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EXHIBIT F.7.b
EXECUTION COPY
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INDENTURE
between
ALLIED CAPITAL COMMERCIAL MORTGAGE TRUST 1998-1,
as Issuer,
and
LASALLE NATIONAL BANK,
as Indenture Trustee
Dated as of January 1, 1998
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TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.01. Definitions.................................................. 3
SECTION 1.02. Rules of Construction........................................ 10
ARTICLE II
The Bonds
SECTION 2.01. Form......................................................... 11
SECTION 2.02. Execution, Authentication and
Delivery..................................................... 11
SECTION 2.03. Temporary Bonds.............................................. 12
SECTION 2.04. Registration; Registration of
Transfer and Exchange........................................ 12
SECTION 2.05. Restrictions on Transfer..................................... 14
SECTION 2.06. Mutilated, Destroyed, Lost or
Stolen Bonds................................................. 17
SECTION 2.07. Persons Deemed Owner......................................... 18
SECTION 2.08. Payment of Principal and Interest;
Defaulted Interest........................................... 18
SECTION 2.09. Cancellation................................................. 19
SECTION 2.10. Book-Entry Bonds............................................. 20
SECTION 2.11. Notices to Clearing Agency................................... 23
SECTION 2.12. Definitive Bonds............................................. 23
SECTION 2.13. Tax Treatment................................................ 24
ARTICLE III
Covenants
SECTION 3.01. Payment of Principal and Interest............................ 24
SECTION 3.02. Maintenance of Office or Agency.............................. 24
SECTION 3.03. Money for Payments To Be Held in
Trust........................................................ 25
SECTION 3.04. Existence.................................................... 26
SECTION 3.05. Protection of Trust Estate................................... 26
SECTION 3.06. Opinions as to Trust Estate.................................. 27
SECTION 3.07. Performance of Obligations;
Servicing of Mortgage Loans and
Funding Note................................................. 28
SECTION 3.08. Negative Covenants........................................... 30
SECTION 3.09. Annual Statement as to Compliance............................ 30
SECTION 3.10. Issuer May Consolidate, etc., Only
on Certain Terms............................................. 31
SECTION 3.11. Successor or Transferee...................................... 32
SECTION 3.12. No Other Business............................................ 33
SECTION 3.13. No Borrowing................................................. 33
SECTION 3.14. Servicer's and Special Servicer's
Obligations.................................................. 33
SECTION 3.15. Guarantees, Loans, Advances and
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Other Liabilities............................................ 33
SECTION 3.16. Capital Expenditures......................................... 33
SECTION 3.17. Removal of Administrator..................................... 33
SECTION 3.18. Restricted Payments.......................................... 33
SECTION 3.19. Notice of Events of Default.................................. 34
SECTION 3.20. Further Instruments and Acts................................. 34
ARTICLE IV
Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge of
Indenture.................................................... 34
SECTION 4.02. Application of Trust Money................................... 35
SECTION 4.03. Repayment of Moneys Held by Paying
Agent........................................................ 35
SECTION 4.04. Release of Collateral........................................ 36
ARTICLE V
Remedies
SECTION 5.01. Events of Default............................................ 36
SECTION 5.02. Acceleration of Maturity;
Rescission and Annulment..................................... 37
SECTION 5.03. Collection of Indebtedness and
Suits for Enforcement by Indenture
Trustee;..................................................... 38
SECTION 5.04. Remedies; Priorities......................................... 40
SECTION 5.05. Optional Preservation of the Trust
Estate....................................................... 41
SECTION 5.06. Limitation of Suits.......................................... 42
SECTION 5.07. Unconditional Rights of Bondholders
To Receive Principal and Interest............................ 42
SECTION 5.08. Restoration of Rights and Remedies........................... 43
SECTION 5.09. Rights and Remedies Cumulative............................... 43
SECTION 5.10. Delay or Omission Not a Waiver............................... 43
SECTION 5.11. Control by Bondholders....................................... 43
SECTION 5.12. Waiver of Past Defaults...................................... 44
SECTION 5.13. Undertaking for Costs........................................ 44
SECTION 5.14. Waiver of Stay or Extension Laws............................. 45
SECTION 5.15. Action on Bonds.............................................. 45
SECTION 5.16. Performance and Enforcement of
Certain Obligations.......................................... 45
ARTICLE VI
The Indenture Trustee
SECTION 6.01. Duties of Indenture Trustee.................................. 46
SECTION 6.02. Rights of Indenture Trustee.................................. 47
SECTION 6.03. Individual Rights of Indenture
Trustee...................................................... 48
SECTION 6.04. Indenture Trustee's Disclaimer............................... 48
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SECTION 6.05. Notice of Defaults........................................... 48
SECTION 6.06. Reports by Indenture Trustee to
Holders...................................................... 48
SECTION 6.07. Compensation and Indemnity................................... 49
SECTION 6.08. Replacement of Indenture Trustee............................. 49
SECTION 6.09. Successor Indenture Trustee by
Merger....................................................... 50
SECTION 6.10. Appointment of Co-Indenture Trustee
or Separate Indenture Trustee................................ 51
SECTION 6.11. Eligibility; Disqualification................................ 52
ARTICLE VII
Bondholders' Lists and Reports
SECTION 7.01. Issuer To Furnish Indenture Trustee
Names and Addresses of Bondholders........................... 52
SECTION 7.02. Preservation of Information;
Communications to Bondholders................................ 53
SECTION 7.03. Fiscal Year of Issuer........................................ 53
ARTICLE VIII
Accounts, Disbursements and Releases
SECTION 8.01. Collection of Money.......................................... 53
SECTION 8.02. Trust Accounts............................................... 54
SECTION 8.03. [RESERVED]................................................... 54
SECTION 8.04. Release of Trust Estate...................................... 55
SECTION 8.05. Opinion of Counsel........................................... 55
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without
Consent of Bondholders....................................... 56
SECTION 9.02. Supplemental Indentures with
Consent of Bondholders....................................... 56
SECTION 9.03. Execution of Supplemental
Indentures................................................... 57
SECTION 9.04. Effect of Supplemental Indenture............................. 58
SECTION 9.05. Reference in Bonds to Supplemental
Indentures................................................... 58
ARTICLE X
Redemption of Bonds
SECTION 10.01. Redemption................................................... 58
SECTION 10.02. Form of Redemption Notice.................................... 59
SECTION 10.03. Bonds Payable on Redemption Date............................. 59
ARTICLE XI
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Miscellaneous
SECTION 11.01. Compliance Certificates and
Opinions, etc................................................ 59
SECTION 11.02. Form of Documents Delivered to
Indenture Trustee............................................ 61
SECTION 11.03. Acts of Bondholders.......................................... 62
SECTION 11.04. Notices, etc., to Indenture
Trustee, Issuer and Rating
Agencies..................................................... 63
SECTION 11.05. Notices to Bondholders; Waiver............................... 63
SECTION 11.06. Alternate Payment and Notice
Provisions................................................... 64
SECTION 11.07. Effect of Headings and Table of
Contents..................................................... 64
SECTION 11.08. Successors and Assigns....................................... 64
SECTION 11.09. Separability................................................. 65
SECTION 11.10. Benefits of Indenture........................................ 65
SECTION 11.11. Legal Holidays............................................... 65
SECTION 11.12. GOVERNING LAW................................................ 65
SECTION 11.13. Counterparts................................................. 65
SECTION 11.14. Recording of Indenture....................................... 65
SECTION 11.15. Trust Obligation............................................. 65
SECTION 11.16. No Petition.................................................. 66
SECTION 11.17. Inspection................................................... 66
Section 11.18. Limitation on Liability of Owner
Trustee...................................................... 66
SCHEDULE A Schedule of Mortgage Loans
EXHIBIT A Form of Rule 144A-IAI Bond
Form of Regulation S Permanent Global Bond
EXHIBIT B Form of Regulation S Temporary Global Bond
EXHIBIT C Form of Regulation S Certification
EXHIBIT D Form of Purchaser's Letter
EXHIBIT E Form of Exchange Certificate
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INDENTURE dated as of January 1, 1998 (the "Indenture"), between ALLIED
CAPITAL COMMERCIAL MORTGAGE TRUST 1998-1, a Delaware business trust (the
"Issuer"), and LASALLE NATIONAL BANK, a national banking association, as trustee
and not in its individual capacity (the "Indenture Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Commercial Mortgage
Collateralized Bonds, Class A, Class B and Class C:
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing Date, as
Indenture Trustee for the benefit of the Holders of the Bonds, all of the
Issuer's right, title and interest, including any security interest therein for
the benefit of the Issuer, in, to and under (_) the Mortgage Loans represented
by the Allied Mortgage Loans and the Allied Participations and identified on the
attached Mortgage Loan Schedule, including the related Mortgage Files and all
interest and principal due with respect to the Mortgage Loans after the Cut-off
Date and allocable to the Allied Interests, but excluding any payments of
interest and principal due on or prior to the Cut-off Date, (_) the Funding Note
and all interest and principal due with respect to the Funding Note after the
Cut-off Date, but excluding any payments of interest and principal due on or
prior to the Cut-off Date including the security interest in the BMI
Participations granted as security for the Funding Note pursuant to the Funding
Note Purchase and Security Agreement, (_) the Allied Mortgage Loan Purchase
Agreement, (_) the BMI Mortgage Loan Purchase Agreement, (_) the Insurance
Policies, (_) all funds on deposit from time to time in the Trust Accounts and
all investments and proceeds thereof (including all income thereon), (_) the
Sale and Servicing Agreement (including the Issuer's right to cause the Seller
to repurchase Mortgage Loans from the Issuer under certain circumstances
described therein), (_) the Funding Note Purchase and Security Agreement, (_)
the ACC Guaranty and (_) all present and future claims, demands, causes of
action and choses in action in respect of any or all of the foregoing and all
payments on or under and all proceeds of every kind and nature whatsoever in
respect of any or all of the foregoing, including all proceeds of the conversion
thereof, voluntary or involuntary, into cash or other liquid property, all cash
proceeds, accounts, accounts receivable, notes, drafts, acceptances, chattel
paper, checks, deposit accounts, insurance proceeds, condemnation awards, rights
to payment of any and every kind and other forms of obligations and receivables,
instruments and other property which at any time constitute all or part of or
are included in the proceeds of any of the foregoing (collectively, the
"Collateral").
The foregoing Grant is made in trust to secure the payment of principal
of and interest on, and any other amounts owing in respect of, the Bonds,
equally and ratably without prejudice, priority or distinction, and to secure
compliance with the provisions of this Indenture, all as provided in this
Indenture.
The Indenture Trustee, on behalf of the Holders of the Bonds,
acknowledges such Grant, accepts the trusts under this Indenture in
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accordance with the provisions of this Indenture and agrees to perform its
duties required in this Indenture to the best of its ability to the end that the
interests of the Holders of the Bonds may be adequately and effectively
protected.
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ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.01. (a) Definitions. Except as otherwise specified herein or as
the context may otherwise require, the following terms have the respective
meanings set forth below for all purposes of this Indenture.
"Act" has the meaning specified in Section 11.03(a).
"Administration Agreement" means the Administration Agreement dated as of
January 1, 1998, among the Administrator, the Issuer and the Indenture Trustee,
as amended or supplemented from time to time, in accordance with the terms
thereof.
"Administrator" means Allied Capital Corporation, or any successor
Administrator under the Administration Agreement.
"Authorized Officer" means, with respect to the Issuer, any officer of
the Owner Trustee who is authorized to act for the Owner Trustee in matters
relating to the Issuer and who is identified on the list of Authorized Officers
delivered by the Owner Trustee to the Indenture Trustee on the Closing Date (as
such list may be modified or supplemented from time to time thereafter) and, so
long as the Administration Agreement is in effect, any Vice President or more
senior officer of the Administrator who is authorized to act for the
Administrator in matters relating to the Issuer and to be acted upon by the
Administrator pursuant to the Administration Agreement and who is identified on
the list of Authorized Officers delivered by the Administrator to the Indenture
Trustee on the Closing Date (as such list may be modified or supplemented from
time to time thereafter).
"Bond" means a Class A, Class B or Class C Bond.
"Bond Balance" means, as of any date of determination, the sum of the
Bond Class Balances for each Class of Bonds as of such date of determination.
"Bond Class Balance" means, as of any date of determination and with
respect to each Class of Bonds, the aggregate principal amount of all Bonds of
such Class Outstanding as of such date of determination.
"Bond Owner" means, with respect to a Book-Entry Bond, the Person who is
the beneficial owner of such Book-Entry Bond, as reflected on the books of the
Clearing Agency or on the books of a Person maintaining an account with such
Clearing Agency (directly as a Clearing Agency Participant or as an indirect
participant, in each case in accordance with the rules of such Clearing Agency).
"Bond Rate" shall have the meaning specified in the Sale and
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Servicing Agreement.
"Bond Register" and "Bond Registrar" have the respective meanings
specified in Section 2.04.
"Book-Entry Bonds" means a beneficial interest in the Bonds, ownership
and transfers of which shall be made through book entries by a Clearing Agency
as described in Section 2.10.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions or trust companies in New York, New York or the city
in which the Corporate Trust Office is located are authorized or obligated by
law, regulation or executive order to remain closed.
"Cede" means Cede & Co., as nominee of the Depository.
"CEDEL" means Cedel Bank, societe anonyme.
"Certificate of Trust" means the certificate of trust of the Issuer
issued pursuant to the Trust Agreement.
"Class A Bonds" means the Allied Capital Commercial Mortgage Trust 1998-1
Commercial Mortgage Collateralized Bonds, Class A.
"Class B Bonds" means the Allied Capital Commercial Mortgage Trust 1998-1
Commercial Mortgage Collateralized Bonds, Class B.
"Class C Bonds" means the Allied Capital Commercial Mortgage Trust 1998-1
Commercial Mortgage Collateralized Bonds, Class C.
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means January 30, 1998.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
"Collateral" has the meaning specified in the Granting Clause of this
Indenture.
"Corporate Trust Office" means the principal office of the Indenture
Trustee at which at any particular time its corporate trust business is
administered, which office at the date of execution of this Indenture is located
at LaSalle National Bank, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, 60674- 4107, Attention: Asset Backed Securities Trust Services Group-
Allied Capital 1998-1, or at such other address as the Indenture Trustee
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may designate from time to time by notice to the Bondholders, the Issuer and the
Servicer, or the principal corporate trust office of any successor Indenture
Trustee at the address designated by such successor Indenture Trustee by notice
to the Bondholders, the Issuer and the Servicer.
"Default" means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.
"Definitive Bond" has the meaning specified in Section 2.10(a).
"Depository" means The Depository Trust Company, the initial Clearing
Agency.
"Depository Agreement" means the Depository Agreement, dated January 29,
1998, among the Issuer, the Administrator, the Indenture Trustee and The
Depository Trust Company.
"Distribution Date" means the 25th day of each month, or, if such day is
not a Business Day, the immediately following Business Day, commencing in
February 1998.
"DTC Custodian" means LaSalle National Bank, in its capacity as custodian
for The Depository Trust Company.
"Euroclear" means the Euroclear System.
"Event of Default" has the meaning specified in Section 5.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Certification" has the meaning specified in Section 2.10(f).
"Executive Officer" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, President,
Managing Director, any Vice President, the Secretary or the Treasurer of such
corporation; and with respect to any partnership, any general partner thereof.
"Final Rated Distribution Date" shall have the meaning assigned thereto
in the Sale and Servicing Agreement.
"Fitch" means Fitch IBCA, Inc.
"Global Bonds" means, collectively, the Rule 144A-IAI Global Bonds, the
Regulation S Permanent Global Bonds and the Regulation S Temporary Global Bonds.
"Grant" means mortgage, pledge, bargain, sell, warrant, alienate, remise,
release, convey, assign, transfer, create, and ▇▇▇▇▇ ▇ ▇▇▇▇ upon and a first
priority security interest in and a right of set-off against, deposit, set over
and confirm pursuant to this
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Indenture. A Grant of the Collateral or of any other agreement or instrument
shall include all rights, powers and options (but none of the obligations) of
the granting party thereunder, including the immediate and continuing right to
claim for, collect, receive and give receipt for principal and interest payments
in respect of the Collateral and all other moneys payable thereunder, to give
and receive notices and other communications, to make waivers or other
agreements, to exercise all rights and options, to bring Proceedings in the name
of the granting party or otherwise, and generally to do and receive anything
that the granting party is or may be entitled to do or receive thereunder or
with respect thereto.
"Holder" or "Bondholder" means a Person in whose name a Bond is
registered in the Bond Register on the applicable Record Date.
"Indenture Trustee" means LaSalle National Bank, a national banking
association, not in its individual capacity, but as Indenture Trustee under this
Indenture, or any successor Indenture Trustee under this Indenture.
"Independent Certificate" means a certificate or opinion to be delivered
to the Indenture Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01, made by an
Independent appraiser or other expert appointed by an Issuer Order and approved
by the Indenture Trustee in the exercise of reasonable care, and such opinion or
certificate shall state that the signer has read the definition of "Independent"
in the Sale and Servicing Agreement and that the signer is Independent within
the meaning thereof.
"Institutional Accredited Investor" means an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D.
"Interest Accrual Period" shall have the meaning assigned thereto in the
Sale and Servicing Agreement.
"Issuer" means Allied Capital Commercial Mortgage Trust 1998-1, a
Delaware Business Trust, until a successor replaces it and, thereafter, means
the successor.
"Issuer Order" or "Issuer Request" means a written order or request
signed in the name of the Issuer by any one of its Authorized Officers and
delivered to the Indenture Trustee.
"Legended Definitive Bond" has the meaning specified in Section 2.05(a).
"Officer's Certificate" means a certificate signed by any Authorized
Officer of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01, and delivered to
the Indenture Trustee. Unless otherwise specified, any reference in this
Indenture to an Officer's Certificate shall be to an Officer's Certificate of
any Authorized
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Officer of the Issuer.
"Opinion of Counsel" means one or more written opinions of counsel who
may, except as otherwise expressly provided in this Indenture, be an employee of
or counsel to the Issuer and who shall be reasonably satisfactory to the
Indenture Trustee, and which opinion or opinions shall be addressed to the
Indenture Trustee, shall comply with any applicable requirements of Section
11.01 and shall be in form and substance reasonably satisfactory to the
Indenture Trustee.
"Outstanding" means, as of any date of determination, all Bonds
theretofore authenticated and delivered under this Indenture except:
(i) Bonds theretofore cancelled by the Bond Registrar or delivered
to the Bond Registrar for cancellation;
(ii) Bonds or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Indenture
Trustee or any Paying Agent in trust for the Holders of such Bonds
(provided, however, that if such Bonds are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision
for such notice has been made, reasonably satisfactory to the Indenture
Trustee); and
(iii) Bonds in exchange for or in lieu of which other Bonds have
been authenticated and delivered pursuant to this Indenture unless proof
reasonably satisfactory to the Indenture Trustee is presented that any
such Bonds are held by a bona fide purchaser;
provided, however, that in determining whether the Holders of the requisite Bond
Balance have given any request, demand, authorization, direction, notice,
consent or waiver hereunder or under any Basic Document, Bonds owned by the
Issuer, any other obligor upon the Bonds, the Seller or any Affiliate of any of
the foregoing Persons 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 Bonds that the Indenture Trustee knows to be so owned shall be
so disregarded. Bonds so owned that have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the reasonable
satisfaction of the Indenture Trustee the pledgee's right so to act with respect
to such Bonds and that the pledgee is not the Issuer, any other obligor upon the
Bonds, the Seller or any Affiliate of any of the foregoing Persons.
"Owner Trustee" means Wilmington Trust Company, not in its individual
capacity but solely as Owner Trustee under the Trust Agreement, or any successor
Owner Trustee under the Trust Agreement.
"Participant" means an account holder of The Depository Trust Company.
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"Paying Agent" means the Indenture Trustee or any other Person that meets
the eligibility standards for the Indenture Trustee specified in Section 6.11
and is authorized by the Issuer to make payments to and distributions from the
Collection Account and the Bond Distribution Account, including payments of
principal of or interest on the Bonds on behalf of the Issuer.
"Private Placement Memorandum" means the Private Placement Memorandum of
the Seller dated January 28, 1998 with respect to the Bonds.
"Proceeding" means any suit in equity, action at law or other judicial or
administrative proceeding.
"QIB" means a qualified institutional buyer within the meaning of Rule
144A.
"Rating Agency Condition" means, with respect to any action specified
herein, that each Rating Agency shall have been given 10 days, (or such shorter
period as is acceptable to each Rating Agency) prior notice thereof and that
each of the Rating Agencies shall have notified the Seller, the Servicer, the
Indenture Trustee and the Issuer in writing that such action will not result in
a downgrade, withdrawal or qualification of the then current rating of any Class
of the Bonds.
"Rating Agency" means each of Fitch and Standard & Poor's. If such
organization or successor is no longer in existence, "Rating Agency" shall be a
nationally recognized statistical rating organization or other comparable Person
designated by the Issuer, notice of which designation shall be given to the
Indenture Trustee, the Owner Trustee, the Servicer and the Special Servicer.
"Record Date" means, with respect to a Distribution Date or Redemption
Date, the close of business on the last day of the month immediately preceding
the month in which such Distribution Date or Redemption Date occurs, or if such
day is not a Business Day, the Business Day immediately preceding such day.
"Redemption Date" means, in the case of a redemption of the Bonds
pursuant to Section 10.01, the Distribution Date specified therefor by the
Seller or a Successor Servicer, as applicable, pursuant to Section 10.01.
"Redemption Price" means, with respect to the Redemption Date, an amount
equal to then outstanding Bond Balance plus accrued and unpaid interest thereon
through the end of the related Interest Accrual Period at the related Bond Rate
for each Bond being redeemed.
"Registered Holder" means the Person in whose name a Bond is registered
in the Bond Register on the applicable Record Date.
"Regulation D" means Regulation D under the Securities Act.
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"Regulation S" means Regulations S under the Securities Act.
"Regulation S Global Bonds" means the Regulation S Permanent Global Bonds
and Regulation S Temporary Global Bonds.
"Regulation S Permanent Global Bond" means any single permanent global
certificate, in definitive, fully registered form without interest coupons
received in exchange for a Regulation S Temporary Global Certificate.
"Regulation S Temporary Global Bond" means, with respect to any Class of
Bonds offered and sold outside of the United States in reliance upon Regulation
S, a single temporary global certificate, in definitive, fully registered form
without interest coupons.
"Release Date" means the date 40 days after the later of (i) the
commencement of the offering of the Bonds and (ii) the Closing Date.
"Responsible Officer" means, with respect to the Indenture Trustee, any
officer within the Corporate Trust Office of the Indenture Trustee, including
any Vice President, Assistant Vice President, Assistant Treasurer, Assistant
Secretary or any other officer of the Indenture Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also, with respect to a particular matter, any other officer to whom such matter
is referred because of such officer's knowledge of and familiarity with the
particular subject.
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 144A-IAI Global Bond" means, with respect to any Class of Bonds,
the single permanent global certificate, in definitive, fully registered form,
without interest coupons, representing the Bonds of such Class sold pursuant to
Rule 144A.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement,
dated as of January 1, 1998, among the Issuer, the Seller, the Servicer, the
Special Servicer, the Indenture Trustee, as Custodian and Indenture Trustee, and
ABN AMRO Bank N.V., as fiscal agent.
"Schedule of Mortgage Loans" means the list of Mortgage Loans set forth
in Schedule A (which Schedule may be in the form of microfiche).
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Legend" has the meaning specified in Section 2.05(a).
"Seller" means Allied Capital CMT, Inc., in its capacity as seller under
the Sale and Servicing Agreement, and its successors in interest.
"Servicer" means Allied Capital Corporation, in its capacity as
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servicer under the Sale and Servicing Agreement, and any Successor Servicer
thereunder.
"Special Servicer" means Allied Capital Corporation, in its capacity as
special servicer under the Sale and Servicing Agreement, and any Successor
Special Servicer thereunder.
"State" means any one of the 50 states of the United States of America or
the District of Columbia.
"Successor Servicer" has the meaning specified in Section 3.07(e).
"Trust Estate" means the Collateral, all money, instruments, rights and
other property that are subject or intended to be subject to the lien and
security interest of this Indenture for the benefit of the Bondholders
(including, without limitation, all property and interests Granted to the
Indenture Trustee), including all proceeds thereof.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as
in force on the date hereof, unless otherwise specifically provided.
"UCC" means, unless the context otherwise requires, the Uniform
Commercial Code, as in effect in the relevant jurisdiction, as amended from time
to time.
"Unlegended Definitive Bond" has the meaning specified in Section
2.05(a).
(b) Except as otherwise specified herein or as the context may otherwise
require, capitalized terms used but not otherwise defined herein have the
respective meanings set forth in the Sale and Servicing Agreement for all
purposes of this Indenture.
SECTION 1.02. Rules of Construction. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) definitions are applicable to the singular and plural forms of
such terms and to the masculine, feminine and neuter genders of such
terms; and
(vi) any agreement, instrument or statute defined or
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referred to herein or in any instrument or certificate delivered in
connection herewith means such agreement, instrument or statute as from
time to time amended, modified or supplemented and includes (in the case
of agreements or instruments) references to all attachments thereto and
instruments incorporated therein; references to a Person are also to its
permitted successors and assigns.
ARTICLE II
The Bonds
SECTION 2.01. Form. The Bonds, in each case together with the Indenture
Trustee's certificate of authentication, shall be in substantially the form set
forth in Exhibit A, with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture, and may
have such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined by the
officers executing such Bonds, as evidenced by their execution of the Bonds. Any
portion of the text of any Bond may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Bond.
The definitive Bonds shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without steel
engraved borders), all as determined by the officers executing such Bonds, as
evidenced by their execution of such Bonds.
Each Bond shall be dated the date of its authentication. The terms of the
Bonds set forth in Exhibit A are part of the terms of this Indenture.
SECTION 2.02. Execution, Authentication and Delivery. The Bonds shall be
executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Bonds may be manual or
facsimile.
Bonds bearing the manual or facsimile signature of individuals who were
at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Bonds or did not hold
such offices at the date of such Bonds.
The Indenture Trustee shall upon Issuer Order authenticate and deliver
Class A, Class B and Class C Bonds for original issue in aggregate principal
amounts of $195,511,831, $21,723,537 and $21,723,537, respectively. The
aggregate principal amount of Class A, Class B and Class C Bonds outstanding at
any time may not exceed such respective amounts except as provided in Section
2.06.
Each Bond shall be dated the date of its authentication. The
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Bonds shall be issuable as registered Bonds in the minimum denomination of
$100,000 and in integral multiples of $1 in excess thereof.
No Bond shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose, unless there appears on such Bond a certificate
of authentication substantially in the form provided for herein executed by the
Indenture Trustee by the manual signature of one of its authorized signatories,
and such certificate upon any Bond shall be conclusive evidence, and the only
evidence, that such Bond has been duly authenticated and delivered hereunder.
SECTION 2.03. Temporary Bonds. Pending the preparation of definitive
Bonds, the Issuer may execute, and upon receipt of an Issuer Order the Indenture
Trustee shall authenticate and deliver, temporary Bonds that are printed,
lithographed, typewritten, mimeographed or otherwise produced, of the tenor of
the definitive Bonds in lieu of which they are issued and with such variations
not inconsistent with the terms of this Indenture as the officers executing such
Bonds may determine, as evidenced by their execution of such Bonds.
If temporary Bonds are issued, the Issuer shall cause definitive Bonds to
be prepared without unreasonable delay. After the preparation of definitive
Bonds, the temporary Bonds shall be exchangeable for definitive Bonds upon
surrender of the temporary Bonds at the office or agency of the Issuer to be
maintained as provided in Section 3.02, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Bonds, the Issuer shall
execute, and the Indenture Trustee shall authenticate and deliver in exchange
therefor, a like principal amount of definitive Bonds of authorized
denominations. Until so exchanged, the temporary Bonds shall in all respects be
entitled to the same benefits under this Indenture as definitive Bonds.
SECTION 2.04. Registration; Registration of Transfer and Exchange. The
Issuer shall cause to be kept a register (the "Bond Register") in which, subject
to such reasonable regulations as it may prescribe and the restrictions on
transfers of the Bonds set forth herein, the Issuer shall provide for the
registration of Bonds and the registration of transfers of Bonds. The Indenture
Trustee initially shall be the "Bond Registrar" for the purpose of registering
Bonds and transfers of Bonds as herein provided. Upon any resignation of any
Bond Registrar, the Issuer shall promptly appoint a successor.
If a Person other than the Indenture Trustee is appointed by the Issuer
as Bond Registrar, the Issuer will give the Indenture Trustee prompt written
notice of the appointment of such Bond Registrar and of the location, and any
change in the location, of the Bond Register, and the Indenture Trustee shall
have the right to inspect the Bond Register at all reasonable times and to
obtain copies thereof, and the Indenture Trustee shall have the right to
conclusively rely upon a certificate executed on behalf of the Bond
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Registrar by an Executive Officer thereof as to the names and addresses of the
Holders of the Bonds and the principal amounts and number of such Bonds.
Upon surrender for registration of transfer of any Bond at the office or
agency of the Issuer to be maintained as provided in Section 3.02, if the
requirements of Section 8-401(1) of the UCC are met the Issuer shall execute,
and the Indenture Trustee shall authenticate and the Bondholder shall obtain
from the Indenture Trustee, in the name of the designated transferee or
transferees, one or more new Bonds of the same Class in any authorized
denominations, of a like aggregate principal amount.
At the option of the Holder, Bonds may be exchanged for other Bonds of
the same Class in any authorized denominations, of a like aggregate principal
amount, upon surrender of the Bonds to be exchanged at such office or agency.
Whenever any Bonds are so surrendered for exchange, if the requirements of
Section 8-401(1) of the UCC are met the Issuer shall execute, and the Indenture
Trustee shall authenticate and the Bondholder shall obtain from the Indenture
Trustee, the Bonds which the Bondholder making the exchange is entitled to
receive.
All Bonds issued upon any registration of transfer or exchange of Bonds
shall be the valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Bonds surrendered
upon such registration of transfer or exchange.
Every Bond presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument of
transfer in form reasonably satisfactory to the Indenture Trustee duly executed
by, the Holder thereof or such Holder's attorney duly authorized in writing,
with such signature guaranteed by an "eligible guarantor institution" meeting
the requirements of the Bond Registrar, which requirements include membership or
participation in the Securities Transfer Agent's Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Bond
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Exchange Act.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Bonds, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Bonds, other than
exchanges pursuant to Section 2.03, 2.05(a) or 9.05 not involving any transfer.
The preceding provisions of this Section notwithstanding, the Issuer
shall not be required to make and the Bond Registrar need not register transfers
or exchanges of Bonds selected for redemption or of any Bond for a period of 15
days preceding the due date for any payment with respect to the Bond.
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SECTION 2.05. Restrictions on Transfer. (a) Except as set forth in the
second following paragraph, all Definitive Bonds shall bear upon the face
thereof, the following legend (the "Securities Legend"):
"THE BONDS EVIDENCED HEREBY HAVE NOT BEEN REGISTERED OR QUALIFIED
UNDER THE UNITED STATES SECURITIES ACT OF SECURITIES, AS AMENDED (THE
"SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT (A)(1) TO A BUYER THAT THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR
RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), OR (4) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT THAT DELIVERS TO THE INDENTURE
TRUSTEE A LETTER IN THE FORM ATTACHED TO THE INDENTURE AND SUCH
CERTIFICATIONS, LEGAL OPINIONS AND OTHER INFORMATION AS IT MAY REASONABLY
REQUIRE TO CONFIRM THAT THE PROPOSED TRANSFER IS BEING MADE PURSUANT TO
AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION."
By acceptance of a Definitive Bond bearing the Securities Legend (a
"Legended Definitive Bond"), whether upon original issuance or subsequent
transfer, each Holder of such a Bond acknowledges the restrictions on the
transfer of such Bond set forth in the Securities Legend and agrees that it will
transfer such Bond only as provided herein.
A transferee shall be permitted to take delivery of a Definitive Bond not
bearing the Securities Legend (an "Unlegended Definitive Bond") only if and
after the Issuer submits to the Indenture Trustee an Opinion of Counsel of the
Issuer stating that the Securities Legend is not required on such Definitive
Bond by applicable law. Upon the Issuer submitting such Opinion of Counsel to
the Indenture Trustee, the Holder of such Bond may submit such Bond to the
Indenture Trustee to exchange such Bond for an Unlegended Definitive Bond and
the Indenture Trustee shall satisfy such request notwithstanding anything else
herein to the contrary, and delivery permitted herein of a Legended Definitive
Bond may be made in the form of an Unlegended Definitive Bond.
Except as described below in Sections 2.05(b) and 2.05(c), no
restrictions to transfer shall apply to the transfer or registration of transfer
of an Unlegended Definitive Bond to a transferee that takes delivery in the form
of an Unlegended Definitive Bond.
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(b) No transfer of a Legended Definitive Bond shall be made unless the
transfer is (v) to the Issuer, (w) to a QIB who has provided the Indenture
Trustee with a Purchaser's Letter in the form of Exhibit D hereto, (x) to a
Person who has provided the Indenture Trustee with a Regulation S Certification
in the form of Exhibit C hereto, (y) being made pursuant to an exemption from
registration under the Securities Act provided by Rule 144 thereunder (if
available), or (z) to an Institutional Accredited Investor who has provided the
Indenture Trustee with a Purchaser's Letter in the form of Exhibit D hereto and
such other certifications, opinions of counsel or other information (at the
transferor's expense) as it may reasonably require to confirm that the proposed
transfer is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act, in each case in
accordance with any applicable securities laws of any state of the United States
or any other applicable jurisdiction.
(c) No transfer of a Bond that is a Definitive Bond shall be made unless
the prospective transferee of a Bondholder desiring to transfer such Bond
provides the Indenture Trustee with a certification as set forth in paragraph f.
of Exhibit D or an Opinion of Counsel, or both at the request of the Indenture
Trustee, which establishes to the reasonable satisfaction of the Indenture
Trustee that no employee benefit plan or other plan that is subject to ERISA or
Section 4975 of the Code (each, a "Plan"), as to which the Initial Purchasers,
the Issuer, the Seller, the Servicer, the Special Servicer, the Fiscal Agent, or
the Indenture Trustee is a party in interest or disqualified person, and no
qualified institutional buyer acting on behalf of or with "plan assets" of any
such Plan may acquire such Bonds unless pursuant to a statutory exemption or any
of the administrative exemptions issued by the U.S. Department of Labor, such
that the acquisition and holding of the Bonds by, on behalf of or with "plan
assets" of such Plan would not constitute or result in a non-exempt prohibited
transaction under ERISA or Section 4975 of the Code by reason of the application
of one or more of the statutory or administrative exemptions from the prohibited
transaction rules described under the heading "ERISA MATTERS" in the Private
Placement Memorandum.
(d) Each investor purchasing Bonds shall be deemed to have represented
and agreed as follows (terms used herein that are defined in Rule 144A, in
Regulation S or in Regulation D are used herein as defined therein):
(i) The investor understands that the Bonds have not been
registered under the Securities Act, and that if in the future it decides
to offer, resell, pledge or otherwise transfer such Bonds within two
years after the later of the original issuance of the Bonds or the last
date on which such Bonds are held by an Affiliate of the Issuer, it will
do so only (A) to the Issuer, (B) to a person that the seller reasonably
believes is a QIB in a transaction meeting the requirements of Rule 144A,
(C) in an offshore transaction meeting the requirements of Rule 903 or
Rule 904 of Regulation S, (D) pursuant to an exemption
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from registration under the Securities Act provided by Rule 144
thereunder (if available), or (E) in certificated form to an
Institutional Accredited Investor that delivers to the Indenture Trustee
a letter in the form of Exhibit D hereto and such certifications, legal
opinions and other information as it may reasonably require to confirm
that the proposed transfer is being made pursuant to an exemption from,
or in a transaction not subject to, the registration requirements of the
Securities Act, in each case in accordance with any applicable securities
laws of any state of the United States or any other applicable
jurisdiction.
(ii) The investor understands that the Bonds will be issued only
in the form of the Global Bonds, which will be held by the DTC Custodian.
Purchasers of such Bonds will acquire beneficial interests in the Global
Bonds, which interests will be held directly or indirectly through
Participants.
(iii) The investor understands that Bonds will bear a Securities
Legend unless the Issuer determines otherwise consistent with applicable
law.
(iv) The investor is either (A) a QIB purchasing for its own
account or for the account of another QIB and it and such other person
are aware that the sale to it is being made in reliance on Rule 144A or
(B) an Institutional Accredited Investor and is purchasing the Bonds for
its own account or for an account with respect to which it exercises sole
investment discretion.
(v) If the investor is a QIB, the investor understands that the
Bonds offered in reliance on Rule 144A will be represented by the Global
Bonds. Before any interest in the Global Bonds may be offered, sold,
pledged or otherwise transferred to an Institutional Accredited Investor,
the transferee will be required to provide the Indenture Trustee with a
Purchaser's Letter in the form attached hereto as Exhibit D as to
compliance with the transfer restrictions referred to above.
(vi) The investor will deliver to each Institutional Accredited
Investor to whom it transfers Bonds notice of any restrictions on
transfer of such Bonds.
(vii) It understands that, in accordance with the prohibited
transaction rules of ERISA and Section 4975 of the Code described under
"ERISA Matters" in the Private Placement Memorandum, no Plan as to which
any of the Initial Purchasers, the Seller, the Issuer, the Servicer, the
Special Servicer, the Fiscal Agent or the Indenture Trustee is a party in
interest or disqualified person, and no investor acting on behalf of or
with "plan assets" of any such Plan may acquire such Bonds unless
pursuant to a statutory exemption or any of the administrative exemptions
from the prohibited transaction rules issued by the
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U.S. Department of Labor, such that the acquisition and holding of Bonds
by, on behalf of or with "plan assets" of such Plan would not constitute
or result in a non-exempt prohibited transaction under ERISA or Section
4975 of the Code.
(viii) If it is acquiring any Bond as a fiduciary or agent for one
or more investor accounts, it represents that it has sole investment
discretion with respect to such account and that it has full power to
make the acknowledgments, representations and agreements contained herein
on behalf of each such account.
(ix) It acknowledges that the Depositor, the Initial Purchasers,
the Issuer, the Indenture Trustee, the Fiscal Agent and others will rely
on the truth and accuracy of the foregoing acknowledgments,
representations and agreements, and agrees that if any of the foregoing
acknowledgments, representations and agreements deemed to have been made
by it by its purchase are no longer accurate, it shall promptly notify
the Seller, the Issuer and the Initial Purchasers.
(e) The Indenture Trustee shall have no liability to the Issuer arising
from a transfer of any Bond in reliance upon a certification, ruling or Opinion
of Counsel described in this Section 2.05.
SECTION 2.06. Mutilated, Destroyed, Lost or Stolen Bonds. If (i) any
mutilated Bond is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Bond, and (ii) there is delivered to the Indenture Trustee such security or
indemnity as may be reasonably required by it to hold the Issuer and the
Indenture Trustee harmless, then, in the absence of notice to the Issuer, the
Bond Registrar or the Indenture Trustee that such Bond has been acquired by a
bona fide purchaser, and provided that the requirements of Section 8-405 of the
UCC are met, the Issuer shall execute, and upon its request the Indenture
Trustee shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Bond, a replacement Bond of the same Class;
provided, however, that if any such destroyed, lost or stolen Bond, but not a
mutilated Bond, shall have become or within seven days shall be due and payable,
or shall have been called for redemption, instead of issuing a replacement Bond,
the Issuer may pay such destroyed, lost or stolen Bond when so due or payable or
upon the Redemption Date without surrender thereof. If, after the delivery of
such replacement Bond or payment of a destroyed, lost or stolen Bond pursuant to
the proviso to the preceding sentence, a bona fide purchaser of the original
Bond in lieu of which such replacement Bond was issued presents for payment such
original Bond, the Issuer and the Indenture Trustee shall be entitled to recover
such replacement Bond (or such payment) from the Person to whom it was delivered
or any Person taking such replacement Bond from such Person to whom such
replacement Bond was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the
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extent of any loss, damage, cost or expense incurred by the Issuer or the
Indenture Trustee in connection therewith.
Upon the issuance of any replacement Bond under this Section, the Issuer
may require the payment by the Holder of such Bond of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other reasonable expenses (including the fees and expenses of the Indenture
Trustee) connected therewith.
Every replacement Bond issued pursuant to this Section in replacement of
any mutilated, destroyed, lost or stolen Bond shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Bond shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Bonds duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Bonds.
SECTION 2.07. Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Bond, the Issuer, the Indenture Trustee and any
agent of the Issuer and the Indenture Trustee may treat the Person in whose name
any Bond is registered (as of the day of determination) as the owner of such
Bond for the purpose of receiving payments of principal of and interest, if any,
on such Bond and for all other purposes whatsoever, whether or not such Bond be
overdue, and none of the Issuer, the Indenture Trustee or any agent of the
Issuer and the Indenture Trustee shall be affected by notice to the contrary.
SECTION 2.08. Payment of Principal and Interest; Defaulted Interest. (a)
The Bonds shall accrue interest at their respective Bond Rates and such interest
shall be payable on each Distribution Date, subject to Section 3.01. Any
installment of interest or principal payable on a Bond that is punctually paid
or duly provided for by the Issuer on the applicable Distribution Date shall be
paid to the Person in whose name such Bond is registered on the Record Date by
check mailed first-class postage prepaid to such Person's address as it appears
on the Bond Register on such Record Date, except that, (i) unless Definitive
Bonds have been issued pursuant to Section 2.12, with respect to Bonds
registered on the Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.), payment will be made by wire
transfer in immediately available funds to the account designated by such
nominee and (ii) if Definitive Bonds have been issued pursuant to Section 2.12,
payment thereon shall be made by wire transfer in immediately available funds to
the account designated by the holder of such Bonds if such Bondholder (a) is the
registered holders of such Bonds and (b) has provided the Indenture Trustee with
wiring instructions in writing five Business Days prior to the related
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Distribution Date or has provided the Indenture Trustee with such instructions
for any previous Distribution Date; provided, however, that the final
installment of principal payable with respect to such Bond on a Distribution
Date or on the Final Rated Distribution Date (including that portion of the
Redemption Price allocable to any Bond upon redemption pursuant to Section
10.01) shall be payable as provided in paragraph (b) below. The funds
represented by any such checks returned undelivered shall be held in accordance
with Section 3.03.
(b) The principal of each Bond shall be payable monthly on each
Distribution Date. Notwithstanding the foregoing, the entire unpaid principal
amount of the Bonds may be declared immediately due and payable, if not
previously paid, in the manner provided in Section 5.02 on the date on which an
Event of Default shall have occurred and be continuing by the Indenture Trustee
or Holders of Bonds representing not less than 51% of the then outstanding Bond
Balance. All principal payments on each Class of Bonds shall be made pro rata to
the Bondholders of each Class entitled thereto. The Indenture Trustee shall
notify the Person in whose name a Bond is registered at the close of business on
the Record Date preceding the Distribution Date on which the Issuer expects the
final installment of principal of and interest on such Bond to be paid. Such
notice shall be mailed no later than five days prior to such final Distribution
Date and shall specify that such final installment will be payable only upon
presentation and surrender of such Bond and shall specify the place where such
Bond may be presented and surrendered for payment of such installment. Notices
in connection with redemptions of Bonds shall be mailed to Bondholders as
provided in Section 10.02.
(c) Reserved.
(d) If the Issuer defaults in a payment of interest on the Bonds, the
Issuer shall pay defaulted interest (plus interest on such defaulted interest to
the extent lawful) at the applicable Bond Rate in any lawful manner on the next
Distribution Date.
SECTION 2.09. Cancellation. All Bonds surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly cancelled by the Indenture Trustee. The Issuer may at any
time deliver to the Indenture Trustee for cancellation any Bonds previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Bonds so delivered shall be promptly cancelled by the
Indenture Trustee. No Bonds shall be authenticated in lieu of or in exchange for
any Bonds cancelled as provided in this Section, except as expressly permitted
by this Indenture. All cancelled Bonds may be held or disposed of by the
Indenture Trustee in accordance with its standard retention or disposal policy
as in effect at the time unless the Issuer shall direct by an Issuer Order that
they be destroyed or returned to it; provided, that such Issuer Order is timely
and the Bonds have not
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been previously disposed of by the Indenture Trustee.
SECTION 2.10. Book-Entry Bonds. (a) The Bonds, upon original issuance,
will be issued in the form of typewritten Bonds representing the Book-Entry
Bonds, to be delivered to the DTC Custodian as custodian for The Depository
Trust Company, the initial Clearing Agency, by, or on behalf of, the Issuer. The
Bonds shall initially be registered in the Bond Register in the name of Cede &
Co., the nominee of The Depository Trust Company, as the initial Clearing
Agency, and no Bond Owner will receive a definitive bond representing such Bond
Owners's interest in the Bonds, except as provided in Section 2.12. Unless and
until definitive, fully registered Bonds (the "Definitive Bonds") have been
issued to the Bond Owners pursuant to Section 2.12:
(i) the provisions of this Section 2.10 shall be in full force and
effect with respect to each such Class;
(ii) the Issuer, the Owner Trustee, the Administrator, the
Servicer, the Special Servicer, the Paying Agent, the Bond Registrar and
the Indenture Trustee may deal with the Clearing Agency for all purposes
(including the making of distributions on the Bonds) as the authorized
representative of the Bond Owners;
(iii) to the extent that the provisions of this Section 2.10
conflict with any other provisions of this Indenture, the provisions of
this Section 2.10 shall control with respect to each such Class; and
(iv) the rights of the Bond Owners of each such Class shall be
exercised only through the Clearing Agency and the applicable
Participants and shall be limited to those established by law and
agreements between such Bond Owners and the Clearing Agency and/or the
Participants. Pursuant to the Depository Agreement, unless and until
Bonds are issued pursuant to Section 2.12, the initial Clearing Agency
will make book-entry transfers among the Participants and receive and
transmit distributions of principal and interest on the related Bonds to
such Participants.
(b) For purposes of any provision of this Indenture requiring or
permitting actions with the consent of, or at the direction of, Holders of the
Bonds evidencing a specified percentage of the outstanding Bond Balance, such
direction or consent may be given by the Clearing Agency at the direction of
Bond Owners whose beneficial ownership in the Bonds evidences such percentage of
such Bond Balance. The Clearing Agency may take conflicting actions with respect
to the Bonds to the extent that such actions are taken on behalf of the Bond
Owners.
(c) The Bonds of each Class initially sold in reliance on Rule
144A or to Institutional Accredited Investors shall be represented by the Rule
144A-IAI Global Bond for such Class. The
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Rule 144A-IAI Global Bond for each Class shall be deposited with the DTC
Custodian and registered in the name of Cede. All Rule 144A-IAI Global Bonds and
any Bonds issued in exchange therefor shall be subject to the restrictions on
transfer set forth in Section 2.04 hereof and shall bear legend(s) regarding
such restrictions, as provided herein.
(d) The Bonds of each Class initially sold in offshore
transactions in reliance on Regulation S shall be represented by the Regulation
S Temporary Global Bond for such Class, which shall be deposited with the DTC
Custodian and registered in the name of Cede. Upon the later of (i) the Release
Date and (ii) the first date on which the requisite certifications as to
non-U.S. ownership are provided to the Indenture Trustee, beneficial interests
in any Regulation S Temporary Global Bond shall be exchangeable for beneficial
interests in the Regulation S Permanent Global Bond for such Class. Beneficial
interests in any Regulation S Temporary Global Bond may be held only through
Euroclear or CEDEL and, except as provided in the immediately preceding sentence
and pursuant to Section 2.10(f), may not be exchanged for a beneficial interest
in any other Bond. The Regulation S Permanent Global Bonds shall be deposited
with the DTC Custodian and registered in the name of Cede.
Each Bond Owner of a Regulation S Temporary Global Bond shall
deliver a Regulation S Certification to Euroclear or CEDEL, as applicable, on or
prior to the Release Date (or, if such Bond Owner holds its beneficial interest
in such Regulation S Temporary Global Bond on or prior to a given Distribution
Date occurring prior to the Release Date, then it shall deliver a Regulation S
Certification to Euroclear or CEDEL, as applicable, on or prior to such
Distribution Date); provided, however, that no such Bond Owner shall be required
to deliver more than one such Regulation S Certification with respect to its
interest in such Regulation S Temporary Global Bond unless such Regulation S
Certification becomes inaccurate, in which event such Bond Owner must promptly
deliver a corrected Regulation S Certification to Euroclear or CEDEL, as
applicable. Euroclear or CEDEL shall be required to promptly deliver to the
Indenture Trustee a certificate to the effect that Euroclear or CEDEL, as
applicable, has received the requisite Regulation S Certification for the Class
of Bond represented by such Regulation S Temporary Global Bond, and no Bond
Owner (or transferee from any such Bond Owner) shall be entitled to receive any
payment or principal or interest with respect to its interest in such Regulation
S Temporary Global Bond, or an interest in the Regulation S Permanent Global
Bond for such Class, prior to the Indenture Trustee's receipt of such
certificate from Euroclear or CEDEL with respect to the portion of such
Regulation S Temporary Global Bond beneficially owned by such Bond Owner (and,
with respect to an interest in the related Regulation S Permanent Global Bond,
prior to the Release Date). After the Release Date, distributions due with
respect to any beneficial interest in a Regulation S Temporary Global Bond shall
not be made to the holders of such beneficial interests unless exchange for a
beneficial interest in the related Regulation S Permanent Global Bond is
improperly withheld or refused.
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(e) Except in the limited circumstances described below in
Section 2.12, owners of beneficial interests in Global Bonds shall not be
entitled to receive physical delivery of Definitive Bonds. The Bonds are not
issuable in bearer form. Upon the issuance of each Global Bond, the Depository
or its custodian shall credit, on its internal system, the respective principal
amount of the individual beneficial interests represented by such Global Bond to
the accounts of persons who have accounts with such depository. Such accounts
initially shall be designated by or on behalf of the Initial Purchasers.
Ownership of beneficial interests in a Global Bond shall be limited to
Participants or Persons who hold interests directly or indirectly through
Participants. Ownership of beneficial interests in the Global Bonds shall be
shown on, and the transfer of that ownership shall be effected only through,
records maintained by the Depository or its nominee (with respect to interests
of Participants) and the records of Participants (with respect to interests of
Persons other than Participants).
So long as the Depository, or its nominee, is the registered
holder of a Global Bond, the Depository or such nominee, as the case may be,
shall be considered the sole owner and holder of the Bonds represented by such
Global Bond for all purposes under this Indenture and the Bonds, including,
without limitation, obtaining consents and waivers thereunder, and the Indenture
Trustee shall not be affected by any notice to the contrary. Except under the
circumstance described in Section 2.12, owners of beneficial interests in a
Global Bond will not be entitled to have any portions of such Global Bond
registered in their names, will not receive or be entitled to receive physical
delivery of Definitive Bonds in certificated form and shall not be considered
the owners or holders of the Global Bond (or any Bonds represented thereby)
under this Indenture or the Bonds. In addition, no Bond Owner of an interest in
a Global Bond shall be able to transfer that interest except in accordance with
the Depository's applicable procedures (in addition to those under this
Indenture and, if applicable, those of Euroclear and CEDEL).
(f) Any holder of an interest in a Regulation S Global Bond for
any Class shall have the right, following delivery to the Indenture Trustee,
Euroclear or CEDEL, as applicable, and the Depository, of a certification in the
form of Exhibit E hereto (an "Exchange Certification"), to exchange all or a
portion of such interest (in authorized denominations as set forth in Section
2.02) for an equivalent interest in the Rule 144A-IAI Global Bond for such Class
in connection with a transfer of its interest therein to a transferee that is
eligible to hold an interest in such Rule 144A-IAI Global Bond as provided
herein; provided, however, that no Exchange Certification shall be required if
any such exchange occurs after the Release Date. Any holder of an interest in
the Rule 144A Global Bond or IAI Global Bond for any Class shall have the right,
following delivery to the Indenture Trustee, the Depository, and Euroclear or
CEDEL, as applicable, of an Exchange Certification, to exchange all or a portion
of such interest (in authorized denominations as set forth in Section 2.02) for
an equivalent
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interest in the Regulation S Global Bond for such Class in connection with a
transfer of its interest therein to a transferee that is eligible to hold an
interest in such Regulation S Global Bond as provided herein; provided, however,
that if such exchange occurs prior to the Release Date, the transferee shall
acquire an interest in a Regulation S Temporary Global Bond only and shall be
subject to all of the restrictions associated therewith, as provided in Section
2.10(d). Following receipt of any Exchange Certification or request for
transfer, as applicable, by the Indenture Trustee: (i) the Indenture Trustee
shall endorse the schedule to any Global Bond representing the Bond or Bonds
being exchanged to reduce the stated principal amount of such Global Bond by the
denominations of the Bond or Bonds for which such exchange is to be made and
(ii) the Indenture Trustee shall endorse the schedule to any Global Bond
representing the Bond or Bonds for which such exchange is to be made to increase
the stated principal amount of such Global Bond by the denominations of the Bond
or Bonds being exchanged therefor. The form of the Exchange Certification shall
be available from the Indenture Trustee.
SECTION 2.11. Notices to Clearing Agency. Whenever a notice or other
communication to the Bondholders is required under this Indenture, unless and
until Definitive Bonds shall have been issued to such Bond Owners pursuant to
Section 2.12, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Holders of the Bonds to the
Clearing Agency, and shall have no obligation to such Bond Owners.
SECTION 2.12. Definitive Bonds. If, but only if, (i) the Clearing Agency
notifies the Issuer and the Indenture Trustee in writing that the Clearing
Agency is no longer willing or able to properly discharge its responsibilities
with respect to Book-Entry Bonds of any Class and a qualifying successor
depositary is not appointed by the Issuer within 90 days thereof, (ii) the
Indenture Trustee has instituted or caused to be instituted or has been directed
to institute any judicial proceeding in a court to enforce the rights of the
Bondholders under this Indenture and under such Book-Entry Bonds and the
Indenture Trustee has been advised by counsel that in connection with such
proceeding it is necessary or advisable for the Indenture Trustee to obtain
possession of the related Global Bond or (iii) after the occurrence of an Event
of Default under this Indenture, beneficial owners representing not less than
51% of the then outstanding Bond Class Balance of such Book-Entry Bonds advise
the Clearing Agency through the Clearing Agency Participants in writing (and the
Clearing Agency so notifies the Issuer, the Indenture Trustee and the Servicer
in writing) that the continuation in global form of the Book-Entry Bonds being
evidenced by such Global Bond is no longer in their best interests, then the
Indenture Trustee shall use all reasonable efforts to notify all Bond Owners of
such Class of Bonds of the occurrence of any such event and of the availability
of Definitive Bonds to Bond Owners requesting the same; provided, that under no
circumstances will Definitive Bonds be issued to Bond Owners of the Regulation S
Temporary Global Bond. Upon surrender to the Indenture Trustee of
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the typewritten Bonds representing the Book-Entry Bonds by the Clearing Agency,
accompanied by registration instructions, the Issuer shall execute and, upon
Issuer Order, the Indenture Trustee shall authenticate the Definitive Bonds in
accordance with the written instructions of the Clearing Agency. None of the
Issuer, the Bond Registrar or the Indenture Trustee shall be liable for any
delay in delivery of such instructions, and each of them may conclusively rely
on, and shall be protected in relying on, such instructions. Upon the issuance
of Definitive Bonds, the Indenture Trustee shall recognize the Holders of the
Definitive Bonds as Bondholders.
SECTION 2.13. Tax Treatment. The Issuer has entered into this Indenture,
and the Bonds will be issued, with the intention that, for federal, state and
local income, single business and franchise tax purposes, the Bonds will qualify
as indebtedness secured by the Trust Estate. The Issuer, by entering into this
Indenture, and each Bondholder, by its acceptance of a Bond (and each Bond Owner
by its acceptance of an interest in the applicable Book-Entry Bond), agree to
treat the Bonds for federal, state and local income and franchise tax purposes
as indebtedness.
ARTICLE III
Covenants
SECTION 3.01. Payment of Principal and Interest. The Issuer will duly and
punctually pay the principal, if any, of and the interest, if any, on the Bonds
in accordance with the terms of the Bonds and this Indenture. Without limiting
the foregoing, subject to Section 8.02(c), on each Distribution Date the Issuer
will cause to be distributed all amounts deposited pursuant to the Sale and
Servicing Agreement into the Bond Distribution Account, (i) for the benefit of
the Class A Bonds, to the Class A Bondholders, (ii) for the benefit of the Class
B Bonds, to the Class B Bondholders and (iii) for the benefit of the Class C
Bonds, to the Class C Bondholders. Amounts properly withheld under the Code by
any Person from a payment to any Bondholder of interest and/or principal shall
be considered as having been paid by the Issuer to such Bondholder for all
purposes of this Indenture.
SECTION 3.02. Maintenance of Office or Agency. The Issuer will maintain
in the Borough of Manhattan, the City of New York, an office or agency where
Bonds may be surrendered for registration of transfer or exchange, and where
notices and demands to or upon the Issuer in respect of the Bonds and this
Indenture may be served. Such office will initially be located at IBJ ▇▇▇▇▇▇▇▇
Bank & Trust Company, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. The
Issuer will give prompt written notice to the Indenture Trustee of the location,
and of any change in the location, of any such office or agency. If at any time
the Issuer shall fail to maintain any such office or agency or shall fail to
furnish the Indenture Trustee with the address thereof, such surrenders, notices
and demands may
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be made or served at the Corporate Trust Office, and the Issuer hereby appoints
the Indenture Trustee as its agent to receive all such surrenders, notices and
demands.
SECTION 3.03. Money for Payments To Be Held in Trust. All payments of
amounts due and payable with respect to any Bonds that are to be made from
amounts withdrawn from the Bond Distribution Account pursuant to Section 8.02(c)
shall be made on behalf of the Issuer by the Indenture Trustee or by another
Paying Agent, and no amounts so withdrawn from the Bond Distribution Account for
payments of Bonds shall be paid over to the Issuer except as provided in this
Section.
On or before the Remittance Date preceding each Distribution Date and the
Redemption Date, the Issuer shall deposit or cause to be deposited in the Bond
Distribution Account an aggregate sum sufficient to pay the amounts then
becoming due under the Bonds, such sum to be held in trust for the benefit of
the Persons entitled thereto and (unless the Paying Agent is the Indenture
Trustee) shall promptly notify the Indenture Trustee in writing of its action or
failure so to act.
The Issuer will cause each Paying Agent other than the Indenture Trustee
to execute and deliver to the Indenture Trustee an instrument in which such
Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of
this Section, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Bonds in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and pay such sums to such Persons as
herein provided;
(ii) give the Indenture Trustee notice of any default by the
Issuer (or any other obligor upon the Bonds) of which it has actual
knowledge in the making of any payment required to be made with respect
to the Bonds;
(iii) at any time during the continuance of any such default, upon
the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of Bonds
if at any time it ceases to meet the standards required to be met by a
Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Bonds of any applicable
withholding taxes imposed thereon and
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with respect to any applicable reporting requirements in connection
therewith.
The Issuer may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, by Issuer Order direct
any Paying Agent to pay to the Indenture Trustee all sums held in trust by such
Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts
as those upon which the sums were held by such Paying Agent; and upon such
payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money
held by the Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Bond and remaining unclaimed for two years
after such amount has become due and payable shall be discharged from such trust
and be paid upon Issuer Request; and the Holder of such Bond shall thereafter,
as an unsecured general creditor, look only to the Issuer for payment thereof
(but only to the extent of the amounts so paid to the Issuer), and all liability
of the Indenture Trustee or such Paying Agent with respect to such trust money
shall thereupon cease; provided, however, that the Indenture Trustee or such
Paying Agent, before being required to make any such repayment, shall at the
expense and direction of the Issuer cause to be published once, in a newspaper
published in the English language, customarily published on each Business Day
and of general circulation in the City of New York, notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication, any unclaimed balance of
such money then remaining will be repaid to the Issuer. The Indenture Trustee
shall also adopt and employ, at the expense and direction of the Issuer, any
other reasonable means of notification of such repayment (including, but not
limited to, mailing notice of such repayment to Holders whose Bonds have been
called but have not been surrendered for redemption or whose right to or
interest in moneys due and payable but not claimed is determinable from the
records of the Indenture Trustee or of any Paying Agent, at the last address of
record for each such Holder).
SECTION 3.04. Existence. The Issuer will keep in full effect its
existence, rights and franchises as a business trust under the laws of the State
of Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other State or of the United States of America,
in which case the Issuer will keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Bonds, the Collateral and each other
instrument or agreement included in the Trust Estate.
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SECTION 3.05. Protection of Trust Estate. The Issuer will from time to
time execute and deliver all such supplements and amendments hereto and all such
financing statements, continuation statements, instruments of further assurance
and other instruments, and will take such other action necessary or advisable
to:
(i) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively the
purposes hereof;
(ii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(iii) enforce any of the Collateral; or
(iv) preserve and defend title to the Trust Estate and the rights
of the Indenture Trustee and the Bondholders in such Trust Estate against
the claims of all persons and parties.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required to be executed pursuant to this Section 3.05.
SECTION 3.06. Opinions as to Trust Estate. (a) On the Closing Date, the
Issuer shall furnish to the Indenture Trustee an Opinion of Counsel either
stating that, in the opinion of such counsel, such action has been taken with
respect to the recording and filing of this Indenture, any indentures
supplemental hereto, and any other requisite documents, and with respect to the
execution and filing of any financing statements and continuation statements, as
are necessary to perfect and make effective the lien and security interest of
this Indenture and reciting the details of such action, or stating that, in the
opinion of such counsel, no such action is necessary to make such lien and
security interest effective.
(b) On or before March 31, in each calendar year, beginning in 1999, the
Issuer shall furnish to the Indenture Trustee an Opinion of Counsel either
stating that, in the opinion of such counsel, such action has been taken with
respect to the recording, filing, re-recording and refiling of this Indenture,
any indentures supplemental hereto and any other requisite documents and with
respect to the execution and filing of any financing statements and continuation
statements as is necessary to maintain the lien and security interest created by
this Indenture and reciting the details of such action, or stating that in the
opinion of such counsel no such action is necessary to maintain such lien and
security interest. Such Opinion of Counsel shall also describe the recording,
filing, re-recording and refiling of this Indenture, any indentures supplemental
hereto and any other requisite documents and the execution and filing of any
financing statements and continuation statements that will, in the opinion of
such counsel, be required to maintain the lien and security interest of this
Indenture until March 31 in the following calendar year.
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SECTION 3.07. Performance of Obligations; Servicing of Mortgage Loans and
Funding Note. (a) The Issuer will not take any action and will use its best
efforts not to permit any action to be taken by others that would release any
Person from any of such Person's material covenants or obligations under any
instrument or agreement included in the Trust Estate or that would result in the
amendment, hypothecation, subordination, termination or discharge of, or impair
the validity or effectiveness of, any such instrument or agreement, except as
expressly provided in this Indenture, the Sale and Servicing Agreement or such
other instrument or agreement.
(b) The Issuer may contract with other Persons acceptable to the
Indenture Trustee to assist it in performing its duties under this Indenture,
and any performance of such duties by a Person identified to the Indenture
Trustee in an Officer's Certificate of the Issuer shall be deemed to be action
taken by the Issuer. Initially, the Issuer has contracted with the Servicer and
the Administrator to assist the Issuer in performing its duties under this
Indenture.
(c) The Issuer will punctually perform and observe all of its obligations
and agreements contained in this Indenture, the other Basic Documents and in the
instruments and agreements included in the Trust Estate, including but not
limited to filing or causing to be filed all UCC financing statements and
continuation statements required to be filed by the terms of this Indenture and
the Sale and Servicing Agreement in accordance with and within the time periods
provided for herein and therein. Except as otherwise expressly provided therein,
the Issuer shall not waive, amend, modify, supplement or terminate this
Indenture in a manner other than as provided for herein or any other Basic
Document or any provision thereof without the consent of the Indenture Trustee
or the Holders of at least 51% of the then outstanding Bond Balance.
(d) If the Issuer shall have knowledge of the occurrence of a Servicer
Termination Event under the Sale and Servicing Agreement, the Issuer shall
promptly notify the Indenture Trustee and the Rating Agencies thereof, and shall
specify in such notice the action, if any, the Issuer is taking with respect to
such default. If a Servicer Termination Event shall arise from the failure of
the Servicer to perform any of its duties or obligations under the Sale and
Servicing Agreement with respect to the Mortgage Loans, the Issuer shall take
all reasonable steps available to it to remedy such failure.
(e) As promptly as possible after the giving of notice of termination to
the Servicer of the Servicer's rights and powers pursuant to Section 8.01 or
Section 8.02 of the Sale and Servicing Agreement, the Indenture Trustee without
further action shall automatically be appointed by the Issuer as the successor
servicer (the "Successor Servicer"). The Indenture Trustee may resign as the
Successor Servicer by giving written notice of such resignation to the Issuer
and in such event will be released from such duties and obligations, such
release not to be effective until the date a new servicer enters into a
servicing agreement with the Issuer, as
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provided below. Upon delivery of any such notice to the Issuer, the Issuer shall
obtain a new servicer as the Successor Servicer under the Sale and Servicing
Agreement. Any Successor Servicer other than the Indenture Trustee shall be an
Eligible Servicer and enter into a servicing agreement with the Issuer having
substantially the same provisions as the provisions of the Sale and Servicing
Agreement applicable to the Servicer. If within 30 days after the delivery of
the notice referred to above, the Issuer shall not have obtained such a new
servicer, the Indenture Trustee may appoint, or may petition a court of
competent jurisdiction to appoint, a Successor Servicer. In connection with any
such appointment, the Indenture Trustee may make such arrangements for the
compensation of such successor as it and such successor shall agree on, subject
to the limitations set forth below and in the Sale and Servicing Agreement, and
in accordance with Section 8.02 of the Sale and Servicing Agreement, the Issuer
shall enter into an agreement with such successor for the servicing of the
Mortgage Loans (such agreement to be in form and substance satisfactory to the
Indenture Trustee). If the Indenture Trustee shall succeed to the Servicer's
duties as servicer of the Mortgage Loans as provided herein, it shall do so in
its individual capacity and not in its capacity as Indenture Trustee and,
accordingly, the provisions of Article VI hereof shall be inapplicable to the
Indenture Trustee in its duties as the successor to the Servicer and the
servicing of the Mortgage Loans. In case the Indenture Trustee shall become
successor to the Servicer under the Sale and Servicing Agreement, the Indenture
Trustee shall be entitled to appoint as Servicer any one of its Affiliates,
provided that it shall be fully liable for the actions and omissions of such
Affiliate in such capacity as Successor Servicer.
(f) Upon any termination of the Servicer's rights and powers pursuant to
the Sale and Servicing Agreement, the Issuer shall promptly notify the Indenture
Trustee and the Rating Agencies. As soon as a Successor Servicer is appointed,
the Issuer shall notify the Indenture Trustee and the Rating Agencies in writing
of such appointment, specifying in such notice the name and address of such
Successor Servicer.
(g) Without derogating from the absolute nature of the assignment granted
to the Indenture Trustee under this Indenture or the rights of the Indenture
Trustee hereunder, the Issuer agrees (i) that it will not, without the prior
written consent of either the Indenture Trustee or the Holders of at least 51%
of the then outstanding Bond Balance, amend, modify, waive, supplement,
terminate or surrender, or agree to any amendment, modification, supplement,
termination, waiver or surrender of, the terms of any Collateral (except to the
extent otherwise provided in the Sale and Servicing Agreement) or the Basic
Documents, or waive timely performance or observance by the Servicer or the
Seller under the Sale and Servicing Agreement; and (ii) that any such amendment
shall not (A) increase or reduce in any manner the amount of, or accelerate or
delay the timing of, distributions that are required to be made for the benefit
of the Bondholders or (B) reduce the aforesaid percentage of the Bonds that is
required to consent to any
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such amendment, without the consent of the Holders of all the Outstanding Bonds.
If the Indenture Trustee or such Holders, as applicable, agree to any such
amendment, modification, supplement or waiver, the Issuer agrees, promptly
following a request by the Indenture Trustee to do so, to execute and deliver,
in its own name and at its own expense, such agreements, instruments, consents
and other documents as the Indenture Trustee may deem necessary or appropriate
in the circumstances.
SECTION 3.08. Negative Covenants. So long as any Bonds are Outstanding,
the Issuer shall not:
(i) except as expressly permitted by this Indenture, the Funding
Note Purchase and Security Agreement, the Mortgage Loan Purchase
Agreements or the Sale and Servicing Agreement, sell, transfer, exchange
or otherwise dispose of any of the properties or assets of the Issuer,
including those included in the Trust Estate, unless directed to do so by
the Indenture Trustee;
(ii) claim any credit on, or make any deduction from the principal
or interest payable in respect of, the Bonds (other than amounts properly
withheld from such payments under the Code) or assert any claim against
any present or former Bondholder by reason of the payment of the taxes
levied or assessed upon any part of the Trust Estate; or
(iii) (A) permit the validity or effectiveness of this Indenture
to be impaired, or permit the lien of this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit any
Person to be released from any covenants or obligations with respect to
the Bonds under this Indenture except as may be expressly permitted
hereby, (B) permit any lien, charge, excise, claim, security interest,
mortgage or other encumbrance (other than the lien of this Indenture) to
be created on or extend to or otherwise arise upon or burden the Trust
Estate or any part thereof or any interest therein or the proceeds
thereof (other than tax liens, mechanics' liens and other liens that
arise by operation of law, in each case on any of the Mortgaged
Properties and arising solely as a result of an action or omission of the
related Mortgagor) or (C) permit the lien of this Indenture not to
constitute a valid first priority (other than with respect to any such
tax, mechanics' or other lien) security interest in the Trust Estate.
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SECTION 3.09. Annual Statement as to Compliance. The Issuer shall deliver
to the Indenture Trustee and each Rating Agency, within 120 days after the end
of each fiscal year of the Issuer (commencing with the fiscal year 1998), an
Officer's Certificate stating, as to the Authorized Officer signing such
Officer's Certificate, that:
(i) a review of the activities of the Issuer during such year and
of its performance under this Indenture has been made under such
Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based on
such review, the Issuer has complied with all conditions and covenants
under this Indenture throughout such year or, if there has been a default
in its compliance with any such condition or covenant, specifying each
such default known to such Authorized Officer and the nature and status
thereof.
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain Terms. (a)
The Issuer shall not consolidate or merge with or into any other Person, unless:
(i) the Person (if other than the Issuer) formed by or surviving
such consolidation or merger shall be a Person organized and existing
under the laws of the United States of America or any State and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Indenture Trustee, in form satisfactory to the Indenture
Trustee, the due and punctual payment of the principal of and interest on
all Bonds and the performance or observance of every agreement and
covenant of this Indenture on the part of the Issuer to be performed or
observed, all as provided herein;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the
effect that such transaction will not have any material adverse tax
consequence to the Issuer, any Bondholder or any Certificateholder;
(v) any action that is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation or merger and such supplemental
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indenture comply with this Article III and that all conditions precedent
herein provided for relating to such transaction have been complied with
(including any filing required by the Exchange Act).
(b) The Issuer shall not convey or transfer any of its properties or
assets, including those included in the Trust Estate, to any Person, unless:
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of which
is hereby restricted (A) shall be a United States citizen or a Person
organized and existing under the laws of the United States of America or
any State, (B) expressly assumes, by an indenture supplemental hereto,
executed and delivered to the Indenture Trustee, in form satisfactory to
the Indenture Trustee, the due and punctual payment of the principal of
and interest on all Bonds and the performance or observance of every
agreement and covenant of this Indenture on the part of the Issuer to be
performed or observed, all as provided herein, (C) expressly agrees by
means of such supplemental indenture that all right, title and interest
so conveyed or transferred shall be subject and subordinate to the rights
of Holders of the Bonds, (D) unless otherwise provided in such
supplemental indenture, expressly agrees to indemnify, defend and hold
harmless the Issuer against and from any loss, liability or expense
arising under or related to this Indenture and the Bonds and (E)
expressly agrees by means of such supplemental indenture that such Person
(or if a group of Persons, then one specified Person) shall make all
filings with the Commission (and any other appropriate Person) required
by the Exchange Act in connection with the Bonds;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the
effect that such transaction will not have any material adverse tax
consequence to the Issuer, any Bondholder or any Certificateholder;
(v) any action that is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
conveyance or transfer and such supplemental indenture comply with this
Article III and that all conditions
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precedent herein provided for relating to such transaction have been
complied with (including any filing required by the Exchange Act).
SECTION 3.11. Successor or Transferee. (a) Upon any consolidation or
merger of the Issuer in accordance with Section 3.10(a), the Person formed by or
surviving such consolidation or merger (if other than the Issuer) shall succeed
to, and be substituted for, and may exercise every right and power of, the
Issuer under this Indenture with the same effect as if such Person had been
named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of the
Issuer pursuant to Section 3.10(b), Allied Capital Commercial Mortgage Trust
1998-1 will be released from every covenant and agreement of this Indenture to
be observed or performed on the part of the Issuer with respect to the Bonds
immediately upon the delivery of written notice by the Issuer to the Indenture
Trustee stating that Allied Capital Commercial Mortgage Trust 1998-1 is to be so
released.
SECTION 3.12. No Other Business. The Issuer shall not engage in any
business other than financing, purchasing, owning, selling and managing the
Mortgage Loans and the Funding Note in the manner contemplated by this Indenture
and the Basic Documents and activities incidental thereto.
SECTION 3.13. No Borrowing. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Bonds.
SECTION 3.14. Servicer's and Special Servicer's Obligations. The Issuer
shall cause the Servicer to comply with Sections 4.09, 4.10 and 4.11 and Article
IX, and shall cause the Special Servicer to comply with Sections 4.10 and 4.11,
of the Sale and Servicing Agreement.
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities. Except
as contemplated by the Trust Agreement, Sale and Servicing Agreement or this
Indenture, the Issuer shall not make any loan or advance or credit to, or
guarantee (directly or indirectly or by an instrument having the effect of
assuring another's payment or performance on any obligation or capability of so
doing or otherwise), endorse or otherwise become contingently liable, directly
or indirectly, in connection with the obligations, stocks or dividends of, or
own, purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any Person.
SECTION 3.16. Capital Expenditures. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
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SECTION 3.17. Removal of Administrator. So long as any Bonds are
Outstanding, the Issuer shall not remove the Administrator without cause unless
the Rating Agency Condition shall have been satisfied in connection with such
removal.
SECTION 3.18. Restricted Payments. Except with respect to the proceeds
from issuance of the Bonds, the Issuer shall not, directly or indirectly, (i)
pay any dividend or make any distribution (by reduction of capital or
otherwise), whether in cash, property, securities or a combination thereof, to
the Owner Trustee or any owner of a beneficial interest in the Issuer or
otherwise with respect to any ownership or equity interest or security in or of
the Issuer or to the Servicer, (ii) redeem, purchase, retire or otherwise
acquire for value any such ownership or equity interest or security or (iii) set
aside or otherwise segregate any amounts for any such purpose; provided,
however, that the Issuer may make, or cause to be made, (x) distributions as
contemplated by, and to the extent funds are available for such purpose under,
the Sale and Servicing Agreement or the Trust Agreement and (y) payments to the
Indenture Trustee pursuant to Section 1(a)(ii) of the Administration Agreement.
The Issuer will not, directly or indirectly, make payments to or distributions
from the Collection Account except in accordance with this Indenture and the
Basic Documents.
SECTION 3.19. Notice of Events of Default. The Issuer shall give the
Indenture Trustee and the Rating Agencies prompt written notice of each Event of
Default hereunder, and of each default on the part of the Servicer or the Seller
of its obligations under the Sale and Servicing Agreement.
SECTION 3.20. Further Instruments and Acts. Upon request of the Indenture
Trustee, the Issuer will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
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ARTICLE IV
Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect with respect to the Bonds except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Bonds, (iii) rights of Bondholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.03, 3.04, 3.05, 3.08,
3.10, 3.12 and 3.13, (v) the rights, obligations and immunities of the Indenture
Trustee hereunder (including the rights of the Indenture Trustee under Section
6.07 and the obligations of the Indenture Trustee under Section 4.02) and (vi)
the rights of Bondholders as beneficiaries hereof with respect to the property
so deposited with the Indenture Trustee payable to all or any of them, and the
Indenture Trustee, on demand of and at the expense of the Issuer, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture
with respect to the Bonds, when
(A) either
(1) all Bonds theretofore authenticated and delivered (other than
(i) Bonds that have been destroyed, lost or stolen and that have been
replaced or paid as provided in Section 2.06 and (ii) Bonds for whose
payment money has theretofore been deposited in trust or segregated and
held in trust by the Issuer and thereafter repaid to the Issuer or
discharged from such trust, as provided in Section 3.03) have been
delivered to the Indenture Trustee for cancellation; or
(2) all Bonds not theretofore delivered to the Indenture Trustee
for cancellation
a. have become due and payable,
b. will become due and payable at the Final Rated
Distribution Date within one year, or
c. are to be called for redemption within one year under
arrangements satisfactory to the Indenture Trustee for the giving
of notice of redemption by the Indenture Trustee in the name, and
at the expense, of the Issuer,
and the Issuer, in the case of a., b. or c. above, has irrevocably
deposited or caused to be irrevocably deposited with the Indenture
Trustee cash or direct obligations of or obligations guaranteed by the
United States of America (which will mature prior to the date such
amounts are payable), in trust for such purpose, in an amount sufficient
to pay and discharge the entire indebtedness on such Bonds not
theretofore delivered to the Indenture Trustee for cancellation when due
to
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the applicable final scheduled Distribution Date or Redemption Date (if
Bonds shall have been called for redemption pursuant to Section 10.01),
as the case may be;
(B) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer; and
(C) the Issuer has delivered to the Indenture Trustee an Officer's
Certificate and, an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge
of this Indenture have been complied with.
SECTION 4.02. Application of Trust Money. All moneys deposited with the
Indenture Trustee pursuant to Section 4.01 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Bonds and this
Indenture, to the payment, either directly or through any Paying Agent, as the
Indenture Trustee may determine, to the Holders of the particular Bonds for the
payment or redemption of which such moneys have been deposited with the
Indenture Trustee, of all sums due and to become due thereon for principal and
interest; but such moneys need not be segregated from other funds except to the
extent required herein or in the Sale and Servicing Agreement or required by
law.
SECTION 4.03. Repayment of Moneys Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to the Bonds,
all moneys then held by any Paying Agent other than the Indenture Trustee under
the provisions of this Indenture with respect to such Bonds shall, upon demand
of the Issuer, be paid to the Indenture Trustee to be held and applied according
to Section 3.03 and thereupon such Paying Agent shall be released from all
further liability with respect to such moneys.
SECTION 4.04. Release of Collateral. Subject to Section 11.01 and the
terms of the Basic Documents, the Indenture Trustee shall release property from
the lien of this Indenture only upon receipt of an Issuer Request accompanied by
an Officer's Certificate and an Opinion of Counsel.
ARTICLE V
Remedies
SECTION 5.01. Events of Default. "Event of Default", wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) default in the payment of interest due on any Bond on any
Distribution Date; or
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(ii) default in the payment of the amount of principal of any Bond
due on any Distribution Date; or
(iii) default in the payment of the then outstanding Bond Balance
in full by the Final Rated Distribution Date; or
(iv) default in the observance or performance of any covenant or
agreement of the Issuer made in this Indenture (other than a covenant or
agreement, a default in the observance or performance of which is
elsewhere in this Section specifically dealt with), or the breach of any
representation or warranty of the Issuer made in this Indenture or in any
certificate or other writing delivered pursuant hereto or in connection
herewith proving to have been incorrect in any material respect as of the
time when the same shall have been made, and such default shall continue
or not be cured, or the circumstance or condition in respect of which
such misrepresentation or warranty was incorrect shall not have been
eliminated or otherwise cured, for a period of 30 days after there shall
have been given, by registered or certified mail, to the Issuer by the
Indenture Trustee or to the Issuer and the Indenture Trustee by the
Holders of at least 25% of the Bond Balance, a written notice specifying
such default or incorrect representation or warranty and requiring it to
be remedied and stating that such notice is a notice of Default
hereunder; or
(v) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial
part of the Owner Trust Estate in an involuntary case under any
applicable federal or state bankruptcy, insolvency or other similar law
now or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the
Issuer or for any substantial part of the Owner Trust Estate, or ordering
the winding-up or liquidation of the Issuer's affairs, and such decree or
order shall remain unstayed and in effect for a period of 60 consecutive
days; or
(vi) the commencement by the Issuer of a voluntary case under any
applicable federal or state bankruptcy, insolvency or other similar law
now or hereafter in effect, or the consent by the Issuer to the entry of
an order for relief in an involuntary case under any such law, or the
consent by the Issuer to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Issuer or for any substantial part of the Owner
Trust Estate, or the making by the Issuer of any general assignment for
the benefit of creditors, or the failure by the Issuer generally to pay
its debts as such debts become due, or the taking of any action by the
Issuer in furtherance of any of the foregoing.
The Issuer shall deliver to the Indenture Trustee, within five days after the
occurrence thereof, written notice in the form of an
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Officer's Certificate of any event which with the giving of notice and the lapse
of time would become an Event of Default under clause (iii), its status and what
action the Issuer is taking or proposes to take with respect thereto.
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment. (a) If
an Event of Default should occur and be continuing, then and in every such case
the Indenture Trustee or the Holders of Bonds representing not less than 51% of
the then outstanding Bond Balance may declare all the Bonds to be immediately
due and payable, by a notice in writing to the Issuer (and to the Indenture
Trustee if given by Bondholders), and upon any such declaration the unpaid
principal amount of such Bonds, together with accrued and unpaid interest
thereon through the date of acceleration, shall become immediately due and
payable.
(b) Reserved.
(c) If an Event of Default specified in clause (v) or (vi) of Section
5.01 shall have occurred and be continuing, then, without any action on the part
of the Trustee or the Bondholders, the Bonds shall become immediately due and
payable at par, together with accrued interest thereon.
(d) At any time after such declaration of acceleration of maturity has
been made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee as provided hereinafter in this Article V, the
Holders of Bonds representing 51% of the then outstanding Bond Balance, by
written notice to the Issuer and the Indenture Trustee, may rescind and annul
such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture Trustee a
sum sufficient to pay:
(A) all payments of principal of and interest on all Bonds
and all other amounts that would then be due hereunder or upon
such Bonds if the Event of Default giving rise to such
acceleration had not occurred; and
(B) all sums paid or advanced by the Indenture Trustee
hereunder and the reasonable compensation, expenses, disbursements
and advances of the Indenture Trustee and its agents and counsel;
and
(ii) all Events of Default, other than the nonpayment of the
principal of the Bonds that has become due solely by such acceleration,
have been cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
SECTION 5.03. Collection of Indebtedness and Suits for
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Enforcement by Indenture Trustee; Authority of the Indenture Trustee. (a) The
Issuer covenants that if (i) default is made in the payment of interest due on
any Bond on any Distribution Date, or (ii) default is made in the payment of the
amount of principal of any Bond due on any Distribution Date, the Issuer will,
upon demand of the Indenture Trustee, pay to it, for the benefit of the Holders
of the Bonds, the whole amount then due and payable on such Bonds for principal
and interest, with interest on the overdue principal and, to the extent payment
at such rate of interest shall be legally enforceable, on overdue installments
of interest at the rate borne by the Bonds and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances (and interest on Advances) of the Servicer, the Special Servicer, the
Indenture Trustee and the Fiscal Agent, and their agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Indenture Trustee, in its own name and as trustee of an express
trust, may institute a Proceeding for the collection of the sums so due and
unpaid, and may prosecute such Proceeding to judgment or final decree, and may
enforce the same against the Issuer or other obligor upon such Bonds and collect
in the manner provided by law out of the property of the Issuer or other obligor
upon such Bonds, wherever situated, the moneys adjudged or decreed to be
payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee may, as more particularly provided in Section 5.04, in its discretion,
proceed to protect and enforce its rights and the rights of the Bondholders, by
such appropriate Proceedings as the Indenture Trustee shall deem most effective
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy or legal or
equitable right vested in the Indenture Trustee by this Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Bonds or any Person having or claiming an ownership interest in
the Trust Estate, Proceedings under Title 11 of the United States Code or any
other applicable federal or state bankruptcy, insolvency or other similar law,
or in case a receiver, assignee or trustee in bankruptcy or reorganization, or
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial Proceedings relative to the Issuer
or other obligor upon the Bonds, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, irrespective of whether the
principal of any Bonds shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in
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such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Bonds and to
file such other papers or documents as may be necessary or advisable in
order to have the claims of the Indenture Trustee (including any claim
for reasonable compensation to the Indenture Trustee and each predecessor
Indenture Trustee, and their respective agents, attorneys and counsel,
and for reimbursement of all expenses and liabilities incurred, and all
advances made, by the Indenture Trustee and each predecessor Indenture
Trustee, except as a result of negligence or bad faith) and of the
Bondholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote
on behalf of the Holders of Bonds in any election of a trustee, a standby
trustee or Person performing similar functions in any such Proceedings;
(iii) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute all amounts received
with respect to the claims of the Bondholders and of the Indenture
Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the
Indenture Trustee or the Holders of Bonds allowed in any Proceedings
relative to the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Bondholders to make
payments to the Indenture Trustee and, in the event that the Indenture Trustee
shall consent to the making of payments directly to such Bondholders, to pay to
the Indenture Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Indenture Trustee, each predecessor Indenture Trustee and
their respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee except as a result of negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Bondholder any plan of reorganization, arrangement, adjustment or
composition affecting the Bonds or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Bondholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this
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Indenture, or under any of the Bonds, may be enforced by the Indenture Trustee
without the possession of any of the Bonds or the production thereof in any
Proceedings relative thereto, and any such Proceedings instituted by the
Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the Bonds.
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Holders of the Bonds, and it shall not be necessary to
make any Bondholder a party to any such Proceedings.
SECTION 5.04. Remedies; Priorities. (a) If an Event of Default shall have
occurred and be continuing, the Indenture Trustee may do one or more of the
following (subject to Section 5.05):
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the Bonds
or under this Indenture with respect thereto, whether by declaration or
otherwise, enforce any judgment obtained and collect from the Issuer and
any other obligor upon such Bonds moneys adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC and
take any other appropriate action to protect and enforce the rights and
remedies of the Indenture Trustee and the Holders of the Bonds; and
(iv) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private sales called and
conducted in any manner permitted by law;
provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default, other than an Event of
Default described in Section 5.01(i), (ii) or (iii), unless (A) the proceeds of
such sale or liquidation distributable to the Bondholders are sufficient to
discharge in full all amounts then due and unpaid upon such Bonds for principal
and interest or (B) the Indenture Trustee determines that the Trust Estate will
not continue to provide sufficient funds for the payment of principal of and
interest on the Bonds as they would have become due if the Bonds had not been
declared due and payable, and the Indenture Trustee obtains the consent of
Holders of a majority of the Bond Balance. In determining such sufficiency or
insufficiency with respect to clause (A) and (B), the Indenture Trustee may at
the
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expense of the Issuer, but need not, obtain and conclusively rely upon an
opinion of an Independent investment banking or accounting firm of national
reputation as to the feasibility of such proposed action and as to the
sufficiency of the Trust Estate for such purpose. Irrespective of whether the
conditions set forth in clauses (A) and (B) of the proviso to the second
preceding sentence have been satisfied, the Indenture Trustee shall sell the
Trust Estate pursuant to Section 5.04(a)(iv) if directed by the Holders of at
least 66b% of the then outstanding Bond Balance.
(b) If the Indenture Trustee collects any money or property pursuant to
this Article V, it shall distribute the net proceeds thereof as specified in
Section 8.02(c).
The Indenture Trustee may fix a record date and special distribution date for
any payment to Bondholders pursuant to this Section. At least 15 days before
such record date, the Indenture Trustee shall mail to each Bondholder and the
Issuer a notice that states the record date, the payment date and the amount to
be paid.
SECTION 5.05. Optional Preservation of the Trust Estate. If the Bonds
have been declared to be due and payable under Section 5.02 following an Event
of Default and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may, but need not, elect to maintain possession
of the Trust Estate. It is the desire of the parties hereto and the Bondholders
that there be at all times sufficient funds for the payment of principal of and
interest on the Bonds, and the Indenture Trustee shall take such desire into
account when determining whether or not to maintain possession of the Trust
Estate. In determining whether to maintain possession of the Trust Estate, the
Indenture Trustee may, but need not, obtain and conclusively rely upon an
opinion of an Independent investment banking or accounting firm of national
reputation as to the feasibility of such proposed action and as to the
sufficiency of the Trust Estate for such purpose.
SECTION 5.06. Limitation of Suits. No Holder of any Bond shall have any
right to institute any Proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(i) such Holder has previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the then outstanding Bond
Balance have made written request to the Indenture Trustee to institute
such Proceeding in respect of such Event of Default in its own name as
Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in complying with such request;
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(iv) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such
Proceedings; and
(v) no direction inconsistent with such written request has been
given to the Indenture Trustee during such 60-day period by the Holders
of 51% or more of the then outstanding Bond Balance.
It is understood and intended that no one or more Holders of Bonds shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Bonds or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except in the
manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of Bonds,
each representing less than 51% of the then outstanding Bond Balance, the
Indenture Trustee in its sole discretion may determine what action, if any,
shall be taken, notwithstanding any other provisions of this Indenture.
SECTION 5.07. Unconditional Rights of Bondholders To Receive Principal
and Interest. Notwithstanding any other provisions in this Indenture, the Holder
of any Bond shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest, if any, on such Bond on or
after the respective due dates thereof expressed in such Bond or in this
Indenture (or, in the case of redemption, on or after the Redemption Date) and
to institute suit for the enforcement of any such payment, and such right shall
not be impaired without the consent of such Holder.
SECTION 5.08. Restoration of Rights and Remedies. If the Indenture
Trustee or any Bondholder has instituted any Proceeding to enforce any right or
remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Bondholder, then and in every such case the Issuer, the
Indenture Trustee and the Bondholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee and the Bondholders shall continue as though no such Proceeding had been
instituted.
SECTION 5.09. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Indenture Trustee or to the Bondholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion
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or employment of any other appropriate right or remedy.
SECTION 5.10. Delay or Omission Not a Waiver. No delay or omission of the
Indenture Trustee, or any Holder of any Bond to exercise any right or remedy
accruing upon any Default or Event of Default shall impair any such right or
remedy or constitute a waiver of any such Default or Event of Default or an
acquiescence therein. Every right and remedy given by this Article V or by law
to the Indenture Trustee, to the Bondholders may be exercised from time to time,
and as often as may be deemed expedient, by the Indenture Trustee or the
Bondholders, as the case may be.
SECTION 5.11. Control by Bondholders. The Holders of not less than 51% of
the than outstanding Bond Balance shall have the right to direct the time,
method and place of conducting any Proceeding for any remedy available to the
Indenture Trustee with respect to the Bonds or exercising any trust or power
conferred on the Indenture Trustee; provided that:
(i) such direction shall not be in conflict with any rule of law
or with this Indenture;
(ii) subject to the express terms of Section 5.04, any direction
to the Indenture Trustee to sell or liquidate the Trust Estate shall be
by Holders of Bonds representing not less than 66b% of the then
outstanding Bond Balance;
(iii) if the conditions set forth in Section 5.05 have been
satisfied and the Indenture Trustee elects to retain the Trust Estate
pursuant to such Section, then any written direction to the Indenture
Trustee by Holders of Bonds representing less than 66b% of the then
outstanding Bond Balance to sell or liquidate the Trust Estate shall be
of no force and effect; and
(iv) the Indenture Trustee may take any other action deemed proper
by the Indenture Trustee that is not inconsistent with such direction.
Notwithstanding the rights of Bondholders set forth in this Section, subject to
Section 6.01, the Indenture Trustee need not take any action that it determines,
in its sole discretion, might involve it in liability or might materially
adversely affect the rights of any Bondholders not consenting to such action.
SECTION 5.12. Waiver of Past Defaults. Prior to the declaration of the
acceleration of the maturity of the Bonds as provided in Section 5.02, the
Holders of Bonds of not less than 51% of the then outstanding Bond Balance may
waive any past Default or Event of Default and its consequences except a Default
(a) in payment of principal of or interest on any of the Bonds or (b) in respect
of a covenant or provision hereof which cannot be modified or amended without
the waiver or consent of the Holder of each Bond affected thereby. In the case
of any such waiver, the Issuer, the
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Indenture Trustee and the Holders of the Bonds shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall extend to
any subsequent or other Default or impair any right consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed to
have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereto.
SECTION 5.13. Undertaking for Costs. All parties to this Indenture agree,
and each Holder of a Bond by such Holder's acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to (a) any suit instituted by the
Indenture Trustee, (b) any suit instituted by any Bondholder, or group of
Bondholders, in each case holding in the aggregate more than 10% of the then
outstanding Bond Balance or (c) any suit instituted by any Bondholder for the
enforcement of the payment of principal of or interest on any Bond on or after
the respective due dates expressed in such Bond and in this Indenture (or, in
the case of redemption, on or after the Redemption Date).
SECTION 5.14. Waiver of Stay or Extension Laws. The Issuer covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture; and
the Issuer (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Indenture
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
SECTION 5.15. Action on Bonds. The Indenture Trustee's right to seek and
recover judgment on the Bonds or under this Indenture shall not be affected by
the seeking, obtaining or application of any other relief under or with respect
to this Indenture. Neither the lien of this Indenture nor any rights or remedies
of the Indenture Trustee or the Bondholders shall be impaired by the recovery of
any judgment by the Indenture Trustee against the Issuer or by the levy of any
execution under such judgment upon any portion
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of the Trust Estate or upon any of the assets of the Issuer. Any money or
property collected by the Indenture Trustee shall be applied in accordance with
Section 5.04(b).
SECTION 5.16. Performance and Enforcement of Certain Obligations. (a)
Promptly following a request from the Indenture Trustee to do so and at the
Administrator's expense, the Issuer shall take all such lawful action as the
Indenture Trustee may request to compel or secure the performance and observance
by the Seller or the Servicer, as applicable, of each of their obligations to
the Issuer under or in connection with the Sale and Servicing Agreement, Funding
Note Purchase and Security Agreement or the Mortgage Loan Purchase Agreements,
as applicable, and to exercise any and all rights, remedies, powers and
privileges lawfully available to the Issuer under or in connection with the Sale
and Servicing Agreement, Funding Note Purchase and Security Agreement or the
Mortgage Loan Purchase Agreements to the extent and in the manner directed by
the Indenture Trustee, including the transmission of notices of default on the
part of the Seller or the Servicer thereunder and the institution of legal or
administrative actions or proceedings to compel or secure performance by the
Seller or the Servicer of each of their obligations under the Sale and Servicing
Agreement, Funding Note Purchase and Security Agreement or the Mortgage Loan
Purchase Agreements.
(b) If an Event of Default has occurred and is continuing at any time,
the Indenture Trustee may, and at the direction (which direction shall be in
writing or by telephone (confirmed in writing promptly thereafter)) of the
Holders of not less than 51% of the then outstanding Bond Balance shall,
exercise all rights, remedies, powers, privileges and claims of the Issuer
against the Seller or the Servicer under or in connection with the Sale and
Servicing Agreement, Funding Note Purchase and Security Agreement and the
Mortgage Loan Purchase Agreements including the right or power to take any
action to compel or secure performance or observance by the Seller or the
Servicer, as the case may be, of each of their obligations to the Issuer
thereunder and to give any consent, request, notice, direction, approval,
extension or waiver under the Sale and Servicing Agreement, Funding Note
Purchase and Security Agreement and the Mortgage Loan Purchase Agreements, as
the case may be, and any right of the Issuer to take such action shall be
suspended.
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ARTICLE VI
The Indenture Trustee
SECTION 6.01. Duties of Indenture Trustee. (a) If an Event of Default has
occurred and is continuing of which a Responsible Officer of the Indenture
Trustee has actual knowledge, the Indenture Trustee shall exercise the rights
and powers vested in it by this Indenture and use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture
against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; however, the Indenture Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is proved
that the Indenture Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Indenture Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.11.
(d) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to paragraphs (a), (b), (c) and (g) of this
Section.
(e) The Indenture Trustee shall not be liable for interest on any money
received by it except as the Indenture Trustee may agree in writing with the
Issuer.
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(f) Money held in trust by the Indenture Trustee need not be segregated
from other funds except to the extent required by law or the terms of this
Indenture or the Sale and Servicing Agreement.
(g) No provision of this Indenture shall require the Indenture Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section.
(i) In no event shall the Indenture Trustee be required to perform, or be
responsible for the manner of performance of, any of the obligations of the
Servicer or any other party under the Sale and Servicing Agreement, except that
LaSalle National Bank, solely in its capacity as Successor Servicer, shall
perform and be responsible for such obligations during such time, if any, as the
Successor Servicer shall be the successor to, and be vested with the rights,
powers, duties and privileges of, the Servicer in accordance with the terms of
the Sale and Servicing Agreement.
For purposes of this Section 6.01 and Section 8.03(c), the Indenture
Trustee, or a Responsible Officer thereof, shall be charged with actual
knowledge of an Event of Default if the Indenture Trustee receives written
notice of such Event of Default from the Issuer, the Servicer or Bondholders
owning Bonds aggregating not less than 10% of the then outstanding Bond Balance.
SECTION 6.02. Rights of Indenture Trustee. (a) The Indenture Trustee may
conclusively rely on any document believed by it to be genuine and to have been
signed or presented by the proper Person. The Indenture Trustee need not
investigate any fact or matter stated in any such document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel reasonably
satisfactory in form and substance to the Indenture Trustee. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on any such Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Indenture Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers.
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SECTION 6.03. Individual Rights of Indenture Trustee. The Indenture
Trustee in its individual or any other capacity may become the owner or pledgee
of Bonds and may otherwise deal with the Issuer or its Affiliates with the same
rights it would have if it were not Indenture Trustee. Any Paying Agent, Bond
Registrar, co-registrar or co-paying agent may do the same with like rights.
However, the Indenture Trustee must comply with Section 6.11.
SECTION 6.04. Indenture Trustee's Disclaimer. The Indenture Trustee shall
not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Bonds, it shall not be accountable for the
Issuer's use of the proceeds from the Bonds, and it shall not be responsible for
any statement of the Issuer in the Indenture or in any document issued in
connection with the sale of the Bonds or in the Bonds other than the Indenture
Trustee's certificate of authentication.
SECTION 6.05. Notice of Defaults. If a Default occurs and is continuing
and if it is known to a Responsible Officer of the Indenture Trustee, the
Indenture Trustee shall mail to each Bondholder and each Rating Agency notice of
the Default within 30 days after it occurs. Except in the case of a Default in
payment of principal of or interest on any Bond (including payments pursuant to
the mandatory redemption provisions of such Bond), the Indenture Trustee may
withhold the notice to Bondholders if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice is in
the interests of Bondholders.
SECTION 6.06. Reports by Indenture Trustee to Holders. (a) The Indenture
Trustee shall deliver to each Bondholder such information as may be required to
enable such Holder to prepare its federal and state income tax returns.
(b) The Indenture Trustee shall mail to all Bondholders, on or before
March 31, in each calendar year, beginning in 1999, a brief report relating to
its eligibility and qualifications to continue as the Indenture Trustee under
the Indenture, any amounts advanced by it under the Indenture, the property and
funds physically held by the Indenture Trustee as such, any lease or
substitution of property subject to the lien of the Indenture which has not been
previously reported and any action taken by the Indenture Trustee which
materially affects the Bonds and which has not been previously reported.
SECTION 6.07. Compensation and Indemnity. The Issuer shall, or shall
cause the Servicer to, pay to the Indenture Trustee from time to time reasonable
compensation for its services. The Indenture Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Issuer
shall, or shall cause the Servicer to, reimburse the Indenture Trustee for all
reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, in addition to the compensation for its services. Such expenses
shall include the reasonable compensation and expenses, disbursements and
advances (and interest on advances)
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of the Indenture Trustee's agents, counsel, accountants and experts and advances
(and interest on advances) of the Fiscal Agent; provided, however, that the
Indenture Trustee shall pay the compensation of the Fiscal Agent. The Issuer
shall, or shall cause the Servicer to, indemnify the Indenture Trustee against
any and all loss, liability or expense (including attorneys' fees and expenses)
incurred by it in connection with the administration of this trust and the
performance of its duties hereunder or under the Sale and Servicing Agreement.
The Indenture Trustee shall notify the Issuer and the Servicer promptly of any
claim for which it may seek indemnity. Failure by the Indenture Trustee to so
notify the Issuer and the Servicer shall not relieve the Issuer or the Servicer
of its obligations hereunder. The Issuer shall, or shall cause the Servicer to,
defend any such claim, and the Indenture Trustee may have separate counsel and
the Issuer shall, or shall cause the Administrator to, pay the fees and expenses
of such counsel. Neither the Issuer nor the Servicer need reimburse any expense
or indemnify against any loss, liability or expense incurred by the Indenture
Trustee through the Indenture Trustee's own willful misconduct, negligence or
bad faith.
The Issuer's payment obligations to the Indenture Trustee and the
Administrator's indemnities to the Indenture Trustee pursuant to this Section
shall survive the discharge of this Indenture or the earlier resignation or
removal of the Indenture Trustee. When the Indenture Trustee incurs expenses
after the occurrence of a Default specified in Section 5.01(v) or (vi) with
respect to the Issuer, the expenses are intended to constitute expenses of
administration under Title 11 of the United States Code or any other applicable
federal or state bankruptcy, insolvency or similar law.
SECTION 6.08. Replacement of Indenture Trustee. No resignation or removal
of the Indenture Trustee and no appointment of a successor Indenture Trustee
shall become effective until the acceptance of appointment by the successor
Indenture Trustee pursuant to this Section 6.08; provided that such successor
Indenture Trustee must be qualified and eligible under Section 6.11. The
Indenture Trustee may resign at any time by so notifying the Issuer. The Holders
of 51% of the then outstanding Bond Balance may remove the Indenture Trustee by
so notifying the Indenture Trustee and may appoint a successor Indenture
Trustee. The Issuer shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) the Indenture Trustee is adjudged a bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the
Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of acting.
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If the Indenture Trustee resigns or is removed or if a vacancy exists in the
office of Indenture Trustee for any reason (the Indenture Trustee in such event
being referred to herein as the retiring Indenture Trustee), the Issuer shall
promptly appoint a successor Indenture Trustee and shall notify each Rating
Agency of such appointment.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuer. Thereupon the
resignation or removal of the retiring Indenture Trustee shall become effective,
and the successor Indenture Trustee shall have all the rights, powers and duties
of the Indenture Trustee under this Indenture. The retiring Indenture Trustee
shall be paid all amounts owed to it upon its resignation or removal. The
successor Indenture Trustee shall mail a notice of its succession to
Bondholders. The retiring Indenture Trustee shall promptly transfer all property
held by it as Indenture Trustee to the successor Indenture Trustee. The retiring
Indenture Trustee shall not be liable for the acts or omissions of any Successor
Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Holders of 51% of the 51% of the then
outstanding Bond Balance may petition any court of competent jurisdiction for
the appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any
Bondholder may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to this
Section, the Issuer's and the Administrator's obligations under Section 6.07
shall continue for the benefit of the retiring Indenture Trustee.
SECTION 6.09. Successor Indenture Trustee by Merger. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another corporation
or banking association, the resulting, surviving or transferee corporation
without any further act shall be the successor Indenture Trustee; provided, that
such corporation or banking association shall be otherwise qualified and
eligible under Section 6.11. The Indenture Trustee shall provide the Rating
Agencies prior written notice of any such transaction.
In case at the time such successor or successors by merger, conversion or
consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture any of the Bonds shall have been authenticated but not delivered,
any such successor to the Indenture Trustee may adopt the certificate of
authentication of any predecessor trustee and deliver such Bonds so
authenticated; and in
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case at that time any of the Bonds shall not have been authenticated, any
successor to the Indenture Trustee may authenticate such Bonds either in the
name of any predecessor hereunder or in the name of the successor to the
Indenture Trustee; and in all such cases such certificates shall have the full
force which it is anywhere in the Bonds or in this Indenture provided that the
certificate of the Indenture Trustee shall have.
SECTION 6.10. Appointment of Co-Indenture Trustee or Separate Indenture
Trustee. (a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust Estate may at the time be located, the Indenture
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Trust, and to vest in
such Person or Persons, in such capacity and for the benefit of the Bondholders,
such title to the Trust Estate, or any part thereof, and, subject to the other
provisions of this Section, such powers, duties, obligations, rights and trusts
as the Indenture Trustee may consider necessary or desirable. No co-trustee or
separate trustee hereunder shall be required to meet the terms of eligibility as
a successor trustee under Section 6.11 and no notice to Bondholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon and
exercised or performed by the Indenture Trustee and such separate trustee
or co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed
the Indenture Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust Estate or any portion
thereof in any such jurisdiction) shall be exercised and performed singly
by such separate trustee or co-trustee, but solely at the direction of
the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the resignation
of or remove any separate trustee or co- trustee.
(c) Any notice, request or other writing given to the Indenture
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Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Indenture and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Indenture on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 6.11. Eligibility; Disqualification. The Indenture Trustee shall
have a combined capital and surplus of at least $50,000,000 as set forth in its
most recent published annual report of condition, and the short-term obligations
of the Indenture Trustee shall be rated at least A-1 by Standard & Poor's and
F-1+ by Fitch.
ARTICLE VII
Bondholders' Lists and Reports
SECTION 7.01. Issuer To Furnish Indenture Trustee Names and Addresses of
Bondholders. The Issuer will furnish or cause to be furnished to the Indenture
Trustee not more than five days after each Record Date, a list, in such form as
the Indenture Trustee may reasonably require, of the names and addresses of the
Holders of Bonds as of such Record Date, and (b) at such other times as the
Indenture Trustee may request in writing, within 30 days after receipt by the
Issuer of any such request, a list of similar form and content as of a date not
more than 10 days prior to the time such list is furnished; provided, however,
that so long as the Indenture Trustee is the Bond Registrar, no such list shall
be required to be furnished.
SECTION 7.02. Preservation of Information; Communications to Bondholders.
(a) The Indenture Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders of Bonds contained in the
most recent list furnished to the Indenture Trustee as provided in Section 7.01
and the names
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and addresses of Holders of Bonds received by the Indenture Trustee in its
capacity as Bond Registrar. The Indenture Trustee may destroy any list furnished
to it as provided in such Section 7.01 upon receipt of a new list so furnished.
The Indenture Trustee shall make such list available to the Bondholders upon
written request of three or more Bondholders or one or more Holders of Bonds
evidencing not less than 25% of the then outstanding Bond Balance.
(b) Bondholders shall have the right to communicate equivalent to that
found in TIA ' 312(b) with other Bondholders with respect to their rights under
this Indenture or under the Bonds.
(c) The Issuer (and the Owner Trustee and Administrator on its behalf),
the Indenture Trustee and the Bond Registrar shall have the protection
equivalent to that found in TIA ' 312(c).
SECTION 7.03. Fiscal Year of Issuer. Unless the Issuer otherwise
determines, the fiscal year of the Issuer shall end on December 31 of each year.
ARTICLE VIII
Accounts, Disbursements and Releases
SECTION 8.01. Collection of Money. Except as otherwise expressly provided
herein, the Indenture Trustee may demand payment or delivery of, and shall
receive and collect, directly and without intervention or assistance of any
fiscal agent or other intermediary, all money and other property payable to or
receivable by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall apply all such money received by it as provided in this Indenture.
Except as otherwise expressly provided in this Indenture, if any default occurs
in the making of any payment or performance under any agreement or instrument
that is part of the Trust Estate, the Indenture Trustee may take such action as
may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate Proceedings. Any such action shall be
without prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.
SECTION 8.02. Trust Accounts. (a) On or prior to the Closing Date, the
Indenture Trustee shall establish the Bond Distribution Account.
(b) On or before each Remittance Date, all amounts required to be
deposited in the Bond Distribution Account with respect to the preceding
Collection Period pursuant to Section 5.06 of the Sale and Servicing Agreement
will be transferred from the Collection Account to the Bond Distribution Account
by the Servicer.
(c) On each Distribution Date and on the Redemption Date, the Indenture
Trustee shall distribute all amounts on deposit in the
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Bond Distribution Account, to the extent of Available Funds, to Bondholders in
respect of the Bonds, in the following amounts and in the following order of
priority:
(i) to Holders of the Class A Bonds, the Interest Distribution
Amount for such Class of Bonds for such date;
(ii) to Holders of the Class B Bonds, the Interest Distribution
Amount for such Class of Bonds for such date;
(iii) to Holders of the Class C Bonds, the Interest Distribution
Amount for such Class of Bonds for such date; and
(iv) (A) with respect to any Distribution Date (other than any
Distribution Date that coincides with the Redemption Date), an amount
equal to the Principal Distribution Amount for such Distribution Date,
together with any unpaid Principal Distribution Amounts in respect of
prior Distribution Dates sequentially, first, to Holders of the Class A
Bonds until the Bond Class Balance of the Class A Bonds has been reduced
to zero, second, to the Holders of the Class B Bonds until the Bond Class
Balance of the Class B Bonds has been reduced to zero, and third, to the
Holders of the Class C Bonds until the Bond Class Balance of the Class C
Bonds has been reduced to zero; and (B) with respect to the Redemption
Date, first, to the Holders of the Class A Bonds, the then outstanding
related Bond Class Balance; second, to the Holders of the Class B Bonds,
the then outstanding related Bond Class Balance; and third, to the
Holders of the Class C Bonds, the then outstanding related Bond Class
Balance.
(d) On each Distribution Date, the Indenture Trustee shall distribute to
the Holders of the respective Classes of Bonds entitled to receive distributions
of principal on such Distribution Date, the amount deposited to the Bond
Distribution Account pursuant to Section 5.06(c)(1) of the Sale and Servicing
Agreement. If there is more than one Class of Bonds entitled to distributions of
principal on such Distribution Date, the aggregate amount described in the
preceding sentence shall be allocated among such Classes on a pro rata basis in
accordance with the relative amounts of such distributions of principal.
SECTION 8.03. [RESERVED].
SECTION 8.04. Release of Trust Estate. (a) Subject to the payment of its
fees and expenses pursuant to Section 6.07, the Indenture Trustee may, and when
required by the provisions of this Indenture shall, execute instruments to
release property from the lien of this Indenture, or convey the Indenture
Trustee's interest in the same, in a manner and under circumstances that are not
inconsistent with the provisions of this Indenture. No party relying upon an
instrument executed by the Indenture Trustee as provided in this Article VIII
shall be bound to ascertain the Indenture Trustee's authority, inquire into the
satisfaction of any
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conditions precedent or see to the application of any moneys.
(b) The Indenture Trustee shall, at such time as there are no Bonds
Outstanding and all sums due the Indenture Trustee pursuant to Section 6.07 have
been paid, release any remaining portion of the Trust Estate that secured the
Bonds from the lien of this Indenture and release to the Issuer or any other
Person entitled thereto any funds then on deposit in the Trust Accounts. The
Indenture Trustee shall release property from the lien of this Indenture
pursuant to this Section 8.04(b) only upon receipt of an Issuer Request
accompanied by an Officer's Certificate and an Opinion of Counsel.
The Issuer agrees, upon request by the Seller or the successor Servicer,
as applicable, and representation by the Seller or the successor Servicer, as
applicable, that it has complied with the procedure in Section 9.01 of the Sale
and Servicing Agreement, to render the Issuer Request to the Indenture Trustee
in accordance with Section 4.04, and take such other actions as are required in
that Section.
SECTION 8.05. Opinion of Counsel. The Indenture Trustee shall receive at
least seven days prior written notice when requested by the Issuer to take any
action pursuant to Section 8.04(a), accompanied by copies of any instruments
involved, and the Indenture Trustee shall also require, as a condition to such
action, an Opinion of Counsel, in form and substance satisfactory to the
Indenture Trustee, stating the legal effect of any such action, outlining the
steps required to complete the same, and concluding that all conditions
precedent to the taking of such action have been complied with and such action
will not materially and adversely impair the security for the Bonds or the
rights of the Bondholders in contravention of the provisions of this Indenture;
provided, however, that such Opinion of Counsel shall not be required to express
an opinion as to the fair value of the Trust Estate. Counsel rendering any such
opinion may rely, without independent investigation, on the accuracy and
validity of any certificate or other instrument delivered to the Indenture
Trustee in connection with any such action.
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ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without Consent of Bondholders.
Without the consent of any Bondholders and with prior notice to the Rating
Agencies, the Indenture Trustee and the Issuer may execute a supplemental
indenture to cure any ambiguity or to correct or supplement any provision or add
provisions to, or change in any manner or eliminate any provisions of, this
Indenture or to modify in any manner the rights of the Bondholders under this
Indenture; provided, however, that such action shall not, as evidenced by an
opinion of counsel, adversely affect in any material respect the interest of any
Bondholder; provided that any supplemental indenture will be deemed not to
adversely affect the interests of the Bondholders if it does not result in a
downgrade, withdrawal or qualification of the then current rating on any Class
of Bonds as confirmed in writing by each Rating Agency. The Indenture Trustee is
hereby authorized to join in the execution of any such supplemental indenture
and to make any further appropriate agreements and stipulations that may be
therein contained.
SECTION 9.02. Supplemental Indentures with Consent of Bondholders. (a)
The Issuer and the Indenture Trustee, with prior notice to the Rating Agencies
and with the consent of the holders of Bonds evidencing not less than 51% of the
Bond Balance, may enter into supplemental indentures for the purpose of adding
any provisions to, or changing in any manner or eliminating any of the
provisions of, this Agreement or of modifying in any manner the rights of the
Bondholders under this Indenture; provided, however, that no such supplemental
indenture shall, without (i) the consent of the Holder of each outstanding Bond
affected thereby and (ii) receipt of an affirmation from each Rating Agency that
such supplemental indenture shall not result in a downgrade, withdrawal or
qualification of the ratings then assigned by such Rating Agency to such Class
of Bonds: (A) change the date of payment of the principal of, or interest on,
any Bond or reduce the principal amount thereof, the interest rate specified
thereon, the redemption price with respect thereto, change the provisions of
this Indenture relating to the application of collections on, or the proceeds of
the sale of, the Trust Estate to payment of principal of or interest on the
Bonds, or change any place of payment where, or the coin or currency in which,
any Bond or any interest thereon is payable, or impair the right to institute
suit for the enforcement of the provisions of this Indenture requiring the
application of funds available therefor, as provided in Article V, to the
payment of any such amount due on the Bonds on or after the respective due dates
thereof (or, in the case of redemption, on or after the Redemption Date); (B)
reduce the percentage of the Bond Balance, the consent of the Holders of which
is required for any such supplemental indenture, or the consent of the Holders
of which is required for the waiver of compliance with certain provisions of
this Indenture
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or the waiver of past Defaults or Events of Default and their consequences; (C)
modify or alter the provisions of the proviso to the definition of the term
"Outstanding"; (D) reduce the percentage of the then outstanding Bond Balance
required to direct the Indenture Trustee to direct the Issuer to sell or
liquidate the Trust Estate pursuant to Section 5.04; (E) modify any provision of
this Section except to increase any percentage specified herein or to provide
that certain additional provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each outstanding Bond affected
thereby; (F) modify any of the provisions of this Indenture in such manner as to
affect the calculation of the amount of any payment of interest or principal due
on any Bond on any Distribution Date (including the calculation of any of the
individual components of such calculation) or to affect the rights of the
Bondholders to the benefit of any provisions for the mandatory redemption of the
Bonds contained herein; or (G) permit the creation of any lien ranking prior to
or on a parity with the lien of this Indenture with respect to any part of the
Trust Estate or, except as otherwise permitted or contemplated herein, terminate
the lien of this Indenture on any property at any time subject thereto or
deprive the Holder of any Bond of the security provided by the lien of this
Indenture, provided, further, that no such supplemental indenture shall, without
the consent of all Bondholders, modify the provisions of this Indenture
described in this Section 9.02(a).
(b) It shall not be necessary for any Act of Bondholders under this
Section that such Bondholders approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such Bondholders approve
the substance thereof.
(c) Promptly after the execution by the Issuer and the Indenture Trustee
of any supplemental indenture pursuant to this Section 9.02, the Indenture
Trustee shall mail to the Holders of the Bonds to which such amendment or
supplemental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Indenture Trustee
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
SECTION 9.03. Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.01 and 6.02, shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Indenture Trustee may, but shall
not be obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties, liabilities or immunities under this
Indenture or otherwise. Before entering into any supplemental indenture, the
Indenture Trustee may require delivery of a tax opinion with respect to
treatment of the Bonds as debt and the treatment of the Trust
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Estate as (i) an entity whose existence separate from Allied REIT (or another
corporation qualifying as a real estate investment trust) will be disregarded
for federal income tax purposes (such as a qualified REIT subsidiary) or (ii) as
an entity not subject to federal income tax.
SECTION 9.04. Effect of Supplemental Indenture. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and shall be deemed to be modified and amended in accordance therewith with
respect to the Bonds affected thereby, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under this Indenture of
the Indenture Trustee, the Issuer and the Holders of the Bonds shall thereafter
be determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
SECTION 9.05. Reference in Bonds to Supplemental Indentures. Bonds
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Bonds so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Bonds.
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ARTICLE X
Redemption of Bonds
SECTION 10.01. Redemption. At (i) the option of the Seller on any
Distribution Date on or after the Distribution Date on which the Bond Balance is
less than 10% of the initial Bond Balance and (ii) in the event that ACC is no
longer the Servicer, at the option of the Successor Servicer on any Distribution
Date on or after the Distribution Date on which the Bond Balance is less than
10% of the initial Bond Balance, the Seller or the Successor Servicer, as
applicable, shall be entitled to redeem the Bonds in full, but not in part. To
exercise such option, the Seller or the Successor Servicer, as applicable, shall
deposit to the Collection Account on the Determination Date preceding the
Redemption Date, pursuant to Section 5.04 of the Sale and Servicing Agreement,
an amount equal to the Redemption Price and shall succeed to all interests in
and to the Funding Note and Allied Interests. The Seller or the Successor
Servicer, as applicable, shall furnish the Rating Agencies notice of such
redemption. If the Bonds are to be redeemed pursuant to this Section 10.01, the
Seller or the Successor Servicer shall furnish notice of such election to the
Indenture Trustee not later than 20 days prior to the Redemption Date and the
Seller or the Successor Servicer, as applicable, shall deposit the Redemption
Price by 10:00 A.M. New York City time on the Remittance Date preceding the
Redemption Date with the Indenture Trustee in the Bond Distribution Account,
whereupon all then outstanding Bonds shall be due and payable on the Redemption
Date upon the furnishing of a notice complying with Section 10.02 to each Holder
of the Bonds.
SECTION 10.02. Form of Redemption Notice. (a) Notice of redemption under
Section 10.01 shall be given by the Indenture Trustee by first-class mail,
postage prepaid, or by facsimile mailed or transmitted not later than 10 days
prior to the applicable Redemption Date to each person that was a Holder of
Bonds as of the close of business on the Record Date preceding the applicable
Redemption Date, at such Holder's address or facsimile number appearing in the
Bond Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price; and
(iii) the place where such Bonds are to be surrendered for payment
of the Redemption Price (which shall be the office or agency of the
Issuer to be maintained as provided in Section 3.02).
Notice of redemption of the Bonds shall be given by the Indenture Trustee in the
name and at the expense of the Issuer. Failure to give notice of redemption, or
any defect therein, to any Holder of
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any Bond shall not impair or affect the validity of the redemption of any other
Bond.
SECTION 10.03. Bonds Payable on Redemption Date. The Bonds shall,
following notice of redemption as required by Section 10.02, on the Redemption
Date become due and payable at the Redemption Price and (unless the Seller or a
Successor Servicer, as applicable, shall default in the payment of the
Redemption Price) no interest shall accrue on the Redemption Price for any
period after the date to which accrued interest is calculated for purposes of
calculating the Redemption Price.
ARTICLE XI
Miscellaneous
SECTION 11.01. Compliance Certificates and Opinions, etc. (a) Upon any
application or request by the Issuer to the Indenture Trustee to take any action
under any provision of this Indenture, the Issuer shall furnish to the Indenture
Trustee (i) an Officer's Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and (ii) an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(1) a statement that each signatory of such certificate or opinion
has read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
In providing any such certificate, an Authorized Officer of the Owner
Trustee may, without conducting any independent investigation, rely solely on a
back-up certificate, opinion or letter of the Administrator, Servicer or any
Certificateholder, and may state such reliance in satisfaction of the foregoing
statements.
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(b) (i) Prior to the deposit of any Collateral or other property
or securities with the Indenture Trustee that is to be made the basis for
the release of any property or securities subject to the lien of this
Indenture, the Issuer shall, in addition to any obligation imposed in
Section 11.01(a) or elsewhere in this Indenture, furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of
each person signing such certificate as to the fair value (within 90 days
of such deposit) to the Issuer of the Collateral or other property or
securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of any
signer thereof as to the matters described in clause (i) above, the
Issuer shall also deliver to the Indenture Trustee an Independent
Certificate as to the same matters, if the fair value to the Issuer of
the securities to be so deposited and of all other such securities made
the basis of any such withdrawal or release since the commencement of the
then-current fiscal year of the Issuer, as set forth in the certificates
delivered pursuant to clause (i) above and this clause (ii), is 10% or
more of the Bond Balance, but such a certificate need not be furnished
with respect to any securities so deposited, if the fair value thereof to
the Issuer as set forth in the related Officer's Certificate is less than
$25,000 or less than one percent of the then outstanding Bond Balance.
(iii) Whenever any property or securities are to be released from
the lien of this Indenture, the Issuer shall also furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the fair value
(within 90 days of such release) of the property or securities proposed
to be released and stating that in the opinion of such person the
proposed release will not impair the security under this Indenture in
contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of any
signer thereof as to the matters described in clause (iii) above, the
Issuer shall also furnish to the Indenture Trustee an Independent
Certificate as to the same matters if the fair value of the property or
securities and of all other property, other than property as contemplated
by clause (v) below or securities released from the lien of this
Indenture since the commencement of the then-current calendar year, as
set forth in the certificates required by clause (iii) above and this
clause (iv), equals 10% or more of the then outstanding Bond Balance, but
such certificate need not be furnished in the case of any release of
property or securities if the fair value thereof as set forth in the
related Officer's Certificate is less than $25,000 or less than one
percent of the then outstanding Bond Balance.
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(v) Notwithstanding Section 4.04 or any other provision of this
Section, the Issuer may, without compliance with the requirements of the
other provisions of this Section, (A) collect, liquidate, sell or
otherwise dispose of Mortgage Loans, the Mortgaged Properties and the
Funding Note as and to the extent permitted or required by the Basic
Documents and (B) make cash payments out of the Trust Accounts as and to
the extent permitted or required by the Basic Documents, so long as the
Issuer shall deliver to the Indenture Trustee every six months,
commencing six months from the first Distribution Date, an Officer's
Certificate of the Issuer stating that all the dispositions of Collateral
described in clauses (A) or (B) above that occurred during the six
calendar months preceding the delivery of such Officer's Certificate were
in the ordinary course of the Issuer's business and that the proceeds
thereof were applied in accordance with the Basic Documents.
SECTION 11.02. Form of Documents Delivered to Indenture Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such officer's certificate or opinion is
based are erroneous. Any such certificate of an Authorized Officer or Opinion of
Counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Servicer, the Special Servicer, the Seller, the Issuer or the Administrator,
stating that the information with respect to such factual matters is in the
possession of the Servicer, the Special Servicer, the Seller, the Issuer or the
Administrator, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's
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compliance with any term hereof, it is intended that the truth and accuracy, at
the time of the granting of such application or at the effective date of such
certificate or report (as the case may be), of the facts and opinions stated in
such document shall in such case be conditions precedent to the right of the
Issuer to have such application granted or to the sufficiency of such
certificate or report. The foregoing shall not, however, be construed to affect
the Indenture Trustee's right to rely upon the truth and accuracy of any
statement or opinion contained in any such document as provided in Article VI.
SECTION 11.03. Acts of Bondholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Bondholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Bondholders in person or by agents duly appointed in writing; and except as
herein otherwise expressly provided such action shall become effective when such
instrument or instruments are delivered to the Indenture Trustee and, where it
is hereby expressly required, to the Issuer. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Bondholders signing such instrument or instruments. Proof
of execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Section
6.01) conclusive in favor of the Indenture Trustee and the Issuer, if made in
the manner provided in this Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Bonds shall be proved by the Bond Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Bonds shall bind the Holder of every
Bond issued upon the registration thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon, whether or not notation of
such action is made upon such Bond.
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SECTION 11.04. Notices, etc., to Indenture Trustee, Issuer and Rating
Agencies. Any request, demand, authorization, direction, notice, consent, waiver
or Act of Bondholders or other documents provided or permitted by this Indenture
shall be in writing and, if such request, demand, authorization, direction,
notice, consent, waiver or act of Bondholders is to be made upon, given or
furnished to or filed with:
(i) the Indenture Trustee by any Bondholder or by the Issuer,
shall be sufficient for every purpose hereunder if made, given, furnished
or filed in writing to or with the Indenture Trustee at its Corporate
Trust Office; or
(ii) the Issuer by the Indenture Trustee or by any Bondholder,
shall be sufficient for every purpose hereunder if in writing and mailed
first-class, postage prepaid to the Issuer addressed to: Allied Capital
Commercial Mortgage Trust 1998-1, in care of Wilmington Trust Company,
▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: Corporate Trustee Administration Department, or at any
other address previously furnished in writing to the Indenture Trustee by
the Issuer or the Administrator. The Issuer shall promptly transmit any
notice received by it from the Bondholders to the Indenture Trustee.
Notices required to be given to the Rating Agencies by the Issuer, the
Indenture Trustee or the Owner Trustee shall be in writing, personally delivered
or mailed by certified mail, return receipt requested, to (i) in the case of
Fitch, at the following address: Fitch IBCA, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Commercial Mortgage Surveillance and (ii) in
the case of Standard & Poor's, at the following address: Standard & Poor's
Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇ ▇▇▇▇▇▇▇▇
(▇▇▇▇ ▇▇▇▇▇), ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Asset Backed Surveillance
Department; or as to each of the foregoing, at such other address as shall be
designated by written notice to the other parties.
SECTION 11.05. Notices to Bondholders; Waiver. Where this Indenture
provides for notice to Bondholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Bondholder affected by such
event, at such Holder's address as it appears on the Bond Register, not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Bondholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Bondholder shall affect the sufficiency of such notice with
respect to other Bondholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive
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such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Bondholders shall be filed with
the Indenture Trustee but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a result
of a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Bondholders when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a
sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies, failure
to give such notice shall not affect any other rights or obligations created
hereunder, and shall not under any circumstance constitute a Default or Event of
Default.
SECTION 11.06. Alternate Payment and Notice Provisions. Notwithstanding
any provision of this Indenture or any of the Bonds to the contrary, the Issuer
may enter into any agreement with any Holder of a Bond providing for a method of
payment, or notice by the Indenture Trustee or any Paying Agent to such Holder,
that is different from the methods provided for in this Indenture for such
payments or notices. The Issuer will furnish to the Indenture Trustee a copy of
each such agreement and the Indenture Trustee will cause payments to be made and
notices to be given in accordance with such agreements.
SECTION 11.07. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 11.08. Successors and Assigns. All covenants and agreements in
this Indenture and the Bonds by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee in
this Indenture shall bind its successors, co-trustees and agents.
SECTION 11.09. Separability. In case any provision in this Indenture or
in the Bonds shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 11.10. Benefits of Indenture. Nothing in this Indenture or in the
Bonds, express or implied, shall give to any Person, other than the parties
hereto, and their successors hereunder, and the Bondholders, and any other party
secured hereunder, and any other Person with an ownership interest in any part
of the Trust Estate, any benefit or any legal or equitable right, remedy or
claim under this Indenture.
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SECTION 11.11. Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Bonds or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
SECTION 11.12. GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.13. Counterparts. This Indenture may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.
SECTION 11.14. Recording of Indenture. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the Indenture Trustee or any other counsel reasonably
acceptable to the Indenture Trustee) to the effect that such recording is
necessary either for the protection of the Bondholders or any other Person
secured hereunder or for the enforcement of any right or remedy granted to the
Indenture Trustee under this Indenture.
SECTION 11.15. Trust Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Bonds or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer, including the Seller, or (iii) any
partner, owner, beneficiary, agent, officer, director, employee or agent of the
Indenture Trustee or the Owner Trustee in its individual capacity, any holder of
a beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee
or of any successor or assign of the Indenture Trustee or the Owner Trustee in
its individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all purposes of
this Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Article VI, VII and VIII of the Trust Agreement.
SECTION 11.16. No Petition. The Indenture Trustee, by entering
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into this Indenture, and each Bondholder, by accepting a Bond, hereby covenant
and agree that they will not at any time, prior to the date that is one year and
one day after the termination of the Indenture, institute against the Seller or
the Issuer, or join in any institution against the Seller or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any United States federal or state bankruptcy or
similar law in connection with any obligations relating to the Bonds, this
Indenture or any of the Basic Documents.
SECTION 11.17. Inspection. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Indenture Trustee or any Rating
Agency, during the Issuer's normal business hours, to examine all the books of
account, records, reports and other papers of the Issuer, to make copies and
extracts therefrom, to cause such books to be audited by Independent certified
public accountants, and to discuss the Issuer's affairs, finances and accounts
with the Issuer's officers, employees and Independent certified public
accountants, all at such reasonable times and as often as may be reasonably
requested. The Indenture Trustee shall, and shall cause its representatives to,
hold in confidence all such information except to the extent disclosure may be
required by law (and all reasonable applications for confidential treatment are
unavailing) and except to the extent that the Indenture Trustee may reasonably
determine that such disclosure is consistent with its obligations hereunder.
Section 11.18. Limitation on Liability of Owner Trustee. This Indenture,
and any Bonds issued in connection herewith, have been or will be executed on
behalf of the Issuer, a Delaware business trust, by Wilmington Trust Company
solely in its capacity as Owner Trustee under the Trust Agreement, and not in
its individual capacity. In no case shall Wilmington Trust Company (or any
entity acting as successor or additional trustee) be personally liable for or on
account of any of the statements, representations, warranties, covenants or
obligations of the Issuer hereunder.
* * * * *
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IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused this
Indenture to be duly executed by their respective officers, thereunto duly
authorized and duly attested, all as of the day and year first above written.
ALLIED CAPITAL COMMERCIAL MORTGAGE
TRUST 1998-1,
By: WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Owner Trustee
by: /s/ W. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: W. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Senior Financial Services Officer
LASALLE NATIONAL BANK,
not in its individual capacity but solely as
Indenture Trustee
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: First Vice President
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ }
} ss.:
COUNTY OF NEW YORK }
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, known
to me to be the person and officer whose name is subscribed to the foregoing
instrument and acknowledged to me that the same was the act of the said Allied
Capital Commercial Mortgage Trust 1998-1, a Delaware business trust, and that
s/he executed the same as the act of said business trust for the purpose and
consideration therein expressed, and in the capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 30th day of January, 1998.
/s/ ▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
-----------------------------------------------
Notary Public in and for the State of New York.
My commission expires:
11/10/99
-----------------------------------------------
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STATE OF NEW YORK }
} ss.:
COUNTY OF NEW YORK }
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared ▇▇▇▇▇▇▇ ▇▇▇▇▇, known to me to
be the person and officer whose name is subscribed to the foregoing instrument
and acknowledged to me that the same was the act of LaSalle National Bank, a
national banking association, and that s/he executed the same as the act of
said national banking association for the purpose and consideration therein
stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 31 day of January, 1998.
/s/ ▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
----------------------------------------------
Notary Public in and for the State of New York.
My commission expires:
11/10/99
------------------------------------------------
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SCHEDULE A
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EXHIBIT A
[FORM OF RULE 144A-IAI BOND]
[FORM OF REGULATION S PERMANENT GLOBAL BOND]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE INDENTURE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE BONDS EVIDENCED HEREBY HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A BUYER THAT THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE
903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), OR (4) TO AN INSTITUTIONAL "ACCREDITED INVESTOR"
WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT THAT DELIVERS TO THE INDENTURE TRUSTEE A LETTER IN THE FORM
ATTACHED TO THE INDENTURE AND SUCH CERTIFICATIONS, LEGAL OPINIONS AND OTHER
INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT THE PROPOSED TRANSFER
IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (B) IN ACCORDANCE WITH
ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION.
THE INDENTURE CONTAINS FURTHER RESTRICTIONS ON THE TRANSFER AND RESALE OF THIS
BOND. EACH TRANSFEREE OF THIS BOND, BY ACCEPTANCE HEREOF, IS DEEMED TO HAVE
ACCEPTED THIS BOND SUBJECT TO THE FOREGOING RESTRICTIONS ON TRANSFERABILITY.
EACH BONDHOLDER OR BOND OWNER, BY ITS ACCEPTANCE OF THIS BOND (OR INTEREST
THEREIN), COVENANTS AND AGREES THAT SUCH BONDHOLDER OR BOND OWNER, AS THE CASE
MAY BE, SHALL NOT, PRIOR TO THE DATE THAT IS ONE YEAR AND ONE DAY AFTER THE
TERMINATION OF THE INDENTURE, ACQUIESCE, PETITION OR OTHERWISE INVOKE OR CAUSE
THE ISSUER TO INVOKE THE PROCESS OF ANY COURT OR GOVERNMENTAL AUTHORITY FOR THE
PURPOSE OF COMMENCING OR SUSTAINING A CASE AGAINST THE ISSUER UNDER ANY FEDERAL
OR STATE BANKRUPTCY, INSOLVENCY, REORGANIZATION OR SIMILAR LAW OR
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APPOINTING A RECEIVER, LIQUIDATOR, ASSIGNEE, TRUSTEE, CUSTODIAN, SEQUESTRATOR OR
OTHER SIMILAR OFFICIAL OF THE ISSUER OR ANY SUBSTANTIAL PART OF ITS PROPERTY, OR
ORDERING THE WINDING UP OR LIQUIDATION OF THE AFFAIRS OF THE ISSUER.
THE PRINCIPAL OF THIS BOND IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS BOND AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS BOND DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE SELLER, THE
SERVICER, THE SPECIAL SERVICER, THE OWNER TRUSTEE, THE PAYING AGENT, THE
INDENTURE TRUSTEE, THE FISCAL AGENT, THE INITIAL PURCHASERS OR ANY OF THEIR
RESPECTIVE AFFILIATES AND WILL NOT REPRESENT AN INTEREST IN OR RECOURSE
OBLIGATION OF THE ISSUER OR ITS AFFILIATES AND WILL NOT BE INSURED OR GUARANTEED
BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
[THIS BOND IS SUBORDINATE IN RIGHT OF PAYMENT TO CERTAIN OTHER CLASSES OF BONDS
AS DESCRIBED IN THE INDENTURE.]
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REGISTERED $__________(1)
No. CUSIP NO.:__________
ALLIED CAPITAL COMMERCIAL MORTGAGE TRUST 1998-1
COMMERCIAL MORTGAGE COLLATERALIZED BONDS, CLASS [A][B][C]
Allied Capital Commercial Mortgage Trust 1998-1, a business trust
organized and existing under the laws of the State of Delaware (herein referred
to as the "Issuer"), for value received, hereby promises to pay to ____________,
or registered assigns, the principal sum of [ ] DOLLARS, payable on each
Distribution Date in an amount equal to the result obtained by multiplying (i) a
fraction the numerator of which is $ [INSERT INITIAL PRINCIPAL AMOUNT OF THIS
BOND] and the denominator of which is $[PRINCIPAL AMOUNT OF CLASS] by (ii) the
aggregate amount, if any, payable from the Bond Distribution Account in respect
of principal on the Class [A][B][C] Bonds pursuant to Section 8.02 of the
Indenture dated as of January 1, 1998 (the "Indenture"), between the Issuer and
LaSalle National Bank, a national banking association, as Indenture Trustee (the
"Indenture Trustee"); provided, however, that the entire unpaid principal amount
of this Bond shall be due and payable on the earlier of January 25, 2028 (the
"Final Rated Distribution Date") and the Redemption Date, if any, pursuant to
Section 10.01 of the Indenture. Capitalized terms used and not defined herein
shall have the meanings assigned to them in the Indenture.
On each Distribution Date, until the outstanding principal amount of this
Bond is paid or made available for payment, this Bond will accrue interest,
payable on each Distribution Date, through the last day of the preceding
calendar month on the outstanding principal amount of this Bond as of the
preceding Distribution Date (after giving effect to payments made on such
preceding Distribution Date) at a rate equal to [6.31][6.60][6.71]% per annum,
based on a 360-day year consisting of twelve 30-day months. "Distribution Date"
means the 25th day of each month, or, if any such day is not a Business Day, the
immediately following Business Day, commencing in February 1998. The Issuer will
pay interest and principal on this Bond on each Distribution Date as further
specified in Section 8.02 of the Indenture.
The principal of and interest on this Bond are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Bond shall be applied first to interest due and payable on
this Bond as provided
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above and then to the unpaid principal of this Bond.
Reference is made to the further provisions of this Bond set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Bond.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Bond shall
not be entitled to any benefit under the Indenture, or be valid or obligatory
for any purpose.
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IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer, as of the date set
forth below.
Date:_____________________ ALLIED CAPITAL COMMERCIAL
MORTGAGE TRUST 1998-1,
By: WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Owner Trustee
By:____________________________________
Authorized Officer
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Bonds designated above and referred to in the
within-mentioned Indenture.
Date:_____________________ LASALLE NATIONAL BANK, not in its
individual capacity but solely as
Indenture Trustee
By:____________________________
Authorized Signatory
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REVERSE OF BOND
This Bond is one of a duly authorized issue of Bonds of the Issuer,
issued under the Indenture, to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the Holders of
the Bonds. The Bonds are subject to all terms of the Indenture.
The Bonds will be secured by the Collateral pledged as security therefor
as provided in the Indenture.
The entire unpaid principal amount of this Bond shall be due and payable
on the earlier of the Final Rated Distribution Date and the Redemption Date, if
any, pursuant to Section 10.01 of the Indenture. Section 10.01 of the Indenture
provides that on any Distribution Date on or after the Distribution Date on
which the Bond Balance is less than 10% of the initial Bond Balance the Bonds
may be redeemed in full, but not in part, (i) at the option of the Seller or
(ii) in the event that Allied Capital Corporation is no longer the Servicer, at
the option of the Successor Servicer. Notwithstanding the foregoing, the entire
unpaid principal amount of the Bonds may be declared immediately due and
payable, if not previously paid, in the manner provided in Section 5.02 of the
Indenture on the date on which an Event of Default shall have occurred and be
continuing by the Indenture Trustee or Holders of Bonds representing not less
than 51% of the then outstanding Bond Balance. The principal of each Bond shall
be payable monthly on each Distribution Date. All principal payments on each
Class of Bonds shall be made pro rata to the Bondholders of each Class entitled
thereto.
Any installment of interest or principal payable on a Bond that is
punctually paid or duly provided for by the Issuer on the applicable
Distribution Date, other than the final Distribution Date, shall be paid to the
Person in whose name such Bond is registered on the Record Date by check mailed
first-class postage prepaid to such Person's address as it appears on the Bond
Register on such Record Date, except that, (i) unless Definitive Bonds have been
issued, with respect to Bonds registered on the Record Date in the name of the
nominee of the Clearing Agency (initially, such nominee to be Cede & Co.),
payment will be made by wire transfer in immediately available funds to the
account designated by such nominee and (ii) if Definitive Bonds have been issued
pursuant to Section 2.12 of the Indenture, payment thereon shall be made by wire
transfer in immediately available funds to the account designated by the Holder
of such Bonds if such Bondholder (a) is the registered Holder of such Bonds and
(b) has provided the Indenture Trustee with wiring instructions in writing five
Business Days prior to the related Distribution Date or has provided the
Indenture Trustee with
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such instructions for any previous Distribution Date.
Any reduction in the principal amount of this Bond effected by any
payments made on any Distribution Date shall be binding upon all future Holders
of this Bond and of any Bond issued upon the registration of transfer hereof or
in exchange hereof or in lieu hereof, whether or not noted hereon. If funds are
expected to be available, as provided in the Indenture, for payment in full of
the then remaining unpaid principal amount of this Bond on a Distribution Date,
then the Indenture Trustee, in the name of and on behalf of the Issuer, will
notify the Person who was the Registered Holder hereof as of the Record Date
preceding such Distribution Date by notice mailed or transmitted by facsimile
prior to such Distribution Date, and the amount then due and payable shall be
payable only upon presentation and surrender of this Bond at the Indenture
Trustee's principal Corporate Trust Office.
The Indenture Trustee shall notify the Person in whose name a Bond is
registered at the close of business on the Record Date preceding the
Distribution Date on which the Issuer expects the final installment of principal
of and interest on such Bond to be paid. Such notice shall be mailed no later
than five days prior to such final Distribution Date and shall specify that such
final installment will be payable only upon presentation and surrender of such
Bond and shall specify the place where such Bond may be presented and
surrendered for payment of such installment. Notices in connection with
redemptions of Bonds shall be mailed to Bondholders as provided in Section 10.02
of the Indenture.
The Issuer covenants that if (i) default is made in the payment of
interest due on any Bond on any Distribution Date, or (ii) default is made in
the payment of the amount of principal of any Bond due on any Distribution Date,
the Issuer will, upon demand of the Indenture Trustee, pay to it, for the
benefit of the Holders of the Bonds, the whole amount then due and payable on
such Bonds for principal and interest, with interest on the overdue principal
and, to the extent payment at such rate of interest shall be legally
enforceable, on overdue installments of interest at the rate borne by the Bonds
and, in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances (and interest on Advances) of the Servicer,
the Special Servicer, the Indenture Trustee and the Fiscal Agent, and their
agents and counsel.
The Issuer shall cause to be kept the Bond Register in which, subject to
such reasonable regulations as it may prescribe and the restrictions on
transfers of the Bonds set forth herein, the Issuer shall provide for the
registration of Bonds and the registration of transfers of Bonds. The Indenture
Trustee initially shall be the
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herein provided. The Issuer shall not be required to make and the Bond Registrar
need not register transfers or exchanges of Bonds selected for redemption or of
any Bond for a period of 15 days preceding the due date for any payment with
respect to the Bond.
Subject to the restrictions and limitations set forth in the Indenture
and on the face hereof, upon surrender for exchange or registration of transfer
of any Bond at the office or agency of the Issuer to be maintained as provided
in Section 3.02 of the Indenture, the Issuer shall execute, and the Indenture
Trustee shall authenticate and the Bondholder shall obtain from the Indenture
Trustee, as applicable, (i) the Bonds which the Bondholder making the exchange
is entitled to receive or (ii) in the name of the designated transferee or
transferees, one or more new Bonds of the same Class in any authorized
denominations, of a like aggregate principal amount. All Bonds issued upon any
registration of transfer or exchange of Bonds shall be the valid obligations of
the Issuer, evidencing the same debt, and entitled to the same benefits under
the Indenture, as the Bonds surrendered upon such registration of transfer or
exchange.
Every Bond presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument of
transfer in form reasonably satisfactory to the Indenture Trustee duly executed
by, the Holder thereof or such Holder's attorney duly authorized in writing,
with such signature guaranteed by an "eligible guarantor institution" meeting
the requirements of the Bond Registrar, which requirements include membership or
participation in the Securities Transfer Agent's Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Bond
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Exchange Act.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Bonds, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Bonds.
No recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Bonds or under the Indenture or any certificate or other writing delivered in
connection herewith or therewith, against (i) the Indenture Trustee or the Owner
Trustee in its individual capacity, (ii) any owner of a beneficial interest in
the Issuer, including the Seller, or (iii) any partner, owner, beneficiary,
agent, officer, director, employee or agent of the Indenture Trustee
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or the Owner Trustee in its individual capacity, any holder of a beneficial
interest in the Issuer, the Owner Trustee or the Indenture Trustee or of any
successor or assign of the Indenture Trustee or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity.
The Issuer has entered into the Indenture, and the Bonds will be issued,
with the intention that, for federal, state and local income, single business
and franchise tax purposes, the Bonds will qualify as indebtedness secured by
the Trust Estate. Each Bondholder, by its acceptance of a Bond (and each Bond
Owner by its acceptance of an interest in the applicable Book-Entry Bond),
agrees to treat the Bonds for federal, state and local income and franchise tax
purposes as indebtedness.
Prior to due presentation for registration of transfer of any Bond, the
Issuer, the Indenture Trustee and any agent of the Issuer and the Indenture
Trustee may treat the Person in whose name any Bond is registered (as of the day
of determination) as the owner of such Bond for the purpose of receiving
payments of principal of and interest, if any, on such Bond and for all other
purposes whatsoever, whether or not such Bond be overdue, and none of the
Issuer, the Indenture Trustee or any agent of the Issuer and the Indenture
Trustee shall be affected by notice to the contrary.
Without the consent of any Bondholders and with prior notice to the
Rating Agencies, the Indenture Trustee and the Issuer may execute a supplemental
indenture to cure any ambiguity or to correct or supplement any provision or add
provisions to, or change in any manner or eliminate any provisions of, the
Indenture or to modify in any manner the rights of the Bondholders under the
Indenture; provided, however, that such action shall not, as evidenced by an
opinion of counsel, adversely affect in any material respect the interest of any
Bondholder. In addition, subject to Section 9.02 of the Indenture, the Issuer
and the Indenture Trustee, with prior notice to the Rating Agencies and with the
consent of the holders of Bonds evidencing not less than 51% of the Bond
Balance, may enter into supplemental indentures for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Agreement or of modifying in any manner the rights of the Bondholders
under the Indenture. Upon the execution of any supplemental indenture, the
Indenture shall be and shall be deemed to be modified and amended in accordance
therewith with respect to the Bonds affected thereby, and the respective rights,
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limitations of rights, obligations, duties, liabilities and immunities under the
Indenture of the Indenture Trustee, the Issuer and the Holders of the Bonds
shall thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of the Indenture for any and all purposes.
The term "Issuer" as used in this Bond includes any successor to the
Issuer under the Indenture.
The Bonds are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Bond and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
Notwithstanding any other provisions in the Indenture, the Holder of any
Bond shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest, if any, on such Bond on or after the
respective due dates thereof expressed in such Bond or in the Indenture (or, in
the case of redemption, on or after the Redemption Date) and to institute suit
for the enforcement of any such payment, and such right shall not be impaired
without the consent of such Holder.
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ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of
assignee:
________________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto:
________________________________________________________________________________
(name and address of assignee)
the within Bond and all rights thereunder, and hereby irrevocably constitutes
and appoints ________________________________________, attorney, to transfer
said Bond on the books kept for registration thereof, with full power of
substitution in the premises.
Dated:_________________________________________________________________*/
Signature Guaranteed:
__________________________________________*/
________________________
*/ NOTICE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Bond in
every particular, without alteration, enlargement or any change whatever.
Such signature must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Bond Registrar, which requirements
include membership or participation in STAMP or such other "signature
guarantee program" as may be determined by the Bond Registrar in addition
to, or in substitution for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.
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CERTIFICATION
In connection with any transfer of any of the Bonds evidenced by this
certificate occurring prior to the date that is two years (or such shorter
period as may then be applicable under the Securities Act) after the later of
the date of original issuance of such Bonds and the last date, if any, on which
such Bonds were owned by the Seller or any Affiliate of the Seller, the
undersigned confirms that such Bonds are being transferred:
CHECK ONE BOX BELOW
(1) G to the Seller; or
(2) G pursuant to and in compliance with Rule 144A under the
Securities Act of 1933; or
(3) G pursuant to and in compliance with Regulation S under the
Securities Act of 1933; or
(4) G to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act of 1933 that has furnished to the Indenture
Trustee a signed letter containing certain representations
and agreements (the form of which letter can be obtained from
the Indenture Trustee): or
(5) G pursuant to another available exemption from the registration
requirements of the Securities Act of 1933.
Unless one of the boxes is checked, the Indenture Trustee will refuse
to register any of the Bonds evidenced by this certificate in the name
of any person other than the registered holder thereof; provided,
however, that if box (3), (4) or (5) is checked, the Indenture Trustee
may require, prior to registering any such transfer of the Bonds such
legal opinions, certifications and other information as the
Administrator has reasonably requested to confirm that such transfer
is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act of
1933, such as the exemption provided by Rule 144 under such Act.
_________________________________________
Signature
Signature Guarantee:*
________________________________________________________________________________
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Bond
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges
___________
* Signature must be guaranteed by a commercial bank, trust company or
member firm of the New York Stock Exchange.
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that it has received such information regarding the Seller and the Issuer as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:
______________________________________
Signature
NOTICE: To be executed by an executive officer.
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[TO BE ATTACHED TO GLOBAL BONDS]
SCHEDULE A
The initial principal amount at maturity of this Global Bond shall be
$ .
--------------
The following increases or decreases in the initial Bond Class Balance of this
Global Bond have been made:
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Date Amount of Amount of Initial Signature
Made increase in decrease in Bond Class of
Initial Bond Initial Balance of authorized
Class Bond Class this Global officer of
Balance of Balance of Bond Indenture
this Global this Global following Trustee or
Bond Bond such DTC
decrease or Custodian
increase
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[FORM OF REGULATION S TEMPORARY GLOBAL BOND]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE INDENTURE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE BONDS EVIDENCED HEREBY HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A BUYER THAT THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE
903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), OR (4) TO AN INSTITUTIONAL "ACCREDITED INVESTOR"
WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT THAT DELIVERS TO THE INDENTURE TRUSTEE A LETTER IN THE FORM
ATTACHED TO THE INDENTURE AND SUCH CERTIFICATIONS, LEGAL OPINIONS AND OTHER
INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT THE PROPOSED TRANSFER
IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (B) IN ACCORDANCE WITH
ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION.
THE INDENTURE CONTAINS FURTHER RESTRICTIONS ON THE TRANSFER AND RESALE OF THIS
BOND. EACH TRANSFEREE OF THIS BOND, BY ACCEPTANCE HEREOF, IS DEEMED TO HAVE
ACCEPTED THIS BOND SUBJECT TO THE FOREGOING RESTRICTIONS ON TRANSFERABILITY.
EACH BONDHOLDER OR BOND OWNER, BY ITS ACCEPTANCE OF THIS BOND (OR INTEREST
THEREIN), COVENANTS AND AGREES THAT SUCH BONDHOLDER OR BOND OWNER, AS THE CASE
MAY BE, SHALL NOT, PRIOR TO THE DATE THAT IS ONE YEAR AND ONE DAY AFTER THE
TERMINATION OF THE INDENTURE, ACQUIESCE, PETITION OR OTHERWISE INVOKE OR CAUSE
THE ISSUER TO INVOKE THE PROCESS OF ANY COURT OR GOVERNMENTAL AUTHORITY FOR THE
PURPOSE OF COMMENCING OR SUSTAINING A CASE AGAINST THE ISSUER UNDER ANY FEDERAL
OR STATE BANKRUPTCY, INSOLVENCY, REORGANIZATION OR SIMILAR LAW OR APPOINTING A
RECEIVER, LIQUIDATOR, ASSIGNEE, TRUSTEE, CUSTODIAN, SEQUESTRATOR OR OTHER
SIMILAR OFFICIAL OF THE ISSUER OR ANY SUBSTANTIAL PART OF ITS PROPERTY, OR
ORDERING THE WINDING UP OR LIQUIDATION OF THE AFFAIRS OF THE ISSUER.
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THE PRINCIPAL OF THIS BOND IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS BOND AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
[THIS BOND IS SUBORDINATE IN RIGHT OF PAYMENT TO CERTAIN OTHER CLASSES OF BONDS
AS DESCRIBED IN THE INDENTURE.]
THIS BOND DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE SELLER, THE
SERVICER, THE SPECIAL SERVICER, THE OWNER TRUSTEE, THE PAYING AGENT, THE
INDENTURE TRUSTEE, THE FISCAL AGENT, THE INITIAL PURCHASERS OR ANY OF THEIR
RESPECTIVE AFFILIATES AND WILL NOT REPRESENT AN INTEREST IN OR RECOURSE
OBLIGATION OF THE ISSUER OR ITS AFFILIATES AND WILL NOT BE INSURED OR GUARANTEED
BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
PRIOR TO THE DATE THAT IS THE LATER OF THE RELEASE DATE AND THE FIRST DATE ON
WHICH THE REQUISITE CERTIFICATIONS AS TO NON-U.S. OWNERSHIP ARE PROVIDED TO THE
INDENTURE TRUSTEE, THIS BOND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED IN THE UNITED STATES OR TO A U.S. PERSON EXCEPT PURSUANT TO AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. NO BOND
OWNERS OF THIS BOND SHALL BE ENTITLED TO RECEIVE PAYMENT OF PRINCIPAL OR
INTEREST HEREON UNLESS THE REQUIRED CERTIFICATIONS HAVE BEEN DELIVERED PURSUANT
TO THE TERMS OF THE INDENTURE.
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL BOND, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED BONDS, ARE AS
SPECIFIED IN THE INDENTURE.
NEITHER THE HOLDER NOR THE BOND OWNERS OF THIS REGULATION S TEMPORARY GLOBAL
BOND SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON EXCEPT AS PROVIDED
HEREIN.
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REGISTERED $_____________*
No. R- CUSIP NO.:_____________
ALLIED CAPITAL COMMERCIAL MORTGAGE TRUST 1998-1
COMMERCIAL MORTGAGE COLLATERALIZED BONDS, CLASS [A][B][C]
Allied Capital Commercial Mortgage Trust 1998-1, a business trust
organized and existing under the laws of the State of Delaware (herein referred
to as the "Issuer"), for value received, hereby promises to pay to ____________,
or registered assigns, the principal sum of [ ] DOLLARS, payable on each
Distribution Date in an amount equal to the result obtained by multiplying (i) a
fraction the numerator of which is $ [INSERT INITIAL PRINCIPAL AMOUNT OF THIS
BOND] and the denominator of which is $[PRINCIPAL AMOUNT OF CLASS] by (ii) the
aggregate amount, if any, payable from the Bond Distribution Account in respect
of principal on the Class [A][B][C] Bonds pursuant to Section 8.02 of the
Indenture dated as of January 1, 1998 (the "Indenture"), between the Issuer and
LaSalle National Bank, a national banking association, as Indenture Trustee (the
"Indenture Trustee"); provided, however, that the entire unpaid principal amount
of this Bond shall be due and payable on the earlier of January 25, 2028 (the
"Final Rated Distribution Date") and the Redemption Date, if any, pursuant to
Section 10.01 of the Indenture. Capitalized terms used and not defined herein
shall have the meanings assigned to them in the Indenture.
On each Distribution Date, until the outstanding principal amount of this
Bond is paid or made available for payment, this Bond will accrue interest,
payable on each Distribution Date, through the last day of the preceding
calendar month on the outstanding principal amount of this Bond as of the
preceding Distribution Date (after giving effect to payments made on such
preceding Distribution Date) at a rate equal to [6.31][6.60][6.71]% per annum,
based on a 360-day year consisting of twelve 30-day months. "Distribution Date"
means the 25th day of each month, or, if any such day is not a Business Day, the
immediately following Business Day, commencing in February 1998. The Issuer will
pay interest and principal on this Bond on each Distribution Date as further
specified in Section 8.02 of the Indenture.
The principal of and interest on this Bond are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Bond shall be applied first to interest due and payable on
this Bond as provided
_________
* Denominations of $100,000 and integral multiples of $1 in excess thereof.
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above and then to the unpaid principal of this Bond.
Reference is made to the further provisions of this Bond set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Bond.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Bond shall
not be entitled to any benefit under the Indenture, or be valid or obligatory
for any purpose.
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IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer, as of the date set
forth below.
Date:_____________________ ALLIED CAPITAL COMMERCIAL
MORTGAGE TRUST 1998-1,
By: WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Owner Trustee
By:___________________________________
Authorized Officer
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Bonds designated above and referred to in the
within-mentioned Indenture.
Date:_____________________ LASALLE NATIONAL BANK, not in its
individual capacity but solely as
Indenture Trustee
By:___________________________________
Authorized Signatory
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REVERSE OF REGULATION S TEMPORARY GLOBAL BOND
This Bond is one of a duly authorized issue of Bonds of the Issuer, all
issued under the Indenture, to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the Holders of
the Bonds. The Bonds are subject to all terms of the Indenture.
The Bonds are and will be secured by the Collateral pledged as security
therefor as provided in the Indenture.
The provisions of the form of Regulation S Permanent Global Bonds
attached as an exhibit to the Indenture are hereby incorporated by reference
herein, mutatis mutandis, and, except as otherwise provided herein, shall be
binding on the Issuer and the Holder hereof as if fully set forth herein. Except
as otherwise provided herein, the Issuer shall make all payments hereunder as
and when provided in the form of Regulation S Permanent Global Bonds and shall
be bound by all its covenants set forth therein. Until exchanged in full for
Regulation S Permanent Global Bonds, the Bond Owners of this Regulation S
Temporary Global Bond shall in all respects be entitled to the same benefits
under the Indenture as the Bond Owner of duly authenticated and delivered
Regulation S Permanent Global Bonds, provided that the Bond Owners of this
Regulation S Temporary Global Bond shall not be entitled to receive payment of
principal or interest hereon except as set forth in the next succeeding
paragraph.
Each Bond Owner of a Regulation S Temporary Global Bond shall
deliver a Regulation S Certification to the Euroclear System ("Euroclear") or
Cedel Bank, societe anonyme ("CEDEL"), as applicable, on or prior to the Release
Date (or, if such Bond Owner holds its interest in such Regulation S Temporary
Global Bond on or prior to a given Distribution Date occurring prior to the
Release Date, then it shall deliver a Regulation S Certification to Euroclear or
CEDEL, as applicable, on or prior to such Distribution Date); provided, however,
that no such Bond Owner shall be required to deliver more than one such
Regulation S Certification with respect to its beneficial interest in such
Regulation S Temporary Global Bond unless such Regulation S Certification
becomes inaccurate, in which event such Bond Owner must promptly deliver a
corrected Regulation S Certification to Euroclear or CEDEL, as applicable.
Euroclear or CEDEL shall be required to promptly deliver to the Indenture
Trustee a certificate to the effect that Euroclear or CEDEL, as applicable, has
received the requisite Regulation S Certification for the Class of Bonds
represented by such Regulation S Temporary Global Bond, and no Bond Owner (or
transferee from any such Bond Owner) shall be entitled to receive any payment of
principal or interest with respect to its beneficial interest in such Regulation
S Temporary Global Bond, or an interest in the Regulation S Permanent Global
Bond for such Class, prior to the Indenture Trustee's receipt of such
certificate from Euroclear or CEDEL with respect to the portion of such
Regulation S Temporary Global Bond beneficially owned by such Bond Owner (and,
with respect to an interest in the related Regulation S Permanent Global Bond,
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prior to the Release Date). After the Release Date, distributions due with
respect to any beneficial interest in a Regulation S Temporary Global Bond shall
not be made to the holders of such beneficial interests unless exchange for a
beneficial interest in the related Regulation S Permanent Global Bond is
improperly withheld or refused.
The Bonds of each Class initially sold in offshore transactions in
reliance on Regulation S shall be represented by the Regulation S Temporary
Global Bond for such Class, which shall be deposited with the DTC Custodian and
registered in the name of Cede & Co. Upon the later of (i) the Release Date and
(ii) the first date on which the requisite certifications as to non-U.S.
ownership are provided to the Indenture Trustee, beneficial interests in any
Regulation S Temporary Global Bond shall be exchangeable for beneficial
interests in the Regulation S Permanent Global Bond for such Class. Beneficial
interests in any Regulation S Temporary Global Bond may be held only through
Euroclear or CEDEL and, except as provided in the immediately preceding sentence
and pursuant to Section 2.10(f), may not be exchanged for a beneficial interest
in any other Bond. The Regulation S Permanent Global Bonds shall be deposited
with the DTC Custodian and registered in the name of Cede & Co.
The "Release Date" is the date 40 days after the later of (i) the
commencement of the offering of the Bonds and (ii) January 30, 1998.
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EXHIBIT C
FORM OF REGULATION S CERTIFICATION
ALLIED CAPITAL COMMERCIAL MORTGAGE TRUST 1998-1
COMMERCIAL MORTGAGE COLLATERALIZED BONDS,
CLASS_(THE "BONDS")
TO: ▇▇▇▇▇▇ Guaranty Trust Company
of New York, Brussels Office
Euroclear Operation Center
or
CEDEL, S.A.
This is to certify that as of the date hereof, and except as set forth
below, the above-captioned Bonds held by you or on your behalf for our account
are beneficially owned by (a) non U.S. person(s) or (b) U.S. person(s) who
purchased the Bonds in transactions which did not require registration under the
United States Securities Act of 1933, as amended (the "Securities Act"). As used
in this paragraph, the term "U.S. person" has the meaning given to it by
Regulation S under the Securities Act. To the extent that we hold an interest in
any of the Bonds on behalf of person(s) other than ourselves, we have received
certifications from such person(s) substantially identical to the certifications
set forth herein.
We undertake to advise you promptly by tested telex on or prior to the
date on which you intend to submit your certification relating to the Bonds held
by you or on your behalf for our account in accordance with your operating
procedures if any applicable statement herein is not correct on such date, and
in the absence of any such notification it may be assumed that this
certification applies as of such date.
This certification excepts and does not relate to $_________ of such
beneficial interest in the above Bonds in respect of which we are not able to
certify and as to which we understand the exercise of any rights to payments
thereon and the exchange for definitive Bonds or for an interest in definitive
Bonds in global form cannot be made until we do so certify.
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100
We understand that this certification is required in connection with
certain securities laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certification is or would be relevant, we irrevocably authorize
you to procedure this certification to any interested party in such proceedings.
Dated:__________, 199__
By:________________________________
As, or as agent for, the beneficial
owner(s) of the Bonds to which this
certificate relates
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EXHIBIT D
FORM OF PURCHASER'S LETTER
[DATE]
LaSalle National Bank, as Indenture Trustee
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Asset Backed Securities Trust Services Group -
Allied Capital 1998-1
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ ▇▇▇▇▇ World Headquarters
World Financial Center, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
In connection with our proposed purchase of $ principal amount of
Commercial Mortgage Collateralized Bonds, Class ___ (the "Bonds"), of Allied
Capital Commercial Mortgage Trust 1998-1 (the "Issuer"), we confirm that:
a. We have received a copy of the Private Placement Memorandum
dated January 28, 1998 relating to the Bonds (the "Memorandum"), and we
understand that the Memorandum speaks only as of its date and that the
information contained therein may not be correct or complete as of any
time subsequent to such date. We further understand that the Bonds have
not been, and will not be, registered under the Securities Act of 1933,
as amended (the "1933 Act"), and may not be sold except as permitted in
the following sentence. We agree, on our own behalf and on behalf of any
accounts for which we are acting as hereinafter stated, that if we should
sell any Bonds within two years of the later of the date of original
issuance of the Bonds or the last day on which such Bonds are owned by
the Issuer or any affiliate of the Issuer we will do so only (A) to the
Issuer, (B) to "qualified institutional buyers" (within the meaning of
Rule 144A under the ▇▇▇▇ ▇▇▇) in accordance with Rule 144A under the 1933
Act ("QIBs"), (C) pursuant to an exemption from registration in
accordance with Rule 903 or 904 of Regulation S under the 1933 Act, (D)
pursuant to the exemption from registration provided by Rule 144 under
the 1933 Act (if available), or (E) to an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the 1933 Act that is not a QIB (an "Institutional
Accredited Investor") which, prior to such sale, delivers to the
Indenture Trustee under the Indenture described
D-1
102
in the Memorandum, a signed letter substantially in the form of this
letter; and we further agree, in the capacities stated above, to provide
to any person purchasing any of the Bonds from us a notice advising such
purchaser that resales of the Bonds are restricted as stated herein.
b. We understand that, in connection with any proposed resale of
any Bonds to an Institutional Accredited Investor, we and such
Institutional Accredited Investor will be required to furnish to the
Indenture Trustee and the Issuer such certifications, legal opinions and
other information as either of them may reasonably require to confirm
that the proposed sale is being made pursuant to an exemption from, or in
a transaction not subject to, the registration requirements of the 1933
Act. We further understand that the Bonds purchased by us will bear a
legend to the foregoing effect.
c. We or, if we are purchasing the Bonds on behalf of one or more
accounts, each of such accounts are either / / an Institutional
Accredited Investor or / / a QIB [please check the appropriate box]. If
not a QIB or, if we are purchasing the Bonds on behalf of one or more
accounts, each of such accounts, (i) are purchasing the Bonds for
investment purposes and not with a view to, or for offer or sale in
connection with, any distribution in violation of the 1933 Act, (ii) have
such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of investment in the Bonds,
and (iii) are able to bear the economic risk of such investment.
d. If we are purchasing the Bonds on behalf of one or more
accounts (each of which is either an Institutional Accredited Investor or
a QIB as indicated above), as to each of such accounts we exercise sole
investment discretion and are authorized to make the representations and
enter into the agreements contained herein.
e. We have received such information as we deem necessary in order
to make our investment decision.
f. We understand that, in accordance with the prohibited
transaction rules of ERISA and Section 4975 of the Code and the terms of
the Exemption as described herein under "ERISA Considerations," no Plan
as to which the Initial Purchasers, the Depositor, the Servicer, the
Fiscal Agent, or the Indenture Trustee is a party in interest or
disqualified person, and no buyer acting on behalf of or with "plan
assets" of any such Plan, may acquire such Bonds unless pursuant to a
statutory exemption or any of the administrative exemptions issued by the
U.S. Department of Labor, such that the acquisition and holding of Bonds
by, on behalf of or with "plan assets" of such Plan would not constitute
or result in a non-exempt prohibited transaction under ERISA or Section
4975 of the Code by reason of the application of one or more of the
statutory or administrative exemptions from the prohibited transaction
rules described in the Memorandum.
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Terms used in this letter which are not otherwise defined herein have the
respective meanings assigned thereto in the Memorandum.
You and the Issuer are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby.
Very truly yours,
By:___________________________________
Name:
Title:
Bonds to be purchased:
$ original Bond
Class Balance of
Class ____________ Bonds.
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EXHIBIT E
FORM OF EXCHANGE CERTIFICATION
____________, 199__
TO: The Depository Trust Company
CEDEL BANK, S.A. or
▇▇▇▇▇▇ Guaranty Trust Company
of New York, Brussels Office
Euroclear Operation Center
LaSalle National Bank, as Indenture Trustee
Attn: Asset-Backed Securities
Trust Services Group
Allied Capital 1998-1
This is to notify you as to the transfer of the beneficial interest in
Allied Capital Commercial Mortgage Trust 1998-1 Commercial Mortgage
Collateralized Bonds, Class __ (the "Bonds"), in the initial principal amount of
$___________.
The undersigned is the owner of a beneficial interest in the Class ___ [Rule
144A-IAI Global Bond] [Regulation S Global Bond] and requests that on [INSERT
DATE], (i) [Euroclear] [CEDEL] [DTC] debt account #___________, with respect to
$__________ principal denomination of the Class __ [Rule 144A-IAI Global Bond]
[Regulation S Global Bond] and (ii) [DTC] [Euroclear] [CEDEL] credit the
beneficial interest of the below-named purchaser, account #_________, in the
Class __ [Rule 144A-IAI Global Bond] [Regulation S Global Bond] in the same
principal denomination as follows:
Name:
Address:
Taxpayer ID. No.:
The undersigned hereby represents that this transfer is being made in
accordance with an exemption from the provisions of Section 5 of the United
States Securities Act of 1933, as amended (the "Securities Act"), which
representation is based upon the reasonable belief that the purchaser is [not a
U.S. Person as defined in Regulation S under the Securities Act] [a "qualified
institutional buyer," as defined in Rule 144A under the Securities Act (a
"QIB"), and that such purchaser has acquired the Bonds in a transaction effected
in accordance with the exemption from the registration requirements of the
Securities Act provided by Rule 144A and, if the purchaser has purchased the
Bonds for one or more accounts for which it is acting as fiduciary or agent,
each such account is a QIB or an institutional "accredited investor" within the
meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act
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("Regulation D")] [an institutional "accredited investor" within the meaning of
Rule 501(a)(1), (2), (3) or (7) of Regulation D and in accordance with any
applicable securities laws of any state of the United States and, if the
purchaser has purchased the Bonds for one or more accounts for which it is
acting as fiduciary or agent, each such account is a QIB or an institutional
"accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) of
Regulation D and that the purchaser is acquiring beneficial interests in the
applicable Bond for its own account or for one or more institutional accounts
for which it is acting as fiduciary or agent in a minimum amount equivalent to
not less than U.S. $100,000 and integral multiples of U.S. $1 in excess thereof
for each such account.
Very truly yours,
[NAME OF HOLDER OF BOND]
By:_______________________________
[Name], [Chief Financial or
other Executive Officer]
___________________
[NOTE: INFORMATION PROVIDED ABOVE WITH RESPECT TO THE PURCHASER AND THE
FOREGOING REPRESENTATION MUST BE PROVIDED TO THE INDENTURE TRUSTEE UPON ANY
TRANSFER OF BONDS IF THE BONDS ARE NO LONGER HELD IN GLOBAL FORM.]
E-2