1
EXHIBIT 4.1
CAPSTEAD SECURITIES CORPORATION IV,
Issuer,
and
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
Trustee
INDENTURE
Dated as of September 1, 1998
Relating to
COLLATERALIZED MORTGAGE OBLIGATIONS
(Issuable in Series)
(Senior/Subordinate Bonds)
2
TABLE OF CONTENTS
PAGE
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ARTICLE I - DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.1 General Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.2 RESERVED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 1.3 Calculations Respecting Mortgage Loans Underlying Certificates . . . . . . . . . . . . . . 26
ARTICLE II - THE BONDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 2.1 Forms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 2.2 Form of Trustee's Certificate of Authentication . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 2.3 Bonds Issuable in Series and Classes; General Provisions with
Respect to Principal and Interest Payments . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 2.4 Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 2.5 Execution, Authentication, Delivery and Dating . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 2.6 Temporary Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 2.7 Registration, Registration of Transfer and Exchange . . . . . . . . . . . . . . . . . . . . 37
SECTION 2.8 Mutilated, Destroyed, Lost or Stolen Bonds . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 2.9 Payments of Principal and Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 2.10 Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 2.11 Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 2.12 Authentication and Delivery of Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 2.13 Book Entry Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 2.14 Termination of Book Entry System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 2.15 Restrictions on Transfer of Certain Classes of Bonds . . . . . . . . . . . . . . . . . . . 53
ARTICLE III - COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 3.1 Payment of Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 3.2 Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 3.3 Money for Bond Payments to Be Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 3.4 Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 3.5 Protection of Trust Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 3.6 Opinions as to Trust Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 3.7 Performance of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 3.8 Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 3.9 Annual Statement as to Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 3.10 Contribution of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 3.11 Successor Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
ARTICLE IV - SATISFACTION AND DISCHARGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 4.1 Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 4.2 Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
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TABLE OF CONTENTS
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SECTION 4.3 REMIC Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 4.4 Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
ARTICLE V - DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 5.1 Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment . . . . . . . . . . . . . . . . . . . . 70
SECTION 5.3 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 5.4 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 5.5 [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 5.6 Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 5.7 Trustee May Enforce Claims without Possession of Bonds . . . . . . . . . . . . . . . . . . 73
SECTION 5.8 Application of Money Collected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 5.9 Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 5.10 Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 5.11 Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 5.12 Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 5.13 Control by Bondholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 5.14 Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 5.15 Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 5.16 Waiver of Stay or Extension Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 5.17 Sale of Trust Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 5.18 Action on Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 5.19 No Recourse to Other Trust Estates or Other Assets of the Issuer . . . . . . . . . . . . . 81
SECTION 5.20 Application of the TIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
ARTICLE VI - THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 6.1 Duties of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 6.2 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 6.3 Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 6.4 Not Responsible for Recitals or Issuance of Bonds . . . . . . . . . . . . . . . . . . . . . 84
SECTION 6.5 May Hold Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
SECTION 6.6 Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
SECTION 6.7 Compensation and Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
SECTION 6.8 Disqualification; Conflicting Interests . . . . . . . . . . . . . . . . . . . . . . . . . . 86
SECTION 6.9 Eligibility; Trustee's Capital and Surplus . . . . . . . . . . . . . . . . . . . . . . . . 87
SECTION 6.10 Resignation and Removal; Appointment of Successor . . . . . . . . . . . . . . . . . . . . . 87
SECTION 6.11 Acceptance of Appointment by Successor . . . . . . . . . . . . . . . . . . . . . . . . . . 88
SECTION 6.12 Merger, Conversion, Consolidation or Succession to Business of Trustee . . . . . . . . . . 89
SECTION 6.13 Preferential Collection of Claims Against Issuer . . . . . . . . . . . . . . . . . . . . . 89
SECTION 6.14 Co-trustees and Separate Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 6.15 Authenticating Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
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TABLE OF CONTENTS
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SECTION 6.16 Alternate Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
ARTICLE VII - BONDHOLDERS' LISTS AND REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
SECTION 7.1 Issuer to Furnish Trustee Names and Addresses of Bondholders . . . . . . . . . . . . . . . 93
SECTION 7.2 Preservation of Information; Communications to Bondholders . . . . . . . . . . . . . . . . 93
SECTION 7.3 Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
SECTION 7.4 Reports by Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
ARTICLE VIII - ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL,
AND RELEASES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
SECTION 8.1 Collection of Moneys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
SECTION 8.2 Collection Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
SECTION 8.3 Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
SECTION 8.4 Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
SECTION 8.5 Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
SECTION 8.6 General Provisions Regarding Pledged Accounts . . . . . . . . . . . . . . . . . . . . . . . 98
SECTION 8.7 Reports by Trustee to Bondholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
SECTION 8.8 Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
SECTION 8.9 Reports by Independent Accountants . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
SECTION 8.10 Expense Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
SECTION 8.11 Substitution of Certificates with Eligible Substitute Certificates . . . . . . . . . . . . 104
ARTICLE IX - SUPPLEMENTAL INDENTURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
SECTION 9.1 Supplemental Indentures without Consent of Bondholders . . . . . . . . . . . . . . . . . . 106
SECTION 9.2 Supplemental Indentures with Consent of Bondholders . . . . . . . . . . . . . . . . . . . . 108
SECTION 9.3 Execution of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
SECTION 9.4 Effect of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
SECTION 9.5 Conformity with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
SECTION 9.6 Reference in Bonds to Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . 110
SECTION 9.7 Amendments to Governing Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
ARTICLE X - REDEMPTION OF BONDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
SECTION 10.1 Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
SECTION 10.2 Form of Redemption Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
SECTION 10.3 Bonds Payable on Payment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
SECTION 10.4 Right of Redemption by Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
SECTION 10.5 Withdrawal of Requests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
SECTION 10.6 Redemption Register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
SECTION 10.7 Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
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ARTICLE XI - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
SECTION 11.1 Compliance Certificates and Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
SECTION 11.2 Form of Documents Delivered to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 117
SECTION 11.3 Acts of Bondholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
SECTION 11.4 Notices, etc. to Trustee and Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
SECTION 11.5 Notices and Reports to Bondholders; Waiver of Notices . . . . . . . . . . . . . . . . . . . 120
SECTION 11.6 Rules by Trustee and Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
SECTION 11.7 Conflict with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
SECTION 11.8 Effect of Headings and Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . 120
SECTION 11.9 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
SECTION 11.10 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
SECTION 11.11 Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
SECTION 11.12 Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
SECTION 11.13 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
SECTION 11.14 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
SECTION 11.15 Recording of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
SECTION 11.16 Corporate Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
SECTION 11.17 Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
SECTION 11.18 Usury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
SECTION 11.19 REMIC Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
SECTION 11.20 Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
SECTION 11.21 Appointment of Tax Matters Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
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INDENTURE, dated as of September 1, 1998 (herein, as amended or
supplemented from time to time as permitted hereby, called this "Indenture"),
between Capstead Securities Corporation IV, a Delaware corporation (herein,
together with its permitted successors and assigns, called the "Issuer"), and
Chase Bank of Texas, National Association, as trustee (herein, together with
its permitted successors in the trusts hereunder, called the "Trustee").
PRELIMINARY STATEMENT
The Issuer has duly authorized the execution and delivery of this
Indenture to provide for one or more series (a "Series") of its Collateralized
Mortgage Obligations ("Bonds"), issuable as provided in this Indenture. Each
Series of such Bonds will be issued only under a separate supplement to this
Indenture duly executed and delivered by the Issuer and the Trustee and limited
to the amount therein described. Each Series of Bonds shall be non-recourse
obligations of the Issuer and shall be limited in right of payment to amounts
available from the Trust Estate (as defined herein) relative thereto as
provided in this Indenture and the Issuer shall not otherwise be liable for
payments on the Bonds. All covenants and agreements made by the Issuer herein
are for the benefit and security of the holders of the Bonds. The Issuer is
entering into this Indenture, and the Trustee is accepting the trusts created
hereby, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged.
All things necessary to make this Indenture a valid agreement of the
Issuer in accordance with its terms have been done.
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ARTICLE I
DEFINITIONS
SECTION 1.1 General Definitions.
Except as otherwise specified or as the context may otherwise require,
the following terms have the respective meanings set forth below (as
supplemented, to the extent indicated below, by the provisions of the Series
Supplement for a particular Series) for all purposes of this Indenture, and the
definitions of such terms are applicable to the singular as well as to the
plural forms of such terms and to the masculine as well as to the feminine and
neuter genders of such terms. Whenever any reference is made to an amount the
determination or calculation of which is governed by Section 1.3, the
provisions of Section 1.3 shall be applicable to such determination or
calculation, whether or not reference is specifically made to Section 1.3,
unless some other method of calculation or determination is expressly specified
in the particular provision. Whenever reference is made herein to an Event of
Default or Default necessitating or involving action by the Trustee, such
reference shall be construed to refer only to an Event of Default or Default of
which the Trustee is deemed to have notice or knowledge pursuant to Section
6.1(d). All other terms used herein which are defined in the Trust Indenture
Act (as hereinafter defined), either directly or by reference therein, have the
meanings assigned to them therein.
"Accountant": A Person engaged in the practice of accounting who
(except when this Indenture provides that an Accountant must be Independent)
may be employed by or affiliated with the Issuer or an Affiliate of the Issuer.
"Accrual Date": With respect to any Series, the date upon which
interest begins accruing on the Bonds of such Series, as specified in such
Bonds and the related Series Supplement.
"Act": With respect to any Bondholder, as defined in Section 11.3.
"Accrued Bond Interest": With respect to any Bond of a Series, other
than a Principal Only Bond, on any Interest Payment Date an amount equal to the
interest accrued on the Imputed Principal Balance or Notional Amount, as
applicable, thereof prior to such Interest Payment Date during the related
Interest Accrual Period at the applicable Bond Interest Rate, less such Bond's
share of any Net Interest Shortfalls and the interest portion of any Excess
Losses and Realized Losses incurred on the mortgage loans underlying the
Conventional Certificates securing such Series in the calendar month preceding
the month in which such Interest Payment Date occurs and which are then
allocable to the Class of such Bonds, in accordance with the provisions of the
related Series Supplement. Interest accrued on a Bond for the purposes of this
definition shall be calculated on the basis of a 360-day year consisting of
twelve months of thirty days each.
"Administrator": As to each Series and at any relevant time, the
Person then acting as administrator under the Pooling and Administration
Agreement applicable to such Series.
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"Advice": With respect to an Uncertificated Certificate, an
instrument or instruments evidencing and acknowledging the transfer or pledge
of such Uncertificated Certificate to the Trustee, issued by one or more
entities maintaining books on which transfers or pledges of such Uncertificated
Certificate are recorded in accordance with applicable statutes and
regulations.
"Affiliate": of any specified Person: Any other Person controlling or
controlled by or under common control with such specified Person. For the
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Agent": Any Bond Registrar, Paying Agent or Authenticating Agent.
"Aggregate Certificate Balance": With respect to the Certificates
securing a Series, the aggregate of the Certificate Principal Balances for all
such Certificates as of the date of determination.
"Aggregate Current Principal Amount": With respect to any Series, the
sum of the Class Current Principal Amounts of all Classes of Bonds of such
Series Outstanding at the time of determination.
"Aggregate Imputed Principal Balance": With respect to any Series,
the sum of the Class Imputed Principal Balances of all Classes of Bonds of such
Series Outstanding at the time of determination.
"Assumed Reinvestment Rate": With respect to any Series for any
period, the respective percentage or percentages per annum, if any, specified
in the related Series Supplement, compounded monthly unless otherwise specified
in the related Series Supplement.
"Authenticating Agent": With respect to any particular Series, the
Person, if any, named as Authenticating Agent for such Series in the related
Series Supplement or appointed by the Trustee at the request of the Issuer
pursuant to Section 6.15, until any successor Authenticating Agent for such
Series is named, and thereafter "Authenticating Agent" shall mean such
successor.
"Available Funds": With respect to a Series of Bonds, as defined in
the Series Supplement relative thereto.
"Bankruptcy Coverage Termination Date": With respect to any relevant
Series of Bonds, the earlier of (a) the Payment Date on which the amount of
Bankruptcy Losses incurred on the mortgage loans underlying the Conventional
Certificates securing such Series of Bonds and not previously deducted from the
Bankruptcy Loss Amount relative to such Series of Bonds equals or exceeds such
Bankruptcy Loss Amount on such Payment Date, and (b) the Cross-over Date
relative to such Series of Bonds.
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"Bankruptcy Loss": Unless otherwise specified in the related Series
Supplement, a loss incurred on a mortgage loan underlying a Conventional
Certificate securing a Series of Bonds as a consequence of a Debt Service
Reduction or a Deficient Valuation.
"Bankruptcy Loss Amount": With respect to any relevant Series of
Bonds, the amount specified in the related Series Supplement, as adjusted from
time to time in accordance with such Series Supplement.
"Beneficial Owner": With respect to a Book Entry Bond, the Person who
is the beneficial owner of such Bond as reflected on the books of the Clearing
Agency for the Class or on the books of a Person maintaining an account with
such Clearing Agency (directly or as an indirect participant, in accordance
with the rules of such Clearing Agency).
"Board of Directors": Either the Board of Directors of the Issuer or
the Executive Committee or Finance Committee, if any, of that Board.
"Bondholder" or "Holder": The Person in whose name a Bond is
registered in the Bond Register.
"Bond Interest Rate": With respect to any Series or Class, the annual
rate at which interest accrues on the Bonds of such Series or Class, as
specified in the related Series Supplement.
"Bond Redemption Date": With respect to a Series of Bonds, as defined
in the Series Supplement relative thereto.
"Bond Register" and "Bond Registrar": As defined in Section 2.7.
"Bonds": Any bonds authorized by, and authenticated and delivered
under, this Indenture.
"Book Entry Bonds": As specified in the related Series Supplement,
Bonds of any Class which are issued in book entry form and held in the form of
a single certificate issued in the name of a Clearing Agency registered with
the Commission.
"Book Entry Nominee": As defined in Section 2.15.
"Book Entry Termination": The time at which the book entry
registration of the Book Entry Bonds shall terminate, as specified in Section
2.14.
"Business Day": Any day that is not a Saturday, Sunday or other day
on which commercial banking institutions in the City of New York or in the city
in which the Corporate Trust Office is located are authorized or obligated by
law or executive order to be closed, or as otherwise set forth in the related
Series Supplement.
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"Certificate": A Conventional Certificate which is Granted to the
Trustee under this Indenture and the related Series Supplement as security for
a particular Series. The term "Certificates" means all of the Conventional
Certificates (if any) Granted to the Trustee under this Indenture and the
related Series Supplement as security for a particular Series. The term
"outstanding Certificates" as of any date means all of the Certificates other
than any Certificates which have been fully paid as of such date.
"Certificate Account": With respect to a Series of Bonds
collateralized by Conventional Certificates, the account designated as the
Certificate Account in respect thereof in the related Pooling and
Administration Agreement.
"Certificate Principal Balance": As of the date of any determination
with respect to any Certificate, the aggregate of the Scheduled Principal
Balances of the mortgage loans underlying such Certificate at such time.
"Certificate Rate": With respect to any Certificate, the pass-through
rate of interest payable to the holder thereof as indicated thereon. In the
event that any Certificate provides for a pass-through rate of interest which
is calculated on a mortgage loan by mortgage loan basis (equal as to each such
mortgage loan to the interest rate borne thereby less the servicing,
Certificate Trustee and other fees specified in such Certificate) the
Certificate Rate for such Certificate at the time of any determination shall be
the weighted average of such individual mortgage loan coupon rates less such
servicing, certificate trustee and other fees, as applicable.
"Certificate Trustee": With respect to any Series of Bonds
collateralized by Conventional Certificates, the entity designated as Trustee
under the related Pooling and Administration Agreement.
"Class": With respect to any Series, each subdivision of the Bonds
created pursuant to the related Series Supplement, such subdivisions having the
characteristics and designations set forth in such related Series Supplement.
"Class Current Principal Balance": With respect to any Class of Bonds
of any Series, and as of any date of determination, the sum of the Current
Principal Amounts of all Outstanding Bonds of such Class at such date.
"Class Imputed Principal Balance": With respect to any Class of Bonds
of a Series as of any date of determination, the sum of the Imputed Principal
Balance of all Outstanding Bonds of such Class at such date.
"Class Original Principal Amount": With respect to any Class of Bonds
of a Series, the aggregate Original Principal Amount of the Bonds of such Class
on the date of issuance thereof, as specified in the related Series Supplement.
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"Class Redemption Amount": With respect to any Class or Classes of
Bonds of any Series, the amount or amounts described in Section 10.4(b) hereof
and determined in accordance with the provisions of the applicable Series
Supplement.
"Clearing Agency": An organization registered as a "clearing agency"
pursuant to Section 17A of the Securities and Exchange Act of 1934, as amended,
and the regulations of the Commission thereunder. The Clearing Agency for any
Class of Book Entry Bonds will be specified in the related Series Supplement.
"Clearing Agency Participants": The entities for whom the Clearing
Agency will maintain book entry records of ownership and transfer of Book Entry
Bonds, which may include securities brokers and dealers, banks and trust
companies and clearing corporations and certain other organizations.
"Closing Date": With respect to any Series, the date on which Bonds
of such Series are first executed, authenticated and delivered.
"Code": The Internal Revenue Code of 1986, as it may be amended from
time to time and as it may be interpreted under regulations promulgated by the
Treasury Department and published rulings issued by the United States Internal
Revenue Service from time to time.
"COFI": The per annum rate equal to the monthly weighted average cost
of funds for member institutions of the Eleventh District of the Federal Home
Loan Bank System, as published by the Federal Home Loan Bank of San Francisco.
"COFI Bond": With respect to any relevant Series, any Bond thereof
the interest rate on which is determined by reference to COFI, as specified in
the related Series Supplement.
"Collateral Group": With respect to any Series, a group of one or
more outstanding Certificates and/or any other assets which may be included in
the Trust Estate securing such Series which have the characteristics described
in the related Series Supplement.
"Collection Account": With respect to any Series, the trust account
or accounts created and maintained pursuant to Section 8.2, which account shall
be an Eligible Account.
"Commission": The Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, or if at
any time such Commission is not existing and performing the duties now assigned
to it under the Trust Indenture Act, then the body performing such duties at
such time under the Trust Indenture Act or similar legislation replacing the
Trust Indenture Act.
"Compound Interest Bond": A Bond on which interest accrues and is
added to the principal of such Bond on each related Interest Payment Date
through the Initial Interest Payment Date for
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such Bond, but with respect to which neither interest nor principal is due or
payable until such Initial Interest Payment Date.
"Conventional Certificate": A conventional mortgage pass through
certificate administered by the Administrator for a particular Series (or one
of the Administrators if there is more than one for a particular Series) and
representing a fractional undivided interest in a pool of conventional mortgage
loans secured by single family (one-to-four unit) or multifamily residences,
which certificate is Granted to the Trustee under this Indenture and the
related Series Supplement as security for such Series. The term "outstanding
Conventional Certificates" as of any date means the Conventional Certificates
other than the Conventional Certificates which have been fully paid as of such
date.
"Conventional Certificate Prepayment Reserve Amount": With respect to
the Straight Pass-Through Conventional Certificates, if any, securing a Series
at any time, an amount equal to interest for such period of time, if any, as
may be specified in the related Series Supplement, at the respective
Certificate Rates for such Conventional Certificates, on their respective
Certificate Principal Balances as of the date of determination.
"Corporate Trust Office": The principal corporate trust office of the
Trustee located at [ ]or at such other address as the Trustee may designate
from time to time by notice to the Bondholders and the Issuer, or the principal
corporate trust office of any successor Trustee.
"Cross-over Date": With respect to a Series of Bonds, unless
otherwise specified in the Series Supplement relative thereto, the Payment Date
on which the Class Imputed Principal Balances of all Classes of Junior Bonds of
such Series have been reduced to zero.
"Current Principal Amount": With respect to any Bond of any Series as
of any date of determination, the sum of:
(a) the Original Principal Amount of such Bond, and
(b) if such Bond is a Compound Interest Bond, the
aggregate amount of interest, if any, accrued on such Bond and added
to the principal thereof on each Interest Payment Date for such Series
through the Interest Payment Date immediately preceding such date of
determination,
reduced by all prior payments, if any, made with respect to principal
(including payments with respect to amounts previously added to principal as
described in clause (b) above) of such Bond.
"Debt Service Reduction": With respect to a mortgage loan underlying
the Conventional Certificates securing a Series, as defined in the related
Pooling and Administration Agreement.
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"Debt Service Requirement": Except as otherwise provided in the
related Series Supplement, with respect to a particular Payment Date for a
Series, the Available Funds.
"Deceased Holder Bonds": Bonds as to which redemption is requested
pursuant to Section 10.4 by the personal representative, surviving joint tenant
or surviving tenant by the entirety of a deceased Holder.
"Default": Any occurrence which is, or with the giving of notice or
the lapse of time or both would become, an Event of Default.
"Deficient Valuation": With respect to a mortgage loan underlying any
Conventional Certificate securing a Series of Bonds, as defined in the related
Pooling and Administration Agreement.
"Definitive Bonds": Bonds other than Book Entry Bonds.
"Disqualified Organization": (i) the United States, any State or
political subdivision hereof, any foreign government, any international
organization, or any agency or instrumentality of any of the foregoing, (ii)
any organization (other than a xxxxxx'x cooperative described in Section 521 of
the Code) that is exempt from the tax imposed by Chapter 1 of the Code and not
subject to the tax imposed by Section 511 of the Code; (iii) any rural electric
or telephone cooperative described in Section 1381(a)(2)(C) of the Code; or
(iv) any other person whose holding of the residual interests of the REMIC may
cause the REMIC to incur a liability for any tax imposed under the Code that
would not otherwise be imposed but for the purchase or transfer of the residual
interests to such person. For purposes of clause (i) of the previous sentence,
a corporation shall not be treated as an instrumentality of the United States
or of any State or political subdivision thereof, if (i) all of the activities
of such corporation are subject to the tax imposed by Chapter 1 of the Code,
and (ii) a majority of the board of directors of such corporation is not
selected by the United States or any State or political subdivision (except
that this clause (ii) shall not apply to the Federal Home Loan Mortgage
Corporation).
"Distribution": With respect to any Certificate, the amount of the
monthly remittance payable to the holder of such Certificate in accordance with
its terms.
"Distribution Date": The date on which a particular Distribution is
payable to the holder of the related Certificate in accordance with its terms,
as more particularly described in the related Series Supplement.
"Eligible Account": With respect to any Series, as defined in the
related Pooling and Administration Agreement.
"Eligible Investments": Except to the extent expanded or restricted
by the Series Supplement for the Series of which such obligations or securities
form part of the Trust Estate, each of the following:
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(i) obligations of, or guaranteed as to principal and
interest by, the United States or any agency or instrumentality
thereof when such obligations are backed by the full faith and credit
of the United States;
(ii) purchase agreements on obligations of, or guaranteed
as to principal and interest by, the United States or any agency or
instrumentality thereof when such obligations are backed by the full
faith and credit of the United States, provided that the unsecured
obligations of the party agreeing to repurchase such obligations are
at the time of purchase rated by the Rating Agency in its highest
long-term rating category;
(iii) certificates of deposit, time deposits and bankers
acceptances of any United States bank or trust company incorporated
under the laws of the United States or any state, including the
Trustee; provided that the debt obligations of such bank or trust
company (or, in the case of a subsidiary in a bank holding system,
debt obligations of the bank holding company) at the date of the
acquisition thereof have been rated by the Rating Agency in its
highest long-term rating category;
(iv) pooled or common trust funds of the Trustee, acting
as trustee and custodian and not in its commercial capacity and
representing ownership solely of the investments listed in clauses (i)
through (iii) above which have been approved by any Rating Agency
requesting to review such funds; any pooled or common trust funds
which provide for demand withdrawals shall be conclusively deemed to
satisfy any maturity requirements for Eligible Investments set forth
in this Indenture;
(v) deposits, including deposits with the Trustee, which
are fully insured by the Bank Insurance Fund or the Savings
Association Insurance Fund of the FDIC, as the case may be;
(vi) participation certificates and senior debt
obligations issued by FHLMC;
(vii) commercial paper of any corporation incorporated
under the laws of the United States or any state thereof, including
corporate affiliates of the Trustee, which has an original maturity of
not more than 365 days and which, at the time of purchase, is rated by
the Rating Agency in its highest short-term rating category;
(viii) debt obligations rated by the Rating Agency at the
time at which the investment is made in its highest long-term rating
category (or those investments specified in (iii) above with
depository institutions which have debt obligations rated by the
Rating Agency in its highest long-term rating category);
(ix) money market funds which, at the time of purchase,
are rated AAA/m by Standard & Poor's and by the Rating Agency (or, if
the Rating Agency is Duff & Xxxxxx Credit Rating Co., by Xxxxx'x
Investors Service, Inc.) in its highest long-term rating category, and
which funds invest only in other Eligible Investments, any such money
market
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funds which provide for demand withdrawals being conclusively deemed
to satisfy any maturity requirements for Eligible Investments set
forth in this Indenture; or
(x) any other demand, money market or time deposit
obligation, security or investment which is acceptable to each of the
Rating Agencies rating such obligation, security or investment.
provided, however, that no instrument or security shall be an Eligible
Investment if such instrument or security evidences either (a) a right
to receive only interest payments with respect to the obligations
underlying such instrument, or (b) both principal and interest
payments derived from obligations underlying such instrument and the
interest and principal payments with respect to such instrument
provide a yield to maturity greater than 120% of the yield to maturity
at par of the underlying obligations; and provided, further, that if
any such instrument is redeemable by the issuer thereof, it shall not
be redeemable at less than par and if redeemable by any party, such
redemption must be without penalty or discount.
If the Bonds are rated by more than one Rating Agency, each reference in this
definition of "Eligible Investments" to the Rating Agency shall be construed,
in the case of each of subparagraphs (ii), (iii), (iv), (vii), (viii), (ix) and
(x), as a reference to each Rating Agency rating the Bonds that has assigned a
rating to the type of Eligible Investments referred to in such subparagraph.
"Eligible Substitute Certificate": A Certificate Granted pursuant to
Section 8.11 for one or more Certificates previously Granted to the Trustee as
collateral for a Series of Bonds, which substituted Certificate, unless
otherwise specified in the related Series Supplement (i) is a Certificate
issued by the same entity (i.e., sponsor of conventional pass-through
certificates) which issued the Certificate for which it is substituted; (ii)
has an annual interest rate (pass-through rate) which is not more than 1%
greater or not more than 1% less than the interest rate of the Certificate for
which it is substituted; (iii) has scheduled Distributions for each
Distribution Date subsequent to the Distribution Date on or preceding which
such substitution occurs which will not cause any Class of Bonds of such Series
to be paid in full later than the Stated Maturity of such Class of Bonds; (iv)
has a maturity date not earlier than one year prior to, and in no event later
than, the maturity date of the Certificate for which it is substituted; and (v)
the outstanding Certificate Principal Balance of which is at least equal to the
outstanding Certificate Principal Balance of the Certificate for which it is
substituted.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Prohibited Bonds": With respect to a Series of Bonds, the
Classes of Bonds designated as such in the related Series Supplement.
"ERISA Restricted Bonds": With respect to a Series of Bonds, the
Classes of Bonds designated as such in the related Series Supplement.
"Event of Default": The meaning specified in Section 5.1.
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"Excess Bankruptcy Loss": With respect to a Series of Bonds and any
Payment Date in respect thereof on which a Bankruptcy Loss or Bankruptcy Losses
is or are allocable to the Bonds of such Series, the amount, if any, by which
such Bankruptcy Loss or Bankruptcy Losses exceeds or exceed the applicable
Bankruptcy Loss Amount (excluding the principal portion of any Debt Service
Reductions that would otherwise be included in such excess amount).
"Excess Fraud Loss": With respect to a Series of Bonds and any
Payment Date in respect thereof on which a Fraud Loss or Fraud Losses is or are
allocable to the Bonds of such Series, the amount, if any, by which such Fraud
Loss or Fraud Losses exceeds or exceed the applicable Fraud Loss Amount.
"Excess Losses": With respect to a Series of Bonds and a Payment
Date, an amount equal to the sum of Excess Bankruptcy Losses (other than Debt
Service Reductions), Excess Fraud Losses and Excess Special Hazard Losses.
"Excess Special Hazard Loss": With respect to a Series of Bonds and
any Payment Date in respect thereof on which a Special Hazard Loss is allocable
to the Bonds of such Series, the amount, if any, by which such Special Hazard
Loss or Special Hazard Losses exceeds or exceed the applicable Special Hazard
Loss Amount.
"Expense Fund": With respect to any Series, the account, if any,
required to be created and maintained with the Trustee pursuant to Section 8.1
which account shall be an Eligible Account.
"Expense Reserve Amount": With respect to any Series, the amount, if
any, specified in the related Series Supplement.
"FHLMC": Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of
the Emergency Home Finance Act of 1970, as amended, or any successor thereto.
"First SAB Paydown Date": With respect to a Class of SAB Bonds, the
first Principal Payment Date for such Class as specified in the related Series
Supplement.
"FNMA": Federal National Mortgage Association, a federally chartered
and privately owned corporation organized and existing under the Federal
National Mortgage Association Charter Act, or any successor thereto.
"Formula Rate Bond": A Bond, if any, designated as such in a Series
Supplement.
"Fraud Loss": With respect to any Series and any mortgage loan
underlying a Conventional Certificate collateralizing such Series, a loss on
such Mortgage Loan by reason of a default arising from fraud, dishonesty or
misrepresentation in connection with such mortgage loan, including loss by
reason of the denial of coverage under any related primary mortgage insurance
policy because of such fraud, dishonesty or misrepresentation.
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"Fraud Loss Amount": With respect to any relevant Series of Bonds,
the amount specified in the related Series Supplement, as adjusted from time to
time in accordance with such Series Supplement.
"Fraud Loss Coverage Termination Date": With respect to any relevant
Series of Bonds, the earlier of (a) the Payment Date on which the amount of
Fraud Losses incurred on the mortgage loans underlying the Conventional
Certificates securing such Series of Bonds and not previously deducted from the
Fraud Loss Amount relative to such Series of Bonds, equals or exceeds the Fraud
Loss Amount on such Payment Date, and (b) the Cross-over Date relative to such
Series of Bonds.
"Future Value": With respect to any cash or Eligible Investment held
or to be deposited in a Pledged Account for a Series, as of any particular date
subsequent to the date of determination, the sum of such cash or Eligible
Investment and the investment income which can be earned thereon to such
subsequent date, determined in accordance with such assumptions or requirements
as may be specified in the related Series Supplement.
"GNMA": The Government National Mortgage Association, a wholly owned
corporate instrumentality of the United States within the Department of Housing
and Urban Development, or any successor thereto.
"Grant": To grant, bargain, sell, warrant, alienate, remise, release,
convey, assign, transfer, mortgage, pledge, create and grant a security
interest in and right of set-off against, deposit, set over and confirm. A
Grant of a Certificate or of any other instrument shall include all rights,
powers and options (but none of the obligations) of the Granting party
thereunder, including without limitation the immediate and continuing right to
claim for, collect, receive and give receipts for principal and interest
payments in respect of such Certificate 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 which the Granting party is or may be entitled to do or
receive thereunder or with respect thereto.
"Guarantor": The party to a Guaranty Agreement with the Issuer and
the Trustee.
"Guaranty Agreement": As to any Series or any Class of Bonds of any
Series which is directly insured, guaranteed or otherwise backed, the insurance
policy, surety bond, letter of credit or similar agreement pursuant to which
such insurance, guaranty or other backing is furnished.
"Highest Lawful Rate": As defined in Section 11.18.
"Highest Priority Junior Class": At any time and with respect to any
Series, that Class of Junior Bonds having (a) the then highest priority of
payment of principal under the related Series Supplement (determined without
regard to any acceleration pursuant to Article V) and (b) a Class Imputed
Principal Balance greater than zero.
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"Holder": A Bondholder.
"Imputed Principal Balance": With respect to a Bond of a Series as of
any date of determination, the amount equal to the lesser of (a) the Current
Principal Amount of such Bond at such date or, in the case of an Interest Only
Bond, the Notional Amount thereof at such date, and (b) the Original Principal
Amount of such Bond or, in the case of an Interest Only Bond, the Notional
Amount thereof on the date of issuance thereof, plus, in the case of a Compound
Interest Bond, the aggregate amount of interest, if any, accrued on such Bond
and added to the principal thereof on each Interest Payment Date for such
Series through the Interest Payment Date immediately preceding such date of
determination, less the sum of (i) all amounts paid on account of principal on
such Bond, or, in the case of an Interest Only Bond, applied in reduction of
the Notional Amount thereof, prior to such date of determination; (ii) all
Realized Losses allocated to such Bond, or, in the case of an Interest Only
Bond, applied in reduction of the Notional Amount thereof, prior to such date
of determination which remain unpaid on such date of determination; and (iii)
the portion of any Junior Bond Writedown Amount allocated to such Bond prior
to such date of determination.
"Indenture" or "this Indenture": This instrument as originally
executed and, if from time to time supplemented or amended by one or more
indentures supplemental hereto entered into pursuant to the applicable
provisions hereof, as so supplemented or amended. All references in this
instrument to designated "Articles", "Sections", "Subsections" and other
subdivisions are to the designated Articles, Sections, Subsections and other
subdivisions of this instrument as originally executed. The words "herein",
"hereof", "hereunder" and other words of similar import refer to this Indenture
as a whole and not to any particular Article, Section, Subsection or other
subdivision.
"Independent": When used with respect to any specified Person means
such a Person who (1) is in fact independent of the Issuer and any other
obligor upon the Bonds, (2) does not have any direct financial interest or any
material indirect financial interest in the Issuer or in any such other obligor
or in an Affiliate of the Issuer or such other obligor, and (3) is not
connected with the Issuer or any such other obligor as an officer, employee,
promoter, underwriter, trustee, partner, director or person performing similar
functions. Whenever it is herein provided that any Independent Person's
opinion or certificate shall be furnished to the Trustee, such Person shall be
appointed by an Issuer Order and such opinion or certificate shall state that
the signer has read this definition and that the signer is Independent within
the meaning thereof.
"Index": With respect to a Series of Bonds a Class or Classes of
which are Variable Rate Bonds the interest rate on which is determined from
time to time by reference to a predetermined index, as defined in the related
Series Supplement.
"Individual Bond": With respect to a Class of Bonds of a Series, as
defined in the related Series Supplement.
"Initial Interest Payment Date": With respect to any Class of
Compound Interest Bonds of any Series, the Principal Payment Date on which the
outstanding principal of the Class of Bonds of such Series whose final
installment of principal has the latest Stated Maturity of principal prior to
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the Stated Maturity of the final installment of principal of such Class of
Compound Interest Bonds is paid in full.
"Interest Accrual Period": With respect to any Payment Date or
Redemption Date for a Series of Bonds, the period specified in the related
Series Supplement for which interest accrued on the Outstanding Bonds of such
Series, or a certain Class thereof, as specified in the related Series
Supplement, during such period is to be paid or, if applicable, deferred and
added to principal, including, unless expressly stated to the contrary or the
context otherwise requires, each Variable Rate Interest Accrual Period.
"Interest Delay Period": With respect to any Class of Bonds of a
Series, the length of time, if any, between the end of each Interest Accrual
Period and the day immediately preceding the corresponding Interest Payment
Date.
"Interest Determination Date": With respect to any Class or Classes
of Variable Rate Bonds of a Series, the date specified in the related Series
Supplement on which the Bond Interest Rate at which interest shall accrue on
such Variable Rate Bonds during the next succeeding Variable Rate Interest
Accrual Period is determined.
"Interest Only Bond": A Bond of a Series which is entitled only to
payments of interest thereon on the basis of the Notional Amount thereof, and
on which no principal is payable, as more particularly described in the related
Series Supplement.
"Interest Payment Date": As to any Series or Class, any date
specified in the related Series Supplement as one of the fixed dates on which
an installment of interest on the Bonds of such Series or Class is due and
payable to the extent of Available Funds on such date.
"Interest Shortfall": Unless otherwise specified in the related
Series Supplement, with respect to a mortgage loan underlying a Conventional
Certificate securing a Series of Bonds, as defined in the related Pooling and
Administration Agreement.
"Issuer": CMC Securities Corporation III, a Delaware corporation,
until a successor Person shall have become the Issuer pursuant to the
applicable provisions of this Indenture, and thereafter "Issuer" shall mean
such successor Person.
"Issuer Order" and "Issuer Request": A written order or request
signed in the name of the Issuer by its Chairman, President, or a Vice
President, and by its Treasurer, an Assistant Treasurer, Controller, an
Assistant Controller, Secretary, or an Assistant Secretary, and delivered to
the Trustee.
"Issuer Resolution": A copy of a resolution certified by the
Chairman, President, any Vice President, Secretary or any Assistant Secretary
of the Issuer to have been duly adopted by the Board of Directors and to be in
full force and effect on the date of such certification and delivered to the
Trustee.
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"Junior Bond": With respect to a Series of Bonds, a Bond of a Class
of such Series which Class is subordinated in right of payment of principal
and/or interest to the Classes of Senior Bonds of such Series, as more
particularly described in the related Series Supplement.
"Junior Bond Writedown Amount": Except as otherwise specified in the
related Series Supplement, with respect to any Class of Junior Bonds of a
Series and a Payment Date, the amount by which the sum of the Class Imputed
Principal Balances of all Classes of Bonds of such Series, after reducing such
Class Imputed Principal Balances on such Payment Date by payments of principal
then made thereon and the allocation of Realized Losses then allocable thereto,
exceeds the related Pool Scheduled Principal Balance of the Mortgage Loans
underlying the Conventional Certificates collateralizing such Series of Bonds.
"Junior Imputed Principal Balance": With respect to a Series of Bonds
and a Payment Date, the amount equal to the sum of the Class Imputed Principal
Balances of the Junior Bonds outstanding at such time.
"Letter Agreement": With respect to a Class of Book Entry Bonds, the
letter agreement among the Issuer, the Trustee and the Clearing Agency
governing book entry transfers of, and certain other matters with respect to,
such Book Entry Bonds and attached as an exhibit to the related Series
Supplement.
"LIBOR": As set forth in the related Series Supplement for any Class
of Variable Rate Bonds the Bond Interest Rate on which is determined by
reference to the London Interbank Offered Rate from time to time, as determined
in the manner specified in the related Series Supplement.
"LIBOR Bond": With respect to any relevant Series, any Bond thereof
the interest rate on which is determined by reference to LIBOR, as specified in
the related Series Supplement.
"LIBOR Interest Accrual Period": With respect to any Class of LIBOR
Bonds of a Series, the interest accrual period in respect thereof, as specified
in the related Series Supplement.
"Liquidated Mortgage Loan": With respect to a Series of Bonds
collateralized by Conventional Certificates, as defined in the related Pooling
and Administration Agreement.
"Liquidation Proceeds": With respect to a Series of Bonds
collateralized by Conventional Certificates, as defined in the related Pooling
and Administration Agreement.
"Manager": The entity, if any, specified in the related Series
Supplement which shall perform certain administrative functions with respect to
a Series of the Bonds.
"Maturity": With respect to any Bond, the date on which the entire
unpaid principal amount of such Bond becomes due and payable as therein or
herein provided, whether at the Stated Maturity of the final installment of
such principal or by declaration of acceleration, call for redemption or
otherwise.
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"Maximum Bond Interest Rate Assumption": With respect to any relevant
Series and any relevant Class or Classes of Variable Rate Bonds, if any, for
any Variable Rate Interest Accrual Period for which the applicable interest
rate on such Variable Rate Bonds has not yet been determined in accordance with
Section 2.3, an assumed interest rate on such Bonds as specified in the related
Series Supplement.
"Maximum Variable Interest Rate": With respect to any relevant Series
and any relevant Class or Classes of Variable Rate Bonds thereof, the Bond
Interest Rate specified as such for any Class of Variable Rate Bonds in the
related Series Supplement.
"Month of Closing": With respect to any Series, the month in which
the Closing Date occurs.
"Monthly Payment": With respect to a mortgage loan underlying a
Conventional Certificate, as defined in the related Pooling and Administration
Agreement.
"Mortgaged Properties": Unless otherwise specified in the related
Series Supplement, as to any Series, the properties securing the mortgage notes
evidencing the mortgage loans pooled to form the Conventional Certificates
securing such Series.
"Net Interest Shortfall": Unless otherwise defined in the related
Series Supplement, with respect to any Series and any Payment Date in respect
thereof, the amount defined as such in the related Pooling and Administration
Agreement by reference to the immediately preceding Distribution Date.
"Net Liquidation Proceeds": With respect to a Series of Bonds
collateralized by Conventional Certificates, as defined in the related Pooling
and Administration Agreement.
"New York Agent": With respect to each Series, the agent initially
appointed by the Issuer for purposes of presentation and surrender of Bonds for
registration of transfer and exchange and for notices and demands to or upon
the Issuer pursuant to Section 3.2, as specified in the related Series
Supplement.
"New York Office": With respect to each Series, the office initially
appointed by the Issuer for purposes of presentation and surrender of Bonds for
registration of transfer and exchange and for notices and demands to or upon
the Issuer pursuant to Section 3.2, as specified in the related Series
Supplement.
"Non-Disqualification Opinion": Except as otherwise provided in the
related Series Supplement, with respect to any action proposed to be taken
under this Indenture where an election to treat the Trust Estate securing a
Series (or any portion thereof) and any other assets set forth in such election
as one or more REMICs has been made or will be made, an Opinion of Counsel to
the effect that the taking of such action will not cause a REMIC Loss.
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"Non-permitted Foreign Holder": As defined in Section 2.15.
"Non-U.S. Person": An individual, corporation, partnership or other
person other than: a citizen or resident of the United States, a corporation,
partnership or other entity created or organized in or under the laws of the
United States or any political subdivision thereof, or an estate or trust that
is subject to U.S. federal income tax regardless of the source of its income.
"Notional Amount": With respect to an Interest Only Bond of a Series,
the notional amount forming the basis of the determination of interest accrued
on such Bond, as more particularly described in the related Series Supplement.
"Officers' Certificate": A Certificate signed by the Chairman, the
President or a Vice President, and by the Treasurer, an Assistant Treasurer,
the Controller, an Assistant Controller, the Secretary or an Assistant
Secretary of the Issuer or of such other Person as is delivering such
certificate, and delivered to the Trustee. Unless otherwise specified, any
reference in this Indenture to an Officers' Certificate shall be to an
Officers' Certificate of the Issuer.
"Opinion of Counsel": A written opinion of counsel who may, except as
otherwise expressly provided in this Indenture, be counsel for the Issuer and
who shall be satisfactory to the Trustee.
"Original Principal Amount": In respect of a Bond, its outstanding
principal amount on the date of issuance thereof.
"Outstanding": With respect to Bonds of a Series, as of the date of
determination, all Bonds of such Series theretofore authenticated and delivered
under this Indenture except:
(i) Definitive Bonds theretofore cancelled by the
Bond Registrar or delivered to the Bond Registrar for
cancellation;
(ii) Bonds or portions thereof for whose payment
or redemption money in the necessary amount has been
theretofore deposited with the Trustee or any Paying Agent
(other than the Issuer) 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 therefor, satisfactory
to the Trustee, has been made;
(iii) Bonds in exchange for or in lieu of which
other Bonds have been authenticated and delivered pursuant to
this Indenture unless proof satisfactory to the Trustee is
presented that any such Bonds are held by a bona fide
purchaser; and
(iv) Bonds alleged to have been destroyed, lost or
stolen which have been paid as provided for in Section 2.8;
provided, however, that in determining whether the Holders of the requisite
percentage of the Aggregate Current Principal Amount of the Outstanding Bonds
or of the Outstanding Bonds of any
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Series have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, Bonds owned by the Issuer, any other obligor upon
the Bonds or any Affiliate of the Issuer or such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent, or waiver, only Bonds which
the Trustee knows to be so owned shall be so disregarded. Bonds so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Bonds and that the pledgee is not the Issuer, any other
obligor upon the Bonds or any Affiliate of the Issuer or such other obligor.
If an election has been made or will be made to treat the Trust Estate and any
other assets securing such Series set forth in such election, as one or more
REMICs, solely for purposes of a Non-Disqualification Opinion and for purposes
of determining whether a Non-Disqualification Opinion must be delivered
pursuant to any requirement of this Indenture, a Bond shall not be deemed to
cease to be Outstanding pursuant to clause (ii) above prior to the date on
which the money is payable to Holders of the Bonds.
"Overdue Bond": As defined in Section 2.9(c).
"Paying Agent": The Trustee or any other depository institution or
trust company that is authorized by the Issuer pursuant to Section 3.3 to pay
the principal of, or interest on, any Bonds on behalf of the Issuer.
"Payment Date": As to any Series or Class, any day which is specified
in the related Series Supplement as an Interest Payment Date or Principal
Payment Date for the Bonds of such Series or Class.
"Payment Date Statement": As defined in Section 2.9(e).
"Permitted Encumbrance": Any lien, charge, security interest,
mortgage or other encumbrance (other than the lien of this Indenture) Granted
by the Issuer in any portion of a Trust Estate, provided that:
(i) such lien, charge, security interest or
encumbrance extends only to a portion of such Trust Estate
which is limited to cash deliverable or payable to or at the
order of the Issuer,
(ii) such lien, charge, security, interest,
mortgage or other encumbrance secures, directly or indirectly,
indebtedness which the Issuer is permitted to incur under the
terms of this Indenture and its Certificate of Incorporation,
and
(iii) the beneficiary of such lien, charge,
security interest, mortgage or other encumbrance shall have
agreed that in connection with the enforcement thereof it will
not bring any Proceeding seeking, or which would result in,
the sale of any portion of any Trust Estate and will not file
any petition for the commencement of insolvency proceedings
with respect to the Issuer under the federal bankruptcy laws,
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as now or hereafter in effect, or any other present or future
federal or state bankruptcy, insolvency or similar law, or for
the appointment of any receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of
the Issuer or of any of its property, or seeking an order for
the winding up or liquidation of the affairs of the Issuer
until not less than 91 days after payment in full of all
Outstanding Bonds.
"Person": Any individual, corporation, partnership, joint venture,
association, joint stock company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or political
subdivision thereof.
"Plan": Any Person which is an employee benefit plan, trust or
account subject to Title I of ERISA or an individual retirement account or
employee benefit plan, trust or account subject to Section 4975 of the Code or
comparable provisions of any subsequent enactment or a governmental plan
defined in Section 3(2) of ERISA subject to any federal, state or local law
which is, to a material extent, similar to the foregoing provisions of ERISA or
the Code.
"Pledged Account": With respect to a Series of Bonds, the Collection
Account relative thereto.
"Pool Scheduled Principal Balance": With respect to a Series of Bonds
collateralized by Conventional Certificates, as defined in the related Pooling
and Administration Agreement.
"Pooling and Administration Agreement": As to any Conventional
Certificate, the agreement pursuant to which such Conventional Certificate was
issued and is governed.
"Predecessor Bonds": With respect to any particular Bond of a Series
and Class, every previous Bond of that Series and Class evidencing all or a
portion of the same debt as that evidenced by such particular Bond; and, for
the purpose of this definition, any Bond of a Series authenticated and
delivered under Section 2.8 in lieu of a lost, destroyed or stolen Bond of the
same Series shall be deemed to evidence the same debt as the lost, destroyed or
stolen Bond.
"Prepayment Period": With respect to a Series of Bonds and a
Principal Payment Date, the calendar month preceding such Payment Date.
"Principal Distribution Amount": With respect to any Payment Date for
a Series, an amount determined as provided in the related Series Supplement
(which amount may, to the extent specified in the related Series Supplement, be
a negative number).
"Principal Only Bond": A Bond of a Series which is entitled only to
payments of principal thereof and on which no interest will accrue or be
payable.
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"Principal Payment Date": With respect to any Series or Class, any
date specified in the related Series Supplement as a fixed date on which an
installment of principal is due and payable to the extent of Available Funds on
such date.
"Principal Prepayment": With respect to any Series, as defined in the
related Pooling and Administration Agreement.
"Principal Receipts": With respect to any Series, as defined in the
related Series Supplement.
"Principal Reduction Date": With respect to a particular Series, any
Principal Payment Date.
"Proceeding": Any suit in equity, action at law or other judicial or
administrative proceeding.
"Qualified GIC": A guaranteed investment contract or surety bond
Granted or to be Granted to the Trustee to provide for the investment of funds
in a Pledged Account for a particular Series and ensuring a minimum rate of
return on investments of such funds, which contract or surety bond shall
(a) be an obligation of an insurance company or other
corporation whose claims paying ability rating or credit standing, as
applicable, is acceptable to each of the Rating Agencies which at all
times that such contract is in force, are rating the Bonds of such
Series;
(b) provide that the Trustee may exercise all of the
rights of the Issuer under such contract or surety bond without the
necessity of the taking of any action by the Issuer;
(c) provide that if at any time the then current claims
paying ability rating or credit standing, as applicable, of the
obligor under such guaranteed investment contract is such that
continued investment pursuant to such contract of funds included in
the Trust Estate for such Series would result in a downgrading of any
rating of the Bonds of such Series, the Trustee may terminate such
contract and be entitled to the return of all funds previously
invested thereunder, together with accrued interest thereon at the
interest rate provided under such contract through the date of
delivery of such funds to the Trustee; and
(d) meet such other standards as may be specified in the
Series Supplement for such Series.
"Qualified Liquidation": With respect to any Series, the plan or
plans for the complete liquidation of the REMIC or REMICs, as applicable,
relative to such Series, within the meaning of Section 860F(a)(4), adopted by
the Issuer within 90 days prior to the final Payment Date of such Series.
"Qualified Nominee": A Person in whose name Certificates or Eligible
Investments Granted to the Trustee may be registered as nominee of the Trustee
in lieu of registration directly in the name
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of the Trustee, provided that the following conditions shall be satisfied in
connection with such registration:
(a) the instruments governing the creation and operation
of the nominee provide that neither the nominee nor any owner of an
interest in the nominee (other than the Trustee) shall have any
interest, beneficial or otherwise, in any Certificates or Eligible
Investments at any time held in the name of the nominee, except for
the purpose of transferring and holding legal title thereto;
(b) the nominee and the Trustee have entered into a
binding agreement:
(i) establishing that any Certificates or
Eligible Investments held in the name of the nominee are to be
held by the nominee as agent (other than commission agent or
broker) or nominee for the account of the Trustee, and
(ii) appointing the Trustee as the agent and
attorney of the nominee with full power and authority
irrevocably to sell, assign, endorse, transfer and deliver any
Certificates or Eligible Investments standing in the name of
the nominee, and to execute and deliver all such instruments
as may be necessary and proper for such purpose; and
(c) in connection with the registration of any
Certificate or Eligible Investment in the name of the nominee, all
requirements under applicable governmental regulations necessary to
effect a valid registration of transfer of such Certificate or
Eligible Investment are complied with.
"Rating Agency" or "Rating Agencies": With respect to each Series of
Bonds at any relevant time, the rating agency or agencies requested by the
Issuer to rate, and then rating, the Bonds of such Series. The Rating Agencies
for each Series of Bonds will be specified in the related Series Supplement.
"Realized Losses": With respect to any Series collateralized by
Conventional Certificates, as defined in the related Pooling and Administration
Agreement, including Excess Losses.
"Record Date": With respect to any Series or Class, a date specified
in the related Series Supplement as a date on which the Holders of Bonds of
such Series or Class entitled to receive a payment of principal or interest (or
notice of a payment in full of principal) on the succeeding Payment Date are
determined.
"Redemption Date": With respect to any Series of Bonds, any Payment
Date on which Bonds of such Series may be redeemed at the option of the Issuer
pursuant to Section 10.1 or Section 10.4.
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"Redemption Price": Except as otherwise specified in the related
Series Supplement, with respect to any Bond of a particular Series to be
redeemed in whole or in part pursuant to Article X hereof, an amount equal to
100% of the Imputed Principal Balance of the Bond to be so redeemed, together
with (except in the case of a Principal Only Bond) interest on such amount at
the applicable Bond Interest Rate through the Interest Accrual Period for the
date of redemption, other than any installments of interest due and payable on
or before the applicable Redemption Date.
"Reference Bank": A bank providing quotations for use in determining
LIBOR as specified in the related Series Supplement for any Series of Bonds
having one or more Classes of LIBOR Bonds.
"Reinvestment Income": With respect to a Series of Bonds and any
related Payment Date, all interest, income and other return on capital received
from the investment of amounts standing to the credit of the related Collection
Account since the previous Payment Date or in the case of the first Payment
Date, since the Closing Date.
"REMIC": A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code. References herein to "a REMIC", "each
REMIC", "the REMIC", or "any REMIC" are to each REMIC established pursuant to
each Series Supplement.
"REMIC Loss": The failure of a REMIC to qualify or to continue to
qualify as a REMIC or the imposition of a tax under the REMIC Provisions on any
income of a REMIC.
"REMIC Provisions": Provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at Section 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations and rulings promulgated thereunder, as the foregoing are in
effect from time to time.
"Remittance Date": Unless otherwise specified in the related Series
Supplement, the 18th day of any month or if such 18th day is not a Business
Day, the Business Day immediately preceding.
"Reserve Interest Rate": With respect to any Class of Variable Rate
Bonds of a Series, as set forth in the related Series Supplement.
"Residual Bond": With respect to any Series, as defined in the
related Series Supplement.
"Residual Interest": Except as otherwise provided in the related
Series Supplement, with respect to any Series for which a REMIC election or
elections has or have been made or will be made in respect of the Trust Estate
or other assets specified in such election and securing such Series, any rights
to receive payments under this Indenture which rights are designated as a
residual interest in a REMIC within the meaning of Section 860G(a)(2) of the
Code.
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"Residual Interest Holders": Except as otherwise provided in the
related Series Supplement, with respect to any Series for which a REMIC
election or elections has or have been made or will be made in respect of the
Trust Estate or other assets specified in such election and securing such
Series, the owner or assignee of the Residual Interest of each such REMIC or an
undivided interest in the Residual Interest of each such REMIC.
"Responsible Officer": With respect to the Trustee, the chairman or
vice-chairman of the board of directors, the chairman or vice-chairman of the
executive committee of the board of directors, the president, any Vice
President, the secretary, any assistant secretary, the treasurer, any assistant
treasurer, the cashier, any trust officer or assistant trust officer, the
controller, any assistant controller or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Restricted Bond": With respect to any relevant Series, as defined in
the related Series Supplement.
"SAB Amount": With respect to any SAB Bond of a Series comprising a
Class or Classes of SAB Bonds, and any SAB Payment Date, the scheduled
principal payment for such Bond as determined from the table of Scheduled
Principal Balances of SAB Bonds in the related Series Supplement.
"SAB Bond": A Scheduled Amortization Bond, as specifically identified
in the related Series Supplement, with respect to which principal is payable on
each SAB Payment Date of such Series only up to the amount of the SAB Principal
Payment indicated for such SAB Payment Date.
"SAB Payment Date": With respect to any Series that includes a Class
or Classes of SAB Bonds, any Payment Date on which a payment of principal on
the SAB Bonds of such Series is required to be made, the first of such dates
being the First SAB Paydown Date.
"SAB Principal Payment": With respect to any Series of Bonds that
includes a Class or Classes of SAB Bonds, and to each SAB Payment Date relative
to such Series, the SAB Amount for such SAB Payment Date plus any portion of a
SAB Amount unpaid from a previous SAB Payment Date, all as specified in the
related Series Supplement.
"Sale": As defined in Section 5.17.
"Schedule of Certificates": Schedule A to a Series Supplement
listing, the Conventional Certificates being Granted to the Trustee on the
Closing Date for such Series.
"Scheduled Principal Balance": With respect to a mortgage loan
underlying a Conventional Certificate, as defined in the related Pooling and
Administration Agreement.
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"Senior Bond": With respect to a Series of Senior/Subordinated Bonds,
a Bond of a Class of such Series which Class is preferred in right of payment
of principal and/or interest to the Classes of Junior Bonds of such Series, as
more particularly described in the related Series Supplement.
"Series": Each separate series of Bonds issued pursuant to this
Indenture and a Series Supplement thereto setting forth the specific terms of
such Series of Bonds, which series may, as provided in the related Series
Supplement, be divided into two or more Classes.
"Series Supplement": A supplemental indenture to this Indenture that
authorizes a particular Series of Bonds.
"Special Hazard Loss": Unless otherwise specified in the related
Series Supplement, with respect to a mortgage loan underlying a Conventional
Certificate securing a Series of Bonds, the principal portion of such mortgage
loan not recovered from insurance proceeds and liquidation proceeds or
otherwise as a result of any casualty loss not covered by standard hazard
insurance, including a loss resulting from vandalism, earthquake, flood, mud
flow, and a loss from partial damage caused by reason of application of any
coinsurance clause in an applicable standard hazard policy, including the
amount of any unrecovered advance made by the servicer of each mortgage loan
incurring a Special Hazard Loss.
"Special Hazard Loss Amount": With respect to any relevant Series of
Bonds, the amount specified in the related Series Supplement, as adjusted from
time to time in accordance with such Series Supplement.
"Special Hazard Coverage Termination Date": With respect to any
relevant Series of Bonds, the earlier of (a) the Payment Date on which the
amount of Special Hazard Losses incurred on the mortgage loans underlying the
Conventional Certificates securing such Series of Bonds and not previously
deducted from the Special Hazard Loss Amount relative to such Series of Bonds,
equals or exceeds the Special Hazard Loss Amount on such Payment Date, and (b)
the Cross-over Date relative to such Series of Bonds.
"Special Payment Date": With respect to any Overdue Bond of any
Series or Class, the fixed day specified in the related Series Supplement
during each month following the month in which any amount due on such Overdue
Bond was not paid.
"Special Payment Date Statement": As defined in Section 2.9(f).
"Special Record Date": With respect to any Special Payment Date for
the Bonds of a Series, the date as of which the Holders of Bonds of the related
Series or any Class within such Series entitled to receive a payment of
principal (other than a payment in full of all unpaid principal of a Bond) or
interest, or notice of payment in full of principal, on such Special Payment
Date are to be determined, which date shall be as specified in the related
Series Supplement.
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"Startup Day": With respect to any Series in respect of which one or
more REMIC elections have been made, as defined in the Series Supplement
relative thereto in respect of each such REMIC.
"Stated Maturity": With respect to any installment of principal of or
interest on any Bond, the date specified in such Bond as the fixed date on
which such installment is due and payable to the extent of Available Funds.
"Straight Pass-Through Conventional Certificate": A Conventional
Certificate under the terms of which no interest is distributable to the holder
thereof with respect to prepaid principal of any underlying mortgage loan for
any period after the date of any such prepayment, with the result that the
amount of interest distributable to the holder of such Conventional Certificate
on the Distribution Date on which such prepaid principal is distributed might
be less than one month's interest at the applicable Certificate Rate on the
Certificate Principal Balance of such Certificate, determined before giving
effect to the Distribution due on such Distribution Date.
"Tender Date": With respect to a Series, a day specified in the
related Series Supplement for each Payment Date on or before which date a
Bondholder must submit notice to the Trustee requesting redemption of his or
its Bonds or submit notice requesting withdrawal of such a request for
redemption pursuant to Section 10.4.
"Trust Estate": With respect to any Series, all money, instruments
and other property subject or intended to be subject to the lien of this
Indenture for the benefit of such Series as of any particular time (including,
without limitation, all property and interests Granted to the Trustee in the
Series Supplement for such Series), including all proceeds thereof.
"Trust Indenture Act" or "TIA": The Trust Indenture Act of 1939 as it
may be amended from time to time.
"Trustee": Chase Bank of Texas, National Association, as trustee,
until a successor Person shall have become the Trustee pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Person. Pursuant to Section 6.16, the Issuer may appoint a
different Person to serve as an alternate to the Trustee and when a different
Person is so appointed pursuant to Section 6.16 and the related Series
Supplement, the term Trustee shall, with respect to such Series of Bonds, refer
to the alternate Person so appointed.
"Uncertificated Certificate": A Certificate issued in book-entry form
and not represented by an instrument.
"Unpaid Interest": With respect to a Class and an Interest Payment
Date, the excess of the Accrued Bond Interest for such Class on such Interest
Payment Date over the amount actually paid in respect of interest on such Class
on such Interest Payment Date.
"Variable Rate Bond Redemption Price": With respect to a Series that
includes one or more Classes of Variable Rate Bonds, as defined in the related
Series Supplement.
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"Variable Rate Bonds": A Bond (including a LIBOR Bond) on which
interest accrues at any time at a Bond Interest Rate that is adjusted,
according to a predetermined index, at fixed periodic intervals, all as set
forth in the related Series Supplement.
"Variable Rate Interest Accrual Period": The period specified in the
related Series Supplement for any Class of Variable Rate Bonds, and including
each LIBOR Interest Accrual Period.
"Vice President": With respect to the Issuer or the Trustee, any vice
president, whether or not designated by a number or a word or words added
before or after the title "vice president".
"Voting Record Date": Unless specified otherwise in the related
Series Supplement for any Series of Bonds, the record date specified in TIA
Section 316(c).
SECTION 1.2 RESERVED.
SECTION 1.3 Calculations Respecting Mortgage Loans Underlying
Certificates.
(a) In connection with all calculations required to be
made pursuant to this Indenture with respect to Distributions on any
Certificate, any payments on the underlying mortgage loans or any
payments on any other assets included in a Trust Estate, and with
respect to the income which can be earned from the reinvestment of
Distributions and of any other amounts receivable for deposit in a
Pledged Account, the rules set forth in this Section 1.3 shall be
applied except to the extent supplemented or modified herein or in the
Series Supplement for any particular Series.
(b) If a Series Supplement provides that calculations
with respect to Distributions on all or any part of the Certificates
securing the related Series shall be made on a mortgage
loan-by-mortgage loan basis, then such calculations shall be based
upon current information as to the terms of such mortgage loans and
reports of payments received on such mortgage loans supplied to the
Trustee or the Issuer, as the case may be, by the Person responsible
for the servicing thereof and satisfying such requirements, if any, as
may be set forth in such Series Supplement. To the extent it is not
patently incorrect on its face, such information may be conclusively
relied upon in making such calculation.
(c) For any Certificate with respect to which
calculations required to be made pursuant to this Indenture are not
made on a mortgage loan-by-mortgage loan basis, such calculations
shall be made on the basis of information or accountings as to
Distributions on such Certificate furnished by the related
Administrator and satisfying such requirements, if any, with respect
thereto as may be set forth in the Series Supplement for the Series
secured thereby.
To the extent they are not patently incorrect on their face, such
information or accountings may be conclusively relied upon in making
such calculations.
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(d) Except as specified in a particular Series
Supplement, each Distribution receivable with respect to a
Certificate, unless actually received earlier, shall be assumed to be
received at the time specified in the related Series Supplement and
shall be assumed to be immediately deposited in the related Collection
Account and reinvested on the next succeeding Business Day at the
applicable Assumed Reinvestment Rate. Unless the related Series
Supplement provides otherwise, all principal of and interest on
investments held in a Pledged Account shall be assumed to be received
on the date due and immediately deposited in such Pledged Account and
reinvested on the next succeeding Business Day at the applicable
Assumed Reinvestment Rate. Unless the related Series Supplement
provides otherwise, all funds assumed to be reinvested at the
applicable Assumed Reinvestment Rate shall be assumed to remain so
invested until the Business Day next preceding the Principal Reduction
Date or Interest Payment Date on which they are required to be
available in the related Collection Account for application, in
accordance with the terms hereof and of the related Series Supplement,
to payments of principal of or interest on the Bonds of the related
Series. All funds eligible to be invested pursuant to a Qualified GIC
shall (subject, however, to any limitations contained in such
Qualified GIC) be assumed to be invested thereunder on the next
Business Day after the assumed date of receipt and to remain invested
thereunder until the Business Day preceding the Principal Reduction
Date on which such funds are, or might be, required to be available
for application pursuant to this Indenture or the applicable Series
Supplement.
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ARTICLE II
THE BONDS
SECTION 2.1 Forms Generally.
The Bonds of each Series and the Trustee's certificate of
authentication thereon shall be in substantially the form or forms set forth in
the Series Supplement pursuant to which such Bonds are constituted and as may
in the Issuer's judgment be necessary, appropriate or convenient to permit the
Bonds to be issued and sold to or held in bearer form by non-United States
Persons, to establish entitlement to an exemption from United States
withholding tax or reporting requirements with respect to payments on the
Bonds, or to comply, or facilitate compliance, with other applicable laws.
Each Series of Bonds may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange on which the Bonds
may be listed, or as may, consistently herewith, be determined by the officers
executing such Bonds, as evidenced by their execution thereof. While Bonds may
contain the above-referenced provisions with respect to Bonds issued in bearer
form, no Bonds may actually be issued in bearer form until the Issuer and the
Trustee shall have entered into an appropriate supplemental indenture pursuant
to Section 9.1(8) providing for such issuance. Any portion of the text of any
Bond may be set forth on the reverse thereof with an appropriate reference on
the face of the Bond.
The definitive Bonds shall be printed, lithographed or engraved or
produced by any combination of these methods on steel engraved borders or may
be produced in any other manner permitted by the rules of any securities
exchange on which the Bonds may be listed, all as determined by the officers
executing such Bonds, as evidenced by their execution thereof.
Each Class of Book Entry Bonds shall be evidenced by one or more
certificates physically held by the Clearing Agency, which certificates may be
typewritten, printed, lithographed, mimeographed or otherwise produced.
SECTION 2.2 Form of Trustee's Certificate of Authentication.
The form of the Trustee's certificate of authentication is as follows:
This is one of the Bonds referred to in the within-mentioned
Indenture.
-----------------------------------------------------
Chase Bank of Texas, National Association, as Trustee
By
----------------------------------------------------
Authorized Signatory
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SECTION 2.3 Bonds Issuable in Series and Classes; General
Provisions with Respect to Principal and Interest
Payments.
The aggregate principal amount of Bonds that may be issued pursuant to
this Indenture is unlimited.
The Bonds may, as provided herein, at the election of and as
authorized by the Board of Directors, be issued in one or more Series, each of
which Series may consist of only one Class of Bonds or may be divided into two
or more Classes, and shall be designated generally as the "Collateralized
Mortgage Obligations" of the Issuer, with such further particular designations
added or incorporated in such title for the Bonds of any particular Series or
Class as the Board of Directors may determine. Each Series shall include at
least one Class of Bonds which are not Compound Interest Bonds and may, but
need not, include one or more Classes of Compound Interest Bonds.
If a Series of Bonds includes more than one Class, the Classes of
Bonds of such Series shall have such Stated Maturities as shall be specified in
the related Series Supplement. Subject to the provisions of Section 3.1,
Section 5.19 and Section 8.2(d), the principal of each Bond shall be payable in
installments ending no later than the Stated Maturity of the final installment
of the principal thereof unless the unpaid principal of such Bond becomes due
and payable at an earlier date by declaration of acceleration, redemption or
otherwise.
All payments of principal on the Bonds of a Series shall be applied on
each Payment Date prior to the occurrence of an Event of Default among the
Classes of such Bonds in accordance with the order of priority of payment set
out, and otherwise upon the terms specified in, the related Series Supplement.
Except to the extent specified in the related Series Supplement for a Series of
Bonds, payments of principal on each Class of Bonds, other than a Class of
Bonds subject to redemption at the request of a Holder, shall be made pro rata
among all Outstanding Bonds of such Class, without preference or priority of
any kind.
The aggregate amount of principal of and interest on the Bonds of a
Series due and payable on each Payment Date for such Series shall be equal to
the Debt Service Requirement for such Series for such Payment Date. All
payments made with respect to any Bond shall be applied first to the interest
then due and payable on such Bond and then to the principal thereof. All
computations of interest accrued on any Bond shall be made as if each year
consisted of twelve months of thirty days each.
Interest shall accrue on the Imputed Principal Balance of each
Outstanding Bond of a Series at the Bond Interest Rate relative thereto over
the related Interest Accrual Period and (other than interest accrued on any
Compound Interest Bonds of such Series, which shall be payable as described
below) shall be payable on each Interest Payment Date for such Series in an
amount equal to the lesser of (a) Available Funds on such Interest Payment
Date, after payment of all amounts payable in priority to such interest
payment, as determined pursuant to the related Series Supplement, and (b)
Accrued Bond Interest for such Interest Payment Date.
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Interest at the applicable Bond Interest Rate shall accrue on the
Imputed Principal Balance of each Outstanding Compound Interest Bond of a
Series from the Accrual Date for such Series, but none of such accrued interest
shall be payable until the Initial Interest Payment Date for such Compound
Interest Bond (or the first Interest Payment Date thereafter if the Debt
Service Requirement for such Initial Interest Payment Date is exactly equal to
the aggregate amount of principal of and interest on all other Classes of Bonds
of such Series which is payable on such Initial Interest Payment Date). On
each Interest Payment Date prior to the Initial Interest Payment Date for a
Compound Interest Bond, Accrued Bond Interest on such Bond during the related
Interest Accrual Period shall be added to the Current Principal Amount of such
Bond and shall thereafter accrue interest. Except as otherwise specified in
the related Series Supplement, on the Initial Interest Payment Date for the
Compound Interest Bonds of a Series, Accrued Bond Interest on such Bonds for
the related Interest Accrual Period shall be payable in an amount not in excess
of the difference between (a) the Debt Service Requirement on the related
Series for such Initial Interest Payment Date and (b) the aggregate amount of
principal of and interest on all other Bonds of the related Series required to
be paid on such date. The portion, if any, of such interest which is not paid
on such Initial Interest Payment Date shall be added to the principal of such
Compound Interest Bonds on such Initial Interest Payment Date and shall
thereafter accrue interest in the manner set forth above. On each Interest
Payment Date after the Initial Interest Payment Date for a Class of Compound
Interest Bonds Accrued Bond Interest on the Class Imputed Principal Balance of
such Class shall be payable to the extent of Available Funds as specified in
the related Series Supplement.
In the case of a Class or Classes of Bonds which are Variable Rate
Bonds, the related Series Supplement shall specify the method of calculating
the Bond Interest Rate at any time to be borne by such Variable Rate Bonds. On
each Interest Determination Date relative to a Class of Variable Rate Bonds the
interest rate of which is calculated by reference to an Index, until such
Variable Rate Bonds are paid in full, the Trustee shall determine the rate of
interest pursuant to the relevant Index for the purposes of such Interest
Determination Date in accordance with the mechanism specified in the related
Series Supplement, and the resulting Bond Interest Rate to be applicable to
such Variable Rate Bonds for the next Variable Rate Interest Accrual Period.
Promptly after its determination thereof, the Trustee shall advise the
Issuer of the rate of interest applicable to each Class of Variable Rate Bonds
of a Series for the next succeeding Variable Rate Interest Accrual Period.
In determining LIBOR or the Reserve Interest Rate and the resulting
Bond Interest Rate for each relevant Variable Rate Interest Accrual Period for
any relevant Class of Variable Rate Bonds, the Trustee may conclusively rely
and shall be protected in relying upon the offered rates quoted (whether quoted
in writing, electronically or orally) by the Reference Banks or other banks as
to LIBOR or the Reserve Interest Rates, as appropriate, in effect from time to
time. The Trustee shall have no liability or responsibility to any Person for
(i) its selection of other banks for purposes of determining the Reserve
Interest Rate or (ii) its inability, following a good faith reasonable effort,
to determine LIBOR or a Reserve Interest Rate, all as provided for in the
definition of "LIBOR" in the related Series Supplement.
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The establishment of a rate of interest by reference to an Index and
the Reserve Interest Rate and the resulting Bond Interest Rate for each
relevant Variable Rate Interest Accrual Period relative to a Series of Bonds
shall (in the absence of manifest error) be final, conclusive and binding upon
the Holder or the Issuer and any of their respective partners, beneficiaries,
agents, officers, directors, employees or successors or assigns.
Unless otherwise specified in the related Series Supplement,
calculation of the amount of interest accrued on the Bonds of any Class of any
Series during an Interest Accrual Period shall be made on the assumption that
any payment of principal on the Bonds of such Class made on a Principal
Reduction Date occurring during such Interest Accrual Period (other than on the
first day thereof) was instead paid on the first day of such Interest Accrual
Period.
Any Unpaid Interest on a Class of Bonds shall be paid subject to and
as provided in the related Series Supplement. Unless otherwise specified in
the related Series Supplement, no interest shall accrue on any Unpaid Interest.
Notwithstanding any of the foregoing provisions with respect to
payments of principal of and interest on the Bonds, if the Bonds of a Series
have become or been declared due and payable following an Event of Default and
such acceleration of maturity and its consequences have not been rescinded and
annulled, payments of principal of and interest on such Bonds shall be made in
accordance with Section 5.8.
Each Bond shall bear upon the face thereof the designation so selected
for the Series and Class to which it belongs.
Each Series of Bonds shall be created by a Series Supplement
authorized by the Board of Directors and establishing the terms and provisions
of such Series, specifying the Certificates and any other property to be
included in the Trust Estate therefor and Granting such Trust Estate as
security for the Series of Bonds created thereby. The several Series may
differ in respect of any of the following matters:
(1) designation of the Series;
(2) dating of the Bonds of the Series and Accrual Date;
(3) the number of Classes, including the number of Classes of
Compound Interest Bonds, if any, the number of Classes of SAB
Bonds, if any, the number of Classes of Variable Rate Bonds,
if any, the number of Classes of Formula Rate Bonds, if any,
the number of Classes of Senior Bonds, if any, the number of
Classes of Junior Bonds, if any, and the maximum aggregate
principal amount of Bonds of each such Class which may be
issued;
(4) the Bond Interest Rate (if any) for each Class, and if such
Series of Bonds includes a Class or Classes of Variable Rate
Bonds, the method of calculating the Bond
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Interest Rate borne at any time by such Variable Rate Bonds;
and if such Series of Bonds includes a Class of Formula Rate
Bonds, the method of calculating the Bond Interest Rate borne
at any time by such Formula Rate Bonds;
(5) the Stated Maturity of the final installment of principal of
each Class of Bonds of such Series entitled to payments of
principal;
(6) the place or places for the payment of the final installment
of principal;
(7) the priority of principal payments among the Classes entitled
to payments of principal and within each Class of the Series
entitled to payments of principal;
(8) the denominations of the Bonds of such Series;
(9) if such Series of Bonds includes a Class of Formula Rate
Bonds, restrictions relating to the transfer of such Class of
Formula Rate Bonds;
(10) whether the Bonds of such Series may be authenticated by an
Authenticating Agent, and, if so, the Person appointed as
Authenticating Agent for such Series;
(11) the Interest Payment Dates, Principal Payment Dates and
Special Payment Dates;
(12) the amount, if any, to be deposited at the Closing Date in the
Collection Account for such Series;
(13) whether a Qualified GIC is to be Granted to the Trustee with
respect to the investment of funds in any Pledged Account for
such Series, and, if so, the standards applicable to such
Qualified GIC, including the conditions, if any, under which
the Trustee shall be required to terminate such Qualified GIC;
(14) any items required to be delivered to the Trustee on the
Closing Date for such Series pursuant to the last paragraph of
Section 2.12;
(15) whether calculations with respect to the mortgage loans
underlying the Certificates securing such Series are to be
made on a mortgage loan-by-mortgage loan basis or on the basis
of the assumptions set forth in Section 1.3, and, if
applicable, any modifications to such assumptions to be used
in making calculations with respect to the Certificates
securing such Series;
(16) if calculations with respect to the mortgage loans underlying
the Certificates securing such Series are to be made on a
basis other than mortgage loan-by-mortgage loan, the
characteristics to be used in grouping such Certificates (and
any other assets to be included in any Collateral Group) into
Collateral Groups;
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(17) (a) the requirements for verification of data supplied in
connection with the Conventional Certificates securing such
Series by the related Administrator regarding the underlying
mortgage loans, and (b) the documents relating to such
Conventional Certificates required to be delivered to the
Trustee pursuant to Section 2.12(k);
(18) the circumstances, if any, under which the Bonds of such
Series will be subject to redemption by Holders pursuant to
Article X and any supplement to or modification of the
requirements of Section 10.4 which are to apply to such
Series;
(19) the extent to which all or any portion of the interest accrued
but not payable on any Compound Interest Bonds of such Series
is to be included in the calculation of the Principal
Distribution Amount for any Payment Date for such Series;
(20) if an election has been or will be made to treat the Trust
Estate or any other assets specified in such election and
securing the Series or any portion thereof as a REMIC, the
designation of a certain Class or Classes of such Series as
"regular interests" in each such REMIC established in respect
of such Series and the designation of a single Class of such
Series as the "residual interest" in each such REMIC
established in respect of such Series;
(21) provisions with respect to the following terms for which the
definitions set forth in Article I require or permit further
specification, to the extent applicable to any Series of
Bonds, in the related Series Supplement:
(a) "Accrued Bond Interest",
(b) "Assumed Reinvestment Rate",
(c) "Available Funds",
(d) "Bankruptcy Loss Amount",
(e) "Book Entry Termination" (if each Series is
issued with Book Entry Bonds),
(f) "Calculation Date",
(g) "COFI",
(h) "Collateral Group",
(i) "Debt Service Requirement",
(j) "Earliest Bond Redemption Date",
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(k) "ERISA Prohibited Bond",
(l) "ERISA Restricted Bond",
(m) "Eligible Investments" (if the definition of
such term is to be expanded or restricted for
such Series),
(n) "Expense Reserve Amount",
(o) "First SAB Paydown Date" (if such Series is
issued with one or more Classes of SAB
Bonds),
(p) "Formula Rate Bond" (if such Series is issued
with a Class of Form Rate Bonds),
(q) "Fraud Loss Amount",
(r) "Highest Bond Interest Rate",
(s) "Index",
(t) "Interest Accrual Period",
(u) "Interest Determination Date",
(v) "LIBOR",
(w) "LIBOR Interest Accrual Period",
(x) "Manager",
(y) "Maximum Bond Interest Rate Assumption",
(z) "Maximum Variable Interest Rate",
(aa) "Net Interest Shortfall",
(bb) "New York Agent",
(cc) "New York Office",
(dd) "Paying Agent" (if there will be a Paying
Agent other than the Trustee for such
Series),
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(ee) "Principal Distribution Amount",
(ff) "Record Date",
(gg) "Redemption Price",
(hh) "Restricted Bond",
(ii) "SAB Bond" (if such Series is issued with one
or more Classes of SAB Bonds),
(jj) "SAB Payment Date" (if such Series is issued
with one or more Classes of SAB Bonds),
(kk) "Special Allocation Bonds" (if such Series is
issued with one or more Special Allocation
Funds),
(ll) "Special Hazard Loss Amount",
(mm) "Special Record Date",
(nn) "SAB Principal Payment" (if such Series is
issued with one or more Classes of SAB
Bonds),
(oo) "Tender Date",
(pp) "Termination Date" (if such Series is issued
with Book Entry Bonds);
(qq) "Variable Rate Interest Accrual Period" (if
such Series is issued with one or more
Classes of Variable Rate Bonds), and
(rr) "Variable Rate Bond Redemption Price",
(22) if applicable, registration, payment and other procedures to
be followed with respect to Certificates issued in book entry
form;
(23) any other provisions expressing or referring to the terms and
conditions upon which the Bonds of that Series are to be
issued under this Indenture; and
(24) The Series Supplement relative to each Series of Bonds secured
by assets in respect of which one or more REMIC elections have
been made shall specify each of the following in respect of
each such REMIC:
(i) the "Startup Day" for the purposes
of the REMIC Provisions;
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(ii) the "latest possible maturity date"
of the regular interests of such REMIC for the
purposes of Section 860(G)(a)(1) of the Code;
(iii) each regular interest and Residual
Interest in such REMIC; and
(iv) the Prepayment Assumption in respect
of such Series of Bonds.
SECTION 2.4 Denominations.
The Bonds of each Series shall be issuable only as registered Bonds in
the denominations prescribed by the terms of the Series Supplement creating the
particular Series.
SECTION 2.5 Execution, Authentication, Delivery and Dating.
The Bonds shall be executed on behalf of the Issuer by its Chairman,
President or one of its Vice Presidents. The signature of any of these
officers on the Bonds may be manual or facsimile.
Bonds bearing the manual or facsimile signature of individuals who
were at any time the proper 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.
At any time and from time to time after the execution and delivery of
this Indenture, the Issuer may deliver Bonds executed by the Issuer to the
Trustee for authentication; and the Trustee shall authenticate and deliver such
Bonds as in this Indenture provided and not otherwise.
Each Bond shall be dated as of the date specified in the related
Series Supplement.
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 Trustee or by any Authenticating Agent for the Series of which
it is a part by the manual signature of one of its authorized officers or
employees, 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 2.6 Temporary Bonds.
Pending the preparation of Definitive Bonds, the Issuer may execute,
and upon Issuer Order the Trustee shall authenticate and deliver, temporary
Bonds which are printed, lithographed, typewritten, mimeographed or otherwise
produced, in any authorized denomination, substantially of the
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tenor of the Definitive Bonds in lieu of which they may be so issued and with
such variations as the officers executing such Bonds may determine, as
evidenced by their execution of such Bonds.
If temporary Bonds are issued, the Issuer will cause Definitive 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 3.2, without charge to the Holder. Upon
surrender or cancellation of any one or more temporary Bonds, the Issuer shall
execute and the Trustee shall authenticate and deliver and exchange therefor a
like principal amount of Definitive Bonds of the same Series and Class and 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 of the same Class and Series.
SECTION 2.7 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, the Issuer
shall provide for the registration of Bonds and the registration of transfers
of Bonds. The Trustee is hereby initially appointed "Bond Registrar" for the
purpose of registering Bonds and transfers of Bonds as herein provided. Upon
any resignation of any Bond Registrar appointed by the Issuer, the Issuer shall
promptly appoint a successor or, in the absence of such appointment, shall
assume the duties of Bond Registrar. In the event that the Trustee is acting
as Bond Registrar and the Trustee resigns as Trustee with respect to one or
more Series of Bonds, the Trustee may resign as Bond Registrar with respect to
the Bonds of such Series or Classes, as applicable.
Each Authenticating Agent for a Series, unless it is appointed Bond
Registrar for such Series, and the Trustee, for any Series for which it is not
the Bond Registrar, shall be a co-Bond Registrar for such Series. The Issuer
shall cause each co-Bond Registrar for a Series to furnish the Bond Registrar
for such Series promptly after each authentication of a Bond by it appropriate
information with respect thereto for entry by the Bond Registrar into the Bond
Register. If the Trustee shall at any time not be authorized to keep and
maintain the Bond Register, the Trustee shall have the right to inspect such
Bond Register at all reasonable times and to rely conclusively upon a
certificate of the Person in charge of the Bond Register as to the names and
addresses of the Holders of the Bonds and the principal amounts and numbers of
such Bonds as held. In the event that the Trustee is acting as Authenticating
Agent and the Trustee resigns as Trustee with respect to one or more Series of
Bonds, the Trustee may resign as Authenticating Agent with respect to the Bonds
of such Series or Classes, as applicable.
Subject to restrictions, if any, in the related Series Supplement,
upon surrender for registration of transfer of any Bond at the office or agency
of the Issuer to be maintained as provided in Section 3.2, the Issuer shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Bonds of any authorized
denominations, of the same Series and of a like aggregate principal amount and
Class.
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At the option of the Holder, Bonds may be exchanged for other Bonds of
any authorized denominations, of the same Series and of a like aggregate
initial principal amount and Class, upon surrender of the Bonds to be exchanged
at such office or agency. Bonds (other than Book Entry Bonds) of a Class which
are subject to redemption at the request of Bondholders and which are redeemed
in part, but not in whole, pursuant to Section 10.4 shall be surrendered at
such office or agency in exchange for new Bond certificates, without service
charge, in an aggregate principal amount equal to and in exchange for the
unredeemed portion of such Bond so surrendered. Whenever any Bonds are so
surrendered for exchange, the Issuer shall execute, and the Trustee shall
authenticate and deliver, the Bonds which the Bondholder making the exchange is
entitled to receive.
Subject to restrictions, if any, in the related Series Supplement, 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, or be accompanied by a written instrument of
transfer in form satisfactory to the Trustee duly executed, by the Holder
thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Bonds, but the Issuer or the Bond Registrar may require payment of
a sum sufficient to cover any tax or other governmental charge as may be
imposed in connection with any registration of transfer or exchange of Bonds,
other than exchanges pursuant to Section 2.8 not involving any transfer.
Except as otherwise specified in the related Series Supplement,
neither the Issuer nor the Bond Registrar shall be required to issue, register
the transfer of or exchange any Bonds which are subject to redemption at the
request of Bondholders of any Series during a period beginning at the opening
of business five (5) Business Days prior to the selection of Bonds of that
Series to be redeemed pursuant to Bondholder redemption under Section 10.4 and
ending at the close of business on the day of the mailing of any relevant
notice of redemption. No Bond which has been tendered for Bondholder
redemption may be transferred or exchanged unless such request for redemption
is withdrawn.
In the case of a Class of Book Entry Bonds, the provisions of this
Section 2.7 may be supplemented by provisions in the related Series Supplement
and by applicable rules established by the Clearing Agency for such Class
providing for transfer of registration of Book Entry Bonds on the books of the
Clearing Agency.
SECTION 2.8 Mutilated, Destroyed, Lost or Stolen Bonds.
If (1) any mutilated Bond is surrendered to the Trustee or the Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Bond, and (2) there is delivered to the Trustee such security or indemnity as
may be required by it to save each of the Issuer and the Trustee harmless,
then, in the absence of notice to the Issuer or the Trustee that such Bond has
been acquired
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by a bona fide purchaser, the Issuer shall execute and upon its request the
Trustee shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Bond, a new Bond or Bonds of the same
Series, tenor, aggregate initial principal amount and Class bearing a number
not contemporaneously outstanding; provided, however, that if any such
mutilated, destroyed, lost or stolen Bond shall have become or shall be about
to become due and payable, or shall have become subject to redemption in full,
instead of issuing a new Bond, the Issuer may pay such Bond without surrender
thereof, except that any mutilated Bond shall be surrendered. If, after the
delivery of such new 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 new Bond was issued presents for payment
such original Bond, the Issuer and the Trustee shall be entitled to recover
such new Bond (or such payment) from the Person to whom it was delivered or any
Person taking such new Bond from such Person, except a bona fide purchaser, and
shall be entitled to recover upon the security or indemnity provided therefor
to the extent of any loss, damage, cost or expenses incurred by the Issuer or
the Trustee in connection therewith.
Upon the issuance of any new Bond under this Section, the Issuer or
the Bond Registrar may require the payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto and any
other reasonable expenses (including the fees and expenses of the Trustee or
Bond Registrar) connected therewith.
Every new Bond issued pursuant to this Section in lieu of any
destroyed, lost or stolen Bond shall constitute an original additional
contractual obligation of the Issuer, whether or not the destroyed, lost or
stolen Bond 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 of the same Series 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 2.9 Payments of Principal and Interest.
(a) Any installment of interest or principal on a Bond,
or the Redemption Price of any Bond called for redemption, payable on
any Bonds of any Series which is punctually paid or duly provided for
by the Issuer on the applicable Payment Date shall be paid to the
Person in whose name such Bond (or one or more Predecessor Bonds) is
registered at the close of business on the Record Date for such
Payment Date in the manner provided for in the related Series
Supplement. Any installment of interest or principal not punctually
paid or duly provided for shall be payable in the manner and to the
Persons specified in subsection (c) of this Section 2.9.
(b) All reductions in the principal amount of a Bond (or
one or more Predecessor Bonds) effected by payments of installments of
principal made on any Payment Date or by the allocation of any
Realized Losses or a Junior Bond Write Down Amount to such Bond
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shall be binding upon all Holders of such Bond and of any Bond issued
upon the registration of transfer thereof or in exchange therefor or
in lieu thereof, whether or not such payment or allocation of losses
is noted on such Bond. The final installment of principal of each
Bond (including the Redemption Price of any Bond called for
redemption, if such redemption will result in payment of the entire
unpaid principal amount of such Bond) shall be payable only upon
presentation and surrender thereof on or after the Payment Date
therefor at the office or agency of the Issuer maintained by it for
such purpose in the Borough of Manhattan, the City of New York, State
of New York, pursuant to Section 3.2.
Whenever, on the basis of Distributions on the Certificates
securing a Series received and expected to be received on the related
Distribution Date, the Issuer expects that the entire remaining unpaid
principal amount of any Bonds of such Series will become due and
payable on the next Principal Payment Date, unless specified otherwise
in the related Series Supplement it shall mail or cause to be mailed,
no later than five days prior to such Principal Payment Date, to each
Person in whose name a Bond to be so retired is registered at the
close of business on the tenth Business Day prior to such Principal
Payment Date, notwithstanding the Record Date otherwise applicable
with respect to such Series, a notice to the effect that:
(i) the Issuer expects that funds sufficient to
pay such final installment will be available in the Collection
Account on such Principal Payment Date, and
(ii) if such funds are available, (A) such final
installment will be payable on such Principal Payment Date,
but only upon presentation and surrender of such Bond at the
office or agency of the Issuer maintained for such purpose
pursuant to Section 3.2 (the address of which shall be set
forth in such notice), and (B) no interest shall accrue on
such Bond after such Principal Payment Date.
Notices in connection with redemptions or special redemptions of Bonds
shall contain the information set forth in, and be mailed in
accordance with, Section 10.2.
(c) If the entire amount of Accrued Bond Interest on any
Class of Bonds of a Series is not paid in full on any Interest Payment
Date by reason of a shortfall in Available Funds over the amount
required to pay such Accrued Bond Interest and any amount required to
be paid out of Available Funds in priority to such Accrued Bond
Interest, the amount of interest not paid on such Interest Payment
Date (such amount being the "Unpaid Interest") shall be payable on the
following Interest Payment Date, to the extent that Available Funds on
such following Interest Payment Date are sufficient and subject at all
times to any order of priority of payments out of Available Funds
specified in the related Series Supplement. No interest shall accrue
or be payable on any amounts of Unpaid Interest.
If the entire Principal Distribution Amount or aggregate
Accrued Bond Interest payable out of Available Funds on any Series of
Bonds on a Payment Date, or the entire Redemption Price payable in
connection with the redemption in whole of any Bond, which is due and
payable on any Redemption Date, shall not have been punctually paid or
duly
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provided for when and as due and payable (any Bond on which such an
amount due and payable has not been punctually paid or duly provided
for being hereinafter referred to as an "Overdue Bond"), then each
such amount, together with, in the case of any Redemption Price not
paid when due, interest thereon from the date such amount was due
until paid, at the Bond Interest Rate of the related Bonds, shall be
payable on each subsequent Special Payment Date, to the extent only
that funds are available therefor in the related Collection Account,
to the Person entitled thereto as provided below. No interest shall
accrue or be payable on any Overdue Bond or any unpaid interest in
respect thereof except as expressly provided above.
Any reduction in the principal amount of any Overdue Bond (or
one or more Predecessor Bonds) effected by any payments made on a
Special Payment Date shall be binding upon all Holders of such Bond
and of any Bond issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof, whether or not such payment is
noted on such Bond. Payments of interest on any overdue portion of
the Redemption Price of any Bond called for redemption shall, except
as provided below with respect to payment of the entire amount
remaining due on an Overdue Bond, be made to the Person entitled
thereto as provided below by check mailed to such Person's address as
it appears in the Bond Register or, if the criteria specified in
paragraph (ii) of Section 2.9(a) are fulfilled, by wire transfer to a
depository institution satisfactory to the Trustee, or by such other
means as may be agreed between the Trustee and the Holder of such
Bond.
If funds sufficient to pay the entire amount remaining due on
any Overdue Bonds of a particular Class are expected to be available
on the next Special Payment Date for such Series, as shown on the
Special Payment Date Statement for such Special Payment Date, the
Trustee, on behalf of the Issuer, will notify each Person in whose
name an Overdue Bond to be so retired is registered at the close of
business on the Special Record Date that would otherwise be applicable
to such Special Payment Date, by notice mailed no later than five days
after such otherwise applicable Special Record Date, that sufficient
funds are expected to be available to make such payment and that, if
such funds are available, such payment will be made only upon
presentation and surrender of such Overdue Bond at the office or
agency of the Issuer maintained for such purpose pursuant to Section
3.2 (the address of which shall be set forth in such notice). Upon
the giving of such notice, the entire amount then due and payable on
any such Overdue Bond shall, if sufficient funds are so available
therefor, be payable only upon presentation and surrender of such
Overdue Bond to the office or agency of the Issuer maintained for that
purpose.
Other amounts payable with respect to any Overdue Bond as
provided above on any Special Payment Date shall be payable (i) to the
Person in whose name that Bond (or one or more Predecessor Bonds) is
registered at the close of business on the Special Record Date for
such Special Payment Date or (ii) in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
such Bond may be listed and upon such notice as may be required by
such exchange, if, after notice given by the Issuer to the Trustee
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of the proposed payment pursuant to this provision, such manner of
payment shall be deemed practicable by the Trustee.
(d) Subject to the foregoing provisions of this Section,
each Bond delivered under this Indenture upon registration of transfer
of or in exchange for or in lieu of any other Bond shall carry the
rights to unpaid principal and interest that were carried by such other
Bond. Any checks mailed pursuant to subsection (a) or (c) of this
Section 2.9 and returned undelivered shall be held in accordance with
Section 3.3.
(e) Not later than each Calculation Date for a Series,
the Trustee shall prepare and deliver to the Issuer a Payment Date
Statement with respect to the following Payment Date setting setting
forth the following items (unless otherwise specified in the related
Series Supplement):
(i) the Debt Service Requirement with respect to
such Series for the following Payment Date;
(ii) the aggregate amount of interest accrued
during the Interest Accrual Period relating to such Payment
Date on all Outstanding Bonds of such Series;
(iii) the aggregate amount of Accrued Bond Interest
payable (to the extent of Available Funds) on each Class of
Bonds of such Series then Outstanding, in accordance with the
order of priority of payment in the Series Supplement;
(iv) the amount of Net Interest Shortfalls and the
interest portion of all Realized Losses allocable to the Bonds
of such Series, or any Class or Classes thereof, on such
Payment Date;
(v) the aggregate amount of principal payable out
of Available Funds for such Payment Date in respect of each
Class of Bonds of such Series then Outstanding, the principal
portion of any Realized Losses then allocable to the Bonds of
such Series and the Classes of Bonds to which such Realized
Losses are required to be allocated pursuant to the related
Series Supplement, and the amount of any Junior Bond Writedown
Amount then allocable to any Class of Junior Bonds of such
Series and the Class or Classes of Junior Bonds to which it is
allocable;
(vi) if such following Payment Date is an Initial
Interest Payment Date for any Class of Compound Interest Bonds
of such Series, the amount of interest payable thereon on such
Interest Payment Date, the amount of the installment of
principal, if any, due and payable on such Class of Compound
Interest Bonds on such Payment Date, and the amount, if any,
of accrued interest to be added to the principal of such Class
of Compound Interest Bonds on such Payment Date;
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(vi) whether the amount expected to be available
in the Collection Account on such Payment Date will be
sufficient to pay on such Payment Date all amounts specified
in clauses (iii) and (v) above, and, if not, the percentages
of each such amount which may be paid in accordance with the
priorities set forth in Section 8.2 from the amounts expected
to be available in the Collection Account for such Series;
(vii) the amounts included in such statement
pursuant to clauses (iii) and (v) above, expressed in each
case per Individual Bond, to be paid on such Payment Date and
the amount of Realized Losses and the portion of the Junior
Bond Write Down Amount, if any, to be allocated to each
Individual Bond of a Class of such Series;
(ix) Reserved
(x) Reserved
(xi) Reserved
(xii) Reserved
(xiii) the amount, if any, to be withdrawn from the
Collection Account by the Trustee in respect of the following
Payment Date pursuant to Section 8.2(d);
(xiv) the amount, if any, to be withdrawn from the
Collection Account and paid over to any firm of Independent
Accountants in respect of the following Payment Date pursuant
to Section 8.2(d);
(xv) Reserved
(xvi) the amount, if any, to be withdrawn from the
Collection Account after such following Payment Date and
transferred to the Expense Fund pursuant to Section 8.2(d);
(xvii) the amount, if any, to be withdrawn from the
Collection Account and paid over to the Issuer or its assignee
or the Residual Interest Holders in respect of the following
Payment Date pursuant to Section 8.2(d); and
(xviii) the Class Imputed Principal Balance and the
Class Current Principal Amount of the Bonds of each Class of
such Series which will remain after giving effect to the
payments and allocating all Realized Losses and Junior Bond
Write Down Amounts to be made or allocated on such Payment
Date (and, in the case of Compound Interest Bonds, after
giving effect to the interest accrued during the Inter-
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est Accrual Period for such Payment Date and added to the
principal thereof) expressed both on an aggregate basis and
per Individual Bond.
Each Payment Date Statement shall be delivered by the Trustee
to the Issuer and, where required by the applicable Series Supplement,
to the firm of Independent Accountants appointed by the Issuer
pursuant to Section 8.9(a). If the actual amount of Distributions
received by the Trustee on a Distribution Date differs from the
expected amount of Distributions used by the Trustee in accordance
with Section 1.3(b) or 1.3(c), whichever is applicable, in determining
the Debt Service Requirement for a Payment Date, the Trustee shall
immediately on such Distribution Date (i) recompute all amounts in the
related Payment Date Statement to reflect the actual amount of
Distributions on such Distribution Date, (ii) revise such Payment Date
Statement accordingly, and (iii) deliver such revised Payment Date
Statement to the Issuer and, where required by the applicable Series
Supplement, to the Independent Accountants. Upon such delivery, such
revised Payment Date Statement shall be controlling for all purposes
under this Indenture.
(f) Not later than the fifth day after the Special Record
Date applicable to any Special Payment Date for any Overdue Bond of a
particular Series, the Trustee shall deliver to the Issuer a statement
(a "Special Payment Date Statement") with respect to such Series
setting forth:
(i) the amount of any overdue principal or any
overdue portion of the Redemption Price of any Overdue Bond
of such Series called for redemption and all unpaid interest
accrued on any Overdue Bonds called for redemption through
the preceding Special Payment Date or the Interest Accrual
Period for the preceding Payment Date (in the case of the
first Special Payment Date after such Bonds became Overdue
Bonds) which was not paid on such preceding Special Payment
Date or Payment Date, expressed both on an aggregate basis and
per Individual Bond of each Class included in such Overdue
Bonds,
(ii) the amount of interest due and payable on
such Special Payment Date on the overdue portion of the
Redemption Price of any Bond of such Series called for
redemption, expressed both on an aggregate basis and per
Individual Bond of each Class included in such Overdue Bonds,
(iii) if such Special Payment Date is all Payment
Date for that Series, the amounts required to be set forth in
clauses (i) through (v) of the Payment Date Statement with
respect to such Payment Date,
(iv) whether the amount expected to be on deposit
in the related Collection Account and available for payment
the Bondholders in accordance with the priorities set forth in
Section 8.2(c) on such Special Payment Date and, if
applicable, such Payment Date is sufficient to pay on such
Special Payment Date all amounts specified in clauses (i)
through (iii) above, and, if not, the percentages of
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each amount specified in clauses (i) through (iii) above which
may be paid, in accordance with the priorities set forth in
said Section 8.2(c), from the amount expected to be on deposit
in the Collection Account for such Series on such Special
Payment Date and, if applicable, such Payment Date, and
(v) the amounts included in such Special Payment
Date Statement pursuant to clauses (i) through (iii) above,
expressed in each case per Individual Bond of each Class of
Bonds of such Series covered by such Special Payment Date
Statement which will remain unpaid after giving effect to
payment of the amounts expected to be on deposit in the
related Collection Account and available for payment on such
Special Payment Date and, if applicable, such Payment Date.
SECTION 2.10 Persons Deemed Owners.
Prior to due presentment for registration of transfer of any Bond, the
Issuer, the Trustee, any Agent and any other agent of the Issuer or the Trustee
may treat the Person in whose name any Bond is registered as the owner of such
Bond (a) on the applicable Record Date or Special Record Date for the purpose
of receiving payments of the principal of and interest on such Bond and (b) on
any other date for all other purposes whatsoever, whether or not such Bond is
an Overdue Bond, and neither the Issuer, the Trustee, any Agent nor any other
agent of the Issuer or the Trustee shall be affected by notice to the contrary.
SECTION 2.11 Cancellation.
All Bonds surrendered for payment, registration of transfer, exchange
or redemption shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly cancelled by it. The Issuer may
at any time deliver to the Trustee for cancellation any Bond 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 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 held by the Trustee shall be held by the
Trustee in accordance with its standard retention policy, unless the Issuer
shall direct by an Issuer Order that they be destroyed or returned to it.
SECTION 2.12 Authentication and Delivery of Bonds.
Bonds of any one or more Series may from time to time be executed by
the Issuer and delivered to the Trustee for authentication, and thereupon the
same shall be authenticated and delivered by the Trustee, upon Issuer Request
and upon receipt by the Trustee of the following:
(a) an Issuer Resolution authorizing the execution,
authentication and delivery of such Bonds and the related Series
Supplement;
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(b) in case the Bonds to be authenticated and delivered
are of any Series not theretofore created, an appropriate Series
Supplement, accompanied by an Issuer Resolution authorizing such
Series Supplement (and, in the case of the first Series to be
authenticated and delivered hereunder, authorizing this Indenture),
designating the new Series to be created and prescribing, consistent
with the applicable provisions of this Indenture, the terms and
provisions relating to the Bonds of such Series;
(c) Opinions of Counsel addressed to the Trustee,
complying with the requirements of Section 11.1, and, except to the
extent provided otherwise in the related Series Supplement, to the
effect that:
(i) all instruments furnished to the Trustee in
connection with such Bonds conform to the requirements of this
Indenture and constitute all the documents required to be
delivered hereunder for the Trustee to authenticate and
deliver the Bonds then applied for;
(ii) all conditions precedent provided for in this
Indenture relating to the authentication and delivery of the
Bonds applied for have been complied with;
(iii) the Issuer has corporate power to execute and
deliver the Series Supplement relating to such Bonds (and, in
the case of the first Series to be authenticated and delivered
hereunder, this Indenture), and to issue such Bonds and has
duly taken all necessary corporate action for those purposes;
(iv) assuming due execution and delivery thereof
by the Trustee, this Indenture and the related Series
Supplement, as executed and delivered by the Issuer, are the
valid, legal and binding obligations of the Issuer,
enforceable in accordance with their terms, subject to
bankruptcy, reorganization, insolvency, arrangement,
moratorium, fraudulent or preferential conveyance and other
similar laws of general application affecting the enforcement
of creditors' rights generally and to general principles of
equity (regardless whether such enforceability is considered
in a proceeding in equity or at law); and the execution of
such Series Supplement is authorized or permitted by Section
9.1 of this Indenture;
(v) the Bonds then applied for, when issued,
delivered, authenticated and paid for, will be the valid,
legal and binding non-recourse obligations of the Issuer,
entitled to the benefits of this Indenture and the related
Series Supplement, equally and ratably with all other Bonds of
such Series, except to the extent specified otherwise in the
related Series Supplement, if any, theretofore issued,
authenticated, delivered and paid for and then Outstanding
hereunder, and enforceable in accordance with their terms,
subject to bankruptcy, reorganization, insolvency,
arrangement, moratorium, fraudulent or preferential conveyance
and other similar laws of general application affecting the
enforcement of creditors' rights generally
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and to general principles of equity (regardless whether such
enforceability is considered in a proceeding in equity or at
law);
(vi) if a Guaranty Agreement applies to such
Series, such Guaranty Agreement has been duly executed and
delivered by the Guarantor and constitutes a valid, legal and
binding obligation of the Guarantor enforceable in accordance
with its terms, subject to bankruptcy, reorganization,
insolvency, arrangement, moratorium, fraudulent or
preferential conveyance and other similar laws of general
application affecting creditors' rights generally and to
general principles of equity (regardless of whether such
enforceability is considered in a proceeding at law or in
equity);
(vii) the Issuer has corporate power and authority
to Grant the Trust Estate for such Series to the Trustee as
security for the Bonds of such Series and has duly authorized
such Grant to the Trustee by all necessary corporate action;
(viii) the Series Supplement delivered to the
Trustee with such Opinion of Counsel creates a valid lien
and/or security interest in and subjects the Certificates
securing such Series and all proceeds therefrom and the
Pledged Accounts or Funds for such Series to the lien and
security interest of this Indenture;
(ix) such action has been taken with respect to
delivery of possession of the Trust Estate and with respect to
the recording and filing of this Indenture, the Series
Supplement for such Series, any other indentures supplemental
hereto and any other requisite documents and with respect to
the execution and filing of any financing statements as is
necessary to make effective and to perfect a first priority
lien and security interest created by this Indenture in the
Trust Estate for such Series, with either the details of such
action being recited therein, or the absence of any such
action being necessary to make such lien and security interest
effective and perfected being stated therein; and, with any
recording, filing, re-recording and re-filing of this
Indenture, the Series Supplement for such Series, any other
indentures supplemental hereto and any other requisite
documents and any 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 created by this Indenture in the Trust
Estate for such Series until February 15 of the year in which
the first Opinion of Counsel with respect to such Series is
required to be delivered under Section 3.6 being described
therein;
(x) this Indenture and the Series Supplement for
such Series have been duly qualified under the TIA, or that no
qualification of such Indenture under the TIA is necessary;
the execution of the Series Supplement for such Series
requires the requalification of this Indenture under the TIA,
or that no requalification of the Indenture under the TIA is
necessary by virtue of the execution of such Series
Supplement;
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(xi) the Issuer is not required to register as an
"investment company" under the Investment Company Act, as such
term is defined thereunder, and the Issuer is not under the
"control" of an "investment company," as such terms are
defined in the Investment Company Act;
(xii) the Pooling and Administration Agreement for
each such Conventional Certificate has been duly authorized,
executed and delivered by the Administrator and constitutes
the legal, valid and binding agreement of the Administrator
enforceable in accordance with its terms, subject to
bankruptcy, reorganization, insolvency, arrangement,
moratorium, fraudulent or preferential conveyance and other
similar laws of general application affecting creditors'
rights generally and to general principles of equity
(regardless of whether such enforceability is considered in a
proceeding at law or in equity);
(xiii) each Conventional Certificate Granted to the
Trustee is validly issued and outstanding and entitled to the
benefit of the related Pooling and Administration Agreement;
(xiv) no authorization, approval or consent of any
governmental body having jurisdiction in the premises which
has not been obtained by the Issuer is required for the valid
issuance and delivery of the Bonds; and
(xv) if an election or elections has or have been
or will be made to treat the Trust Estate securing the Series,
or any other assets securing a Series, as identified in such
election or elections, as a REMICs, (1) assuming the proper
making of each such election, (2) compliance with the
pertinent provisions of this Indenture, and (3) continuing
compliance with the applicable provisions of the Code, the
Trust Estate or such assets will qualify as a REMIC, each
Class of Bonds designated in the related Series Supplement as
"regular interests" in a REMIC will be treated as "regular
interests" in such REMIC and each Class of Bonds or other
security designated in the related Series Supplement as a
"residual interest" in a REMIC will be treated, in the
aggregate, as the single Class of "residual interests" in such
REMIC.
The Opinion of Counsel delivered to the Trustee at the closing
of the related Series of Bonds may differ from the Opinion of Counsel
described in this Section 2.12(c) so long as the Opinion of Counsel so
delivered is acceptable to each Rating Agency, which shall be
conclusively evidenced by the delivery at the Closing of each such
Rating Agency's rating letter.
(d) an Officers' Certificate complying with the
requirements of Section 11.1 and stating that:
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(i) the Issuer is not in Default under this
Indenture and the issuance of the Bonds applied for will not
result in any breach of any of the terms, conditions or
provisions of, or constitute a default under, the Issuer's
certificate of incorporation or by-laws or any indenture,
mortgage, deed of trust or other agreement or instrument to
which the Issuer is a party or by which it is bound, or any
order of any court or administrative agency entered in any
proceeding to which the Issuer is a party or by which it may be
bound or to which it may be subject;
(ii) all conditions precedent provided in this
Indenture relating to the authentication and delivery of the
Bonds applied for have been complied with;
(iii) the Issuer is the owner of each Certificate
securing such Series, has not assigned any interest or
participation in any such Certificate (or, if any such
interest or participation has been assigned, it has been
released) and has the right to Grant each such Certificate to
the Trustee;
(iv) the Issuer has Granted to the Trustee all of
its right, title, and interest in each such Certificate; and
(v) attached thereto are true and correct copies
of letters signed by one or more nationally recognized
statistical rating agencies confirming that the Bonds of such
Series have been rated in the rating category specified for
such Class in the Prospectus Supplement or Private Placement
Memorandum (as applicable) relative to such Series by each
such rating agency.
(e) [Reserved]
(f) All of the Certificates and any other assets to be
included in a Collateral Group securing such Series, or, in the case
of Uncertificated Certificates, Advices issued for each such
Uncertificated Certificate by the Person or Persons in whose name such
Uncertificated Certificate is registered, in each case as listed on
Schedule A to the applicable Series Supplement; which Certificates,
assets and Uncertificated Certificates
(i) shall have
(A) an aggregate initial Certificate
Principal Amount at least equal to the aggregate
initial Original Principal Amount of the Bonds
proposed to be authenticated and delivered, and
(B) aggregate scheduled Distributions on
each Distribution Date which, together with
(1) the amount, if any, to be
deposited in the Collection Account on the
Closing Date pursuant to clause (g) below,
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(2) income that can be earned from
the reinvestment of Distributions and to
which the Bondholders are entitled (as
specified in the related Series Supplement)
and all other amounts receivable with respect
to the assets securing such Series, computed
as described in subsection (e)(i)(E) above,
and
(3) all other amounts, if any,
available for such purpose and required
hereby or by the related Series Supplement to
be deposited in the Collection Account on or
prior to the Payment Date immediately
following the related Distribution Date, are
sufficient,
when applied, in accordance with the terms hereof and
the related Series Supplement, to payments of
principal of and interest on the Bonds (under the
Maximum Bond Interest Rate Assumption if such Series
of Bonds includes a Class or Classes of Variable Rate
Bonds),
(1) to pay on each Payment Date for
such Series (after deduction of all fees and
expenses then due to the Trustee pursuant to
the related Series Supplement) all interest
(under the Maximum Bond Interest Rate
Assumption if such Series of Bonds includes a
Class or Classes of Variable Rate Bonds) then
due and payable on the Bonds proposed to be
authenticated and delivered, and
(2) to pay the entire principal
amount of each Class of such Bonds on or
prior to the Stated Maturity of the final
installment of principal thereof;
The certificate delivered to the Trustee pursuant to Section 2.12(d)
shall conclusively evidence compliance with such requirement.
(ii) shall otherwise satisfy each of the
requirements established for such Certificates in the related
Series Supplement; and
(iii) shall have been registered in the name of the
Trustee (or, if requested by the Trustee, in the name of a
Qualified Nominee); provided, that the Issuer may, at its sole
option, instead request the Trustee to cause all of such
Certificates to be so registered promptly following the
Closing Date for such Series, in which event such Certificates
shall be accompanied by such powers and shall otherwise be in
such form as shall permit the registration thereof in the name
of the Trustee or its Qualified Nominee without the taking of
any further action other than presentation for registration of
transfer and payment of the applicable fees in connection
therewith. (The Trustee, by its acceptance of such
Certificates, shall be deemed to have agreed to present them
for registration of transfer no later than the opening of
business on the last Business Day of the Month of Closing and
to pay the
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applicable transfer fees, subject to its right of
reimbursement under Section 6.7); and, provided, further that
in the case of Certificates issuable in book-entry form only,
in lieu of delivering such Certificates the Issuer shall take
such actions to effect the Grant thereof to the Trustee as are
specified in the related Series Supplement.
(g) Cash in the amount, if any, required by the terms of
the related Series Supplement to be deposited in the Collection
Account for such Series and held by the Trustee and applied in
accordance with Section 8.2, and if there is an Expense Fund for such
Series, cash or Eligible Investments in the amount specified in the
related Series Supplement.
(h) [Reserved]
(i) Such certificates, insurance policies, surety bonds,
instruments, opinions or other documents as may be required by the
terms of the Series Supplement creating such Series.
(j) If such Series or any Class or Classes of such Series
is directly insured, guaranteed or otherwise backed, the Guaranty
Agreement for such Series.
(k) A certificate of an Independent Person appointed by
an Issuer Order, whose regular business activity includes valuing
securities similar to the Certificates securing such Series, as to the
fair market value of such Certificates, which determination of fair
market value shall, unless otherwise provided in the related Series
Supplement, be based upon generally available market quotations as of
a date not earlier than three Business Days prior to the related
Closing Date.
(l) Such other documents, certificates, instruments or
opinions as may be required by the terms of the Series Supplement
creating such Series of Bonds.
SECTION 2.13 Book Entry Bonds.
Unless provided otherwise in the related Series Supplement, each Class
of Bonds subject to redemption at the request of Bondholders shall, and any
other class of any Series, may, if specified in the related Series Supplement,
be issued initially as a single certificate in the name of a Clearing Agency
maintaining book entry records with respect to ownership and transfer of such
Bonds, or its nominee, or a custodian bank of such Clearing Agency, or its
nominee, and registration of such Bonds may not be transferred by the Trustee
or Bond Registrar except under the conditions, if any, described in the related
Series Supplement. In such case, the Trustee shall deal with the Clearing
Agency and Clearing Agency Participants as representatives of the Beneficial
Owners of such Bonds for purposes of exercising the rights of Bondholders
hereunder, as provided in the related Series Supplement. Requests and
directions from, and votes of, such representatives shall not be deemed to be
inconsistent if they are made with respect to different Beneficial Owners.
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SECTION 2.14 Termination of Book Entry System.
(a) Except as otherwise provided in the related Series
Supplement, the book entry system through the Clearing Agency with
respect to any Class of Book Entry Bonds may be terminated upon the
happening of any of the following:
(i) The Clearing Agency or the Issuer advises the
Trustee that the Clearing Agency is no longer willing or able
to properly discharge its responsibilities under the
respective Letter Agreement and the Issuer is unable to locate
a qualified successor clearing agency satisfactory to the
Trustee and the Issuer;
(ii) The Issuer, in its sole discretion but with
the consent of the Trustee, elects to terminate the book entry
system by notice to the Clearing Agency and the Trustee; or
(iii) After the occurrence of an Event of Default
(at which time the Trustee shall use all reasonable efforts to
promptly notify each Beneficial Owner through the Clearing
Agency of such Event of Default when such notice shall be
given pursuant to Section 6.2, the Beneficial Owners of a
majority in Aggregate Current Principal Amount of the Book
Entry Bonds advise the Trustee in writing, through the related
Clearing Agency Participants and the Clearing Agency, that the
continuation of a book entry system through the Clearing
Agency to the exclusion of any Definitive Bond certificates
being issued to any person other than the Clearing Agency or
its nominee is no longer in the best interests of the
Beneficial Owners.
(b) Upon the occurrence of any event described in
subsection (a) above, the Trustee shall use all reasonable efforts to
notify all Beneficial Owners, through the Clearing Agency, of the
occurrence of such event and of the availability of Definitive Bond
certificates to Beneficial Owners requesting the same, in an Aggregate
Current Principal Amount representing the interest of each, making
such adjustments and allowances as it may find necessary or
appropriate as to accrued interest and previous calls for redemption
or special redemption. Definitive Bond certificates shall be issued
only upon surrender to the Trustee of the Bond by the Clearing Agency,
accompanied by registration instructions for the Definitive Bond
certificates. Neither the Issuer nor the Trustee shall be liable for
any delay in delivery of such instructions and may conclusively rely
on, and shall be protected in relying on, such instructions. Upon
issuance of the Definitive Bond certificates, all references herein
and in the Series Supplement to obligations imposed upon or to be
performed by the Clearing Agency shall cease to be applicable and the
provisions relating to Definitive Bonds shall be applicable.
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SECTION 2.15 Restrictions on Transfer of Certain Classes of Bonds.
(a) No legal or beneficial interest in all or any portion
of any Residual Bonds of any Series may be transferred directly or
indirectly to (i) a Disqualified Organization or an agent of a
Disqualified Organization (including a broker, nominee, or middleman),
(ii) an entity that holds REMIC residual securities as nominee to
facilitate the clearance and settlement of such securities through
electronic book entry changes in accounts of participating
organizations (a "Book-Entry Nominee"), or (iii) an individual,
corporation, partnership or other person unless such transferee (A) is
not a Non-U.S. Person or (B) is a Non-U.S. Person that will hold such
Residual Bond in connection with the conduct of a trade or business
within the United States and has furnished the transferor and the
Trustee with an effective Internal Revenue Service Form 4224 or (C) is
a Non-U.S. Person that has delivered to both the transferor and the
Trustee an opinion of a nationally recognized tax counsel to the
effect that the transfer of a Residual Bond to it is in accordance
with the requirements of the Code and the regulations promulgated
thereunder and that such transfer of a Residual Bond will not be
disregarded for federal income tax purposes (any such person who is
not covered by clause (A), (B) or (C) above being referred to herein
as "Non-permitted Foreign Holder"), and any such purported transfer
shall be void and have no effect. The Trustee shall not authenticate
and deliver a Residual Bond in connection with any transfer thereof
unless the transferor shall have provided to the Trustee an affidavit,
substantially in the form attached as Exhibit B to the related Series
Supplement, signed by the transferee.
The affidavit described in the preceding paragraph, if not
executed in connection with the initial issuance of the Residual Bonds
of any relevant Series, shall be accompanied by a written statement in
the form attached as Exhibit E to the related Series Supplement,
signed by the transferor of any such Residual Bond. The Residual
Bonds (if any) of each Series shall bear a legend referring to the
foregoing restrictions contained in this paragraph and the preceding
paragraph.
Upon written notice to the Trustee that any legal or
beneficial interest in any portion of a Residual Bond of any Series
has been transferred, directly or indirectly, to a Disqualified
Organization or agent thereof (including a broker, nominee, or
middleman) in contravention of the foregoing restrictions, (i) such
transferee shall be deemed to hold such Residual Bond in constructive
trust for the last transferor who was not a Disqualified Organization
or agent thereof, and such transferor shall be restored as the owner
of such Residual Bond as completely as if such transfer had never
occurred, provided that the Trustee may, but is not required to,
recover any payments made to such transferee with respect to such
Residual Bond and return such recovery to the transferor, and (ii) the
Trustee agrees, at the Issuer's expense, to furnish to the Internal
Revenue Service and to any transferor of such Residual Bond or such
agent (within 60 days of the request therefor by the transferor or
agent) such information necessary to the application of Section
860E(e) of the Code as may be required by the Code, including but not
limited to the present value of the total anticipated excess
inclusions with respect to such Residual Bond (or portion thereof) for
periods after such transfer. At the election of the Trustee, the cost
to the Trustee of computing and furnishing
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such information may be charged to the transferor or such agent
referred to above; however, the Trustee shall in no event be excused
from furnishing such information.
The restrictions on transfers of the Residual Bonds of any
Series set forth in the preceding three paragraphs shall cease to
apply to transfers (and the applicable portions of the legend to such
Residual Bonds may be deleted) after delivery to the Trustee of an
Opinion of Counsel to the effect that the elimination of such
restrictions will not cause a REMIC Loss.
(b) No transfer of a Restricted Bond of any Series shall
be made unless such transfer is exempt from the registration
requirements of the Securities Act of 1933, as amended (the "Act"),
and any applicable state securities laws, or is made in accordance
with the Act and any applicable state securities laws. As a condition
precedent to the transfer of a Restricted Bond, (i) the Trustee shall
require a written opinion of counsel, which counsel shall be
acceptable to the Trustee, that such transfer may be made pursuant to
an exemption from the Act and any applicable state securities laws
(which opinion shall not be at the expense of the Trustee) or (ii) the
Trustee shall require the transferee to execute an investment letter
in the form substantially as set forth in Exhibit F to the related
Series Supplement or in such other form as may be acceptable to the
Trustee, certifying as to the facts surrounding such transfer. The
holder of any Restricted Bond desiring to effect the transfer thereof
shall, and hereby agrees to, indemnify the Trustee and the Issuer
against any liability that may result if the transfer thereof is not
so exempt or is not made in accordance with such federal and state
laws. Such agreement to so indemnify the Trustee and the Issuer shall
survive the termination of this Agreement.
(c) No transfer of an ERISA Restricted Bond (if any) of a
Series shall be made to any Person unless the Trustee has received (A)
either (i) a certificate substantially in the form required by the
related Series Supplement, from such transferee to the effect that
such transferee is not a Plan or a Person that is using the assets of
a Plan to acquire such ERISA Restricted Bond or (ii) a certificate in
such form and substance as shall be satisfactory to the Trustee and
the Issuer in lieu of the Certificate required by the related Series
Supplement or (B) an opinion of counsel, which counsel shall be
satisfactory to the Trustee and the Issuer to the effect that the
purchase and holding of such ERISA Restricted Bond will not constitute
or result in the assets of the Trust Estate being deemed to be "plan
assets" subject to the prohibited transactions provisions of ERISA or
Section 4975 of the Code and will not subject the Trustee, the
Certificate Trustee, the Administrator relative to such Series or the
Issuer to any obligation in addition to those undertaken in this
Indenture or in the related Pooling and Administration Agreement;
provided, however, that the Trustee will not require such certificate
or opinion if, as a result of a change of law or otherwise, counsel
satisfactory to the Trustee has rendered an opinion to the effect that
the purchase and holding of an ERISA Restricted Bond by a Plan or a
Person that is purchasing or holding such ERISA Restricted Bond with
the assets of a Plan will not constitute or result in a prohibited
transaction under ERISA or Section 4975 of the Code. The preparation
and delivery of the certificate and
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opinions referred to above shall not be an expense of the Trust
Estate, the Trust, the Certificate Trustee, the Administrator relative
to such Series or the Issuer.
(i) No transfer of an ERISA Prohibited Bond shall
be made to any Person unless the Trustee has received a
certificate (substantially in the form of Exhibit B to the
related Series Supplement in the case of a Residual Bond, or
containing a certification substantially as set forth in
paragraph 17 of Exhibit B to the related Series Supplement, in
the case of an ERISA Prohibited Bond that is not a Residual
Bond) from such transferee to the effect that, among other
things, such transferee is not a Plan or a Person that is
using the assets of a Plan to acquire any such Bond. The
preparation and delivery of such certificate shall not be an
expense of the Trust Estate, the Trustee, the Issuer.
(d) Subject to Section 6.1 hereof, the Trustee may
conclusively rely upon any certificate, affidavit or opinion delivered
pursuant to Section 2.15(a), (b), or (c).
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ARTICLE III
COVENANTS
SECTION 3.1 Payment of Bonds.
The Issuer will pay or cause to be duly and punctually paid the
principal of, and interest on, the Bonds of each Series in accordance with the
terms of such Bonds and this Indenture. The Bonds of each Series shall be non-
recourse obligations of the Issuer and shall be limited in right of payment to
amounts available from the Trust Estate relative to such Series as provided in
this Indenture and the Issuer shall not otherwise be liable for payments on the
Bonds. No person shall be personally liable for any amounts payable under the
Bonds. If any other provision of this Indenture conflicts or is deemed to
conflict with the provisions of this Section 3.1, the provisions of this
Section 3.1 shall control.
SECTION 3.2 Maintenance of Office or Agency.
The Issuer will maintain in the Borough of Manhattan, the City of New
York, the State of New York an office or agency where Bonds may be presented or
surrendered for payment or 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. The Issuer will give prompt written
notice to the Trustee of the location and any change in the location of such
office or agency. Until written notice of any change in the location of such
office or agency is delivered to the Trustee or if at any time the Issuer shall
fail to maintain any such required office or agency or shall fail to furnish
the Trustee with the address thereof, Bonds may be so presented or surrendered,
and such notices and demands may be made or served, at the New York Office, and
the Issuer hereby appoints the New York Agent as its agent in the City of New
York, for the foregoing purposes.
The Issuer may also from time to time designate one or more other
offices or agencies (in or outside the City of New York) where the Bonds may be
presented or surrendered for any or all such purposes and may from time to time
rescind such designations; provided, however, that (i) no such designation or
rescission shall in any manner relieve the Issuer of its obligation to maintain
an office or agency in the Borough of Manhattan, the City of New York, the
State of New York for the purposes set forth in the preceding paragraph, (ii)
presentations or surrenders of Bonds for payment may be made only in the City
of New York, the State of New York and (iii) any designation of an office or
agency for payment of Bonds shall be subject to Section 3.3. The Issuer will
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.
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SECTION 3.3 Money for Bond Payments to Be Held in Trust.
All payments of amounts due and payable with respect to any Bonds
which are to be made from amounts withdrawn from the related Collection Account
pursuant to Section 8.2(c) or Section 5.8 shall be made on behalf of the Issuer
by the Trustee or by a Paying Agent, and no amounts so withdrawn from a
Collection Account for payments of Bonds shall be paid over to the Issuer under
any circumstances except as provided in this Section 3.3 or in Section 5.8.
When the Issuer shall have a Paying Agent for a Series that is not
also the Bond Registrar for such Series, it shall furnish, or cause the Bond
Registrar for such Series to furnish, no later than
(a) the fifth calendar day after each Record Date for
such Series, and
(b) the fifth calendar day after each Special Record Date
applicable to a Special Payment Date for such Series,
a list, in such form as such Paying Agent may reasonably require, of the names
and addresses of the Holders of Bonds of such Series and of the number of
Individual Bonds of each Class of such Series held by each such Holder.
Whenever the Issuer shall have a Paying Agent other than the Trustee,
it will, on or before the Business Day next preceding each Payment Date and
Special Payment Date for each Series of Bonds, direct the Trustee to deposit
with such Paying Agent an aggregate sum sufficient to pay the amounts then
becoming due (to the extent funds are then available for such purpose in the
Collection Account for such Series), such sum to be held in trust for the
benefit of the Persons entitled thereto. Any moneys deposited with a Paying
Agent in excess of an amount sufficient to pay the amounts then becoming due on
the Bonds with respect to which such deposit was made shall, upon Issuer Order,
be paid over by such Paying Agent to the Trustee for application in accordance
with Article VIII.
Any Paying Agent shall be appointed by Issuer Order. The Issuer shall
not appoint any Paying Agent (other than the Trustee) which is not, at the time
of such appointment, a depository institution or trust company whose
obligations would be Eligible Investments pursuant to clause (ii) of the
definition of the term "Eligible Investment". In the event that the Trustee is
acting as Paying Agent and the Trustee resigns as Trustee with respect to one
or more Series of Bonds (or to the extent permitted in any Series Supplement,
with respect to one or more Classes within a Series), the Trustee may resign as
Paying Agent with respect to the Bonds of such Series or Classes, as
applicable. The Issuer will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee (and if the Trustee acts as Paying Agent, it
hereby so agrees), subject to the provisions of this Section, that such Paying
Agent will:
(1) allocate all sums received for payment to the Holders
of Bonds of each Series for which it is acting as Paying Agent on each
Payment Date and Special Payment Date
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among such Holders in the proportion specified in the applicable
Payment Date Statement and Special Payment Date Statement, as the case
may be, in each case to the extent permitted by applicable law;
(2) 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;
(3) if such Paying Agent is not the Trustee, immediately
resign as a Paying Agent and forthwith pay to the Trustee all sums
held by it in trust for the payment of Bonds if at any time it ceases
to meet the standards set forth above required to be met by a Paying
Agent at the time of its appointment;
(4) if such Paying Agent is not the Trustee, give the
Trustee notice of any Default by the Issuer (or any other obligor upon
the Bonds) in the making of any payment required to be made with
respect to any Series of Bonds for which it is acting as Paying Agent;
(5) if such Paying Agent is not the Trustee, at any time
during the continuance of any such Default, upon the written request
of the Trustee, forthwith pay to the Trustee all sums so held in trust
by such Paying Agent; and
(6) 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 with respect to any
applicable reporting requirements in connection therewith; provided,
however, that with respect to withholding and reporting requirements
applicable to original issue discount (if any) on any Class of Bonds,
the Issuer shall have first provided the calculations pertaining
thereto to the Trustee.
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, if other than the Trustee, to pay to the
Trustee all sums held in trust by such Paying Agent, such sums to be held by
the Trustee upon the same trusts as those upon which such sums were held by
such Paying Agent; and upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Except as provided by applicable law, any money held by the Trustee or
any Paying Agent in trust for the payment of any amount due with respect to any
Bond and remaining unclaimed for two and one-half years after such amount has
become due and payable to the Holder of such Bond (or, if earlier, three months
prior to the date on which such amount would escheat to a governmental entity
under applicable law) shall be discharged from such trust and paid to the
Issuer; 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 Trustee or such
Paying Agent with respect to such trust money shall thereupon cease; provided,
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however, that if an election has been or will be made to treat the Trust Estate
securing the Series or any other assets specified in a REMIC election relative
to such Series, as a REMIC, any such unclaimed funds shall be paid to the state
pursuant to applicable escheat laws and in such event the Holder of such Bond
shall thereafter look only to such state for payment thereof and all liability
of the Issuer, the Trustee or such Paying Agent with respect to such trust
money shall thereupon cease. The Trustee may adopt and employ, at the expense
of the Issuer, any 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 Trustee or any Agent, at the last address
of record for each such Holder).
SECTION 3.4 Corporate Existence.
(a) Subject to Section 3.4(b) and (c), the Issuer will
keep in full effect its existence, rights and franchises as a
corporation under the laws of the State of Delaware or under the laws
of any other state or the United States of America, and will obtain
and preserve its qualification to do business as a foreign corporation
in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this
Indenture, the Bonds or any of the Certificates.
(b) Any corporation into which the Issuer hereunder may
be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which such Issuer
hereunder shall be a party, shall be the successor Issuer under this
Indenture without the execution or filing of any paper, instrument or
further act to be done on the part of the parties hereto, anything
herein, or in any agreement relating to such merger or consolidation,
by which any such Issuer may seek to retain certain powers, rights and
privileges theretofore obtaining for any period of time following such
merger or consolidation, to the contrary notwithstanding.
(c) Upon any consolidation or merger of or other
succession to the Issuer in accordance with Section 3.4(b) hereof, the
Person formed by or surviving such consolidation or merger (if other
than the Issuer) 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.
SECTION 3.5 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 as may be necessary or advisable
to
(i) Grant more effectively all or any portion of a Trust
Estate,
(ii) maintain or preserve the lien of this Indenture or
carry out more effectively the purposes hereof,
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(iii) perfect, publish notice of, or protect the validity
of, any Grant made or to be made by this Indenture,
(iv) enforce any of the Certificates, or
(v) preserve and defend title to any Certificate or other
instrument included in a Trust Estate and the rights of the Trustee,
and of the Bondholders of the Series secured thereby, in such
Certificate or other instrument against the claims of all persons and
parties.
The Issuer hereby designates the Trustee its agent and attorney-in-fact to
execute, upon the Issuer's failure to do so, any financing statement,
continuation statement or other instrument required pursuant to this Section
3.5; provided, however, that such designation shall not be deemed to create a
duty in the Trustee to monitor the compliance of the Issuer with the foregoing
covenants and provided, further, that the duty of the Trustee to execute any
instrument required pursuant to this Section 3.5 shall arise only if the
Trustee has knowledge of any failure of the Issuer to comply with the
provisions of this Section 3.5.
SECTION 3.6 Opinions as to Trust Estate.
On or before February 15 in each calendar year, the Issuer shall
furnish to the 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 re-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
is necessary to maintain the lien and security interest created by this
Indenture with respect to the Trust Estate for such Series 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
re-filing 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 with
respect to the Trust Estate for such Series until February 15 in the following
calendar year.
The Trustee shall not remove any portion of any Trust Estate that
consists of money or is evidenced by an instrument, certificate or other
writing from the jurisdiction in which it was held at the date the most recent
opinion of Counsel was delivered pursuant to this Section 3.6 (or from the
jurisdiction in which it was held as described in the Opinion of Counsel
delivered at the Closing Date pursuant to Section 2.12(c), if no Opinion of
Counsel has yet been delivered pursuant to this Section 3.6) or cause or permit
ownership or the pledge of any portion of the Trust Estate that consists of
book-entry securities to be recorded on the books of a Person located in a
different jurisdiction from the jurisdiction in which such ownership or pledge
was recorded at such date unless the Trustee shall have first received an
Opinion of Counsel to the effect that the lien and security interest
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created by this Indenture with respect to such property will continue to be
maintained after giving effect to such action or actions.
SECTION 3.7 Performance of Obligations.
The Issuer will not take any action or permit any action to be taken
by others which would release any Person from any of such Person's covenants or
obligations under any instrument included in a Trust Estate, or which would
result in the amendment, hypothecation, subordination, termination or discharge
of, or impair the validity or effectiveness of, any such instrument, except as
expressly provided in this Indenture.
SECTION 3.8 Negative Covenants.
The Issuer will not:
(a) sell, transfer, exchange or otherwise dispose of any
portion of a Trust Estate except as expressly permitted by this
Indenture;
(b) claim any credit on, or make any deduction from, the
principal of, or interest on, any of the Bonds by reason of the
payment of any taxes levied or assessed upon any portion of a Trust
Estate;
(c) (i) engage in any business or activity other than in
connection with, or relating to, the issuance of Bonds pursuant to
this Indenture or any Series Supplement or the issuance of bonds
permitted under clause (d) below, or (ii) amend Article III or VIII of
its Certificate of Incorporation, as in effect on the Closing Date for
the initial Series of Bonds, without, in each case, the consent of the
Holders of not less than 66 2/3% of the Aggregate Current Principal
Amount of the Bonds of each Series then Outstanding;
(d) issue bonds under any other indenture unless such
bonds are non-recourse obligations of the Issuer;
(e) incur, assume, guaranty or agree to indemnify any
indebtedness of any Person, except for such indebtedness as may be
incurred by the Issuer in connection with the issuance of a Series of
Bonds pursuant to this Indenture or any Series Supplement or as
permitted under clause (d) above or indebtedness which, if consisting
of indebtedness other than Bonds or indebtedness permitted under
clause (d) above, (i) shall either be (1) subordinate to each Series
of Bonds issued pursuant to the Indenture or (2) secured by collateral
other than the Trust Estate and to which the creditor with respect to
such indebtedness has recourse only to such collateral and not to any
other assets of the Issuer and (ii) shall provide that the holder
thereof may not file a petition in any bankruptcy or insolvency
proceeding with respect to the Issuer until not less than 91 days
after payment in full of all Outstanding Bonds issued pursuant to this
Indenture;
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(f) dissolve or liquidate in whole or in part;
(g) merge or consolidate with any corporation other than
an Affiliate of the Issuer, any such merger or consolidation with an
Affiliate of the Issuer to be subject to the following conditions:
(1) the surviving or resulting entity shall be a
corporation organized under the laws of the United States or
any state thereof and its certificate of incorporation shall
contain substantially the same restrictions as are contained
in Articles III and VIII of the Issuer's Certificate of
Incorporation;
(2) the surviving or resulting corporation (if
other than the Issuer) shall expressly assume by an indenture
supplemental hereto all of the Issuer's obligations hereunder;
(3) the consummation of such merger or
consolidation shall not result in the lowering of any rating
of the Outstanding Bonds of any Series by the rating agencies
that rated the initial Series of Bonds; and
(4) immediately after consummation of the merger
or consolidation no Default shall exist with respect to any
Series;
(h) (1) permit the validity or effectiveness of this
Indenture or any Grant under the related Series Supplement to be
impaired, or permit the lien of this Indenture to be amended,
hypothecated, subordinated, terminated or discharged with respect to
any Series, or permit any Person to be released from any covenants or
obligations with respect to any Series under this Indenture, except as
may be expressly permitted hereby or by any Series Supplement, (2)
permit any lien, charge, security interest, mortgage or other
encumbrance (other than the lien of this Indenture or any Permitted
Encumbrance) to be created on or extend to or otherwise arise upon or
burden the Trust Estate for any Series or any part thereof or any
interest therein or the proceeds thereof, so long as such proceeds
remain a part of the Trust Estate, or (3) permit the lien of this
Indenture not to constitute a valid first priority security interest
in the Trust Estate securing any Series; or
(i) take any action, or omit to take any action, if such
action or omission may (i) cause any Trust Estate or any other assets
securing a Series of Bonds and in respect of which a REMIC election
has been made to fail to qualify as a REMIC during any taxable year,
or (ii) cause or permit any REMIC relative to any Series to engage in
any "prohibited transaction" as defined in Section 860F of the Code.
SECTION 3.9 Annual Statement as to Compliance.
On or before 120 days after the end of the first fiscal year of the
Issuer which ends more than three months after the Closing Date for a Series,
and each fiscal year thereafter, the Issuer shall
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deliver to the Trustee a brief statement with respect to such Series, signed by
its principal executive officer, principal financial officer or principal
accounting officer, that
(1) a review of the fulfillment by the Issuer during such
year of its obligations under this Indenture has been made under such
officer's supervision; and
(2) to the best of such 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 the fulfillment of any such obligation, specifying each
such Default known to such officer and the nature and status thereof.
For purposes of this paragraph, such compliance shall be determined
without regard to any period of grace or requirement of notice
provided under the Indenture.
SECTION 3.10 Contribution of Assets.
Except as otherwise provided in the related Series Supplement, if an
election has been made or will be made to treat the Trust Estate or any other
assets specified in such election securing the related Series as a REMIC,
following the Closing Date, the Trustee shall not accept any contribution of
additional assets to the Trust Estate or such other assets, unless it has
received a Non-Disqualification Opinion with respect thereto and an opinion of
counsel that the contribution will not result in the imposition of a penalty
tax under the Code on the related REMIC.
SECTION 3.11 Successor Substituted.
Upon any consolidation or merger in accordance with Section 3.8(g),
the person resulting from 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 the Indenture with the same effect as
if such Person had been named as the Issuer herein. Promptly upon the
occurrence of any such succession, such Person shall give notice thereof to the
Trustee.
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ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1 Satisfaction and Discharge of Indenture.
Whenever the following conditions shall have been satisfied with
respect to a Series:
(1) either
(A) all Bonds of such Series theretofore
authenticated and delivered (other than (i) Bonds which have
been destroyed, lost or stolen and which have been replaced or
paid as provided in Section 2.8, and (ii) Bonds for whose
payment money has theretofore been deposited in trust and
thereafter repaid to the Issuer, as provided in Section 3.3)
have been delivered to the Trustee for cancellation; or
(B) all Bonds of such Series not theretofore
delivered to the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at the
Stated Maturity of the final installment of the
principal thereof within one year, or
(iii) are to be called for redemption
within one year under irrevocable arrangements
satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the
expense, of the Issuer,
and, in the case of any Series in respect of the assets
securing which a REMIC election or elections have been made,
the Issuer has delivered to the Trustee a Non-Disqualification
Opinion relevant to the actions specified in clauses (i), (ii)
or (iii) above, and has deposited or caused to be deposited
with the Trustee, in trust for such purpose, an amount
sufficient to pay and discharge the Aggregate Imputed
Principal Balance at such time of the Bonds of such Series,
together with an amount equal to the aggregate amount of
interest that will have accrued on such Series of Bonds (under
the Maximum Bond Interest Rate Assumption if such Series of
Bonds includes a Class or Classes of Variable Rate Bonds);
(2) the Issuer has paid or caused to be paid all other
sums payable hereunder by the Issuer with respect to such Series; and
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(3) the Issuer has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that all conditions
precedent herein provided for the satisfaction and discharge of this
Indenture with respect to such Series have been complied with;
then, upon Issuer Request, authorized by a Board Resolution, this Indenture and
the related Series Supplement and the lien, rights and interests created hereby
and thereby shall cease to be of further effect with respect to such Series,
and the Trustee and each co-trustee and separate trustee, if any, then acting
as such hereunder shall, at the expense of the Issuer, execute and deliver all
such instruments as may be necessary to acknowledge the satisfaction and
discharge of this Indenture and the related Series Supplement with respect to
such Series and shall pay, or assign or transfer and deliver, all cash,
securities and other property held by it as part of the Trust Estate or other
assets for such Series remaining after satisfaction of the conditions specified
in clauses (1) and (2) above, (x) with respect to each Series of Bonds for
which an election to treat the Trust Estate and any other assets specified in
such election and securing the Bonds as one or more REMICs has not been made
and will not be made, to the Issuer or upon Issuer Order or (y) with respect to
each Series of Bonds for which such an election has been made or will be made,
and upon receipt by the Trustee of a Non-Disqualification Opinion as required
by Section 4.3, as provided in the related Series Supplement.
In the absence of an Issuer Request authorized by a Board Resolution,
the payment of all Outstanding Bonds of all Series shall not render this
Indenture inoperative or prevent the Issuer from issuing additional Series of
Bonds from time to time thereafter as herein provided.
Notwithstanding the satisfaction and discharge of this Indenture with
respect to a Series, the obligations of the Issuer to the Trustee under Section
6.7, the obligations of the Trustee to the Issuer and to the Holders of Bonds
of such Series under Section 3.3, the obligations of the Trustee to the Holders
of Bonds of such Series under Section 4.2, the obligation of the Trustee to
determine and publish notices of the rates to be borne by the Variable Rate
Bonds pursuant to Section 2.3, the provisions of Article II with respect to
lost, stolen, destroyed or mutilated Bonds of such Series, registration of
transfers of Bonds of such Series, and rights to receive payments of principal
of and interest on the Bonds of such Series, and the rights, privileges and
immunities of the Trustee under Article VI shall survive.
SECTION 4.2 Application of Trust Money.
All money deposited with the Trustee pursuant to Sections 3.3 and 4.1
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 Trustee may determine, to the Persons entitled thereto, of
the principal and interest for whose payment such money has been deposited with
the Trustee.
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SECTION 4.3 REMIC Matters.
(a) Each Series Supplement shall contain a statement
specifying whether or not it is intended that one or more REMIC
elections be made in respect of the Trust Estate and other assets
specified in such Series Supplement and securing the Bonds issued
thereby. If an election or elections are made as aforesaid, it is
intended that each REMIC specified in the related Series Supplement
shall constitute, and the affairs thereof shall be conducted so as to
qualify each such REMIC as, a "real estate mortgage investment
conduit" as defined in and in accordance with the REMIC Provisions.
In furtherance of such intention, and with respect to each such REMIC,
the Issuer covenants and agrees that it shall:
(i) prepare and file, or cause to be prepared and
filed, in a timely manner, a U.S. Real Estate Mortgage
Investment Conduit Income Tax Return (Form 1066) and prepare
and file or cause to be prepared and filed with the Internal
Revenue Service and applicable state or local tax authorities
income tax or information returns for each taxable year with
respect to each calendar year as the taxable year and the
accrual method of accounting, containing such information and
at the times and in the manner as may be required by the Code
or state or local tax laws, regulations, or rules, and shall
furnish or cause to be furnished to the related Bondholders
the schedules, statements or information at such times and in
such manner as may be required thereby;
(ii) within thirty days of the Closing Date of
each such Series, shall furnish or cause to be furnished to
the Internal Revenue Service, on Form 8811 or as otherwise may
be required by the Code, the name, title, address, and
telephone number of the person that the holders of the related
Bonds may contact for tax information relating thereto (and
the Issuer shall act as the representative of each relevant
Trust Estate for this purpose), together with such additional
information as may be required by such Form, and shall update
such information at the time or times in the manner required
by the Code;
(iii) make or cause to be made an election on
behalf of such REMIC, to be treated as a REMIC on its federal
tax return for its first taxable year (and, if necessary,
under applicable state law);
(iv) prepare and forward, or cause to be prepared
and forwarded, to the related Bondholders and to the Internal
Revenue Service and, if necessary, state tax authorities, all
information returns or reports, or furnish or cause to be
furnished by telephone, mail, publication or other appropriate
method such information, as and when required to be provided
to them in accordance with the REMIC Provisions, including
without limitation, the calculation of any original issue
discount using the Prepayment Assumption specified in the
related Series Supplement;
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(v) provide information necessary for the
computation of tax imposed on the transfer of a Residual
Interest of each such REMIC (including the information
required by Treasury Regulation 1.860D- 1(b)(5)(ii)) to the
Internal Revenue Service and to a Disqualified Organization,
or an agent (including a broker, nominee or other middleman)
of a Disqualified Organization, or a pass-through entity in
which a Disqualified Organization is the record holder of an
interest and to any other Person specified in Section
860E(e)(3) and (6) of the Code as liable for the tax imposed
under Section 860E(e) of the Code (the reasonable cost of
computing and furnishing such information may be charged to
the Person liable for such tax);
(vi) conduct the affairs of each such REMIC at all
time that any Bonds relative thereto are Outstanding so as to
maintain the status thereof as a REMIC under the REMIC
Provisions;
(vii) not knowingly or intentionally take any
action or omit to take any action that would cause the
termination of the REMIC status of each such REMIC;
(viii) exercise reasonable care not to allow the
creation of any "interests" in each such REMIC within the
meaning of Section 860D(d)(2) of the Code other than as
provided in the related Series Supplement ;
(ix) exercise reasonable care not to allow the
occurrence of any "prohibited transactions" within the meaning
of Section 860F of the Code in respect of any such REMIC,
unless the Issuer shall have provided a Non-Disqualification
Opinion to the Trustee that such occurrence would not result
in a REMIC Loss in respect of such REMIC;
(x) exercise reasonable care not to allow such
REMIC to receive income from the performance of services or
from assets not permitted under the REMIC Provisions to be
held by a REMIC;
(xi) pay from amounts in the Trust Estate the
amount of any federal or state law, including prohibited
transaction taxes, taxes on certain contributions to such
REMIC after the Startup Day relative thereto, and taxes on net
income from foreclosure property, imposed on such REMIC and as
the same shall be due and payable (but such obligation shall
not prevent the Issuer or any other appropriate Person from
contesting any such tax in appropriate proceedings and shall
not prevent the Issuer from withholding payment of such tax,
if permitted by law, pending the outcome of such proceedings);
(xii) ensure that all federal, state or local
income tax or information returns shall be signed by the
Issuer or such other person as may be required to sign such
returns by the Code or state or local laws, regulations or
rules; and
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(xiii) maintain such records relating to each such
REMIC, including but not limited to the income, expenses,
individual mortgage loans (including mortgaged property)
relative to such REMIC, other assets and liabilities of the
Trust Estate relative to such REMIC, and the fair market value
and adjusted basis of the property of each determined at such
intervals as may be required by the Code, as may be necessary
to prepare the foregoing returns, schedules, statement or
information.
(b) Reserved
(c) The Issuer shall cause the first federal income tax
return of each REMIC relative to a Series of Bonds to include the
information required by Treasury Regulation Section 1.860D-1(d)(2) and
Treasury Regulation Section 1.860F-4(b)(2).
(d) Except as otherwise provided in the related Series
Supplement, where an election has been made or will be made to treat
the Trust Estate or any other assets specified in such election and
securing the Series as one or more REMICs, the termination of each
such REMIC shall be effected by the Issuer pursuant to a Qualified
Liquidation and only after delivery by the Issuer to the Trustee of a
Non-Disqualification Opinion.
SECTION 4.4 Reinstatement.
If the Trustee or any Paying Agent is unable to apply any money in
accordance with Sections 4.1 and 4.2 by reason of any legal proceeding or by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Issuer's
obligations under the Indenture and the Bonds shall be revived and reinstated
as though no deposit had occurred pursuant to Section 4.1 until such time as
the Trustee or such Paying Agent is permitted to apply all such money or
obligations in accordance with Sections 4.1 and 4.2; provided, however, that if
the Issuer has made payment of interest on or principal of any of the Bonds
because of the reinstatement of its obligations, the Issuer shall be subrogated
to the Holders of the Bonds to receive such payment from the money or
obligations held by the Trustee or such Paying Agent.
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ARTICLE V
DEFAULTS AND REMEDIES
SECTION 5.1 Event of Default.
(A) "Event of Default", wherever used herein, means, with respect
to a Series of Bonds issued hereunder, except to the extent specified otherwise
in the related Series Supplement for such Series of Bonds, 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):
(1) if the Issuer shall
(A) subject to clause 5.1(B) hereof, default in
the payment when and as due of any installment of principal of
or interest on any Bond of such Series, or
(B) default in the payment of the Redemption
Price of any Bond of such Series which has been called for
redemption pursuant to Article X,
and, except in the case of any such default in the payment of
principal, such default or failure shall continue for a period of five
days;
(2) if the Issuer shall breach or default in the due
observance of any one or more of the covenants set forth in clauses
(a), (c)(ii), (f) or (g) of Section 3.8;
(3) Reserved
(4) Reserved
(5) the entry of a decree or order for relief by a court
having jurisdiction in respect of the Issuer in an involuntary case
under the federal bankruptcy laws, as now or hereafter in effect, or
any other present or future federal or state bankruptcy, insolvency or
similar law, or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Issuer or of
any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Issuer and the continuance of any
such decree or order unstayed and in effect for a period of 60
consecutive days; or
(6) the commencement by the Issuer of a voluntary case
under the federal bankruptcy laws, as now or hereafter in effect, or
any other present or future federal or state bankruptcy, insolvency or
similar law, or the consent by the Issuer to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other
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similar official of the Issuer or of any substantial part of its
property or the making by the Issuer of an 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 corporate action by the
Issuer in furtherance of any of the foregoing.
(B) Neither (a) the allocation of Realized Losses to any Class of
Bonds of a Series, nor (b) the reduction of the Imputed Principal Balance of
any Bond of any Class of a Series by reason of the application of a Junior Bond
Write Down Amount, nor (c) the failure to pay the full amount of any principal
entitlement or any Accrued Bond Interest or any Unpaid Interest on any Class of
Bonds of a Series by reason of the insufficiency of Available Funds on a
Payment Date and the order of allocation of payments from Available Funds
specified in the related Series Supplement, shall constitute an Event of
Default under this Indenture or any Series Supplement, it being expressly
agreed and understood that the Issuer's obligation to make payment on the Bonds
of any Series on any Payment Date constitutes an obligation to pay an aggregate
amount equal to the Available Funds on such Payment Date.
(C) Payments on the Bonds of any Series shall be made on each
Payment Date from Available Funds subject to and in accordance with the order
of priority of payments specified in the related Series Supplement. No
recourse shall be had to the Issuer or any of its assets, other than the Trust
Estate securing the related Series, in the event of (a) a failure by any Holder
of a Bond of any Series to recover by the Stated Maturity thereof or at all the
Current Principal Amount of such Bond by reason of the incurrence of
delinquencies or Realized Losses on the mortgage loans evidenced by the
Conventional Certificates securing such Series or by the application to such
Bond of any portion of a Junior Bond Write Down Amount, or (b) a failure by any
Holder of a Bond of any Series to recover the full amount of any Accrued Bond
Interest or Unpaid Interest thereon by reason of the insufficiency of Available
Funds on any Payment Date and the order of allocation of payments from
Available Funds specified in the related Series Supplement.
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment.
(A) Except to the extent specified otherwise in the Series
Supplement relating to any Series of Bonds, if an Event of Default occurs and
is continuing with respect to a Series, then and in every such case the Holders
of Senior Bonds representing not less than 100% of the Aggregate Current
Principal Amount of the Outstanding Senior Bonds of that Series may declare all
the Bonds of that Series to be immediately due and payable, by a notice in
writing to the Issuer and the Trustee, and upon any such declaration of such
Bonds, an amount equal to (i) the Aggregate Imputed Principal Balance of the
Bonds of such Series at the time of such declaration; (ii) the aggregate of (x)
Accrued Bond Interest on each Class of Bonds of such Series that is due and
unpaid as of the Interest Payment Date most recently preceding such
declaration, and (y) any Unpaid Interest outstanding as of the date of such
declaration, and (iii) an amount equal to the excess of (x) the Aggregate
Current Principal Amount of such Bonds of such Series over (y) the Aggregate
Imputed Principal Balance of the Bonds of such Series, calculated at the time
of such declaration, shall, subject to Section 5.3 hereof, become immediately
due and payable.
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(B) Except to the extent specified otherwise in the Series
Supplement relating to any Series of Bonds, the Holders of Junior Bonds of such
Series shall have no right to exercise the rights referred to in clause (A)
above until the Class Imputed Principal Balance of each Class of the Senior
Bonds of such Series has been reduced to zero. If any date on or after the
date on which the Class Imputed Principal Balance of each Class of the Senior
Bonds of a Series has been reduced to zero, an Event of Default occurs and is
continuing with respect to such Series, then and in every such case the Holders
of the Highest Priority Junior Class of such Series representing not less than
66 2/3% of the Aggregate Current Principal Amount of such Class may declare all
the Bonds of that Series to be immediately due and payable, by notice in
writing to the Issuer and the Trustee, in which event the outstanding Bonds of
such Series shall be accelerated in the same manner and with the same effect as
provided in clause (A) above.
(C) Except to the extent specified otherwise in the Series
Supplement relating to any Series of Bonds, at any time after such a
declaration of acceleration of maturity of the Bonds of a Series has been made
and before a judgment or decree for payment of the money due has been obtained
by the Trustee as hereinafter in this Article provided, the Holders of Bonds
representing 100% of the Aggregate Current Principal Amount of the Outstanding
Senior Bonds of such Series (if such declaration is made pursuant to clause (A)
above), or the Holders of the Highest Priority Junior Class of such Series
representing not less than 66 2/3% of such Class (if such declaration is made
pursuant to clause (B) above), by written notice to the Issuer and the Trustee,
may rescind and annul such declaration and its consequences if
(1) the Issuer delivered or caused to be delivered to the
Trustee a Non-Disqualification Opinion regarding the actions described
in this subsection, if one or more REMIC elections has or have been
made in respect of the assets securing the Series, and the Issuer has
paid or deposited with the Trustee a sum sufficient to pay
(i) all payments of principal of, and interest
on, all Bonds of that Series and all other amounts which would
then be due hereunder or upon such Bonds if the Event of
Default giving rise to such acceleration had not occurred; and
(ii) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel; and
(2) all Events of Default in respect to such Series,
other than the nonpayment of the principal of Bonds of that Series
which have become due solely by such acceleration, have been cured or
waived as provided in Section 5.14.
No such rescission shall affect any subsequent Default or impair any right
consequent thereon.
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SECTION 5.3 Proceedings.
Subject to the provisions of Section 3.1 and the following sentence,
if an Event of Default occurs and is continuing with respect to a Series, the
Trustee may in its discretion proceed to protect and enforce its rights and the
rights of the Bondholders by such appropriate Proceedings as the 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 enforce any other proper
remedy. Any proceedings brought by the Trustee on behalf of the Bondholders or
any Bondholder against the Issuer shall be limited to the preservation,
enforcement and foreclosure of the liens, assignments, rights and security
interests under the Indenture and no attachment, execution or other unit or
process shall be sought, issued or levied upon any assets, properties or funds
of the Issuer, other than the Trust Estate relative to the Series of Bonds in
respect of which such Event of Default has occurred. If there is a foreclosure
of any such liens, assignments, rights and security interests under this
Indenture, by private power of sale or otherwise, no judgment for any
deficiency upon the indebtedness represented by the Bonds may be sought or
obtained by the Trustee or any Bondholder against the Issuer.
SECTION 5.4 Remedies.
If an Event of Default shall have occurred and be continuing in
respect to a Series of Bonds and the Bonds of such Series have been declared
due and payable and such declaration and its consequences have not been
rescinded and annulled, the Trustee may do one or more of the following:
(a) institute Proceedings for the collection of all
amounts then payable on the Bonds of that Series, or under this
Indenture in respect to that Series of Bonds, whether by declaration
or otherwise, enforce any judgment obtained and collect from the
Issuer (other than from the Trust Estate or other assets securing any
other Series of Bonds) moneys adjudged due;
(b) in accordance with Section 5.17, sell the Trust
Estate and other assets, if any, securing the Bonds of that Series 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;
(c) institute Proceedings from time to time for the
complete or partial foreclosure of this Indenture with respect to the
Trust Estate securing the Bonds of that Series; and
(d) exercise any remedies of a secured party under the
Uniform Commercial Code and take any other appropriate action to
protect and enforce the rights and remedies of the Trustee or the
Holders of the Bonds hereunder, including, without limitation, any
action specified in the Series Supplement for any Series of Bonds.
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SECTION 5.5 [Reserved].
SECTION 5.6 Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, composition or other judicial
Proceeding relative to the Issuer or any other obligor upon any of the Bonds or
the property of the Issuer or of such other obligor or their creditors, the
Trustee (irrespective of whether the Bonds of any Series shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Issuer for the payment of
any overdue principal or interest) shall be entitled and empowered, by
intervention in such Proceeding or otherwise, to
(i) file and prove a claim for the whole amount of
principal and interest owing and unpaid in respect of the Bonds of
each Series issued hereunder and to file such other papers or
documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and
counsel) and of the Bondholders allowed in such Proceeding, and
(ii) collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same,
and any receiver, assignee, trustee, liquidator, or sequestrator (or other
similar official) in any such Proceeding is hereby authorized by each
Bondholder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the
Bondholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 6.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Bondholder any plan
of reorganization, arrangement, adjustment, or composition affecting any of the
Bonds or the rights of any Holder thereof, or to authorize the Trustee to vote
in respect of the claim of any Bondholder in any such Proceeding.
SECTION 5.7 Trustee May Enforce Claims without Possession of
Bonds.
All rights of action and claims under this Indenture or any of the
Bonds may be prosecuted and enforced by the Trustee without the possession of
any of the Bonds or the production thereof in any Proceeding relating thereto,
and any such Proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment shall be, in
accordance with Section 5.8, for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel
and, except to the extent specified otherwise in the Series Supplement for any
Series of Bonds, for the ratable benefit of the Holders of the Bonds of the
Series in respect of which such judgment has been recovered.
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SECTION 5.8 Application of Money Collected.
If the Bonds of a Series have been declared due and payable following
an Event of Default and such declaration and its consequences have not been
rescinded and annulled, any money collected by the Trustee with respect to such
Series of Bonds pursuant to this Article or otherwise and any monies that may
then be held or thereafter received by the Trustee with respect to such Series
of Bonds shall be applied in the following order, at the date or dates fixed by
the Trustee and, in case of the distribution of the entire amount due on
account of principal of, and interest on, such Bonds, upon presentation and
surrender thereof:
First: To the payment of all amounts due the Trustee under
Section 6.7;
Second: Except to the extent specified otherwise in the Series
Supplement for any Series of Bonds, to the payment of amounts then due
and unpaid upon the Outstanding Bonds of such Series for:
(a) the aggregate of the Accrued Bond Interest on
each Class of Bonds Outstanding that is due and unpaid as of
the Interest Payment Date most recently preceding date of any
declaration made pursuant to Section 5.2(A), together with any
Unpaid Interest outstanding as of such date of declaration,
such amount to be paid ratably among the Bonds of such Series
without preference or priority of any kind
(b) interest on the Class Imputed Principal
Balance of each Class of Bonds (including interest on any
Class of Compound Interest Bonds) of such Series then
Outstanding at the Bond Interest Rate applicable thereto, for
the period from the end of the Interest Accrual Period with
respect to the Interest Payment Date most recently preceding
the date of any declaration made pursuant to Section 5.2(A),
to the date specified for such Class in the related Series
Supplement, (less such Class' share of the Net Interest
Shortfalls and the interest portion of any Realized Losses
incurred during the aforesaid accrual period on the mortgage
loans underlying the Conventional Certificates securing such
Series), such amount to be paid ratably among the Bonds of
such Series, without preference or priority of any kind;
Third: Except to the extent specified otherwise in the Series
Supplement for any Series of Bonds, to the payment of the Aggregate
Imputed Principal Balance of the Bonds of such Series, the Imputed
Principal Balance of each Bond of such Series ratably, without
preference or priority of any kind;
Fourth: Except to the extent specified in the Series
Supplement for any Series of Bonds, to the payment of the excess of
(a) the Aggregate Current Principal Amount of the Bonds of such Series
over (b) the Aggregate Imputed Principal Balance of such Bonds, each
such Bond's respective share of such excess amount, ratably, without
preference or priority of any kind; and
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Fifth: Except as otherwise provided in the related Series
Supplement, to the payment of the remainder, if any, (i) to the Issuer
or any other Person legally entitled thereto if one or more REMIC
elections has or have not been made in respect of the assets securing
the Bonds of such Series or (ii) if such an election or elections has
or have been or will be made, to the Residual Interest in the REMIC
that includes such assets, as stipulated in the related Series
Supplement.
SECTION 5.9 Limitation on Suits.
No Holder of a Bond of any Series shall have any right to institute
any Proceedings, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless
(1) such Holder has previously given written notice to
the Trustee of a continuing Event of Default with respect to such
Series;
(2) (a) all of the Holders of the Classes of Senior Bonds
of such Series having Class Imputed Principal Balances greater than
zero or (b) in the event that no Class of Senior Bonds of such Series
has a Class Imputed Principal Balance greater than zero, the Holders
of the Highest Priority Junior Class of such Series representing not
less than 66 2/3% of the Aggregate Current Principal Amount of such
Class shall have made written request to the Trustee to institute
Proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute any
such Proceeding; and
(5) no direction inconsistent with such written requests
has been given to the Trustee during such 60-day period by (a) any
Holder of a Class of Senior Bonds of such Series having Class Imputed
Principal Balances greater than zero or (b) in the event that no Class
of Senior Bonds of such Series has a Class Imputed Principal Balance
greater than zero, any Holder of the Highest Priority Junior Class of
such Series;
it being 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 and for the equal and ratable benefit of all the
Holders of Bonds of the same Series, except to the extent specified otherwise
in the Series Supplement for any Series.
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SECTION 5.10 Restoration of Rights and Remedies.
If the 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 Trustee or to such Bondholder, then and in every such case the Issuer, the
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 Trustee and the
Bondholders shall continue as though no such Proceeding had been instituted.
SECTION 5.11 Rights and Remedies Cumulative.
No right or remedy herein conferred upon or reserved to the 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 or employment of any other appropriate right or
remedy.
SECTION 5.12 Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Bond to
exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Bondholders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Bondholders, as the
case may be.
SECTION 5.13 Control by Bondholders.
If an Event of Default is declared by or at the direction of the
Holders of Senior Bonds of a Series pursuant to Section 5.2(A) above, the
Holders of Bonds representing more than 50% of the Aggregate Current Principal
Amount of the Outstanding Senior Bonds of such Series shall have the right to
direct the time, method and place of conducting any Proceeding for any remedy
available to the Trustee with respect to such Series or exercising any trust or
power conferred on the Trustee with respect to such Series. If an Event of
Default is declared by or at the direction of the Holders of the Highest
Priority Junior Class of a Series pursuant to Section 5.2(B) above (and subject
to the conditions therein contained), the Holders of the Highest Priority
Junior Class of such Series representing more than 50% of the Aggregate Current
Principal Amount of such Class shall have the right to direct the time, method
and place of conducting any Proceeding for any remedy available to the Trustee
with respect to such Series or exercising any trust or power conferred on the
Trustee. Any direction given by the Holders of Senior Bonds or Junior Bonds
pursuant to this Section 5.13 shall be subject to the following conditions:
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(1) such direction shall not be in conflict with any rule
of law or with this Indenture,
(2) any direction to the Trustee to undertake a Sale of a
Trust Estate shall be by the Holders of Bonds secured thereby
representing the percentage of the Aggregate Current Principal Amount
of the Outstanding Bonds specified in Section 5.17(b)(1), unless
Section 5.17(b)(2) is applicable, or except to the extent specified
otherwise in the Series Supplement for any Series of Bonds,
(3) the Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with such direction;
provided, however, that, subject to Section 6.1, the Trustee need not
take any action which it determines might involve it in liability or
be unjustly prejudicial to the Bondholders not consenting.
SECTION 5.14 Waiver of Past Defaults.
(a) Except to the extent specified otherwise in the
Series Supplement for any Series of Bonds, the Holders of Bonds
representing 100% of the Aggregate Current Principal Amount of the
Outstanding Senior Bonds of a Series may on behalf of the Holders of
all the Bonds of such Series waive any past Default hereunder with
respect to such Series and its consequences, except a Default in the
payment of any installment of principal of, or interest on, any Bond
of that Series.
Upon any such waiver, such Default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been
cured for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or impair any right
consequent thereon.
(b) Except to the extent specified otherwise in the
Series Supplement for any Series of Bonds, the Holders of the Highest
Priority Junior Class of such Series representing not less than 66
2/3% of the Aggregate Current Principal Amount of such Class may on
behalf of all the Junior Bonds of such Series waive any past Default
hereunder in respect of which such Holders would have been entitled to
exercise their rights pursuant to Section 5.2(B), and may waive the
consequences of such Default, except, in either case, a Default
(1) in the payment of any installment of
principal of, or interest on, any Bond of that Series, or
(2) in respect of a covenant or provision hereof
which under Section 9.2 cannot be modified or amended without
the consent of each Outstanding Junior Bond affected.
Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured for
every purpose of this Indenture; but no
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such waiver shall extend to any subsequent or other Default or impair
any right consequent thereon.
SECTION 5.15 Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Bond by
his 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 Trustee for any action taken,
suffered or omitted by it as 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 any suit instituted by the
Trustee, except to the extent specified otherwise in the Series Supplement
relating to any Series of Bonds, to any suit instituted by any Bondholder, or
group of Bondholders, holding in the aggregate Bonds representing more than 10%
of the Aggregate Current Principal Amount of the Outstanding Bonds of a Series,
or to any suit instituted by any Bondholder for the enforcement of the payment
of any installment of interest on any Bond on or after the Stated Maturity
thereof expressed in such Bond or for the enforcement of the payment of the
entire remaining unpaid principal amount of any Bond on or after the Stated
Maturity of the final installment of the principal thereof (or, in the case of
any Bond called for redemption, on or after the applicable Redemption Date).
SECTION 5.16 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, which may affect the covenants
in, 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 Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
SECTION 5.17 Sale of Trust Estate.
(a) The power to effect any sale (a "Sale") of any
portion of a Trust Estate pursuant to Section 5.4 shall not be
exhausted by any one or more Sales as to any portion of such Trust
Estate remaining unsold, but shall continue unimpaired until the
entire such Trust Estate shall have been sold or all amounts payable
on the Bonds of the Series secured thereby and under this Indenture
with respect thereto shall have been paid. The Trustee may from time
to time postpone any public Sale by public announcement made at the
time and place of such Sale. The Trustee hereby expressly waives its
right to any amount fixed by law as compensation for any Sale.
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(b) To the extent permitted by law, and except as
specified otherwise in the Series Supplement for any Series of Bonds,
the Trustee shall not in any private Sale sell or otherwise dispose of
the Trust Estate, or any portion thereof, securing a Series of Bonds
which has been declared due and payable unless
(1) if such Sale is effected consequent on a
declaration made by the Holders of Senior Bonds of a Series
pursuant to Section 5.2(A), the Holders of all Outstanding
Senior Bonds of such Series consent to, or direct the Trustee
to make, such Sale, or, if such Sale is effected consequent on
a declaration made by the Holders of the Highest Priority
Junior Class of such Series representing not less than 66 2/3%
of the Aggregate Current Principal of such Class pursuant to
Section 5.2(B), the Holders of the Highest Priority Junior
Class of such Series representing not less than 66 2/3% of the
Aggregate Current Principal of such Class consent to, or
direct the Trustee to make, such a Sale, or
(2) the proceeds of such Sale would be not less
than the entire amount which would be distributable to the
Holders of the Senior Bonds or the Junior Bonds, as the case
may be, of such Series, in full payment thereof in accordance
with Section 5.8.
The foregoing provisions shall not preclude or limit the ability of
the Trustee to purchase all or any portion of the Trust Estate at a
private Sale, provided that, unless otherwise specified in the related
Series Supplement, in no event (except as may be compelled or required
by applicable law or court order in which case the provisions of
Section 4.3 shall apply if appropriate) shall the Trustee purchase or
sell the Trust Estate or any portion thereof (if an election or
elections has or have been made or will be made to treat the Trust
Estate or such other assets specified in such election securing the
Series as a REMIC) unless it either (i) has received a
Non-Disqualification Opinion, or (ii) the proceeds of such Sale net of
any tax on "prohibited transactions" as defined in Section 860F of the
Code that is payable from the Trust Estate would be not less than the
entire amount that would be distributable to the Holders of the Bonds,
in full payment thereof in accordance with Section 5.8, and such sale
meets the requirements of Section 4.3.
(c) Except as otherwise provided in the related Series
Supplement, unless the Holders of all Outstanding Bonds have otherwise
consented or directed the Trustee, at any public Sale of all or any
portion of a Trust Estate at which a minimum bid equal to or greater
than the amount described in paragraph (2) of subsection (b) of this
Section 5.17 and the amount of any tax on "prohibited transactions" as
defined in Section 860F of the Code that would be payable from the
Trust Estate if an election or elections has or have been made or
will be made to treat the Trust Estate or such other assets specified
in such election securing the Series as a REMIC, has not been
established by the Trustee and no Person bids an amount equal to or
greater than such amount, the Trustee shall bid an amount at least
$1.00 more than the highest other bid.
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(d) In connection with a Sale of all or any portion of a
Trust Estate
(1) any Holder or Holders of Bonds of the Series
secured thereby may bid for and purchase the property offered
for Sale, and upon compliance with the terms of such Sale may
hold, retain and possess and dispose of such property, without
further accountability, and may, in paying the purchase money
therefor, deliver any Outstanding Bonds of such Series or
claims for interest thereon in lieu of cash up to the amount
which shall, upon distribution of the net proceeds of such
Sale, be payable thereon, and such Bonds, in case the amounts
so payable thereon shall be less than the amount due thereon,
shall be returned to the Holders thereof after being
appropriately stamped to show such partial payment; for the
purposes of this clause (1), the principal amount of
indebtedness of the Issuer evidenced by any Outstanding Bond
delivered in lieu of cash shall be the Imputed Principal
Balance of such Bond.
(2) the Trustee may bid for and acquire the
property offered for Sale in connection with any public Sale
thereof, and, in lieu of paying cash therefor, may make
settlement for the purchase price by crediting the gross Sale
price against the sum of (A) the amount which would be
distributable to the Holders of the Bonds of the Series
secured thereby as a result of such Sale in accordance with
Section 5.8 and (B) the expenses of the Sale and of any
Proceedings in connection therewith which are reimbursable to
it, without being required to produce the Bonds of such Series
in order to complete any such Sale or in order for the net
Sale price to be credited against such Bonds, and any property
so acquired by the Trustee shall be held and dealt with by it
in accordance with the provisions of this Indenture;
(3) the Trustee shall execute and deliver an
appropriate instrument of conveyance transferring its interest
in any portion of such Trust Estate in connection with a Sale
thereof;
(4) the Trustee is hereby irrevocably appointed
the agent and attorney-in-fact of the Issuer to transfer and
convey its interest in any portion of such Trust Estate in
connection with a Sale thereof, and to take all action
necessary to effect such Sale; and
(5) no purchaser or transferee at such a Sale
shall be bound to ascertain the Trustee's authority, inquire
into the satisfaction of any conditions precedent or see to
the application of any moneys.
(e) Notwithstanding anything in this Indenture to the
contrary, if an Event of Default specified in Section 5.1(A)(1) is the
Event of Default, or one of the Events of Default, on the basis of
which the Bonds of a Series have been declared due and payable, then
the Trustee may, in its sole discretion, sell the Trust Estate
securing such Series without
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compliance with this Section 5.17, but except as otherwise provided in
the related Series Supplement, subject to and in compliance with
Section 4.3.
SECTION 5.18 Action on Bonds.
The Trustee's right to seek and recover judgment on a Series of 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 Trustee or
the Holders of Bonds of any Series shall be impaired by the recovery of any
judgment by the Trustee against the Issuer or by the levy of any execution
under such judgment upon any portion of the Trust Estate securing such Series.
SECTION 5.19 No Recourse to Other Trust Estates or Other Assets of
the Issuer.
Except to the extent provided otherwise in the related Series
Supplement, the Trust Estate Granted to the Trustee as security for a
particular Series will serve as security only for that Series. Except to the
extent provided otherwise in the related Series Supplement, Holders of Bonds of
one Series shall have no recourse against the Trust Estate Granted to the
Trustee as security for any other Series, and no judgment against the Issuer
for any amount due with respect to one Series of Bonds may be enforced against
either the Trust Estate securing any other Series or any other assets of the
Issuer, nor may any prejudgment lien or other attachment be sought against any
such other Trust Estate or any other assets of the Issuer.
SECTION 5.20 Application of the TIA.
(a) Pursuant to Section 3.16(a) of the TIA, all
provisions automatically provided for in Section 3.16(a) are hereby
expressly excluded.
(b) Section 3.16(b) of the TIA requires the following
provision to be included herein:
Notwithstanding any other provision of the indenture
to be qualified, the right of any holder of any indenture
security to receive payment of the principal of and interest
on such indenture security, on or after the respective due
dates expressed in such indenture security, or to institute
suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without
the consent of such holder, except as to a postponement of an
interest payment consented to as provided in paragraph (2) of
subsection (a), and except that such indenture may contain
provisions limiting or denying the right of any such holder to
institute any such suit, if and to the extent that the
institution or prosecution thereof or the entry of judgment
therein would, under applicable law, result in the surrender,
impairment, waiver, or loss of the lien of such indenture upon
any property subject to such lien.
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ARTICLE VI
THE TRUSTEE
SECTION 6.1 Duties of Trustee.
(a) The Trustee shall be subject to TIA Section 315(c).
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties
that are specifically set forth in this Indenture and no
others and no implied covenants or obligations of the Trustee
shall be read into this Indenture.
(2) In the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture.
The Trustee shall, however, examine such certificates and
opinions to determine whether they conform to the requirements
of this Indenture.
(c) The Trustee may not be relieved from liability for
its own negligent action, its own negligent failure to act, or its own
wilful misconduct, except that:
(1) This paragraph does not limit the effect of
subsection (b) of this Section.
(2) The Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer,
unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts.
(3) The 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
5.4 or Section 5.17.
(d) For all other purposes under this Indenture, the
Trustee shall not be deemed to have notice of any Event of Default
described in Section 5.1(A)(2), 5.1(A)(5) or 5.1(A)(6) or any default
(other than a default in payment to the Trustee) under any Pooling and
Administration Agreement or any Guaranty Agreement unless a
Responsible Officer assigned to and working in the Trustee's corporate
trust department has actual knowledge thereof or unless written notice
of any event which is in fact such an Event of Default or Default is
received by the Trustee at the Corporate Trust Office, and such notice
references the Bonds generally, the Bonds of any Series, the Issuer,
any Trust Estate or this Indenture.
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(e) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably
assured to it; provided, however, that the Trustee shall not refuse or
fail to perform any of its duties hereunder solely as a result of
nonpayment of its normal fees and expenses and further provided that
nothing in this Section 6.1(e) shall be construed to limit the
exercise by the Trustee of any right or remedy permitted under this
Indenture or otherwise in the event of the Issuer's failure to pay the
Trustee's fees and expenses pursuant to Section 6.7. In determining
that such repayment or indemnity is not reasonably assured to it, the
Trustee must consider not only the likelihood of repayment or
indemnity by or on behalf of the Issuer but also the likelihood of
repayment or indemnity from amounts payable to it from the applicable
Trust Estate pursuant to Sections 6.7 and 8.2(d).
(f) Every provision of this Indenture that in any way
relates to the Trustee is subject to the provisions of this Section.
(g) Notwithstanding any extinguishment of all right,
title and interest of the Issuer in and to the Trust Estate following
an Event of Default and a consequent declaration of acceleration of
the Maturity of the Bonds, whether such extinguishment occurs through
a Sale of the Trust Estate to another Person, the acquisition of the
Trust Estate by the Trustee or otherwise, the rights, powers and
duties of the Trustee with respect to the Trust Estate (or the
proceeds thereof) and the Holders of the Bonds and the rights of the
Bondholders shall, to the extent permitted by law, continue to be
governed by the terms of this Indenture.
SECTION 6.2 Notice of Default.
Within 90 days after the occurrence of any Default known to the
Trustee, the Trustee shall transmit by mail to all Holders of Bonds of each
Series as to which such Default has occurred notice of each such Default,
unless such Default shall have been cured or waived, provided, however, that
except in the case of a Default of the type described in Section 5.1(A)(1), the
Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee or a trust committee of directors
and/or Responsible Officers of the Trustee in good faith determine that the
withholding of such notice is in the interests of the Holders of the Bonds of
the Series affected by such Default.
SECTION 6.3 Rights of Trustee.
(a) The Trustee may rely on any document believed by it
to be genuine and to have been signed or presented by the proper
Person. The Trustee need not investigate any fact or matter stated in
the document.
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(b) Before the Trustee acts or refrains from acting, it
may require an Officers' Certificate or an Opinion of Counsel. The
Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on the Officers' Certificate or Opinion of
Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The 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.
SECTION 6.4 Not Responsible for Recitals or Issuance of Bonds.
The recitals contained herein and in the Bonds, except the
certificates of authentication on the Bonds, shall be taken as the statements
of the Issuer, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations with respect to any Trust Estate or as to
the validity or sufficiency of this Indenture or of the Bonds. The Trustee
shall not be accountable for the use or application by the Issuer of Bonds or
the proceeds thereof or any money paid to the Issuer or upon Issuer Order
pursuant to the provisions hereof.
SECTION 6.5 May Hold Bonds.
The Trustee, any Agent, or any other agent of the Issuer, in its
individual or any other capacity, may become the owner or pledgee of Bonds and,
subject to Sections 6.8 and 6.13, may otherwise deal with the Issuer or any
Affiliate of the Issuer with the same rights it would have if it were not
Trustee, Agent, or such other agent.
SECTION 6.6 Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by this Indenture or by law, but
shall be accounted for separately for each Series. The Trustee shall be under
no liability for interest on any money received by it hereunder except as
otherwise agreed with the Issuer and except to the extent of income or other
gain on investments which are obligations of the Trustee, in its commercial
capacity, and income or other gain actually received by the Trustee on
investments, which are obligations of others.
SECTION 6.7 Compensation and Reimbursement.
(a) The Issuer agrees
(1) subject to any separate written agreement
with the Trustee, to pay the Trustee from time to time
reasonable compensation for all services rendered by it
hereunder (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of
an express trust);
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(2) except as otherwise expressly provided
herein, to reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or
made by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except
any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(3) to indemnify the Trustee and its agents for,
and to hold them harmless against, any loss, liability or
expense incurred without negligence or bad faith on their
part, arising out of, or in connection with, the acceptance or
administration of this trust, including the costs and expenses
of defending themselves against any claim in connection with
the exercise or performance of any of their powers or duties
hereunder, provided that:
(i) with respect to any such claim, the
Trustee shall have given the Issuer written notice
thereof promptly after the Trustee shall have
knowledge thereof;
(ii) while maintaining absolute control
over its own defense, the Trustee shall cooperate and
consult fully with the Issuer in preparing such
defense; and
(iii) notwithstanding anything to the
contrary in this Section 6.7(a)(3), the Issuer shall
not be liable for settlement of any such claim by the
Trustee entered into without the prior consent of the
Issuer.
Subject to Section 6.10, the Trustee agrees to fully perform
its duties under this Indenture notwithstanding any failure on the
part of the Issuer to make any payments, reimbursements or
indemnifications to the Trustee pursuant to this Section 6.7.
(b) The Issuer may remit payment for such fees and
expenses to the Trustee or, in the absence thereof, the Trustee may
reimburse itself from time to time pursuant to Section 8.2(d) hereof
for payments of its fees and expenses hereunder from moneys on deposit
in the Collection Account.
(c) Notwithstanding the provisions of Section 6.1(e) and
6.7(a)(1), (2) and (3) hereof, the fees, expenses, disbursements and
advances payable to the Trustee pursuant to Section 6.7(a)(1) and (2)
and any indemnity payments due to the Trustee pursuant to Section
6.7(a)(3) shall not in the aggregate on any Payment Date exceed the
Expense Reserve Amount, if any; provided, however, that the Trustee
shall advance any amounts in excess thereof due under this Section
6.7.
(d) If the Bonds have been declared due and payable
following an Event of Default pursuant to Section 5.2, which
acceleration of Maturity and its consequences have
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not been rescinded and annulled and moneys collected by the Trustee
are being applied in accordance with Section 5.8 as may be amended by
any Series Supplement, expenses, disbursements and advances due the
Trustee under 6.7(a)(2) and indemnity payments due to the Trustee
under Section 6.7(a)(3) hereof shall no longer be subject to the
provisions of Section 6.7(c).
(e) As security for the payment obligations of the Issuer
pursuant to the foregoing provisions of this Section 6.7, the Issuer
hereby Grants to the Trustee a lien ranking at all times senior to the
lien of the Bonds with respect to which any claim of the Trustee under
this Section arose and senior to all other liens, if any, upon all
property and funds held or collected as part of the Trust Estate for
such Bonds by the Trustee in its capacity as such. The Trustee shall
not (i) exercise or enforce such senior lien in any manner, or (ii)
institute any Proceeding against the Issuer for any payments,
reimbursements, or indemnifications to the Trustee or to enforce such
lien, in either case unless (i) the Bonds have been declared due and
payable following an Event of Default pursuant to Section 5.2, (ii)
such acceleration of Maturity and its consequences have not been
rescinded and annulled, and (iii) moneys collected by the Trustee are
being applied in accordance with Section 5.8, as may be amended by any
Series Supplement.
(f) Subject to the last sentence of Section 6.7(e),
nothing in this Section 6.7 shall be construed to limit (except as
otherwise expressly provided in subsection (e) of this Section 6.7)
the exercise by the Trustee of any right or remedy permitted under the
Indenture or otherwise in the event of the Issuer's failure to pay the
amounts due the Trustee pursuant to this Section 6.7.
SECTION 6.8 Disqualification; Conflicting Interests.
In addition to the conflicting interests specified in TIA Section
310(b), the Trustee shall be deemed to have a conflicting interest under said
Section 310(b) upon the occurrence of a default, if by reason of supplements
or amendments to this Indenture as originally executed there shall be created
covenants, restrictions, conditions or additional events of default which
(1) unless otherwise provided in the related Series
Supplement, would give the Holders of Bonds of any Series any rights
with respect to the Trust Estate or any other property held by the
Trustee for the benefit of Holders of Bonds of any other Series with
respect to which it is also serving as Trustee, or
(2) is sufficiently likely to involve a material conflict
of interest between Series of Bonds that it is advisable in the public
interest or for the protection of Holders of Bonds of any Series that
the Trustee disqualify itself from acting as such with respect to one
or more applicable Series of Bonds.
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SECTION 6.9 Eligibility; Trustee's Capital and Surplus.
The Trustee shall at all times meet the then current capital and
surplus requirements of the TIA and shall have a combined capital and surplus
of at least $50,000,000 or be a member or subsidiary of a bank holding system,
the aggregate combined capital and surplus of which is at least $50,000,000.
If the Trustee or the members of the bank holding company system of which it is
a part publish annual reports of condition of the type described in TIA Section
310(a)(2), its (or such bank holding company system's) combined capital and
surplus for purposes of TIA Section
310(a)(2) shall be as set forth in the latest such report or reports. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of TIA Section 310(a)(2), it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
SECTION 6.10 Resignation and Removal; Appointment of Successor.
(a) Subject to the provisions of the Series Supplement
with respect to any Series of Bonds, the Trustee may resign at any
time with respect to the Bonds of one or more Series (or for fewer
than all Classes within any such Series) by giving written notice
thereof to the Issuer. If an instrument of acceptance by a successor
Trustee shall not have been delivered to the Trustee within 30 days
after the giving of such notice of resignation, the resigning Trustee
may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
(b) The Trustee may be removed at any time with respect
to any Series, or any Class within any Series, by Act of the Holders
representing more than 50% of the Aggregate Current Principal Amount
of the Outstanding Bonds of that Series, delivered to the Trustee and
to the Issuer.
(c) If at any time following a default:
(1) the Trustee shall have a conflicting interest
under Section 6.8 and TIA Section 310(b) and shall fail to
resign or eliminate such conflicting interest in accordance
with TIA Section 310(b) after written request therefor by the
Issuer or by any Bondholder, or
(2) the Trustee shall cease to be eligible under
Section 6.9 or shall become incapable of acting or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee
or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property
or affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (i) the Issuer by a Board Resolution may
remove the Trustee, and the Issuer shall join with the Trustee in the
execution, delivery and performance of all instruments and agreements
necessary or proper to appoint a successor Trustee and to vest in such
successor Trustee any property, title, right or power deemed necessary
or desirable,
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subject to the other provisions of this Indenture; provided, however,
if the Issuer does not join in such appointment within fifteen (15)
days after the receipt by it of a request to do so, or in case an
event of default has occurred and is continuing, the Trustee may
petition a court of competent jurisdiction to make such appointment,
or (ii) subject to Section 5.15, and, in the case of a conflicting
interest as described in clause (1) above, unless the Trustee's duty
to resign has been stayed as provided in TIA Section 310(b), any
Bondholder who has been a bona fide Holder of a Bond for at least six
months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
(d) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of the
Trustee with respect to the Bonds of one or more Series, or any Class
within such Series, for any cause, the Issuer by a Board Resolution
shall promptly appoint a successor Trustee with respect to such Series
or such Class. If within one year after such resignation, removal or
incapability or the occurrence of such vacancy a successor Trustee
with respect to any Series shall be appointed by Act of the Holders of
Bonds representing more than 50% of the Aggregate Current Principal
Amount of the Outstanding Bonds of that Series delivered to the Issuer
and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment, become the
successor Trustee and supersede the successor Trustee appointed by the
Issuer. If no successor Trustee shall have been so appointed by the
Issuer or Bondholders and shall have accepted appointment in the
manner hereinafter provided, any Bondholder who has been a bona fide
Holder of a Bond for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(e) The Issuer shall give or shall cause to be given
notice of each resignation and each removal of the Trustee and each
appointment of a successor Trustee to the Holders of Bonds of each
Series affected thereby. Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust Office.
(f) Except as otherwise provided in the Series Supplement
with respect to a Series, any costs or expenses incurred in connection
with the resignation or removal of the Trustee with respect to such
Series shall be paid by the Trustee.
SECTION 6.11 Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Issuer and the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act,
deed or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee. Notwithstanding the foregoing, on request of
the Issuer or the successor Trustee, such retiring Trustee shall, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee (provided, however, that if the
retiring
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Trustee has been removed or has resigned, pursuant to Section 6.10, with
respect to less than all Series for which it is Trustee, or for less than all
Classes within any such Series, then such transfer shall be limited to its
rights and powers with respect to each Series or Class with respect to which it
has resigned or been removed), and shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such retiring Trustee
hereunder (provided, however, that if the retiring Trustee has been removed or
has resigned, pursuant to Section 6.10, with respect to less than all Series
for which it is Trustee, or for less than all Classes within any such Series,
then such assignment, transfer and delivery by the retiring Trustee shall be
limited to the property and money held by it for the benefit of the Holders of
Bonds of the Series or Class with respect to which it has resigned or been
removed); provided, however, that the execution and delivery of any such
instruments by the retiring Trustee and the succession of a new Trustee shall
not in any way (i) impair or release the liens of the retiring Trustee provided
for in Section 6.7, (ii) constitute a waiver of any charges due the retiring
Trustee under the Indenture, or (iii) constitute a waiver of any right of the
retiring Trustee to institute proceedings to enforce any rights or remedies
available to the retiring Trustee pursuant to this Indenture. Upon request of
any such successor Trustee, the Issuer shall execute and deliver any and all
instruments for more fully and certainly vesting in and confirming to such
successor Trustee all such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 6.12 Merger, Conversion, Consolidation or Succession to
Business of Trustee.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Bonds have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Bonds so authenticated with the same effect as
if such successor Trustee had authenticated such Bonds.
SECTION 6.13 Preferential Collection of Claims Against Issuer.
The Trustee, and any co-trustee or separate trustee authorized in
Section 6.14, shall be subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b), and a Trustee, co-trustee or
separate trustee who has resigned or been removed shall be subject to TIA
Section 311(a) to the extent indicated.
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SECTION 6.14 Co-trustees and Separate Trustees.
At any time or times, for the purpose of meeting the legal
requirements of the TIA or of any jurisdiction in which any of a Trust Estate
may at the time be located, or the requirements of the Series Supplement with
respect to any Series of Bonds, the Issuer and the Trustee shall have power to
appoint, and, upon the written request of the Trustee or of the Holders of
Bonds representing more than 50% of the Aggregate Current Principal Amount of
the Outstanding Bonds of the Series or Class, as the case may be, secured by
the Trust Estate with respect to which a co-trustee or separate trustee is
being appointed, the Issuer shall for such purpose join with the Trustee in the
execution, delivery and performance of all instruments and agreements necessary
or proper to appoint, one or more Persons approved by the Trustee either to act
as co-trustee, jointly with the Trustee, of all or any part of such Trust
Estate, or to act as separate trustee of any such property, in either case with
such powers as may be provided in the instrument of appointment, and to vest in
such Person or Persons in the capacity aforesaid, any property, title, right or
power deemed necessary or desirable, subject to the other provisions of this
Section. If the Issuer does not join in such appointment within 15 days after
the receipt by it of a request so to do, or in case an Event of Default has
occurred and is continuing, the Trustee alone shall have power to make such
appointment.
Should any written instrument from the Issuer be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right or power, any and
all such instruments shall, on request, be executed, acknowledged and delivered
by the Issuer.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms:
(1) The Bonds shall be authenticated and delivered and
all rights, powers, duties and obligations hereunder in respect of the
custody of securities, cash and other personal property held by, or
required to be deposited or pledged with, the Trustee hereunder, shall
be exercised, solely by the Trustee.
(2) The Trustee at any time, by an instrument in writing
executed by it, with the concurrence of the Issuer evidenced by a
Board Resolution, may accept the resignation of or remove any
co-trustee or separate trustee appointed under this Section, and, in
case an Event of Default has occurred and is continuing, the Trustee
shall have power to accept the resignation of, or remove, any such
co-trustee or separate trustee without the concurrence of the Issuer.
Upon the written request of the Trustee, the Issuer shall join with
the Trustee in the execution, delivery and performance of all
instruments and agreements necessary or proper to effectuate such
resignation or removal. A successor to any co-trustee or separate
trustee so resigned or removed may be appointed in the manner provided
in this Section.
(3) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Trustee, or
any other such trustee hereunder, and the
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Trustee shall not be personally liable by reason of any act or
omission of any co-trustee or other such separate trustee hereunder.
(4) Any Act of Bondholders delivered to the Trustee shall
be deemed to have been delivered to each such co-trustee and separate
trustee.
SECTION 6.15 Authenticating Agents.
Upon the request of the Issuer, the Trustee shall appoint an
Authenticating Agent with power to act on its behalf and subject to its
direction in the authentication and delivery of the Bonds of each Series
designated for such authentication by the Issuer and containing provisions
therein for such authentication (or with respect to which the Issuer has made
other arrangements, satisfactory to the Trustee and such Authenticating Agent,
for notation on the Bonds of such Series of the authority of an Authenticating
Agent appointed after the initial authentication and delivery of such Bonds) in
connection with transfers and exchanges under Sections 2.6 and 2.7, as fully to
all intents and purposes as though the Authenticating Agent had been expressly
authorized by those Sections to authenticate and deliver Bonds of such Series.
Notwithstanding the foregoing, if an Authenticating Agent for a Series is
designated in the related Series Supplement, no separate request or appointment
shall be required. For all purposes of this Indenture (other than in
connection with the authentication and delivery of Bonds pursuant to Sections
2.5 and 2.12 in connection with their initial issuance and for purposes of
Section 2.8), the authentication and delivery of Bonds by the Authenticating
Agent pursuant to this Section shall be deemed to be the authentication and
delivery of Bonds "by the Trustee." Such Authenticating Agent shall at all
times be a Person that both meets the requirements of Section 6.9 for the
Trustee hereunder and has its principal office in the Borough of Manhattan,
City and State of New York.
Any Authenticating Agent for a Series shall also serve as Bond
Registrar or co-Bond Registrar for such Series, as provided in Section 2.7.
Any Authenticating Agent appointed by the Trustee pursuant to the terms of this
Section 6.15 or pursuant to the terms of any Supplemental Indenture shall
deliver to the Trustee as a condition precedent to the effectiveness of such
appointment an instrument accepting the trusts, duties and responsibilities of
Authenticating Agent and of Bond Registrar or co-Bond Registrar and
indemnifying the Trustee for and holding the Trustee harmless against, any
loss, liability or expense (including reasonable attorneys, fees) incurred
without negligence or bad faith on its part, arising out of or in connection
with the acceptance, administration of the trust or exercise of authority by
such Authenticating Agent, Bond Registrar or co-Bond Registrar.
Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate trust business
of any Authenticating Agent, shall be the successor of the Authenticating Agent
hereunder, if such successor corporation is otherwise eligible under this
Section, without the execution or filing of any further act on the part of the
parties hereto or the Authenticating Agent or such successor corporation.
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Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and the Issuer. The Trustee may at any
time terminate the agency of any Authenticating Agent by giving written notice
of termination to such Authenticating Agent and the Issuer. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
any Authenticating Agent shall cease to be eligible under this Section, the
Trustee shall promptly appoint a successor Authenticating Agent, shall give
written notice of such appointment to the Issuer and shall mail notice of such
appointment to all Holders of Bonds of the applicable Series.
The Trustee agrees, subject to Section 6.1(e), to pay to any
Authenticating Agent from time to time reasonable compensation for its services
and the Trustee shall be entitled to be reimbursed for such payments, subject
to Section 6.7. The provisions of Sections 2.10, 6.4 and 6.5 shall be
applicable to any Authenticating Agent.
SECTION 6.16 Alternate Trustees.
Whenever the Issuer shall so determine, a Person different than the
initial Trustee may be appointed by the Issuer to act as an alternate Trustee
with respect to any Series of Bonds proposed to be issued hereunder. Such
alternate Trustee shall also satisfy the eligibility requirements of the TIA
and this Article VI. The Issuer shall have the power to appoint a separate
Trustee to act as Trustee with respect to any Series of Bonds proposed to be
issued hereunder and each such alternate Trustee and the Issuer alone shall
have the power to execute and deliver an agreement supplemental hereto, which
agreement supplemental hereto may be the Series Supplement for such Series of
Bonds, which shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trust and duties of the
Trustee with respect to the Outstanding Bonds of any Series as to which the
Trustee initially named in the Series Supplement for such Series is not
retiring, shall continue to be vested in such initial Trustee, and shall add to
or change any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trust hereunder by more
than one Trustee with respect to the Outstanding Bonds of any Series as to
which the initial Trustee named herein is not to be the Trustee or with respect
to any proposed Series of Bonds, it being understood that nothing herein or in
such supplemental agreement shall constitute such Trustees as co-Trustees of
the same trust and that each such Trustee shall be a Trustee of a separate
trust or trusts with respect to different Series of Bonds each concurrently
Outstanding. No separate or alternate Trustee shall accept its appointment
unless, at the time of such acceptance such separate Trustee shall be qualified
and eligible under this Article VI.
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ARTICLE VII
BONDHOLDERS' LISTS AND REPORTS
SECTION 7.1 Issuer to Furnish Trustee Names and Addresses of
Bondholders.
(a) The Issuer will furnish or cause to be furnished to
the Trustee (i) semi-annually, not less than 45 days nor more than 60
days after each Interest Payment Date for a Series, a list, in such
form as the Trustee may reasonably require, of the names and addresses
of the Holders of Bonds of such Series, and (ii) at such other times,
as the Trustee may request in writing, within 30 days after receipt by
the Issuer of any such request, a list of similar form and content as
of a date not more that 10 days prior to the time such list is
furnished; provided, however, that so long as the Trustee is the Bond
Registrar, no such list shall be required to be furnished. If the
Bonds of a particular Series have Interest Payment Dates which are
more frequent than semi-annual, then the applicable Interest Payment
Dates for purposes of clause (i) of the preceding sentence shall be
the Interest Payment Date occurring closest to six months after the
Closing Date for such Series and each Interest Payment Date occurring
at six-month intervals thereafter.
(b) In addition to furnishing to the Trustee the
Bondholder lists, if any, required under subsection (a), the Issuer
shall also furnish all Bondholder lists, if any, required under
Section 3.3 at the times required by said Section 3.3.
SECTION 7.2 Preservation of Information; Communications to
Bondholders.
(a) The Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of the Holders of
Bonds contained in the most recent list, if any, furnished to the
Trustee as provided in Section 7.1 and the names and addresses of the
Holders of Bonds received by the Trustee in its capacity as Bond
Registrar. The Trustee may destroy any list furnished to it as
provided in Section 7.1 upon receipt of a new list so furnished.
(b) The Issuer, the Trustee and the Bond Registrar shall
have the protection of TIA Section 312(c).
SECTION 7.3 Reports by Trustee.
(a) In addition to any report required to be delivered by
the Trustee to the Holders of Bonds of any Series pursuant to TIA
Section 313(a), additional reports may be required to be delivered by
the Trustee as set forth in the Series Supplement for any Series of
Bonds.
(b) For purposes of the information required to be
included in any reports to be delivered by the Trustee pursuant to TIA
Sections 313(a)(3), 313(b)(1) (if applicable), 313(b)(2),
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or pursuant to the Series Supplement for any Series of Bonds as may be
required pursuant to Section 7.3(a), the principal amount of
"indenture securities" outstanding on the date as of which such
information is provided shall be the Aggregate Current Principal
Amount of the then Outstanding Bonds of the particular Series covered
by the report.
(c) With respect to any report required to be delivered
by the Trustee pursuant to TIA Section 313(a) or (b), or as otherwise
required pursuant to Section 7.3(a), the Trustee shall mail any such
report to
all Holders of such Series of Bonds within 30 days after May 15 of
each year (the "reporting date"), commencing with the year after the
issuance of such Series of Bonds.
(d) Unless provided otherwise in the Series Supplement
for any Series of Bonds, upon written request in form satisfactory to
the Trustee received by the Trustee at least fifteen days prior to the
next Payment Date, the Trustee will provide notice to a Bondholder on
such Payment Date of such Bondholder's priority status with respect to
such Bondholder's requests for redemption pursuant to Section 10.4.
SECTION 7.4 Reports by Issuer.
The Issuer (a) shall file with the Trustee within 15 days after it
files them with the Commission copies of the annual reports and of the
information, documents, and other reports (or copies of such portions of any of
the foregoing as the Commission may by rules and regulations prescribe) which
the Issuer is required to file with the Commission pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 and (b) shall also comply with the
other provisions of TIA Section 314(a).
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ARTICLE VIII
ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES
SECTION 8.1 Collection of Moneys.
Except as otherwise expressly provided herein, the 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 Trustee pursuant to this
Indenture. The Trustee shall hold all such money and property received by it
as part of the Trust Estate with respect to which it was received, and shall
apply it as provided in this Indenture. If the Trustee shall not have received
a Distribution with respect to any Certificate by the Business Day immediately
following the related Distribution Date, the Trustee shall, unless the Issuer
shall have made provisions satisfactory to the Trustee for delivery to the
Trustee of an amount equal to such Distribution, request the issuer or
guarantor of such Certificate, as appropriate, to make such payment as promptly
as practicable or legally permitted. If the Trustee shall subsequently receive
any such Distribution, it may withdraw such request. Notwithstanding any other
provision hereof, the Trustee shall deliver to the Issuer or its designee or
assignee any Distribution received with respect to a Certificate after the
related Distribution Date to the extent that the Issuer previously made payment
or provision for payment with respect to such Distribution in accordance with
this Section 8.1, and any such Distribution shall not be deemed part of the
Trust Estate for the related Series.
Except as otherwise expressly provided in this Indenture, if,
following any request by the Trustee for payment of a late Distribution, any
default occurs in the making of such payment, or if a default occurs in any
other performance required under any Certificate with respect to any Series,
the Trustee may, and upon the request of the Holders of Bonds representing more
than 50% of the Aggregate Current Principal Amount of the Outstanding Bonds of
the affected Series shall, 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 with respect to such Series under
this Indenture and to proceed thereafter as provided in Article V.
SECTION 8.2 Collection Accounts.
(a) On or before the Closing Date for a Series, the
Issuer shall open, at the Corporate Trust Office, one or more accounts
(each of which shall be an Eligible Account) which shall collectively
be the "Collection Account" for such Series. The Trustee shall
promptly deposit in the related Collection Account all Distributions
received by it with respect to Certificates securing the Bonds of a
Series (other than Distributions required to be delivered to the
Issuer pursuant to Section 8.1). All Distributions deposited from
time to time in a Collection Account, any amount required to be
deposited in the Collection Account for a Series pursuant to Section
2.12(g) and the terms of the related Series Supplement, all
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other deposits therein pursuant to this Indenture, and all investments
made with such moneys, including all income or other gain from such
investments, shall be held by the Trustee in such Collection Account
as part of the Trust Estate for the related Series as herein provided,
subject to withdrawal by the Trustee for the purposes set forth in
subsections (c) and (d) of this Section 8.2. All funds withdrawn from
a Collection Account pursuant to subsection (c) of this Section 8.2
for the purpose of making payments to the Holders of Bonds of the
related Series shall be applied in accordance with Section 3.3.
(b) So long as no Default or Event of Default shall have
occurred and be continuing with respect to a Series of Bonds, all or a
portion of the related Collection Account shall be invested and
reinvested by the Trustee at the Issuer's direction or pursuant to the
provisions of the related Series Supplement in one or more Eligible
Investments bearing interest or sold at discount. No such investment
shall mature later than the Business Day immediately preceding the
next Principal Reduction Date for such Series unless permitted
otherwise by the Rating Agencies.
Notwithstanding the foregoing,
(i) except as permitted by clause (ii) below, no
investment of any amount held in a Collection Account may
mature later than the Business Day immediately preceding the
next Payment Date for Bonds of the related Series unless
permitted otherwise by the Rating Agencies,
(ii) any investment (including repurchase
agreements) on which the Trustee (or any agent of the Trustee
acceptable to the Rating Agency or Agencies that rated such
Series) is the obligor, may mature on a Payment Date or
Special Payment Date if, under this Section 8.2, such
investment could otherwise mature on the Business Day
immediately preceding such Payment Date or Special Payment
Date and
(iii) if there are any Overdue Bonds of a Series
Outstanding, funds then in the related Collection Account may
be invested in investments maturing later than the Business
Day immediately preceding the next Special Payment Date,
unless permitted otherwise by the Rating Agencies, only to the
extent that after giving effect to such proposed investment
the amount of funds that would be on deposit in the Collection
Account (including therein the amount of Distributions and
proceeds of investments scheduled to be deposited in such
Collection Account prior to such next Special Payment Date)
and would be available to make payments on the Bonds of such
Series on such next Special Payment Date, exceeds any payments
of principal of or interest on any Overdue Bonds of such
Series due and payable on such next Special Payment Date.
All income or other gains from investment of moneys deposited
in a Collection Account shall be deposited by the Trustee in such
Collection Account
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immediately upon receipt, and any loss resulting from such investment
shall be charged to such Collection Account.
(c) Unless the Bonds of a Series have been declared due
and payable pursuant to Section 5.2 and moneys collected by the
Trustee with respect to such Series are being applied in accordance
with Section 5.8, amounts on deposit in the related Collection Account
on any Payment Date or Special Payment Date shall be withdrawn from
such Collection Account, in the amounts required, for application as
follows:
(i) on any Special Payment Date, except to the
extent provided otherwise in the applicable Series Supplement
and to the extent permitted by applicable law,
first, to the payment of all interest due
with respect to any Overdue Bonds of such Series
called for redemption, pro rata without any
preference or priority as to Maturity, and
second, to the payment of amounts due with
respect to principal of such Overdue Bonds (including
any portion of an installment of principal required
to be paid which was not paid therefor, and any
amounts remaining unpaid on Bonds with respect to
which the Redemption Price was not paid in full on
the applicable Redemption Date), in the order in
which such amounts became due and pro rata among all
amounts which became due on the same date, each such
amount being the amount thereof set forth in the
applicable Special Payment Date Statement; and
(ii) on any Payment Date, in accordance with the
order of priority of payment specified in the related Series
Supplement;
each such amount being the amount thereof set forth in the applicable
Special Payment Date Statement or Payment Date Statement, as the case
may be.
(d) On or after each Payment Date for a Series, so long
as the Trustee shall have prepared a Payment Date Statement in respect
of such Payment Date and shall have made, or, in accordance with
Section 3.3, set aside from amounts in the Collection Account for such
Series an amount sufficient to make the payment of principal of and
interest on the Bonds of such Series then required to be made as
indicated in such Payment Date Statement, the cash balance, if any,
then remaining in the related Collection Account, less the amount of
Distributions due on the related Certificates but not received on the
immediately preceding Distribution Date and the amount of any
Reinvestment Income then payable to the Bond Manager, shall be
withdrawn from such Collection Account by the Trustee and applied
first, to the payment of any unpaid amount due the
Trustee pursuant to Section 6.7,
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second, to the payment of any unpaid amount due any
firm of Independent Accountants pursuant to Section 8.9(a),
third, to the extent required by the related Series
Supplement, to deposit an amount in the related Expense Fund
(any amount so deposited being released from the lien of the
Indenture pursuant to Section 8.10).
Except as otherwise provided in the related Series Supplement, the
balance, if any, of the amount so withdrawn shall be released from the
lien of this Indenture and paid by the Trustee (i) with respect to
each Series of Bonds for which a REMIC election or elections has or
have not been made and will not be made, to the Issuer or, upon Issuer
Order, to its assignee, or (ii) where such an election or elections
has or have been made or will be made, to the Residual Interest that
is entitled to such assets as stipulated in the related Series
Supplement, in each case subject to satisfaction of the following
conditions:
(i) no Default or Event of Default shall have
occurred and be continuing,
(ii) an Independent Accountant shall have
delivered to the Trustee the certificate or opinion in respect
of such Payment Date required by Section 8.9(b);
(iii) the Issuer shall have delivered to the
Trustee an Officers' Certificate stating that all conditions
precedent to such release specified in this subsection (d)
have been satisfied, and
(iv) the Issuer shall have delivered to the
Trustee an Opinion of Counsel to the effect that all documents
delivered to the Trustee in connection with such release
comply as to form with the requirements of this subsection (d)
and all conditions precedent to such release specified in this
subsection (d) have been satisfied.
SECTION 8.3 Reserved.
SECTION 8.4 Reserved.
SECTION 8.5 Reserved.
SECTION 8.6 General Provisions Regarding Pledged Accounts.
(a) Each Pledged Account shall relate solely to the Bonds
of the Series with respect to which it was established and to the
Certificates and other property securing such Series. Funds and other
property in each Pledged Account shall not be commingled with any
other moneys or property of the Issuer or any Affiliate thereof.
Notwithstanding the foregoing, the Trustee may hold any funds or other
property received or held by it as part of a Pledged Account in
collective accounts maintained by it in the normal course of its
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business and containing funds or property held by it for other Persons
(which may include the Issuer or an Affiliate), provided that such
accounts are under the sole control of the Trustee and the Trustee
maintains adequate records indicating the ownership of all such funds
or property and the portions thereof held for credit to each Pledged
Account.
(b) The Issuer will not direct the Trustee to make any
investment of any funds in a Pledged Account or to sell any investment
held in a Pledged Account except under the following terms and
conditions:
(i) each such investment shall be made in the
name of the Trustee (in its capacity as such) or in the name
of a Qualified Nominee of the Trustee (or, if, as indicated by
an Opinion of Counsel delivered to the Trustee, applicable law
provides for perfection of pledges of an investment not
evidenced by a certificate or other instrument through
registration of such pledge on books maintained by or on
behalf of the issuer of such investment, such pledge may be so
registered),
(ii) the Trustee shall have sole control over such
investment, the income thereon and the proceeds thereof,
(iii) any certificate or other instrument
evidencing such investment shall be delivered directly to the
Trustee or its agent, and
(iv) the proceeds of each sale of such an
investment shall be remitted by the purchaser thereof directly
to the Trustee for deposit in the Pledged Account in which
such investment was held.
(c) Except as otherwise provided in the related Series
Supplement, if a REMIC election or elections has or have been made or
will be made in respect of the assets securing such Series, prior to
any disposition of any investment in a Pledged Account that would
result in a gain to a REMIC of such Series, the Trustee shall inform
the Issuer of its intention to dispose of such investment and of the
possibility that such disposition could result in the imposition of
taxes on "prohibited transactions" as defined in Section 860F of the
Code. If any amounts are needed for disbursement from a Pledged
Account and sufficient uninvested funds are not available therein to
make such disbursement, in the absence of an Issuer Order for the
liquidation of investments held therein in an amount sufficient to
provide the required funds, the Trustee shall cause to be sold or
otherwise converted to cash a sufficient amount of the investments in
such Pledged Account.
(d) The Trustee shall not in any way be held liable by
reason of any insufficiency in any Pledged Account except for losses
on investments which are liabilities of the Trustee (or of any agent
of the Trustee).
(e) All investments of funds in a Pledged Account and all
sales of investments held in a Pledged Account shall, except as
provided below, be made by the Trustee in
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accordance with an Issuer Order. Subject to compliance with the
requirements of Section 8.2(b), such Issuer Order may authorize the
Trustee to make the specific investments set forth therein, to make
investments from time to time consistent with the general instructions
set forth therein, or to make specific investments pursuant to
written, telegraphic or telephonic instructions of the employees or
agents of the Issuer identified therein, in each case in such amounts
as such Issuer Order shall specify.
In the event that:
(i) the Issuer shall have failed to give
investment directions to the Trustee by 12:30 p.m. Eastern
Time on any Business Day authorizing the Trustee to invest the
funds then in a Pledged Account,
(ii) a Default or Event of Default with respect to
such Series shall have occurred and be continuing but the
Bonds of such Series shall not have been declared due and
payable pursuant to Section 5.2, or
(iii) an Event of Default with respect to such
Series shall have occurred and be continuing, the Bonds of
such Series shall have been declared due and payable pursuant
to Section 5.2, and amounts collected or receivable from the
related Trust Estate are being applied in accordance with
Section 5.8,
the Trustee shall invest and reinvest the funds then in each related
Pledged Account to the fullest extent practicable, in such manner as
the Trustee shall from time to time determine, but only in one or more
Eligible Investments bearing interest or sold at a discount. All
investments made pursuant to clause (i) above shall mature on the next
Business Day following the date of such investment, all such
investments made pursuant to clause (ii) above shall mature no later
than the maturity date therefor permitted by Section 8.2(b), or by the
terms of any related Series Supplement, whichever is applicable, and
all investments made pursuant to clause (iii) above shall mature no
later than the first date following the date of such investment on
which the Trustee proposes to make a distribution to Holders of Bonds
of the related Series pursuant to Section 5.8.
(f) Subject to the restriction on the maturity of
investments set forth in Sections 8.2(b), or in any related Series
Supplement, and notwithstanding paragraph (e) above, the Issuer will
give appropriate and timely investment directions to the Trustee such
that at the close of business on not more than two Business Days in
any one calendar year not more than an aggregate of $50,000 of funds
in the Pledged Accounts for a Series are not invested pursuant,
directly or indirectly, to an Issuer Order in Eligible Investments
bearing interest or sold at a discount which mature on or after the
opening of business on the next Business Day.
(g) Unless it shall have otherwise agreed in writing with
the Issuer, the Trustee shall not be required to enter into repurchase
obligations for the investment of funds in any
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Pledged Account with any Person whose repurchase obligations would be
Eligible Investments only if the requirements of subclause (b) of
clause (iii) of the definition of the term "Eligible Investments" were
complied with in connection with such investment.
SECTION 8.7 Reports by Trustee to Bondholders.
On each Payment Date for a Series the Trustee shall deliver a written
report
(a) to each Holder of Bonds of a Class of such Series on
which a payment of principal and interest is then being made, setting
forth the amount of such payment which represents principal and the
amount which represents interest, and the principal amount of an
Individual Bond of each such Class after giving effect to the payment
of principal made on such Payment Date;
(b) to each Holder of Bonds of a Class of such Series on
which a payment of interest only is then being made, setting forth the
Class Current Principal Amount and Class Imputed Principal Balance of
Bonds of each Class of such Series Outstanding after giving effect to
the payment of principal made on such Payment Date and the allocation
of all Realized Losses and any Junior Bond Writedown Amount then
allocable to such Class and after including in the aggregate principal
amount of Compound Interest Bonds Outstanding the amount of any
accrued interest added to the principal amount thereof on such Payment
Date; and
(c) to each Holder of a Compound Interest Bond of such
Series (but only if such Holder shall not have received on such
Payment Date a payment of interest equal to the entire amount of
Accrued Bond Interest on such Bond for such Payment Date, or since the
related Accrual Date if no Payment Date has yet occurred), setting
forth
(i) the information contained in the report
delivered pursuant to clause (b) above,
(ii) the interest accrued on an Individual Bond of
such Class of Compound Interest Bonds through the Interest
Accrual Period for such Payment Date and added to the
principal of such Compound Interest Bond, and
(iii) the principal amount of an Individual Bond of
such Class of Compound Interest Bonds after giving effect to
the addition thereto of interest accrued thereon during the
Interest Accrual Period for such Payment Date.
(d) to each Holder of Bonds of a Class of such Series,
the aggregate amount of Realized Losses and any Junior Bond Write Down
Amount allocated to the Bonds of such Class on such Payment Date;
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(i) the amount of any Realized Losses or portion
of any Junior Bond Write Down Amount allocated to an
Individual Bond of such Class on such Payment Date; and
(ii) the Imputed Principal Balance and the Current
Principal Amount of an Individual Bond of such Class on such
Payment Date,
in the case of (iii) above, after application of all payments of principal on
such Bonds and allocation of any Realized Losses and the Junior Bond Write Down
Amount, if any, allocable on such Payment Date.
SECTION 8.8 Reports by Trustee.
In addition to any statements required to be delivered or prepared by
the Trustee pursuant to Sections 2.9 or 8.2, the Trustee shall deliver to the
Issuer and the Independent Accountants appointed pursuant to Section 8.9,
within two Business Days after the request of either the Issuer or such
Independent Accountants, a written report setting forth the amount of each
Pledged Account or Fund established hereunder and the identity of the
investments included therein. Without limiting the generality of the
foregoing, the Trustee shall, upon the request of the Issuer, promptly transmit
to the Issuer copies of all accountings of, and information with respect to,
Distributions furnished it by the issuer of, or the paying agent for, each
Certificate and shall promptly notify the Issuer if, or on the third Business
Day after any Distribution Date in the case of a Conventional Certificate, any
related Distribution then due or any portion thereof has not been received by
the Trustee.
SECTION 8.9 Reports by Independent Accountants.
(a) At the Closing Date for a Series the Issuer shall
appoint the firm of Independent Accountants for purposes of preparing
and delivering the reports or certificates with respect to such Series
required by this Section 8.9. Upon any resignation by such firm the
Issuer shall promptly notify the Trustee and appoint a successor
thereto that shall also be a firm of Independent Accountants of
recognized national reputation. If the Issuer shall fail to appoint a
successor to a firm of Independent Accountants which has resigned on
or before the fifteenth day after such resignation, the Trustee shall
promptly notify the Issuer of such failure in writing. If the Issuer
shall not have appointed a successor within ten days thereafter the
Trustee shall promptly appoint a successor firm of Independent
Accountants of recognized national reputation. The fees of such
successor shall be payable by the Issuer, and any fees not so paid by
the Issuer may be paid by the Trustee on behalf of the Issuer, from
amounts otherwise payable to the Issuer from the related Collection
Account pursuant to Section 8.2(d).
(b) The Issuer, or the Trustee on behalf of the Issuer,
shall direct the firm of Independent Accountants appointed pursuant to
subsection (a) (or any successor firm so appointed) to review, and
prepare and deliver to the Trustee a report or certificate with
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respect to each Payment Date Statement specified in the related Series
Supplement delivered by the Trustee pursuant to Section 2.9(e).
Such report or certificate shall state that
(i) such Independent Accountants have reviewed
such Payment Date Statement,
(ii) they have performed the calculations
required to be made in connection therewith,
(iii) they have reviewed the accountings of the
related Distributions and of the related Collection Account
furnished by the Trustee with respect to the Distribution Date
relative to such Payment Date Statement, and
(iv) based upon such review, such firm of
Independent Accountants has no material exceptions to the
Trustee's calculations set forth in any of such Statements, or
that all of such exceptions are set forth in such report or
certificate.
Such report or certificate shall be delivered to the Trustee, and a
copy of such report or certificate shall be delivered to the Issuer,
prior to the close of business on the second Business Day following
the related Calculation Date. If such firm of Independent Accountants
sets forth any material exceptions to the Trustee's Payment Date
Statement in its report or certificate, the Trustee's Payment Date
Statement shall be deemed to have been amended to reflect such
exceptions, and a copy of such report shall be delivered to each
Rating Agency rating the related Bonds.
(c) If the Trustee shall fail to deliver to the Issuer
any Payment Date Statement by the due date therefor, the Issuer shall,
at the opening of business on the next Business Day after such due
date, direct the firm of Independent Accountants appointed pursuant to
subsection (a) to prepare and deliver to the Trustee such Payment Date
Statement at the expense of the Issuer, no later than 2:00 p.m. on the
Business Day following the day on which such direction was given. Any
fees of such Independent Accountants not paid by the Issuer may be
paid by the Trustee, on behalf of the Issuer, from amounts otherwise
payable to the Issuer from the related Collection Account pursuant to
Section 8.2(d).
SECTION 8.10 Expense Fund.
(a) Except as otherwise provided in the related Series
Supplement, any cash or Eligible Investments received by the Trustee
for deposit in the Expense Fund for a Series pursuant to Sections
2.12(g) or 8.2(d) hereof, together with any other Eligible Investments
in which amounts in such Expense Fund are or will be invested or
reinvested during the term of the Bonds of such Series, shall be held
by the Trustee subject to disbursement and withdrawal as herein
provided, but shall not be security for the Bonds of such Series.
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(b) Except as otherwise provided in the related Series
Supplement all or a portion of the Expense Fund for a Series shall be
invested and reinvested at the Issuer's direction in one or more
Eligible Investments.
(c) Except as otherwise provided in the related Series
Supplement amounts on deposit in the Expense Fund for a Series shall
be applied by the Trustee to the payment of expenses relating to the
administration of the Bonds of such Series (other than interest
expense on such Bonds) specified in the related Series Supplement to
the extent that such expenses have not been paid by the Issuer or from
other sources.
(d) Except as otherwise provided in the related Series
Supplement, upon full and final payment of all Outstanding Bonds of
the related Series and payment of all unpaid expenses relating to the
administration of the Bonds of such Series (other than interest
expense on such Bonds) covered by such Expense Fund, the Trustee shall
pay to or upon the order of the Issuer all amounts remaining on
deposit in the Expense Fund for such Series.
SECTION 8.11 Substitution of Certificates with Eligible Substitute
Certificates.
(a) Except as otherwise provided in the related Series
Supplement, the Issuer shall have the right to Grant one or more
Eligible Substitute Certificates for any one or more Certificates
securing a Series of Bonds, any such substitution to take place on a
Payment Date, subject, however, to satisfaction of the following
conditions:
(i) no Default or Event of Default shall have
occurred and be continuing;
(ii) if the Eligible Substitute Certificates to be
Granted in substitution for the Certificates to be released
are issued in definitive or certificated form, such Eligible
Substitute Certificates, registered in the name of the Trustee
(or, if requested by the Trustee, in the name of its Qualified
Nominee) shall have been delivered to the Trustee;
(iii) if the Eligible Substitute Certificates to be
Granted in substitution for the Certificates to be released
are issuable in book entry form only, the Trustee shall have
received (A) written notification or confirmation from the
operator of the book-entry system that ownership of such
Eligible Substitute Certificates has been registered in the
name of the Trustee or a Qualified Nominee or (B) notification
from a bank, broker, clearing corporation or other Person that
maintains securities accounts for the Issuer or the Trustee
and is acting in that capacity with respect to such Eligible
Substitute Certificates that either (1) ownership of such
Eligible Substitute Certificates in the name of the Issuer and
the Grant thereof to the Trustee have been entered on the
securities accounts books of such Person or (2) ownership of
such Eligible Substitute Certificates in the name of the
Trustee has been entered on the securities accounts books of
such Person;
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(iv) the Trustee shall have received a certificate
or opinion from a firm of Independent Accountants stating that
(A) such firm has reviewed (1) the terms of the Certificates
proposed to be released and of the Eligible Substitute
Certificates proposed to be Granted in substitution therefor,
(2) the Issuer's calculations of the Certificate Principal
Balance of the Certificates to be released and of the
Eligible Substitute Certificates to be granted in substitution
therefor and the Issuer's calculations of the aggregate
Certificate Principal Balance of all of the Certificates
pledged to secure the Bonds immediately following the
substitutions and (3) the Issuer's calculations demonstrating
that the Eligible Substitute Certificates proposed to be
Granted in substitution for the Certificates to be released
satisfy all conditions precedent to such release and
substitution set forth in the Indenture and the related Series
Supplement that are of a type that can be verified by
mathematical computations and (B) based on such review,
nothing has come to their attention that the Issuer's
calculations were not made in compliance with the terms of the
Indenture and the related Series Supplement and are not
mathematically correct;
(v) the Trustee shall have received an Officers'
Certificate stating that all conditions precedent to such
release specified in this subsection (a) and in the related
Series Supplement have been satisfied;
(vi) the Trustee shall have received an Opinion of
Counsel to the effect (A) that all documents delivered to the
Trustee in connection with such release comply as to the form
with the requirements of this subsection (a) and the
requirements, if any, set forth in the related Series
Supplement, (B) that all conditions to such release specified
in this subsection (a) and in the related Series Supplement
have been satisfied and (C) of the opinion required by Section
2.12(c) but only as applicable to the portion of the Trust
Estate comprised of the Eligible Substitute Certificates; and
(vii) the Trustee shall have received a certificate
of an Independent Person, whose regular business activity
includes valuing securities similar to such Eligible
Substitute Certificates, as to the fair market value of such
Eligible Substitute Certificates, which determination of fair
market value shall be based upon generally available market
quotations as of a date not earlier than three Business Days
prior to the date of Grant to the Trustee.
(b) Upon any such Grant, the Trustee shall transfer and
assign the replaced Certificates to the Issuer whereupon they shall be
released from, and no longer subject to, the lien of the Indenture.
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ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 Supplemental Indentures without Consent of
Bondholders.
Without the consent of the Holders of any Bonds, the Issuer, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to correct or amplify the description of any property
at any time subject to the lien of this Indenture, or better to
assure, convey and confirm unto the Trustee any property subject or
required to be subjected to the lien of this Indenture, or to subject
to the lien of this Indenture additional property;
(2) to add to the conditions, limitations and
restrictions on the authorized amount, terms and purposes of the
issuance, authentication and delivery of any Series of Bonds, as
herein set forth, additional conditions, limitations and restrictions
thereafter to be observed;
(3) to set forth the terms of, and security for, any
Series that has not theretofore been authorized by a Series
Supplement;
(4) to modify or eliminate any of the terms of this
Indenture; provided, however, that
(A) such supplemental indenture shall expressly
provide that any such modifications or eliminations shall not
be effective with respect to any Outstanding Bond of any
Series created prior to the execution of such supplemental
indenture; and
(B) the Trustee may, in its discretion, decline
to enter into any such supplemental indenture which, in its
opinion, would adversely affect its own rights, duties or
immunities;
(5) to evidence the succession of another Person to the
Issuer, and the assumption by any such successor of the covenants of
the Issuer herein and in the Bonds contained, or the appointment of an
alternate Trustee under Section 6.16;
(6) to add to the covenants of the Issuer, for the
benefit of the Holders of all Bonds or of the Bonds of any Series, or
to surrender any right or power herein conferred upon the Issuer;
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(7) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision herein, or to amend any other provisions with respect to
matters or questions arising under this Indenture; provided that such
action shall not adversely affect in any material respect the
interests of the Holders of any Series of Bonds; and provided,
further, that the amendment shall not be deemed to adversely affect in
any material respect the interests of the Holders of any Series of
Bonds if the Person requesting the amendment obtains a letter from
each Rating Agency that the amendment would not result in the
downgrading or withdrawal of the ratings then assigned to any Series
of Bonds;
(8) to provide for the issuance of Bonds of any Series
(including Bonds of a Series theretofore authorized and then
Outstanding) or any Class within such Series in bearer form with
coupons ("Bearer Bonds") and for the exchangeability of Bearer Bonds
and Bonds of the same Series and Class issued in registered form
("Registered Bonds"); any such supplemental indenture may provide for
payments on Bearer Bonds only outside the United States and for
appointment of a foreign Paying Agent that does not satisfy the
requirements of clause (ii) of the definition of the term "Eligible
Investments" but is otherwise acceptable to the rating agencies that
rated the initial Series of the Bonds and may also contain any
provisions as may in the Issuer's judgment be necessary, appropriate
or convenient (a) to permit the Bonds to be issued and sold to or held
in bearer form by non-United States Persons, (b) to establish
entitlement to an exemption from United States withholding tax or
reporting requirements with respect to payments on the Bonds, (c) to
comply, or facilitate compliance, with other applicable laws or
regulations, (d) to provide for usual and customary provisions for
communication (by notice publication, maintenance of lists of holders
of Bearer Bonds who have provided names and addresses for such
purpose, or otherwise) with holders of Bearer Bonds, or (e) to
otherwise effectuate provisions for the issuance of Bearer Bonds and
their exchangeability with Registered Bonds (under no circumstances
will this provision allow the Trustee or the Issuer to issue a second
Class of "residual interests" as defined in the Code);
(9) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under TIA or under any similar federal
statute hereafter enacted, and to modify, eliminate or add to the
provisions of this Indenture to such extent as shall be necessary or
appropriate to conform to any provisions of the TIA, as the same may
from time to time be amended; or
(10) if a REMIC election or elections has or have been
made or will be made in respect of the Trust Estate or such other
assets specified in such election and securing the Bonds of a Series,
to modify, eliminate or add to the provisions of this Indenture to
such extent as shall be necessary (i) to maintain the qualification of
such assets as a REMIC under the Code or (ii) to avoid or minimize the
risk of the imposition of any tax on the Issuer, the Trust Estate or
another Person under the Code that would be a claim against the
Issuer, Trust Estate or such other Person, as the case may be, or
(iii) to prevent a REMIC Loss, provided that (a) there shall have been
delivered an Opinion of Counsel to the effect that such action
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is necessary to maintain such qualification or to avoid any such tax
or minimize the risk of its imposition or to prevent such prohibited
transaction, respectively, and (b) such supplemental indenture shall
not have any of the effects described in paragraphs (1) through (6) of
the proviso to Section 9.2 of this Indenture.
SECTION 9.2 Supplemental Indentures with Consent of Bondholders.
With the consent of the Holders of Bonds representing not less than
two-thirds of the Aggregate Current Principal Amount of all Outstanding Bonds
in case Outstanding Bonds of all Series are to be affected or with the consent
of the Holders of Bonds representing not less than two-thirds of the Aggregate
Current Principal Amount of the Outstanding Bonds of each Series to be affected
in case one or more, but less than all, of the Series of Outstanding Bonds are
to be affected, by Act of said Holders delivered to the Issuer and the Trustee,
the Issuer, when authorized by a Board Resolution, and the Trustee may enter
into an indenture or indentures supplemental hereto for the purpose of adding
any provisions to, or changing in any manner or eliminating any of the
provisions, of this Indenture relating to such Series or of modifying in any
manner the rights of the Holders of the Bonds of such Series under this
Indenture; provided, however, that no such supplemental indenture shall,
without the consent of the Holder of each Outstanding Bond affected thereby:
(1) change the Stated Maturity of the final installment
of the principal of, or any installment of interest on, any Bond or
reduce the principal amount thereof, the Bond Interest Rate thereon or
the Redemption Price with respect thereto, change Bond Redemption Date
for any Series of Bonds, 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 payment of any installment of interest due on any Bond on or after
the Stated Maturity thereof or for the enforcement of the payment of
the entire remaining unpaid principal amount of any Bond on or after
the Stated Maturity of the final installment of the principal thereof
(or, in the case of redemption, on or after the applicable Redemption
Date);
(2) reduce the percentage of the Aggregate Current
Principal Amount of the Outstanding Bonds of any Series, 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 any
waiver of compliance with provisions of this Indenture or Defaults
hereunder and their consequences provided for in this Indenture;
(3) modify any of the provisions of this Section, Section
5.13 or Section 5.17(b), except to increase any percentage specified
therein or to provide that certain other provisions of this Indenture
cannot be modified or waived without the consent of the Holder of each
Outstanding Bond affected thereby;
(4) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
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(5) 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 a Trust Estate or terminate the lien of this Indenture on any
property at any time subject hereto or deprive the Holder of any Bond
of the security afforded by the lien of this Indenture; or
(6) modify any of the provisions of this Indenture in
such manner as to affect the calculation of the Debt Service
Requirement for any Payment Date for any Series of Bonds (including
the calculation of any of the individual components of such Debt
Service Requirement) or to affect rights of the Holders of Bonds of
any Series to the benefits of any provisions for the mandatory
redemption of Bonds of such Series contained herein or in the related
Series Supplement.
Notwithstanding any of the foregoing, prior to the date on which the
Class Imputed Principal Balance of each Class of Senior Bonds of a Series has
been reduced to zero, no amendment, variation or modification shall be made to
Article V hereof in respect of any Series of Bonds without the consent of the
Holders representing not less than 100% of the Aggregate Current Principal
Amount of all Outstanding Senior Bonds of such Series. The consent of the
Holders of any Junior Bonds of such Series shall not be required to be obtained
prior to making any amendment for such series to Article V above for so long as
any Senior Bond of such Series is Outstanding. Upon reduction to zero of the
Class Imputed Principal Balance of each Class of Senior Bonds of a Series, no
amendment, variation or modification to Article V hereof shall be made in
respect of such Series of Bonds without the consent of the Holders representing
not less than 66 2/3% of the Aggregate Current Principal Amount of the Highest
Priority Junior Class of such Series.
The Trustee may in its discretion determine whether or not any Bonds
of any particular Series would be affected by any supplemental indenture and
any such determination shall be conclusive upon the Holders of all Bonds,
whether theretofore or thereafter authenticated and delivered hereunder. The
Trustee shall not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Bondholders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to this Section, the Issuer shall mail to the
Holders of the Bonds of each Series to which such supplemental indenture
relates a notice setting forth in general terms the substance of such
supplemental indenture. Any failure of the Issuer 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 9.3 Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby
of the trusts created by this Indenture, the Trustee shall be entitled to
receive, and (subject to Section 6.1) shall be fully protected in relying
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upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. In addition, in
executing any supplemental indenture which modifies an existing trust created
by this Indenture, the Trustee shall require, as a condition of such execution
or acceptance if a REMIC election or elections has or have been made or will be
made in respect of the Trust Estate or such other assets specified in such
election and securing such Series of Bonds, a Non-Disqualification Opinion.
The Trustee may, but shall not (except to the extent required in the case of a
supplemental indenture entered into under Section 9.1(8)) be obligated to,
enter into any such supplemental indenture which affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise.
SECTION 9.4 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every
Holder of Bonds of any Series to which such supplemental indenture relates
which have theretofore been or thereafter are authenticated and delivered
hereunder shall be bound thereby.
SECTION 9.5 Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of TIA as then in effect so long as this Indenture
shall then be qualified under TIA.
SECTION 9.6 Reference in Bonds to Supplemental Indentures.
Bonds authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article which relates to the Series of
which such Bonds are a part may, and if required by the Issuer shall, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Issuer shall so determine, new Bonds so
modified as to conform, in the opinion of Trustee and the Issuer, to any such
supplemental indenture which relates to the Series of which such Bonds are a
part may be prepared and executed by the Issuer and authenticated and delivered
by the Trustee in exchange for Outstanding Bonds of such Series.
SECTION 9.7 Amendments to Governing Documents.
Except as is otherwise provided in Section 3.8(c) the Trustee shall,
upon Issuer Request, consent to any proposed amendment to the Issuer's
governing documents, or an amendment to or waiver of any provision of any other
document relating to the Issuer's governing documents, such consent to be given
without the necessity of obtaining the consent of the Holders of any Bonds upon
receipt by the Trustee of:
(1) an Officer's Certificate, to which such proposed
amendment or waiver shall be attached, stating that such attached copy
is a true copy of the proposed amendment or
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waiver and that all conditions precedent to such consent specified in
this Section 9.7 have been satisfied; and
(2) written confirmation from each of the rating agencies
that rated any Series of the Issuer's Bonds that the implementation of
the proposed amendment or waiver will not adversely affect their
respective ratings of any Series of Bonds.
Notwithstanding the foregoing, the Trustee may decline to consent to a
proposed waiver or amendment that adversely affects its own rights, duties or
immunities under the Indenture or otherwise.
Nothing in this Section 9.7 shall be construed to require that any
Person obtain the consent of the Trustee to any amendment or waiver or any
provision of any document where the making of such amendment or the giving of
such waiver without obtaining the consent of the Trustee is not prohibited by
the Indenture or by the terms of the document that is the subject of the
proposed amendment or waiver.
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ARTICLE X
REDEMPTION OF BONDS
SECTION 10.1 Redemption.
All the Bonds of a Series may be redeemed in whole, but not in part,
on any Payment Date for such Series in accordance with and subject to the
provisions relating to such redemption contained in the related Series
Supplement. If the Issuer shall elect to redeem the Bonds of a Series pursuant
to this Section 10.1 and the related Series Supplement, it shall furnish notice
of such election to the Trustee not later than thirty (30) days prior to the
Payment Date selected for such redemption, whereupon all such Bonds shall be
due and payable on such Payment Date upon the furnishing of a notice pursuant
to Section 10.2 to each Holder of such Bonds.
SECTION 10.2 Form of Redemption Notice.
Unless otherwise specified in the related Series Supplement notices of
redemptions of Bonds shall be given by the Trustee in the name and at the
expense of the Issuer and shall be mailed, or caused to be mailed, no later
than five days prior to such Payment Date on which such Bonds are to be
redeemed to the Persons who were Holders of such Bonds at the close of business
on the tenth Business Day prior to such Payment Date notwithstanding the Record
Date otherwise applicable.
Unless otherwise provided in the related Series Supplement, no prior
notice of redemption at the request of a Bondholder or redemption of Book Entry
Bonds shall be required.
All notices of redemption shall state:
(1) the Payment Date on which such redemption will take
place,
(2) the Redemption Price at which the Bonds of such
Series will be redeemed,
(3) the fact of payment in full on such Bonds, 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 3.2), and that no interest shall
accrue on such Bond for any period after the date fixed for
redemption.
Failure to give notice of redemption, or any defect therein, to any Holder of
any Bond selected for redemption shall not impair or affect the validity of the
redemption of any other Bond.
SECTION 10.3 Bonds Payable on Payment Date.
Notice of redemption having been given as provided in Section 10.2,
the Bonds or portions thereof so to be redeemed shall, on the applicable
Payment Date, become due and payable at the
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Redemption Price and (unless the Issuer shall default in the payment of the
Redemption Price) no interest shall accrue on such Payment Date.
SECTION 10.4 Right of Redemption by Holder.
(a) Unless the Bonds of a Series have been declared due
and payable prior to their Stated Maturity by reason of an Event of
Default, a Holder may request the redemption of Bonds of one or more
Classes of such Series if the related Series Supplement provides that
such Class or Classes shall be subject to redemption as so provided in
this Section 10.4. A Bondholder may request redemption by delivering
the following to the Trustee on or before the Tender Date: (i) a
written request for redemption in form satisfactory to the Trustee
(such as the form appearing on the back of each Bond), by the
Bondholder or the Bondholder's legal representative, with appropriate
evidence of authority; (ii) in the case of Definitive Bonds, the
certificate or certificates representing the Bond or Bonds for which
redemption is being requested, and (iii) in the case of a request on
behalf of a deceased Holder, appropriate evidence of death and any tax
waivers requested by the Trustee. With respect to each Class of Bonds
subject to redemption at the request of Holders, on each Payment Date
for such Series, the Issuer shall redeem Bonds with respect to which
redemption has been properly requested in the order of priority
described in paragraph (b) of this Section 10.4 and subject to the
limitations that (1) except as set forth in such subsection (b), the
Issuer shall not, on any one Payment Date, redeem from any personal
representative, surviving joint tenant or surviving tenant by the
entirety of a deceased Holder more than one hundred Individual Bonds
of such Series or redeem from any other Holder more than ten
Individual Bonds of such Series, unless all other Holders of Bonds for
which redemption has been properly requested for such Payment Date
have had their Bonds redeemed up to such limitations, and (2) with
respect to each Class of a Series subject to redemption pursuant to
this Section 10.4, the Issuer shall, on each Redemption Date, only
make redemptions to the extent of the aggregate amount of principal
payable on the Bonds of such Class on such Payment Date, rounded down
to the nearest Individual Bond (the "Class Redemption Amount"). Bonds
which have been accepted for Redemption shall become due and payable
on the applicable Redemption Date and shall cease to bear interest as
of the end of the Interest Accrual Period for such Redemption Date.
Upon presentation and surrender of such Bonds for redemption on or
after the Redemption Date therefor, such Bonds shall be redeemed by
the Issuer at the Redemption Price, together with accrued interest.
Installments of interest due on or prior to a Redemption Date shall
continue to be payable to the Holders of such Bonds as of the
applicable Record Date according to their terms and the provisions of
Section 2.9.
(b) Subject to the limitations provided in subsection (a)
of this Section 10.4, with respect to each Redemption Date and with
respect to each Class, requests for redemption of Deceased Holder
Bonds shall be accepted in the order of receipt of such requests by
the Trustee to the extent permitted by the one hundred Individual Bond
limitation referred to in Section 10.4(a); requests for redemption of
Bonds other than Deceased Holder Bonds shall be accepted in the order
of receipt of such requests by the Trustee to the extent permitted by
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the ten Individual Bond limitation referred to in Section 10.4(a),
after all requests for redemption of Deceased Holder Bonds of the same
Class theretofore submitted have been accepted within the one hundred
Individual Bond limitation. With respect to each Redemption Date, the
Issuer shall accept requests for redemption of Deceased Holder Bonds
in excess of the one hundred Individual Bond limitation, but only to
the extent of the Class Redemption Amount for such Class for such
Series after all requests for redemption in this subsection (b) with
respect to such Redemption Date within the one hundred Individual Bond
and ten Individual Bond limitations set forth above have been
accepted. With respect to each Redemption Date, the Issuer shall
accept requests for redemption of Bonds other than Deceased Holder
Bonds in excess of the ten Individual Bond limitation, but only to the
extent of the Class Redemption Amount for such Class for such Series
after all other requests for redemption in this subsection (b) with
respect to such Redemption Date within the one hundred Individual Bond
and ten Individual Bond limitations set forth above have been
accepted. With respect to each Redemption Date, the Issuer shall
accept requests for redemption of Bonds other than Deceased Holder
Bonds in excess of the ten Individual Bond limitation, but only to the
extent of the Class Redemption Amount for such Class for such Series
after all other requests for redemption in this subsection (b) with
respect to such Redemption Date have been accepted. Subject to the
foregoing provisions, requests for redemption shall be accepted in the
order that they were received by the Trustee.
(c) In order to obtain redemption, the Holder or the
personal representative, surviving joint tenant or surviving tenant by
the entirety of a deceased Holder must deliver to the Trustee on or
before the Tender Date preceding the Redemption Date: (i) a written
request for redemption in form satisfactory to the Trustee (such as
the form appearing on the certificate representing the Bonds), signed
by the Holder or the Holder's legal representative (with appropriate
evidence of authority), (ii) the certificates representing the Bond or
Bonds for which redemption is being requested, and (iii) in the case
of Deceased Holder Bonds, appropriate evidence of death and any tax
waivers required by the Trustee. No particular forms of request for
redemption or authority to request redemption are necessary (but the
form set forth on the form of Bond in Section 2.2 shall be
sufficient). Requests for redemption of Bonds received by the Trustee
after the Tender Date preceding the Redemption Date, and requests for
redemption not accepted in respect of such Redemption Date, whether on
behalf of a deceased Holder or otherwise, will be treated as a request
for redemption on the next succeeding Redemption Date, and the Bonds
submitted will be held by the Trustee, until the request is accepted
or withdrawn, except that the Trustee, in its discretion, may cancel
the certificates representing any such Bonds provided that it shall
maintain a record of the Bonds so cancelled and such Bonds shall
continue to be deemed Outstanding for all purposes. Within the first
five Business Days of any month, the Trustee shall notify each Holder
whose Bonds have been accepted for redemption in whole or in part on
the Redemption Date in such month. Only whole Individual Bonds may be
redeemed.
(d) For purposes of this Section, the death of a tenant
by the entirety, joint tenant or tenant in common will be deemed the
death of a Holder, and the entire principal amount of the Bond so held
will be deemed to be a Deceased Holder Bond. The death of a person
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who, during his lifetime, was entitled to substantially all of the
beneficial interests of ownership of a Bond will be deemed the death
of the Holder, regardless of the registered Holder, if such beneficial
interest can be established to the satisfaction of the Trustee. Such
beneficial interest shall be deemed to exist in typical cases of
street name of nominee ownership, ownership under the Uniform Gifts to
Minors Act, community property or other joint ownership arrangement
between a husband and wife, and trust and certain other arrangements
where a person has substantially all of the beneficial ownership
interests in the Bonds during his or her lifetime. Beneficial
interest shall include the power to sell, transfer or otherwise
dispose of a Bond and the right to receive the proceeds therefrom, as
well as interest and principal payable with respect thereto.
(e) To the extent that the Class Redemption Amount as
defined under Section 10.4(a) for a Principal Payment Date exceeds the
aggregate amount of Bonds of a Class to be redeemed on such Principal
Payment Date at the option of the Holders of such Class, Bonds of such
Class shall be mandatorily redeemed by the Issuer at the price
specified in the related Series Supplement. Unless otherwise provided
in the related Series Supplement, if less than all of the Bonds of any
such Class are to be redeemed, the particular Bonds to be redeemed
shall be selected by the Trustee from the Outstanding Bonds of such
Series not previously called or accepted for redemption, not more than
30 days prior to the applicable Principal Payment Date. The Trustee
shall select the Bonds to be redeemed by random lot. Only whole
Individual Bonds may be redeemed.
The Trustee shall promptly notify the Issuer in writing of the
Individual Bonds selected for redemption pursuant to this Section
10.4(e) and, in the case of any Bond selected for partial redemption,
the principal amount thereof to be redeemed.
(f) Beneficial Owners of Book Entry Bonds may tender
their interest in Bonds for redemption on any Principal Payment Date
subject to the limitations established in this Section 10.4. If, and
to the extent provided in the related Series Supplement, the Clearing
Agency will receive requests for redemption and requests for
withdrawal, determine the order of receipt of request for redemption,
select Bonds to be mandatorily redeemed, provide notices of redemption
and/or make payments of the redemption price and accrued interest, if
any, in accordance with the terms and provisions of the related Series
Supplement and the rules and procedures of the Clearing Agency.
(g) Each of the terms and provisions of this Section 10.4
may be modified, with respect to any Series, by the related Series
Supplement.
SECTION 10.5 Withdrawal of Requests.
Any requests for redemption pursuant to Section 10.4 may be withdrawn
by the persons making the same upon the delivery of a written request for such
withdrawal received by the Trustee not later than the Tender Date for a given
Redemption Date on which such Bond would otherwise be redeemable pursuant to
Section 10.4. If not so withdrawn, the redemption request will be irre-
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vocable with respect to the selection of Bonds for redemption on the Redemption
Date within such month. In the event a request for redemption has been
withdrawn as provided herein, the Trustee shall return the certificate
representing the Bond or Bonds in respect of which the redemption request has
been withdrawn or, in the case of Bonds the certificates of which were
cancelled by the Trustee pursuant to Section 10.4(c), the Issuer shall execute,
and the Trustee shall authenticate and deliver, new certificates representing
the Bonds in respect of which the redemption request has been withdrawn, such
new Bonds to be of the same date and tenor as the Bonds cancelled under Section
10.4(c) in the amount which remains outstanding.
SECTION 10.6 Redemption Register.
The Trustee shall maintain at its Corporate Trust Office a register in
which it shall record, in the order of receipt, all requests for redemption
received by the Trustee under Section 10.4. The Trustee may establish such
procedures as it may deem fair and equitable in order to determine the order of
receipt of requests for redemption received by the Trustee on a single day, and
any such determination shall be conclusive. In establishing procedures for
determining the order of receipt of request for redemption, the Trustee may
designate from time to time any particular person, department or office as the
designated recipient of such requests and provide that, after Holders have been
notified in writing of such designation, no request for redemption will be
deemed received until received by the person, department or office so
designated. Unless withdrawn as provided in Section 10.5, all such requests
shall remain in effect until the Bonds which are the subject of such request
have been redeemed.
SECTION 10.7 Reserved.
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ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Compliance Certificates and Opinions.
Upon any application or request by the Issuer to the Trustee to take
any action under any provision of this Indenture, the Issuer shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate
or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture, including one furnished
pursuant to specific requirements of this Indenture relating to a particular
application or request (other than certificates provided pursuant to TIA
Section 314(a)(4)) shall include and shall be deemed to include (regardless of
whether specifically stated therein) the following:
(1) a statement that each individual signing such
certificate or opinion has 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
individual, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether
or not such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each
such individual, such condition or covenant has been complied with.
SECTION 11.2 Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
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Any certificate or opinion of an officer of the Issuer may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate 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 Issuer, stating that the
information with respect to such factual matters is in the possession of the
Issuer, unless such officer or 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. Any opinion of counsel may be based on
the written opinion of other counsel, in which event such Opinion of Counsel
shall be accompanied by a copy of such other counsel's opinion and shall
include a statement to the effect that such counsel believes that such counsel
and the Trustee may reasonably rely upon the opinion of such other counsel.
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.
Wherever in this Indenture, in connection with any application or
certificate or report to the 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 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 Trustee's right to rely upon the truth and accuracy
of any statement or opinion contained in any such document as provided in
Section 6.1(b)(2).
Whenever in this Indenture it is provided that the absence of the
occurrence and continuation of a Default or Event of Default is a condition
precedent to the taking of any action by the Trustee at the request or
direction of the Issuer, then notwithstanding that the satisfaction of such
condition is a condition precedent to the Issuer's right to make such request
or direction, the Trustee shall be protected in acting in accordance with such
request or direction if it does not have knowledge of the occurrence and
continuation of such Default or Event of Default as provided in Section 6.1(d).
SECTION 11.3 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 agent 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 Trustee, and, where it is hereby expressly required, to the
Issuer. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are
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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
6.1) conclusive in favor of the 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 by the affidavit of a
witness of such execution or by the certificate of any notary public
or other officer authorized by law to take acknowledgments of deeds,
certifying that the individual signing such instrument or writing
acknowledged to him the execution thereof. Whenever such execution is
by an officer of a corporation or a member of a partnership on behalf
of such corporation or partnership, such certificate or affidavit
shall also constitute sufficient proof of his authority.
(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 of
transfer thereof or in exchange therefor or in lieu thereof, in
respect of anything done, omitted or suffered to be done by the
Trustee or the Issuer in reliance thereon, whether or not notation of
such action is made upon such Bonds.
(e) The Voting Record Date specified in this Indenture,
or in the related Series Supplement for any Series of Bonds, shall be
applicable with respect to all Acts of Bondholders under this Section
11.3.
SECTION 11.4 Notices, etc. to Trustee and Issuer.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Bondholders or other documents provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with
(1) the 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 and received by the Trustee at its
Corporate Trust Office, or
(2) the Issuer by the Trustee or by any Bondholder shall
be sufficient for every purpose hereunder (except as provided in
Section 5.1(A)(3) and (4)) if in writing and mailed, first-class
postage-prepaid, to the Issuer addressed to it at 0000 X. Xxxxxxx,
Xxxxx 0000, Xxxxxx, Xxxxx 00000 or at any other address previously
furnished in writing to the Trustee by the Issuer.
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SECTION 11.5 Notices and Reports to Bondholders; Waiver of Notices.
Where this Indenture provides for notice to Bondholders of any event
or the mailing of any report to Bondholders, such notice or report shall be
sufficiently given (unless otherwise herein expressly provided) if mailed,
first-class postage prepaid, to each Bondholder affected by such event or to
whom such report is required to be mailed, at the address of such Bondholder 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 or the
mailing of such report. In any case where a notice or report to Bondholders is
mailed in the manner provided above, neither the failure to mail such notice or
report, nor any defect in any notice or report so mailed, to any particular
Bondholder shall affect the sufficiency of such notice or report with respect
to other Bondholders, and any notice or report which is mailed in the manner
herein provided shall be conclusively presumed to have been duly given or
provided.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Bondholders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
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 Trustee shall be deemed to be a
sufficient giving of such notice.
SECTION 11.6 Rules by Trustee and Agents.
The Trustee may make reasonable rules for any meeting of Bondholders.
Any Agent may make reasonable rules and set reasonable requirements for its
functions.
SECTION 11.7 Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with the duties
imposed by operation of TIA Section 318(c), the imposed duties under the TIA
shall control.
SECTION 11.8 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.
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SECTION 11.9 Successors and Assigns.
All covenants and agreements in this Indenture by the Issuer shall
bind its successors and assigns, whether so expressed or not.
SECTION 11.10 Severability.
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 11.11 Benefits of Indenture.
Nothing in this Indenture or in the Bonds, expressed or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, any separate trustee or co-trustee appointed under Section 6.14, any
alternate trustee appointed under Section 6.16 and the Bondholders, any benefit
or any legal or equitable right, remedy or claim under this Indenture.
SECTION 11.12 Legal Holidays.
In any case where the date of any Payment Date, Redemption Date,
Special Payment Date, or any other date on which principal of or interest on
any Bond or Overdue Bond is proposed to be paid 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 nominal date of
any such Payment Date, Redemption Date, Special Payment Date, or other date for
the payment of principal of or interest on any Bond or Overdue Bond, as the
case may be, and no interest shall accrue for the period from and after any
such nominal date, provided such payment is made in full on such next
succeeding Business Day.
SECTION 11.13 GOVERNING LAW.
IN VIEW OF THE FACT THAT BONDHOLDERS ARE EXPECTED TO RESIDE IN MANY
STATES AND OUTSIDE THE UNITED STATES AND THE DESIRE TO ESTABLISH WITH CERTAINTY
THAT THIS INDENTURE WILL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAW OF A STATE HAVING A WELL-DEVELOPED BODY OF COMMERCIAL
AND FINANCIAL LAW RELEVANT TO TRANSACTIONS OF THE TYPE CONTEMPLATED HEREIN,
THIS INDENTURE, EACH SERIES SUPPLEMENT AND EACH BOND SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
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SECTION 11.14 Counterparts.
This instrument 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 11.15 Recording of Indenture.
This Indenture is subject to recording in any appropriate public
recording offices, such recording to be effected by the Issuer and at its
expense in compliance with any Opinion of Counsel delivered pursuant to Section
2.12(c) or 3.6.
SECTION 11.16 Corporate Obligation.
No recourse may be taken, directly or indirectly, against any
incorporator, subscriber to the capital stock, stockholder, officer or director
of the Issuer or the Trustee or of any predecessor or successor of the Issuer
or the Trustee with respect to the Issuer's obligations with respect to the
Bonds or the obligations of the Issuer or the Trustee under this Indenture or
any certificate or other writing delivered in connection herewith or therewith.
SECTION 11.17 Inspection.
The Issuer agrees that, on reasonable prior notice, it will permit any
representative of the Trustee, during the Issuer's normal business hours, to
examine all of 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 Accountants selected by the Trustee, and to discuss its
affairs, finances and accounts with its officers, employees and Independent
Accountants (and by this provision the Issuer hereby authorizes its Accountants
to discuss with such representatives such affairs, finances and accounts), all
at such reasonable times and as often as may be reasonably requested. Any
expense incident to the exercise by the Trustee of any right under this Section
11.17 shall be borne by the Issuer.
SECTION 11.18 Usury.
The amount of interest payable or paid on any Bond under the terms of
this Indenture shall be limited to an amount which shall not exceed the maximum
nonusurious rate of interest allowed by the applicable laws of the United
States or the State of New York (whichever shall permit the higher rate), which
could lawfully be contracted for, charged or received (the "Highest Lawful
Rate"). In the event any payment of interest on any Bond exceeds the Highest
Lawful Rate, the Issuer stipulates that such excess amount will be deemed to
have been paid as a result of an error on the part of both the Trustee, acting
on behalf of the Holder of such Bond, and the Issuer, and the Holder receiving
such excess payment shall promptly, upon discovery of such error or upon notice
thereof from the Issuer or the Trustee, refund the amount of such excess or, at
the option of the Trustee, apply the excess to the payment of principal of such
Bond, if any, remaining unpaid. In
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addition, all sums paid or agreed to be paid to the Trustee for the benefit of
Holders of Bonds for the use, forbearance or detention of money shall, to the
extent permitted by applicable law, be amortized, prorated, allocated and
spread throughout the full term of such Bonds.
SECTION 11.19 REMIC Status.
The provisions of this Indenture shall be construed so as to carry out
the intention of the parties that the Trust Estate and any other assets
specified in such REMIC election or elections and securing a Series of Bonds,
be treated as a REMIC, if a REMIC election or elections has or have been made
or will be made in respect of the Trust Estate or such other assets, at all
times so long as any Bond of such Series is Outstanding (or would be treated as
Outstanding for purposes of a Non-Disqualification Opinion).
SECTION 11.20 Reserved.
SECTION 11.21 Appointment of Tax Matters Partner.
If a REMIC election or elections has or have been made or will be made
in respect of the Trust Fund or any other assets specified in such REMIC
election or elections which assets secure the Bonds of a Series, the tax
matters partner for each such REMIC and for all purposes of the Code shall be
the Person designated as such in the related Series Supplement.
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IN WITNESS WHEREOF, the Issuer and the Trustee have caused this
Indenture to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
Capstead Securities Corporation IV
By: /s/ XXXX XXXXXX
-----------------------------------
Xxxx Xxxxxx, Vice President
STATE OF TEXAS )
: ss.:
COUNTY OF DALLAS )
On the 29th day of September, 1998, before me personally came Xxxx
Xxxxxx to me known, who, being by me duly sworn, did depose and say that he
resides in Dallas, Texas; that he is a Vice President of Capstead Securities
Corporation IV, the corporation described in and that executed the above
instrument; and that he signed his name thereto by order of the Board of
Directors of said Corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/S/ XXXXX XXXXXXXX
-----------------------------------
Notary Public
000
Xxxxx Xxxx xx Xxxxx, National Association,
as Trustee
By: /s/ XXXXX XXXXX
--------------------------------
Name: Xxxxx Xxxxx
------------------------------
Title: Vice President
-----------------------------
STATE OF TEXAS )
: ss.:
COUNTY OF DALLAS )
On the 29th day of September, 1998 before me personally came Xxxxx
Xxxxx to me known, who, being by me duly sworn, did depose and say that he/she
resides in Houston, Tx.; that he/she is a Vice President of Chase Bank of
Texas, National Association, the national banking association described in and
that executed the above instrument as Trustee; and that he/she signed his/her
name thereto by order of the Board of Directors of said national banking
association.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxxxx XxXxxxxx
-----------------------------------
Notary Public
