______________________________________________________________________
TRUST INDENTURE
Dated as of Xxxxx 0, 0000
Xx and Between
BFC FINANCE CORP.,
as Sponsor
and
SOUTHTRUST BANK OF ALABAMA, NATIONAL ASSOCIATION,
as Trustee, Paying Agent
and Bond Registrar
__________________________________________________________________
$142,000,000
BFC FINANCE CORP.
REMIC LEASE-BACKED BONDS
SERIES 1996
Federal Lease-Backed Class A
Federal Lease-Backed Class B
__________________________________________________________________
TRUST INDENTURE
TABLE OF CONTENTS
PAGE
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PARTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
PREAMBLES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE II
THE BONDS AND PAYMENTS ON THE BONDS
Section 2.01. Authorized Amount of Bonds. . . . . . . . . . . . . . . . . . .16
Section 2.02. Issuance of and Payments on Bonds . . . . . . . . . . . . . . .16
Section 2.03. Execution; Limited Obligation . . . . . . . . . . . . . . . . .18
Section 2.04. Authentication. . . . . . . . . . . . . . . . . . . . . . . . .19
Section 2.05. Forms of Bonds; Incorporation of Provisions . . . . . . . . . .19
Section 2.06. Delivery of Bonds . . . . . . . . . . . . . . . . . . . . . . .20
Section 2.07. Mutilated, Destroyed, Lost or Stolen Bonds. . . . . . . . . . .21
Section 2.08. Registration and Exchange of Bonds; Persons Treated as Owners .22
Section 2.09. Destruction of Bonds. . . . . . . . . . . . . . . . . . . . . .24
Section 2.10. Reserved. . . . . . . . . . . . . . . . . . . . . . . . . . . .24
Section 2.11. Temporary Bonds . . . . . . . . . . . . . . . . . . . . . . . .25
Section 2.12. Reserved. . . . . . . . . . . . . . . . . . . . . . . . . . . .25
Section 2.13. Nonpresentment of Bonds . . . . . . . . . . . . . . . . . . . .25
Section 2.14. Termination of Book-Entry System. . . . . . . . . . . . . . . .25
Section 2.15. Redemption Prior to Maturity. . . . . . . . . . . . . . . . . .26
Section 2.16. Notice of Redemption. . . . . . . . . . . . . . . . . . . . . .28
ARTICLE III
REMIC STATUS
Section 3.01. REMIC Election. . . . . . . . . . . . . . . . . . . . . . . . .30
Section 3.02. Tax Compliance. . . . . . . . . . . . . . . . . . . . . . . . .31
Section 3.03. Termination of the REMIC Upon Redemption of the Bonds . . . . .33
Section 3.04. [Reserved]. . . . . . . . . . . . . . . . . . . . . . . . . . .34
Section 3.05. REMIC Taxes . . . . . . . . . . . . . . . . . . . . . . . . . .34
Section 3.06. Limitation of Liability . . . . . . . . . . . . . . . . . . . .34
i
ARTICLE IV
GENERAL COVENANTS; REPRESENTATIONS AND WARRANTIES
Section 4.01. Payment of Principal and Interest . . . . . . . . . . . . . . .35
Section 4.02. Performance of Covenants. . . . . . . . . . . . . . . . . . . .35
Section 4.03. Instruments of Further Assurance. . . . . . . . . . . . . . . .35
Section 4.04. Recording and Filing. . . . . . . . . . . . . . . . . . . . . .36
Section 4.05. Rights Under the Notes and Loan Documents . . . . . . . . . . .36
Section 4.06. Creation of Liens; Sale of Notes. . . . . . . . . . . . . . . .37
Section 4.07. Books and Funds . . . . . . . . . . . . . . . . . . . . . . . .37
Section 4.08. Covenants Regarding the Residual Holders. . . . . . . . . . . .37
Section 4.09. Duties and Responsibilities of the Sponsor; Indemnification . .38
Section 4.10. List of Bondholders . . . . . . . . . . . . . . . . . . . . . .38
Section 4.11. Maintenance of Casualty Insurance Policy. . . . . . . . . . . .38
Section 4.12. Withholding Taxes . . . . . . . . . . . . . . . . . . . . . . .38
Section 4.13. Direction of Residual Holders for Certain Actions . . . . . . .38
Section 4.14. Moneys to Be Held in Trust. . . . . . . . . . . . . . . . . . .39
Section 4.15. General Representations and Warranties of Sponsor . . . . . . .39
Section 4.16. Special Purpose Representations and Covenants of the Sponsor. .40
Section 4.17 Sponsor Representations and Warranties Regarding Trust Estate .42
ARTICLE V
REVENUES AND TRUST FUNDS
Section 5.01. Creation of Funds and Accounts to be Held by the Trustee. . . .43
Section 5.02. Sponsor Contribution. . . . . . . . . . . . . . . . . . . . . .43
Section 5.03. Debt Service Fund . . . . . . . . . . . . . . . . . . . . . . .43
Section 5.04. The Redemption Fund . . . . . . . . . . . . . . . . . . . . . .44
Section 5.05. The Trust Expense Fund. . . . . . . . . . . . . . . . . . . . .44
Section 5.06. The Residual Fund . . . . . . . . . . . . . . . . . . . . . . .45
Section 5.07. Amounts Remaining in Funds. . . . . . . . . . . . . . . . . . .45
ARTICLE VI
INVESTMENT OF MONEYS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46
ARTICLE VII
DISCHARGE OF INDENTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . .48
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ARTICLE VIII
EVENTS OF DEFAULT; REMEDIES
Section 8.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . .50
Section 8.02. Waiver, Rescission and Annulment of Remedy Event. . . . . . . .50
Section 8.03. Collection of Indebtedness and Suits for Enforcement by
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . .50
Section 8.04. Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . .51
Section 8.05. Trustee May Enforce Claims Without Possession of Bonds. . . . .52
Section 8.06. Application of Moneys Collected . . . . . . . . . . . . . . . .52
Section 8.07. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . .53
Section 8.08. Unconditional Rights of Bondholders to Receive Principal and
Interest. . . . . . . . . . . . . . . . . . . . . . . . . . .53
Section 8.09. Restoration of Rights and Remedies. . . . . . . . . . . . . . .54
Section 8.10. Rights and Remedies Cumulative. . . . . . . . . . . . . . . . .54
Section 8.11. Delay or Omission Not Waiver. . . . . . . . . . . . . . . . . .54
Section 8.12. Control by the Bondholders Until There Are No Outstanding
Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . .54
Section 8.13. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . .55
Section 8.14. Sale of Trust Estate. . . . . . . . . . . . . . . . . . . . . .55
Section 8.15. Action on Bonds . . . . . . . . . . . . . . . . . . . . . . . .56
Section 8.16. Receiver. . . . . . . . . . . . . . . . . . . . . . . . . . . .56
Section 8.17. Notice of Defaults Under Section 8.01(c); Opportunity of
Sponsor and the Residual Holders to Cure Such Defaults. . . .56
ARTICLE IX
TRUSTEE
Section 9.01. Representations and Warranties of the Trustee; Acceptance
of the Trusts . . . . . . . . . . . . . . . . . . . . . . . .58
Section 9.02. Fees, Charges and Expenses of Trustee . . . . . . . . . . . . .62
Section 9.03. Notice of Default . . . . . . . . . . . . . . . . . . . . . . .63
Section 9.04. Intervention by Trustee . . . . . . . . . . . . . . . . . . . .63
Section 9.05. Successor Trustee . . . . . . . . . . . . . . . . . . . . . . .63
Section 9.06. Resignation by Trustee. . . . . . . . . . . . . . . . . . . . .63
Section 9.07. Removal of Trustee. . . . . . . . . . . . . . . . . . . . . . .64
Section 9.08. Appointment of Successor Trustee; Temporary Trustee . . . . . .64
Section 9.09. Concerning Any Successor Trustee. . . . . . . . . . . . . . . .65
Section 9.10. Designation and Succession of Paying Agents . . . . . . . . . .65
iii
ARTICLE X
SUPPLEMENTAL INDENTURES
Section 10.01. Supplemental Indentures Without Consent of Bondholders. . . . .67
Section 10.02. Supplemental Indentures With Consent of Bondholders . . . . . .68
Section 10.03. Consent of the Trustee or the Manager . . . . . . . . . . . . .69
Section 10.04. Execution of Supplemental Indentures. . . . . . . . . . . . . .69
Section 10.05. Effect of Supplemental Indentures . . . . . . . . . . . . . . .70
Section 10.06. Reference in Bonds and Certificates to Supplemental Indentures.70
ARTICLE XI
AMENDMENT OF NOTES; LOAN DOCUMENTS
Section 11.01. Amendments to Notes and Loan Documents Without Consent
of Bondholders. . . . . . . . . . . . . . . . . . . . . . . .71
Section 11.02. Amendments to Notes and Loan Documents With Consent of
Bondholders . . . . . . . . . . . . . . . . . . . . . . . . .71
Section 11.03. Execution of Amendments . . . . . . . . . . . . . . . . . . . .71
ARTICLE XII
CERTIFICATES OF RESIDUAL INTEREST
Section 12.01. Creation of Residual Interest; Limited Rights of Sponsor;
Form and Execution of Certificates. . . . . . . . . . . . . .73
Section 12.02. Registration, Transfer and Exchange of Certificates . . . . . .73
Section 12.03. Lost, Stolen, Destroyed or Mutilated Certificates . . . . . . .76
Section 12.04. Communications With Other Residual Holders. . . . . . . . . . .77
Section 12.05. Initial Issuance of Certificates. . . . . . . . . . . . . . . .77
Section 12.06. Payments, Distributions and Reports . . . . . . . . . . . . . .77
Section 12.07. [Reserved]. . . . . . . . . . . . . . . . . . . . . . . . . . .78
Section 12.08. Covenants of Residual Holders . . . . . . . . . . . . . . . . .78
Section 12.09. [RESERVED]. . . . . . . . . . . . . . . . . . . . . . . . . . .79
Section 12.10. Liability for Unclaimed Moneys Under the Indenture. . . . . . .79
Section 12.11. Appointment of the Manager. . . . . . . . . . . . . . . . . . .79
Section 12.12. Duties of the Manager . . . . . . . . . . . . . . . . . . . . .79
Section 12.13. Other Duties of the Manager . . . . . . . . . . . . . . . . . .80
Section 12.14. Cooperation of Parties; Furnishing of Information . . . . . . .81
Section 12.15. Manager Compensation. . . . . . . . . . . . . . . . . . . . . .81
Section 12.16. Covenants of the Manager. . . . . . . . . . . . . . . . . . . .82
Section 12.17. Manager May Seek Instructions . . . . . . . . . . . . . . . . .82
Section 12.18. Obligations of Residual Holders . . . . . . . . . . . . . . . .83
Section 12.19. Indemnification . . . . . . . . . . . . . . . . . . . . . . . .83
iv
Section 12.20. Independence of the Manager . . . . . . . . . . . . . . . . . .84
Section 12.21. Termination of the Manager. . . . . . . . . . . . . . . . . . .84
Section 12.22. Limitation of Liability of the Manager. . . . . . . . . . . . .85
ARTICLE XIII
MISCELLANEOUS
Section 13.01. Compliance Certificates and Opinions. . . . . . . . . . . . . .87
Section 13.02. Form of Documents Delivered to Trustee. . . . . . . . . . . . .87
Section 13.03. Acts of Bondholders . . . . . . . . . . . . . . . . . . . . . .88
Section 13.04. Notices to Holders; Waiver. . . . . . . . . . . . . . . . . . .88
Section 13.05. Legal Holidays. . . . . . . . . . . . . . . . . . . . . . . . .89
Section 13.06. Nature of Interest in Trust Estate. . . . . . . . . . . . . . .89
Section 13.07. Severability. . . . . . . . . . . . . . . . . . . . . . . . . .90
Section 13.08. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . .90
Section 13.09. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . .90
Section 13.10. Applicable Provisions of Law. . . . . . . . . . . . . . . . . .90
Section 13.11. Captions; References in Indenture . . . . . . . . . . . . . . .90
Section 13.12. Parties Interested Herein . . . . . . . . . . . . . . . . . . .91
TESTIMONIUM
SIGNATURES
EXHIBIT A CLASS A BOND FORM
EXHIBIT B CLASS B BOND FORM
EXHIBIT C RESIDUAL CERTIFICATE FORM
EXHIBIT D CERTIFICATE TRANSFER AFFIDAVIT
EXHIBIT E CERTIFICATE TRANSFEREE'S AGREEMENT FORM
EXHIBIT F LOAN DOCUMENTS
EXHIBIT G SCHEDULE OF AMOUNTS TO BE RESERVED AGAINST FUTURE BOND
PRINCIPAL PAYMENTS
EXHIBIT H CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION
OF TRANSFER OF BONDS FORM
v
TRUST INDENTURE
This TRUST INDENTURE is made and entered into as of March 1, 1996 (the
"Indenture") by and between BFC FINANCE CORP., a Delaware corporation (together
with any successor to its rights, duties and obligations hereunder, the
"Sponsor"), and SOUTHTRUST BANK OF ALABAMA, NATIONAL ASSOCIATION, a national
banking association duly organized and existing under the laws of the United
States of America, as trustee, bond registrar and paying agent (together with
any successor hereunder, the "Trustee"). CAPITALIZED TERMS HEREIN, UNLESS
OTHERWISE DEFINED, SHALL HAVE THE MEANINGS SET FORTH IN ARTICLE I.
R E C I T A L S :
1. Parcel 49C Limited Partnership, a District of Columbia limited
partnership ("49C"), has acquired fee simple title to certain real property in
the District of Columbia located at 000 00xx Xxxxxx, X.X. and proposes to
construct thereon an office building to be known as Portals II, containing an
aggregate of approximately 545,000 square feet of net usable area, a detached
parking garage and certain other related facilities (such real estate and the
improvements to be constructed thereon, the "Project"). 49C has entered into a
lease (Lease No. GS-11B-40155, effective January 3, 1996, the "GSA Lease") with
the United States of America acting through the General Services Administration
(the "GSA") for a total of 449,859 net usable square feet of office and related
space to be located within such office building and constructed, owned and
managed by 49C (the "GSA Leased Space"). Following construction, the GSA Leased
Space is expected to be used initially by the Federal Communications Commission.
2. In connection with the refinancing of the acquisition of the real
estate related to the Project, 49C has executed and delivered an amended and
restated promissory note evidencing an acquisition loan in the amount of
$27,087,366.74 (the "Acquisition Loan") to Building Finance Company of
Tennessee, Inc. (the "Lender").
3. To finance the construction of the improvements related to the
Project, 49C has entered into a Loan Agreement dated as of March 1, 1996 with
the Lender (the "Loan Agreement"), pursuant to which 49C has borrowed the sum of
$99,000,000 from the Lender.
4. To evidence the Acquisition Loan, 49C has executed and delivered a
note in the amount of $27,087,366.74 (the "Acquisition Note"). To secure its
obligations under the Acquisition Note, 49C has executed and delivered various
documents specified therein (collectively and as further described on Exhibit F,
the "Acquisition Loan Documents"). Pursuant to the Construction Loan Agreement,
49C has executed and delivered to the Lender a note in the amount of $99,000,000
(the "Construction Note," and together with the Acquisition Note, the "49C
Notes") to memorialize its obligations thereunder and various other documents
specified therein securing or relating to the indebtedness evidenced by the
Construction Note (collectively and as further described on Exhibit F, the
"Construction Loan Documents," and
together with the Acquisition Loan Documents, the "49C Loan Documents"). The
49C Notes are primarily secured by deeds of trust (collectively, the "Deed of
Trust") on the Project and by an assignment of the lease payments to be made
under the GSA Lease.
5. The base rent payable under the GSA Lease is based on an initial
annual rental rate of $38.85 per net usable square foot for the first 287,483 of
net usable square feet of space leased and $37.95 per net usable square foot for
the remaining 162,376 of net usable square feet leased for a total initial
amount of $17,330,883.75 per year, or $1,444,240.31 per month. The Government
may deduct from the base rent during any year of the term of the GSA Lease an
amount which will not exceed $8.50 per net usable square foot (which amount may
be increased each year in accordance with a formula set forth in the GSA Lease
using the same methodology for calculating the increase in the rent for
operating costs set forth in the GSA Lease) for 49C's failure to perform its
obligations under the GSA Lease. Consequently, the total base rent not subject
to set-off is $13,507,082.22 per year, or $1,125,590.19 per month. Full rent is
payable in equal monthly installments in arrears commencing March 1, 1998.
6. To finance the loans to 49C, the Lender has formed the Sponsor as a
special purpose entity and absolutely sold and assigned to the Sponsor all of
its rights, title and interest in and to the 49C Notes and the 49C Loan
Documents pursuant to a Sale Agreement dated as of March 1, 1996 between the
Lender and the Sponsor (the "Sale Agreement") (excluding scheduled interest
payments on the 49C Notes for interest which accrues through January 31, 1998
and certain other rights with respect to construction of the Project as therein
described).
7. Concurrently with such absolute sale and assignment, the Sponsor is
lending to DCDC II, Inc., a Colorado corporation ("DCDC II"), the sum of
$9,310,689.07, in exchange for which the Sponsor will receive from DCDC II a
note in such principal amount (the "DCDC II Note"). The DCDC II Note will be
secured by various documents specified therein, including a deed of trust on
approximately 300 acres of undeveloped land in Castle Rock, Colorado (the "DCDC
II Deed of Trust") and a collateral pledge agreement (such documents
collectively and as further described on Exhibit F, the "DCDC II Loan
Documents").
8. The Sponsor now desires to deposit the 49C Notes, the DCDC II Note
(collectively, the "Notes"), the 49C Loan Documents and the DCDC II Loan
Documents (collectively, the "Loan Documents") into the trust created hereby and
to issue various classes of debt secured by the Notes, the payments thereon
(excluding scheduled interest payments on the 49C Notes for interest which
accrues through January 31, 1998) (the "Note Payments"), the Loan Documents and
the other security constituting the Trust Estate.
9. 49C shall make Note Payments from the sources (primarily payments on
the GSA Lease) and in the manner provided in the Loan Agreement. To facilitate
such payments, SouthTrust Bank of Alabama, National Association shall establish,
hold and administer the Income Account and the Cash Flow Account specified in
the Loan Agreement as Approved Bank under the Loan Agreement and not in its
capacity as Trustee hereunder.
2
10. The Sponsor has determined (i) to issue and sell $142,000,000
aggregate original principal amount REMIC Lease-Backed Bonds, Series 1996 (the
"Bonds") in two classes as hereafter described and (ii) to cause to be issued,
concurrent with issuance and sale of the Bonds, the Series 1996 REMIC Residual
Certificates (the "Certificates") evidencing ownership of all of the Residual.
The initial Holder of all the Certificates shall be the Sponsor.
11. The Bonds shall be issued in two classes. The Class A Bonds shall be
issued in the total original principal amount of $74,925,000 and the Class B
Bonds (collectively with the Class A Bonds, the "Bonds") shall be issued in the
total original principal amount of $67,075,000. The Class A Bonds shall be sold
in a public offering and the Class B Bonds shall be placed with BFC Guaranty
Corp., as assignee of the Lender.
12. The Class A Bonds, Class B Bonds and the Certificates shall be in
substantially the forms set forth in Exhibits A, B and C to this Indenture, with
necessary and appropriate variations, omissions and insertions as permitted or
required by this Indenture.
13. All things necessary to make the Bonds, when authenticated by the
Trustee and issued as in this Indenture provided, the valid, binding and legal
special and limited obligations of the Sponsor according to the import thereof,
and to constitute this Indenture a valid assignment and Grant of the Trust
Estate; and for the creation, execution and delivery of this Indenture, and the
issuance of the Bonds and the Certificates, subject to the terms hereof, have in
all respects been duly authorized.
NOW, THEREFORE, THIS TRUST INDENTURE WITNESSETH:
GRANTING CLAUSES
The Sponsor, in consideration of the premises and the acceptance by the
Trustee of the trusts hereby created and of the acceptance of the Bonds and the
Certificates by the owners thereof, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, in order to secure
the payment of the principal of and interest on the Bonds according to their
tenor and effect, to provide for the Grant of the Residual and to secure the
performance and observance by the Sponsor of all the covenants expressed herein
and in the Bonds, does hereby irrevocably Grant to the Trustee, and its
successors in trust and assigns forever, all of the Sponsor's right, title and
interest in and to (a) the Notes and the Note Payments, (b) the Loan Documents,
(c) all moneys, securities and investments deposited with the Trustee on the
Closing Date or thereafter and held in all Trust Funds created hereunder,
(d) the Casualty Insurance Policy, (e) its security interest in the Income
Account and the Cash Flow Account, (f) all proceeds of the foregoing, including,
without limitation, all proceeds of the conversion, voluntary or involuntary, of
any of the foregoing into cash or other liquid property, tangible and
intangible, and (g) all other property, tangible and intangible, from time to
time deposited with or pledged to the Trustee in accordance with this Indenture
(collectively, the "Trust Estate").
3
TO HAVE AND TO HOLD all and singular the Trust Estate, whether now owned or
hereafter acquired, unto the Trustee and its successors in trust and assigns
forever;
IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth for the
benefit and security of all present and future owners of the Bonds, as their
respective interests may appear, without preference of any Bond over any other
except for the availability of certain different remedies among the Holders of
the Class A Bonds and the Class B Bonds, and for enforcement of the payment of
the Bonds in accordance with their terms, and all other sums payable hereunder
or on the Bonds and for the performance of and compliance with the obligations,
covenants and conditions of this Indenture, as if all the Bonds at any time
Outstanding had been authenticated, executed and delivered simultaneously with
the execution and delivery of this Indenture, all as herein set forth;
PROVIDED, HOWEVER, that, if the Residual Holders shall cause to be paid the
principal of and interest on the Bonds due thereon, at the times and in the
manner mentioned in such Bonds according to the true intent and meaning thereof,
and shall cause the payments to be made as required under the provisions of this
Indenture, or shall provide, as provided for in Article VII of this Indenture,
for the payment thereof, and there shall have been well and truly kept,
performed and observed all the covenants and conditions pursuant to the terms of
this Indenture, and there shall have been paid or caused to be paid to the
Trustee and any Paying Agent all sums of money due or to become due in
accordance with the terms and provisions hereof, then, upon the last to occur of
such events, this Indenture and the rights hereby Granted with respect to the
Bonds shall cease, determine and be void, otherwise this Indenture to be and
remain in full force and effect.
AND, PROVIDED, FURTHER, the Sponsor irrevocably Grants, subject to the
rights specifically reserved to the Sponsor under this Indenture, all of its
rights, titles and interests in the Residual to the Residual Holders.
Notwithstanding anything herein to the contrary, such irrevocable sale,
transfer, assignment and Grant shall at all times be subject and subordinate to
the rights of the Trustee and the Bondholders in and to the Trust Estate as
provided in this Indenture. In no event shall the Sponsor be entitled to retain
any economic benefits from the exercise of any rights, duties and obligations
under this Indenture other than its rights, if any, to indemnification.
AND, PROVIDED, FURTHER, the Trustee agrees to accept receipt of the Trust
Estate and the Grants and assignments referred to herein, and declares that it
holds and will hold, the same for the sole benefit of Bondholders and the
Residual Holders, as their respective interests may appear.
THIS TRUST INDENTURE FURTHER WITNESSETH, and it is expressly declared, that
all the Bonds and Certificates issued and secured hereunder are to be issued,
authenticated and delivered, and all said property, rights and interests,
including, without limitation, the amounts hereby assigned and Granted, are to
be dealt with and disposed of, under, upon and subject to the terms, conditions,
stipulations, covenants, agreements, trusts, uses and purposes
4
hereinafter expressed, and the Sponsor has agreed and covenanted, and does
hereby agree and covenant, with the Trustee, the respective owners of the
Bonds and the Residual Holders from time to time, as follows (subject,
however, to the provisions of Section 2.03):
5
ARTICLE I
DEFINITIONS
Except as otherwise specified or as the context may otherwise require, the
following terms have the respective meanings set forth below 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.
"ACCOUNTANT" shall mean a person or firm engaged in the practice of
accounting who is a nationally recognized certified public accountant approved
by the Trustee and who (except when this Indenture provides that an Accountant
must be Independent) may be employed by the Sponsor, the Trustee or the Residual
Holders.
"ACQUISITION LOAN" shall have the meaning set forth in the Recitals.
"ACQUISITION LOAN DOCUMENTS" shall mean those documents specified as such
on Exhibit F hereto.
"ACQUISITION NOTE" shall have the meaning set forth in the Recitals.
"AUTHORIZED OFFICER" shall mean, with respect to the Sponsor, the
President, the Vice President or the Secretary of the Sponsor or any other
Persons authorized by resolution of the Sponsor to perform an act or sign a
document.
"BENEFICIAL OWNER" shall mean any purchaser of a Bond and others who
acquire beneficial ownership interest in a Bond held by the Securities
Depository. In determining the Beneficial Owner of any Bond, the Trustee may
rely exclusively upon written representations made, and information given, to
the Trustee by the Securities Depository or its Participants through the
Securities Depository with respect to any Bond held by the Securities Depository
in which a beneficial ownership interest is claimed.
"BONDHOLDER" or "HOLDER" shall mean the Person in whose name a Bond is
registered in the Bond Register.
"BOND PAYMENT DATE" shall mean any Interest Payment Date and any other date
on which the principal, premium (if any) or interest on the Bonds to be paid to
the Owners thereof (whether at maturity thereof, or upon prior redemption or
acceleration).
"BOND REGISTER" shall mean the register for the registration of the Bonds
established by the Trustee pursuant to Section 2.08 hereof.
"BOND REGISTRAR" shall mean the Trustee or any other entity subsequently
appointed to serve in such capacity.
6
"BONDS" shall mean the $142,000,000 aggregate initial principal amount of
REMIC Lease-Backed Bonds, Series 1996, issued pursuant to this Indenture,
consisting of the Class A Bonds and the Class B Bonds.
"BUSINESS DAY" shall mean any day that is not a Saturday or Sunday or other
day on which banking institutions in the city in which the Corporate Trust
Office is located or in New York, New York, are authorized or obligated by law
or executive order to be closed or any day on which the payment system of the
Federal Reserve is not operational.
"CASH FLOW ACCOUNT" shall mean the Cash Flow Account specified in the Loan
Agreement and held by SouthTrust Bank of Alabama, National Association as
Approved Bank thereunder.
"CASTLE ROCK PLEDGE AGREEMENT" shall mean the Bond Pledge and Security
Agreement dated as of March 1, 1996 among BFC Guaranty Corp., the Trustee and
SouthTrust Bank of Alabama, National Association, in its capacity as trustee for
the Castle Rock Ranch Public Improvements Authority Public Facilities Revenue
Bonds, Series 1996.
"CASUALTY INSURANCE POLICY" shall mean the casualty insurance policy in the
amount of $151,000,000 issued by USF&G to insure the Project with respect to
certain casualty events and rental interruption events described therein and
naming the Trustee as insured thereunder, and any replacement policy delivered
to the Trustee pursuant to Section 4.11.
"CERTIFICATE OF RESIDUAL INTEREST" or "CERTIFICATE" shall mean each
certificate representing a fractional undivided beneficial ownership interest in
the Residual in substantially the form attached hereto as Exhibit C.
"CERTIFICATE REGISTER" shall mean the register for the registration of the
Certificates established by the Trustee pursuant to Section 12.02(a) hereof.
"CLASS" shall mean any of the 2 classes (A or B) designated for issuance of
the Bonds pursuant to Section 2.02.
"CLASS A BONDS" shall mean the Bonds designated as such authorized pursuant
to Section 2.02.
"CLASS B BONDS" shall mean the Bonds designated as such authorized pursuant
to Section 2.02.
"CLOSING DATE" shall mean March 29, 1996, the date on which the Bonds and
the Certificates are first executed, authenticated and delivered.
"CODE" shall mean the Internal Revenue Code of 1986, as amended, together
with corresponding and applicable final, temporary or proposed regulations and
revenue rulings issued
7
or amended with respect thereto by the Treasury Department or the Internal
Revenue Service of the United States, to the extent applicable to the Bonds
or the REMIC election.
"CONSTRUCTION LOAN DOCUMENTS" shall mean those documents specified as such
on Exhibit F hereto.
"CONSTRUCTION NOTE" shall have the meaning set forth in the Recitals.
"CORPORATE TRUST OFFICE" shall mean the principal corporate trust office of
the Trustee, located at Post Office Box 2554, 000 Xxxxxx Xxxx Xxxxx, Xxxxx
Xxxxx, Xxxxxxxxxx, Xxxxxxx 00000; Attention: Corporate Trust Department, or such
other address as the Trustee may designate from time to time by notice to the
Bondholders, the Residual Holders and the Sponsor, or the principal corporate
trust office of any successor Trustee.
"DCDC II" shall mean DCDC II, Inc., a Colorado corporation, its successors
and assigns.
"DCDC II DEED OF TRUST" shall have the meaning set forth in the Recitals.
"DCDC II LOAN DOCUMENTS" shall mean those documents specified as such on
Exhibit F hereto.
"DCDC II NOTE" shall have the meaning set forth in the Recitals.
"DEBT SERVICE FUND" shall mean the fund of that name established pursuant
to Section 5.01.
"DEFAULT" shall mean any occurrence which is, or, with notice or lapse of
time or both, would become, an Event of Default.
"DISQUALIFIED ORGANIZATION" shall mean either (i) the United States, any
State or political subdivision thereof, any foreign government, any
international organization, or any agency or instrumentality of any of the
foregoing, (ii) any organization (other than a cooperative described in Section
521 of the Code) which is exempt from the tax imposed by Chapter 1 of the Code
unless such organization is subject to the tax imposed by Section 511 of the
Code or (iii) any organization described in Section 1381(a)(2)(C) of the Code. A
corporation will not be treated as an instrumentality of the United States or of
any State or political subdivision thereof if all of its activities are subject
to tax, and, with the exception of the FHLMC, a majority of its board of
directors is not selected by such governmental unit.
"DTC REPRESENTATION LETTER" shall mean the agreement among the Sponsor, the
Trustee and the Securities Depository with respect to the deposit of Bonds
therewith.
8
"ELIGIBLE ACCOUNT" shall mean a segregated trust account maintained with
the corporate trust department of a federal depository institution or state-
chartered depository institution subject to regulations regarding fiduciary
funds on deposit similar to Title 12 of the Code of Federal Regulations Section
9.10(b) which has corporate trust powers, acting in its fiduciary capacity.
"ERISA" shall mean the provisions of the Employee Retirement Income
Security Act of 1974 and the related provisions of Code Section 4975, as amended
from time to time, and any applicable rule, regulation or order promulgated
thereunder.
"EVENT OF DEFAULT" shall mean any event specified in Section 8.01.
"FHLMC" shall mean the Federal Home Loan Mortgage Corporation, a
corporation organized and existing under the laws of the United States of
America, and its successors.
"49C" shall mean Parcel 49C Limited Partnership, its successors and
assigns.
"GOVERNMENT SECURITIES" shall mean, and includes, any of the following
investments, to the extent permitted or authorized by the laws of the State at
the time purchased by the Trustee:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (including obligations issued or held in book-entry form on the
books of the Department of the Treasury of the United States of America);
(b) bonds, debentures, notes or other evidence of indebtedness issued
or guaranteed by any of the following federal agencies and provided such
obligations are backed by the full faith and credit of the United States of
America (stripped securities are only permitted if they have been stripped
by the agency itself):
(i) U.S. Export-Import Bank (direct obligations or fully
guaranteed certificates of beneficial ownership);
(ii) Farmers Home Administration (certificates of beneficial
ownership);
(iii) Federal Financing Bank;
(iv) General Services Administration participation certificates;
(v) Government National Mortgage Association ("GNMA") guaranteed
mortgage-backed bonds and pass through certificate obligations;
(vi) U.S. Maritime Administration guaranteed Title XI financing
obligations; or
9
(vii) U.S. Department of Housing and Urban Development (HUD)
project notes, local authority bonds, new communities debentures (U.S.
guaranteed) and U.S. public housing notes and bonds -- U.S. government
guaranteed public housing notes and bonds; and
(c) any money market fund which invests solely in the types of
securities described in clauses (a) and (b) above, provided such fund is
rated AAAm or AAAmG by the Rating Agency.
"GRANT" shall mean to grant, bargain, sell, warrant, alienate, demise,
release, convey, assign, transfer, mortgage, pledge, create and grant a security
interest or ownership in and right of setoff against, deposit, set over and
confirm. A Grant of the Sponsor's rights with respect to the Trust Estate and
the Residual hereunder and in and to amounts released from the lien of this
Indenture or any other instruments shall include all rights, powers and options
thereof.
"GSA LEASE" shall have the meaning set forth in the Recitals.
"HOLDER" shall mean a Bondholder, a Residual Holder, or both, as the
context requires.
"INCOME ACCOUNT" shall mean the Income Account specified in the Loan
Agreement to be held by SouthTrust Bank of Alabama, National Association as
Approved Bank thereunder.
"INDENTURE" shall mean 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.
"INDEPENDENT" shall mean, when used with respect to any specified Person,
such a Person who (i) is in fact independent of the Sponsor, the Trustee, any
Residual Holder or the Manager or any affiliate thereof, (ii) does not have any
direct or any material indirect financial interest in the Sponsor, the Trustee,
any Residual Holder or the Manager or in an affiliate thereof, and (iii) is not
connected with the Sponsor, the Trustee, any Residual Holder or the Manager 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 designated or appointed in an Officer's Certificate and
approved by the Trustee in the exercise of reasonable due care and such opinion
or certificate shall state that the signer has read this definition and that the
signer is Independent within the meaning hereof.
"INDEPENDENT DIRECTOR" shall mean, with respect to the Sponsor, an
individual who is not at the time of such individual's appointment as a director
of the Sponsor, and has not been at any time during the preceding five years,
and does not become subsequently, (a) a direct or indirect legal or beneficial
owner in the Sponsor or any of its affiliates, (b) a creditor, supplier,
employee, officer, director (other than during such individual's tenure as
director of the Sponsor) family member, manager or contractor of the Sponsor or
any of its affiliates, or (c) a person
10
who controls (whether directly, indirectly or otherwise) the Sponsor or its
affiliates or any creditor, supplier, employee, officer, director, manager or
contractor of the Sponsor or its affiliates.
"INTEREST PAYMENT DATE" shall mean, with respect to the Class A Bonds, each
June 1 and December 1, commencing December 1, 1996, and with respect to the
Class B Bonds, each June 1 and December 1, commencing June 1, 1998.
"INVESTMENT AGREEMENT" means each agreement between the Trustee and each
Investment Agreement provider, providing for the deposit and investment of
monies held under the Indenture, including the Debt Service Deposit Agreement
dated as of March 29, 1996 among the Trustee, the Sponsor and Xxxxxx Brothers
Special Financing Inc., a Delaware corporation, as to the monies deposited in
the Debt Service Fund, or any substituted agreement which shall be in
substantially the same form as the initial Debt Service Deposit Agreement and
shall have no adverse impact on the Rating Agency's rating on the Bonds as
determined by written confirmation of the Rating Agency.
"LENDER" shall mean Building Finance Company of Tennessee, Inc., a
Tennessee corporation, its successors and assigns.
"LOAN AGREEMENT" shall have the meaning set forth in the Recitals.
"LOAN DOCUMENTS" shall mean the documents specified on Exhibit F hereto as
the same may be amended or supplemented in accordance with Article XI.
"MAJORITY RESIDUAL HOLDERS" shall mean the Holders of a majority in
interest of Certificates.
"MANAGER" shall mean, initially, the Lender and any successor entity
assuming the duties of the Manager specified in Article XII hereof.
"1933 ACT" shall mean the Securities Act of 1933, as amended.
"NON-DISQUALIFICATION OPINION" shall mean, with respect to any action
proposed to be taken under this Indenture, an Opinion of Counsel to the effect
that the taking of such action will not cause the Trust Estate to fail to
qualify as a REMIC at any time while any Bonds are Outstanding and will not
result in the imposition of a tax pursuant to Section 860F(a) of the Code or
otherwise subject the Trust Estate to taxation.
"NOTE PAYMENT" shall have the meaning set forth in the Recitals.
"NOTES" shall mean the Acquisition Note, the Construction Note and the
DCDC II Note.
11
"NOTICE ADDRESS" shall mean:
(a) As to the Sponsor:
BFC Finance Corp.
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attention: President
(b) As to the Trustee:
SouthTrust Bank of Alabama, National Association
Post Office Box 2554
000 Xxxxxx Xxxx Xxxxx
Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Corporate Trust Office
(c) As to the Rating Agency:
Standard & Poor's Ratings Services
00 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Public Finance Group
(d) As to the Manager:
Building Finance Company of Tennessee, Inc.
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attention: President
The Sponsor, the Rating Agency, the Manager or the Trustee may, by notice given
to the parties hereto and to the Manager and the Rating Agency, designate any
further or different addresses to which subsequent notices, certificates or
other communications shall be sent.
"OFFICER'S CERTIFICATE" shall mean a certificate executed by an Authorized
Officer.
"OPINION OF COUNSEL" shall mean a written opinion signed by any attorney or
firm of attorneys (who may be employed by or of counsel to the Sponsor, the
Trustee, a Residual Holder or the Manager or an attorney or firm of attorneys
retained by any of them in connection with other matters) licensed to practice
in the state in which such attorney or firm maintains an office (and, if the
opinion is with respect to an interpretation of federal tax laws or regulations
12
or any pledge under or amendment of this Indenture, is also a nationally
recognized Independent attorney or firm of attorneys experienced in such
matters), selected by or employed on behalf of the Sponsor, the Trustee, a
Residual Holder or the Manager and who shall be reasonably satisfactory to the
Trustee. Whenever an Opinion of Counsel is required hereunder, such opinion may
rely on the opinions of other counsel who are so admitted.
"OUTSTANDING" shall mean, with respect to all Bonds, as of the date of
determination, all Bonds theretofore authenticated and delivered under this
Indenture, except:
(a) Bonds theretofore cancelled by the Bond Registrar or delivered to
the Bond Registrar for cancellation;
(b) Bonds for the payment or redemption of which cash funds or
direct, noncallable Government Securities of the type described in (a) or
(b) of the definition of "GOVERNMENT SECURITIES" or any combination thereof
in the necessary amount shall have been deposited with the Trustee or any
Paying Agent (whether upon or prior to the stated maturity or redemption
date of any such Bonds) as provided in Article VII; provided that, if such
Bonds are to be redeemed prior to the stated maturity thereof, notice of
such redemption shall have been given or arrangements satisfactory to the
Trustee shall have been made therefor, or waiver of such notice
satisfactory in form to the Trustee shall have been filed with the Trustee;
and
(c) Bonds in exchange for or in lieu of which other Bonds have been
authenticated and delivered pursuant to this Indenture.
"PARTICIPANTS" shall mean brokers, dealers, banks and other financial
institutions and other Persons for whom, from time to time, the Securities
Depository effects book-entry transfers and pledges of securities deposited with
the Securities Depository.
"PAYING AGENT" shall mean any bank or trust company designated pursuant to
Section 9.10 to serve as a paying agency or place of payment for the Bonds and
any successors designated pursuant to this Indenture. Unless otherwise
designated by the Sponsor, the Trustee shall be the Paying Agent.
"PERSON" shall mean 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.
"PROCEEDING" shall mean any suit in equity, law or other judicial or
administrative proceeding.
"PROJECT" shall have the meaning set forth in the Recitals.
13
"RATING AGENCY" shall mean Standard & Poor's Ratings Services. If Standard
& Poor's Ratings Services is no longer rating any of the Bonds, "Rating Agency"
means any nationally recognized statistical rating organization which is then
rating the Bonds.
"RECORD DATE" shall mean the 15th day preceding each Interest Payment Date.
"REDEMPTION FUND" shall mean the Fund of that name established pursuant to
Section 5.01.
"REMIC" shall mean the segregated asset pool comprising the Trust Estate
for which an election to be taxed as a "real estate mortgage investment conduit"
under the Code will be made pursuant to Section 3.01 hereof.
"REPLACEMENT BONDS" shall mean the certificated Bonds authenticated and
delivered by the Trustee pursuant to Section 2.14(b).
"RESIDUAL" shall mean the economic benefit to the Sponsor of the Trust
Estate arising by, through or under this Indenture, including the amounts of
cash representing that portion of the Trust Estate which is in excess of the
amounts required to be applied from the Trust Estate to pay or provide for
payment of the Bonds and expenses hereunder (the "Excess Cash Flow") in
accordance with the terms of this Indenture, which Residual is being assigned by
the Sponsor pursuant to this Indenture.
"RESIDUAL DISTRIBUTION DATE" shall mean each June 1 and December 1,
commencing December 1, 1996.
"RESIDUAL FUND" shall mean the Fund of that name established pursuant to
Section 5.01.
"RESIDUAL HOLDER" shall mean the owner of a fractional undivided interest
in the Residual pursuant to this Indenture.
"RESIDUAL RECORD DATE" shall mean the Business Day before a Residual
Distribution Date.
"SALE AGREEMENT" shall have the meaning set forth in the Recitals.
"SECURITIES DEPOSITORY" shall mean, with respect to any Class of Bonds to
be issued in book entry form, The Depository Trust Company, and its successors
and assigns or a successor clearing agency designated pursuant to Section 2.14
and its successors and assigns.
"SPECIAL TAX COUNSEL" shall mean Xxxxx Xxxx.
"SPONSOR" shall mean BFC Finance Corp., a Delaware corporation, its
successors and assigns.
14
"SPONSOR'S CONSENT" shall mean the Waiver of Notice and Unanimous Written
Consent of the Board of Directors of the Sponsor dated March 21, 1996,
authorizing the issuance of the Bonds and the Certificates and the execution and
delivery of this Indenture and certain related documents.
"STATE" shall mean the State of Delaware.
"TRUSTEE" shall mean SouthTrust Bank of Alabama, National Association,
solely in its capacity as trustee, paying agent and bond registrar hereunder,
and its successors and assigns.
"TRUST ESTATE" shall mean the property, rights, moneys, securities and
other amounts Granted to the Trustee pursuant to the Granting Clauses hereof and
all other money, instruments or property subject to the lien of this Indenture.
"TRUST EXPENSE FUND" shall mean the Fund of that name established pursuant
to Section 5.01.
"TRUST FUNDS" shall mean the funds designated as such in Section 5.01.
"TRUST OFFICER" shall mean any officer of the Trustee or the Co-Trustee so
designated by the Trustee or the Co-Trustee.
"UCC" shall mean the Uniform Commercial Code as enacted and in effect in
the State, as applicable, as amended from time to time.
"UNDERWRITER" shall mean Xxxxxx Brothers Inc.
(End of Article I)
15
ARTICLE II
THE BONDS AND PAYMENTS ON THE BONDS
Section 2.01. AUTHORIZED AMOUNT OF BONDS.
No Bonds may be issued under the provisions of this Indenture except in
accordance with this Article II. The total aggregate principal amount of Bonds
that may be issued and authenticated hereunder is expressly limited to an
original face amount of $142,000,000. No additional Bonds may be issued except
for Bonds authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of other Bonds as provided in Sections 2.05, 2.07,
2.08, 2.11 and 2.14.
Section 2.02. ISSUANCE OF AND PAYMENTS ON BONDS.
(a) There is hereby authorized to be issued upon satisfaction of the
conditions specified in Section 2.06 Bonds designated "BFC Finance Corp. REMIC
Lease-Backed Bonds, Series 1996," in two classes designated "Federal Lease-
Backed Class A," and "Federal Lease-Backed Class B," in the initial aggregate
principal amount of $142,000,000.
(b) The Bonds initially shall be issued only as fully registered Bonds
without coupons. Each Class of Bonds shall mature on the dates and in the
principal amounts and shall bear interest on the Outstanding principal amounts
thereof at the interest rates per annum set forth below:
CLASS A BONDS
Original Interest
Principal Rate
Stated Maturities Amount (Per Annum)
----------------- ----------- -----------
December 1, 1998 $ 2,630,000 6.125%
December 1, 1999 1,990,000 6.250
December 1, 2000 2,115,000 6.375
December 1, 2001 2,250,000 6.500
December 1, 2002 2,400,000 6.625
December 1, 2008 18,245,000 6.875
December 1, 2017 45,295,000 7.375
16
CLASS B BONDS
Original Interest
Principal Rate
Stated Maturities Amount (Per Annum)
----------------- ----------- -----------
December 1, 1998 $ 5,000 5.750%
December 1, 1999 1,985,000 5.750
December 1, 2000 2,100,000 5.750
December 1, 2001 2,220,000 5.750
December 1, 2002 2,345,000 5.750
December 1, 2003 2,480,000 5.900
December 1, 2004 2,625,000 6.000
December 1, 2005 2,785,000 6.100
December 1, 2006 2,955,000 5.700
December 1, 2007 3,120,000 6.300
December 1, 2008 3,315,000 6.400
December 1, 2009 3,530,000 6.500
December 1, 2010 3,760,000 6.375
December 1, 2011 4,000,000 6.375
December 1, 2012 4,255,000 6.250
December 1, 2013 4,520,000 6.250
December 1, 2014 4,800,000 6.250
December 1, 2015 5,100,000 6.250
December 1, 2016 5,420,000 6.250
December 1, 2017 5,755,000 6.250
(c) Each Class of Bonds shall be numbered from R-1 upwards. The Class A
Bonds shall be issued in authorized denominations of $100,000 and multiples of
$5,000 in excess thereof and shall bear interest payable semiannually on each
June 1 and December 1 commencing December 1, 1996. Except for the Class B Bonds
with a stated maturity date of December 1, 1998 which shall be issued in an
authorized denomination of $5,000, the Class B Bonds shall be issued in
authorized denominations of $100,000 and multiples of $5,000 in excess thereof
and shall bear interest payable semiannually on each June 1 and December 1
commencing June 1, 1998.
The Class A Bonds will upon initial issuance be dated March 1, 1996, and
will bear interest from and including March 1, 1996, if the date of
authentication is prior to December 1, 1996, and otherwise from the Interest
Payment Date that is, or that immediately precedes, the date of authentication
(unless payment of interest on the Class A Bonds shall be in default, in which
case the Class A Bonds will bear interest from the date to which interest has
been paid or duly provided for or, if no such interest has been paid, from
March 1, 1996).
17
The Class B Bonds will upon initial issuance be dated March 1, 1996, and
will bear interest from and including March 1, 1998, if the date of
authentication is prior to June 1, 1998, and otherwise from the Interest Payment
Date that is, or that immediately precedes, the date of authentication (unless
payment of interest on the Class B Bonds shall be in default, in which case the
Class B Bonds will bear interest from the date to which interest has been paid
or duly provided for or, if no such interest has been paid, from March 1, 1998).
The interest payable on the Bonds will be computed on the basis of a 360-
day year of twelve 30-day months.
Principal of, premium (if any), on, and interest on, the Bonds shall be
payable in any coin or currency of the United States of America which, at the
respective times of payment, is legal tender for the payment of public and
private debts. Except as may otherwise be required by a DTC Representation
Letter with respect to Bonds held by a Securities Depository, principal of and
interest on the Bonds shall be payable prior to final payment thereof (whether
at maturity or earlier redemption) to the Holders of the Bonds in whose names
the Bonds are registered as of the close of business on the applicable Record
Date by check mailed to such Holders at their addresses as they then appear on
the registration books kept by the Registrar or at such other address as is
furnished to the Paying Agent in writing by any such Holder; provided at the
option of any Holder of Bonds in an aggregate principal amount of at least
$1,000,000, any payment on the Bonds owned by such Holder may be transmitted by
wire transfer to such Holder, at such Holder's written request, to the bank
account number on file with the Registrar on the 5th day before the Record Date
or, if any such day is not a Business Day, the Business Day next preceding such
day. Principal of and interest on the Bonds due at final payment thereof
(whether at maturity or earlier redemption) shall be paid upon presentation and
surrender of the Bonds at the Corporate Trust Office of the Trustee.
If any payment of the principal of, premium (if any) on, or interest on,
the Bonds is due on a Bond Payment Date that is not a Business Day, such payment
will be made on the next succeeding Business Day, and no interest will accrue on
the amount of such payment during the intervening period.
Section 2.03. EXECUTION; LIMITED OBLIGATION.
The Bonds shall be executed on behalf of the Sponsor with the manual or
facsimile signature of its President or Vice President and attested by the
manual or facsimile signature of its Secretary. A facsimile signature shall have
the same force and effect as if personally signed. In case any officer of the
Sponsor whose manual or facsimile signature appears on the Bonds shall cease to
be such officer before the delivery of the Bonds, such manual or facsimile
signature shall nevertheless be valid and sufficient for all purposes, the same
as if such officer had remained in office until delivery. The Sponsor may adopt
and use for that purpose the manual or facsimile signature of any person or
persons who shall have been the President, Vice President or Secretary at any
time on or after the date borne by the Bonds, notwithstanding that such person
may not have been such President, Vice President or Secretary on the date of any
18
such Bond or may have ceased to be such officer of the Sponsor at the time when
any such Bond shall be authenticated and delivered.
The Bonds, together with interest thereon, are not general obligations of
the Sponsor but are limited obligations thereof payable solely from the Trust
Estate pledged therefor and shall be a valid claim of the respective Holders
thereof against the Trust Estate held by the Trustee under this Indenture which
is hereby pledged, assigned and otherwise secured for the payment of the Bonds
as provided in this Indenture and shall be used for no other purpose than to pay
the principal of and interest on the Bonds, except as may be otherwise expressly
authorized in this Indenture. The Sponsor shall not be obligated to pay the
principal of the Bonds, the interest thereon or the other costs incident thereto
or any other obligations of the Sponsor hereunder except from the Trust Estate.
All covenants, stipulations, obligations and agreements of the Sponsor
contained in this Indenture shall be deemed to be covenants, stipulations,
obligations and agreements of the Sponsor to the full extent permitted by law.
No covenant, stipulation, obligation or agreement contained herein shall be
deemed to be a covenant, stipulation, obligation or agreement of any present or
future officer, agent or employee of the Sponsor in their individual capacity,
none of whom shall be liable personally on the Bonds or be subject to any
personal liability or accountability by reason of the issuance thereof. No
officer, agent or employee of the Sponsor shall incur any personal liability in
acting or proceeding or in not acting or not proceeding, in good faith,
reasonably, and in accordance with the terms of this Indenture.
Section 2.04. AUTHENTICATION.
No Bond shall be valid or obligatory for any purpose or entitled to any
security or benefit under this Indenture unless and until a certificate of
authentication on such Bond shall have been duly executed by the manual
signature of the Trustee, and such executed certificate of the Trustee upon any
such Bond shall be conclusive evidence that such Bond has been authenticated and
delivered under this Indenture. The Trustee's certificate of authentication on
any Bond shall be deemed to have been executed by it if signed by an authorized
Trust Officer, but it shall not be necessary that the same Trust Officer sign
the certificate of authentication on all of the Bonds issued hereunder.
Section 2.05. FORMS OF BONDS; INCORPORATION OF PROVISIONS.
(a) The Class A Bonds and the Trustee's certificate of authentication
therefor shall be in substantially the form set forth in Exhibit A hereto, and
the Class B Bonds and the Trustee's certificate of authentication therefor shall
be in substantially the form set forth in Exhibit B hereto, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture, and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon,
as may be required for them to comply with the rules of any securities exchange
on which the Bonds may be listed, or as may be required by any applicable
regulation (whether proposed, temporary or final)
19
promulgated pursuant to the Code, including, without limitation, any legend
required in respect of original issue discount on any Bonds, as applicable,
or as consistently herewith, may be determined by the officers of the Sponsor
executing such Bonds, as evidenced by their execution of the Bonds. Any
portion of the text of any Bond may be set forth on the reverse thereof, with
an appropriate reference thereto on the face of the Bond. By this reference,
the terms of the Bonds set forth in Exhibits A and B hereto are incorporated
herein as if fully set forth.
(b) Each Bond shall bear upon the face thereof the designation so selected
for the Class to which it belongs. All Bonds of all Classes at any time
Outstanding shall be identical except for differences, if any, among the Bonds
of the different Classes in stated maturities, interest rates and other terms
which are required by this Indenture to differ.
(c) Upon original issuance, the Class B Bonds shall be registered in the
name or upon the order of BFC Guaranty Corp., as assignee of the Lender, and
delivered as provided in the Sponsor's Request described in Section 2.06(b).
The Class B Bonds shall be subject to restrictions on transfers as provided in
Section 2.08. The Class A Bonds, upon original issuance, will be issued in the
form of a single bond certificate for each maturity thereof (which shall be
typed in lieu of printing or engraving), to be delivered to the Securities
Depository by the Sponsor. Each such Class A Bond shall be initially registered
on the Bond Register in the name of the nominee of such Securities Depository,
and no Beneficial Owner will receive a certificate representing his interest in
such Class A Bonds, except in the event the Sponsor issues, and the Trustee
authenticates, Replacement Bonds as provided herein. While the Securities
Depository remains the sole Bondholder of such Class A Bonds, it will agree to
make book-entry transfers among its Participants and receive and transmit
payments of principal of, and interest on, such Class A Bonds until and unless
the Sponsor issues, and the Trustee authenticates and delivers, Replacement
Bonds to the Beneficial Owners of Bonds or their nominees, as described herein.
(e) Subject to Section 2.11, Replacement Bonds shall be either
typewritten, printed, lithographed or engraved or produced by any combination of
these methods, with or without 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 or the Securities and Exchange Commission.
Section 2.06. DELIVERY OF BONDS.
Upon the execution and delivery of this Indenture by the Sponsor and the
Trustee, the Sponsor shall execute and deliver to the Trustee the Bonds of each
Class for authentication and the Trustee shall thereupon authenticate and
deliver the Bonds as directed by the Sponsor consistent with the terms hereof,
upon delivery by the Sponsor to the Trustee, and receipt by the Trustee, of the
following:
(a) SPONSOR'S CONSENT. A copy, duly certified by the Secretary of the
Sponsor, of the Sponsor's Consent.
20
(b) SPONSOR'S REQUEST. A request and authorization to the Trustee on
behalf of the Sponsor and signed by an Authorized Officer (1) to authenticate
and deliver the Class A Bonds to the Securities Depository on behalf of the
Underwriter, the Class B Bonds to BFC Guaranty Corp. or upon its order and (2)
to execute and deliver the Certificates to the Sponsor as the initial Residual
Holder.
(c) NOTES. The original Notes, duly endorsed to the Trustee.
(d) LOAN DOCUMENTS. Originals of each of the Loan Documents.
(e) CASUALTY INSURANCE POLICY. An original of the Casualty Insurance
Policy.
(f) TITLE INSURANCE POLICIES. The title insurance policies with respect
to the Deed of Trust.
(g) DTC REPRESENTATION LETTER. A copy of the DTC Representation Letter
with respect to the Class A Bonds.
Upon receipt of these documents, the Trustee shall authenticate and deliver
the Bonds and execute and deliver the Certificates as requested by the Sponsor
in its request delivered pursuant to (b) above.
Section 2.07. MUTILATED, DESTROYED, LOST OR STOLEN BONDS.
If 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
there is delivered to the Trustee such security or indemnity as may be required
by the Trustee to save the Sponsor and the Trustee harmless, the Sponsor shall
execute and the Trustee shall authenticate and deliver, in exchange for or in
lieu of any mutilated, destroyed, lost or stolen Bond, a new Bond of like Class,
stated maturity, tenor and principal amount, bearing a number not
contemporaneously Outstanding. If any such mutilated, destroyed, lost or stolen
Bond shall have become due and payable, or shall have been called for
redemption, instead of issuing a new Bond, the Sponsor may pay such Bond without
surrender thereof, except that any mutilated Bond shall be surrendered.
Upon the issuance of a new Bond, the Sponsor or the Trustee may require the
payment by the Bondholder of a sum sufficient to cover any tax or other
governmental charge that may be imposed and any other reasonable expenses
(including the fees and expenses of the Trustee) related to such issuance.
Every new Bond issued pursuant to this Section 2.07 in lieu of any
mutilated, destroyed, lost or stolen Bond shall constitute an original
additional obligation of the Sponsor, whether the mutilated, destroyed, lost or
stolen Bond shall be at any time enforceable by anyone, and shall
21
be entitled to all the benefits of this Indenture equally and ratably with
any and all other Bonds of the same Class duly issued hereunder.
The provisions of this Section 2.07 are exclusive and shall preclude, to
the extent permitted by applicable law, all other rights and remedies with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Bonds.
Section 2.08. REGISTRATION AND EXCHANGE OF BONDS; PERSONS TREATED AS
OWNERS.
(a) The Sponsor shall cause a Bond Register to be kept to record the
registration and transfer of the Bonds at the Corporate Trust Office and hereby
appoints the Trustee, as Bond Registrar, to keep such books and to make such
registrations and transfers, subject to the provisions of this Section 2.08,
under such reasonable regulations as the Sponsor or Trustee may prescribe. The
Bond Register shall show the names and addresses of each Holder of the Bonds.
(b) Upon surrender for registration of transfer or exchange of any Bond at
the Corporate Trust Office, the Sponsor shall execute and the Trustee shall
authenticate and deliver in the name of the transferee or transferees, a new
Bond of the same stated maturity and of authorized denominations for the same
Class and then unpaid principal amount.
At the option of the Bondholder, any Replacement Bonds issued when
permitted under this Indenture may be exchanged for other Replacement Bonds of
the same Class in any authorized denominations, of a like Class and aggregate
Outstanding principal amount and stated maturity, upon surrender of the
Replacement Bonds to be exchanged at the Corporate Trust Office.
Notwithstanding the foregoing, if the outstanding principal amount of a Bond
surrendered for exchange or transfer is in an amount less than $100,000 for a
Bond of the same Class, the Bond delivered in exchange therefor shall be in an
outstanding principal amount equal to that of the Bond so surrendered, and any
Bond so delivered upon such a transfer or exchange shall be deemed to be in an
authorized denomination for all purposes hereof. Whenever any Replacement Bonds
are so surrendered for exchange, the Sponsor shall execute, and the Trustee
shall authenticate and deliver, the Replacement Bonds which the Bondholder
making the exchange is entitled to receive.
All Bonds presented for any registration of transfer or exchange shall be
duly endorsed, or be accompanied by a written instrument of transfer, in form
and with guaranty of signature satisfactory to the Trustee, duly executed by the
registered owner or by an attorney duly authorized in writing.
The Sponsor and the Trustee shall not be required to register, transfer or
exchange any Bonds selected, called or being called for redemption, during any
period from a Record Date to the immediately succeeding Interest Payment Date.
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All Bonds issued upon any registration of transfer or exchange of Bonds
shall be valid obligations of the Sponsor, evidencing the same debt and entitled
to all of the security and benefits under this Indenture to the same extent as
the Bonds surrendered.
Bonds held by the Securities Depository shall be registered in the name of
the Securities Depository or its nominee and beneficial ownership of such Bonds
shall be transferred in accordance with the procedures of the Securities
Depository and the Participants.
Prior to the due presentment for registration of transfer or exchange of
any Bond, the Sponsor, the Trustee and any agent of the Sponsor or the Trustee
shall treat the Person in whose name such Bond is registered on any Record Date,
for purposes of receiving payments of principal of and interest on such Bond,
and on any other date for any other purpose, as the owner thereof, whether or
not such Bond be overdue, and the Sponsor, the Trustee and any such agent shall
not be affected by notice to the contrary.
In case of any registration of transfer or exchange, the Sponsor and the
Trustee may require payment of a sum sufficient to cover actual expenses
incurred in making such exchange or transfer and any tax or other governmental
charge that may be imposed in connection with any such registration of transfer
or exchange. In any actions taken by the Securities Depository, the Trustee
shall not be precluded from collecting its usual and customary fees, charges and
expenses.
(c) The foregoing Section 2.08(b) notwithstanding, the Trustee (i) shall
not register the transfer of any Class B Bond to the Lender and (ii) shall only
register transfer of the Class B Bonds in accordance with the provisions of the
Castle Rock Pledge Agreement, while the Class B Bonds are subject to the pledge
provided therein. The Sponsor hereby authorizes the Trustee to enter into and
perform under the Castle Rock Pledge Agreement in its capacity as Trustee
hereunder. At any time the Class B Bonds are not subject to the pledge provided
for in the Castle Rock Pledge Agreement, any request by BFC Guaranty Corp. or
any subsequent Holder of a Class B Bond to the Trustee to register the transfer
of a Class B Bond shall be accompanied by (in addition to the items required by
Section 2.08(b)) the following: (A) if such Class B Bond is being transferred
to a "qualified institutional buyer" (as defined in Rule 144A under the 0000
Xxx) in accordance with Rule 144A under the 1933 Act or pursuant to an exemption
from registration in accordance with Rule 144 or Rule 904 under the 1933 Act or
pursuant to an effective registration statement under the 1933 Act, a
certification to that effect from such Holder (in substantially the form of
Exhibit H hereto); or (B) if such Class B Bond is being transferred in reliance
on another exemption from the registration requirements of the 1933 Act, a
certification to that effect from such Holder (in substantially the form of
Exhibit H hereto) and an Opinion of Counsel from such Holder or the transferee
reasonably acceptable to the Sponsor and to the Trustee to the effect that such
transfer is in compliance with the 1933 Act.
(d) Unless otherwise agreed by the Sponsor, each Class B Bond shall bear a
legend to the following effect:
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THIS BOND (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX XXXXXX XXXXXX
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THIS BOND MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF
THIS BOND IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THIS BOND AGREES FOR
THE BENEFIT OF THE SPONSOR THAT (A) DURING THE TIME THIS BOND IS
PLEDGED UNDER THE CASTLE ROCK PLEDGE AGREEMENT (AS DEFINED IN THE
INDENTURE) THIS BOND MAY NOT BE TRANSFERRED EXCEPT IN ACCORDANCE WITH
THE TERMS THEREOF AND THEREAFTER THIS BOND MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (1) INSIDE THE UNITED STATES TO A PERSON
WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, OR IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
(AND BASED UPON AN OPINION OF COUNSEL AS REQUIRED BY THE INDENTURE),
(2) TO THE SPONSOR, (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT, OR (4) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES
ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THIS BOND OF THE RESALE
RESTRICTIONS SET FORTH IN (A) ABOVE.
Section 2.09. DESTRUCTION OF BONDS.
Whenever any Bond Outstanding shall be delivered to the Trustee for
cancellation pursuant to this Indenture, upon payment of the principal amount or
redemption price, for replacement pursuant to Section 2.07, 2.11 or 2.14 or for
transfer or exchange pursuant to Section 2.08, such Bond shall be cancelled and
destroyed by the Trustee, and counterparts of a certificate of destruction
evidencing such destruction shall be furnished by the Trustee to the Sponsor.
Section 2.10. RESERVED.
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Section 2.11. TEMPORARY BONDS.
Pending the preparation of definitive Bonds, the Sponsor may execute and
the Trustee shall authenticate and deliver temporary Bonds. Temporary Bonds
shall be issuable as fully registered Bonds, of any authorized denomination, and
substantially in the form of the definitive Bonds, but with such omissions,
insertions and variations as may be appropriate for temporary Bonds, all as may
be determined by the Sponsor. Temporary Bonds may be issued without specific
terms and may contain such reference to any provisions of this Indenture as may
be appropriate. Every temporary Bond shall be executed by the Sponsor and
authenticated by the Trustee upon the same conditions and in substantially the
same manner, and with like effect, as the definitive Bonds. As promptly as
practicable the Sponsor shall execute and shall furnish definitive Bonds at
which time temporary Bonds may be surrendered in exchange for definitive Bonds
without charge to the Holder at the Corporate Trust Office of the Trustee, and
the Trustee shall authenticate and shall deliver in exchange for such temporary
Bonds a like aggregate principal amount of definitive Bonds of the same Class
and stated maturity. Until so exchanged the temporary Bonds shall be entitled
to the same benefits under this Indenture as definitive Bonds.
Section 2.12. RESERVED.
Section 2.13. NONPRESENTMENT OF BONDS.
Any money deposited with the Trustee or any Paying Agent in trust for the
payment of the principal of or interest on any Bond and remaining unclaimed for
five years after such principal or interest has become due and payable shall be
paid to the Residual Holders upon the written order of the Majority Residual
Holders if no Event of Default exists and all amounts due to the Trustee
hereunder have been paid. If such amounts are paid to the Residual Holders, the
Holder of such Bond shall thereafter, as an unsecured general creditor, look
only to such Residual Holders for payment thereof, and all liability of the
Trustee, the Sponsor or such Paying Agent with respect to such trust money shall
thereupon cease.
Any money deposited with the Trustee or any Paying Agent in trust for
payment of principal of or interest on any Bond which is unclaimed shall not be
invested and therefore the Trustee shall have no liability for any interest
thereon.
Section 2.14. TERMINATION OF BOOK-ENTRY SYSTEM.
(a) So long as the Class A Bonds (or any other Class of Bonds subsequently
delivered to a Securities Depository) are in book-entry only form, the Trustee
shall comply with the terms of the applicable DTC Representation Letter.
However, the book-entry system through the Securities Depository may be
terminated upon the happening of any of the following:
(i) The Securities Depository advises the Trustee in writing that the
Securities Depository is no longer willing or able to properly discharge
its responsibilities under the
25
DTC Representation Letter and the Trustee or the Sponsor are unable to
locate a qualified successor clearing agency satisfactory to the Trustee
or the Sponsor; or
(ii) The Sponsor elects to discontinue the book-entry system through
the Securities Depository and so advises the Trustee and the Securities
Depository in writing.
(b) Upon the occurrence of any event described in Section 2.14(a), the
Trustee shall notify the Securities Depository of the occurrence of such event
and of the availability of definitive or temporary Replacement Bonds to
Beneficial Owners requesting the same, in an aggregate Outstanding amount
representing the interest of each such Beneficial Owner, making such adjustments
and allowances as it may find necessary or appropriate as to accrued interest
and previous payments of principal and calls for redemption. Definitive
Replacement Bonds for a Class shall be issued only upon surrender to the Trustee
of the Bond of such Class by the Securities Depository, accompanied by
registration instructions for the definitive Replacement Bonds for such Class
from the Securities Depository. Neither the Sponsor nor the Trustee shall be
liable for any delay in delivery of such instructions and conclusively may rely
on, and shall be protected in relying on, such instructions. Upon issuance of
definitive Replacement Bonds, all references herein to obligations imposed upon
or to be performed by the Securities Depository shall be deemed of no further
force and effect, and the Holders of the definitive Replacement Bonds shall be
deemed the Bondholders for all purposes of this Indenture.
Section 2.15. REDEMPTION PRIOR TO MATURITY.
(a) MANDATORY SINKING FUND REDEMPTION. (1) The Class A Bonds with
maturity dates shown below shall be redeemed in part, prior to their scheduled
maturity, on the dates and in the principal amounts shown below, at a redemption
price equal to the principal amount thereof, plus accrued interest thereon to
the redemption date, without premium, from moneys deposited into the Debt
Service Fund in accordance with Article V hereof:
CLASS A BONDS MATURING DECEMBER 1, 2008
December 1, Amount
----------- ----------
2003 $2,560,000
2004 2,735,000
2005 2,920,000
2006 3,120,000
2007 3,340,000
2008 3,570,000
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CLASS A BONDS MATURING DECEMBER 1, 2017
December 1, Amount
----------- ----------
2009 $3,815,000
2010 4,095,000
2011 4,395,000
2012 4,720,000
2013 5,070,000
2014 5,445,000
2015 5,845,000
2016 6,275,000
2017 5,635,000
(2) Redemptions pursuant to this Section 2.15(a) shall be made PRO RATA
among the Holders of each stated maturity by redeeming from each such Holder
that principal amount which bears the same proportion to the principal amount of
such stated maturity registered in the name of such Holder as the total
principal amount of such stated maturity to be redeemed on any sinking fund
payment date bears to the aggregate principal amount of such stated maturity
Outstanding prior to redemption. If the Trustee cannot make a strict PRO RATA
redemption among the Holders of a stated maturity, the Trustee shall redeem more
or less than a PRO RATA portion from one or more Holders of such stated maturity
in such manner as the Trustee deems fair and reasonable.
In connection with any such redemption prior to maturity, the Trustee shall
make appropriate entries in the Bond Register to reflect the portion of any Bond
so redeemed and the amount of the principal remaining outstanding. The
Trustee's notation in the Bond Register shall be conclusive as to the principal
amount of any Bond Outstanding at any time.
(b) EXTRAORDINARY MANDATORY REDEMPTION. (1) The Class A Bonds maturing on
December 1, 2017 and the Class B Bonds maturing on or after December 1, 2016 are
subject to extraordinary mandatory redemption prior to maturity on or after
December 1, 2015, upon notice from the Sponsor to the Trustee of the optional
total prepayment of the 49C Notes by 49C, as a whole on any Interest Payment
Date set forth below at the redemption prices (expressed as a percentage of the
principal amount redeemed) set forth below, plus accrued interest to the
redemption date.
Interest Payment Dates Redemption Price
---------------------- ----------------
December 1, 2015 and June 1, 2016 102%
December 1, 2016 and June 1, 2017 101%
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(2) The Bonds shall be subject to extraordinary mandatory redemption from
monies received by the Trustee constituting Note prepayments, in whole or in
part to the extent of such monies received by the Trustee, upon notice from the
Sponsor to the Trustee that the 49C Notes have become subject to mandatory
prepayment in whole due to casualty or condemnation with respect to all or
substantially all of the Project, at a price equal to one hundred percent (100%)
of the principal amount thereof, plus accrued interest thereon to the redemption
date, on the Interest Payment Date for which required notice can be given and
which next follows receipt by the Trustee of monies constituting such Note
prepayments.
(3) If not all of the Outstanding Bonds can be redeemed from monies
received by the Trustee pursuant to Section 2.15(b)(2), the Trustee shall apply
all monies so received to redeem the Outstanding Bonds in part, which redemption
shall be made pro rata among the Holders of the Outstanding Bonds.
In connection with any such partial redemption prior to maturity, the
Trustee shall make appropriate entries in the Bond Register to reflect the
portion of any Bond so redeemed and the amount of the principal remaining
outstanding. The Trustee's notation in the Bond Register shall be conclusive as
to the principal amount of any Bond Outstanding at any time.
Section 2.16. NOTICE OF REDEMPTION.
(a) Notice of any redemption under Section 2.15(b) shall be given by the
Trustee by certified mail, return receipt requested, not less than 30 days nor
more than 45 days prior to the applicable redemption date to each Holder in
whose name a Bond to be redeemed is registered on the Record Date preceding the
applicable redemption date, at such Bondholder's address appearing in the Bond
Register; provided, however, that prior to the Trustee giving any notice of
redemption, the Trustee shall have on deposit in the applicable account of the
Redemption Fund the redemption price for the Bonds to be redeemed.
(b) All notices of redemption shall state the amount and Class of Bonds
being redeemed, redemption date, redemption price, CUSIP numbers, (with respect
to the Class A Bonds only) the place where the Bonds are to be surrendered for
payment of the redemption price (in the case of redemptions in whole) and that
no interest shall accrue on such Bonds after such redemption date. Any failure
to give such notice, or any defect therein, shall not affect the validity of any
proceedings for the redemption of any other Bonds for which no such failure or
defect occurs.
(c) Notice of redemption having been given as provided above, and moneys
available for redemption being held by the Trustee for that purpose, thereupon
the Bonds to be redeemed, on the applicable redemption date, shall become due
and payable at the redemption price and interest thereon shall cease to accrue
and, unless there shall be a default in the payment of the redemption price, no
interest shall accrue on such redemption price for any period after such
redemption date. Bonds redeemed thereafter shall no longer be entitled to any
security or benefit under this Indenture, except to receive payment of the
applicable redemption price.
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(End of Article II)
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ARTICLE III
REMIC STATUS
Section 3.01. REMIC ELECTION.
(a) It is the intention of this Indenture and the parties hereto that the
Trust Estate shall constitute, and the affairs of the Trust Estate shall be so
conducted as to qualify the Trust Estate as a "real estate mortgage investment
conduit" as defined in and in accordance with Section 860D of the Code. In
furtherance of such intention, the Trustee covenants that it shall not knowingly
or intentionally take any action or omit to take any action that would cause the
termination of the REMIC status of the Trust Estate prior to liquidation of the
Trust Estate in accordance with the provisions hereof.
(b) The Class A Bonds and Class B Bonds are hereby designated as "regular
interests" in the REMIC within the meaning of Section 860G(a)(1) of the Code.
(c) The Residual is hereby designated as the sole "residual interest" in
the REMIC within the meaning of Section 860G(a)(2) of the Code.
(d) The Closing Date shall constitute the "startup day" for the REMIC
within the meaning of Section 860G(a)(9) of the Code.
(e) The Trustee shall, for federal income tax purposes, maintain books and
records with respect to the Trust Estate on a calendar year and on an accrual
basis.
(f) After the Closing Date, the Trustee shall not (i) accept any
contribution of additional assets to the Trust Estate unless the Trustee shall
have received an Opinion of Counsel to the effect that such contribution will
not cause the imposition of a tax on the Trust Estate or cause the Trust Estate
to lose its status as a REMIC at any time that any Bonds are Outstanding, or
(ii) permit or cause the sale, transfer, exchange or other disposition of any
portion of the Trust Estate, except as otherwise provided herein, unless such
sale or disposition is pursuant to a "qualified liquidation," as defined in Code
Section 860F(a)(4)(A), or unless the Trustee has received an Opinion of Counsel
that such sale will not cause the Trust Estate to lose its status as a REMIC at
any time that any Bonds are Outstanding or otherwise subject the Trust Estate to
taxation. The cost of any Opinion of Counsel specified in this Section 3.01(f)
shall not be an expense of the Trustee.
(g) No Investment Security shall be sold before its stated maturity if, as
a result of such sale, the Trust Estate would realize a gain unless sold either
(i) to meet a required payment on the Bonds or (ii) pursuant to a qualified plan
of liquidation in accordance with Section 3.03 hereof.
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(h) The Trustee is hereby authorized and directed to make information
available to the Internal Revenue Service and to any Residual Holder or
transferee thereof necessary to comply with Section 860D(a)(6)(B) of the Code
and to maintain records and information sufficient to make any calculations that
may be required pursuant to such section of the Code.
(i) Neither the Trustee nor the Sponsor shall enter into any arrangement
by which the Trust Estate will receive a fee or other compensation for services
nor permit the Trust Estate to receive any income from assets other than
"qualified mortgages" or "permitted investments" within the meaning of Section
860G of the Code.
Section 3.02. TAX COMPLIANCE.
(a) Subject to Section 3.02(c), the Trustee shall perform, or cause to be
performed, the following duties relating to the federal, state and local tax
compliance of the Trust Estate:
(i) cause to be prepared and filed with the Internal Revenue Service
and applicable state or local taxing authorities income tax or information
returns or reports relating to the Trust Estate, the Bonds and the
Certificates (including without limitation all returns and reports of the
Trust Estate as a REMIC) that are due after the Closing Date in the time
and manner required by the Code, applicable regulations or procedures
thereunder or equivalent provisions of state or local law;
(ii) cause the REMIC, in its first federal income tax return for the
short taxable year ending December 31, 1996, to elect to be treated as a
REMIC for such taxable year and all succeeding taxable years, and shall
file or cause to be filed all subsequent tax returns, or information
reports, and take such actions, as are required for such status;
(iii) within 30 days after the Closing Date, 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 Bonds may contact for tax information relating thereto,
together with such additional information as may be required by such Form,
and shall update (or cause to be updated) such information at the time and
in the manner required by the Code;
(iv) cause the REMIC, within 30 days after the Closing Date, to file
an application for a federal employer tax identification number; and
(v) cause to be prepared and delivered to Bondholders and Residual
Holders any and all tax or information returns or reports in the time and
manner required by the Code, applicable regulations or procedures
thereunder or equivalent provisions of state or local law.
31
The federal, state or local income tax or information returns of the Trust
Estate shall be signed by the Trustee or such other Person as may be required to
sign such returns by the Code or state or local tax laws, regulations or rules.
If the Sponsor is determined to be the proper party to sign the foregoing tax
returns, the Sponsor shall sign such returns as directed by the Trustee. The
Trustee shall not have any obligation to determine whether any Person other than
the Trustee shall be required to sign such returns except during any period in
which the Manager is in default of its obligations hereunder.
(b) The Trustee shall have responsibility for all compliance with the
requirements of federal tax withholding and shall withhold, as required by the
Code, in respect of amounts payable to Holders of Certificates or Bonds.
(c) Notwithstanding the foregoing, the parties hereto acknowledge that
responsibility for preparing any tax report or tax return required by this
Section 3.02 (other than with respect to withholding) shall be with the Manager
or such other Person hired to prepare such returns by the Trustee in accordance
with this Indenture. All such reports or returns shall be delivered by the
Manager or other Person responsible for its preparation to the Trustee not later
than five days before the date on which the Trustee is required under this
Indenture or the Code (or applicable provisions of state or local law) to file
or distribute such report or return (such date, the "Due Date"); provided,
however, that, in the case of the Manager, the Due Date shall be the date which
is 14 days after the date the Manager has received all required information to
prepare such return or report) (such date before the required date for filing or
distributing, the "Submission Date"). If, by the Submission Date, the Trustee
has not received such return or report, the Trustee shall appoint, to prepare
any report or return not received by the Trustee on its Submission Date, an
organization which regularly engages in the preparation of such reports on a
continuous basis for profit and which represents itself to be an expert in such
matters. The cost or expense of any such organization appointed by the Trustee
shall be a cost and expense of the Trust Estate which shall be paid out of
amounts otherwise distributable to the Residual Holders. The Residual Holders
shall indemnify the Trustee for any costs incurred by the Trustee to comply with
its tax reporting duties pursuant to this Section 3.02. Notwithstanding any
other provision of this Indenture, the Trustee shall not be liable for any
errors by the Manager or any organization appointed by the Trustee pursuant to
this Section 3.02(c) and the Trustee shall be entitled to rely on the written
advice of the Manager or such Person as to who is the appropriate Person to sign
any return on behalf of the REMIC.
(d) If in any taxable year there shall be more than one Holder of the
Certificates, the Manager may be designated a tax matters person with respect to
the REMIC pursuant to Treasury Regulation Section 1.860F-4(d), which tax matters
person shall have the same duties with respect to the REMIC as those of a "tax
matters partner" under Subchapter C of Chapter 63 of Subtitle F of the Code.
32
Section 3.03. TERMINATION OF THE REMIC UPON REDEMPTION OF THE BONDS.
In the event of redemption of the Bonds pursuant to Section 2.15(b)(1) or
(2) hereof, unless the Residual Holders have delivered to the Trustee a
Non-Disqualification Opinion with respect to failure to comply with the
requirements of this Section 3.03, the Trust Estate shall be liquidated as
follows:
(i) Not less than 15 days before the date on which the final payment
on the Bonds is expected to be made, the Trustee will notify the Residual
Holders of the expected date of such final payment;
(ii) As soon as possible after receiving the notice referred to in
clause (i) above (but in no event less than 5 days before the date on which
the Trustee expects to make the final payment on the Bonds), the Residual
Holders, by action of the Majority Residual Holders, shall cause to be
adopted a plan of complete liquidation of the Trust Estate within the
meaning of Section 860F(a)(4) of the Code, the Trustee shall sign such plan
(or cause the proper party, if not the Trustee, to sign the plan), and the
Trustee shall dispose of the Trust Estate in accordance with the provisions
of Section 3.03(iii);
(iii) At or after the time at which the plan of complete liquidation
of the Trust Estate is adopted and the Trustee is instructed to liquidate
the same and at or before the time at which the Trustee makes the final
payment on the Bonds, the Trustee shall request a nationally recognized
securities dealer designated in the plan of complete liquidation of the
Trust Estate to sell for cash to the highest bidder all of the Trust Estate
(except for (A) cash on hand and (B) any asset comprising all or part of
the Trust Estate which, pursuant to the terms of such asset, will be fully
converted into cash before the final payment on the Bonds); provided,
however, that such sale must be at a price not less than the redemption
price plus expenses less moneys available under this Indenture to redeem
the Bonds, exclusive of the sale proceeds; and
(iv) Upon liquidation of the Trust Estate, the Trustee shall make
final payment: first, on each Class of Bonds then Outstanding as provided
in this Indenture; and second, all of the remaining cash (and all other
remaining assets, if any) that comprises the Trust Estate, as provided in
Article XI hereof (other than cash retained to meet claims), shall be paid
to the Residual Holders pro rata as quickly as possible, but in no event
later than the close of business on the 90th day after the day on which the
plan of complete liquidation was adopted, and the existence of the REMIC
shall thereupon terminate.
Nothing in this Section 3.03 shall prevent the final payment of the Bonds.
The Trustee shall not be liable, in the absence of bad faith, negligence or
willful misconduct, for its failure to sell any asset or to obtain the best
price for any asset sold. The cost of any Opinion of Counsel required under this
Section 3.03, including any Non-Disqualification Opinion, shall not be a cost or
expense of the Trustee.
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Section 3.04. RESERVED
Section 3.05. REMIC TAXES.
Unless, under the terms of this Indenture, another party is liable for such
tax, any tax on prohibited transactions or contributions or any other tax
imposed under the Code (or state or local law) on the Trust Estate shall be
payable from amounts that would otherwise be distributable to the Holders of
Residual Certificates on a pro rata basis; PROVIDED, HOWEVER, that if such
amounts are insufficient to pay such tax, the Trustee may accept funds to pay
such tax from any Person, so long as the Trustee receives a Non-Disqualification
Opinion (the cost of which opinion shall be paid by the Person furnishing such
funds) with respect thereto, to the effect that the acceptance of such funds
will not result in any additional unfunded tax liability or result in the
imposition of a tax on contributions to the Trust Estate. Notwithstanding
anything to the contrary contained herein, if the Residual Holders intend to
contest any such tax in appropriate Proceedings, the Residual Holders, by action
of the Majority Residual Holders, may prevent the Trustee, by delivering written
notice (and indemnification satisfactory to the Trustee) to the Trustee, from
making payment of such tax, if permitted by law, pending the outcome of such
proceedings. The Trustee is hereby authorized to retain from those amounts
otherwise distributable to the Residual Holders sufficient funds to reimburse
the Trustee for the payment of any tax liability of the Trust Estate (to the
extent that the Trustee has not been previously reimbursed therefor).
Section 3.06. LIMITATION OF LIABILITY.
Notwithstanding the foregoing provisions of this Article III, the Trustee
shall have no liability for compliance with matters pertaining to the tax status
of the REMIC or the Bonds or for otherwise complying with the provisions of the
Code as they pertain to the Bonds, other than (i) to follow the express
provisions set forth above in Sections 3.01(a), (e), (f), (g), (h) and (i) and
Section 3.02, and (ii) following such instructions as may be given by the
Manager, or in the absence of a Manager, by the Trustee's tax advisor, with
respect to such matters.
Anything herein to the contrary notwithstanding, under no circumstances
shall the Trustee be obligated to expend or advance its own funds for payment of
any tax imposed as a result of any action taken by any Person other than the
Trustee. It is hereby acknowledged and agreed to by the Holders that the
Trustee's obligation to pay any taxes or expenses hereunder imposed, other than
as a result of the Trustee's negligence or willful misconduct, is expressly
limited to the Residual.
(End of Article III)
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ARTICLE IV
GENERAL COVENANTS; REPRESENTATIONS AND WARRANTIES
Section 4.01. PAYMENT OF PRINCIPAL AND INTEREST.
In addition to the covenants and agreements of the Sponsor elsewhere in
this Indenture, the Sponsor covenants that it will cause to be duly and
punctually paid the principal of and interest on every Bond issued under this
Indenture at the place, on the dates and in the manner provided herein according
to the true intent and meaning thereof, provided that such principal and
interest are payable solely from the Trust Estate, including but not limited to,
income, revenues and receipts and amounts derived or to be derived from the
Trust Estate and payable to the Trustee and nothing in the Bonds or this
Indenture shall be considered as Granting any other funds or assets of the
Sponsor other than the Trust Estate. Amounts properly withheld under the Code
from payment to any Bondholder of interest or principal shall be considered as
having been paid by the Sponsor to such Bondholder for all purposes under this
Indenture.
The Sponsor and the Trustee further covenant that at no time when the Bonds
are Outstanding will it or they commingle any of its other moneys or other
assets (from whatever source) with the Trust Estate.
Notwithstanding any provision of this Indenture or any Bond to the
contrary, the Bonds, including any interest with respect thereto, are limited
obligations of the Sponsor and are payable solely from the sources provided
therefor, as described in this Indenture.
Section 4.02. PERFORMANCE OF COVENANTS.
The Sponsor covenants that it will perform faithfully at all times any and
all covenants, undertakings, stipulations and provisions to be performed by the
Sponsor and contained in this Indenture, in any and every Bond executed,
authenticated and delivered hereunder and in all of its proceedings pertaining
hereto. The Sponsor covenants that it has taken all necessary corporate and
legal action to issue the Bonds authorized hereby and to execute this Indenture,
to assign the Trust Estate and the amounts payable thereunder, to pledge the
amounts hereby pledged in the manner and to the extent herein set forth, to
constitute the Trust Estate as a segregated asset pool and to sell the Residual,
that all action on its part for the issuance of the Bonds and the execution and
delivery of this Indenture has been duly and effectively taken and that the
Bonds in the hands of the Bondholders, as the case may be, are and will be valid
and enforceable special and limited obligations of the Sponsor according to the
terms thereof and hereof.
Section 4.03. INSTRUMENTS OF FURTHER ASSURANCE.
The Sponsor agrees that the Trustee may defend its rights to the payments
and other amounts due with respect to the Trust Estate, including but not
limited to amounts due the Trustee under the Notes, the Loan Documents and the
Casualty Insurance Policy or any other
35
insurance policy for the benefit of the Bondholders and the Residual Holders,
as their respective interests may appear, against the claims and demands of
all Persons whomsoever. The Sponsor covenants that it will do, execute,
acknowledge and deliver, or cause to be done, executed, acknowledged and
delivered, such supplemental indentures and such further acts, instruments
and transfers as the Trustee may reasonably require to better assure and
confirm unto the Trustee all and singular the rights Granted hereby to secure
the payment of principal of and interest on the Bonds or to Grant more
effectively all or any part of the Residual to the Residual Holders as
contemplated by this Indenture. The Sponsor covenants and agrees that, as a
result of the Grant of the Residual to the Residual Holders and the sale of
the Certificates, it has no further power or authority to sell, convey,
assign, pledge, encumber or otherwise dispose of any part of the Trust Estate
(except to the extent and for any period of time the Sponsor is a Holder of
all or part of the Certificates).
Section 4.04. RECORDING AND FILING.
Except for such financing statements and other documents relating to the
Trust Estate required to be filed on or prior to the Closing Date, the Trustee
will cause all financing statements related to this Indenture and all
supplements hereto, and such other documents as may be, in an Opinion of
Counsel, necessary to be kept and filed in such manner and in such places as may
be required by law in order to preserve and protect fully the security of the
Bondholders, the interests of the Residual Holders and the rights of the Trustee
hereunder, as their respective interests may appear. The Sponsor shall cooperate
in such filings and in the signing of such financing statements, continuation
statements and other documents presented to it as specified in an Opinion of
Counsel delivered pursuant to this Section 4.04.
Section 4.05. RIGHTS UNDER THE NOTES AND LOAN DOCUMENTS.
The Sponsor (to the extent the Sponsor has rights therein) and the Trustee
hereby covenant and agree they will not take any action or do anything or fail
to do anything specifically required of them which will result in a default
under or nonperformance of the Notes and Loan Documents. The Sponsor further
covenants and agrees that it will fulfill and faithfully perform its obligations
under the Loan Documents.
The Sponsor agrees that the Trustee, in the Trustee's name or (to the
extent required by law) in the name of the Sponsor, may enforce all rights of
the Sponsor, if any, and all obligations under and pursuant to the Notes and the
Loan Documents for and on behalf of the Bondholders and the Residual Holders, as
their respective interests may appear, whether or not the Sponsor is in Default
hereunder.
The Trustee shall have no obligation to exercise any rights or powers under
or with respect to the Notes or the Loan Documents except after the occurrence
of a payment default under the Notes or except after the occurrence of any other
type of default with respect to the Loan Documents of which the Trustee has
actual knowledge, in which case the Trustee shall exercise such of the rights
and powers vested in it by the Notes and the Loan Documents and
36
use the same degree of care and skill in such exercise as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs, in
all events subject to the rights, privileges and immunities of the Trustee
provided for in Article IX hereof.
Section 4.06. CREATION OF LIENS; SALE OF NOTES.
(a) The Sponsor shall not issue any bonds, obligations or other evidences
of indebtedness, other than the Bonds, secured by a pledge of or lien upon the
Trust Estate, and shall not create or cause to be created any lien or charge on
such revenues and moneys equal or superior to the lien created by this
Indenture.
(b) Neither the Sponsor nor the Residual Holders shall have any right to
sell or cause the sale of the Notes or any interest in any of the Loan Documents
unless such sale is effected pursuant to Article VIII hereof following an Event
of Default.
Section 4.07. BOOKS AND FUNDS.
The Trustee shall keep, or cause to be kept, proper books of record and
account in which complete and accurate entries shall be made of all its
transactions relating to all Funds established by or pursuant to this Indenture
and the Trust Estate, which shall, at all reasonable times, be subject to
inspection and available for copying, at such parties' expense, by the Sponsor,
a Residual Holder or of the owners of an aggregate of not less than 5% of the
aggregate Outstanding amount of Bonds or their representatives duly authorized
in writing. Such records and financial statements shall be prepared in
accordance with generally accepted accounting principles.
Section 4.08. COVENANTS REGARDING THE RESIDUAL HOLDERS.
In addition to each agreement and covenant of the Sponsor elsewhere
contained in this Indenture, the Sponsor hereby covenants and agrees with the
Residual Holders and the Trustee as follows:
(i) Upon request, the Sponsor will file or cause to be filed all
necessary certificates and documents as and when required or permitted by
this Indenture so as to obtain release of all property or amounts in the
Trust Estate which are properly releasable from the lien of this Indenture
in a timely fashion;
(ii) The Sponsor will not create or attempt to create any interest in
the Residual other than the interests created by this Indenture in favor of
the Residual Holders;
(iii) The Sponsor will not attempt to deny the irrevocable Grants and
assignments made in this Indenture to the Residual Holders; and
37
(iv) The Sponsor will defend the Residual Holders against any claim
asserted against their interest in the Residual by any Person claiming to
have an interest in the Residual created by, through or under the Sponsor
or its successors.
Section 4.09. DUTIES AND RESPONSIBILITIES OF THE SPONSOR; INDEMNIFICATION.
The Sponsor need only perform those duties as are specifically set forth in
this Indenture, and no implied covenants or obligations of the Sponsor shall be
read into this Indenture. In the absence of bad faith on its part, the Sponsor
may rely, as to the truth of statements and the correctness of opinions
expressed therein, on certificates or Opinions of Counsel furnished to it.
Section 4.10. LIST OF BONDHOLDERS.
The Trustee, as Bond Registrar, will keep the Bond Register on file at the
Corporate Trust Office.
Section 4.11. MAINTENANCE OF CASUALTY INSURANCE POLICY.
The Sponsor covenants and agrees to obtain a replacement Casualty Insurance
Policy in the event the rating of the provider of the Casualty Insurance Policy
is downgraded below AA and to maintain and to comply with all conditions of and
to keep the Casualty Insurance Policy in an outstanding amount at all times at
least equal to the principal amount of the Outstanding Bonds and in full force
and effect throughout the term of this Indenture.
Section 4.12. WITHHOLDING TAXES.
Whenever it is acting as a Paying Agent for the Bonds, the Trustee shall
comply with all requirements of the Code, and all regulations thereunder, with
respect to the withholding from any payments made on such Bonds of any
withholding taxes imposed thereon and with respect to any reporting requirements
in connection therewith.
Section 4.13. DIRECTION OF RESIDUAL HOLDERS FOR CERTAIN ACTIONS.
The Sponsor and the Trustee hereby agree and acknowledge that, pursuant to
this Indenture, (i) the Residual Holders are Granted the right to consent to
certain actions by the Trustee or the Sponsor, (ii) the Residual Holders are
Granted the right to give certain directions to the Trustee and the Sponsor, and
(iii) the Residual Holders are Granted the right to exercise certain rights of
the Sponsor under this Indenture. Any request, demand, authorization,
direction, notice, consent, waiver or other action by the Residual Holder
described in (i) through (iii) above (collectively, a "Residual Holder Act")
shall be binding and be given effect by the Trustee and the Sponsor under this
Indenture if the same is (A) in writing, (B) signed by the Majority Residual
Holders as of the date such writing is executed and delivered, (C) accompanied
by any indemnification to the Trustee and the Sponsor specifically required by
this
38
Indenture in connection with that Residual Holder Act and (D) accompanied by
all payments, Opinions of Counsel or other written instruments, if any,
specifically required under this Indenture or with respect to that Residual
Holder Act. In determining whether the Residual Holders signing such Residual
Holder Act are Majority Residual Holders, the Trustee and the Sponsor shall
conclusively be entitled to rely on a written statement contained in or
attached to such Residual Holder Act.
Section 4.14. MONEYS TO BE HELD IN TRUST.
All moneys required to be deposited with or paid to the Trustee for deposit
into any Trust Fund established under any provision of this Indenture shall be
held in trust by the Trustee in its trust capacity in Eligible Accounts for the
benefit of the Bondholders and the Residual Holders, as their respective
interests may appear, and, until applied or released in accordance with this
Indenture, shall constitute a part of the Trust Estate and be subject to the
security interest created hereby with respect to the Bonds. No Eligible Account
shall be evidenced by a certificate of deposit, passbook or other instrument.
Each Eligible Account shall be a separate and identifiable account from all
other funds and accounts held by the Trustee. All Eligible Accounts shall be
established and maintained in the name of the Trustee, bearing a designation
clearly indicating that the funds deposited therein are held for the benefit of
the holders of the Bonds. The Trustee shall possess all right, title and
interest in all funds on deposit from time to time in each Eligible Account and
in all proceeds thereof. Each Eligible Account shall be under the sole dominion
and control of the Trustee for the benefit of the holders of the Bonds, and
shall contain only funds held for their benefit. The Trustee agrees that it has
no right of setoff or banker's lien against, and no right to otherwise deduct
from any funds held in any Eligible Account (except the Trust Expense Fund) for
any amount owed it by the Sponsor, any securityholder or any credit support
provider.
Section 4.15. GENERAL REPRESENTATIONS AND WARRANTIES OF SPONSOR.
The Sponsor hereby makes the following general representations and
warranties for the benefit of the Trustee and the Holders:
(a) DUE ORGANIZATION, VALID EXISTENCE. The Sponsor is duly
organized, validly existing and in good standing under the laws of the
State of Delaware and possesses all licenses and authorizations necessary
to carry on its business.
(b) POWER AND AUTHORITY. The Sponsor has full power and authority to
carry on its business as now being conducted and to enter into this
Indenture and the Sale Agreement and the transactions contemplated thereby.
(c) EXECUTION AND DELIVERY. This Indenture and the Sale Agreement
have been duly executed and delivered by the Sponsor.
39
(d) ENFORCEABILITY. This Indenture and the Sale Agreement constitute
valid, legal, binding and enforceable obligations of the Sponsor (subject
to bankruptcy, insolvency or creditor rights laws generally, and principles
of equity generally) without offset, defense, or counterclaim.
(e) NO CONFLICT. The execution, delivery and performance of this
Indenture and the Sale Agreement by the Sponsor will not cause or
constitute (with due notice or lapse of time or both) a default under or
conflict with the Sponsor's organizational documents or other agreements by
which the Sponsor is bound or otherwise materially or adversely affect
performance of duties.
(f) NO VIOLATION OF LAWS. The execution, delivery and performance of
this Indenture and the Sale Agreement by the Sponsor will not violate any
law, regulation, order or decree of any governmental authority.
(g) CONSENTS OBTAINED. All consents, approvals, authorizations,
orders or filings of or with any court or governmental agency or body, if
any, required for the execution, delivery and performance of this Indenture
and the Sale Agreement by the Sponsor have been obtained or made.
(h) NO LITIGATION. There is no pending action, suit or proceeding,
arbitration or governmental investigation against the Sponsor an adverse
outcome of which would materially affect the Sponsor's performance under
this Indenture or the Sale Agreement.
Section 4.16. SPECIAL PURPOSE REPRESENTATIONS AND COVENANTS OF THE
SPONSOR.
(a) PURPOSE. The Sponsor was organized solely for the purpose of
acquiring the Trust Estate, depositing the same into the trust created
hereby, issuing the Bonds and participating in the transactions
contemplated hereby and by the Sale Agreement.
(b) NO OTHER BUSINESS. The Sponsor has not and will not engage in
any business unrelated to the purpose set forth above.
(c) NO OTHER ASSETS. The Sponsor has not acquired and will not
acquire any assets other than those constituting the Trust Estate.
(d) NO DISSOLUTION. The Sponsor has not engaged in, sought or
consented to, and will not engage in, seek or consent to, any dissolution,
winding up, liquidation, consolidation, merger, asset sale, or amendment of
its certificate of incorporation.
(e) INDEPENDENT DIRECTOR. The Sponsor has and shall at all times
while the Bonds are Outstanding have at least one Independent Director.
40
(f) UNANIMOUS CONSENT. The Sponsor has not caused or allowed and
will not cause or allow its board of directors to take any action requiring
the unanimous affirmative vote of 100% of the members of the board of
directors unless an independent director shall have participated in such
vote.
(g) BANKRUPTCY FILING. The Sponsor, without the unanimous consent of
all of its directors, shall not file a bankruptcy or insolvency petition or
otherwise institute insolvency proceedings with respect to itself or to any
other entity in which it has a direct or indirect legal or beneficial
ownership interest.
(h) NO OTHER INDEBTEDNESS. The Sponsor has no indebtedness other
than the indebtedness represented by the Bonds and will not incur any other
indebtedness while the Bonds are Outstanding.
(i) MISUNDERSTANDINGS. The Sponsor has not and will not fail to
correct any known misunderstanding regarding the separate identity of the
Sponsor.
(j) SEPARATE ACCOUNTS. The Sponsor has maintained and will maintain
its accounts, books and records separate from any other person or entity.
(k) OFFICIAL RECORDS. The Sponsor has maintained and will maintain
its books, records, resolutions and agreements as official records.
(l) COMMINGLING. The Sponsor has not and will not commingle its
funds or assets with those of any other entity, and has held and will hold
its assets in its own name.
(m) OWN NAME. The Sponsor has conducted and will conduct its
business in its own name.
(n) SEPARATE RECORDS. The Sponsor has maintained and will maintain
its financial statements, accounting records and other entity documents
separate from any other person or entity.
(o) OWN LIABILITIES. The Sponsor has paid and will pay its own
liabilities out of its own funds and assets.
(p) FORMALITIES. The Sponsor has observed and will observe all
corporate formalities.
(q) GUARANTEES. The Sponsor has not and will not assume or guarantee
or become obligated for the debts of any other entity or hold out its
credit as being available to satisfy the obligations of any other entity.
41
(r) AFFILIATE SECURITIES. The Sponsor has not acquired and will not
acquire obligations or securities of its shareholders.
(s) ALLOCATIONS. The Sponsor has allocated and will allocate fairly
and reasonably any overhead for shared office space and use separate
stationery, invoices and checks.
(t) PLEDGES. The Sponsor has not pledged and will not pledge its
assets for the benefit of any other person or entity.
(u) IDENTIFICATION. The Sponsor has held itself out and identified
itself and will hold itself out and identify itself as a separate and
distinct entity under its own name and not as a division or part of any
other person or entity.
(v) LOANS. The Sponsor has not made and will not make loans to any
person or entity, except for the Sponsor's loan to DCDC II as evidenced by
the DCDC II Note.
(w) DIVISIONS. The Sponsor has not identified and will not identify
its shareholders, or any affiliates of them, as a division or part of it.
(x) ARM'S-LENGTH TRANSACTION. The Sponsor has not entered into and
will not enter into or be a party to, any transaction with its shareholders
or its affiliates except in the ordinary course of its business and on
terms which are intrinsically fair and are no less favorable to it than
would be obtained in a comparable arm's-length transaction with an
unrelated third party.
Section 4.17. SPONSOR REPRESENTATIONS AND WARRANTIES REGARDING TRUST
ESTATE. The Sponsor hereby makes the same representations and warranties with
respect to the assets constituting the Trust Estate as made by the Lender in
Section 3.01(b) of the Sale Agreement.
(End of Article IV)
42
ARTICLE V
REVENUES AND TRUST FUNDS
Section 5.01. CREATION OF FUNDS AND ACCOUNTS TO BE HELD BY THE TRUSTEE.
The following funds and separate accounts within the funds are hereby created
for the Bonds and shall be held and maintained for the Holders of Bonds and the
Residual Holders, as their respective interests may appear, by the Trustee as
Trust Funds under this Indenture:
Debt Service Fund
Redemption Fund
Class A Bonds Account
Class B Bonds Account
Residual Fund
Trust Expense Fund
Trustee Account
Manager Account
For the purposes of internal accounting, any fund or account created by
this Indenture may contain one or more sub-accounts, as the Trustee may deem
proper.
Section 5.02. SPONSOR CONTRIBUTION. On the date of issuance of the Bonds,
the Sponsor shall deposit into the trust created hereby the Notes and the Loan
Documents. In exchange therefor, the Trustee shall issue for the benefit of the
Sponsor and upon the terms herein described the Class A Bonds, the Class B Bonds
and the Certificates.
Section 5.03 DEBT SERVICE FUND.
(a) DEPOSITS OR TRANSFER OF MONEYS INTO THE DEBT SERVICE FUND.
The Trustee shall deposit into the Debt Service Fund upon receipt (i) all
monies transferred from the Income Account held by the Trustee as the Approved
Bank with respect thereto which are payments made on account of the 49C Notes
pursuant to the Loan Agreement and (ii) all amounts received by it from payments
on the DCDC II Note.
(b) USE OF MONEYS IN DEBT SERVICE FUND.
Moneys on deposit in the Debt Service Fund shall be used in the following
order and priority: (i) to transfer to the Trustee Account of the Trust Expense
Fund on each Interest Payment Date beginning June 1, 1998 the sum of $10,000;
(ii) to pay interest on the Bonds coming due on each Bond Payment Date; and
(iii) to pay the principal on the Bonds as it becomes due on any Bond Payment
Date or, if principal is not due on any such Bond Payment Date, to reserve
against the principal due on the next succeeding Bond Payment Date the amount
set forth on Exhibit G hereto. After making such payments on the Bonds or
reserving such
43
amounts, as applicable, on each Bond Payment Date, the Trustee will transfer
to the Manager Account of the Trust Expense Fund from the Debt Service Fund
the lesser of (A) the sum of the accrued fees and expenses of the Manager
then due and payable or (B) the balance on deposit in the Debt Service Fund.
After making such transfer to the Manager Account of the Trust Expense
Fund, on each June 1 and December 1 commencing December 1, 1998, the Trustee
will transfer the balance in the Debt Service Fund to the Residual Fund,
provided no Event of Default has occurred and is continuing.
Except for the transfers to the Trust Expense Fund and the Residual Fund
described above, the Trustee shall use moneys in the Debt Service Fund solely
for the payment of interest on the Bonds when due and the payment of principal
of and premium (if any) on the Bonds as the same become due and payable at
maturity or upon earlier redemption or acceleration. The Trustee shall at all
times maintain accurate records of deposits into the Debt Service Fund, and the
sources and timing of such deposits.
Section 5.04. THE REDEMPTION FUND.
(i) DEPOSITS INTO REDEMPTION FUND. The Sponsor shall cause to be
deposited into the Class A Bonds Account and the Class B Bonds Account, as
applicable, of the Redemption Fund, for the payment of principal, accrued
interest to the redemption date, if any, and premium, if any, upon any
extraordinary mandatory redemption of the Bonds (pursuant to Section 2.15
hereof), solely out of moneys received as prepayment on the 49C Notes, an amount
sufficient to pay, when due, the principal, accrued interest to the redemption
date, if any, and premium, if any, upon such a redemption of the Bonds.
(ii) USE OF MONEYS IN THE REDEMPTION FUND. The Trustee shall use moneys in
the Redemption Fund solely for the payment of principal of, premium, if any, and
accrued interest on the Bonds to the redemption date in connection with an
extraordinary mandatory redemption of Bonds pursuant to Section 2.15 hereof but
only if notice thereof has been given pursuant to Section 2.16 hereof.
Section 5.05. THE TRUST EXPENSE FUND.
(a) DEPOSITS AND TRANSFERS INTO TRUST EXPENSE FUND. Moneys shall be
transferred into the Trust Expense Fund from the Debt Service Fund at the times
and as provided in Section 5.03(b).
(b) USE OF TRUST EXPENSE FUND. The Trustee shall use the moneys
transferred or deposited into the Trustee Account of the Trust Expense Fund to
pay the fees and expenses of the Trustee, and use the moneys transferred or
deposited into the Manager Account of the Trust Expense Fund to pay the fees and
expenses of the Manager.
44
Section 5.06. THE RESIDUAL FUND.
(a) DEPOSITS INTO RESIDUAL FUND. Moneys shall be transferred into the
Residual Fund from the Debt Service Fund at the times and as provided in Section
5.03.
(b) USE OF RESIDUAL FUND. The Trustee shall use moneys transferred into
the Residual Fund solely to make distributions on the Certificates on each
Residual Distribution Date.
Section 5.07. AMOUNTS REMAINING IN FUNDS.
Subject to compliance with Section 3.03 hereof, any amounts remaining in
any Fund and any revenues derived from the Notes after full payment of the
Bonds, including any fees, charges and expenses of the Trustee as provided
herein and all other amounts required to be paid hereunder shall be paid to the
Residual Holders and, upon such payment, the Trustee shall have no
responsibility for the use or application by the Residual Holders of such
amounts or the use or application by the Residual Holders of amounts from time
to time released from any other Fund established hereunder.
(End of Article V)
45
ARTICLE VI
INVESTMENT OF MONEYS
(a) All amounts held in the Debt Service Fund by the Trustee shall be
initially invested in accordance with the provisions of the Investment
Agreement, and if such Investment Agreement or any substitute therefor ever
ceases to be in effect, at the direction of the Majority Residual Holders in
accordance with paragraph (b) below.
The Trustee is hereby authorized and directed to enter into the original
Investment Agreement. The Trustee shall give all required notices under the
Investment Agreement. The Trustee shall maintain said Investment Agreement
unless otherwise directed in writing by the Majority Residual Holders to obtain
a substitute Investment Agreement and such procurement is consistent with the
terms of the existing Investment Agreement. The Trustee shall notify the Rating
Agency prior to any amendment or modification of the Investment Agreement, and
shall furnish the Rating Agency with a copy of any such amendment or
modification. In addition, the Trustee shall notify the Rating Agency prior to
the execution and delivery of any substitute Investment Agreement and shall
furnish the Rating Agency with a copy thereof.
The Sponsor shall not assign any of its rights or interests in or to the
Investment Agreement (or any substitute Investment Agreement) unless the Sponsor
has first notified both the Trustee and the Rating Agency of the proposed
assignment and the Trustee has received from the Rating Agency a letter to the
effect that such proposed assignment will not result in any downgrade,
withdrawal or qualification of the rating on the Class A Bonds.
(b) All other amounts held under this Indenture by the Trustee shall be
invested at the direction of the Majority Residual Holders in Government
Securities and in such manner as may then be required by applicable federal or
state laws and regulations and applicable laws and regulations of the State,
regarding security for, or granting a preference in the case of, the deposit of
trust funds; provided all such Government Securities shall mature or be
redeemable at the times necessary to provide funds to make payments of debt
service and other expenditures as provided herein. In the absence of direction
from the Majority Residual Holders, the Trustee shall invest such amounts in
investments described in clause (c) of the definition of "Government
Securities."
All amounts deposited with the Trustee shall be credited to the particular
Fund to which such moneys belong.
(c) Whenever the cash balance in a particular Trust Fund is insufficient
to make payments required therefrom, the Trustee shall sell and reduce to cash
any Government Securities held therein as needed to make such payments.
(d) Government Securities purchased as an investment of moneys in any
Trust Fund held by the Trustee under the provisions of this Indenture shall be
deemed at all times to be a
46
part of such Trust Fund. Any income or interest earned and any losses
suffered with respect to an investment in a Government Security shall be
credited or charged as applicable to the Trust Fund in which such Government
Security is held.
(e) The Trustee shall provide to the Sponsor and the Residual Holders
written monthly statements of transactions and investments pertaining to all
Trust Funds so long as any Bonds remain Outstanding.
(f) The Trustee shall have no liability with respect to investment in any
Government Security made at the written direction of the Majority Residual
Holders, and the Trustee shall have the right to require written direction of
the Majority Residual Holders before investing in any Government Security.
(g) The Trustee may act as principal or agent in the acquisition or
disposition of any Government Securities.
(End of Article VI)
47
ARTICLE VII
DISCHARGE OF INDENTURE
Whenever the following conditions shall have been satisfied with respect to
the Bonds:
(a) either:
(i) all Bonds theretofore authenticated and delivered (other
than Bonds which have been mutilated, destroyed, lost or stolen and
which have been replaced or paid as provided in Section 2.07) have
been delivered to the Trustee for cancellation; or
(ii) all Bonds not theretofore delivered to the Trustee for
cancellation have become due and payable and there has been deposited
with the Trustee, in trust for such purpose, an amount of cash or non-
callable Government Securities of the type described in clauses (a)
and (b) of the definition thereof, the principal of and interest on
which non-callable obligations when due is sufficient to pay and
discharge the entire indebtedness on such Bonds not theretofore
delivered to the Trustee for cancellation;
(b) all other sums payable hereunder with respect to the Bonds
(including all Trustee fees and expenses) have been paid or provided for;
and
(c) the Trustee has received an Opinion of Counsel to the effect that
all conditions precedent herein provided for the satisfaction and discharge
of this Indenture with respect to the Bonds have been complied with;
then, at the direction of the Residual Holders, this Indenture and the lien,
rights and interests created hereby and thereby shall cease to be of further
effect, and the Trustee and each co-trustee and separate trustee, if any, then
acting as such hereunder shall, at the expense of the Residual Holders, execute
and deliver all such instruments as may be necessary to acknowledge the
satisfaction and discharge of this Indenture and shall pay, or assign or
transfer and deliver, to the Residual Holders all cash, securities and other
property held by the Trustee as part of the Trust Estate remaining after
satisfaction of the conditions set forth in (a) and (b) above.
48
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Sponsor to the Trustee under Section 9.02, the obligations of
the Trustee and any Paying Agents to the Sponsor and to the holders of Bonds
under Section 9.10, the obligations of the Trustee to the owners of Bonds under
Section 4.14 and the provisions of Article II with respect to lost, stolen,
destroyed and mutilated Bonds, registration of transfers and exchanges of Bonds
and rights to receive payments of principal of and interest on the Bonds from
the moneys and/or Investment Securities deposited with and held by the Trustee
shall survive discharge of the lien of this Indenture on the Trust Estate.
(End of Article VII)
49
ARTICLE VIII
EVENTS OF DEFAULT; REMEDIES
Section 8.01. EVENTS OF DEFAULT.
If any of the following events occur, subject to Section 8.17, it is hereby
defined as and declared to be and to constitute an Event of Default:
(a) A default in any payment when and as due of interest on any Bond;
or
(b) A default in any payment of principal of any Bond when and as
due, whether at the stated maturity thereof or when called for redemption;
or
(c) A failure by the Sponsor to perform or observe any covenants of
the Sponsor other than such covenants relating to (a) or (b) above, or if
any representation made in this Indenture or in any certificate delivered
pursuant to this Indenture shall prove to be materially incorrect at the
time made, and failure to remedy the same within 90 days after notice
thereof pursuant to Section 8.17 (or such longer period permitted in
accordance with Section 8.17).
Section 8.02. WAIVER, RESCISSION AND ANNULMENT OF REMEDY EVENT.
(a) The Trustee may waive any Event of Default which has been remedied and
its consequences.
(b) Subject to Section 8.12, the Trustee shall waive any Event of Default
which has not been remedied upon the written request of the Holders of a
majority of the aggregate Outstanding amount of each Class of Bonds affected
thereby.
(c) Notwithstanding Sections 8.02(a) and (b), no Event of Default shall be
waived or rescinded, or its consequences annulled, unless the Trustee is
provided a Non-Disqualification Opinion with respect to such action.
(d) No waiver, rescission or annulment shall extend to or affect any
subsequent Event of Default or impair any right consequent thereon.
Section 8.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
Subject to Section 8.12, if an Event of Default occurs and is continuing,
the Trustee, in its discretion, may proceed to protect and enforce its rights
and the rights of 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
50
or in aid of the exercise of any power Granted herein, or to enforce any
other proper remedy or legal right vested in the Trustee by this Indenture or
by law.
Notwithstanding anything to the contrary in this Article VIII, the Sponsor
shall be liable for the payment of principal of and interest on the Bonds, and
for the payment of all other claims which may arise against it under this
Indenture or pursuant to any judgment entered against the Sponsor of any nature
whatsoever, only to the extent of the assets which are included in the Trust
Estate and such obligations are special and limited in accordance with Section
2.03.
Section 8.04. REMEDIES.
If an Event of Default shall have occurred and be continuing and its
consequences have not been rescinded or annulled, the Trustee may, subject to
Section 8.12 and in addition to its rights under Section 4.05, do one or more of
the following:
(a) Institute Proceedings for the collection of all amounts then
payable on the Notes, including all action commercially reasonable to
realize upon the collateral securing the Notes (assuming an event of
default exists with respect to the Notes pursuant to the terms thereof);
(b) Institute Proceedings for the collection of all amounts then
payable on the Bonds or under this Indenture, enforce any judgment obtained
and collect from the Trust Estate securing the Bonds moneys adjudged due;
(c) Institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Trust Estate or
to enforce its rights hereunder;
(d) Exercise any remedies as a secured party under the UCC and take
any other appropriate action to protect and enforce the rights and remedies
of the Trustee or Holders;
(e) Replace the Manager in accordance with Section 12.21; and
(f) With respect to an Event of Default under Section 8.01(a) or (b)
that remains uncured for a period of 120 days or more, accelerate and
declare the Bonds immediately due and payable in full; provided at any time
there exists and is continuing an Event of Default under Section 8.01(a) or
(b), the Trustee shall accelerate and declare the Bonds immediately due and
payable in full if directed to do so by a majority in aggregate outstanding
amount of each Class of Bonds in accordance with Section 8.12 hereof. (Any
notice of an Event of Default under Section 8.01(a) or (b) provided to
Holders pursuant to Section 9.03 shall advise such Holders of such ability
to direct the Trustee to accelerate the Bonds.)
51
Notwithstanding the foregoing, no deficiency judgment shall be sought or
obtained against the Sponsor or the Residual Holders if the amounts realizable
from the Trust Estate under this Indenture are insufficient to pay the
obligations hereunder or on the Bonds.
Section 8.05. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF BONDS.
All rights of action and claims under this Indenture or the Bonds may be
prosecuted and enforced by the Trustee without the possession of any Bonds or
evidence of ownership of the Residual 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 for the ratable benefit of the Bondholders until
all Bonds have been paid, and the Residual Holders, as their respective
interests may appear.
Section 8.06. APPLICATION OF MONEYS COLLECTED.
All moneys received by the Trustee following an Event of Default upon the
exercise of any remedies available to it or otherwise, after payment of the
costs and expenses of the Proceedings resulting in the collection of such moneys
and of any amounts due and owing to the Trustee under this Indenture and any
extraordinary fees, charges, out-of-pocket expenses or advances incurred by the
Trustee as a result of its exercise of powers hereunder following the occurrence
of an Event of Default, shall be deposited in the Debt Service Fund and all
moneys in the Debt Service Fund (other than moneys held for redemption of Bonds
duly called for redemption) shall be applied to the extent permitted by law in
the following order, at the date or dates from time to time fixed by the
Trustee, in the manner and priority provided as follows until such Event of
Default is cured:
First - To the payment to the persons entitled thereto of all
installments of interest then due on the Bonds, in the direct order of the
maturity of the installments of such interest and, if the amounts available
shall not be sufficient to pay in full any particular installment, then to
the payment ratably, according to the amounts due on such installment, to
the persons entitled thereto, without any discrimination or privilege; and
Second - To the payment to the persons entitled thereto of the unpaid
principal and premium, if any, on any of the Bonds, which shall have become
due (other than Bonds which have matured or otherwise become payable before
such Event of Default and moneys for the payment of which are held in the
Debt Service Fund or otherwise held by the Trustee), with interest on such
principal from the respective dates upon which the same became due and, if
the amount available shall not be sufficient to pay in full the amount of
principal, premium, if any, and the interest due on any particular date,
then to the payment ratably, according to the amount of principal due on
such date, to the persons entitled thereto, without any discrimination or
privilege.
52
To the extent funds remain after such payments, such funds shall be held by
the Trustee; provided that in no event shall Bonds be called for redemption in
part so long as an Event of Default is outstanding under this Indenture.
Section 8.07. LIMITATION ON SUITS.
(a) No Bondholder 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:
(i) Such Bondholder previously has given written notice to the
Trustee of a continuing Event of Default in respect of such Bond;
(ii) Bondholders of not less than 51% in aggregate Outstanding amount
of Bonds shall have made written request to the Trustee pursuant to Section
8.12 to institute Proceedings in respect of such Event of Default in its
own name as Trustee hereunder;
(iii) Such Bondholders have offered to the Trustee, and the
Trustee shall have accepted, reasonable indemnity against the costs,
expenses and liabilities to be incurred in compliance with such request;
and
(iv) The Trustee for 30 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such Proceeding.
(b) Notwithstanding subsection (a) above, no Bondholders 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
Bondholders or to obtain or to seek to obtain priority or preference over any
other Bondholder or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all Bondholders.
(c) Notwithstanding subsection (a) above, each Holder of the Class A Bonds
shall have the right to institute, individually but on behalf of all Holders of
Bonds, any Proceedings, judicial or otherwise, for the collection of payments
due under the GSA Lease securing the 49C Notes or otherwise to realize upon the
value of the collateral pledged hereunder related to the GSA Lease if an Event
of Default under Section 8.01(a) or (b) has occurred and continues to exist. If
any such Proceeding is instituted by a Holder of the Class A Bonds, the Trustee
may but shall not be obligated to, intervene in any such Proceeding or institute
any similar Proceeding in its own name unless directed to do so by the requisite
percentage of Bondholders pursuant to Section 8.12.
Section 8.08. UNCONDITIONAL RIGHTS OF BONDHOLDERS TO RECEIVE PRINCIPAL AND
INTEREST.
Notwithstanding any other provision in this Indenture, a Bondholder shall
have the right, which is absolute and unconditional, to receive payment of the
principal of and interest, if any,
53
on Bonds owned by such Bondholder (subject to Section 4.01) on or after the
respective Bond Payment Date.
Section 8.09. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee, any Residual Holder 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, any Residual Holder or to such Bondholder,
then and in every such case the Sponsor, the Trustee, any Residual Holder and
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, any Residual Holder and Bondholders
shall continue as though no such Proceeding had been instituted.
Section 8.10. RIGHTS AND REMEDIES CUMULATIVE.
No right or remedy herein conferred upon or reserved to the Trustee, the
Residual Holders or to 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 8.11. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee, any Residual Holder or of any
Bondholder to exercise any right or remedy accruing upon an Event of Default
shall impair any right or remedy or constitute a waiver of any such Event of
Default or any acquiescence therein. Every right and remedy given by this
Article VIII or by law to the Trustee, the Residual Holders or to Bondholders
may be exercised from time to time, and as often as may be deemed expedient, by
the Trustee, the Residual Holders or by Bondholders, as the case may be.
Section 8.12. CONTROL BY THE BONDHOLDERS UNTIL THERE ARE NO OUTSTANDING
BONDS.
Subject to Sections 8.07(a) and 9.01, Holders of a majority in aggregate
Outstanding amount of each Class of Bonds shall have the right at any time, by
an instrument in writing executed and delivered to the Trustee, to direct the
time, method and place of conducting any Proceeding for any remedy available to
the Trustee with respect to the Bonds or exercising any trust or power conferred
on the Trustee with respect to the Bonds provided that:
(a) such direction shall not be in conflict with any rule of law or
with this Indenture;
54
(b) the Trustee shall have been provided with indemnity reasonably
satisfactory to it;
(c) any direction to the Trustee to undertake a sale of the Trust
Estate securing the Bonds shall be accompanied by a Non-Disqualification
Opinion;
(d) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction; provided, however,
that the Trustee need not take any action which it determines would be
unjustly prejudicial to Bondholders not consenting.
Section 8.13. UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Bondholder by such Holder's
acceptance of a Bond 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.
Section 8.14. SALE OF TRUST ESTATE.
(a) The power to make any sale of any portion of the Trust Estate (a
"Sale") shall not be exhausted by any one or more Sales as to any portion of the
Trust Estate remaining unsold, but shall continue unimpaired until the entire
Trust Estate shall have been sold or all amounts payable on the Bonds and under
this Indenture with respect thereto shall have been paid. The Trustee may from
time to time postpone any 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 but such waiver does not apply to amounts to
which the Trustee is otherwise entitled under Section 9.02.
(b) The Trustee may bid for and acquire any portion of the Trust Estate in
connection with a public Sale thereof, and, in lieu of paying cash therefor, may
make settlement for the purchase price by crediting against amounts owing on the
Bonds or other amounts secured by this Indenture, all or part of the net
proceeds of such Sale after deducting the costs, charges and expenses incurred
by the Trustee in connection with such Sale. The Bonds need not be produced in
order to complete any such Sale, or in order for the net proceeds of such Sale
to be credited against the Bonds. The Trustee may hold, lease, operate, manage
or otherwise deal with any property so acquired in any manner permitted by law.
If the Trustee shall have acquired the entire Trust Estate by purchasing it at
any public Sale, the Trustee will, to the extent permitted by applicable law,
apply all distributions received with respect to such Trust Estate pursuant to
Section 8.06.
55
(c) The Trustee shall execute and deliver an appropriate instrument of
conveyance transferring its interest in any portion of the Trust Estate in
connection with a Sale thereof. In addition, the Trustee is hereby irrevocably
appointed the agent and attorney-in-fact of the Residual Holders to transfer and
convey its interest in any portion of the Trust Estate in connection with a Sale
thereof and to take all action necessary to effect such Sale. 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.
(d) The foregoing provisions shall not preclude or limit the ability of
the Trustee to purchase, to the extent permitted by applicable law, all or any
portion of the Trust Estate at a private sale, provided that, in no event shall
the Trustee purchase or sell the Trust Estate unless it either (i) has received
an Opinion of Counsel to the effect that such sale will not result in the
imposition of taxes on "prohibited transactions," as defined in Section 860F of
the Code 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 8.06.
Section 8.15. ACTION ON BONDS.
The Trustee's right to seek and recover judgment under this Indenture shall
not be affected by the seeking, obtaining or applying 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 Bondholders shall be impaired by the
recovery of any judgment by the Trustee against the Sponsor or by the levy of
any execution under such judgment upon any portion of the Trust Estate.
Section 8.16. RECEIVER.
Upon the occurrence of an Event of Default, and upon the filing of a suit
or other commencement of Proceedings to enforce the rights of the Trustee or the
Bondholders under this Indenture, the Trustee shall be entitled, as a matter of
right, to the appointment of a receiver or receivers of the Trust Estate and of
the revenues, receipts, earnings, income, and profits thereof, pending such
Proceedings, with such powers as the court making such appointment shall confer.
Section 8.17. NOTICE OF DEFAULTS UNDER SECTION 8.01(c); OPPORTUNITY OF
SPONSOR AND THE RESIDUAL HOLDERS TO CURE SUCH DEFAULTS.
Anything herein to the contrary notwithstanding, no Default under Section
8.01(c) shall constitute an Event of Default until actual notice of such Default
by first-class mail (postage prepaid) shall be given to the Sponsor (with a copy
to the Residual Holders) by the Trustee, the Majority Residual Holders or by the
owners of not less than 25% of the aggregate Outstanding amount of Bonds and the
Sponsor shall have had 90 days after receipt of such notice to correct such
Default or cause such Default to be corrected, and shall not have corrected such
Default
56
or caused such Default to be corrected within the applicable period;
provided, however, if such Default be such that it cannot be corrected within
the 90-day period and if, within such 90-day period the Sponsor shall have
given notice to the Trustee of corrective action it proposes to take, which
corrective action is agreed to in writing by the Trustee with the consent of
the Majority Residual Holders to be satisfactory and the Sponsor shall
thereafter pursue such corrective action diligently until such Default is
cured, it shall not be considered an Event of Default during such period as
the Trustee shall permit in writing to the Sponsor, but such permission may
be revoked in writing to the Sponsor and the Trustee after reasonable time if
progress toward curing such Default satisfactory to the Trustee has not been
achieved. The foregoing notwithstanding, if any Default under Section
8.01(c) is not cured within 180 days following the Sponsor's receipt of the
notice described above, such Default shall constitute an Event of Default
hereunder.
With regard to any alleged Default concerning which notice is given to the
Sponsor and the Majority Residual Holders under the provisions of this Section
8.17, the Sponsor hereby grants, to the extent permitted by law, to the Majority
Residual Holders full authority to perform any covenant or obligation alleged in
said notice to constitute a Default, in the name and stead of the Sponsor with
full power to do any and all things and acts to the same extent that the Sponsor
could do and perform any such things and acts and with power of substitutions,
to the extent permitted by law.
(End of Article VIII)
57
ARTICLE IX
TRUSTEE
Section 9.01. REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE; ACCEPTANCE OF
THE TRUSTS.
In connection with the acceptance of its duties hereunder, the Trustee
makes the following representations and warranties:
(i) DUE ORGANIZATION, VALID EXISTENCE. The Trustee is duly organized
and validly existing as a national banking association with corporate trust
powers.
(ii) POWER AND AUTHORITY. The Trustee has full power and authority to
carry on its business as now being conducted and to enter into this
Indenture and accept the trusts imposed upon it hereby.
(iii) EXECUTION AND DELIVERY. This Indenture has been duly executed
and delivered by the Trustee.
(iv) ENFORCEABILITY. This Indenture constitutes the valid, legal,
binding and enforceable obligation of the Trustee (subject to bankruptcy,
insolvency or creditor rights laws generally, and principles of equity
generally) without offset, defense, or counterclaim.
(v) NO CONFLICT. The execution, delivery and performance of this
Indenture by the Trustee will not cause or constitute (with due notice or
lapse of time or both) a default under or conflict with the Trustee's
organizational documents or other agreements by which the Trustee is bound
or otherwise materially or adversely affect performance of duties.
(vi) NO VIOLATION OF LAWS. The execution, delivery and performance of
this Indenture by the Trustee will not violate any law, regulation, order
or decree of any governmental authority.
(vii) CONSENTS OBTAINED. All consents, approvals, authorizations,
orders or filings of or with any court or governmental agency or body, if
any, required for the execution, delivery and performance of this Indenture
by the Trustee have been obtained or made.
(viii) NO LITIGATION. There is no pending action, suit or proceeding,
arbitration or governmental investigation against the Trustee an adverse
outcome of which would materially affect the Trustee's performance under
this Indenture.
58
The Trustee hereby accepts the trusts imposed upon it by this Indenture,
and agrees to perform said trusts, but only upon and subject to the following
express terms and conditions:
(a) Except during the continuance of an Event of Default of which the
Trustee is deemed to have notice under Section 9.03, the Trustee shall
perform such duties and only such duties as are specifically set forth in
this Indenture and no implied covenants or obligations shall be read into
this Indenture against the Trustee. Subject to Sections 9.01(c) and
9.01(f) and the standard of care established therein, if an Event of
Default has occurred and is continuing, the Trustee shall exercise such of
the rights and powers vested in it by this Indenture and use the same
degree of care and skill in its exercise, as a prudent man would exercise
or use under the circumstances in the conduct of his own affairs;
(b) The Trustee may execute any of the trusts or powers hereof and
perform any of its duties by or through attorneys, agents or receivers or
employees or other experts but shall be answerable for the conduct of the
same in accordance with the standard of care imposed upon the Trustee for
its own actions under this Indenture, and shall be entitled to advice of
counsel, accountants and other professionals or other experts concerning
all matters of trust hereof and the duties hereunder, and may in all cases
pay such reasonable compensation to all such attorneys, agents,
accountants, other professionals, receivers or other experts and employees
as may reasonably be employed and approved in the exercise of due care in
connection with the trusts hereof. The Trustee may act and rely upon the
opinion or advice of any attorneys, accountants and other professionals or
experts (who may be the attorney or attorneys, accountants and other
professionals or experts for the Sponsor, a Residual Holder or the
Manager), approved by the Trustee in the exercise of reasonable care. The
Trustee shall not be responsible for any loss or damage resulting from any
action taken or nonaction in good faith in reliance upon such opinion or
advice;
(c) The recitals of facts herein in the Bonds and in the Certificates
shall be taken as statements of the Sponsor, and the Trustee assumes no
responsibility for the correctness of the same, nor makes any
representations as to the validity or sufficiency of this Indenture or the
Trust Estate or of the Bonds or the Certificates nor shall incur any
responsibility in respect thereof, other than in connection with the duties
or obligations herein and in the Bonds and in the Certificates assigned to
or imposed upon it. The Trustee shall not be liable in connection with the
performance of its duties hereunder, except for its own negligent action,
negligent failure to act or willful misconduct and the Trustee shall not be
deemed to have breached any of its fiduciary duties under this Indenture to
the extent the Trustee is acting pursuant to a written direction of the
Residual Holders or the Bondholders permitted or required under this
Indenture. The Trustee may become the owner of Bonds with the same rights
it would have if it were not Trustee, and, to the extent permitted by law,
may act as depositary for and permit any of its officers or directors to
act as a member of, or in any other capacity with respect to, any committee
formed to protect the rights of owners, whether
59
or not such committee shall represent the owners of a majority of the
aggregate Outstanding amount of the Bonds;
(d) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, statement, opinion, notice,
request, consent, certificate, order, affidavit, letter, telegram or other
paper or document reasonably believed (i) to be genuine and correct and
(ii) to have been signed or sent by the proper Person or Persons (which, in
the case of the Sponsor, shall be an Authorized Officer). The Trustee
shall not withhold unreasonably its consent, approval or action to any
reasonable request of the Sponsor or the Residual Holders. Any action
taken by the Trustee pursuant to this Indenture upon the request or
authority or consent of any Person who at the time of making such request
or giving such authority or consent is the owner of any Bond on the Bond
Register shall be conclusive and binding upon all future owners of the same
Bond or Certificate, as applicable, and upon Bonds or Certificates issued
in exchange therefor or in place thereof;
(e) As to the existence or nonexistence of any fact or as to the
sufficiency or validity of any instrument, paper or proceeding, the Trustee
shall be entitled to rely reasonably upon an Officer's Certificate or on a
certificate or written representation of others as sufficient evidence of
the facts therein contained and prior to the occurrence of a default of
which the Trustee has been notified as provided in Section 9.01(g), or of
which by Section 9.01(g) it is deemed to have notice, shall also be at
liberty to accept a similar certificate to the effect that any particular
dealing, transaction or action is necessary or expedient, but may, at its
discretion, secure such further evidence deemed necessary or advisable, but
shall in no case be bound to secure the same. The Trustee may accept such
Officer's Certificate or other certificate or written representation to the
effect that resolutions in the form therein set forth have been adopted as
conclusive evidence that such resolutions have been duly adopted and are in
full force and effect;
(f) The permissive right of the Trustee to do things enumerated in
this Indenture shall not be construed as a duty and it shall not be
answerable for other than its negligence, willful misconduct or reckless
disregard;
(g) The Trustee shall not be required to take notice or be deemed to
have notice of any Default or Event of Default hereunder except an Event of
Default under Section 8.01(a) or (b), the failure to make any of the
payments to the Trustee required to be made by Article IV hereof or the
failure of the Sponsor, the Manager or the Residual Holders to file with
the Trustee any document required by this Indenture to be so filed
subsequent to the issuance of the Bonds, unless a Trust Officer has actual
knowledge or notice of such Default or Event of Default or the Trustee
shall be specifically notified in writing of such Default by the Sponsor,
the Manager, the Residual Holders or by the owners of at least 25% of the
aggregate Outstanding amount of the Class of Bonds affected thereby or
owners of at least 25% of the Residual. All notices or other instruments
required by this Indenture to be delivered to the Trustee must, in
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order to be effective, be delivered to the Trustee must, in order to be
effective, be delivered at the Notice Address; and, in the absence of such
notice so delivered, the Trustee may conclusively assume there is no
Default or Event of Default except as foresaid;
(h) At any and all reasonable times, the Trustee, and its duly
authorized agents, attorneys, experts, engineers, accountants, other
professionals, and representatives, shall have the right fully to inspect
any and all of the property herein conveyed, including all books, papers
and records of the Sponsor pertaining to the revenues and receipts under
the Notes, Loan Documents and the Bonds and to make copies thereof;
provided, however, that the foregoing shall not impose any additional
obligations on the Trustee;
(i) The Trustee shall not be required to give any bond or surety in
respect of the execution of the said trusts and powers or otherwise in
respect of the premises;
(j) Notwithstanding anything elsewhere in this Indenture contained,
in respect of the authentication of any Bonds and the execution of any
Certificates, the withdrawal of any cash or the taking of any action
whatsoever within the purview of this Indenture, the Trustee shall have the
right, but shall not be required, to demand any showings, certificates,
opinions, appraisals or other information, or corporate action or evidence
thereof, in addition to that by the terms hereof required as a condition of
such action by the Trustee deemed desirable for the purpose of establishing
the right of the Sponsor to the authentication of any Bonds, the execution
of any Certificates, the withdrawal of any cash or the taking of any other
action by the Trustee;
(k) Before taking any action under Article VIII or any action in this
Indenture for which the express right to receive indemnification is granted
to the Trustee, the Trustee may require that a satisfactory indemnity be
furnished for the reimbursement of all expenses to which the Trustee may be
put and to protect the Trustee against all liability, except liability
which is adjudicated to have resulted from its negligence or willful
misconduct by reason of any action so taken;
(l) The Trustee shall not be responsible for any act or omission of
the Trustee taken in good faith or any consequences thereof but nothing in
this Section 9.01(l) shall be construed to excuse the Trustee for a
violation of the Trustee's standard of care hereunder;
(m) All moneys received into the Trust Funds hereunder by the Trustee
or any Paying Agent shall, until used or applied or invested as herein
provided, be held in trust for the purposes for which they were received
but need not be segregated from other funds except to the extent required
by law or this Indenture. Neither the Trustee nor any Paying Agent shall
be under any liability for the payment of interest on any moneys received
hereunder;
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(n) 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;
(o) Notwithstanding any other provision of this Indenture, the
Trustee makes no representation as to the validity or adequacy of this
Indenture or the Bonds, shall not be accountable for the Sponsor's use of
the proceeds from the Bonds paid to the Sponsor, and shall not be
responsible for any statement in the Bonds (except the certificate of
authentication) or this Indenture or for the initial perfection of any lien
created by this Indenture or otherwise as security for the Bonds;
(p) Notwithstanding any other provision of this Indenture, the
Trustee shall not be responsible for the application of any of the proceeds
of the Bonds or any other moneys deposited with it and paid out, withdrawn
or transferred hereunder if such application, payment, withdrawal or
transfer shall be made in accordance with the provisions of this Indenture;
and
(q) Notwithstanding any other provision of this Indenture, the
Trustee shall not be personally liable for any claims by or on behalf of
any person, firm, corporation or other legal entity arising from the
conduct or management of, or from any work or thing done on, the Project,
and shall have no affirmative duty with respect to compliance of the
Project under state or Federal laws pertaining to the transport, storage,
treatment or disposal of pollutants, contaminants, waste or hazardous
materials or regulations, permits or licenses issued under such laws.
Section 9.02. FEES, CHARGES AND EXPENSES OF TRUSTEE.
The Trustee shall be entitled to payment and/or reimbursement for its fees,
charges and expenses, but solely from amounts deposited for such purposes into
the Trustee Account of the Trust Expense Fund or such amounts as to which it may
otherwise be entitled under the provisions of this Indenture, including, without
limitation, Section 8.06 hereof. Except for extraordinary fees, charges and
expenses that may be owed to or incurred by the Trustee following the occurrence
of an Event of Default and which shall be paid to the Trustee from the sources
and as otherwise provided in Section 8.06, the Trustee acknowledges that all its
fees, charges and expenses for all services to be rendered hereunder from the
Closing Date through December 1, 1997 were paid in advance on the Closing Date,
and acknowledges that its fees, charges and expenses for all services to be
rendered hereunder after December 1, 1997 shall be equal to and shall be
satisfied by the payment of $10,000 semiannually on each Interest Payment Date
commencing June 1, 1998. All fees, charges and expenses of the Trustee not paid
when due shall bear interest from the date incurred to the date of payment at a
rate of interest equal to two percent (2%) in excess of the Base Rate of
SouthTrust Bank of Alabama, National Association, as announced from time to
time.
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Section 9.03. NOTICE OF DEFAULT.
If a Default occurs of which the Trustee is by Section 9.01(g) required to
take notice or if notice of a Default or Event of Default is given as in Section
9.01(g) hereof provided, then the Trustee shall promptly give or cause to be
given written notice thereof by first-class mail to the Rating Agency and to the
Holders at their addresses as shown on the Bond Register and the Certificate
Register, respectively. The Trustee shall provide the Securities Depository
with notice of an Event of Default described in Section 8.01(a) or (b)
immediately upon the Trustee's knowledge of such Event of Default and, with
respect to any other Default or Event of Default, within 30 days of the
Trustee's knowledge thereof.
Section 9.04. INTERVENTION BY TRUSTEE.
In any Proceeding concerning the issuance or the payment of the Bonds or
the Certificates and which in the opinion of the Trustee and its counsel has a
substantial bearing on the interests of the owners of the Bonds, the Trustee may
intervene on behalf of Bondholders and the Trustee shall intervene if requested
to do so in writing by the owners of at least a majority of the aggregate
Outstanding amount of each Class of Bonds or the Majority Residual Holder, upon
request of indemnification acceptable to the Trustee.
Section 9.05. SUCCESSOR TRUSTEE.
Any corporation or association into which the Trustee may be converted or
merged, or with which it may be consolidated, or to which it may sell or
transfer its trust business and assets as a whole or substantially as a whole,
or any corporation or association resulting from any such conversion, sale,
merger, consolidation or transfer to which it is a party, IPSO FACTO shall be
and become successor to the Trustee hereunder and vested with all of the title
to the Trust Estate and all the trusts, powers, discretions, immunities,
privileges and all other matters as was its predecessor, without the execution
or filing of any instrument or any further act, deed or conveyance on the part
of any of the parties hereto, anything herein to the contrary notwithstanding,
provided that (i) the Majority Residual Holders consent to such succession and
(ii) the successor corporation or association satisfies the standards of Section
9.08.
Section 9.06. RESIGNATION BY TRUSTEE.
The Trustee and any successor Trustee may at any time resign from the
trusts hereby created by giving 30 days' prior written notice by registered or
certified mail to the Sponsor, the Rating Agency, the Manager and by first
class-mail (postage prepaid) to the registered Holder of each Bond and
Certificate, all at the Trustee's expense, and such resignation shall take
effect only upon the appointment and acceptance of a successor Trustee, pursuant
to Section 9.08. If no successor Trustee shall have been appointed and have
accepted appointment within 45 days of giving notice of removal or notice of
resignation as aforesaid, the resigning Trustee or any Holder (on behalf of
himself and all other Holders) may petition any court of competent jurisdiction
for the appointment of a successor Trustee and such court may thereupon, after
such
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notice (if any) as it may deem proper, appoint such successor Trustee.
Resignation of a Trustee pursuant to this Section 9.06 or removal of the
Trustee pursuant to Section 9.07 shall not relieve such resigning or removed
Trustee from liability for its acts before the date such removal or
resignation is effective.
Section 9.07. REMOVAL OF TRUSTEE.
The Trustee may be removed at any time by an instrument or concurrent
instruments in writing delivered to the Trustee, the Rating Agency, the Sponsor,
the Manager and the Residual Holders and signed by the owners of a majority of
the aggregate Outstanding amount of each Class of Bonds; provided, however, that
no removal shall become effective until a successor Trustee has been appointed
and has accepted the duties of the Trustee. In addition, any Trustee hereunder
may be removed at any time, (i) at the written request of the Majority Residual
Holders, for cause, including breach of the trusts set forth in this Indenture
and (ii) by the Sponsor with the written approval of the Majority Residual
Holders.
Section 9.08. APPOINTMENT OF SUCCESSOR TRUSTEE; TEMPORARY TRUSTEE.
In case the Trustee hereunder shall resign or be removed, or be dissolved,
or shall be in course of dissolution or liquidation, or otherwise become
incapable of acting hereunder, or in case it shall be taken under the control of
any public officer or officers, or of a receiver appointed by a court, a
successor may be appointed by the owners of a majority of the aggregate
Outstanding amount of each Class of Bonds, with the consent of the Majority
Residual Holders, by an instrument or concurrent instruments in writing signed
by such owners, or by their attorneys-in-fact, duly authorized and a copy of
which shall be delivered personally or sent by registered mail to the Sponsor,
the Trustee and the Manager. In addition, in case of such vacancy, the Sponsor,
upon written notice to the Manager, the Majority Residual Holders, the
Bondholders, and to the outgoing trustee may, with the consent of the Majority
Residual Holders, appoint a temporary Trustee to fill such vacancy until a
successor Trustee shall be appointed by the owners of a majority of the
aggregate Outstanding amount of each Class of Bonds with the consent of the
Majority Residual Holders in the manner above provided; and any such temporary
Trustee so appointed by the Sponsor shall immediately and without further act be
superseded by the Trustee so appointed. Notice of the appointment of a
successor Trustee shall be given in the same manner as provided by Section 9.06
with respect to the resignation of a Trustee. Any Trustee appointed under the
provisions of this Article (other than the initial Trustee hereunder) or
appointed as a successor to the Trustee shall be (i) a trust company or bank in
good standing, duly authorized to exercise trust powers under this Indenture,
having trust assets of at least $500,000,000 and a combined capital and surplus
of at least $75,000,000, and subject to supervision or examination by federal or
state authority provided there is such a bank or trust company willing or able
to serve in such capacity. In case at any time the successor Trustee shall
cease to be eligible in accordance with these provisions, the Trustee shall
resign immediately in the manner and with the effect specified in this Article
IX. If there is no qualified trustee willing to serve, the successor Trustee
shall be selected by the Majority Residual Holders.
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Section 9.09. CONCERNING ANY SUCCESSOR TRUSTEE.
Every successor Trustee appointed hereunder shall execute, acknowledge and
deliver to its or his predecessor and also to the Sponsor, the Trustee and the
Manager an instrument in writing accepting such appointment hereunder, with a
copy to the Residual Holders, and thereupon such successor, without any further
act, deed or conveyance, shall become fully vested with all the estates,
properties, rights, powers, trusts, duties and obligations of its predecessors;
but such predecessor shall, nevertheless, on the written request of the Sponsor,
or of its successors, execute and deliver an instrument transferring to such
successor Trustee all the estates, properties, rights, powers and trusts of such
predecessor hereunder; and every predecessor Trustee shall deliver all
securities and moneys held by it as Trustee hereunder to its or his successor.
Should any instrument in writing from the Sponsor be required by any successor
Trustee for more fully and certainly vesting in such successor the estate,
rights, powers and duties hereby vested or intended to be vested in the
predecessor, any and all such instruments in writing shall, on request, be
executed, acknowledged and delivered by the Sponsor. The resignation of any
Trustee and appointing a successor hereunder, together with all other
instruments provided for in this Article IX, shall be filed or recorded by the
successor Trustee in each recording office where this Indenture shall have been
filed or recorded.
Section 9.10. DESIGNATION AND SUCCESSION OF PAYING AGENTS.
The Trustee is hereby appointed as Paying Agent hereunder. Any bank or
trust company with or into which the Paying Agent may be merged or consolidated,
or to which the assets and business of such Paying Agent may be sold, shall be
deemed the successor of such Paying Agent for the purposes of this Indenture.
If the position of Paying Agent shall become vacant for any reason, the Sponsor
shall, within 30 days thereafter, appoint a bank or trust company to fill such
vacancy; provided, however, that if the Sponsor shall fail to appoint such
Paying Agent within said period, the Trustee shall make such appointment. Other
Paying Agents or fiscal agents may be appointed pursuant to Article IX hereof by
the Sponsor if in its discretion additional Paying Agents or fiscal agents are
deemed advisable. Any Paying Agent appointed to serve in such capacity
hereunder shall hold all moneys transferred to it in Eligible Accounts.
Paying Agents shall enjoy the same protective provisions in performance of
their duties hereunder as are specified in Section 9.01 with respect to the
Trustee insofar as such provisions may be applicable, and shall be entitled to
reasonable compensation and reimbursement of their expenses and costs from the
Trust Expense Fund.
Notice of the appointment of Paying Agents shall be given in the same
manner as provided by Section 9.06 with respect to the appointment of a
successor Trustee.
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Resignation or removal of a Paying Agent pursuant to this Section 9.10
shall not relieve such resigning or removed Paying Agent from liability for its
acts prior to the date such removal or resignation is effective.
(End of Article IX)
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ARTICLE X
SUPPLEMENTAL INDENTURES
Section 10.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF BONDHOLDERS.
Subject to Section 10.03, without the consent of, or notice to, any
Bondholders, the Sponsor (but only with the consent or direction of the Majority
Residual Holders) 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:
(a) To cure any ambiguity, to correct or supplement any provision of
this Indenture or in any supplemental indenture which may be defective or
inconsistent with any other provision herein or in any supplemental
indenture or to make such other provisions in regard to matters or
questions arising under this Indenture or under any supplemental indenture,
which shall not be inconsistent with the provisions of this Indenture, and
which do not adversely affect the interests of the Holders of any affected
Bonds;
(b) To conform to any mandatory provisions of law;
(c) To modify, amend or supplement this Indenture in such manner as
to permit the qualification hereof under the Trust Indenture Act of 1939 or
any similar federal statute hereafter in effect or under any state
securities laws and to add to this Indenture such other provisions as may
be expressly required by the Trust Indenture Act of 1939;
(d) To correct or amplify the description of the Trust Estate or
better to assure, convey and confirm unto the Trustee the Trust Estate, or
to subject to the lien of this Indenture additional property;
(e) To modify, eliminate or add to the provisions of this Indenture
to such extent as shall be necessary to maintain the qualification of the
Trust Estate as a REMIC under the Code; or
(f) To maintain or improve the then current rating by the Rating
Agency of any Class of Bonds (so long as the rating (if any) with respect
to any other Class of Bonds is not adversely affected thereby).
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Section 10.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF BONDHOLDERS.
(a) Subject to Section 10.03, with the consent of the Bondholders of not
less than two-thirds in aggregate Outstanding amount of the Class of Bonds
affected thereby, the Sponsor (but only with the consent or direction of the
Majority Residual Holders) and the Trustee may enter into 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 or of
modifying in any manner the rights of Bondholders under this Indenture;
provided, however,
(1) that no such supplemental indenture shall, without the consent of
Bondholders of 100% in aggregate Outstanding amount of Bonds affected
thereby, change the stated maturity of the principal of, or any installment
of principal or interest on, any Bond or reduce the principal amount
thereof or the interest rate thereon or the redemption price with respect
thereto; and
(2) that no such supplemental indenture shall, without the consent of
Bondholders of 100% in aggregate Outstanding amount of Bonds:
(i) reduce the percentage of aggregate Outstanding amount of
Bonds, holders of which are specifically required hereunder (A) to
direct the Trustee to liquidate the Trust Estate, (B) consent to any
supplemental indenture or (C) for any waiver of compliance with
certain provisions of this Indenture or certain defaults hereunder and
their consequences provided for in this Indenture; or
(ii) except as expressly provided in this Indenture, create any
lien having a priority over or a parity with the lien of this
Indenture or terminate the lien of this Indenture on the Trust Estate
or deprive any Bondholder of the security afforded by the lien of this
Indenture.
If at any time the Sponsor shall, at the written direction of the Majority
Residual Holders, request the Trustee to enter into a supplemental indenture for
any of the purposes of this Section, the Trustee shall, at the expense of the
Residual Holders, cause notice of the proposed execution of such supplemental
indenture to be mailed, postage prepaid, to all Bondholders. Such notice shall
briefly set forth the nature of the proposed supplemental indenture and shall
state that copies thereof are on file at the Corporate Trust Office for
inspection by all Bondholders and Residual Holders. The Trustee shall not,
however, be subject to any liability to any Bondholder by reason of its failure
to mail the notice required by this Section, and any such failure shall not
affect the validity of such supplemental indenture when consented to and
approved as provided in this Section.
Whenever, at any time within one year after the date of mailing of such
notice, the Sponsor shall deliver to the Trustee an instrument or instruments in
writing purporting to be executed by the Majority Residual Holders and the
Holders of not less than the percentage of the Bondholders of each Class
required hereunder to approve the amendments set forth in the
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proposed supplemental indenture, which instrument or instruments shall refer
to the proposed supplemental indenture described in such notice and shall
specifically consent to and approve the execution thereof in substantially
the form of the copy thereof referred to in such notice, thereupon but not
otherwise, the Trustee may, if all other requirements of this Indenture with
respect thereto have been satisfied, execute such supplemental indenture in
substantially such form, without liability or responsibility to any Holder of
any Bond or Certificate, whether or not such Holder shall have consented
thereto.
If the Majority Residual Holders and the Holders of not less than the
percentage of the Bondholders of each Class required hereunder to approve the
amendments set forth in the proposed supplemental indenture at the time of the
execution of such supplemental indenture shall have consented to and approved
the execution thereof as herein provided, no Holder shall have any right to
object to the execution of such supplemental indenture, or to object to any of
the terms and provisions contained therein or the operation thereof, or in any
manner to question the propriety of the execution thereof, or to enjoin or
restrain the Trustee or the Sponsor from executing the same or from taking any
action pursuant to the provisions thereof.
(b) Promptly after the execution by the Sponsor and the Trustee of any
supplemental indenture pursuant to this Section 10.02, the Trustee shall mail by
first class mail, postage prepaid, to the Residual Holders, to each Bondholder
to which such supplemental indenture relates, and to the Rating Agency, a notice
setting forth in general terms the substance of such supplemental indenture.
Any failure of the Trustee to mail such notice, or any defect therein, shall
not, however, in any way impair or affect the validity of any such supplemental
indenture.
Section 10.03. CONSENT OF THE TRUSTEE OR THE MANAGER.
Notwithstanding any other provision of this Article X, no supplemental
indenture shall be adopted without the prior written consent of the Trustee or
the Manager if such supplemental indenture, as evidenced by an Opinion of
Counsel delivered by the Trustee or the Manager, would impose additional duties
or obligations upon the Trustee or the Manager.
Section 10.04. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article X or the modifications thereby
of the trusts created by this Indenture, (i) the Trustee shall require, as a
condition of such execution or acceptance, an Opinion of Counsel to the effect
that the execution and delivery of such supplemental indenture will not, when
applicable, cause the Trust Estate to fail to qualify as a REMIC so long as any
Bonds are Outstanding and (ii) the Trustee and the Sponsor shall be entitled to
receive, and (subject to Section 9.01) shall be fully protected in relying upon,
an Opinion of Counsel stating that the
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execution of such supplemental indenture is authorized or permitted by this
Indenture and that all conditions precedent thereto have been complied with.
The Trustee may, but shall not 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 10.05. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article X, this
Indenture shall be modified and amended in accordance therewith, and such
supplemental indenture shall from a part of this Indenture for all purposes, and
every Holder theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
Section 10.06. REFERENCE IN BONDS AND CERTIFICATES TO SUPPLEMENTAL
INDENTURES.
Bonds and Certificates authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article X shall, if required by the
Sponsor, bear a notation in form approved by the Sponsor as to any matter
provided for in such supplemental indenture. If the Sponsor shall so determine,
new Bonds or Certificates, as appropriate, so modified as to conform, in the
opinion of the Trustee and the Sponsor, to any such supplemental indenture may
be prepared and executed by the Sponsor and authenticated and delivered by the
Trustee in exchange for Bonds Outstanding or Certificates, as appropriate. The
Trustee shall be reimbursed from the Trust Estate for all reasonable and direct
costs and expenses incurred by the Trustee in performing its duties and
obligations under this Section 10.06.
(End of Article X)
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ARTICLE XI
AMENDMENT OF NOTES; LOAN DOCUMENTS
Section 11.01. AMENDMENTS TO THE NOTES AND LOAN DOCUMENTS WITHOUT CONSENT
OF BONDHOLDERS.
The Sponsor, acting at the direction of the Majority Residual Holders, and
the Trustee may, without the consent of or notice to the Bondholders, consent to
any amendment of the Notes and Loan Documents (i) to cure any ambiguity or to
make minor corrections consistent with the terms thereof, or (ii) to make any
other change that does not materially adversely affect the interests of the
Bondholders, provided in either case there is delivered to the Trustee an
Opinion of Counsel stating such amendment would not materially adversely affect
the interests of the Bondholders and a Non-Disqualification Opinion.
Section 11.02. AMENDMENTS TO THE NOTES AND LOAN DOCUMENTS WITH CONSENT OF
BONDHOLDERS.
Except for the amendments as provided in Section 11.01, neither the Sponsor
nor the Trustee shall consent to any other amendment, change or modification of
the Notes and Loan Documents without the written consent of the Holders of not
less than two-thirds of the aggregate Outstanding amount of each Class of Bonds
affected thereby and the Majority Residual Holders. Prior to any such
amendment, there must be delivered to the Trustee a Non-Disqualification
Opinion. If at any time the Sponsor, the Majority Residual Holders or the
Trustee shall request the consent of the Trustee or the Holders to any such
proposed amendment, change or modification, the Trustee shall, upon being
satisfactorily indemnified with respect to expenses, cause notice of such
proposed amendment, change or modification mailed in the same manner as provided
by Section 10.02 with respect to supplemental indentures. Such notice shall
briefly set forth the nature of such proposed amendment, change or modification
and shall state that copies of the instrument embodying the same are on file
with the Trustee for inspection by all Bondholders. Nothing contained in this
Section 11.02 or the foregoing Section 11.01 shall permit, or be construed as
permitting, a reduction of the aggregate Outstanding amount of Bonds the owners
of which are required to consent to any such amendment, change or modification,
or a reduction in, or a postponement of, the payments under the Notes, without
the consent of all Bondholders and the Majority Residual Holders.
Section 11.03. EXECUTION OF AMENDMENTS.
In executing, or accepting the additional duties created by, any amendment
to the Notes or Loan Documents permitted under this Article XI, there shall, if
requested by the Trustee, be delivered, but not at the expense of the Trustee,
to the Trustee an Opinion of Counsel, upon which the Trustee may rely, setting
forth the specific provision of this Indenture pursuant to which the Notes or
Loan Documents are to be amended and to the effect that the execution of such
amendment is authorized or permitted by this Indenture; to the effect that all
conditions
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precedent thereto have been complied with; to the effect that the requisite
consent of Bondholders (of all Bonds or any specific Class) and the Majority
Residual Holders, if any, has been obtained; and, to the effect that the
execution of such amendment shall not adversely affect the interests of the
Bondholders.
(End of Article XI)
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ARTICLE XII
CERTIFICATES OF RESIDUAL INTEREST
Section 12.01. CREATION OF RESIDUAL INTEREST; LIMITED RIGHTS OF SPONSOR;
FORM AND EXECUTION OF CERTIFICATES.
(a) A Certificate of Residual Interest shall evidence a fractional
undivided ownership interest in the Residual, the rights of a Residual Holder
hereunder and the right of the registered Residual Holder thereof to receive the
respective fractional undivided interest in amounts released from the lien of
this Indenture and distributable to such Residual Holder as provided herein.
(b) Each Residual Holder from time to time is deemed to have conclusively
agreed and acknowledged, by its acceptance of a Certificate, that the only
amounts it shall be entitled to receive or claim for under this Indenture at any
time in its capacity as a Residual Holder hereunder, and from time to time, are
those amounts actually and properly released from the lien of this Indenture in
accordance with the express terms thereof and payable to the Residual Holders
under the terms hereof, and no Residual Holder in its capacity as a Residual
Holder hereunder shall have any claims or rights against the Trustee, the
Sponsor or the Bondholders with respect to any amounts not properly releasable
or to be released from the lien of this Indenture or payable to Residual Holders
under the terms hereof.
(c) Each Certificate of Residual Interest shall be substantially in the
form attached as Exhibit C hereto, which Exhibit C is hereby incorporated by
reference herein. Each Certificate shall, on issuance, be executed by manual
signature of a Trust Officer. A Certificate bearing the manual signature of an
individual who was, at the time of execution, a Trust Officer shall bind the
Trustee, notwithstanding that such individual has ceased to be a Trust Officer
before delivery of such Certificate or was not a Trust Officer at the date of
such Certificate. The initial Certificates shall be dated as of the Closing
Date. Certificates other than the initial Certificates shall be dated the date
of their execution by the Trustee. The Trustee's execution of any Certificate
shall be solely in its capacity as Trustee hereunder and not in its individual
capacity.
Section 12.02. REGISTRATION, TRANSFER AND EXCHANGE OF CERTIFICATES.
(a) The Trustee shall cause to be kept at its Corporate Trust Office a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Trustee shall provide for the registration of the Certificates
and the transfers and exchanges of such Certificates as herein provided. No
Certificate shall be entitled to any benefit under this Indenture, or be valid
for any purpose, unless there appears on such Certificate a certification by the
Trustee substantially in the form provided for on Exhibit C executed by the
Trustee by manual signature of a Trust Officer, and such executed certification
by the Trustee upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly executed, authenticated and
delivered hereunder. The Trustee's signature shall be for
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execution and authentication purposes only and neither the Trustee nor any
Person signing on its behalf shall have any liability on the respective
Certificate (other than the certificate of authentication thereon). All
Certificates issued upon registration of transfer or exchange shall be dated
the date of their authentication.
(b) Notwithstanding any other provision of this Indenture, no legal or
beneficial interest in all or any portion of a Certificate may be transferred,
directly or indirectly, to a Disqualified Organization, or to an agent of a
Disqualified Organization (including a broker, nominee, or other middleman) (a
"Transferee's Agent") and any such purported transfer shall be void and of no
effect. Further, no legal or beneficial interest in all or any portion of a
Certificate may be registered in the name of 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"). The Trustee shall not authenticate and
deliver a new Certificate in connection with any transfer of a Certificate, and
the Trustee shall not accept a surrender for transfer or registration of
transfer, or register the transfer of, any Certificate unless the transferor
shall have provided to the Trustee an affidavit (a "Transfer Affidavit"),
substantially in the form of Exhibit D hereof, signed by the transferee, to the
effect that the transferee is not acquiring the Certificate for the purpose of
avoiding or impeding the assessment or collection of tax and is not a
Disqualified Organization, an agent for any entity as to which the transferee
has not received a substantially similar affidavit, or a Book-Entry Nominee.
Each Certificate shall bear a legend referring to the foregoing restrictions.
Upon notice to the Trustee that any legal or beneficial interest in any portion
of a Certificate has been transferred, directly or indirectly, to a Disqualified
Organization or a Transferee's Agent in contravention of the foregoing
restrictions, the Trustee shall, as provided in Sections 3.02(a) and (c),
furnish to the transferor of such Certificate or to such Transferee's Agent
information with respect to the requirements of Section 860(e) of the Code,
including but not limited to the present value of the total anticipated excess
inclusions with respect to such Certificate (or portion thereof) for periods
after such transfer. The cost of computing and furnishing such information
shall be charged to the transferor or to such Transferee's Agent; however, the
Trustee shall in no event be excused from furnishing such information. Every
holder of a Certificate shall be deemed to have consented to such amendments to
this Indenture as may be required to further effectuate the restrictions on
transfer of Certificates to a Disqualified Organization, a Transferee's Agent or
a Book-Entry Nominee.
(c) No transfer of a Certificate shall be made unless such transfer is
made pursuant to an effective registration statement or otherwise in accordance
with the requirements under the 1933 Act and effective registration or
qualification under applicable state securities laws or is made in a transaction
which does not require such registration or qualification under state law. The
Trustee shall be entitled to assume conclusively that no such registrations are
then effective unless the request for transfer is accompanied by an Opinion of
Counsel addressed to the Trustee that all such registrations are then in effect.
If a transfer of a Certificate is to be made in reliance upon an exemption from
the 1933 Act, the Trustee shall not transfer such Certificate unless it receives
a Transferee's Agreement substantially in the form of Exhibit E hereto, signed
by the Transferee; provided, however, that if the proposed Transferee does not
deliver such
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Transferee's Agreement, in lieu of such Transferee's Agreement, (i) the
Trustee shall require a written Opinion of Counsel, addressed to the Trustee,
to the effect that such transfer may be made pursuant to an exemption,
describing the applicable exemption and the basis therefor, from the 1933 Act
and state laws or is being made pursuant to the 1933 Act and state laws or is
being made pursuant to the 1933 Act and state laws, which Opinion of Counsel
shall not be an expense of the Trustee or the Sponsor, and (ii) the Trustee
shall require the transferee to execute a certification on which the Trustee,
absent the Trustee having actual knowledge that such certification is false,
may rely setting forth the facts surrounding such transfer. The Holder of
such a Certificate desiring to effect such transfer shall, and does hereby
agree to, indemnify the Trustee and the Sponsor against any liability that
may result if the transfer is not so exempt or is not made in accordance with
such federal and state laws.
(d) No transfer of a Certificate shall be made unless the Trustee shall
have received either (i) a representation letter from the transferee of such
Certificate to the effect that such transferee is not an employee benefit plan
subject to Section 406 of ERISA, nor a Person acting on behalf of any such plan,
which representation letter shall not be an expense of the Trustee or the
Sponsor, or (ii) in the case of any such Certificate presented for registration
in the name of an employee benefit plan subject to ERISA (or comparable
provisions of any subsequent enactments), or a trustee of any such plan, an
Opinion of Counsel addressed to the Trustee to the effect that the purchase or
holding of such Certificate will not constitute or result in a prohibited
transaction under ERISA, will not cause the Trustee, the Sponsor or the Manager
to be a fiduciary under the plan and will not subject the Sponsor, the Trustee
or the Manager to any obligation in addition to those undertaken in this
Indenture, which Opinion of Counsel shall not be an expense of the Trustee or
the Sponsor.
(e) Subject to the requirements and limitations of this Section 12.02,
upon surrender for registration of transfer or exchange of any Certificate at
the Corporate Trust Office, the affidavits, certificates and Opinions of Counsel
required by Sections 12.02(b), (c) and (d), and the name, address and taxpayer
identification number of the proposed transferee, the Trustee shall execute,
authenticate and deliver, in the name of the designated transferee or
transferees, subject to the minimum denomination limits of Section 12.01(d)
hereof, one or more new Certificates of like aggregate fractional undivided
interest in the Residual. All Certificates surrendered for registration of
transfer or exchange shall be cancelled, and held by the Trustee subject to its
standard retention policy and thereafter destroyed by the Trustee. A service
charge shall be made for any registration of transfer or exchange of
Certificates, and, in addition, the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with expenses in connection with any required Opinions of Counsel,
Transfer Affidavits, Transferee Agreements or certifications required hereunder
in connection with a transfer of a Certificate shall be borne by the transferee
or the transferor, and shall not be an expense of the Trustee, the Residual or
the Sponsor. The transferee of a Certificate shall, for all purposes of this
Indenture, be deemed to be the Residual Holder of such Certificate from and
after the date as of which the transfer to it is registered by the Trustee on
the Certificate register maintained by the Trustee in accordance with Section
12.02(a) hereof, and, upon registration of such transfer to the transferee, the
transferor shall be released from all
75
duties and obligations under this Indenture; provided, however, that such
transferor shall remain liable to the Trustee and the Sponsor with respect to
the duties, obligations and liabilities arising from and after the date the
transferor became a registered holder of the transferred Certificate and
before the date of such transfer to the transferee.
(f) Every Certificate presented or surrendered for transfer or exchange
shall (i) be duly endorsed by, or be accompanied by a written instrument of
transfer in form acceptable to, transfer agents registered with the Securities
and Exchange Commission and (ii) be duly executed by the Residual Holder thereof
or his attorney duly authorized in writing. Before due presentation of a
Certificate for registration of transfer or exchange, the Trustee, and any agent
of the Trustee shall treat the Person in whose name any Certificate is
registered on the Certificate Register maintained by the Trustee as the owner of
such Certificate for the purpose of receiving distributions pursuant to Section
12.06 hereof, for any allocation of taxable income or net loss to such Residual
Holder required by the Code and for all other purposes whatsoever including but
not limited to giving direction to the Trustee or giving consents as provided
herein, and neither the Trustee nor any agent of the Trustee shall be affected
by notice to the contrary.
(g) Each Person who has or who acquires any ownership interest in the
Certificates shall be deemed by the acceptance or acquisition of such ownership
interest to have agreed to be bound by the provisions of this Section and the
rights of each Person acquiring any ownership interest in the Certificates are
expressly subject to the following provisions:
(1) Any attempted or purported transfer of any ownership interest in
the Certificates in violation of the provisions of this Section 12.02 shall
be absolutely null and void and shall vest no rights in the purported
transferee; and
(2) Each Person at any time acquiring any ownership interest in the
Certificates by its acceptance of the same shall be deemed to have
indemnified the Sponsor, the Trustee, any Manager and each Bondholder from
and against any cost, liability, claim or expense, including any tax,
incurred as a result of any transfer or attempted or purported transfer of
any ownership interest in the Certificates by or to such Person in
violation of the provisions of this Section 12.02. Each such Person also
authorizes the Trustee, acting as an independent agent on behalf of such
Person, to withhold from amounts, if any, otherwise payable to such Person
pursuant to the terms of this Indenture all amounts due as indemnification
under this Section 12.02 and to pay such amounts to the Person entitled to
indemnification.
Section 12.03. LOST, STOLEN, DESTROYED OR MUTILATED CERTIFICATES.
If (i) any mutilated Certificate is surrendered to the Trustee, or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate, and (ii) there was delivered to the Trustee such security or
indemnity as may be required by the Trustee to save the Trustee harmless (the
unsecured indemnity agreement of an institutional Residual Holder having a net
worth at least equal to the amount of the indemnity required by the Trustee
pursuant
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to this Section 12.03 shall be deemed reasonable indemnity for purposes of
this Section 12.03), the Trustee shall execute, authenticate and deliver, in
exchange for or in lieu of such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like tenor and aggregate fractional
undivided interest in the Residual. In connection with the issuance of any
new Certificate under this Section 12.03, the Trustee may impose a service
charge and shall require the payment by the holder of a sum sufficient to
cover any tax or other governmental charge and shall require the payment by
the holder of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expense (including an
indemnity bond required by the Trustee or fees and expenses of the Trustee)
connected therewith. Any duplicate Certificate issued pursuant to this
Section 12.03 shall constitute complete and indefeasible evidence of
ownership of a fractional undivided interest in the Residual hereunder, as if
originally issued, whether or not the lost or stolen Certificate shall be
found at any time.
Section 12.04. COMMUNICATIONS WITH OTHER RESIDUAL HOLDERS.
If any Residual Holder (hereinafter referred to as "applicant") applies in
writing to the Trustee, and such application states that the applicant desires
to communicate with other Residual Holders with respect to the Residual Holders'
rights under this Indenture or under the Certificates and is accompanied by a
copy of the communication which such applicant proposes to transmit, the Trustee
shall, within five Business Days after its receipt of such application, furnish
or cause to be furnished to such applicant a list of the names and addresses of
the Residual Holders as of a date no more than five Business Days before the
date the Trustee received such request from the applicant. Every Residual
Holder, by receiving and holding the same, agrees with the Trustee that the
Trustee shall not be held accountable by reason of the disclosure of such
information as to the names and addresses of the Residual Holders hereunder,
regardless of the source from which such information was derived.
Section 12.05. INITIAL ISSUANCE OF CERTIFICATES.
The initial Certificates shall be executed and authenticated by the
Trustee, following execution and delivery of this Indenture by the parties
hereto, and shall be registered in the name of and delivered to the Sponsor as
the initial Residual Holder.
Section 12.06. PAYMENTS, DISTRIBUTIONS AND REPORTS.
(a) On each Residual Distribution Date, all amounts in the Residual Fund
shall be distributed by the Trustee to the Residual Holders of record on the
Residual Record Date for such Residual Distribution Date, pro rata in accordance
with the percentage of the Residual owned by each Residual Holder of record on
such Residual Record Date. Payments of distributions to a Residual Holder shall
be made by the Trustee by check mailed to the Residual Holder at the address of
such Residual Holder as it appears on the Certificate Register on the Residual
Record Date for such distribution or as may otherwise be agreed to by the
Trustee and such Residual Holder; provided, however, that any distribution to a
Residual Holder owning 50% or more of the Residual shall, if in an amount
greater than $1,000, be paid by wire transfer
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to such Residual Holder if such Residual Holder has provided written wire
instructions to the Trustee before the Residual Record Date for such
distribution. Any checks returned undelivered shall be held in accordance
with Section 11.10 hereof.
(b) All distributions to the Residual Holders pursuant to this Section
12.06 shall be divided among such Residual Holders PRO RATA in accordance with
the percentage of the entire fractional undivided ownership interest in the
Residual owned by such Residual Holder. All Residual items of income, gain,
loss, deduction and credit also shall be allocated among the Residual Holders in
accordance with the percentage of the fractional undivided ownership interest in
the Residual owned by each such Residual Holder.
Section 12.07. RESERVED.
Section 12.08. COVENANTS OF RESIDUAL HOLDERS.
Each Residual Holder, by acceptance of a Certificate of Residual Interest,
covenants with the Sponsor and the Trustee that it:
(a) Shall pay and be liable for all federal, state and local taxes
attributable to its ownership of the fractional undivided interest in the
Residual evidenced by its Certificate including, taking into account, in
determining its taxable income, its pro rata portion of the taxable income
under all applicable provisions of the Code and all income as may be
reported to it on Schedule Q to Internal Revenue Service Form 1066;
(b) Will take no action to question or invalidate the lien of this
Indenture against the Trust Estate or seek or maintain any claim or
interest in the Trust Estate having a priority over the lien of this
Indenture;
(c) In its capacity as a Residual Holder, will assert no claim or
interest in the Trust Estate by reason of owning its Certificate other than
with respect to amounts properly or actually releasable from the lien of
this Indenture as provided therein and payable to Residual Holders pursuant
to Section 12.06 hereof;
(d) In its capacity as a Residual Holder, will not cause, or
participate in, the filing of a petition in involuntary bankruptcy,
insolvency or receivership against the Sponsor or the Trust Estate, or take
any action to cause the Sponsor or the Trust Estate to be declared a
bankrupt or insolvent, under any applicable federal or state law;
(e) In its capacity as a Residual Holder, will not assert any claim
or interest under this Indenture in any other assets or interests of the
Sponsor other than with respect to its interest in the Residual created by
this Indenture;
(f) In its capacity as Residual Holder, will not take any action
which would (i) cause the segregated asset pool comprising the Trust Estate
to be disqualified as a
78
REMIC under the Code, (ii) constitute a "prohibited transaction" with
respect to the Trust Estate as a REMIC under the Code, or (iii) subject the
Sponsor or the Trust Estate to tax; and
(g) In its capacity as Residual Holder, will not take, or fail to
take, any action which would create a liability for the Sponsor.
Section 12.09. RESERVED.
Section 12.10. LIABILITY FOR UNCLAIMED MONEYS UNDER THE INDENTURE.
If, as provided in Section 2.13 of this Indenture, moneys held by the
Trustee for payment of the Bonds are released from the lien of this Indenture
and distributed to the then Residual Holders as provided in Section 12.06
hereof, the Trustee shall have the right to claim for and obtain the return of
the amount of any such payments received by such Residual Holders to the extent
a Holder of a Bond has a claim for such amounts as a general unsecured creditor
of the Trust Estate; provided, however, that such Residual Holder shall only be
liable to the Trustee for an aggregate amount equal to the amount released from
this Indenture and actually distributed to such Residual Holder. The Residual
Holder's liability under this Section 12.10 shall survive termination of this
Indenture.
Section 12.11. APPOINTMENT OF THE MANAGER.
The Manager is hereby appointed to serve as Manager hereunder. By its
execution and acknowledgement hereof, the Manager agrees to perform the duties
and obligations of the Manager specified herein.
Section 12.12. DUTIES OF THE MANAGER.
(a) The Manager shall be responsible for preparing and delivering to the
Trustee, on or before the Submission Dates specified in Section 3.02, all tax
returns or reports to be prepared by the Trustee pursuant to this Indenture.
(b)(1) If, in connection with preparing or making any filings of reports
or returns required under Section 3.02, any elections are permitted or required
to be made, the Manager shall notify the Residual Holders in writing with
respect to any such elections permitted or required to be made, which
notification shall set forth the Manager's recommendations, if any, with respect
to which elections, if any, should be made with respect to a report or return
under Section 3.02. Such notification to the Residual Holders shall request
direction from the Residual Holders with respect to such elections. Subject to
the last sentence of this Section 12.12(b)(1), the Manager, and if necessary the
Trustee, shall make such elections as they may be directed in writing to make by
the Majority Residual Holders. If the Majority Residual Holders fail to provide
timely direction to the Manager following a request by the Manager with respect
to elections permitted or required to be made with respect to such tax or
information reports or
79
returns, then, subject to the last sentence of this Section 12.12(b)(1), the
Manager may make such elections as are consistent with this Indenture and as
may be necessary or advisable or as may from time to time be required, under
any applicable federal, state or local statute or rule or regulation thereunder.
Notwithstanding any written direction with respect to an election from the
Majority Residual Holders, and notwithstanding any recommendation of the
Manager, (i) no election shall be made if the making of such election would or
could, in the reasonable opinion of the Manager, result in the imposition of a
tax on the Trust Estate or result in a disqualification of the Trust Estate as
a REMIC and (ii) all elections necessary to preserve the qualification of the
Trust Estate as a REMIC and avoid imposition of a tax on the Trust Estate shall
be made in such reports or returns.
(2) In preparing the returns, related schedules and information required
pursuant to Section 3.02, the Manager shall not be liable for any action taken
in reliance on an Opinion of Counsel (a copy of which shall be received by the
Trustee on the Submission Date (as provided in Section 3.02(c)) absent a written
objection to the form and content thereof received by the Manager from the
Majority Residual Holders. If such written objection is received by the
Manager, then the Manager, to the extent not inconsistent with this Indenture,
shall, upon receipt of appropriate indemnification for itself, the Trustee and
the Sponsor against and with respect to tax and other liabilities from the
Residual Holders (if the Residual Holders made such written objection) and
written advice from Counsel to the Residual Holders or the Trustee, as the case
may be, as to the appropriateness of the form and content recommended by the
Majority Residual Holders, prepare such reports in the form and content so
directed by the Residual Holders. All returns and reports required under
Section 3.02 shall be signed as provided in Section 3.02, except that each such
return or report shall be signed by the Manager as "income tax preparer" if
necessary.
Section 12.13. OTHER DUTIES OF THE MANAGER.
(a) On or before January 31 of each year commencing January 31, 1997, the
Manager shall advise the Trustee, in writing, as to all reports and returns
(including the dates for filing or distributing such returns or reports) which,
until the following January 31, then applicable provisions of the Code, Treasury
regulations thereunder or state or local law require to be prepared, filed or
distributed with respect to the Trust Estate as a REMIC, or with respect to the
Bonds or the Certificates. If, after any such written advice to the Trustee,
there is a change in applicable law deleting or adding a report or return, or
changing the date for filing or distribution thereof, the Manager shall so
notify the Trustee in writing.
(b) The Manager shall also (i) monitor the REMIC status of the Trust
Estate; (ii) advise the Trustee whether transactions proposed by the Trustee or
the Holders of Residual Certificates could jeopardize the REMIC status of the
Trust Estate or result in the imposition of tax on the Trust Estate; and (iii)
advise the Trustee and the Holders of Certificates (including any such Holders
designated as the "tax matters persons" of the REMIC) with respect to any
administrative or judicial proceedings relating to an audit or examination by
any governmental taxing authority regarding the REMIC. The Manager shall not be
liable or responsible for any
80
action taken or failure to take action by the Trustee or the Residual Holders
recommended by the Manager pursuant to this Section 12.13(b).
Section 12.14. COOPERATION OF PARTIES; FURNISHING OF INFORMATION.
(a) By its execution of the acceptance of its appointment hereunder, the
Manager acknowledges receipt, on or before the Closing Date, of copies of this
Indenture.
(b) To permit the Manager to perform its duties under this Indenture, the
Trustee agrees that, within a reasonable period of time of receipt by the
Trustee, it will cause to be mailed to the Manager copies of the following:
(1) the Notes, Loan Documents and Casualty Insurance Policy;
(2) information as to the amounts paid or payable as compensation,
expenses and indemnification of the Trustee with respect to this Indenture;
(3) all Officers' Certificates and Opinions of Counsel delivered to
the Trustee with respect to the Bonds or the Certificates; and
(4) such other documents and information as the Manager may
reasonably request in order to perform its duties under this Indenture.
(c) Within a reasonable period of time after its delivery to the Manager
of any information specified in Section 12.14(b), the Trustee shall, upon
request, mail copies of such information to any Person which is then the
Majority Residual Holder.
Section 12.15. MANAGER COMPENSATION.
(a) Except as provided in Section 12.15(b), the Manager agrees that the
fee to be paid to it on the Closing Date shall constitute full payment of all
amounts due it for performing the duties of Manager under this Indenture.
Except as provided in Section 12.15(b), all direct and indirect expenses
incurred by the Manager in connection with its performance of its duties and
obligations under this Indenture, including but not limited to expenses of
agents or subcontractors or counsel shall be paid by the Manager, and the
Manager shall not be entitled to reimbursement therefor from the Sponsor, the
Residual Holders, the Trustee or the Bondholders.
(b) Notwithstanding anything in Section 12.15(a) to the contrary, the
Manager shall be entitled to receive reimbursement of its extraordinary and
necessary reasonable out-of-pocket expenses paid to third parties solely from
moneys deposited and available for such purpose in the Manager Account of the
Trust Expense Fund. In order to receive any such reimbursement, the Manager
will provide to the Trustee a certification that such out-of-pocket expenses
have been incurred, upon which certification the Trustee shall be entitled to
rely conclusively.
81
Section 12.16. COVENANTS OF THE MANAGER.
The Manager hereby covenants and agrees, for the benefit of the Trustee,
the Sponsor and the Residual Holders from time to time, as follows:
(i) It will not engage or participate in any "prohibited transaction"
with respect to the Trust Estate (as such term is defined in the Code with
respect to a REMIC), or otherwise cause a federal or state tax to be
imposed on the Trust Estate as a REMIC or upon the Sponsor;
(ii) It will prepare reports to Residual Holders in accordance with
the terms of this Indenture with respect to the Certificates and taxable
income or net loss with respect thereto in accordance with applicable
regulations thereunder;
(iii) It will comply with all applicable provisions of the Code and
applicable regulations thereunder with respect to the Trust Estate as a
REMIC and maintaining the continuing treatment of the Trust Estate as a
REMIC under the Code and applicable regulations thereunder; and
(iv) At its own cost and expense, it will promptly take all actions as
may be necessary to discharge any liens on any part of the Trust Estate
which result from actions by or claims against the Manager not related to
the administration of the Trust Estate or the transactions contemplated by
this Indenture.
Section 12.17. MANAGER MAY SEEK INSTRUCTIONS.
(a) If, in performing its duties under this Indenture, (i) the Manager is
required to decide between alternative courses of action or (ii) the Manager is
unsure of the application of any provision of this Indenture with respect to its
duties and responsibilities hereunder or thereunder, or (iii) any action
permitted hereunder may, in the determination of the Manager, have a material
adverse effect on the Residual, then the Manager may, at its expense and cost,
promptly deliver a notice to the Trustee, requesting the Trustee to seek
direction of the Residual Holders in accordance with this Indenture. If the
Trustee does not receive instructions within 10 Business Days after it has
delivered notice requesting such instructions to the Residual Holders, or such
shorter period of time set forth in such notice, the Manager shall not be liable
for taking or refraining from taking any action if such action or non-action is
not inconsistent with the provisions of this Indenture.
(b) Notwithstanding anything in this Indenture to the contrary, the
Manager shall not be required to take any action at the request or direction of
the Trustee or the Residual Holders if, in the reasonable determination of the
Manager, such action would result in (i) the Manager being deemed to have
engaged in a prohibited transaction with respect to the Trust Estate as a REMIC;
(ii) result in a disqualification of the Trust Estate as a REMIC; (iii) subject
the Sponsor or the Trust Estate to tax; or (iv) adversely affect the Holders of
the Bonds.
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(c) The Manager shall not be liable for any termination or
disqualification of the Trust Estate's status as a REMIC or for any prohibited
transaction with respect to the Trust Estate as a REMIC if (i) such termination
or disqualification is caused by actions or inactions of the Manager taken or
omitted by the Manager as specifically permitted to be taken or omitted in this
Indenture or (ii) such termination or prohibited transaction is the result of
actions or inactions of the Manager as to which this Indenture specifically
entitles the Manager to act or not act pursuant to written instructions of the
Trustee or written direction of the Majority Residual Holders. Nothing herein,
however, shall be construed as relieving the Manager from liability under this
Indenture for its own negligent action, negligent failure to act or willful
misconduct.
Section 12.18. OBLIGATIONS OF RESIDUAL HOLDERS.
By their acknowledgment hereof, the Holders of the Certificates severally
agree to indemnify the Manager for, and to hold it harmless against, any and all
losses and liabilities, obligations, damages, penalties, taxes (excluding any
taxes payable by the Manager on or measured by any compensation for services
rendered by the Manager under this Indenture), claims, actions, suits or out-of-
pocket expenses or cost of any kind and nature whatsoever incurred or arising
out of or in connection with the services rendered by the Manager under this
Indenture, including but not limited to the reasonable cost and out-of-pocket
expenses of defending itself against any claim of liability in the premises,
except to the extent the same may be incurred or arise out of the Manager's
failure to perform its specific duties and obligations hereunder or, the
negligent action of the Manager, the Manager's negligent failure to act or the
Manager's willful misconduct in the performance of the Manager's duties and
obligations hereunder. As provided in this Indenture, the Holders of the
Residual, by their acknowledgment hereof, covenant and agree that the Residual
Holders shall have no claim upon, and shall assert no liability against, the
Sponsor or the Trustee for any action or failure to act by the Manager during
the term of this Indenture, without regard to whether the Manager itself is
liable to the Residual Holders with respect to such action or failure to act and
without regard to whether a Residual Holder itself consented to the appointment
of such Manager. Such claims or liabilities shall be asserted solely against
the Manager, and not against the Sponsor or the Trustee.
Section 12.19. INDEMNIFICATION.
The Manager shall reimburse, indemnify and hold harmless the Trustee, its
affiliates, shareholders, directors, officers, employees, the Sponsor, and
Residual Holders (the "Indemnified Persons") with respect to all expenses,
losses, damages, liabilities, demands, charges and claims of any nature in
respect of the negligent action of the Manager, the Manager's negligent failure
to act or perform its duties hereunder or the Manager's willful misconduct in
the performance of the Manager's duties and obligations hereunder, including
without limiting the generality of the foregoing, claims against, and
liabilities of, the Residual Holders, or taxes levied or imposed upon the
Sponsor or the Trust Estate as a REMIC by reason of, caused by or arising out of
any such negligent act, performance or omission or willful misconduct by the
Manager, unless (i) if the Trustee is the Person seeking indemnification under
83
this Section 12.19, the Trustee shall have specifically consented to such action
or inaction in writing at the request of the Manager or such action or inaction
by the Manager shall have been at the written request or direction of the
Trustee or (ii) if a Residual Holder is the Person seeking indemnification under
this Section 12.19, such action or inaction shall have been undertaken by the
Manager at the written direction of the Majority Residual Holders.
Section 12.20. INDEPENDENCE OF THE MANAGER.
The Manager shall be an independent contractor. The Manager shall have no
authority to act for or represent the Trustee or the Residual Holder in any way
and shall not be deemed an agent of the Trustee or the Residual Holder. The
Manager shall not be deemed to assume the obligations of the Trustee under this
Indenture except as specifically provided in this Indenture. Nothing contained
in this Indenture (i) shall constitute the Manager and the Trustee as members of
any partnership, joint venture, association, syndicate, unincorporated business,
or other separate entity, (ii) shall be construed to impose any liability as
such on either of them, or (iii) shall be deemed to confer on either of them any
express, implied or apparent authority to incur any obligation or liability on
behalf of the other.
Section 12.21. TERMINATION OF THE MANAGER.
(a) The Manager may be removed by the Trustee or the Majority Residual
Holders acting with the consent of the Trustee, which consent shall not be
unreasonably withheld, if the Manager shall default in the performance of any
term of this Indenture and, after written notice of such default to the Manager
and the Trustee, shall not cure such default within 30 days, such removal to be
of immediate effect. In addition to failure to perform hereunder, the Manager
shall be deemed to be in default of its obligations hereunder if: (i) a decree
or order by a court having jurisdiction in the premises is entered adjudging the
Manager a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in respect
to the Manager under the Federal Bankruptcy Code or any other applicable federal
or state law, or appointing a receiver, liquidator, assignee, or sequestrator
(or other similar official) of the Manager or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree, order or appointment unstayed and in effect for
a period of 60 consecutive days; or (ii) the Manager institutes a proceeding to
be adjudicated a bankrupt or insolvent, or it consents to the institution of
bankruptcy or insolvency proceedings against it, or it files a petition or
answer or consent seeking reorganization or relief under the Federal Bankruptcy
Code or any other similar applicable federal or state law, or it consents to the
filing of any such petition or to the appointment of a receiver, liquidator,
assignee, trustee or sequestrator (or other similar official) of the Manager or
of any substantial part of its property, or the making by it of a general
assignment for the benefit of creditors in connection therewith, or the
admission by it in writing of its inability to pay its debts generally as they
become due, or the taking of corporate action by the Manager in furtherance of
any such action.
84
(b) The Manager may not resign its duties hereunder unless the Manager
secures a successor manager, approved by the Trustee and the Majority Residual
Holders. Approval by the Trustee and the Majority Residual Holders shall not be
unreasonably withheld.
(c) Before the effective date of any such termination or resignation, the
Manager shall deliver or cause to be delivered to the Trustee or its designee,
all of its files, records and materials with respect to the services theretofore
rendered by it hereunder; provided, however, that the Manager shall not be
required to disclose, turn over or make available its software, proprietary or
otherwise, or other proprietary materials. Any such termination or resignation
shall not be effective as to the Trustee until the Trustee has received written
notice thereof.
(d) Notwithstanding any discharge of this Indenture, the Manager shall
remain liable pursuant to the provisions hereof to the Sponsor, the Trustee and
the Residual Holders for its acts and omissions before the effective date of any
such termination.
Section 12.22. LIMITATION OF LIABILITY OF THE MANAGER.
(a) Unless otherwise expressly provided herein, except for acts of
negligence or willful misconduct hereunder, the Manager shall not be liable to
the Residual Holders, in its capacity as Manager hereunder, with respect to any
action taken or omitted to be taken by it in accordance with this Indenture.
(b) The Manager shall not be responsible or liable, in its capacity as
Manager hereunder, for or in respect of the recitals herein, the validity or
sufficiency of this Indenture and the Certificates or for the due execution
hereof or thereof by the Sponsor, the Residual Holders or any other party
thereto, or for the form, character, sufficiency, value or validity of any part
of the Trust Estate or for or in respect of the validity or sufficiency of the
Certificates, and the Manager shall in no event assume or incur liability, duty
or obligation to any Residual Holder or to the Sponsor other than as expressly
provided for herein. The representations and warranties contained herein and in
the Bonds shall be taken as the representations and warranties of the parties
making such representations and warranties and the Manager assumes no
responsibility for the correctness of the same. The Manager shall not be under
any responsibility or duty with respect to the application of any money pursuant
to this Indenture.
(c) The Manager shall be obligated only for the performance of such duties
as are specifically set forth in this Indenture and no implied covenant or
obligations of the Manager shall be read into this Indenture. The Manager shall
not be liable for any action or omission to act as manager hereunder except for
its own negligence or willful misconduct hereunder. The Manager shall have no
liability or responsibility to the Residual Holders for acting upon any written
instructions presented by the Majority Residual Holders or the Trustee in
connection with this Indenture which the Manager in good faith believes to be
genuine and to be in conformity with this Indenture. In no event shall the
Manager have any responsibility to ascertain or take action with respect to the
property constituting the Residual (except as expressly provided herein) whether
or not the Manager has or is deemed to have notice or knowledge of such matter,
or
85
take any steps necessary to preserve rights against any parties with respect
to the property constituting the Residual, or account for the validity or value,
or the kind or amount, of any property constituting the Residual.
(d) The Manager shall not be bound in any way by any agreement or contract
with respect to the matters set forth in this Indenture, other than this
Indenture, and the Manager shall not be required to ascertain or inquire as to
the performance or observance of any of the covenants or agreements contained
herein or in any Certificate delivered pursuant hereto or thereto, to be
performed or observed by the Sponsor, the Trustee or any other Person.
(e) The Manager, upon receipt of any notice, resolution, request, consent,
order, certificate, report, opinion, bond, or other paper or document furnished
to it pursuant to any provision of this Indenture shall examine such instrument
to determine whether it conforms to the requirements of this Indenture and shall
be protected in acting upon any such instrument believed by it to be genuine and
to have been signed or presented by the proper party or parties. The Manager
may consult with counsel, at its own expense, acceptable to Majority Residual
Holders and any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered by the Manager under this
Indenture in good faith and in accordance therewith.
(f) Whenever the Manager shall deem it necessary or desirable that a
matter be proved or established before taking or suffering any action under this
Indenture, such matter (unless other evidence in respect thereof is specifically
prescribed in this Indenture) may be deemed conclusively to be proved and
established by a certificate of the appropriate party executing such
certificate, and such certificate shall be full warrant for any action taken or
suffered in good faith under the provisions of this Indenture upon the faith
thereof, but in its discretion and in lieu thereof, the Manager may accept other
evidence of such fact or matter or may require such further or additional
evidence as to it may seem reasonable.
(End of Article XII)
86
ARTICLE XIII
MISCELLANEOUS
Section 13.01. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Sponsor to the Trustee to take any
action under any provision of this Indenture, the Sponsor shall furnish to the
Trustee an Officer's Certificate stating that all conditions precedent, if any
provided for in this Indenture relating to the proposed action have been
complied with and, if deemed reasonably necessary by the Trustee, an Opinion of
Counsel stating that, in the opinion of such counsel, there has been compliance
with all such conditions precedent, if any. Notwithstanding the foregoing, in
the case of any such application or request as to which the furnishing of such
document is specifically required by any provision of this Indenture relating to
such particular application or request, no additional certificate or opinion
need be furnished.
Any certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(i) 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;
(ii) 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 there has been compliance
with such covenant or condition; and
(iii) A statement as to whether, in the opinion of each such
individual, there has been compliance with such condition or covenant.
Section 13.02. 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 may certify or give an opinion as to other matters,
and any such Person may certify or give an opinion as to such matters in one or
several documents.
Any Officer's Certificate or certificate of the Trustee may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representation by, counsel, unless such officer executing such Officer's
Certificate or certificate of the Trustee knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representation
with respect to the matters upon which his certificate or opinion is based is
erroneous. Any such certificate or
87
Opinion of Counsel may be based, insofar as it relates to factual matters,
upon an Officer's Certificate or certificate of the Trustee, unless such
counsel knows, or in the exercise of reasonable care should know, that the
Officer's Certificate or certificate of the Trustee with respect to such
matters is erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 13.03. ACTS OF BONDHOLDERS.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Bondholders
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Bondholders in person or by their 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 Sponsor.
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act of the Bondholders"
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and conclusive in favor of the Trustee and the
Sponsor, if made in the manner provided in this Section 13.03.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Trustee deems
sufficient.
(c) The ownership of Bonds shall be proved by the Bond Register, to be
maintained by the Trustee as the Bond Registrar.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the holder of any Bond or Certificate shall bind the Holder
of each Bond or Certificate issued in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Sponsor in reliance thereon, whether or not notation of such action is made upon
such Bond or Certificate.
Section 13.04. NOTICES TO HOLDERS; WAIVER.
(a) Where this Indenture provides for Notice to the Holders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and given in accordance with Section 13.08 to each
Holder affected by such event, at its address as it appears on the Bond Register
or Certificate Register, as applicable, not later than the latest date, and not
earlier than the earliest date, prescribed herein for the giving of such notice.
In any case where notice to the Holders is given by mail, neither the failure to
mail such notice nor any
88
defect in any notice so mailed to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders for which proper
notice has been given, and any notice which is mailed in the manner herein
provided shall conclusively be presumed to have been duly given.
(b) Where this Indenture provides for notice in any manner, such notice
may be waived in writing by anyone 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 the Holders 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.
(c) If by reason of the suspension of regular mail service as a result of
a strike, work stoppage, act of God or similar activity, the Trustee shall deem
it impractical to mail notice of any event to the Holders 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.
(d) Any notice sent to Bondholders shall at the same time be sent to the
Rating Agency.
Section 13.05. LEGAL HOLIDAYS.
In any case where any date on which any payment is proposed to be paid
hereunder or the date upon which any notice or report is to be made or given or
any other action is to be taken hereunder shall not be a Business Day, then
(notwithstanding any other provision of the Bonds, the Certificates or this
Indenture) the payment, report or action need not be made or taken on such date,
but may be made or taken on the next succeeding Business Day with the same force
and effect as if made or taken on the nominal date, for such payment or date for
a notice or report or date for taking such action hereunder, as the case may be,
and no interest shall accrue with respect to such payment for the period from
and after any such nominal date.
Section 13.06. NATURE OF INTEREST IN TRUST ESTATE.
No owner of the Certificates shall have legal title to any part of the
Trust Estate and shall only be entitled to receive distributions with respect to
their undivided beneficial interest in the Trust Estate pursuant to this
Indenture once all amounts then due and payable on the Bonds have been paid in
accordance with this Indenture and such amounts are properly releasable from the
Trust Estate under the terms of this Indenture and all other amounts due under
Section 12.06 hereof have been paid. No transfer, by operation of law or
otherwise, of any right, title and interest of any other owner of a Certificate,
held by such other owner, shall operate to terminate this Indenture or the
trusts hereunder or entitle any successor transferee to an accounting or to the
transfer to it of legal title to any part of the Trust Estate.
89
Section 13.07. SEVERABILITY.
If any provision of this Indenture shall be held or deemed to be or shall,
in fact, be illegal, inoperative or unenforceable, the same shall not affect any
other provision or provisions herein contained or render the same invalid,
inoperative or unenforceable to any extent whatever.
Section 13.08. NOTICES.
(a) Any notice, request, complaint, demand, communication or other paper
shall be sufficiently given and shall be deemed given when delivered or mailed
by first-class, registered or certified mail, postage prepaid, or sent by
telegram, facsimile, telecopy, telex, overnight mail or overnight delivery
service, addressed to the appropriate Notice Address. The Sponsor, the Trustee,
the Rating Agency or the Manager may, by notice given hereunder, designate any
further or different addresses to which subsequent notices, certificates or
other communications shall be sent.
(b) The Trustee will permit the Sponsor to have access to and to make
copies of all books and records relating to the Bonds at any reasonable time.
Section 13.09. COUNTERPARTS.
This Indenture may be executed simultaneously in several counterparts, each
of which shall be an original and all of which shall constitute but one and the
same instrument.
SECTION 13.10. APPLICABLE PROVISIONS OF LAW.
THIS INDENTURE, EACH SUPPLEMENTAL INDENTURE, IF ANY, AND EACH BOND SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE.
Section 13.11. CAPTIONS; REFERENCES IN INDENTURE.
The captions or headings in this Indenture are for convenience only and in
no way define, limit or describe the scope or intent of any provisions or
sections of this Indenture. All references in this instrument to designated
"Articles," "Sections," "Subsections" and other subdivisions are to be
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.
90
Section 13.12. PARTIES INTERESTED HEREIN.
Nothing in this Indenture or in the Bonds or the Certificates expressed or
implied is intended or shall be construed to confer upon, or to give to, any
person or entity other than the Sponsor, the Residual Holders, the Trustee, the
Paying Agent, if any, the Manager and the registered owners of the Bonds, any
right, remedy or claim under or by reason of this Indenture or any covenant,
condition or stipulation hereof, and all covenants, stipulations, promises and
agreements in this Indenture contained by and on behalf of the Sponsor shall be
for the sole and exclusive benefit of the Sponsor, the Trustee, the Residual
Holders, the Paying Agent, if any, the Manager and the registered owners of the
Bonds.
91
IN WITNESS WHEREOF, the Sponsor has caused this Indenture to be executed in
its name and on its behalf by the signature of its President or Vice President
and to be attested by the signature of its Secretary, and the Trustee, as
Trustee, Paying Agent and Bond Registrar, has caused this Indenture to be
executed by its duly authorized officer.
BFC FINANCE CORP., as Sponsor
Attest:
By: By:
---------------------------- ----------------------------------------
Name: Xxxxx Xxxxxx Name: Xxxxxxxx X. Xxxxx
Title: Secretary Title: President
SOUTHTRUST BANK OF ALABAMA, NATIONAL
ASSOCIATION,
as Trustee, Paying Agent and Bond Registrar
By:
----------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President - Corporate Trust
ACKNOWLEDGEMENT AND AGREEMENT OF MANAGER
The undersigned hereby acknowledges its appointment as Manager under this
Indenture, and agrees to perform the duties of Manager as herein provided on the
terms and conditions herein provided.
BUILDING FINANCE COMPANY OF
TENNESSEE, INC.,
a Tennessee corporation
By:
--------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: President
EXHIBIT A
CLASS A BOND FORM
THE PRINCIPAL OF THIS BOND IS SUBJECT TO MANDATORY REDEMPTION AND PAYMENT IN
PART PRIOR TO MATURITY AS SET FORTH HEREIN, WITHOUT NOTATION ON THIS BOND.
ACCORDINGLY, THE UNPAID PRINCIPAL BALANCE OF THIS BOND MAY BE LESS THAN THAT SET
FORTH BELOW. ANYONE ACQUIRING THIS BOND MAY ASCERTAIN ITS CURRENT PRINCIPAL
AMOUNT BY INQUIRY OF SOUTHTRUST BANK OF ALABAMA, NATIONAL ASSOCIATION, AS
TRUSTEE, PAYING AGENT AND BOND REGISTRAR (THE "TRUSTEE").
THE INTEREST ON THIS BOND IS SUBJECT TO FEDERAL INCOME TAX. AN ELECTION IS
BEING MADE TO TREAT THE SEGREGATED ASSET POOL COMPRISING THE TRUST ESTATE AS A
REAL ESTATE MORTGAGE INVESTMENT CONDUIT ("REMIC"). THIS BOND IS TO REPRESENT A
"REGULAR INTEREST" IN SUCH REMIC UNDER SECTION 860G OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED.
R- $
BFC FINANCE CORP.
REMIC LEASE-BACKED BOND
SERIES 1996
FEDERAL LEASE-BACKED CLASS A
Interest Rate: Original Dated Date: Maturity Date: CUSIP No.:
-------------- -------------------- -------------- -----------
% March 1, 1996 December 1,
REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM:
BFC FINANCE CORP. (the "Sponsor"), a Delaware corporation, for value
received, hereby promises to pay, but solely from the sources hereinafter
described, to the registered Owner set forth above or registered assigns, the
Principal Sum set forth above on the Maturity Date set forth above (unless this
Bond shall have been duly called for prior redemption, in which case on such
redemption date), and to pay such registered Owner interest (computed on the
basis of a 360-day year of twelve 30-day months) on such Principal Sum at the
Interest Rate set forth above, semiannually on each June 1 and December 1,
commencing December 1, 1996 (each an "Interest Payment Date") from and including
March 1, 1996, if the date of authentication hereof
is prior to December 1, 1996, and otherwise from the Interest Payment Date
that is, or that immediately precedes, the date of authentication hereof
(unless payment of interest on this Bond shall be in default, in which case
from the date to which interest has been paid or duly provided for or, if no
such interest has been paid, from March 1, 1996).
Principal of, premium (if any), on, and interest on, this Bond shall be
payable in any coin or currency of the United States of America which, at the
respective times of payment, is legal tender for the payment of public and
private debts. Except as may otherwise be required by a DTC Representation
Letter in effect with respect to this Bond, principal of and interest on this
Bond shall be payable prior to final payment hereof (whether at maturity or
earlier redemption) to the Holder in whose name this Bond is registered as of
the close of business on the applicable Record Date by check mailed to such
Holder at the address thereof appearing on the registration books kept by the
Registrar or at such other address as is furnished to the Paying Agent in
writing by such Holder; provided at the option of any Holder of Bonds in an
aggregate principal amount of at least $1,000,000, any payment on the Bonds
owned by such Holder may be transmitted by wire transfer to such Holder, at such
Holder's written request, to the bank account number on file with the Registrar
on the 5th day before the Record Date or, if any such day is not a Business Day,
the Business Day next preceding such day. Principal of and interest on this
Bond due at final payment hereof (whether at maturity or earlier redemption)
shall be paid to the Holder hereof upon presentation and surrender of this Bond
at the Corporate Trust Office of the Trustee.
If any payment of the principal of, premium (if any) on, or interest on,
this Bond is due on a Bond Payment Date that is not a Business Day, such payment
will be made on the next succeeding Business Day, and no interest will accrue on
the amount of such payment during the intervening period.
This Bond is one of a duly authorized issue of bonds of the Sponsor, known
as "BFC Finance Corp. REMIC Lease-Backed Bonds Series 1996" issued in the total
original aggregate principal amount of $142,000,000 (the "Bonds") in two classes
designated "Federal Lease-Backed Class A" (the "Class A Bonds") and "Federal
Lease-Backed Class B" (the "Class B Bonds") pursuant to a Trust Indenture dated
as of March 1, 1996 (the "Indenture"), between the Sponsor and the Trustee.
This Bond constitutes one of the Class A Bonds issued pursuant to the Indenture.
The Class A Bonds and the Class B Bonds (collectively, the "Bonds") are parity
obligations under the Indenture (except for certain rights, including remedies,
available to the Class A Bondholders not available to the Class B Bondholders).
The Bonds, together with interest thereon, are not general obligations of
the Sponsor but are limited obligations thereof payable solely from the Trust
Estate pledged therefor under the Indenture.
The Trust Estate under the Indenture consists of all of the Sponsor's
right, title and interest in and to (a) the Notes and the Note Payments, (b) the
Loan Documents, (c) all moneys, securities and investments deposited with the
Trustee on the Closing Date or thereafter and held
A-2
in all Trust Funds created under the Indenture, (d) the Casualty Insurance
Policy, (e) its security interest in the Income Account and the Cash Flow
Account, (f) all proceeds of the foregoing, including, without limitation,
all proceeds of the conversion, voluntary or involuntary, of any of the
foregoing into cash or other liquid property, tangible and intangible, and
(g) all other property, tangible and intangible, from time to time deposited
with or pledged to the Trustee in accordance with the Indenture.
Reference is made to the Indenture for a more detailed description of the
security therein provided for the Bonds, for the nature, extent and manner of
enforcement of such security, for the covenants and agreements made for the
benefit of the Holders of the Bonds and for a statement of the rights of the
Holders of the Bonds. All capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned such terms in the Indenture.
The Indenture, the Notes and the Loan Documents may be modified, amended or
supplemented only to the extent and in the circumstances permitted by the
Indenture as from time to time amended.
(a) MANDATORY SINKING FUND REDEMPTION. (1) The Class A Bonds maturing on
December 1, 2008 shall be subject to mandatory sinking fund redemption on
December 1, 2003 and each December 1 thereafter to and including December 1,
2007, in the principal amounts provided in a mandatory sinking fund schedule set
forth in the Indenture, at a redemption price equal to the principal amount
thereof, plus accrued interest thereon to the redemption date, without premium,
from moneys deposited into the Debt Service Fund.
(2) The Class A Bonds maturing on December 1, 2017 shall be subject to
mandatory sinking fund redemption on December 1, 2009 and each December 1
thereafter to and including December 1, 2016 in the principal amounts provided
in a mandatory sinking fund schedule set forth in the Indenture, at a redemption
price equal to the principal amount thereof, plus accrued interest thereon to
the redemption date, without premium, from moneys deposited into the Debt
Service Fund.
(3) Redemptions pursuant to (a)(1) and (2) above shall be made PRO RATA
among the Holders of each stated maturity by redeeming from each such Holder
that principal amount which bears the same proportion to the principal amount of
such stated maturity registered in the name of such Holder as the total
principal amount of such stated maturity to be redeemed on any sinking fund
payment date bears to the aggregate principal amount of such stated maturity
Outstanding prior to redemption. If the Trustee cannot make a strict PRO RATA
redemption among the Holders of a stated maturity, the Trustee shall redeem more
or less than a PRO RATA portion from one or more Holders of such stated maturity
in such manner as the Trustee deems fair and reasonable.
In connection with any such redemption prior to maturity, the Trustee shall
make appropriate entries in the Bond Register to reflect the portion of any Bond
so redeemed and the
A-3
amount of the principal remaining outstanding. The Trustee's notation in the
Bond Register shall be conclusive as to the principal amount of any Bond
Outstanding at any time.
(b) EXTRAORDINARY MANDATORY REDEMPTION. (1) The Bonds shall be subject to
extraordinary mandatory redemption from monies received by the Trustee
constituting Note prepayments, in whole or in part to the extent of such monies
received by the Trustee, upon notice from the Sponsor to the Trustee that the
49C Notes have become subject to mandatory prepayment in whole due to casualty
or condemnation with respect to all or substantially all of the Project, at a
price equal to one hundred percent (100%) of the principal amount thereof, plus
accrued interest thereon to the redemption date, on the Interest Payment Date
for which required notice can be given and which next follows receipt by the
Trustee of monies constituting such Note prepayments. If not all of the
Outstanding Bonds can be redeemed from monies so received by the Trustee, the
Trustee shall apply all such monies received to redeem the Outstanding Bonds in
part, which redemption shall be made PRO RATA among the Holders of the
Outstanding Bonds.
(2) The Class A Bonds maturing on December 1, 2017 are subject to
extraordinary mandatory redemption prior to maturity on or after December 1,
2015, upon notice from the Sponsor to the Trustee of the optional total
prepayment of the 49C Notes by 49C, as a whole on any Interest Payment Date set
forth below at the redemption prices (expressed as a percentage of the principal
amount redeemed) set forth below, plus accrued interest to the redemption date.
Interest Payment Dates Redemption Price
---------------------- ----------------
December 1, 2015 and June 1, 2016 102%
December 1, 2016 and June 1, 2017 101%
Notice of any redemption under (b) above shall be given by the Trustee by
certified mail, return receipt requested, not less than 30 days nor more than 45
days prior to the applicable redemption date to each Holder in whose name a Bond
to be redeemed is registered on the Record Date preceding the applicable
redemption date, at such Bondholder's address appearing in the Bond Register.
Any failure to give such notice, or any defect therein, shall not affect
the validity of any proceedings for the redemption of any other Bonds for which
no such failure or defect occurs.
Upon surrender for transfer of any Bond at the Corporate Trust Office of
the Trustee, duly endorsed for transfer or accompanied by an assignment duly
executed by the Holder or his attorney duly authorized in writing, the Sponsor
shall execute and the Trustee shall authenticate and deliver in the name of the
transferee or transferees a new fully registered Bond or Bonds for a like
aggregate principal amount of the same maturity and Class. Bonds may be
exchanged
A-4
upon surrender thereof at the Corporate Trust Office of the Trustee for a
like aggregate principal amount of fully registered Bonds of the same
maturity and Class.
The Sponsor and the Trustee shall not be required to register, transfer or
exchange any Bonds selected, called or being called for redemption, during any
period from a Record Date to the immediately succeeding Interest Payment Date.
In case of any registration of transfer or exchange, the Sponsor and the Trustee
may require payment of a sum sufficient to cover actual expenses incurred in
making such exchange or transfer and any tax or other governmental charge that
may be imposed in connection with any such registration of transfer or exchange.
The Sponsor and the Trustee may treat the Holder hereof as the absolute
owner hereof for all purposes, and the Sponsor and the Trustee shall not be
affected by any notice to the contrary. This Bond shall not be entitled to any
benefit under the Indenture or become valid or obligatory for any purpose, until
the certificate of authentication hereon endorsed shall have been signed by the
Trustee.
The Holder of this Bond shall have no right to enforce the provisions of
the Indenture or to institute action to enforce the pledge, assignment or
covenants made therein or to take any action with respect to an Event of Default
under the Indenture or to institute, appear in or defend any suit, action or
other proceeding at law or in equity with respect thereto, except as provided in
the Indenture.
The terms and provisions of the Indenture are incorporated herein by
reference and made a part hereof with the same force and effect as if fully
stated herein. By the acceptance of this Bond, the Holder hereof is deemed to
have agreed and consented to all the terms and provisions of the Indenture.
All acts, conditions and things required to exist, to happen and to be
performed precedent to and in connection with the issuance of this Bond exist,
have happened and have been performed in due time, form and manner as required
by the Indenture and by the proceedings of the Sponsor with respect hereto.
A-5
IN WITNESS WHEREOF, BFC Finance Corp. has caused this Bond to be executed
on its behalf by the manual or facsimile signature of its President and attested
by the manual or facsimile signature of its Secretary, all as of March 1, 1996.
BFC FINANCE CORP.
--------------------------------
Xxxxxxxx X. Xxxxx
President
ATTEST:
-------------------------------
Secretary
CERTIFICATE OF AUTHENTICATION
This Bond is one of the BFC Finance Corp. REMIC Lease-Backed Bond Series
1996 Federal Lease-Backed Class A issued under the provisions of the
within-mentioned Indenture.
Dated:
SOUTHTRUST BANK OF ALABAMA,
NATIONAL ASSOCIATION, as Trustee
By:
--------------------------------
Authorized Signatory
A-6
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
-------------------------------------------------------------------------------
(Please print or typewrite Name and Address, including Zip Code,
and Federal Taxpayer Identification or Social Security Number of Assignee)
-------------------------------------------------------------------------------
the within Bond and all rights thereunder, and hereby irrevocably constitutes
and appoints
-------------------------------------------------------------------------------
Attorney to register the transfer of the within Bond on the books kept for
registration thereof, with full power of substitution in the premises.
Dated:
---------------------------
Signature guaranteed by:
--------------------------------- ----------------------------------
NOTICE: Signature must be NOTICE: The signature to this
guaranteed by an eligible assignment must correspond with
guarantor institution (as defined the name as it appears on the
in Rule 17Ad-15 under the face of the within Bond in every
Securities Exchange Act of 1934, particular, without alteration or
as amended) that participates in any change whatsoever.
a Securities Transfer Association
recognized signature guarantee
program or such other guarantee
program acceptable to the Trustee.
A-7
EXHIBIT B
CLASS B BOND FORM
THIS BOND (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER XXXXXXX 0 XX XXX XXXXXX XXXXXX SECURITIES ACT OF 1933
(THE "SECURITIES ACT"), AND THIS BOND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS BOND IS HEREBY NOTIFIED THAT THE SELLER MAY
BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES
ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THIS BOND AGREES FOR THE
BENEFIT OF THE SPONSOR THAT (A) DURING THE TIME THIS BOND IS PLEDGED UNDER THE
CASTLE ROCK PLEDGE AGREEMENT (AS DEFINED IN THE INDENTURE) THIS BOND MAY NOT BE
TRANSFERRED EXCEPT IN ACCORDANCE WITH THE TERMS THEREOF AND THEREAFTER THIS BOND
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) INSIDE THE UNITED
STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, OR IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED
UPON AN OPINION OF COUNSEL AS REQUIRED BY THE INDENTURE), (2) TO THE SPONSOR,
(3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, OR (4) OUTSIDE THE UNITED
STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904
UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
TO, NOTIFY ANY PURCHASER FROM IT OF THIS BOND OF THE RESALE RESTRICTIONS SET
FORTH IN (A) ABOVE.
THE PRINCIPAL OF THIS BOND IS SUBJECT TO MANDATORY REDEMPTION AND PAYMENT IN
PART PRIOR TO MATURITY AS SET FORTH HEREIN, WITHOUT NOTATION ON THIS BOND.
ACCORDINGLY, THE UNPAID PRINCIPAL BALANCE OF THIS BOND MAY BE LESS THAN THAT SET
FORTH BELOW. ANYONE ACQUIRING THIS BOND MAY ASCERTAIN ITS CURRENT PRINCIPAL
AMOUNT BY INQUIRY OF SOUTHTRUST BANK OF ALABAMA, NATIONAL ASSOCIATION, AS
TRUSTEE, PAYING AGENT AND BOND REGISTRAR (THE "TRUSTEE").
THE INTEREST ON THIS BOND IS SUBJECT TO FEDERAL INCOME TAX. AN ELECTION IS
BEING MADE TO TREAT THE SEGREGATED ASSET POOL COMPRISING THE TRUST ESTATE AS A
REAL ESTATE MORTGAGE INVESTMENT CONDUIT ("REMIC"). THIS BOND IS TO REPRESENT A
"REGULAR INTEREST" IN SUCH REMIC UNDER SECTION 860G OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED.
R- $
BFC FINANCE CORP.
REMIC LEASE-BACKED BOND
SERIES 1996
FEDERAL LEASE-BACKED CLASS B
Interest Rate: Original Dated Date: Maturity Date:
-------------- --------------------- --------------
% March 1, 1996
REGISTERED OWNER:
PRINCIPAL SUM:
BFC FINANCE CORP. (the "Sponsor"), a Delaware corporation, for value
received, hereby promises to pay, but solely from the sources hereinafter
described, to the registered Owner set forth above or registered assigns, the
Principal Sum set forth above on the Maturity
Date set forth above (unless this Bond shall have been duly called for prior
redemption, in which case on such redemption date), and to pay such
registered Owner interest (computed on the basis of a 360-day year of twelve
30-day months) on such Principal Sum at the Interest Rate set forth above,
semiannually on each June 1 and December 1, commencing June 1, 1998 (each an
"Interest Payment Date") from and including March 1, 1998, if the date of
authentication hereof is prior to June 1, 1998, and otherwise from the
Interest Payment Date that is, or that immediately precedes, the date of
authentication hereof (unless payment of interest on this Bond shall be in
default, in which case from the date to which interest has been paid or duly
provided for or, if no such interest has been paid, from March 1, 1998).
Principal of, premium (if any), on, and interest on, this Bond shall be
payable in any coin or currency of the United States of America which, at the
respective times of payment, is legal tender for the payment of public and
private debts. Except as may otherwise be required by a DTC Representation
Letter in effect with respect to this Bond, principal of and interest on this
Bond shall be payable prior to final payment hereof (whether at maturity or
earlier redemption) to the Holder in whose name this Bond is registered as of
the close of business on the applicable Record Date by check mailed to such
Holder at the address thereof appearing on the registration books kept by the
Registrar or at such other address as is furnished to the Paying Agent in
writing by such Holder; provided at the option of any Holder of Bonds in an
aggregate principal amount of at least $1,000,000, any payment on the Bonds
owned by such Holder may be transmitted by wire transfer to such Holder, at such
Holder's written request, to the bank account number on file with the Registrar
on the 5th day before the Record Date or, if any such day is not a Business Day,
the Business Day next preceding such day. Principal of and interest on this
Bond due at final payment hereof (whether at maturity or earlier redemption)
shall be paid to the Holder hereof upon presentation and surrender of this Bond
at the Corporate Trust Office of the Trustee.
If any payment of the principal of, premium (if any) on, or interest on,
this Bond is due on a Bond Payment Date that is not a Business Day, such payment
will be made on the next succeeding Business Day, and no interest will accrue on
the amount of such payment during the intervening period.
This Bond is one of a duly authorized issue of bonds of the Sponsor, known
as "BFC Finance Corp. REMIC Lease-Backed Bonds, Series 1996" issued in the total
original aggregate principal amount of $142,000,000 (the "Bonds") in two classes
designated "Federal Lease-Backed Class A" (the "Class A Bonds"), and "Federal
Lease-Backed Class B" (the "Class B Bonds") pursuant to a Trust Indenture dated
as of March 1, 1996 (the "Indenture"), between the Sponsor and the Trustee.
This Bond constitutes one of the Class B Bonds issued pursuant to the Indenture.
The Class A Bonds and the Class B Bonds (collectively, the "Bonds") are parity
obligations under the Indenture (except for certain rights, including remedies,
available to the Class A Bondholders not available to the Class B Bondholders).
B-2
The Bonds, together with interest thereon, are not general obligations of
the Sponsor but are limited obligations thereof payable solely from the Trust
Estate pledged therefor under the Indenture.
The Trust Estate under the Indenture consists of all of the Sponsor's
right, title and interest in and to (a) the Notes and the Note Payments, (b) the
Loan Documents, (c) all moneys, securities and investments deposited with the
Trustee on the Closing Date or thereafter and held in all Trust Funds created
under the Indenture, (d) the Casualty Insurance Policy, (e) its security
interest in the Income Account and the Cash Flow Account, (f) all proceeds of
the foregoing, including, without limitation, all proceeds of the conversion,
voluntary or involuntary, of any of the foregoing into cash or other liquid
property, tangible and intangible, and (g) all other property, tangible and
intangible, from time to time deposited with or pledged to the Trustee in
accordance with the Indenture.
Reference is made to the Indenture for a more detailed description of the
security therein provided for the Bonds, for the nature, extent and manner of
enforcement of such security, for the covenants and agreements made for the
benefit of the Holders of the Bonds and for a statement of the rights of the
Holders of the Bonds. All capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the Indenture.
The Indenture, the Notes and the Loan Documents may be modified, amended or
supplemented only to the extent and in the circumstances permitted by the
Indenture as from time to time amended.
EXTRAORDINARY MANDATORY REDEMPTION. (1) The Bonds shall be subject to
extraordinary mandatory redemption from monies received by the Trustee
constituting Note prepayments, in whole or in part to the extent of such monies
received by the Trustee, upon notice from the Sponsor to the Trustee that the
49C Notes have become subject to mandatory prepayment in whole due to casualty
or condemnation with respect to all or substantially all of the Project, at a
price equal to one hundred percent (100%) of the principal amount thereof, plus
accrued interest thereon to the redemption date, on the Interest Payment Date
for which required notice can be given and which next follows receipt by the
Trustee of monies constituting such Note prepayments. If not all of the
Outstanding Bonds can be redeemed from monies so received by the Trustee, the
Trustee shall apply all such monies received to redeem the Outstanding Bonds in
part, which redemption shall be made PRO RATA among the Holders of the
Outstanding Bonds.
(2) The Class B Bonds maturing on or after December 1, 2016 are subject to
extraordinary mandatory redemption prior to maturity on or after December 1,
2015, upon notice from the Sponsor to the Trustee of the optional total
prepayment of the 49C Notes by 49C, as a whole on any Interest Payment Date set
forth below at the redemption prices (expressed as a percentage of the principal
amount redeemed) set forth below, plus accrued interest to the redemption date.
B-3
Interest Payment Dates Redemption Price
---------------------- ----------------
December 1, 2015 and June 1, 2016 102%
December 1, 2016 and June 1, 2017 101%
Notice of any redemption under (1) or (2) above shall be given by the
Trustee by certified mail, return receipt requested, not less than 30 days nor
more than 45 days prior to the applicable redemption date to each Holder in
whose name a Bond to be redeemed is registered on the Record Date preceding the
applicable redemption date, at such Bondholder's address appearing in the Bond
Register.
Any failure to give such notice, or any defect therein, shall not affect
the validity of any proceedings for the redemption of any other Bonds for which
no such failure or defect occurs.
This Bond is subject to restrictions on transfer as provided in the legend
appearing on the first page hereof and in the Indenture.
The Sponsor and the Trustee shall not be required to register, transfer or
exchange any Bonds selected, called or being called for redemption, during any
period from a Record Date to the immediately succeeding Interest Payment Date.
In case of any registration of transfer or exchange, the Sponsor and the Trustee
may require payment of a sum sufficient to cover actual expenses incurred in
making such exchange or transfer and any tax or other governmental charge that
may be imposed in connection with any such registration of transfer or exchange.
The Sponsor and the Trustee may treat the Holder hereof as the absolute
owner hereof for all purposes, and the Sponsor and the Trustee shall not be
affected by any notice to the contrary. This Bond shall not be entitled to any
benefit under the Indenture or become valid or obligatory for any purpose, until
the certificate of authentication hereon endorsed shall have been signed by the
Trustee.
The Holder of this Bond shall have no right to enforce the provisions of
the Indenture or to institute action to enforce the pledge, assignment or
covenants made therein or to take any action with respect to an Event of Default
under the Indenture or to institute, appear in or defend any suit, action or
other proceeding at law or in equity with respect thereto, except as provided in
the Indenture.
The terms and provisions of the Indenture are incorporated herein by
reference and made a part hereof with the same force and effect as if fully
stated herein. By the acceptance of this Bond, the Holder hereof is deemed to
have agreed and consented to all the terms and provisions of the Indenture.
All acts, conditions and things required to exist, to happen and to be
performed precedent to and in connection with the issuance of this Bond exist,
have happened and have been
B-4
performed in due time, form and manner as required by the Indenture and by
the proceedings of the Sponsor with respect hereto.
B-5
IN WITNESS WHEREOF, BFC Finance Corp. has caused this Bond to be executed
on its behalf by the manual or facsimile signature of its President and attested
by the manual or facsimile signature of its Secretary, all as of March 1, 1996.
BFC FINANCE CORP.
--------------------------------
Xxxxxxxx X. Xxxxx
President
ATTEST:
-------------------------------
Secretary
CERTIFICATE OF AUTHENTICATION
This Bond is one of the BFC Finance Corp. REMIC Lease-Backed Bond Series
1996 Federal Lease-Backed Class B issued under the provisions of the
within-mentioned Indenture.
Dated:
SOUTHTRUST BANK OF ALABAMA,
NATIONAL ASSOCIATION, as Trustee
By:
------------------------------
Authorized Signatory
B-6
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
-------------------------------------------------------------------------------
(Please print or typewrite Name and Address, including Zip Code,
and Federal Taxpayer Identification or Social Security Number of Assignee)
-------------------------------------------------------------------------------
the within Bond and all rights thereunder, and hereby irrevocably constitutes
and appoints
-------------------------------------------------------------------------------
Attorney to register the transfer of the within Bond on the books kept for
registration thereof, with full power of substitution in the premises.
Dated:
-----------------------
Signature guaranteed by:
--------------------------------- ----------------------------------
NOTICE: Signature must be NOTICE: The signature to this
guaranteed by an eligible assignment must correspond with
guarantor institution (as defined the name as it appears on the
in Rule 17Ad-15 under the face of the within Bond in every
Securities Exchange Act of 1934, particular, without alteration or
as amended) that participates in any change whatsoever.
a Securities Transfer Association
recognized signature guarantee
program or such other guarantee
program acceptable to the Trustee.
B-7
EXHIBIT C
RESIDUAL CERTIFICATE FORM
THE RESIDUAL INTEREST REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN, AND WILL NOT
BE, REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR
ANY STATE SECURITIES LAWS, AND MAY NOT BE DIRECTLY OR INDIRECTLY OFFERED OR SOLD
OR OTHERWISE DISPOSED OF (INCLUDING PLEDGED) BY THE OWNER HEREOF EXCEPT IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 12.02 OF THE INDENTURE REFERRED TO
HEREIN.
NO.: PERCENTAGE INTEREST: %
BFC FINANCE CORP.
REMIC RESIDUAL CERTIFICATE
SERIES 1996
REGISTERED OWNER:
THIS CERTIFICATE DOES NOT CONTAIN A COMPLETE SUMMARY OF THE INDENTURE
PURSUANT TO WHICH IT IS ISSUED. THE OWNER IS REFERRED TO SUCH INDENTURE, COPIES
OF WHICH MAY BE OBTAINED FROM SOUTHTRUST BANK OF ALABAMA, NATIONAL ASSOCIATION,
(THE "TRUSTEE").
THIS CERTIFIES THAT SOUTHTRUST BANK OF ALABAMA, NATIONAL ASSOCIATION,
acting not in its individual capacity, but solely as Trustee under and pursuant
to the Trust Indenture dated as of March 1, 1996 (the "Indenture"), by and
between the Trustee and BFC Finance Corp. (the "Sponsor"), hereby certifies that
the Registered Owner set forth above (the "Owner") is the owner of the undivided
fractional Percentage Interest set forth above in the Residual pursuant to the
Indenture. Capitalized terms used herein, unless otherwise defined, shall have
the meanings ascribed thereto in the Indenture.
This Certificate is one of the Certificates referred to in the Indenture
and is issued under and is subject to the terms, provisions and conditions of
the Indenture to which the Owner of this Certificate, by virtue of its
acceptance hereof, agrees and by which the Owner hereof is bound. Reference is
hereby made to the Indenture for a statement of the rights and obligations of
the Owner of this Certificate, the duties, rights and obligations of the Sponsor
and the Trustee, and the limitations thereon, as well as for a statement of the
terms and conditions of the interest created by the Indenture. Reference is
also made to the Indenture for the provisions regarding the transfer of this
Certificate and requirements with respect thereto, amendment of the Indenture
and other matters. The terms of the Indenture are hereby incorporated herein
and deemed accepted by the Owner of this Certificate. A copy of the Indenture
may be obtained from the Trustee. THE FRACTIONAL UNDIVIDED INTEREST IN THE
RESIDUAL EVIDENCED HEREBY IS A FRACTIONAL UNDIVIDED INTEREST IN A RESIDUAL
INTEREST IN A SEGREGATED ASSET POOL FOR WHICH ELECTION FOR TREATMENT AS A "REAL
ESTATE MORTGAGE INVESTMENT CONDUIT" ("REMIC"), AS DEFINED IN THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), IS BEING MADE.
TRANSFER OF THIS CERTIFICATE IS RESTRICTED AS SET FORTH IN THE INDENTURE.
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO A "DISQUALIFIED ORGANIZATION" AS
DEFINED IN SECTION 860E(e)(5) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE"). SUCH TERM INCLUDES THE UNITED STATES, ANY STATE OR POLITICAL
SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, ANY
AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN CERTAIN TAXABLE
INSTRUMENTALITIES), ANY COOPERATIVE ORGANIZATION FURNISHING ELECTRIC ENERGY OR
PROVIDING TELEPHONE SERVICE TO PERSONS IN RURAL AREAS, OR ANY ORGANIZATION
(OTHER THAN A FARMERS' COOPERATIVE) THAT IS EXEMPT FROM FEDERAL INCOME TAX
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX ON UNRELATED BUSINESS INCOME. NO
TRANSFER OF THIS CERTIFICATE WILL BE REGISTERED BY THE TRUSTEE UNLESS THE
PROPOSED TRANSFEREE HAS DELIVERED AN AFFIDAVIT AFFIRMING, AMONG OTHER THINGS,
THAT THE PROPOSED TRANSFEREE IS NOT A DISQUALIFIED ORGANIZATION AND IS NOT
ACQUIRING THE CERTIFICATE FOR THE ACCOUNT OF A DISQUALIFIED ORGANIZATION. A
COPY OF THE FORM OF AFFIDAVIT REQUIRED OF EACH PROPOSED TRANSFEREE IS ON FILE
AND AVAILABLE FROM THE TRUSTEE.
A TRANSFER OF THIS CERTIFICATE IN VIOLATION OF THE APPLICABLE TRANSFER
RESTRICTIONS MAY GIVE RISE TO A SUBSTANTIAL TAX UPON THE TRANSFEROR OR, IN
CERTAIN CASES, UPON AN AGENT ACTING FOR THE TRANSFEREE. A PASS-THRU ENTITY THAT
HOLDS THIS CERTIFICATE AND THAT HAS A DISQUALIFIED ORGANIZATION AS A RECORD
OWNER IN ANY TAXABLE YEAR GENERALLY WILL BE SUBJECT TO A TAX FOR EACH SUCH YEAR
EQUAL TO THE PRODUCT OF (A) THE AMOUNT OF EXCESS INCLUSIONS WITH RESPECT TO THE
PORTION OF THIS CERTIFICATE OWNED THROUGH SUCH PASS-THRU ENTITY BY SUCH
DISQUALIFIED ORGANIZATION, AND (B) THE HIGHEST MARGINAL FEDERAL TAX RATE ON
CORPORATIONS. FOR PURPOSES OF THE PRECEDING SENTENCE, THE TERM "PASS-THRU"
ENTITY INCLUDES REGULATED INVESTMENT COMPANIES, REAL ESTATE INVESTMENT TRUSTS,
COMMON TRUST FUNDS, PARTNERSHIPS, TRUSTS, ESTATES, COOPERATIVES TO WHICH PART I
OF SUBCHAPTER T OF THE CODE APPLIED AND, EXCEPT AS PROVIDED IN REGULATIONS,
NOMINEES.
In addition to the other representations, warranties and covenants set
forth in the Indenture, by acceptance hereof, the Owner named in this
Certificate represents and warrants to the Sponsor and the Trustee as follows:
(1) The Owner understands that this Certificate is not registered
under the 1933 Act or any state "Blue Sky" laws;
(2) The Owner has knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of an
investment in this Certificate, it is able to bear the economic risk of
investment in this Certificate and it is an accredited investor as defined
in Regulation D under the 1933 Act;
(3) The Owner acquired this Certificate for its own account or for
accounts as to which it exercises sole investment discretion and not with a
view to any distribution of this Certificate, subject, nevertheless, to the
understanding that disposition of its property shall at all times be and
remain within the Owner's control;
C-2
(4) This Certificate must be held indefinitely by the Owner unless
subsequently registered under the 1933 Act and any applicable state "Blue
Sky" laws or an exemption from the registration requirements of the 1933
Act and any such laws is available;
(5) The Owner's interest in and rights with respect to the Trustee
Estate are specifically limited to the rights and interests created by the
Indenture and are expressly subordinate to the lien of the Indenture; and
(6) The Owner is not a Disqualified Organization.
The Owner hereof agrees that, as the Owner hereof, it is severally liable
for liabilities of the holder of the Certificates pursuant to the Indenture,
including but not limited to liabilities and indemnities under Section 12.18 of
the Indenture and not to transfer this Certificate except in accordance with the
Indenture. Failure to comply with the transfer requirements of the Indenture
will void any purported transfer and have the other effects on the transferor
and transferee provided in the Indenture, reference to which is hereby made.
By the acceptance hereof, the Owner agrees with the Sponsor and the Trustee
that neither the Sponsor nor the Trustee shall be held accountable by reason of
the disclosure of information regarding the name and address of such Owner,
regardless of the source from which such information was derived, provided such
disclosure is pursuant to Section 12.04 of the Indenture. The Owner, by its
acceptance hereof, acknowledges and agrees that the only amounts that it shall
be entitled to receive or claim for on any Residual Distribution Date, and from
time to time, are those amounts actually and properly released from the lien of
the Indenture in accordance with express terms thereof and payable under the
Indenture, and the Owner shall have no claim or right by reason of owning this
Certificate against the Trustee under the Indenture, the Sponsor or the Holders
of the Bonds issued under the Indenture with respect to any amounts not properly
released or to be released from the lien of the Indenture.
By acceptance of this Certificate, the Owner consents to amendments or
modification of this Certificate and the Indenture to the extent the Trustee, on
advice of counsel, deems such amendment or modification necessary or required
under the Code or applicable regulations thereunder to make or maintain the
REMIC election or the REMIC status of the Trust Estate.
This Certificate does not represent a debt or a liability of the Sponsor.
No lien or claim is created hereby or by the Indenture against the assets of the
Sponsor other than to the Residual in the Trust Estate to the extent provided
for in the Indenture.
C-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be issued as
of the date hereof.
Dated: SOUTHTRUST BANK OF ALABAMA,
NATIONAL ASSOCIATION, not in its individual
capacity but solely as Trustee
By:
------------------------------------------
Name:
Title:
C-4
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and
not as tenants in common
UNIF GIFT MIN ACT Custodian
----------------- ---------------------
(Cust) (Minor)
under Uniform Gifts to Minors
Act
--------------------------
(State)
Additional abbreviations may also be used though not in the above list
---------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
------------------------------------------------------------------------------
------------------------------------------------------------------------------
(Please print or typewrite name and address,
including zip code, of assignee)
------------------------------------------------------------------------------
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
------------------------------------------------------------------------------
Attorney to transfer said Certificate on the Certificate Register, with full
power of substitution in the premises.
Dated:
----------------------- ---------------------------------
Signature Guaranteed by
---------------------------------
NOTICE: The signature(s) to this assignment must correspond with the name as
it appears upon the face of the within Certificate in every particular,
without alteration or enlargement or any change whatever. Signature(s) must
be guaranteed by a commercial bank or by a member firm of the New York Stock
Exchange or another national securities exchange. Notarized or witnessed
signatures are not acceptable.
C-5
EXHIBIT D
CERTIFICATE TRANSFER AFFIDAVIT
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says under penalty of
perjury as follows:
1. The undersigned is an officer of ________________, the proposed
Transferee of a Certificate issued pursuant to the Trust Indenture dated as of
March 1, 1996 (the "Indenture") by and between BFC Finance Corp. and SouthTrust
Bank of Alabama, National Association, as Trustee. Capitalized terms used, but
not defined herein, shall have the meanings ascribed to such terms in the
Indenture. The Transferee has authorized the undersigned to make this affidavit
on behalf of the Transferee.
2. The Transferee is not a Disqualified Organization. The Transferee is
not acquiring its ownership interest in the Certificates for the account of, or
as agent (including a broker, nominee or other middleman) for, any person as
entity from which it has not received an affidavit substantially in the form of
this Transfer Affidavit. The Transferee is not an entity that holds REMIC
residual interests as nominee in order to facilitate the clearance and
settlement of such securities through electronic book-entry changes to accounts
of participating organizations.
3. The Transferee has been advised of, and understands that under the
Code, (i) a tax will be imposed on transfers of Certificates to Persons that are
Disqualified Organizations; (ii) such tax will be imposed on the transferor, or,
if such transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is a Disqualified Organization, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent transferee furnished to such Person an affidavit that
such subsequent transferee is not a Disqualified Organization and, at the time
of transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee is not acquiring its ownership interest in the
Certificates for the purpose of avoiding or impeding the assessment or
collection of tax.
5. The Transferee has been advised of, and understands that under the
Code, a tax will be imposed on a "pass-thru entity" holding Certificates if at
any time during the taxable year of the pass-thru entity a Person that is a
Disqualified Organization is the record holder of an interest in such entity.
(For this purpose, a "pass-thru entity" includes a regulated investment company,
a real estate investment trust or common trust fund, a partnership, trust or
estate, and
certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interest in pass-thru entities as a nominee for another
Person).
6. The Transferee has received a copy of and has reviewed the provisions
of the Indenture (incorporated herein by reference) (including, but not limited
to, Article XII thereof) and understands the legal consequences of the
acquisition of an ownership interest in the Certificates including, without
limitation, the restrictions on subsequent transfers and the provisions
regarding voiding the transfer. The Transferee expressly agrees to be bound by
and to abide by the provisions of the Indenture (including, but not limited to,
Article XII thereof) and the restrictions noted on the face of the Certificates.
The Transferee understands and agrees that any breach of any of the
representations included herein shall render the transfer to the Transferee
contemplated thereby null and void.
The Transferee further acknowledges that the breach of any of the
representations included herein shall permit the Trustee to withhold payments
otherwise distributable in respect of the Certificate and to apply such amounts
as indemnification from and against any cost, liability or tax incurred as a
result of the purported transfer.
7. The Transferee agrees to require a Transfer Affidavit containing the
representations and agreements substantially in the form hereof from any Person
to whom the Transferee attempts to transfer its ownership interest in a
Certificate, and in connection with any transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
transfer its ownership interest or cause any ownership interest to be
transferred to any Person that the Transferee knows is a Disqualified
Organization.
8. The Transferee's taxpayer identification number is __________________.
D-2
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, by its duly authorized officer and its corporate seal
to be hereunto affixed, duly attested, this ______ day of __________________.
[NAME OF TRANSFEREE]
By:
------------------------------
Name:
Title:
[Corporate Seal]
ATTEST:
-------------------------------------
Title:
D-3
EXHIBIT E
CERTIFICATE TRANSFEREE'S AGREEMENT FORM
SouthTrust Bank of Alabama, National Association
The undersigned is an officer of ____________, the proposed Transferee of a
Certificate issued pursuant to the Trust Indenture dated as of March 1, 1996
(the "Indenture") by and between BFC Finance Corp. and SouthTrust Bank of
Alabama, National Association, as Trustee. Capitalized terms used, but not
defined herein, shall have the meanings ascribed to such terms in the Indenture.
By its execution and acknowledgement hereof, and its acceptance of the
Certificate evidencing % of the ownership of the Residual, the proposed
Transferee represents and warrants to, and covenants and agrees with, the
Trustee as follows:
(a) It understands that the Certificates have not been, and will not be,
registered under the Securities Act of 1933 ("1933 Act"), in reliance upon the
exemptions provided in the 1933 Act, or under the securities or "Blue Sky" laws
of any state in reliance upon exemptions therefrom, and it hereby covenants and
agrees that it will not sell or otherwise transfer the Certificates or any part
thereof (i) without registration under the 1933 Act and any applicable
securities or "Blue Sky" laws or pursuant to exemptions therefrom and (ii) upon
compliance with the provisions of the Indenture and the Certificates then
applicable to such sale or other transfer. It further represents and warrants
that it fully understands and agrees that it must bear the economic risk of the
purchase of the Certificates for an indefinite period of time and that neither
the Trustee nor the Sponsor has an obligation to register or otherwise
facilitate the transfer of any Certificate or an ownership interest in the
Residual except as expressly provided in the Indenture.
(b) It is acquiring the Certificates for its own account as principal and
not for the account of one or more pension or trust accounts for which it is
acting as trustee, or for the account of one or more agency accounts for which
it is acting as agent, and that, in any such case, such acquisition is being
made not with a view to a distribution thereof, in whole or in part.
(c) It understands that under current law the purchase and holding of the
Certificates by or on behalf of any employee benefit plan subject to the
fiduciary responsibility provisions of ERISA may result in "prohibited
transactions" within the meaning of ERISA and the Code. It is not, and is not
purchasing on behalf of, any such plan. Transfer of the Certificates will not
be registered unless, before the registration of any transfer, the transferee
(i) executes a representation letter stating that it is not, and is not
purchasing on behalf of, any such plan or (ii) provides an Opinion of Counsel
addressed to the Trustee that the purchase or holding of Certificates by or on
behalf of such plan will not constitute or result in a prohibited transaction
under ERISA, will not cause the Sponsor, the Trustee, or the Manager to be a
fiduciary under
the plan, and will not subject the Sponsor, the Trustee, or the Manager to
any obligation or liability in addition to those undertaken in the Indenture.
(d) It customarily engages in the purchase of mortgages, mortgage-related
securities, mortgage derivative securities and residual interests therein, and
has such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks specifically in the area of mortgage-
related securities and mortgage derivative securities of an investment in the
Certificates, it is able to bear the substantial economic risk of investment in
the Certificates and the manner in which fluctuations in interest rates affect
the value of mortgages, mortgage-related securities, mortgage derivative
securities and residual interests therein and it is an "accredited investor" as
that term is defined in Regulation D under the 1933 Act.
(e) It is not affiliated with the Trustee or any affiliate of the Trustee
or its nominee to hold the Trust Estate.
(f) It understands that substantial risks are involved in an investment in
the Residual and that, under certain circumstances, it could fail to recoup its
initial investment in the Residual.
(g) It has read and understood, and is bound by, all the terms and
conditions of the Certificates and the Indenture and the obligations of an owner
of a Certificate under the Indenture, including, but not limited to, the
provisions of the Indenture setting forth limitations on the liability of the
Trustee, the Sponsor and the Manager.
(h) It has discussed with any of its advisors, counsel and accountants
that it has deemed appropriate the legal, tax and financial implications of
investment in a REMIC residual interest and understands that its taxable income
for any accounting period may not correspond to the cash flow, if any, for such
period and its decision to invest in the REMIC residual interest evidenced by
the Certificates acquired by it is not based upon any representation made to it
by the Sponsor other than the statements or representations by the Sponsor in
the Indenture.
(i) It has not relied upon the Sponsor or the Trustee, or upon any
information or materials prepared or furnished by the Sponsor or the Trustee, or
its agents or counsel, in determining whether its investment in the Certificate
is legal for it or an investment which it may make under applicable federal or
state laws and regulations.
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(j) It will be, except to the extent specified in the Indenture, severally
liable for all fees, expenses, taxes, indemnity payments and other liabilities
of the Sponsor and the Trustee, other than the Bonds, to the extent such fees,
expenses, taxes, indemnity payment and other liabilities of the Sponsor or the
Trustee, as the case may be, are not paid out of the Residual and for all other
obligations of an owner of Certificates pursuant to the Indenture.
[NAME OF TRANSFEREE]
By:
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E-3
EXHIBIT F
LOAN DOCUMENTS
1. Instrument of Assignment of Payments under Government Contracts from 49C to
Trustee.
2. Notice of Assignment of U.S. Government Contract acknowledged by
contracting officer.
3. Lease Status Certificate executed by contracting officer dated March 28,
1996.
4. $99,000,000 Promissory Note dated as of March 26, 1996 from 49C to Lender.
5. $27,087,366.74 Promissory Note dated as of March 26, 1996 from 49C to
Lender.
6. $9,310,689.07 Promissory Note dated as of March 26, 1996 from DCDC II to
Sponsor.
7. Loan Agreement dated as of March 26, 1996 between the Lender and 49C.
8. Deed of Trust, Security Agreement and Assignment of Rents dated as of March
29, 1996 among 49C, Xxxxxxx X. Xxxxx, Xx., as trustor, and the Lender, as
beneficiary.
9. Assignment of Rents and Leases and Other Income dated as of March 26, 1996
by 49C in favor of the Lender.
10. Acknowledgement, Subordination, Non-Disturbance and Attornment Agreement
dated as of March 26, 1996 among United States of America acting by and
through the General Services Xxxxxxxxxxxxxx, 00X, the Lender, the Sponsor
and the Trustee.
11. Cash Flow Account Security, Pledge and Assignment Agreement dated as of
March 26, 1996 between 49C and the Lender.
12. Account Agreement dated as of March 26, 1996 among the Lender, the Borrower
and the Trustee relating to the Operating Reserve Account.
13. Income Account Security, Pledge and Assignment Agreement dated as of March
26, 1996, between 49C and the Lender.
14. Account Agreement dated as of March 26, 1996 among the Borrower, the Lender
and the Trustee relating to the Income Account.
15. Account Agreement dated as of March 26, 1996 Crestar Bank, N.A., 49C and
the Lender relating to the Operating Account.
16. Security Agreement dated as of March 26, 1996 between 49C as debtor and the
Lender as secured party.
17. Assignment of Warranties, Management Agreements, Contractors' Agreements
and other Contract Rights dated as of March 26, 1996 by 49C in favor of the
Lender.
18. Second Deed of Trust, Security Agreement and Assignment of Rents made as of
March 26, 1996, among 49C, as trustor, Xxxxxxx X. Xxxxx, Xx., as trustee,
and the Lender, as beneficiary.
19. UCC-1 Financing Statements
20. Assignment of Collateral and Trust Agreement dated as of March 1, 1996 by
and among DCDC II, the Sponsor and the Trustee as collateral agent.
21. Agreement Relating to Refinancing of Existing Indebtedness and Other
Matters dated as of March 26, 1996 among the Lender, Parcel 49B Limited
Partnership, 49C, Tower Associates, Inc., and Tower Associates II, Inc.
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EXHIBIT G
SCHEDULE OF AMOUNTS TO BE RESERVED AGAINST FUTURE
BOND PRINCIPAL PAYMENTS
EXHIBIT H
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF BONDS FORM
Re: BFC Finance Corp.
REMIC Lease-Backed Bonds
Series 1996
Federal Lease-Backed Class B Bonds
This Certificate relates to $___________________ principal amount of Bonds
held in *______________ book-entry or *________________ definitive form by
__________________ (the "Transferor").
The Transferor*:
/ / has requested the Trustee by written order to deliver in exchange for
its beneficial interest in the Book-Entry Bond held by the Depository a Bond or
Bonds in definitive, registered form of authorized denominations in an aggregate
principal amount equal to its beneficial interest in such Book-Entry Bond (or
the portion thereof indicated above); or
/ / has requested the Trustee by written order to exchange or register the
transfer of a Bond or Bonds.
In connection with such request and in respect of each such Bond, the
Transferor does hereby certify that Transferor is familiar with the Indenture
relating to the above captioned Bonds and as provided in such Indenture, the
transfer of this Bond does not require registration under the Securities Act (as
defined below) because:*
/ / Such Bond is being required for the Transferor's own account, without
transfer (in satisfaction of Section _____ or Section ______ of the Indenture).
/ / Such Bond is being transferred to a "qualified institutional buyer"
(as defined in Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act")) in reliance on Rule 144A (in satisfaction of Section ______,
Section ______ or Section ______ of the Indenture) or pursuant to an exemption
from registration in accordance with Rule 904 under the Securities Act (in
satisfaction of Section ______ or Section ________ of the Indenture).
_________________
* Check application box.
/ / Such Bond is being transferred in accordance with Rule 144 under the
Securities Act, or pursuant to an effective registration statement under the
Securities Act (in satisfaction of Section ______ or Section ______ of the
Indenture).
/ / Such Bond is being transferred in reliance on and in compliance with
an exemption from the registration requirements of the Securities Act, other
than Rule 144A, 144 or Rule 904 under the Securities Act. An Opinion of Counsel
to the effect that such transfer does not require registration under the
Securities Act accompanies this Certificate (in satisfaction of Section _____ or
Section _______ of the Indenture).
[INSERT NAME OF TRANSFEROR]
By:
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Date:
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