, the sum of (a) the amount of interest accrued during the
related Accrual Period at the Class C Note Rate on the sum of (i) the Aggregate
Outstanding Principal Amount of the Class C Notes on the Business Day
immediately prior to such Payment Date and (ii) any previously accrued and
unpaid interest at the Class C Note Rate for prior Payment Dates, and (b) any
previously accrued and unpaid interest at the Class C Note Rate for prior
Payment Dates.
Class C Note shall mean each Class C Note issued pursuant to Article II of
------------
the Indenture.
Class C Note Rate shall mean a rate equal to the Weighted Average Net Rate.
-----------------
Class C Noteholder shall mean any Person in whose name the Class C Notes
------------------
are registered in the Note Register.
Closing Date shall mean the date on which the Notes are first executed,
------------
authenticated and delivered.
Code shall mean the Internal Revenue Code of 1986, as amended, or any
----
successor statute thereto, including the regulations promulgated thereunder.
Collateral shall mean with respect to any Loan, the personal property
----------
collateral pledged by the Borrower in the related Security Agreement.
Collection Account shall mean the Account by that name established,
------------------
maintained and disbursed pursuant to Article V of the Indenture.
Condemnation Proceeds shall mean all compensation, awards and proceeds
---------------------
received by or on behalf of a Borrower as a result of a condemnation (which term
shall include any damage or taking by any governmental or quasi-governmental
authority and any transfer by private sale in lieu thereof), net of all
reasonable direct fees, costs (exclusive of overhead) and disbursements incurred
in connection with the collection thereof or the restoration or replacement of
the Borrower's collateral as contemplated by the Loan Documents.
Converted Treasury Yield shall mean with respect to any Loan the yield
------------------------
available, or if there is more than one yield available the average yields, on
United States Treasury non-callable bonds (excluding Flower Bonds) and notes
having a maturity date closest to (before, on or after) the Remaining Average
Life of such Loan, as reported in The Wall Street Journal or similar publication
on the fifth Business Day preceding the date such Loan is prepaid converted to a
twelve-month "equivalent yield" plus twenty-five basis points (0.25%). The
----
terms "Converted Treasury Yield" and a twelve-month "equivalent yield" are
annualized rates that reflect the frequency of the interest payments made during
a calendar year.
Credit Enhancement Policy means the policy issued by the Credit Enhancer
-------------------------
that guarantees Insured Payments on the Class A Notes.
Credit Enhancer shall mean Capital Markets Assurance Corporation, a New
---------------
York-domiciled monoline stock insurance company.
Credit Enhancement Premium shall mean with respect to any Payment Date an
--------------------------
amount equal to the product of (i) the Insurance Premium Rate and (ii) the
Aggregate Outstanding Principal Amount of the Class A Notes for such Payment
Date prior to giving effect to any principal paid on the Class A Notes on such
Payment Date, rounded to the nearest dollar.
Credit Enhancement Reimbursement Amount shall mean an amount equal to all
---------------------------------------
unreimbursed payments made by the Credit Enhancer under the Credit Enhancement
Policy with respect to the Class A Notes plus interest thereon from the time of
the disbursements at the applicable Class A Note Rate.
Custodial Agreement shall mean the Master Custody Agreement dated March 14,
-------------------
1997 between Bankers Trust Company, as Note Custodian, and Orinda Management
Company, as Depositor, as the same may be amended or supplemented from time to
time.
Custodian shall mean Bankers Trust Company and any successor thereto as a
---------
custodian under the Servicing Agreement.
Custody Receipt Available Funds shall mean for each Payment Date the amount
-------------------------------
paid on the Class A Notes on such Payment Date.
Custody Receipt Balance shall mean with respect to the Class A Custody
-----------------------
Receipts and any Payment Date, the Aggregate Outstanding Principal Amount of the
Class A Notes immediately prior to such Payment Date.
Custody Receipt Rate shall mean either the Class A Custody Receipt Interest
--------------------
Rate or the Class A-IO Custody Receipt Interest Rate, as the case may be.
Custody Receipt Registrar shall mean Bankers Trust Company and any
-------------------------
successor thereto under the Custodial Agreement.
Custody Receipts shall mean the Class A Custody Receipts and the Class A-IO
----------------
Custody Receipts.
Cut Off Date shall mean March 1, 1997, or if such date is not a Business
------------
Day, the next succeeding Business Day.
Default shall mean any occurrence which is, or with notice or the lapse of
-------
time or both would become, an Event of Default or, with respect to the Custodial
Agreement only, any "Default" as defined in the Custodial Agreement.
Default Rate shall mean with respect to a Loan the meaning assigned thereto
------------
in the related Loan Documents.
Defaulted Loan shall mean a Loan which is a Delinquent Loan for which a
--------------
Scheduled Payment is overdue (without taking into account any extension of the
due date for any such Scheduled Payment) for more than the greater of (x) 120
consecutive days or (y) such period of consecutive days which may be consented
to in writing with notice to the Rating Agencies by either (i) the Credit
Enhancer, so long as the Credit Enhancer is not in default under the Credit
Enhancement Policy, or (ii) in all other cases, the Indenture Trustee, and which
consent, in any case, shall not be unreasonably withheld or delayed.
Delinquency Condition shall be deemed to exist with respect to any Payment
---------------------
Date if on the Accounting Date for such Payment Date, the Aggregate Outstanding
Principal Amount of all Delinquent Loans and Defaulted Loans exceeds 5% of the
Aggregate Outstanding Principal Amount of all Loans.
Delinquent Loan shall mean a Loan (a) as to which a Scheduled Payment was
---------------
not received as of the date on which such payment was due and payable, including
any applicable grace period, and (b) which is not a Defaulted Loan.
Depositor shall mean Orinda Management Company.
---------
Determination Date, as used in the definitions of the terms Prepayment
------------------
Amount and Remaining Payments, shall mean the date Remaining Payments are to be
prepaid (in the case of a prepaid Loan) or accelerated (in the case of a
Defaulted Loan).
Due Period shall mean with respect to a Payment Date, the period from and
----------
including the second day of the calendar month preceding the month in which such
Payment Date occurs through and including the first day of the calendar month in
which such Payment Date occurs.
Duff & ▇▇▇▇▇▇ shall mean Duff & ▇▇▇▇▇▇ Credit Rating Co.
-------------
Early Payment shall mean with respect to a Loan and any Payment Date, any
-------------
Scheduled Payment in respect of such Loan which is due for any Due Period
subsequent to the Due Period relating to such Payment Date. An Early Payment
shall not be deemed a prepayment of any Loan.
Eligible Institution shall mean (a) a depository institution acceptable to
--------------------
the Credit Enhancer organized under the laws of the United States of America or
any one of the States thereof, the deposits of which depository institution are
insured, to the full extent permitted by applicable law, by the FDIC, which is
subject to supervision and examination by federal or state authorities and whose
long-term unsecured debt obligations are rated at least "A" by Standard & Poor's
and Duff & ▇▇▇▇▇▇ and "A2" by Moody's, or if not rated by Duff & ▇▇▇▇▇▇, rated
at least "A" by Standard & Poor's and "A2" by Moody's at the time of any deposit
therein, or (b) a federal or state chartered depository institution whose long-
term unsecured debt obligations are rated at least "A" by Standard & Poor's and
Duff & ▇▇▇▇▇▇ and "A2" by Moody's, or if not rated by Duff & ▇▇▇▇▇▇, rated at
least "A" by Standard & Poor's and "A2" by Moody's subject to regulations
regarding fiduciary funds on deposit substantially similar to 12 C.F.R. Section
9.10(b).
Eligible Investments at any time means any of the following:
--------------------
(i) Government Obligations; or
(ii) commercial paper having (a) an original maturity of less than 270
days and (b) a rating in the highest rating category of Duff & ▇▇▇▇▇▇,
Moody's and S&P at the time of such investment, and if not rated by Duff &
▇▇▇▇▇▇, a rating in the highest rating category of Moody's and S&P at the
time of such investment; or
(iii) certificates of deposit of, banker's acceptances issued by or
federal funds sold by any depository institution or trust company
(including the
Indenture Trustee or any agent of the Indenture Trustee acting in their
commercial capacity so long as they are an Eligible Institution)
incorporated under the laws of the United States of America or any State
thereof and subject to supervision and examination by federal and/or state
authorities, so long as at the time of such investment or contractual
commitment providing for such investment such depository institution or
trust company has a long-term unsecured debt rating in the highest rating
category of Duff & ▇▇▇▇▇▇, Moody's and S&P, and if not rated by Duff &
▇▇▇▇▇▇, a rating in the highest rating category of Moody's and S&P, and
provided that each such investment has an original maturity of less than
365 days, and any other demand or time deposit or certificate of deposit
which is fully insured by the FDIC and rated at least "P-1" by Moody's; or
(iv) repurchase obligations with respect to (A) any security described
in clause (i) collateralized at 105% of the principal amount of such
repurchase obligations or (B) any other security issued or guaranteed as to
timely payment by an agency or instrumentality of the United States of
America, collateralized at 105% of the principal amount of such repurchase
obligations in either case entered into with a depository institution or
trust company (including the Indenture Trustee), acting as principal, whose
obligations having the same maturity as that of the repurchase agreement
would be Eligible Investments under clause (iii) above (provided that the
counter party is rated at least "P-1" by Moody's, "A-1+" by Standard &
Poor's and D-1 by Duff & ▇▇▇▇▇▇; or, if not rated by Duff & ▇▇▇▇▇▇, "P-1"
by Moody's and "A-1+" by Standard & Poor's); or
(v) a guaranteed investment contract issued by any insurance company
or other corporation having a long-term unsecured debt rating in the
highest rating category of S&P, Duff & ▇▇▇▇▇▇ and Moody's or, if not rated
by Duff & ▇▇▇▇▇▇, in the highest rating category of S&P and Moody's at the
time of such investment and approved in writing by the Credit Enhancer; or
(vi) money market mutual funds having ratings in the highest rating
category of S&P, Duff & ▇▇▇▇▇▇ and Moody's or, if not rated by Duff &
▇▇▇▇▇▇, in the highest rating category of S&P and Moody's; or
(vii) investments approved in writing by the Credit Enhancer and the
Majority-in-Interest and acceptable to the Rating Agencies.
Environmental Laws shall mean any federal, state or local statute, code,
------------------
ordinance, rule, regulation, permit, consent, approval, license, judgment,
order, writ, judicial decision,
common law rule, decree, agency interpretation, injunction or other
authorization or requirement whenever promulgated, issued, or modified,
including the requirement to register underground storage tanks, relating to:
(i) emissions, discharges, spills, releases or threatened releases of
pollutants, contaminants, Hazardous Substances, materials containing Hazardous
Substances, or hazardous or toxic materials or wastes into ambient air, surface
water, groundwater, watercourses, publicly or privately owned treatment works,
drains, sewer systems, wetlands, septic systems or onto land; (ii) the use,
treatment, storage, disposal, handling, manufacturing, transportation, or
shipment of Hazardous Substances, materials containing Hazardous Substances or
hazardous and/or toxic wastes, materials, products or by-products (or of
equipment or apparatus containing Hazardous Substances) as defined in or
regulated under the following statutes and their implementing regulations: the
Hazardous Materials Transportation Act, 49 U.S.C. (S) 1801 et seq., the Resource
-- ---
Conservation and Recovery Act, 42 U.S.C. (S) 6901 et seq., the Comprehensive
-- ---
Environmental Response, Compensation and Liability Act, as amended by the
Superfund Amendments and Reauthorization Act, 42 U.S.C. (S) 9601 et seq., and/or
-- ---
the Toxic Substances Control Act, 15 U.S.C. (S) 2601 et seq. each as amended
-- ---
from time to time; or (iii) otherwise relating to environmental pollution or the
protection of human health and the environment.
Event of Default shall have the meaning specified in Section 7.1 of the
----------------
Indenture.
Expected Maturity of the Class A Notes shall mean August, 15, 2009.
--------------------------------------
FDIC shall mean The Federal Deposit Insurance Corporation, or any successor
----
thereto.
Final Maturity Date shall mean February 15, 2013, which is the final
-------------------
Payment Date on the Notes and Custody Receipts.
Fiscal Year shall mean the calendar year from each January 1 (or in the
-----------
case of 1997, from March 1) to the following December 31.
Franchisee Loan Agreement shall mean the loan agreement between a Borrower
-------------------------
and an Originator relating to a Loan.
Franchisor shall mean any franchisor of a System.
----------
Franchisor Intercreditor Agreement shall mean, with respect to each
----------------------------------
Franchisee Loan Agreement, a related intercreditor or similar agreement among a
Franchisor, the Seller and the Borrower, if any, as such agreement may be
amended, supplemented or otherwise modified from time to time.
Franchisor Subordination of Lessor's Lien means, with respect to each Loan,
-----------------------------------------
the related subordination of lessor's lien or similar agreement between a
Franchisor and the Seller, if any, as such agreement may be amended,
supplemented or otherwise modified from time to time.
Government Obligations shall mean (i) non-callable direct obligations of,
----------------------
or non-callable obligations fully guaranteed by, the United States of America or
any agency or instrumentality of the United States of America the obligations of
which are backed by the full faith and credit of the United States of America or
(ii) an investment in a no-load money market fund rated AAAm-G by Standard &
Poor's, Aaa by Moody's and AAA by Duff & ▇▇▇▇▇▇ (or, if not rated by Duff &
▇▇▇▇▇▇, AAAm-G by Standard & Poor's and Aaa by Moody's), the assets of which are
invested solely in obligations described in clause (i) of this definition.
Grant shall have the meaning specified in the Granting Clauses of the
-----
Indenture.
Guaranty, with respect to a Loan, shall mean the guaranty (including a
--------
secured guaranty) contained in the Loan Documents of certain Borrowers relating
to each such Borrower's Loan from an Affiliate of the Borrower of the Borrower's
obligations under such Loan.
Hazardous Substances shall mean (a) hazardous materials, hazardous wastes,
--------------------
and hazardous substances as those terms are defined under the following statutes
and their implementing regulations as they may be amended from time to time: the
Hazardous Materials Transportation Act, 49 U.S.C. (S) 1791 et seq., the Resource
-- ---
Conservation and Recovery Act, 42 U.S.C. (S) 6901 et seq., the Comprehensive
-- ---
Environmental Response, Compensation and Liability Act, as amended by the Super-
fund Amendments and Reauthorization Act, 42 U.S.C. (S) 9601 et seq., the Clean
-- ---
Water Act, 33 U.S.C. (S) 1251 et seq., (b) petroleum and petroleum products
-- ----
including crude oil and any fractions thereof, (c) natural gas, synthetic gas,
and any mixtures thereof, (d) asbestos and/or any material which contains any
hydrated mineral silicate, including, without limitation, chrysotile, amosite,
crocidolite, tremolite, anthophylite and/or actinolite, whether friable or
nonfriable, (e) PCBs, or PCB-containing materials or fluids, (f) radon, (g) any
other hazardous radioactive, toxic or noxious substance, material, pollutant, or
solid, liquid or gaseous waste, and (h) any substance with respect to which a
federal, state or local agency requires environmental investigation, monitoring
or remediation.
Highest Lawful Rate shall have the meaning specified in Section 11.14 of
-------------------
the Indenture.
Holdback Amount shall mean an amount initially equal to the excess of (i)
---------------
the Aggregate Outstanding Principal Amount of the
Loans as of the Cut Off Date over (ii) the sum of (A) the Aggregate Outstanding
Principal Amount of the Class A Notes as of the Closing Date, (B) the Aggregate
Outstanding Principal Amount of the Class B Notes as of the Closing Date, and
(C) the Aggregate Outstanding Principal Amount of the Class C Notes as of the
Closing Date. Such amount will be reduced through payments made pursuant to
Section 5.2(c) of the Indenture and Net Losses allocated to the Holdback Amount.
Holder shall mean a Noteholder.
------
Indenture shall mean the Indenture of Trust, dated March 14, 1997 between
---------
the Issuer and the Indenture Trustee, as the same may be amended or supplemented
from time to time.
Indenture Trustee shall mean First Bank National Association, a national
-----------------
banking association, until a successor Person shall have become the Indenture
Trustee pursuant to the applicable provisions of the Indenture, and thereafter
"Indenture Trustee" shall mean such successor Person.
Independent shall mean, when used with respect to any specified Person,
-----------
such Person who (a) is not an Affiliate of or controlled by and is in fact
independent of each of the Seller, the Servicer, the Note Custodian, the
Servicing Advisor, the Issuer and any Borrower with respect to any Loan, (b)
does not have any direct financial interest or any material indirect financial
interest in the Seller, the Servicer, the Note Custodian, the Servicing Advisor,
the Issuer, any Borrower with respect to any Loan, or an Affiliate thereof, and
(c) is not connected with the Seller, the Servicer, the Note Custodian, the
Servicing Advisor, the Issuer or any Borrower with respect to any of the Loans
as an officer, employee, promoter, underwriter, trustee, partner, director or
Person performing similar functions.
Independent Accountant shall mean the firm of independent accountants
----------------------
appointed by the Issuer pursuant to Section 3.2 of the Servicing Agreement.
Individual Note shall mean a Note of an original principal amount equal to
---------------
the minimum denomination for Notes as specified in the Indenture; a Note of an
original principal amount in excess of such minimum denomination shall be deemed
to be a number of Individual Notes equal to the quotient obtained by dividing
such original principal amount by such minimum denomination.
Ineligible Loan shall have the meaning accorded to such term in the Loan
---------------
Sale and Purchase Agreement.
Initial Aggregate Class A-IO Custody Receipt Notional Amount shall mean
------------------------------------------------------------
$35,931,000.
Initial Aggregate Principal Amount shall mean (i) with respect to all
----------------------------------
Notes, $92,411,000, (ii) with respect to the Class A-1 Notes, $48,698,000, (iii)
with respect to the Class A-2 Notes, $35,931,000, (iii) $3,891,000 with respect
to the Class B Notes, (iv) $3,891,000 with respect to the Class C Notes, and (v)
with respect to the Loans, $97,276,237.82.
Initial Custody Receipt Balance shall mean $84,443,000.
-------------------------------
Initial Principal Amount shall mean, with respect to any Note, the initial
------------------------
principal amount of such Note on the Closing Date as indicated thereon.
Insurance Agreement shall mean the Insurance Agreement dated March 14, 1997
-------------------
among the Issuer, the Seller and the Credit Enhancer, as it may be amended from
time to time.
Insurance Policy or Insurance Policies shall mean any insurance policy or
--------------------------------------
policies maintained by a Borrower in accordance with the requirements of its
Loan Documents or by the Servicer pursuant to the Servicing Agreement with
respect to any Loan.
Insurance Premium Rate shall mean the percentage set forth in the Insurance
----------------------
Agreement.
Insurance Proceeds shall mean any amounts received upon settlement of a
------------------
claim filed under an Insurance Policy (including proceeds of title insurance),
net of direct fees, costs (exclusive of overhead) and disbursements incurred in
connection with the collection thereof or the restoration or replacement of such
Borrower's collateral as contemplated by the Loan Documents.
Insured Payment shall have the meaning provided in the Credit Enhancement
---------------
Policy.
Intercreditor Agreement means, with respect to each Loan, a related
-----------------------
intercreditor or similar agreement among a Franchisor, the Seller and the
Borrower, if any, as such agreement may be amended, supplemented or otherwise
modified from time to time.
Interest Payment shall mean with respect to a Payment Date and a Loan, any
----------------
payment of interest due from the Borrower in respect of such Loan in the related
Due Period.
Issuer shall mean ▇▇▇▇▇▇▇▇ Franchisee Loan Funding 1997-A LLC, a special
------
purpose limited liability company organized under the laws of the State of
Delaware, and its successors and assigns.
Late Payment Charges shall mean with respect to a Payment Date and a Loan,
--------------------
all Late Payment Charges (as described in the
Promissory Note) due for such Loan in respect of the related Due Period.
Leasehold Mortgage shall mean the leasehold mortgage (or collateral
------------------
assignment of lease) with respect to any lease, if any, securing the obligations
of the Borrower under its Promissory Note, as such leasehold mortgage (or
assignment of lease) may be amended, modified or renewed from time to time.
Limited Liability Company Agreement shall mean the limited liability
-----------------------------------
company agreement dated March 14, 1997 between Orinda Management Company and
▇▇▇▇▇▇▇▇.
Liquidated Loan shall mean with respect to any Defaulted Loan the earlier
---------------
of (i) the date the Servicer reasonably determines that it has collected all
amounts it reasonably expects to collect with respect to such Defaulted Loans
and (ii) the date such Defaulted Loan has been delinquent for a period of 20
months.
Liquidation Date shall mean, with respect to a Defaulted Loan, the date on
----------------
which such Defaulted Loan is determined to be a Liquidated Loan.
List of Loans shall mean the schedule, attached to the Indenture as
-------------
Schedule I, respectively, together listing all of the Loans constituting a part
of the Trust Estate under the Indenture, which schedule shall set forth or
include for each Loan listed thereon (i) the name of the Borrower under such
Loan, (ii) the original Principal Amount (as defined in the Promissory Note) of
the Promissory Note evidencing such Loan, (iii) the original and the remaining
term to the maturity date of such Loan, (iv) the amortization term of such Loan,
(v) the interest rate and (vi) a list of certain Loan Documents for such Loan
identifying, to the extent applicable, the Loan Documents required to be
included in the Loan File.
Loan shall mean each loan made by the Originator to franchisees of one or
----
more of the Systems, which Loan (i) is evidenced by a Promissory Note owned by
the Issuer listed on the List of Loans and Granted and delivered to the
Indenture Trustee under the Indenture as security for the Notes, and (ii) is not
a Liquidated Loan.
Loan Balance shall mean as of any date and Loan the unpaid principal
------------
balance thereof.
Loan Collateral shall mean with respect to a Loan, the related Security
---------------
Agreement, the Leasehold Mortgage or the Mortgage, if any, the Guaranty, if any,
and any other Loan Documents.
Loan Documents shall mean with respect to a Loan, those instruments,
--------------
agreements, guaranty documents, certificates or other writings, now or hereafter
executed and delivered by the Borrower in respect of such Loan, including,
without limitation, those which are required to be included in the Loan File
therefor, as the same may be modified, amended, consolidated, continued or
extended from time to time.
Loan File shall mean the following instruments and documents in connection
---------
with each Loan:
(i) the executed original of the Promissory Note endorsed "Pay to the
order of ____________, without recourse," with all intervening
endorsements, if any, showing a complete chain of title from the originator
to the party endorsing such Promissory Note, plus amendments thereto;
(ii) an executed original of the Franchise Loan Agreement;
(iii) an executed original Security Agreement;
(iv) the original Mortgage, if applicable, with evidence of recording
thereon, or a duplicate original Mortgage, if applicable, together with
escrow instructions requiring such Mortgage to be dispatched to the
appropriate public recording office for recordation;
(v) an executed original recorded Leasehold Mortgage, if applicable,
in appropriate form for recording (with the possible exception of the
obtaining of a landlord signature) or with evidence of recording thereon;
(vi) an executed original Guaranty, if applicable;
(vii) the UCC-1 Financing Statement, with evidence of filing thereon,
or a copy of the original UCC-1 Financing Statement, together with escrow
instructions requiring such UCC-1 Financing Statement to be dispatched to
the appropriate public filing office;
(viii) one or more UCC-2 or UCC-3 Assignments in form and substance
acceptable for filing;
(ix) an executed original of each landlord, mortgagee or prior lien or
estoppel, if applicable;
(x) an executed original of a Franchisor Intercreditor Agreement, if
applicable;
(xi) an executed original of a Franchisor Subordination of Lessor's
Lien, if applicable;
(xii) the original title insurance policy, if applicable;
(xiii) applicable certificate(s) of insurance;
(xiv) the environmental indemnity, if applicable;
(xv) an assignment of Mortgage, if applicable;
(xvi) a general assignment of the Loan File from the Seller (the
"Loan Assignment"), assigning, without recourse, all of the grantor's
----------------
right, title and interest in each Loan, including but not limited to, the
Franchisee Loan Agreement, the Promissory Note, the Security Agreement, the
Mortgage, the Leasehold Mortgage, the Franchisor Intercreditor Agreement,
the Franchisor Subordination of Lessor's Lien, the origination escrow
agreement and the Guaranty, as applicable; and
(xvii) any other credit or security document necessary for the
documentation and enforcement of such Loan.
Loan Payments shall mean with respect to a Payment Date and a Loan, the sum
-------------
of all Principal Payments, Interest Payments, Loan Yield Maintenance Amounts, if
any, Late Payment Charges, if any, and any other amounts received from the
Borrower in respect of such Loan for the related Due Period.
Loan Prepayment Principal Amount shall mean with respect to any Loan any
--------------------------------
unscheduled principal amount received in respect of a Loan and with respect to
which a Loan Yield Maintenance Amount is due.
Loan Rate shall mean, with respect to each Loan, the rate of interest borne
---------
thereby as set forth on the List of Loans.
Loan Reduction Amount shall mean with respect to any Payment Date and Loan
---------------------
the sum of (i) the related scheduled Principal Payments for such Payment Date;
(ii) the related Loan Prepayment Principal Amount received during the related
Due Period, or (iii) the related Net Loss incurred during the related Due
Period.
Loan Sale and Purchase Agreement shall mean the Loan Sale and Purchase
--------------------------------
Agreement, dated March 14, 1997 between the Managing Member, as seller, and the
Issuer, as purchaser, with respect to the Loans as the same may be amended or
supplemented from time to time.
Loan Sale and Purchase Agreements shall mean the ▇▇▇▇▇▇▇▇ Loan Sale and
---------------------------------
Purchase Agreement and the Loan Sale and Purchase Agreement.
Loan Submission Summary shall mean any loan submission summary in
-----------------------
substantially the form set forth in Schedule 1 of the Servicing Agreement.
Loan Yield Maintenance Amount shall mean the greater of the following two
-----------------------------
amounts: (a) one percent (1%) of the then outstanding Loan balance; and (b) an
amount determined by: (i) calculating the sum of the present values of all
unpaid principal and interest payments required under the loan documents by
discounting such payments from their scheduled payment dates back to the date
prepayment will be made, utilizing a discount rate equal to the Converted
Treasury Yield divided by the frequency of the interest payments made during a
calendar year, and (ii) subtracting from such sum the outstanding principal
balance as of the date prepayment will be made.
Majority-in-Interest shall mean Holders of Notes representing in excess of
--------------------
fifty percent (50%) of the Percentage Interests of the Notes.
Majority of Affected Securityholders shall mean, with respect to a proposed
------------------------------------
action in respect of the Notes, a Majority-in-Interest of each class of Notes
affected by such proposed action.
Managing Member shall mean Orinda Management Company.
---------------
Maturity shall mean, with respect to any Note, the date on which the unpaid
--------
principal of such Note becomes due and payable as therein or in the Indenture
provided, whether at its stated maturity or otherwise.
Maturity Date shall mean, with respect to any Loan, its stated maturity
-------------
date.
Members shall mean the Owners of any Membership Interests.
-------
Membership Interest shall mean the membership interests issued by ▇▇▇▇▇▇▇▇
-------------------
Franchisee Loan Funding 1997-A LLC pursuant to the Limited Liability Company
Agreement.
Moody's shall mean ▇▇▇▇▇'▇ Investors Service, Inc.
-------
Mortgage shall mean any mortgage or deed of trust or deed to secure a Loan
--------
entered into by a Borrower (but not including Leasehold Mortgages) creating a
lien on and a security interest in the Mortgaged Property securing the
obligations of the Borrower under the related Promissory Note, together with any
other security instruments and any related UCC financing and continuation
statements delivered by the Borrower, including, in all events, the property and
rights assigned under all such instruments, together with all amendments,
substitutions and replacements of any of the foregoing.
Mortgage Assignment shall mean with respect to each Mortgage, one or more
-------------------
executed original assignments in recordable form evidencing the assignment of
the related Mortgage from the Seller to the Managing Member, from the Managing
Member to the Issuer and from the Issuer to the Indenture Trustee for the
benefit of the Noteholders.
Mortgaged Property shall mean, collectively, all fee simple (or ground
------------------
lessee) interests of the mortgagor in any real property, including the
improvements thereon, subject to the lien of a Mortgage which secures a Loan.
Net Loss shall mean, with respect to a Liquidated Loan, the amount equal to
--------
(i) the Remaining Principal Payments with respect of such Loan on the Business
Day immediately prior to the Liquidation Date for such Liquidated Loan, less
(ii) all principal received in liquidation of such Loan, net of the reasonable
liquidation expenses of the Servicer.
Net Loss Condition shall be deemed to exist with respect to any Payment
------------------
Date on the Accounting Date for such Payment Date, the Aggregate Outstanding
Principal Amount of all Defaulted Loans with respect to which Net Losses have
occurred exceeds 1% of the Initial Aggregate Principal Amount of all Loans.
Net Rate shall mean with respect to any Accrual Period and Loan, a per
--------
annum rate equal to (i) the Loan Rate, (ii) less the sum of (A) the Servicing
Fee Rate and (B) the Trustee Fee Rate.
1933 Act shall mean the Securities Act of 1933, as amended, and the
--------
applicable published rules and regulations thereunder.
1940 Act shall mean the Investment Company Act of 1940, as amended, and the
--------
applicable published rules and regulations thereunder.
Note or Notes shall mean any note or notes, as the case may be, issued
---- -----
pursuant to the Indenture.
Note Custodian shall mean Bankers Trust Company and any successor thereto
--------------
as a note custodian under the Custodial Agreement.
Note Obligations shall mean any and all liabilities and obligations under
----------------
or in connection with the Notes, including, without limitation, any and all
liabilities and obligations for payment of principal, interest and Yield
Maintenance Amount, if any, under the Notes.
Note Rate shall mean, as determined by the Indenture Trustee, (i) with
---------
respect to the Class A-1 Notes, the Class A-1 Note Rate, (ii) with respect to
the Class A-2 Notes, the Class A-2 Note Rate, (iii) with respect to the Class B
Notes, the Class B
Note Rate, and (iv) with respect to the Class C Notes, the Class C Note Rate.
Note Register and Note Registrar shall have the respective meanings
------------- --------------
specified in Section 2.6 of the Indenture.
Noteholder shall mean the registered owner of a Note as evidenced by the
----------
Note Register. Notwithstanding any other provision hereof, the Credit Enhancer
shall be considered the Holder of the Class A Notes for which it has paid all
principal and interest thereon and the Indenture Trustee shall note the Credit
Enhancer's interest in the Class A Notes with respect to interest payments made
therein in its books and shall note the Credit Enhancer's ownership interest in
the Class A Notes as to which the Credit Enhancer has paid all principal and
interest thereon.
Officer's Certificate shall mean, unless otherwise specified, a certificate
---------------------
signed by any Authorized Officer of the party delivering such certificate,
delivered to the Indenture Trustee and complying with the applicable
requirements of Section 11.1 of the Indenture.
Opinion of Counsel shall mean one or more written opinions of counsel who
------------------
may, except as otherwise expressly provided in the Indenture, be counsel for the
Issuer or its Affiliates.
Origination Escrow shall mean any amount held back and deposited in an
------------------
escrow account at the origination of the related loan from the loan proceeds
pursuant to the related Loan Documents, the amount and terms of which shall be
provided in writing by the Seller to the Servicer.
Originator shall mean The ▇▇▇▇▇▇▇▇ Group Incorporated or ▇▇▇▇▇▇▇▇ Capital
----------
Partners, L.P.
Outstanding shall mean, as of the date of determination, all Notes
-----------
theretofore authenticated and delivered under the Indenture except:
(i) Notes theretofore canceled by the Note Registrar or delivered to
the Note Registrar for cancellation;
(ii) Notes for the payment of which money in the necessary amount has
been theretofore deposited with the Indenture Trustee in trust for the
Holder of such Notes;
(iii) Notes in exchange for or in lieu of which other Notes have been
authenticated and delivered under the Indenture; and
(iv) Notes alleged to have been mutilated, destroyed, lost or stolen
for which replacement Notes have been issued as provided for in Section 2.8
of the Indenture;
provided, however, that in determining whether the Holders of Notes having the
requisite aggregate Percentage Interest have given any request, demand,
authorization, direction, notice, consent or waiver under the Indenture, Notes
owned by the Issuer or any Affiliate of the Issuer shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Indenture
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Notes which the
Indenture Trustee knows to be so owned shall be so disregarded. Notes so owned
which have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Indenture Trustee the pledgee's
right so to act with respect to such Notes and that the pledgee is not the
Issuer or any other obligor upon the Notes or any Affiliate of the Issuer or
such other obligor; and provided further that Notes which have been paid with
the proceeds of the Credit Enhancement Policy shall continue to remain
Outstanding for purposes of the Indenture until the Credit Enhancer has been
paid the Credit Enhancement Reimbursement Amount with respect to such Notes and
the Credit Enhancer shall be deemed to be the Holder thereof to the extent of
any principal payments made thereon.
Outstanding Notional Amount shall mean as of any date of determination with
---------------------------
respect to any Class A-IO Custody Receipt, the Initial Notional Amount thereof
less any reductions of the notional amount thereof prior to such date of
determination.
Outstanding Principal Amount shall mean as of any date of determination
----------------------------
with respect to any Note, the Initial Principal Amount thereof less any payment
of principal on such Note prior to such date of determination.
Owner means the registered owner of a Custody Receipt.
-----
Paying Agent shall mean Bankers Trust Company or any successor thereto as
------------
Paying Agent with respect to the Notes pursuant to the Indenture.
Payment Date shall mean the fifteenth day of each month in each year, or if
------------
such day is not a Business Day, the next succeeding Business Day, commencing
April 15, 1997.
Percentage Interest shall mean (i) with respect to each Note a fraction,
-------------------
expressed as a percentage, the numerator of which is the Initial Principal
Amount of such Note and the denominator of which is the Initial Aggregate
Principal Amount of all Notes, (ii) with respect to a class of Notes, a
fraction, expressed as a percentage, the numerator of which is the Initial
Principal
Amount of such Note, and the denominator of which is the Initial Aggregate
Principal Amount of all Notes of the same class, (iii) with respect to a Class A
Custody Receipt or a Class A-IO Custody Receipt, the percentage set forth on the
face thereof and (iv) with respect to the Notes of a class, a fraction,
expressed as a percentage, the numerator of which is the Initial Principal
Amount of such Notes and the denominator of which is the Initial Aggregate
Principal Amount of all Notes.
Periodic Filings shall mean any filings or submissions that the Issuer is
----------------
required to make with any state or federal regulatory agency or under the Code.
Permitted Encumbrances shall have the meaning specified in the Security
----------------------
Agreement with respect to each Loan.
Person shall mean any legal person, including any individual, corporation,
------
limited liability company, partnership, joint venture, association, joint stock
company, trust, unincorporated organization or government or any agency or
political subdivision thereof.
Placement Agent Agreement shall mean, with respect to the private placement
-------------------------
of any series of Securities, that certain Placement Agent Agreement between the
Issuer and ▇▇▇▇▇▇ Brothers Inc. relating thereto.
Pre-Cut Off Date Loan Payments shall mean all payments under the Loans
------------------------------
(including all payments of principal and interest) due on and prior to the Cut
Off Date.
Prepayment Amount shall mean as of any Determination Date (i) with respect
-----------------
to a prepaid Loan or a Defaulted Loan, an amount equal to the sum of (1) the
Remaining Payments of such Loan or Defaulted Loan together with any other
principal payments due on the Loan, (2) accrued interest on such Loan or
Defaulted Loan to the date of prepayment not included in clause (i) above, and
(3) an amount equal to the Loan Yield Maintenance Amount, if any, with respect
to such prepaid Loan or Defaulted Loan; and (ii) with respect to a Repurchased
Loan, an amount equal to the Repurchase Price for such Loan.
Principal Payment shall mean with respect to a Payment Date and a Loan, any
-----------------
payment of principal due in respect of such Loan in the related Due Period.
Proceeding shall mean any suit in equity, action at law or other judicial
----------
or administrative proceeding.
Promissory Note shall mean the note executed by a Borrower as evidence of
---------------
the obligation of such Borrower to repay funds borrowed by the Borrower from the
Originator, as such note may be amended, extended, modified or renewed from time
to time.
Property shall mean the property where the restaurant relating to a Loan is
--------
located, which property consists of either a fee or leasehold estate in real
property and the related improvements located on such real property, including
the restaurant.
Rating Agencies shall mean S&P, Moody's and Duff & ▇▇▇▇▇▇, and their
---------------
successors.
Record Date shall mean, with respect to a Payment Date, (i) the last day of
-----------
the immediately preceding calendar month or (ii) with respect to the initial
Payment Date, the Closing Date.
Recoveries shall mean for any Due Period occurring after the date on which
----------
any Loan becomes a Defaulted Loan and with respect to such Defaulted Loan, all
payments or amounts received on or in respect of such Loan (whether in
connection with the disposition of such Loan or any of the related Loan
Collateral or otherwise) during such Due Period in respect of amounts then
payable pursuant to such Defaulted Loan (including, without limitation, any
amounts received by the Servicer or the Indenture Trustee in connection with the
management or operation of any REO Property (as defined in the Servicing
Agreement)), net of out-of-pocket direct costs (exclusive of overhead) and
expenses reasonably incurred (including legal fees and expenses) by the Servicer
or the Indenture Trustee in connection with any such payments or amounts and any
preservation and disposition of the Loan or related Loan Collateral.
Reinvestment Yield shall mean, with respect to any Payment Date, the yield
------------------
available, or if there is more than one yield available, the average yields, on
United States Treasury non-callable bonds (excluding Flower Bonds) and notes
having a maturity date closest to (before, on or after) the Expected Maturity
Date for the Class A Notes, as reported in The Wall Street Journal or similar
publication on the last Business Day of the Due Period converted to a twelve-
month "equivalent yield" plus 50 basis points (0.50%).
----
Remaining Average Life shall mean, with respect to a Loan on any date, the
----------------------
number of years (calculated to the nearest one-twelfth year) obtained by
dividing (a) the sum of the products obtained by multiplying (i) each remaining
principal payment (but not interest thereon) by (ii) the number of years
(calculated to the nearest one-twelfth year) which will elapse between the date
of determination and the scheduled due date of such remaining principal payment
by (b) the outstanding principal balance of the Loan.
Remaining Payments shall mean with respect to any Loan or Defaulted Loan,
------------------
all Scheduled Payments with respect to such Loan or Defaulted Loan that would be
or become due on or after the
Determination Date for such Loan or Defaulted Loan if no Principal Payment were
made prior to its scheduled due date.
REO Property shall mean any mortgaged property or other loan collateral
------------
acquired by the Servicer in foreclosure, by deed in lieu of foreclosure or
otherwise.
Repurchase Price shall mean an amount equal to the then Aggregate
----------------
Outstanding Principal Amount of such Loan plus any unpaid interest thereon that
has accrued at the Loan Rate to the date of repurchase.
Repurchased Loan shall mean any Loan repurchased by the Seller or the
----------------
Managing Member pursuant to the Loan Sale and Purchase Agreements.
Restricting Event shall mean, as of any Payment Date, the existence of (i)
-----------------
a Delinquency Condition or (ii) a Net Loss Condition as reported in the
Servicer's Certificate for such Payment Date.
Rule 144A shall mean 17 CFR 230.144A, or any comparable successor rule or
---------
regulation under the 1933 Act.
Scheduled Payment shall mean with respect to a Payment Date and a Loan, the
-----------------
sum of the scheduled Principal Payments and Interest Payments (as such terms are
defined in the Loan Documents with respect to such Loan), if any, due from the
Borrower in respect of such Loan in the related Due Period in accordance with
the terms of the related Promissory Note and the amortization schedule then
applicable thereto; provided that with respect to any Loan that becomes a
Liquidated Loan during the related Due Period the scheduled Principal Payment
shall mean the sum of the Remaining Principal Payments with respect to such
Loan.
Scheduled Principal Amount shall mean, with respect to any Payment Date,
--------------------------
the aggregate of the Loan Reduction Amounts relating to such Payment Date.
Secured Party with respect to any Loan shall have the meaning accorded to
-------------
such term in the Loan Documents for such Loan.
Securities shall mean the Notes and the Custody Receipts.
----------
Securities Purchase Agreements shall mean the Securities Purchase
------------------------------
Agreements, among the Issuer or the Depositor, as applicable, and the Securities
Purchaser and relating to the purchases of Securities on the Closing Date.
Securities Purchaser shall mean any of the purchasers of the Securities
--------------------
pursuant to a Securities Purchase Agreement.
Security Agreement shall mean with respect to a Loan, the Security
------------------
Agreement included in the Loan Documents in respect of such Loan providing for
the grant of a security interest in the restaurant equipment and other personal
property relating to the restaurant business in one of the Systems to secure
such Loan.
Securityholder shall mean a Holder of a Security or of a Custody Receipt.
--------------
Seller shall mean ▇▇▇▇▇▇▇▇ Capital Incorporated, in its capacity as seller
------
under the Loan Sale and Purchase Agreement.
Servicer shall mean Bankers Trust Company, a New York banking corporation,
--------
in its capacity as servicer under the Servicing Agreement, together with its
subservicers, successors and assigns as permitted thereunder.
Servicer Recommendation shall mean a recommendation with respect to a Loan
-----------------------
as to which a default has occurred prepared by the Servicing Advisor pursuant to
the Servicing Agreement.
Servicer Report Date shall mean with respect to a Payment Date the third
--------------------
Business Day preceding such Payment Date.
Servicer's Certificate shall mean a certificate to be provided by the
----------------------
Servicer in accordance with the Servicing Agreement and signed by an Authorized
Officer of the Servicer and furnished to the Issuer, the Credit Enhancer and the
Indenture Trustee by the Servicer.
Servicing Advisor shall mean ▇▇▇▇▇▇▇▇.
-----------------
Servicing Advisor Fee shall mean with respect to any Payment Date the
---------------------
Servicing Advisor Fee Rate multiplied by the Aggregate Outstanding Principal
Amount of the Loans on the first day of the related Due Period.
Servicing Advisor Fee Rate shall mean ***/1/ per annum.
--------------------------
Servicing Agreement shall mean the Servicing and Custodial Agreement dated
-------------------
March 14, 1997, by and among the Issuer, the Indenture Trustee, the Servicer and
the Servicing Advisor.
Servicing Fee shall mean with respect to any Payment Date an amount equal
-------------
to the sum of (i) one-twelfth of the product of (x) the Servicing Fee Rate and
(y) the Aggregate Outstanding Principal Amount of the Loans for such Payment
Date, plus (ii)
--------------
/1/ Certain information has been deleted from this document where denoted
---
by asterisks, and has been filed separately with the Commission. The Company
has requested confidential treatment for such omitted information.
Late Payment Charges, if any, received during the related Due Period with
respect to Loans.
Servicing Fee Rate shall mean ***/2/ per annum.
------------------
S&P shall mean Standard & Poor's Ratings Services, a division of The
---
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
State shall mean any one of the states of the United States of America, or
-----
the District of Columbia.
Stated Payment Amount shall, with respect to any Loan, have the meaning
---------------------
accorded to such term in the Promissory Note included in the Loan Documents for
such Loan.
Subordination Deficit shall mean, as of any Payment Date, the excess, if
---------------------
any, of (i) the Aggregate Outstanding Amount of the Class A Notes over (ii) the
Aggregate Outstanding Principal Amount of the Loans.
Super-Majority-in-Interest shall mean Holders of Notes representing in
--------------------------
excess of sixty-six and two-thirds percent (66-2/3%) of the Percentage Interests
of the Notes.
Systems shall mean one or more of the following concepts: ***.
-------
Title Insurance Policy shall mean with respect to a particular Mortgaged
----------------------
Property, an ALTA (extended coverage) Loan Title Insurance Policy or Policies or
other title insurance (including all riders or endorsements thereto) and
insuring the Seller that the Mortgage constitutes a valid first lien on the
Mortgaged Property, subject to Permitted Encumbrances.
Transfer shall have the meaning accorded to such term in Section 3.3 of the
--------
Indenture.
Trust Estate shall have the meaning specified in the Granting Clauses of
------------
the Indenture.
Trustee Fee Rate shall mean *** per annum.
----------------
UCC shall mean Uniform Commercial Code.
---
Unit FCR, with respect to any Loan, shall have the meaning set forth for
--------
"FCR" in the Underwriting Guidelines delivered with the Loan Sale and Purchase
Agreement.
------------
/2/ Certain information has been deleted from this document where denoted
---
by asterisks, and has been filed separately with the Commission. The Company
has requested confidential treatment for such omitted information.
Unpaid Principal Shortfall shall mean as of any Payment Date (i) with
--------------------------
respect to each class of Custody Receipts and Notes, an amount, to the extent
unpaid on any previous Payment Date, equal to the remainder, if any, of (A) the
related Scheduled Principal Amount allocable to such class of Custody Receipts
or Notes on all preceding Payment Dates less (B) the actual amount of the
related Scheduled Principal Amount actually distributed to such class of Notes
or Class C Notes on such Payment Dates.
Weighted Average Net Rate shall mean as to any Payment Date, the average of
-------------------------
the Net Rates of the Loans weighted on the basis of the Loan Balances as of the
first day of the related Due Period.
Yield Maintenance Amount shall mean either the Class A Custody Receipt
------------------------
Yield Maintenance Amount, the Class A-IO Custody Receipt Yield Maintenance
Amount, the Class A-1 Yield Maintenance or the Class A-2 Yield Maintenance
Amount, as the context requires.