Exhibit 2.1
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TRUST INDENTURE
BETWEEN
PMC JOINT VENTURE, L.P. 2002-1,
A DELAWARE LIMITED PARTNERSHIP
AND
BNY MIDWEST TRUST COMPANY,
AS TRUSTEE
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DATED AS OF APRIL 3, 2002
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$63,453,688
PMC JOINT VENTURE, L.P. 2002-1
LOAN-BACKED FIXED RATE NOTES
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TABLE OF CONTENTS
(This Table of Contents is for convenience of reference only and is not a
part of the Trust Indenture.)
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS ..................................................................3
ARTICLE II THE NOTES ...................................................................3
2.1 Authorized Amount of Notes.............................................3
2.2 Issuance of Notes; Denominations; Form of Notes........................4
2.3 Book-Entry-Only System.................................................4
2.4 Execution..............................................................5
2.5 Authentication.........................................................5
2.6 Delivery of Notes and Receipt of Loans.................................6
2.7 Payments of Principal of and Interest on Notes........................10
2.8 Mutilated, Lost, Stolen or Destroyed Notes............................10
2.9 Registration and Exchange of Notes; Persons Treated as
Holders; Restrictions on Transfers of Notes......................11
2.10 Destruction of Notes..................................................13
ARTICLE III REPRESENTATIONS AND WARRANTIES; SUBSTITUTION OF LOANS......................13
3.1 Representations and Warranties of Issuer..............................13
3.2 Representations and Warranties With Respect to Loans..................14
3.3 Repurchase and Substitution of Loans..................................20
3.4 Release and Exchange of Loans.........................................21
ARTICLE IV REDEMPTION PROVISIONS.......................................................22
4.1 Optional Redemption of the Notes......................................22
4.2 Notice of Redemption..................................................22
4.3 Redemption Payments...................................................23
4.4 Cancellation..........................................................23
ARTICLE V COVENANTS OF ISSUER..........................................................23
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5.1 Payment of Principal and Interest.....................................23
5.2 Performance of Covenants..............................................23
5.3 Instruments of Further Assurance......................................24
5.4 Recording and Filing..................................................24
5.5 Existence.............................................................24
5.6 Access to Records; Discussions With Officers..........................24
5.7 Notice of Material Events.............................................25
5.8 Maintenance of Licenses; Rating.......................................25
5.9 Use of Funds..........................................................26
5.10 Negative Covenants of the Issuer......................................26
5.11 Opinions as to Loans and Trust Estate.................................27
5.12 Maintenance of Office.................................................28
5.13 Restrictions on Issuer's Actions......................................28
5.14 Insurance Coverage....................................................29
5.15 Financial Statements and Accountants' Reports.........................30
ARTICLE VI REVENUES AND ACCOUNTS.......................................................30
6.1 Creation of Accounts..................................................30
6.2 Deposits to the Collection Account....................................30
6.3 Deposits in Spread Account; Permitted Withdrawals from
Spread Account...................................................31
6.4 Distributions.........................................................32
6.5 Moneys To Be Held in Trust............................................33
6.6 Amounts Remaining in Funds and Accounts...............................33
6.7 Accounts and Reports..................................................33
6.8 Tax Reporting.........................................................33
ARTICLE VII INVESTMENT OF MONEYS.......................................................34
ARTICLE VIII DISCHARGE OF INDENTURE....................................................34
ARTICLE IX DEFAULT PROVISIONS AND REMEDIES OF
TRUSTEE AND NOTEHOLDERS.......................................................35
9.1 Events of Default.....................................................35
9.2 Remedies; Rights of Noteholders.......................................37
9.3 Right of Noteholders To Direct Proceedings............................37
9.4 Appointment of Receivers..............................................38
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9.5 Application of Moneys.................................................38
9.6 Remedies Vested in Trustee............................................39
9.7 Rights and Remedies of Noteholders....................................39
9.8 Termination of Proceedings............................................39
9.9 Waivers of Events of Default..........................................40
ARTICLE X TRUSTEE .....................................................................40
10.1 Acceptance of the Trusts..............................................40
10.2 Fees, Charges and Expenses of Trustee.................................43
10.3 Notice to Noteholders if Default Occurs...............................44
10.4 Intervention by Trustee...............................................44
10.5 Merger or Consolidation of Trustee....................................44
10.6 Resignation by Trustee................................................44
10.7 Removal of Trustee....................................................45
10.8 Appointment of Successor Trustee; Temporary Trustee...................45
10.9 Concerning Any Successor Trustee......................................45
10.10 Designation and Succession of Paying Agents...........................46
10.11 Appointment of Co-Trustee.............................................46
ARTICLE XI SUPPLEMENTAL INDENTURES.....................................................47
11.1 Supplemental Indentures; Consent of Noteholders.......................47
11.2 Notice of Supplemental Indentures.....................................49
11.3 Amendments to Transaction Documents...................................49
ARTICLE XII MISCELLANEOUS .............................................................49
12.1 Consents, etc., of Noteholders........................................49
12.2 Limitation of Rights..................................................50
12.3 Severability..........................................................50
12.4 Notices...............................................................50
12.5 Payments Due on Saturdays, Sundays and Holidays.......................50
12.6 Counterparts..........................................................50
12.7 Applicable Provisions of Law..........................................51
12.8 Captions..............................................................51
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SCHEDULE 1 DEFINITIONS
SCHEDULE 2 FEES
EXHIBIT A FORM OF NOTE
EXHIBIT B LOAN SCHEDULE
EXHIBIT C FORM OF MONTHLY TRUSTEE REPORT
EXHIBIT D-1 FORM OF TRANSFEREE'S LETTER
EXHIBIT D-2 FORM OF TRANSFEREE'S LETTER
EXHIBIT E FORM OF RELEASE OF LIENS
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TRUST INDENTURE
THIS TRUST INDENTURE (this "INDENTURE") is made and entered into as of
April 3, 2002 by and between PMC JOINT VENTURE, L.P. 2002-1, a Delaware limited
partnership (the "ISSUER"), and BNY MIDWEST TRUST COMPANY, an Illinois state
banking corporation, as trustee (the "TRUSTEE"), who did declare that they have
made and entered into, and do hereby make, enter into and effect, a Trust
Indenture under the following terms and conditions,
W I T N E S S E T H :
WHEREAS, pursuant to its Limited Partnership Agreement and the
applicable provisions of Delaware law, the Issuer is authorized to issue notes
secured as provided herein and to enter into any agreements made in connection
therewith; and
WHEREAS, the Issuer is hereby issuing its Loan-Backed Fixed Rate Notes
(collectively, the "NOTES") and will use the proceeds from the sale of the Notes
to effect a pro rata distribution to its partners and deposit funds into the
Spread Account (as defined herein); and
WHEREAS, the Issuer has authorized the issuance of the Notes pursuant
to and secured by this Indenture and the execution of this Indenture to secure
the Notes by a pledge of the Loans (as defined herein) and moneys held by the
Trustee; and
WHEREAS, upon satisfaction of certain requirements contained herein and
simultaneously with the authentication and delivery of the Notes, the Issuer
will deliver and pledge the Loans to the Trustee to secure the obligations of
the Issuer under the Notes and hereunder, and the Trustee is instructed to
accept the deposit of the Loans from the Issuer, fund the Spread Account and to
release the net proceeds of the Notes to the Issuer.
NOW, THEREFORE, THIS TRUST INDENTURE
WITNESSETH:
GRANTING CLAUSES
The Issuer, in consideration of the premises and the acceptance by the
Trustee of the trusts hereby created and of the purchase and acceptance of the
Notes by the Holders thereof, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, to secure the payment
of the principal of and interest, when due, on the Notes according to their
tenor and effect and to secure the performance and observance by the Issuer of
all the covenants expressed or implied herein and in the Notes, does hereby
irrevocably pledge, set over and grant a security interest (which security
interest is hereby represented and warranted by the Issuer to be a first
priority perfected security interest) in and unto the Trustee, and its
TRUST INDENTURE - Page 1
successors in trust and assigns forever, for the securing of the performance of
the obligations of the Issuer hereinafter set forth, all right, title and
interest of the Issuer in, to and under:
(a) the Loans, the Related Assets and any REO Property, including all
payments with respect thereto (other than the Prepayment Penalties) and escrow
deposits and fees, if any, and any interest, profits and other income derived
from the investment thereof and any and all insurance policies and Loan Files
related thereto;
(b) any moneys or investments held or entitled to be held by the
Trustee under this Indenture, including, without limitation, moneys held in the
Collection Account and the Spread Account, any investments therein and the
security entitlements to all financial assets credited thereto from time to
time, and the interest, profits and other income derived from the investment
thereof;
(c) all right, title and interest of the Issuer in, to and under the
Servicing Agreement, the Contribution Agreement and the other Transaction
Documents, including all extensions and renewals of their terms, if any,
including, but without limiting the generality of the foregoing, the present and
continuing right to make claim for, collect and receive any income, revenues,
receipts, issues, profits, insurance proceeds and other sums of money payable to
or receivable by the Issuer under the Servicing Agreement, the Contribution
Agreement or the other Transaction Documents, whether payable pursuant to the
Servicing Agreement, the Contribution Agreement or the other Transaction
Documents, or otherwise, to bring actions and proceedings under the Servicing
Agreement, the Contribution Agreement or the other Transaction Documents or for
the enforcement thereof, and to do any and all things which the Issuer is or may
become entitled to do under the Servicing Agreement, the Contribution Agreement
or the other Transaction Documents;
(d) any and all other real or personal property of every name and
nature from time to time hereafter by delivery or by writing of any kind
conveyed, mortgaged, pledged, assigned or transferred as and for additional
security hereunder by the Issuer, or by anyone on its behalf or with its written
consent, to the Trustee which is hereby authorized to receive any and all such
property at any and all times and to hold and apply the same subject to the
terms hereof; and
(e) all proceeds of the above, and any proceeds thereof.
TO HAVE AND TO HOLD all and singular the Trust Estate, whether now
owned or hereafter acquired, unto the Trustee and its respective successors in
trust and assigns forever;
IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth for
the equal and proportionate benefit and security of all present and future
Holders of the Notes without preference of any Note over any other, and for
enforcement of the payment of the Notes in accordance with their terms, and all
other sums payable hereunder or on the Notes and for the performance of and
compliance with the obligations, covenants and conditions of this Indenture,
TRUST INDENTURE - Page 2
as if all the Notes at any time outstanding had been authenticated, executed and
delivered simultaneously with the execution and delivery of this Indenture, all
as herein set forth;
PROVIDED, HOWEVER, that if the Issuer, its successors or assigns shall
indefeasibly pay, or cause to be paid, the principal of and interest on the
Notes due or to become due thereon, at the times and in the manner mentioned in
the Notes according to the true intent and meaning thereof, and shall cause the
payments to be made as required under Article V hereof, or shall provide, as
permitted hereby, for the payment thereof by depositing with the Trustee the
entire amount due or to become due thereon, and shall keep, perform and observe
all the covenants and conditions pursuant to the terms of this Indenture to be
kept, performed and observed by it, and shall pay or cause to be paid to the
Trustee and any paying agent all sums of money due or to become due in
accordance with the terms and provisions hereof, then upon such final payments
this Indenture and the rights hereby and thereby granted shall cease, determine
and be void; otherwise this Indenture is to be and remain in full force and
effect;
AND PROVIDED, FURTHER, the Trustee agrees to accept receipt of the
Loans and the Trustee Loan Files, and declares that it holds and will hold for
the benefit of the Noteholders such documents and the other documents
constituting a part of the Loans and the Trustee Loan Files delivered to it as
the Trustee upon the terms stated herein.
THIS TRUST INDENTURE FURTHER WITNESSETH, and it is expressly declared,
that all Notes issued and secured hereunder are to be issued, authenticated and
delivered, and all said property, rights and interests, including, without
limitation, the amounts hereby assigned and pledged, are to be dealt with and
disposed of, under, upon and subject to the terms, conditions, stipulations,
covenants, agreements, trusts, uses and purposes hereinafter expressed, and the
Issuer has agreed and covenanted, and does hereby agree and covenant, with the
Trustee and with the respective Holders, from time to time or at any time, of
the Notes, or any part thereof, as follows:
ARTICLE I
DEFINITIONS
All capitalized terms used herein and not otherwise defined herein
shall have the same meanings as set forth in Schedule 1 attached hereto.
ARTICLE II
THE NOTES
2.1 AUTHORIZED AMOUNT OF NOTES. No Notes may be issued under the
provisions of this Indenture, except in accordance with this Article. Except as
provided in Sections 2.8 and 2.9 hereof, the total principal amount of Notes
that may be issued is hereby expressly limited to $63,453,688.
TRUST INDENTURE - Page 3
2.2 ISSUANCE OF NOTES; DENOMINATIONS; FORM OF NOTES. (a) The Notes
shall be designated the "PMC Joint Venture, L.P. 2002-1 Loan-Backed Fixed Rate
Notes" and shall be issued in an initial aggregate principal amount equal to
$63,453,688.
The Notes shall mature on the Maturity Date, and shall accrue interest
during each Interest Accrual Period at the Remittance Rate. The Notes shall also
accrue interest on the unpaid principal and, to the extent permitted by
applicable law, accrued interest to the extent that such amount has not been
distributed to the Noteholders when due at the Default Rate. The Notes shall be
non-recourse to the Issuer's partners and neither the Trustee nor the
Noteholders shall have any right to enforce the payment or performance of the
Issuer's obligations under this Indenture and the Notes against the partners of
the Issuer or their respective assets.
(b) The Notes will be available for purchase in book-entry form
only in minimum denominations of $250,000 and integral multiples of $1,000 in
excess thereof. One (1) Note may be issued in an additional amount equal to the
remainder of the aggregate stated principal balance of the Notes on the Closing
Date.
(c) The Notes issued under this Indenture shall be
substantially in the form set forth in Exhibit A hereto with such variations,
omissions and insertions as are permitted or required thereby and hereby.
2.3 BOOK-ENTRY-ONLY SYSTEM. (a) The Notes may be issued in the form of
a separate single authenticated Note in substantially the form of Exhibit A
hereto. On the Closing Date, if so directed by the Issuer in writing, the Notes
shall be registered in the Note Register in the name of DTC's Nominee. With
respect to the Notes registered in the Note Register in the name of DTC's
Nominee, no Person other than DTC shall receive an authenticated Note, and the
Issuer, the Trustee and the Servicers shall have no responsibility or obligation
to any DTC Participant or to any Beneficial Owner with respect to the following:
(i) the accuracy of the records of DTC or DTC's Nominee or any DTC Participant
with respect to any ownership interest in the Notes, (ii) the delivery to any
DTC Participant, any Beneficial Owner, or any other Person, other than DTC, of
any notice with respect to the Notes, including any notice of redemption, or
(iii) the payment to any DTC Participant, any Beneficial Owner, or any other
Person, other than DTC, of any amount with respect to the Notes. The Trustee
shall make payments with respect to the Notes only to or upon the written order
of DTC and all such payments shall be valid and effective fully to satisfy and
discharge the obligations with respect to the Notes to the extent of the sum or
sums so paid.
(b) Upon receipt by the Issuer, the Trustee and the Servicers of
written notice from DTC to the effect that DTC is unable or unwilling to
discharge its responsibilities, the Trustee shall, at the expense of the Issuer,
issue, transfer and exchange Notes requested by DTC in appropriate amounts and,
whenever DTC requests the Issuer and the Trustee to do so, the Issuer and the
Trustee shall cooperate with DTC in taking appropriate action after reasonable
notice (i) to arrange for a substitute depository willing and able upon
reasonable and customary terms to
TRUST INDENTURE - Page 4
maintain custody of the Notes or (ii) to make available Definitive Notes
registered in whatever name or names the Beneficial Owners transferring or
exchanging such Notes shall designate.
(c) Definitive Notes shall be issued to Beneficial Owners or their
respective nominees, if (i) the Issuer, at its option, elects to terminate the
book-entry system through DTC or its successors and assigns or (ii) after the
occurrence of an Event of Default or a Servicer Default with respect to the
Notes, the Required Noteholders advise the Trustee through DTC in writing that
the continuation of a book-entry system through DTC or its successors and
assigns with respect to the Notes is no longer in the best interests of the
Noteholders.
(d) Notwithstanding any other provision of this Indenture to the
contrary, so long as any Note is registered in the name of DTC or DTC's Nominee,
all payments with respect to such Note and all notices with respect to such Note
shall be made and given, respectively, to DTC as provided in a representation
letter in the form required by DTC acceptable to the Issuer and the Trustee.
(e) In the event the Notes are issued in book-entry form with DTC and
until any such time that Definitive Notes are issued: (i) the Trustee and the
Issuer may deal with DTC as the authorized representative of the Noteholders;
(ii) the rights of the Noteholders shall be exercised only through DTC and shall
be limited to those established by law and agreement between the Noteholders and
DTC and/or direct participants of DTC; (iii) DTC will make book-entry transfers
among the direct participants of DTC and will receive and transmit distributions
of principal and interest on the Notes to such direct participants; and (iv) the
direct participants of DTC shall have no rights under this Indenture under or
with respect to any of the Notes held on their behalf by DTC, and DTC may be
treated by the Trustee and the Issuer and their respective agents, employees,
officers and directors as the absolute owner of the Notes for all purposes
whatsoever.
2.4 EXECUTION. The Notes shall be executed on behalf of the Issuer with
the signature of any Authorized Officer of the General Partner and attested by
the signature of the Secretary or Assistant Secretary of the General Partner. In
case any officer of the General Partner of the Issuer whose signature shall
appear on the Notes shall cease to be such officer before the delivery of such
Notes, such signature shall nevertheless be valid and sufficient for all
purposes, the same as if he had remained in office until delivery.
The Notes are negotiable instruments (subject to compliance with
applicable Securities Laws) and shall be solely the obligations of the Issuer.
2.5 AUTHENTICATION. No Note shall be valid or obligatory for any
purpose or entitled to any security or benefit under this Indenture unless and
until a certificate of authentication on such Note shall have been duly executed
by the Trustee by manual signature, which execution shall be at the written
direction of the Issuer, and such executed certificate of the Trustee upon any
such Note shall be conclusive evidence that such Note has been authenticated and
delivered under this Indenture. The Trustee's certificate of authentication on
any Note shall be deemed to have been executed by it if signed by an Authorized
Officer or signatory of the Trustee, but it
TRUST INDENTURE - Page 5
shall not be necessary that the same officer or signatory sign the certificate
of authentication on all of the Notes issued hereunder. Except as provided in
Sections 2.8 and 2.9(d), all Notes shall be dated the date of their
authentication.
2.6 DELIVERY OF NOTES AND RECEIPT OF LOANS. (a) After the execution and
delivery of this Indenture, the Issuer shall execute and deliver to the Trustee,
and the Trustee shall authenticate, the Notes and deliver the Notes to DTC for
the benefit of the Beneficial Owners, for the purchase price specified by the
Issuer, as hereinafter in this Section provided.
Simultaneously with or prior to the delivery by the Trustee of all of
the Notes and the disbursement of a portion of the net proceeds of the issuance
of the Notes, there shall be received by the Trustee:
(i) A copy, duly certified by the General Partner of the Issuer,
of each of the resolutions of the board of directors of the General Partner and
the Issuer authorizing the issuance of the Notes and the execution and delivery
of this Indenture;
(ii) An original executed counterpart of each Transaction
Document;
(iii) A request and authorization to the Trustee on behalf of the
Issuer and signed by the General Partner of the Issuer to authenticate and
deliver such series of Notes to the purchasers therein identified upon payment
to the Trustee, but for the account of the Issuer, of a sum specified in such
request and authorization. The proceeds of such payment shall be paid over to
the Trustee and deposited as required by such request and authorization in the
various funds specified in, and pursuant to Article VI hereof;
(iv) An Opinion of Counsel, satisfactory in form and scope to the
Trustee, that the Notes constitute debt of the Issuer for federal income tax
purposes;
(v) The documents with respect to the Loans described in the Loan
Schedule in accordance with paragraph (b) below;
(vi) A letter from Xxxxx'x, indicating that the Notes have been
rated at least "Aaa";
(vii) Certified copies of resolutions, organizational documents,
bylaws and incumbency certificates for PMC, PMCT, the Issuer and the General
Partner of the Issuer;
(viii) Opinions of Issuer's counsel, satisfactory in form and
scope to the Trustee, addressed to, among others, the Trustee and the Beneficial
Owners to the effect that, among other things, and based upon the
qualifications, assumptions and reasoning stated therein:
(A) (1) The contribution and assignment of the Loans (and related
rights) by PMC and PMCT to the Issuer constitute a "true sale" and will
result in the Loans not being deemed property of PMC's or PMCT's estate
pursuant to
TRUST INDENTURE - Page 6
Section 541 of the Bankruptcy Code (and based upon Lien search reports,
there is no public record of any prior UCC financing statements
covering such Loans, other than by entities which have executed a UCC
termination statement or other appropriate agreement(s) indicating the
release of their security interests, or any notice of any federal tax
Lien), and (2) based upon Lien search reports, the Trustee has a valid
first priority perfected security interest in the Trust Estate as
security for the Notes (and based upon Lien search reports, there is no
public record of any prior UCC financing statements covering such
Loans, other than by entities which have executed a UCC termination
statement or other appropriate agreement(s) indicating the release of
their security interests, or any notice of any federal tax Lien); and
(B) in the event of a bankruptcy of PMC, PMCT or the General
Partner of the Issuer, the assets and liabilities of the Issuer would
not be substantively consolidated with the assets and liabilities of
PMC, PMCT or the General Partner, as applicable.
(ix) Copies of properly prepared and executed financing statements
in sufficient form for filing, naming (A) PMC or PMCT, as the case may be, as
seller, the Issuer as purchaser, and the Trustee as assignee of the purchaser to
reflect the conveyance of the Loans to the Issuer, and (B) the Issuer as debtor
and the Trustee as secured party, covering the Issuer's interest in the Trust
Estate, as may be necessary or desirable to perfect the security interest of the
Trustee (for the benefit of the Noteholders) in the Issuer's interest in the
Trust Estate and copies of properly prepared and executed releases in sufficient
form for filing, indicating the release of any security interest by any third
party in such assets; and
(x) Copies of UCC and tax and judgment Lien search reports against
PMC, PMCT and the Issuer.
Any of the foregoing statements which are not, as of the Closing Date,
properly filed in the appropriate office as necessary to evidence the conveyance
of the Loans to the Issuer or perfect the security interest of the Trustee (for
the benefit of the Noteholders) in the Issuer's interest in the Trust Estate or
to effect the release of any security interest held by any third party in such
assets shall be mailed on the Closing Date by overnight mail to the
jurisdictions in which such statements are to be filed.
(b) In connection with the transfer and assignment of the Loans to the
Trustee, the Issuer does hereby deliver to, and deposit with, or cause to be
delivered to and deposited with, the Trustee the following documents or
instruments with respect to each Loan so transferred and assigned (hereinafter
referred to as the "TRUSTEE LOAN FILE"):
(i) the original Underlying Note showing a complete chain of
endorsement from the originator to the current holder (if other than the
originator) and endorsed by the originator or current holder by means of an
allonge as follows: "Pay to the order of BNY Midwest Trust Company, as Trustee
under the Trust Indenture, dated as of April 3, 2002, for the
TRUST INDENTURE - Page 7
benefit of the holders of PMC Joint Venture, L.P. 2002-1 Loan-Backed Fixed Rate
Notes, without recourse";
(ii) either: (A) the original Mortgage with evidence of recording
thereon, (B) with respect to a Loan for which the original Mortgage was not
returned after recordation, a copy of the Mortgage certified by the appropriate
recording officer to be true and accurate, or (C) with respect to a Loan for
which the original Mortgage has been sent to the appropriate public official for
recording and with respect to which a certified copy of the Mortgage is not
available from such public official, a copy of the Mortgage certified as a true
copy by an Authorized Officer of the Issuer;
(iii) either: (A) the original executed assignments of the
Mortgage (which may be in the form of a blanket assignment in the event there
are Mortgages that have not been returned by the local recording officer in
which case the Issuer shall execute and deliver to the appropriate public office
for recording or filing within fifteen (15) Business Days after the Company's
receipt of the recorded Mortgage, an original assignment of each Mortgage),
showing a complete chain of assignment from the originator to the current
assignee (if other than the originator) and acceptable for recording in the
jurisdiction in which the applicable Mortgaged Property is located, and from the
originator or current assignee in the following form: "BNY Midwest Trust
Company, as the Trustee under the Trust Indenture, dated as of April 3, 2002" or
(B) copies of such assignments certified as true copies by an Authorized Officer
of the Issuer where the original of such assignment has been transmitted for
recording, which such certification may be in the form of one or more blanket
certificates;
(iv) the original of each assumption, modification, written
assurance or substitution agreement, if any;
(v) either (i) originals of any title insurance policies relating
to the Mortgaged Properties or (ii) copies of any title insurance policies
certified as true by PMC or PMCT, as applicable;
(vi) for all Loans, a blanket assignment of all collateral
securing the Loan, including without limitation, all rights under applicable
guarantees and insurance policies;
(vii) for all Loans, an irrevocable power of attorney from PMC or
PMCT, as applicable to the Trustee, delegable by the Trustee to the Servicer and
any successor servicer, to execute, deliver, file or record and otherwise deal
with the collateral for the Loans in accordance with the Contribution Agreement
and to prepare, execute and file or record UCC financing statements and notices
to insurers; and
(viii) for all Loans, a blanket UCC-1 financing statement
describing the Loans and identifying by type all collateral for the Loans in the
Loan Pool and naming the Trustee as Secured Party and the Issuer as Debtor, such
UCC-1 to be filed promptly following the Closing Date in the office of the
Secretary of State of Delaware.
TRUST INDENTURE - Page 8
The Issuer will deliver for recording or filing each assignment of a
Loan to the appropriate public office for real property records within fifteen
(15) Business Days after the Closing Date to protect the Trustee's interest in
the Loans against sale, further assignments, satisfaction or discharge by the
Servicer, PMC, PMCT, the Issuer or any third party. Within six (6) months after
the Closing Date, the Issuer shall confirm to the Trustee and the Noteholders in
writing that all assignments of the Loans were sent for recordation or filing
and have been recorded.
For Loans which have been prepaid in full after the Cut-Off Date and
prior to the Closing Date, the Issuer, in lieu of delivering the above
documents, and with respect to all Monthly Payments received after the Cut-Off
Date, herewith delivers to the Trustee an Officers' Certificate to the effect
that all amounts received in connection with such payments which are required to
be deposited in the Lockbox Account have been so delivered to the Trustee and
indicating the amount of any payment received with respect to each such Loan.
With respect to Loans for which the original Mortgage and related
assignment have been sent to the appropriate public official for recording, the
Issuer shall provide the original Mortgage and related assignments to the
Trustee promptly upon receipt from the public official after recording. Within
seven (7) months after the Closing Date, the Trustee shall certify that all such
original Mortgages and related assignments have been recorded and, if not,
shall, upon prior written consent of the Required Noteholders, demand repurchase
of the related Loan pursuant to Section 3.3.
(c) The Trustee, by execution and delivery hereof, subject to the
next preceding paragraph and the last paragraph of this Section, acknowledges
receipt of the documents and other property referred to in and required to be
delivered pursuant to this Section 2.6 and declares that the Trustee holds and
will hold all other property to be received pursuant to this Indenture, in
trust, for the benefit of all Holders.
The Trustee further acknowledges that it has also received a
certificate from the Supervisory Servicer, a copy of which has been provided to
the Rating Agency, to the effect that, as to each Loan listed in the Loan
Schedule, (i) all documents constituting part of such Trustee Loan File required
to be delivered to the Trustee pursuant to this Indenture have been delivered to
the Trustee, (ii) such documents have been reviewed by it as to form and appear
to have been properly executed and regular on their face, purport to be recorded
or filed (as applicable), have not been torn, mutilated or otherwise defaced and
relate to such Loan and (iii) based on its examination and only as to the
foregoing, the information set forth in the Loan Schedule accurately reflects
information set forth in the Trustee Loan File, except for exceptions detailed
on the exhibit attached to such list. In performing such review, the Supervisory
Servicer may rely upon the purported genuineness and due execution of any such
document and on the purported genuineness of any signature thereon. If at any
time the Trustee finds any document or documents constituting a part of a
Trustee Loan File to be defective, or to be unrelated to the Loans identified on
the Loan Schedule, the Trustee shall promptly so notify the Noteholders, the
Issuer, the Servicer, the Rating Agency, PMCT and PMC, and the Trustee, as
assignee under the
TRUST INDENTURE - Page 9
Contribution Agreement, shall make written demand upon PMC or PMCT, as
applicable, to comply with its obligation under Section 8 of the Contribution
Agreement and shall send copies of such written demand to the Noteholders, the
Issuer, the Servicer and the Rating Agency. If PMC or PMCT, as applicable, fails
to comply with such obligation, the Trustee will give prompt written notice to
the Noteholders, the Supervisory Servicer and the Rating Agency and the Trustee
shall take such reasonable action as the Required Noteholders direct in writing,
at the expense of the Servicer if the Servicer is an Affiliate of the Issuer.
2.7 PAYMENTS OF PRINCIPAL OF AND INTEREST ON NOTES. (a) The person in
whose name any Note is registered as of a Record Date with respect to a Payment
Date shall be entitled to receive the interest and principal payable on such
Payment Date notwithstanding the cancellation of such Note upon any registration
of transfer or exchange thereof subsequent to such Record Date and prior to such
Payment Date.
(b) The Notes shall bear interest from and including the Closing
Date. In all cases, interest shall be calculated on the basis of a 30-day month
and a 360-day year. Interest accrued on the Notes during an Interest Accrual
Period will be due and payable on the related Payment Date.
Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture upon transfer of or exchange for or in lieu of
any other Note shall carry the rights to interest due and unpaid, and to become
due, which were carried by such other Note.
(c) Principal payments on the Notes shall be made on each Payment
Date as provided in Section 6.4 hereof. Principal payments on the Notes shall be
applied pro rata to all Notes.
(d) Payments to each Holder shall be made by check mailed to
such Holder's address as it appears on the Note Register on the relevant Record
Date (or, in the case of any Holder of Notes having an aggregate initial
principal amount of not less than $1,000,000, by wire transfer of immediately
available funds to the account of such Noteholder and without presentation of
the Note or the making of any notations thereon, if such Noteholder shall have
given the Trustee appropriate written notice of such account, and changes (if
any) to such instructions at least five (5) Business Days prior to the Record
Date immediately preceding the Payment Date).
2.8 MUTILATED, LOST, STOLEN OR DESTROYED NOTES. In the event any Note
is mutilated, lost, stolen or destroyed, upon receipt by the Trustee of evidence
reasonably satisfactory to it of the ownership of the Note and in the absence of
notice to the Trustee that such Note has been acquired by a bona fide purchaser,
the Issuer shall execute and the Trustee shall authenticate and deliver a new
Note executed in the same manner as the Note being replaced, in the same
principal amount as the unpaid principal amount of such Note and dated the date
to which interest shall have been paid on such Note or, if no interest shall
have yet been so paid, dated the date of such Note, provided that, in the case
of any mutilated Note, such mutilated Note shall first be surrendered to the
Trustee, and, in the case of any lost, stolen or destroyed Note, there
TRUST INDENTURE - Page 10
shall be first furnished to the Trustee and the Issuer evidence of such loss,
theft or destruction reasonably satisfactory to the Trustee, together with any
indemnity satisfactory to each of them. Further, in the case of a past due or a
matured, lost, stolen or destroyed Note, the Trustee shall pay the face amount
of such past due or matured Note upon delivery to the Trustee of evidence of
such loss, theft or destruction reasonably satisfactory to the Trustee, together
with any indemnity satisfactory to each of them. Upon the execution of any new
Note under this Section 2.8, the Trustee may require the Holder to pay a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trustee) connected therewith. Any new Note issued pursuant to this Section 2.8
shall constitute complete and indefeasible evidence of ownership of the Note, as
if originally issued, whether or not the lost, stolen or destroyed Note shall be
found at any time.
2.9 REGISTRATION AND EXCHANGE OF NOTES; PERSONS TREATED AS HOLDERS;
RESTRICTIONS ON TRANSFERS OF NOTES. (a) The Issuer shall cause books for the
registration and for the transfer of the Notes as provided in this Indenture to
be kept by the Trustee, who is hereby appointed as the initial Registrar. The
Trustee hereby accepts its appointment as initial Registrar and shall maintain
the Note Register. The Registrar may resign or be discharged or removed and a
new successor appointed in accordance with the procedures and requirements set
forth in Article X hereof with respect to the resignation, discharge or removal
of the Trustee and the appointment of a successor Trustee. The Registrar may
appoint, by a written instrument delivered to the Issuer, the Trustee, the
Supervisory Servicer, the Noteholders, the Servicer and the Holders, any other
bank or trust company to act as co-registrar under such conditions as the
Registrar may prescribe, provided that the Registrar shall not be relieved of
any of its duties or responsibilities hereunder by reason of such appointment.
The ownership of Notes shall be proved by the Note Register. The Trustee will
keep on file at the Corporate Trust Office of the Trustee a list of names and
addresses of the owners of all Notes as shown on the Register maintained by the
Trustee as Registrar.
At reasonable times and under reasonable regulations established by the
Trustee, the Note Register may be inspected and copied by the Issuer, the
Supervisory Servicer, any Holder or any Beneficial Owner (or a designated
representative thereof).
(b) Prior to presentation of any Note for registration of
transfer, the Issuer and the Trustee shall treat the Person in whose name such
Note is registered as the owner and holder of such Note for all purposes
whatsoever, whether or not such Note shall be overdue, and the Issuer and the
Trustee or their agents shall not be affected by notice to the contrary.
(c) No transfer or sale of any Note shall be made unless the
registration requirements of the Securities Act of 1933, as amended (the "ACT"),
and any applicable state securities laws are complied with, or such transfer or
sale is exempt from the registration requirements under said Act and laws. In
the event that a transfer of any Note is to be made, the Trustee shall require
the Holder of such Note to deliver, at its expense, a certificate in the form of
Exhibit D-1 or Exhibit D-2 hereto, as the case may be, or a certificate
otherwise reasonably acceptable to and in form and substance reasonably
satisfactory to the Trustee that such transfer
TRUST INDENTURE - Page 11
is being made pursuant to an exemption, describing the applicable exemption and
the basis therefor, from said Act and laws or is being made pursuant to said Act
and laws. If a certificate is not in the form of either Exhibit D-1 or Exhibit
D-2 hereto, the Trustee may request an Opinion of Counsel (which counsel may be
in-house counsel of the transferor or transferee) to establish compliance with
such Act or laws. The Opinion of Counsel shall not be an expense of the Trustee
or the Issuer. Neither the Issuer nor the Trustee is under an obligation to
register any such Note under said Act or any other Securities Law. Any
Noteholder desiring to effect a transfer under this Section 2.9(c) shall
indemnify the Trustee, the Servicers and the Issuer against any liability that
may result if the transfer is not exempt from the registration requirements
under the Act or applicable state securities laws or if the transfer is not
conducted in accordance with such laws. In the event that any Note is
transferred to a transferee which is using funds to purchase the Note which
constitute assets of one or more employee benefit plans, such transferee shall
advise the Issuer in writing of such source of funds and the Issuer shall advise
such transferee in writing whether the Issuer is or is not a party in interest
with respect to any employee benefit plan disclosed to the Issuer by such
transferee. As used in this Section, the terms "party-in-interest" and "employee
benefit plan" shall have the respective meanings assigned to them in ERISA.
(d) The holder of any Note, at its option, may in person or by
duly authorized attorney surrender the same for exchange at the Corporate Trust
Office and promptly thereafter and at the Issuer's expense, except as provided
in Section 2.9(e), receive in exchange therefor a new Note or Notes, each in the
denomination requested by such Holder (but not less than $250,000, or, if such
Holder shall be a Holder of less than $250,000 in aggregate principal amount of
Notes, such lesser amount), dated the date to which interest shall have been
paid on the Note so surrendered or, if no interest shall have yet been so paid,
dated the date of the Note so surrendered and registered in the name of such
Person or Persons as shall have been designated in writing by such Holder or its
attorney for the same principal amount as the then unpaid principal amount of
the Note so surrendered. Upon surrender for transfer of any Note at the
Corporate Trust Office of the Trustee, the Trustee shall authenticate and
deliver (upon satisfaction of the conditions stated above) in the name of the
transferee or transferees a new Note or Notes of authorized denomination for the
aggregate principal amount entitled to be received by such transferee or
transferees. Notes to be exchanged shall be surrendered at the Corporate Trust
Office of the Trustee and the Trustee shall authenticate and deliver in exchange
therefor the Note or Notes which the Noteholder making the exchange shall be
entitled to receive (upon satisfaction of the conditions stated above).
(e) All Notes presented for transfer, exchange, registration,
discharge from registration, redemption or payment (if so required by the Issuer
or the Trustee) shall be accompanied by a written instrument or instruments of
transfer or authorization for exchange, in form (and with guaranty of signature)
reasonably satisfactory to the Issuer and the Trustee, duly executed by the
registered Holder or by his duly authorized attorney.
TRUST INDENTURE - Page 12
Notes shall be transferred or exchanged without cost to the Noteholder,
except for any stamp or other tax or governmental charge required to be paid
with respect to such transfer or exchange.
(f) New Notes delivered upon any transfer or exchange shall be
valid obligations of the Issuer, evidencing the same debt as the Notes
surrendered, shall be secured by this Indenture and shall be entitled to all of
the security and benefits hereof to the same extent as the Notes surrendered.
2.10 DESTRUCTION OF NOTES. If any Note shall be delivered to the
Trustee for cancellation pursuant to this Indenture, upon payment of the final
principal amount and interest with respect to the Note represented thereby, or
for replacement pursuant to Section 2.8 hereof or transfer or exchange pursuant
to Section 2.9 hereof, such Note shall be canceled and destroyed by the Trustee
and counterparts of a certificate of destruction evidencing such destruction
shall be furnished by the Trustee to the Issuer.
ARTICLE III
REPRESENTATIONS AND WARRANTIES;
SUBSTITUTION OF LOANS
3.1 REPRESENTATIONS AND WARRANTIES OF ISSUER. The Issuer represents and
warrants to the Trustee for the benefit of the Noteholders as follows:
(a) the Issuer is a limited partnership duly organized and validly
existing under the laws of the State of Delaware and has full power to own its
property, to carry on its business as presently conducted, to enter into and
perform its obligations under this Indenture and the other Transaction
Documents, and to create the trusts created pursuant hereto;
(b) the execution and delivery by the Issuer of the Transaction
Documents have been duly authorized by all necessary action on the part of the
Issuer;
(c) neither the execution and delivery of the Transaction
Documents by the Issuer, nor the consummation of the transactions herein or
therein contemplated, nor compliance by the Issuer with the provisions hereof or
thereof, will conflict with or result in a breach of, or constitute a default
under, any of the provisions of the partnership agreement of the Issuer or
conflict with, result in a breach or violation of or constitute a default under,
the terms of any indenture or other agreement or instrument to which the Issuer
is a party or by which the Issuer is bound, or any statute, order or regulation
applicable to the Issuer of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Issuer;
(d) the execution, delivery and performance by the Issuer of the
Transaction Documents and the consummation of the transactions contemplated
hereby and thereby do not require the consent or approval of, the giving of
notice to, the registration with, or the taking of
TRUST INDENTURE - Page 13
any other action in respect of, any state, federal or other governmental
authority or agency, except for such consents or approvals which have been
obtained on or before the Closing Date;
(e) each Transaction Document has been duly executed and delivered
by the Issuer and, assuming due authorization, execution and delivery by the
other parties thereto, constitutes a legal, valid and binding obligation of the
Issuer enforceable against it in accordance with its terms (subject to
applicable bankruptcy and insolvency laws and other similar laws affecting the
enforcement of the rights of creditors generally and general principles of
equity);
(f) there are no actions, suits or proceedings pending or, to the
knowledge of the Issuer, threatened or likely to be asserted against or
affecting the Issuer, before or by any court, administrative agency, arbitrator
or governmental body (i) with respect to any of the transactions contemplated by
the Transaction Documents or (ii) with respect to any other matter which, in the
reasonable judgment of the Issuer will be determined adversely to the Issuer and
will, if determined adversely to the Issuer, materially and adversely affect it
or its business, assets, operations or condition, financial or otherwise, or
materially and adversely affect its ability to perform its obligations under the
Transaction Documents. The Issuer is not in default with respect to any order of
any court, administrative agency, arbitrator or governmental body so as to
materially and adversely affect the transactions contemplated by the Transaction
Documents;
(g) as of the Closing Date, the Issuer had good title to, and was
the sole owner of, each Loan and any other asset included in the Trust Estate
free and clear of all Liens, and, immediately upon the transfer and assignment
herein contemplated and taking possession of the Trustee Loan File, the Trustee
shall have a first priority perfected security interest in the Trust Estate free
and clear of all Liens;
(h) the Issuer acquired title to the Loans in good faith, without
notice of any adverse claim; and
(i) the Issuer has not, directly or indirectly, offered or sold
any Note or other security in a manner that would render the issuance and sale
of the Notes pursuant to this Indenture a violation of Section 5 of the
Securities Act or require registration pursuant thereto, nor has it authorized
any Person to act in such manner. The offering and sale of the Notes are exempt
from the registration requirements of the Securities Act;
(j) the Issuer is not now, nor after giving effect to the
offering and sale of the Notes will be, an "investment company" as defined in
the Investment Company Act of 1940, as amended; and
(k) this Indenture is not required to be qualified under the Trust
Indenture Act of 1939, as amended.
3.2 REPRESENTATIONS AND WARRANTIES WITH RESPECT TO LOANS. (a) The
Issuer hereby represents and warrants to the Trustee for the benefit of the
Noteholders as of the date hereof with respect to each Loan as follows:
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(i) Immediately prior to the collateral assignment of the Loan to
the Trustee, the Issuer had good title to, and was the sole owner of, the Loan
free and clear of all Liens. Except for the Issuer, no Person other than PMC or
PMCT, as the case may be, and the Trustee has any interest in the Mortgage,
whether as mortgagee, assignee, pledgee or otherwise. Immediately upon the
collateral assignment of the Loan and taking possession thereof, the Trustee
will have a first priority perfected security interest in each Loan, free and
clear of all Liens.
(ii) The Loan was originated in the United States, in a state
where the originator of such Loan is qualified to transact such business, in the
ordinary course of its business, except to the extent that any failure to be so
qualified would not adversely affect the Loan or the Mortgage or the transfer
thereof or the enforceability of the Obligor's obligations thereunder. PMC or
PMCT, as the case may be, acquired title to the Loans in good faith, without
notice of any adverse claim.
(iii) The Loan has not been originated in, nor is such Loan
subject to the laws of, any jurisdiction under which the transfer and assignment
of such Loan to the Issuer would be unlawful, void or voidable.
(iv) The information set forth in the Loan Schedule is true and
correct in all material respects.
(v) The terms of the Underlying Note and the Mortgage have not
been impaired, waived, altered or modified in any respect, except by written
instruments, executed in accordance with the customary credit policies of PMC or
PMCT, as the case may be, which are reflected on the Loan Schedule. No Obligor
has been released, in whole or in part, except pursuant to the terms of an
assumption agreement which is part of the related Loan File and the terms of
which are reflected in the Loan Schedule.
(vi) The Underlying Note and the related Mortgage are not subject
to any right of rescission, setoff, abatement, diminution, counterclaim or
defense, including the defense of usury, nor will the operation of any of the
terms of the Underlying Note or the Mortgage, or the exercise of any right
thereunder in accordance with the terms thereof, render the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
setoff, abatement, diminution, counterclaim or defense, including the defense of
usury, and no such right of rescission, setoff, abatement, diminution,
counterclaim or defense has been asserted with respect thereto.
(vii) The Mortgage has not been satisfied, canceled or
subordinated, in whole or in part, or rescinded, and except as reflected on the
Loan Schedule, the Mortgaged Property has not been released from the Lien of the
Mortgage, in whole or in part, nor has any instrument been executed that would
effect any such release, cancellation, subordination or rescission.
TRUST INDENTURE - Page 15
(viii) The Underlying Note and the Mortgage delivered to the
Trustee are genuine originals (except where certified copies of the Mortgage
have been delivered in accordance with this Indenture) and each is the legal,
valid and binding obligation of the maker thereof, enforceable in accordance
with its terms.
(ix) There has been no fraud, dishonesty, misrepresentation or
negligence on the part of the Issuer, the Independent Managers or the General
Partner or, to the Issuer's knowledge, on the part of the originator, PMC, PMCT
or the Obligor in connection with the origination of any Loan or in connection
with the transfer and assignment of such Loan to the Issuer.
(x) As of the Closing Date, there was no material default, breach,
violation or event of acceleration existing under the Mortgage or the Underlying
Note and no event which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute such a default, breach,
violation or event of acceleration, and since the Cut-off Date the Issuer had
not waived any such default, breach, violation or event of acceleration.
(xi) The Mortgage and the Underlying Note comply with all
requirements of applicable federal, state and local laws and regulations. The
origination and servicing of the Loan and the assignment of the Loan comply with
any and all applicable requirements of any applicable federal, state or local
law, including, without limitation, usury, truth-in-lending, real estate
settlement procedures, consumer credit protection, equal credit opportunity and
disclosure laws. To the Issuer's knowledge, each Mortgaged Property is in
compliance in all material respects with all applicable laws, zoning ordinances,
rules, covenants and restrictions affecting the construction, occupancy, use and
operation of such Mortgaged Property. To the Issuer's knowledge, all
inspections, licenses and certificates required, including certificates of
occupancy, whether by law, ordinance, regulation or insurance standards to be
made or issued with regard to the Mortgaged Property, have been obtained and are
in full force and effect.
(xii) To the Issuer's knowledge, each Loan was originated or
purchased in accordance with PMCT's or PMC's standard mortgage, underwriting,
origination and lending procedures. To the Issuer's knowledge, no adverse
selection criteria were utilized by PMC, PMCT or the Issuer in selecting the
Loans for inclusion in this transaction.
(xiii) No Loan is 30 or more days contractually past due.
(xiv) The Issuer has not advanced funds or induced, solicited or
knowingly received any advance of funds from a party other than the owner of the
Mortgaged Property subject to the Mortgage, directly or indirectly, for the
payment of any amount required by the Loan.
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(xv) To the Issuer's knowledge, there are no delinquent taxes,
ground rents, water charges, sewer rents, assessments (including assessments
payable in future installments) or other outstanding charges affecting the
related Mortgaged Property.
(xvi) The Mortgaged Property is located in the state indicated on
the Loan Schedule, and, except as reflected on the Loan Schedule, consists of a
single parcel of real property. The Mortgaged Property is in good repair, is
free of damage and waste that would materially and adversely affect its value
and such Mortgaged Property has not been materially damaged by fire, wind or
other cause, which damage has not been fully repaired or for which insurance
proceeds have not been received or are not expected to be received in an amount
sufficient to pay for such repairs.
(xvii) The Mortgage is a valid, subsisting and enforceable first
Lien on the Mortgaged Property, including all buildings on the Mortgaged
Property and all fixtures related thereto, and all additions, alterations and
replacements made at any time with respect to the foregoing, except as reflected
on the Loan Schedule. Such Lien is subject only to (1) the Lien of current real
property taxes and assessments not yet due and payable, (2) covenants,
conditions and restrictions, rights-of-way, easements and other matters of the
public record as of the date of recording, none of which individually or in the
aggregate materially interfere with the benefits of the security intended to be
provided by the Mortgage or the operation and use of the related Mortgaged
Property, and (3) other matters to which like properties are commonly subject
which do not materially interfere with the benefits of the security intended to
be provided by the Mortgage or the use, enjoyment, value or marketability of the
related Mortgaged Property. Any security agreement, chattel mortgage or
equivalent document related to and delivered in connection with the Loan
establishes and creates a valid, subsisting and enforceable first Lien and first
priority security interest on the property described therein, except as
reflected on the Loan Schedule. Except as reflected on the Loan Schedule, the
Underlying Note is not secured by any collateral except the Lien of the
corresponding Mortgage and the security interest of any applicable security
agreement or chattel mortgage referred to in this paragraph.
(xviii) The Mortgage contains provisions for the acceleration of
the payment of the unpaid principal balance of the Loan in the event the related
Mortgaged Property is sold without the prior written consent of the Mortgagee
thereunder.
(xix) The Issuer has no knowledge of any mechanics' or similar
liens or claims which have been filed for work, labor or material (or any rights
outstanding that under applicable law could give rise to such Lien) affecting
the Mortgaged Property which are or may be liens prior to, or equal or on parity
with, the Lien of the Mortgage.
(xx) The proceeds of the Loan have been fully disbursed and there
is no requirement for future advances thereunder, and any and all requirements
as to completion of any on-site or off-site improvements and as to disbursements
of any escrow funds therefor have been complied with.
TRUST INDENTURE - Page 17
(xxi) There is no proceeding pending for the total or partial
condemnation of the Mortgaged Property.
(xxii) The Mortgage contains customary provisions such as to
render the rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the security
provided thereby, including, (1) in the case of a Mortgage designated as a deed
of trust, by trustee's sale and (2) otherwise by judicial foreclosure or power
of sale. To the Issuer's knowledge, there is no homestead or other exemption
available to the Obligor which would interfere with the right to sell the
Mortgaged Property at a trustee's sale or the right to foreclose the Mortgage.
(xxiii) In the event the Mortgage constitutes a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in the Mortgage, and no fees or
expenses are or will become payable by the Issuer or its assignees to the
trustee under the deed of trust, except in connection with a trustee's sale
after default by the Obligor.
(xxiv) The Loan is an Eligible Loan as of the Closing Date.
(xxv) The form of endorsement of each Underlying Note satisfies
the requirement, if any, of endorsement in order to transfer all right, title
and interest of the party so endorsing, as noteholder or assignee thereof, in
and to that Underlying Note, and each form of assignment is in recordable form
and is sufficient to effect the assignment of and to transfer to the assignee
thereof, all right, title and interest under each Mortgage to which that
assignment relates.
(xxvi) Each document required under Section 2.6(b) hereof to be
delivered to the Trustee on behalf of the Issuer for each Loan meets the
requirements of Section 2.6(b) and has been or will be, on or before the Closing
Date, delivered to the Trustee.
(xxvii) A Phase I environmental report was prepared with respect
to each Mortgaged Property or part thereof constituting primary collateral
securing the Loan, other than the Mortgaged Properties indicated in the Loan
Schedule, prior to the date of this Agreement. To the Issuer's knowledge, each
Mortgaged Property was, as of its date of origination of the Underlying Note and
as of the Closing Date in material compliance with all applicable environmental
laws and regulations.
(xxviii) All escrow deposits, if any, and other payments relating
to each Loan have been delivered to the Servicer or its agent, and all amounts
required to be deposited by the Issuer or the related Obligor have been
deposited and there are no deficiencies with regard thereto.
(xxix) The Lien of each Mortgage is insured by an ALTA lender's
title insurance policy (or a binding commitment) or its equivalent, as adopted
in the applicable jurisdiction. Except as reflected on the Loan Schedule, the
policy (or such binding commitment)
TRUST INDENTURE - Page 18
insures the originator of such Loan, its successors and assigns, as to the first
priority Lien of the Mortgage in the original principal amount after all
advances of principal, subject only to permitted encumbrances, none of which,
individually or in the aggregate should interfere with the current use of the
Mortgaged Property or materially detract from the benefit of the first priority
Lien of the Mortgage. The originator of such Loan (including its successors and
assigns) is the sole named insured of the policy (or such binding commitment),
and the policy (or such binding commitment) is assignable to the Issuer without
the consent of or any notification to the insurer. No claims have been made
under such policy (or such binding commitment), and the Issuer has no knowledge
of any matter that would impair or diminish the coverage of such policy.
(xxx) Each Mortgaged Property is covered by insurance policies
providing (1) coverage against loss or damage sustained by fire and extended
perils included within the classification "All Risk of Physical Loss" in an
amount sufficient to prevent the Obligor from being deemed a co-insurer, and to
provide coverage of replacement or actual cost, consistent with industry
standards; and the policies contain a standard mortgagee clause naming the
mortgagee and its successors as mortgagees and loss payees; (2) flood insurance
(if any portion of the Mortgaged Property is located in an area identified by
the Federal Emergency Management Agency as having special hazards); and (3)
comprehensive general liability insurance in amounts as are generally required
by commercial mortgage lenders. The insurance policies contain clauses providing
they are not terminable and may not be reduced without 10 days prior written
notice to the mortgagee, and all premiums due and payable through the Closing
Date have been made. To the Issuer's knowledge, no notice of termination or
cancellation with respect to any such policies has been received by PMC or PMCT,
as applicable, which remains effective.
(xxxi) To the Issuer's knowledge, the Obligor has good title to
the Mortgaged Property.
(xxxii) The Issuer acknowledges that the Trustee, as assignee of
the Issuer with respect to the Contribution Agreement, may enforce any right or
remedy thereunder, including any right or remedy with respect to breaches of the
representations and warranties thereunder.
(xxxiii) Attached as Attachment B to the Officer's Certificate
delivered to the Issuer on the Closing Date pursuant to Section 4(c)(vi) of the
Contribution Agreement (the "Closing Certificate") are true and complete copies
of the following standard form loan documents of the Companies: (i) note, (ii)
mortgage, security agreement and assignment of rents, (iii) guaranty, (iv)
pledge agreement, (v) security agreement, (vi) environmental indemnity
agreement, and (vii) construction loan agreement (each, a "Form Loan Document").
Except as set forth on the Loan Schedule, each document evidencing and/or
securing each Loan which corresponds to a Form Loan Document is in substantially
the form of the relevant Form Loan Document attached to the Closing Certificate,
with such modifications thereto as were deemed reasonably necessary or
appropriate by the Company or the Affiliate thereof that originated such
TRUST INDENTURE - Page 19
Loan; provided that such modifications shall not substantially interfere with
the practical realization of the principal legal benefits and security provided
by such documents; and provided further, to the extent that the documents
evidencing and/or securing any Loan do not conform to the Form Loan Documents,
such documents will provide in all material respects the principal legal
benefits and security provided by the Form Loan Documents.
3.3 REPURCHASE AND SUBSTITUTION OF LOANS. (a) Upon discovery by either
the Issuer, the Servicer, the Trustee or the Supervisory Servicer of a breach of
any of the representations and warranties made by PMC or PMCT, as the case may
be, pursuant to the Contribution Agreement or made by the Issuer pursuant to
Section 3.2 hereof (in each case, without regard to any limitation set forth in
such representation or warranty concerning the knowledge of PMC, PMCT, or the
Issuer, as the case may be, as to the facts stated therein), the party
discovering such breach shall give prompt written notice to the others, to the
Noteholders, to the Rating Agency and to PMC or PMCT, as the case may be, and
the Trustee, upon such discovery or receipt of such notice, shall make written
demand upon the Issuer with respect to a breach of any of the representations or
warranties contained in Section 3.2 hereof to comply with this Section 3.3 or
upon PMC or PMCT, as the case may be, to comply with Section 8 or Section 13, as
applicable, of the Contribution Agreement. Within thirty (30) days of its
discovery or its receipt of notice of any breach or defect the Issuer, PMC or
PMCT, as the case may be, shall, at its option, (i) promptly cure such defect or
breach in all material respects, (ii) purchase the affected Loan at a price
equal to the Takeout Price, upon the Required Noteholders' consent, or (iii) if
such defect or breach occurs within two (2) years of the Closing Date, deliver
to the Trustee, upon the Required Noteholders' consent, in exchange for the
affected Loan, a Substitute Loan, together with any related Asset Substitution
Shortfall. If the breach or defect has not been cured or a Substitute Loan so
delivered to the Trustee within thirty (30) days after such discovery or receipt
of notice, the Issuer, PMC or PMCT, as the case may be, must purchase the
Defective Loan within one (1) Business Day for an amount equal to the Takeout
Price.
(b) In the event a Loan becomes a Charged-Off Loan, PMC or PMCT,
as the case may be, may purchase the Charged-Off Loan at a price equal to the
Takeout Price or cause or permit the Charged-Off Loan to be released from the
Lien of this Indenture in accordance with Section 3.4(a)(iii) hereof.
(c) In the event a Loan becomes a Refinancable Loan, the
applicable Servicer shall give prompt written notice to the Noteholders, the
Trustee, the other Servicer and the Supervising Servicer and PMC or PMCT, as the
case maybe, may repurchase the Loan at a price equal to the Takeout Price and
cause or permit the Refinancable Loan to be released from the Lien of this
Indenture in accordance with Section 3.4(a)(iii) hereof.
(d) If PMC or PMCT, as the case may be, pursuant to Section 8 of
the Contribution Agreement, or the Issuer, PMC or PMCT, as the case may be,
pursuant to paragraph (a) above, elects to cause one or more Substitute Loans to
be delivered to the Trustee in substitution for any one or more of the original
Loans, the Issuer, PMC or PMCT, as the case may be, shall deliver to the Trustee
the information required by the Substitute Loan Schedule
TRUST INDENTURE - Page 20
with respect to the Substituted Loan in substantially the form of Exhibit B-1
attached hereto and any required documentation pursuant to paragraph (e) below.
A Substitute Loan must (i) be an Eligible Loan; (ii) contractually require
interest payments to be made each month in an aggregate amount at least equal to
that of the Deleted Mortgage Loan; and (iii) have characteristics such that, as
of the substitution date (instead of as of the Closing Date), each of the
representations and warranties set forth in Section 3.2(a) and Sections 3.1(g)
and (h) hereof is true and correct in all material respects with respect to the
Substitute Loan. If the Substitute Loan has an outstanding Loan Principal
Balance (after application of the Monthly Payment due in the month of
substitution) which is less than the Takeout Price of the Deleted Mortgage
Loan(s) (an "ASSET SUBSTITUTION SHORTFALL"), the Person delivering the
Substitute Loan(s) must deliver to the Trustee on the substitution date
immediately available funds in the amount of any such Asset Substitution
Shortfall, which the Trustee shall deposit in the Collection Account on the
substitution date. In the case of a substitution pursuant to Section 3.3(a), the
Asset Substitution Shortfall shall include the amounts described in clauses
(ii), (iii) and (iv) of the definition of Takeout Price.
(e) In connection with any such substitution, on the substitution
date, PMC, PMCT or the Issuer, as the case may be, shall deliver to the Trustee
(i) each Substitute Loan to be delivered on such date and (ii) the amount of any
Asset Substitution Shortfall relating to the Substitute Loan. In addition, on
the substitution date, PMC, PMCT or the Issuer, as the case may be, shall
deliver the related Trustee Loan File to the Trustee and the Servicer Loan File
to the Servicer with respect to each Substitute Loan.
(f) Upon such purchase or substitution, the Trustee shall deliver
to the Person purchasing the Loans or delivering the Substitute Loans, the
related Deleted Mortgage Loans and shall amend the Loan Schedule to reflect the
deletion of the Deleted Mortgage Loans and, if applicable, the addition of the
Substitute Loans and shall release the Deleted Mortgage Loans from the Lien of
this Indenture by executing and delivering to such Person the release in the
form of Exhibit E attached hereto.
(g) Pursuant to the Servicing Agreement, the applicable Servicer
shall prepare any instruments necessary for transfers pursuant to this Section.
(h) Substitute Loans may not be delivered (and Defective Loans may
not be purchased) pursuant to this Section 3.3 on any date which is a
Determination Date.
3.4 RELEASE AND EXCHANGE OF LOANS. (a) The Trustee shall not release
and discharge any Loan from the Lien of this Indenture until the principal of
and interest on the Notes shall have been paid or duly provided for under this
Indenture except as follows:
(i) in accordance with the provisions of Section 3.3 hereof;
(ii) upon any Servicer's request provided that the conditions
to release have been met pursuant to Sections 3.10 and 4.4 of the Servicing
Agreement; and
TRUST INDENTURE - Page 21
(iii) on each Payment Date, the Trustee shall release all
Charged-Off Loans and Refinancable Loans from the Lien of this Indenture and
deliver to the Issuer the deleted Charged-Off Loans and Refinancable Loans;
provided, however, that the Trustee shall release any Charged-Off Loan or
Refinancable Loan from the Lien of this Indenture only if (x) there exists no
Funds Retention Event, (y) all outstanding amounts due and payable with respect
to the Charged-Off Loan or Refinancable Loan have been paid to the Noteholders
as Principal Distribution Amounts or the Takeout Price has been paid for the
Charged-Off Loan or Refinancable Loan or a Substitute Loan has been substituted
for the Charged-Off Loan, and (z) the amount on deposit in the Spread Account
after giving effect to such proposed release is at least equal to the Specified
Spread Account Requirement.
(b) The Trustee shall release a Loan from the Lien of this
Indenture by executing and delivering a release in the form of Exhibit E hereto,
to the Issuer with respect to such Loan. Upon release from the Lien of this
Indenture, the Issuer simultaneously shall distribute to its partners, or
otherwise dispose of, any Loan released pursuant to this Section 3.4. Upon
release from the Lien of this Indenture, the Trustee shall amend the Loan
Schedule to reflect the deletion of the Loans.
(c) Neither the Issuer nor the Trustee shall, without the consent
of the Holders of 100% of the principal amount of the Notes Outstanding, sell or
otherwise dispose of the Loans as a whole after the Closing Date.
ARTICLE IV
REDEMPTION PROVISIONS
4.1 OPTIONAL REDEMPTION OF THE NOTES. The Notes are subject to
redemption in whole, but not in part, at the option of the Issuer on any Payment
Date on or after the date on which the Outstanding Note Amount is less than 10%
of the Outstanding Note Amount on the Closing Date, at a redemption price equal
to 100% of the Outstanding Note Amount plus accrued and unpaid interest thereon
at the Remittance Rate to the redemption date.
4.2 NOTICE OF REDEMPTION. When the Trustee shall receive written notice
from the Issuer of its election to redeem the Notes in accordance with Section
4.1 hereof, the Trustee shall, subject to Section 4.3 hereof and in accordance
with the provisions of this Indenture, give notice of the redemption of the
Notes not less than twenty (20) nor more than sixty (60) days prior to the date
fixed for redemption by certified mail, registered mail or overnight delivery to
the Holders of the Notes at the last address for each appearing on the Note
Register, in the name of the Issuer, which notice shall specify the following:
(a) the complete official name of the Notes, (b) the CUSIP number (if any) of
the Notes, (c) the date of such notice, (d) the issuance date for the Notes, (e)
the redemption price, the Remittance Rate and Maturity Date of the Notes, (f)
the redemption date, (g) the place or places where amounts due upon such
redemption will be payable, (h) that on the redemption date there shall become
due and payable upon each Note to be redeemed the amount of the principal,
together with interest accrued to the redemption date
TRUST INDENTURE - Page 22
and (i) the redemption agent name and address with a contact person and
telephone number. Notice having been so given by the Trustee, the redemption
price and unpaid interest accrued to the redemption date shall be due and
payable on the specified redemption date. The registered owner of $1,000,000 or
more in original principal amount of Notes may specify in writing to the Trustee
one additional address to which such notice of redemption shall be sent. Failure
to give such notice by mail to any Noteholder, or any defect therein, shall not
affect the validity of any proceedings for the redemption of other Notes.
Upon the giving of notice and the payment of funds for redemption
pursuant to Section 4.3, the Trustee is hereby authorized and directed to apply
such funds to the payment of the Notes, together with accrued interest thereon
to the redemption date.
4.3 REDEMPTION PAYMENTS. On or prior to the date specified for
redemption set forth in Section 4.2 hereof, the Issuer shall deposit with the
Trustee funds, which together with amounts then on deposit in the Collection
Account, are sufficient to pay on the redemption date, the principal of and
interest on the Notes called for redemption. If the Trustee is required to
redeem the Notes pursuant to Section 4.1, and subject to and in accordance with
the terms of this Article, the Trustee shall give notice of the redemption in
the manner prescribed by Section 4.2 hereof; provided, however, that no such
notice of redemption shall be given until the Trustee holds, on the date notice
is given pursuant to this Indenture, Available Moneys in the amount necessary to
pay, on the redemption date, the principal of and interest on the Notes called
for redemption.
The Trustee shall apply moneys held in the Collection Account for the
redemption of Notes, and upon such redemption such Notes shall be canceled.
4.4 CANCELLATION. All Notes which have been redeemed, paid or retired
or received by the Trustee for exchange shall not be reissued but shall be
canceled and destroyed by the Trustee in accordance with Article II hereof.
ARTICLE V
COVENANTS OF ISSUER
5.1 PAYMENT OF PRINCIPAL AND INTEREST. The Issuer covenants that it
will promptly pay the principal of and interest on every Note issued under this
Indenture at the place, on the dates and in the manner provided herein and in
said Notes according to the intent and meaning thereof.
5.2 PERFORMANCE OF COVENANTS. The Issuer covenants that it will perform
at all times any and all covenants, undertakings, stipulations and provisions
contained in the Transaction Documents, in any and every Note executed,
authenticated and delivered hereunder and in all of its proceedings pertaining
hereto and comply with all material requirements of any law, rule or regulation
applicable to it.
TRUST INDENTURE - Page 23
5.3 INSTRUMENTS OF FURTHER ASSURANCE. The Issuer agrees that the
Trustee may defend its rights to the payments and other amounts due under the
Loans for the benefit of the Holders against the claims and demands of all
persons whomsoever. The Issuer covenants that it will do, execute, acknowledge
and deliver, or cause to be done, executed, acknowledged and delivered, such
indentures supplemental hereto and such further acts, instruments and transfers
as the Trustee may reasonably require for the better assuring, transferring,
pledging, assigning and confirming unto the Trustee all and singular the rights
assigned hereby and the amounts pledged hereby to the payment of the principal
of and interest on the Notes.
5.4 RECORDING AND FILING. The Issuer will cause all financing
statements related to this Indenture and the Contribution Agreement, and such
other documents as may, in the Opinion of Independent Counsel reasonably
acceptable to the Trustee, be necessary to be kept and filed in such manner and
in such places as may be required by law in order to preserve and protect fully
the security of the Holders and the rights of the Trustee hereunder.
5.5 EXISTENCE. The Issuer will take and fulfill, or cause to be taken
and fulfilled, all actions and conditions necessary to preserve and keep in full
force and effect its existence, rights and privileges as a limited partnership
and will not liquidate or dissolve, and it will take and fulfill, or cause to be
taken and fulfilled, all actions and conditions necessary to qualify, and to
preserve and keep in full force and effect its qualification to do business as a
foreign limited partnership in each jurisdiction in which the conduct of its
business or the ownership or leasing of its properties requires such
qualification, except to the extent that any failure to so qualify, or to so
preserve and keep in full force and effect such qualification, would not have a
material and adverse effect on the business, earnings, prospects, properties or
condition (financial or other) of the Issuer. The Issuer shall conduct its
business in accordance with the terms of its partnership agreement.
5.6 ACCESS TO RECORDS; DISCUSSIONS WITH OFFICERS. The Issuer shall,
upon the request of the Trustee, a Noteholder, a Beneficial Owner, the
Supervisory Servicer or the Rating Agency, permit the Trustee, the Noteholders,
the Beneficial Owners, the Supervisory Servicer, the Rating Agency or their
designees or authorized agents:
(a) to inspect the books and records of the Issuer as they may
relate to the Notes, the Loans and the obligations of the Issuer under the
Transaction Documents; and
(b) to discuss the affairs, finances and accounts of the Issuer
with the General Partner.
Such inspections and discussions shall be conducted during normal
business hours and shall not unreasonably disrupt the business of the Issuer,
PMCT or PMC. Such inspections shall be at the expense of the inspecting party,
or the party requesting the Trustee to conduct such inspection, unless an Event
of Default shall have occurred and then be continuing in which case, any such
inspection shall be at the expense of the Issuer. The books and records of the
Issuer will be maintained at the address of the Issuer designated herein for
receipt of notices, unless the Issuer shall otherwise advise the Trustee and the
Noteholders in writing.
TRUST INDENTURE - Page 24
5.7 NOTICE OF MATERIAL EVENTS. The Issuer shall promptly and, in any
event, within five Business Days after the occurrence thereof, inform the
Trustee, the Noteholders, the Supervisory Servicer and the Rating Agency in
writing of the occurrence of any of the following:
(a) the submission of any material claim or the initiation of any
legal process, litigation or administrative or judicial investigation against
the Issuer;
(b) any change in the location of the Issuer's principal office or
any change in the location of the Issuer's books and records;
(c) the occurrence of any Event of Default, any "event of default"
under any other Transaction Document or the occurrence of any event or condition
which with the giving of notice or lapse of time or both would constitute an
Event of Default or "event of default" under any other Transaction Document;
(d) the commencement or threat of any proceedings instituted by or
against the Issuer in any federal, state or local court or before any
governmental body or agency, or before any arbitration board, or the
promulgation of any proceeding or any proposed or final rule which, if adversely
determined, would result in a material adverse change with respect to the
Issuer;
(e) the commencement of any proceedings by or against the Issuer
under any applicable bankruptcy, reorganization, liquidation, rehabilitation,
insolvency or other similar law now or hereafter in effect or of any proceeding
in which a receiver, liquidator, conservator, trustee or similar official shall
have been, or may be, appointed or requested for the Issuer or any of its
assets.
(f) any merger, consolidation or sale of substantially all of the
assets of PMC, PMCT (except any merger or consolidation between PMC and PMCT or
where PMC or PMCT, as applicable, is the surviving entity) or the Issuer;
(g) any change in the Issuer's name, corporate or other structure
or jurisdiction of organization;
(h) any amendment or other modification of this Indenture, the
Servicing Agreement or any of the other Transaction Documents; or
(i) the final payment in full of the Notes.
5.8 MAINTENANCE OF LICENSES; RATING. The Issuer shall maintain all
licenses, permits, charters and registrations which are material to the conduct
of its business. The Issuer shall at all times while the Notes are outstanding
cause the Rating Agency to maintain an ongoing monitoring rating with respect to
the Notes.
TRUST INDENTURE - Page 25
5.9 USE OF FUNDS. Except for the distribution of the net proceeds
(other than amounts utilized to fund the Spread Account) from the sale of the
Notes pro rata to its partners and the distribution of funds and other assets
released from the Lien of this Indenture pursuant to its partnership agreement
which are contemplated and expressly permitted hereby, the Issuer shall apply
its funds only towards the payment of amounts due under the Notes and towards
the other sums payable by the Issuer under the Transaction Documents.
5.10 NEGATIVE COVENANTS OF THE ISSUER. The Issuer hereby agrees that as
long as any Notes remain Outstanding:
(a) No Amendments to Organization Documents. The Issuer shall not
amend, supplement or otherwise modify Section 2.3 of its partnership agreement
(or permit any of the foregoing). The Issuer shall not amend, supplement or
otherwise modify Sections 2.2, 8.1 or 9.1 or Articles V or VI of its partnership
agreement without the prior written consent of the Required Noteholders.
(b) Limitation on Indebtedness. The Issuer shall not create, incur
or suffer to exist any indebtedness other than the Notes.
(c) No Subsidiaries. The Issuer shall not form, or cause to be
formed, any subsidiaries.
(d) Restrictions on Liens. The Issuer shall not (i) create, incur
or suffer to exist, or agree to create, incur or suffer to exist, or consent to
cause or permit in the future (upon the happening of a contingency or otherwise)
the creation, incurrence or existence of any Lien on the Loans or on any of its
assets except for Liens in favor of the Trustee or (ii) sign or file under the
Uniform Commercial Code of any jurisdiction any financing statement which names
the Issuer as a debtor, or sign any security agreement authorizing any secured
party thereunder to file such financing statement, except in each case any such
instrument solely securing the rights and preserving the Lien of the Trustee.
(e) No Impairment of Rights. The Issuer shall not (i) take any
action, or fail to take any action, if such action or failure to take action may
interfere with the enforcement of any material rights, benefits or obligations
of the Trustee under the Transaction Documents; (ii) waive or alter any rights
with respect to the Loans (or any agreement or instrument relating thereto);
(iii) take any action, or fail to take any action, if such action or failure to
take action may interfere with the enforcement of any rights with respect to the
Loans; or (iv) fail to pay any tax, assessment, charge or fee with respect to
the Loans, or fail to defend any action, if such failure to pay or defend may
adversely affect the priority or enforceability of the Trustee's first priority
Lien on or perfected security interest in the Loans or the Issuer's right, title
or interest in the Loans.
(f) Limitation on Mergers, Etc. The Issuer shall not consolidate
with or merge with or into any Person or transfer all or any material amount of
its assets to any Person or liquidate or dissolve unless (i) the Issuer shall
have provided prior written notice thereof to the
TRUST INDENTURE - Page 26
Noteholders, together with an officer's certificate and an Opinion of Counsel to
the effect that such consolidation, merger or transfer complies with the terms
of the Transaction Documents and the Issuer's partnership agreement, and (ii)
the Required Noteholders have consented thereto in writing. The Issuer shall not
permit the General Partner, PMCT or PMC to sell, transfer, assign or otherwise
dispose of or convey its respective partnership interest in the Issuer.
(g) No Waiver, Amendments, Etc. The Issuer shall not waive, modify
or amend, or consent to any waiver, modification or amendment of, any of the
provisions of any of the Transaction Documents, except as expressly permitted
thereby.
(h) Restriction on Actions Under Partnership Agreement. The Issuer
shall not take any of the actions prohibited by Section 2.3 of its partnership
agreement.
(i) No Action Making Issuer a Taxable Mortgage Pool. The Issuer
shall not take any action or fail to take any action that would cause the Issuer
to be treated as a "taxable mortgage pool" as defined in Section 7701(i) of the
Code.
5.11 OPINIONS AS TO LOANS AND TRUST ESTATE. (a) On the Closing Date,
the Issuer shall furnish to the Trustee an Opinion of Independent Counsel either
stating that, in the opinion of such counsel, such actions have been taken as
are necessary to perfect and make effective the Lien and first priority
perfected security interest of (i) the Issuer with respect to PMCT's and PMC's
interest in the Loans in the event the contribution of the Loans to the Issuer
by PMC or PMCT pursuant to the Contribution Agreement is recharacterized as a
secured lending transaction, and (ii) this Indenture with respect to the Trust
Estate and reciting the details of such action, or stating that, in the opinion
of such counsel, no such action is necessary to make such liens and security
interests effective. Such Opinion of Counsel shall also describe the recording,
filing, re-recording and refiling of this Indenture, any supplemental indentures
and any other requisite documents and the execution and filing of any financing
statements and continuation statements and the taking of any other action that
will, in the opinion of such counsel, be required to maintain such liens and
first priority perfected security interests.
(b) The Issuer shall furnish to the Trustee an Opinion of Counsel
on or before March 30 of each calendar year, commencing March 30, 2003, either
stating that, in the opinion of such counsel, such actions have been taken as
are necessary to maintain the liens and first priority perfected security
interests of the Issuer in the Loans (to the extent the contribution of the
Loans to the Issuer by PMC or PMCT pursuant to the Contribution Agreement is
recharacterized as a secured lending transaction) and of the Trustee created by
this Indenture with respect to the Trust Estate and reciting the details of such
action or stating that, in the opinion of such counsel, no such action is
necessary to maintain such liens and security interests. Such Opinion of Counsel
shall also describe the recording, filing, re-recording and refiling of this
Indenture, any supplemental indentures and any other requisite documents and the
execution and filing of any financing statements and continuation statements and
the taking of any other action that will, in the opinion of such counsel, be
required to maintain such liens and first
TRUST INDENTURE - Page 27
priority perfected security interests of this Indenture and the Contribution
Agreement until March 30 in the following calendar year.
5.12 MAINTENANCE OF OFFICE. The Issuer will maintain at its office
located at its address shown in the definition of "Notice Address" an office
where notices, presentations and demands in respect of this Indenture and the
Notes may be given to and made upon it; provided, however, that it may, upon
fifteen (15) Business Days' prior written notice to the Noteholders and the
Trustee, move such office to any other location within the boundaries of the
continental United States of America.
5.13 RESTRICTIONS ON ISSUER'S ACTIONS. The Issuer covenants and agrees,
until the cancellation and discharge of the Lien of this Indenture, to take any
and all actions to ensure that the Issuer will be recognized as a Person
separate from each of its Affiliates and that its assets and liabilities will
not be commingled with the assets and liabilities of any of its Affiliates. In
furtherance and not in limitation of the foregoing, the Issuer covenants and
agrees that:
(a) Until the cancellation and discharge of the Lien of this
Indenture, at least two (2) of the managers of the General Partner will be
persons who are not and have not been during the two (2) years preceding such
appointment (i) an officer, director, partner, manager, employee or stockholder
of any Affiliate of the Issuer, (ii) affiliated with a significant customer or
supplier of the Issuer or any of its Affiliates, or (iii) a spouse, parent,
sibling or child of any person described in clauses (i) or (ii) (each such
manager, an "INDEPENDENT MANAGER").
(b) Funds and other assets of the Issuer shall be separately
identified and segregated. All of the Issuer's assets shall at all times be held
by or on behalf of the Issuer, and, if held by another entity, shall at all
times be kept identifiable (in accordance with customary usages) as assets owned
by the Issuer. The Issuer shall maintain its own separate bank accounts, payroll
and books of account. In no event shall any of the Issuer's assets be held on
its behalf by any Affiliate.
(c) The Issuer shall pay from its assets all obligations of any
kind incurred by the Issuer (other than organizational expenses).
(d) All financial statements, accounting records and other
corporate documents of the Issuer shall be maintained at its office separate
from those of any Affiliate or any other Person.
(e) The Issuer shall observe all customary formalities regarding
its existence as a limited partnership.
(f) The audited annual, consolidated balance sheets and income
statements of PMC and PMCT and the unaudited annual balance sheet and income
statement of the Issuer shall disclose, in accordance with and to the extent
required under generally accepted accounting principles, any transactions
between the Issuer and any Affiliate.
TRUST INDENTURE - Page 28
(g) All business transactions, other than those contemplated by
this Indenture, entered into by the Issuer with any Affiliate shall be on terms
and conditions that are not more or less favorable to the Issuer than the terms
and conditions that would be expected to have been obtained, under similar
circumstances, from unaffiliated persons. In addition, all such transactions
shall be approved by the Independent Managers. The Issuer shall not guarantee
any liabilities or obligations of any Affiliate, nor shall it assume any
indebtedness or other liabilities or obligations of any Affiliate.
(h) The Issuer shall at all times hold itself out to the public
(including any Affiliate's creditors) as a separate and distinct entity
operating under the Issuer's own name and the Issuer shall act solely on its own
name and through its own authorized partners, officers and agents.
(i) The Issuer shall pay out of its own funds fees, if any, for
its directors and salaries, if any, of its officers and employees, and shall
promptly reimburse any Affiliate for any service provided to the Issuer by such
Affiliate (other than the Servicers pursuant to the terms of the Servicing
Agreement).
(j) Notwithstanding any other provision of the Issuer's
partnership agreement and any provision of law that otherwise so empowers the
Issuer, the Issuer shall not:
(i) engage in any business or activity other than as set forth
in the Issuer's agreement of limited partnership;
(ii) without the approval of a majority of the managers of the
General Partner, including all of the Independent Managers and only upon the
Issuer's insolvency, institute proceedings to be adjudicated a bankrupt or
insolvent, or consent to the institution of bankruptcy or insolvency proceedings
against it, or file a petition seeking or consent to reorganization or relief
under any applicable federal or state law relating to bankruptcy, or consent to
the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of the Issuer or a substantial part of its property, or
make any assignment for the benefit of creditors, or admit in writing its
inability to pay its debts generally as they become due, or take any corporate
action in furtherance of any such action;
(iii) liquidate, in whole or in part; or
(iv) acquire, by redemption or otherwise, any of its
partnership interests during the period in which any Notes are Outstanding.
5.14 INSURANCE COVERAGE. In the event the Trust Estate shall include
REO Property, the Issuer will notify the Trustee and the Noteholders in writing
no later than five (5) Business Days prior to the acquisition of such REO
Property. The Servicer will maintain liability and casualty insurance with
respect to the related Mortgaged Property in accordance with the terms of the
Servicing Agreement.
TRUST INDENTURE - Page 29
5.15 FINANCIAL STATEMENTS AND ACCOUNTANTS' REPORTS. The Issuer shall
furnish or cause to be furnished to the Trustee, the Noteholders and the Rating
Agency:
(i) Annual Financial Statements. As soon as available, and in
any event within one hundred twenty (120) days after the close of each fiscal
year of the Issuer, the Issuer's financial statements as of the end of such
fiscal year; and
(ii) Accountants' Reports. Promptly upon receipt thereof,
copies of any reports submitted to the Issuer by its independent accountants, if
any, in connection with any examination of the financial statements of the
Issuer.
(iii) In addition to the foregoing, the Issuer shall furnish or
cause to be furnished to any Noteholder or any prospective purchaser of the
Notes, upon the written request of any Noteholder, any additional information
required by Rule 144A(d)(4) under the Act.
ARTICLE VI
REVENUES AND ACCOUNTS
6.1 CREATION OF ACCOUNTS. On the Closing Date, the Trustee shall
establish the Collection Account and the Spread Account as non-interest bearing
trust accounts in its corporate trust department. The Collection Account shall
be entitled "Collection Account--BNY Midwest Trust Company, as Trustee, in trust
for registered Holders of $63,453,688 PMC Joint Venture, L.P. 2002-1 Loan-Backed
Fixed Rate Notes" and the Spread Account shall be entitled "Spread Account--BNY
Midwest Trust Company, as Trustee, in trust for registered Holders of
$63,453,688 PMC Joint Venture, L.P. 2002-1 Loan-Backed Fixed Rate Notes." All
amounts credited to the Collection Account or the Spread Account shall be held
by the Trustee in trust for the Holders of the Notes until distribution of any
such amounts is authorized under this Indenture. All distributions, payments and
withdrawals from the Collection Account and the Spread Account shall be
determined in accordance with the related Determination Date Report.
6.2 DEPOSITS TO THE COLLECTION ACCOUNT. There shall be deposited into
the Collection Account:
(a) so long as the Notes are Outstanding, on each Business Day,
all Collections deposited to the Lockbox Account;
(b) on the date of receipt thereof, any Takeout Price or Asset
Substitution Shortfall received pursuant to Section 3.3 hereof;
(c) on the date of receipt thereof, all income from investment or
reinvestment of amounts held in the Collection Account;
(d) on the relevant Payment Date, any amounts transferred from the
Spread Account pursuant to Section 6.3; and
TRUST INDENTURE - Page 30
(e) on the date of receipt thereof, any other amounts received by
the Trustee with respect to the Loans or the trusts created hereby, including,
without limitation, any amounts received pursuant to Section 4.3 to redeem the
Notes.
6.3 DEPOSITS IN SPREAD ACCOUNT; PERMITTED WITHDRAWALS FROM SPREAD
ACCOUNT. (a) The Trustee shall, promptly upon receipt, deposit in the Spread
Account:
(i) on the Closing Date, the Initial Deposit; and
(ii) on each Payment Date, from amounts then on deposit in the
Collection Account, the amount required to be deposited into the Spread Account
pursuant to Section 6.4(b) until the amount on deposit therein equals the then
applicable Specified Spread Account Requirement.
(b) Amounts on deposit in the Spread Account shall be withdrawn by
the Trustee in the manner set forth in subclause (c) below on each Payment Date
in the following order of priority:
(i) to deposit in the Collection Account an amount by which (a)
the Interest Distribution Amount, the Principal Distribution Amount and the
Carry Forward Amount, if any, exceed (b) the Available Funds for such Payment
Date (but excluding from such definition of Available Funds, amounts in the
Spread Account); and
(ii) to the extent that the amount then on deposit in the
Spread Account after giving effect to any required transfers from the Spread
Account to the Collection Account on such Payment Date pursuant to clause (i)
above then exceeds the Specified Spread Account Requirement as of such Payment
Date (such excess, a "SPREAD ACCOUNT EXCESS"), an amount equal to such Spread
Account Excess shall be deposited in the Collection Account prior to the making
of any distributions to the Servicers in reimbursement of Servicing Expenses on
such Payment Date;
and also, in no particular order of priority:
(iii) to invest amounts on deposit in the Spread Account in
Eligible Investments pursuant to Article VII;
(iv) to withdraw any amount not required to be deposited in the
Spread Account or deposited therein in error; and
(v) to clear and terminate the Spread Account upon the
termination of this Indenture in accordance with the terms hereof.
(c) Any amounts which are required to be withdrawn from the Spread
Account pursuant to paragraph (b) above shall be withdrawn from the Spread
Account in the
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following order of priority: (i) first, from any uninvested funds therein, and
second, from the proceeds of the liquidation of any investments therein pursuant
to Article VII.
6.4 DISTRIBUTIONS. (a) The rights of the Noteholders to receive
payments of principal and interest on the Notes shall be as set forth in this
Indenture.
(b) On each Payment Date, based on information contained in the
related Determination Date Report, the Trustee shall withdraw the amounts then
on deposit in the Collection Account which shall include amounts, if any,
deposited therein from the Spread Account and make distributions thereof in the
following order of priority:
(i) First, to the Trustee, the Servicers, and the Supervisory
Servicer, if any, for payment of the Trustee's Fee, the Servicing Fee, and the
Supervisory Servicing Fee, if any;
(ii) Second, to the Noteholders, in an amount up to the
Interest Distribution Amount;
(iii) Third, to the Noteholders, in an amount up to the sum of
(a) the Principal Distribution Amount and (b) the Carry Forward Amount, if any;
(iv) Fourth, to the Spread Account, any remainder unless and
until the amount therein equals the Specified Spread Account Requirement;
(v) Fifth, to the Servicers, in reimbursement of Servicing
Expenses paid by the Servicers pursuant to Section 3.8 of the Servicing
Agreement and to the Trustee, Supervisory Servicer, Registrar and Paying Agent
in reimbursement of expenses incurred pursuant to the Transaction Documents;
(vi) Sixth, provided no Funds Retention Event then exists, to
the Issuer, in an amount sufficient to pay the administrative and operating
expenses of the Issuer, including without limitation, any unpaid expenses and
other amounts owed by the Issuer to the Trustee and Supervisory Servicer and
other administrative costs of maintaining the Trust Estate; provided, however,
in the event that a Funds Retention Event then exists, any remaining amount that
would have otherwise been paid to the Issuer on such Payment Date pursuant to
this clause 6.4(b)(vi) shall be retained in the Collection Account; and
(vii) Seventh, provided no Funds Retention Event then exists,
to the Issuer any remaining amounts, together with any permitted release from
the Spread Account free and clear of the Lien of this Indenture; provided,
however, in the event that a Funds Retention Event then exists, any remaining
amount that would have otherwise been paid to the Issuer on such Payment Date
pursuant to this clause 6.4(b)(vii) shall be retained in the Collection Account;
(c) All distributions made to the Noteholders will be made on a
pro rata basis among the Noteholders of record on the next preceding Record Date
based on each such
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Noteholder's percentage of the Aggregate Note Principal Balance represented by
its respective Notes, and shall be made by wire transfer of immediately
available funds to the account of such Noteholder at a bank or other entity
having appropriate facilities therefor.
6.5 MONEYS TO BE HELD IN TRUST. All moneys required to be deposited
with or paid to the Trustee for the account of any fund or account established
under any provision of this Indenture shall be held by the Trustee in trust and
not commingled with the funds or accounts of any other Person, and notice of the
redemption of which has been duly given, shall, while held by the Trustee,
constitute part of the Trust Estate and be subject to the security interest
created hereby. Any moneys erroneously deposited in any fund or account
established under this Indenture shall be promptly returned to the Issuer and
shall not constitute part of the Trust Estate or be subject to the security
interest granted hereby.
6.6 AMOUNTS REMAINING IN FUNDS AND ACCOUNTS. Any amounts remaining in
any fund or account after full payment of the Notes, and all other amounts
required to be paid hereunder, shall be released to the Issuer.
6.7 ACCOUNTS AND REPORTS. The Trustee, on behalf of the Issuer, shall
keep, or cause to be kept, proper books of record and account in which complete
and accurate entries shall be made of all its transactions relating to the Notes
and all funds and accounts established by or pursuant to this Indenture, which
shall at all reasonable times during regular business hours, be subject to the
inspection of the Issuer or of the Holders of an aggregate of not less than ten
percent in principal amount of Notes Outstanding or their representatives duly
authorized in writing.
By the fifteenth (15th) day of each month or the next Business Day if
the 15th is not a Business Day, the Trustee shall furnish to the Issuer, the
Rating Agency and the Noteholders monthly statements in the form attached hereto
as Exhibit C (the "MONTHLY TRUSTEE REPORT") showing the beginning and ending
balances of and deposits to and withdrawals from and assets held in the
Collection Account and the Spread Account as of the close of business on the
last day of the preceding month. The Trustee shall also provide such other
information regarding the Trust Estate and the Issuer as may be reasonably
requested by the Rating Agency or any Noteholders to the extent the Trustee can
obtain such information without unreasonable effort or expense.
6.8 TAX REPORTING. The Issuer shall be responsible for the preparation
and filing with the appropriate governmental agency of all tax returns and
reports ("TAX RETURNS") with respect to the Issuer. The Issuer shall cause a
copy of the completed and signed Tax Return (and a copy of any check delivered
in connection therewith in payment of any tax due) to be delivered to the
Trustee, at least five (5) Business Days prior to the required filing date,
after any additional time granted pursuant to any properly filed extensions. The
Trustee shall have no responsibility to verify the accuracy of the information
in any such Tax Return, may rely on the information included therein and shall
not have any liability for any inaccuracy or misstatement in such Tax Return.
TRUST INDENTURE - Page 33
ARTICLE VII
INVESTMENT OF MONEYS
Any moneys held as part of any fund or account shall be invested and
reinvested in Eligible Investments by the Trustee at the written direction of
the Servicers; provided, however, in the event that the Servicers at any time
fail to give or confirm such direction to the Trustee, the Servicers shall be
deemed to have directed the Trustee in writing to invest any moneys held as part
of any fund or account and not already invested in Eligible Investments, in a
money market fund meeting the requirements of clause (vi) of the definition of
"Eligible Investments." With respect to each investment made by the Trustee, the
Trustee shall make such investment in its name as Trustee and take such action
as shall be required from time to time to accomplish the transfer to the Trustee
the ownership thereof and all income thereon and all proceeds thereof, in good
faith and free and clear of any adverse claim. All such investments shall at all
times be a part of the fund or account from whence the moneys used to acquire
such investments shall have come, and all income and profits on such investments
shall be first used to offset any investment losses in such fund, and then shall
be credited as provided in Article VI. All Eligible Investments shall mature no
later than the day prior to the next Payment Date, provided that any investments
in money market funds may mature on the applicable Payment Date. The Trustee
shall sell and reduce to cash a sufficient amount of such investments in the
respective fund or account whenever the cash balance therein is insufficient to
pay the amounts contemplated to be paid therefrom. The Trustee shall have no
liability or responsibility for the selection of investments or for any loss
resulting from any investment made in accordance with the provisions of this
Article VII. The Trustee shall have no liability with respect to losses incurred
as a result of the liquidation of any investment prior to its stated maturity or
the failure of the Servicers to provide timely written investment directions.
The Trustee shall not be liable for any investment made in accordance with the
directions of the Servicers or for keeping the funds fully invested at all
times, provided that the Trustee invests funds in a non-negligent manner in
accordance with this Article VII and the Servicers' directions.
ARTICLE VIII
DISCHARGE OF INDENTURE
If the Issuer shall (i) pay or cause to be paid to the Holders of the
Notes all outstanding principal and accrued and unpaid interest due thereon at
the times and in the manner stipulated therein, and shall pay or cause to be
paid to the Trustee all sums of moneys due according to the provisions hereof
(including the Trustee's reasonable fees and expenses and those of its
attorneys) and the Notes, and (ii) deliver to the Trustee an Officer's
Certificate and Opinion of Counsel stating that all conditions precedent under
the Indenture relating to the discharge of the Indenture have been complied
with, then these presents and the estate and rights hereby granted shall cease,
determine and be void, whereupon the Trustee shall cancel and discharge the Lien
of this Indenture, and execute and deliver to the Issuer such instruments in
writing as shall be
TRUST INDENTURE - Page 34
requisite to cancel and discharge the Lien hereof, and release, assign and
deliver unto the Issuer any and all of the estate, right, title and interest in
and to any and all rights assigned or pledged to the Trustee or otherwise
subject to the Lien of this Indenture, including, but not limited to, all
moneys, securities and other property held in the Trust Estate.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Issuer to the Trustee under Section 9.2 hereof, the
obligations of the Trustee and each Paying Agent to the Issuer and to the
Holders of Notes under Section 10.10 hereof, the obligations of the Trustee to
the Holders of Notes under this Article VIII and the provisions of Article II
hereof with respect to lost, stolen, destroyed and mutilated Notes, registration
of transfers and exchanges of Notes, and rights to receive payments of principal
of the Notes and accrued and unpaid interest thereon shall survive.
ARTICLE IX
DEFAULT PROVISIONS AND REMEDIES OF
TRUSTEE AND NOTEHOLDERS
9.1 EVENTS OF DEFAULT. The happening of any one or more of the
following events shall constitute an "Event of Default":
(a) default in the due and punctual payment of the entire amount
of any interest due and payable on any Note which continues unremedied for five
(5) Business Days;
(b) default in the due and punctual payment of (i) the Principal
Distribution Amount on any Payment Date which continues unremedied for five (5)
Business Days or (ii) the entire remaining principal upon the redemption of the
Notes pursuant to Section 4.1 or at the Maturity Date;
(c) default in the performance or observance of any of the
covenants in Section 5.10 or 5.13;
(d) default in the performance or observance of any of the
covenants, agreements or conditions on the part of the Issuer contained in this
Indenture or in the Notes and not described in another paragraph of this Section
9.1, which failure shall continue for a period of thirty (30) days after the
earlier to occur of the date on which the Issuer obtained actual knowledge of
such failure or the date written notice of such failure, requiring the same to
be remedied, shall have been received by the Issuer from the Trustee or any
Holder, provided that, if such failure shall be of a nature that it cannot be
cured within thirty (30) days, such failure shall not constitute an Event of
Default hereunder if within such 30-day period the Issuer shall have given
notice to the Trustee and the Noteholders of the Notes of corrective action it
proposes to take, which corrective action is agreed in writing by the Trustee
and the Required Noteholders to be satisfactory and the Issuer shall thereafter
pursue such corrective action diligently until such default is cured but in no
event longer than ninety (90) days;
TRUST INDENTURE - Page 35
(e) any representation or warranty made by the Issuer under this
Indenture, or any representation or warranty made by the Issuer or any Affiliate
of the Issuer in any Transaction Document or in any certificate or report
furnished under this Indenture or any Transaction Document, shall prove to be
untrue or incorrect in any material respect and such breach is not cured in all
material respects within thirty (30) days after the date written notice of such
inaccuracy, requiring it to be remedied, is given to the Issuer by the Trustee
or any Holder;
(f) (i) the Issuer shall have asserted that any of the Transaction
Documents to which it is a party are not valid and binding on the parties
thereto; or (ii) any court, governmental authority or agency having jurisdiction
over any of the parties to any of the Transaction Documents or any property
thereof shall find or rule that any material provision of any of the Transaction
Documents is not valid and binding on the parties thereto;
(g) the General Partner or the Issuer shall fail to pay its debts
generally as they come due, or shall admit in writing its inability to pay its
debts generally, or shall make a general assignment for the benefit of
creditors, or shall institute any proceeding seeking to adjudicate the General
Partner or the Issuer insolvent or seeking a liquidation, or shall take
advantage of any insolvency act, or shall commence a case or other proceeding
naming the Issuer as debtor under the United States Bankruptcy Code or similar
law, domestic or foreign, or a case or other proceeding shall be commenced
against the General Partner or the Issuer under the United States Bankruptcy
Code or similar law, domestic or foreign, or any proceeding shall be instituted
against the General Partner or the Issuer seeking liquidation of the General
Partner's or the Issuer's assets and the General Partner or the Issuer, as
applicable, shall fail to take appropriate action resulting in the withdrawal or
dismissal of such proceeding within ninety (90) days or there shall be appointed
or the General Partner or the Issuer shall consent to, or acquiesce in, the
appointment of a receiver, liquidator, conservator, trustee or similar official
in respect of the General Partner or the Issuer or the whole or any substantial
part of its properties or assets or the General Partner or the Issuer shall take
any corporate action in furtherance of any of the foregoing;
(h) the existence of any Event of Default by PMC or PMCT under the
Contribution Agreement, any Servicer Default under the Servicing Agreement if
the Servicer is PMC and/or PMCT or an Affiliate of PMC, PMCT or the Issuer, and
any Supervisory Servicer Default under the Supervisory Servicer Agreement if the
Supervisory Servicer is PMC, PMCT or an Affiliate of PMC, PMCT or the Issuer; or
(i) the occurrence of an "event of default" under any other of the
Transaction Documents (other than an "event of default" by the Supervisory
Servicer or a Servicer Default if the Servicer is not an Affiliate of the
Issuer), after the satisfaction of any applicable notice provisions and the
expiration of any applicable cure periods.
The Trustee shall give written notice to the Noteholders, the Rating
Agency and the U.S. Small Business Administration of any Event of Default within
five Business Days after the Trustee has actual knowledge of such Event of
Default.
TRUST INDENTURE - Page 36
9.2 REMEDIES; RIGHTS OF NOTEHOLDERS. Upon the occurrence of an Event of
Default, the Trustee, upon the request of the Required Noteholders shall, pursue
any available remedy at law or in equity to enforce the payment of the principal
of and interest on the Notes then outstanding and all other amounts due and
owing under the Transaction Documents, including enforcement of any rights of
the Issuer under the Transaction Documents, Loans and any documents or
instruments related thereto.
If an Event of Default described in Section 9.1(g) occurs, the
principal of all the Notes and all accrued and unpaid interest thereon shall
become immediately due and payable. The Trustee shall provide notice in writing
of such Event of Default to the Noteholders, the Servicer and the Supervisory
Servicer.
If an Event of Default (other than an Event of Default described in
Section 9.1(g)) occurs and is continuing and if the Required Noteholders have
requested the Trustee to accelerate the Notes, the Trustee shall declare the
principal of all the Notes to be immediately due and payable, by a notice in
writing to the Issuer, the Noteholders, the Servicers and the Supervisory
Servicer (and to the Trustee if given by the Noteholders), and upon any such
declaration such principal and accrued and unpaid interest shall become
immediately due and payable.
If an Event of Default shall have occurred, and if indemnified as
provided in Section 10.1(p) hereof, the Trustee shall, if directed in writing by
the Required Noteholders, be obligated to exercise one or more of the rights and
powers conferred by this Article IX, as the Trustee shall be directed by the
Required Noteholders.
No remedy by the terms of this Indenture conferred upon or reserved to
the Trustee (or to the Noteholders) is intended to be exclusive of any other
remedy, but each and every such remedy shall be cumulative and shall be in
addition to any other remedy given to the Trustee or to the Noteholders of the
Notes hereunder or now or hereafter existing at law or in equity or by statute.
No delay or omission to exercise any right or power accruing upon any
Event of Default shall impair any such right or power or shall be construed to
be a waiver of any such Event of Default or acquiescence therein; and every such
right and power may be exercised from time to time as often as may be deemed
expedient.
No waiver of any Event of Default hereunder, whether by the Trustee or
by the Noteholders, shall extend to or shall affect any subsequent Event of
Default or shall impair any rights or remedies consequent thereon.
9.3 RIGHT OF NOTEHOLDERS TO DIRECT PROCEEDINGS. Anything in this
Indenture to the contrary notwithstanding, the Required Noteholders shall have
the right, at any time, by an instrument or instruments in writing executed and
delivered to the Trustee, to direct the method and place of conducting all
proceedings to be taken in connection with the enforcement of the terms and
conditions of this Indenture, or for the appointment of a receiver or any other
TRUST INDENTURE - Page 37
proceedings hereunder or thereunder; provided that such direction shall not be
otherwise than in accordance with the provisions of law and of this Indenture.
9.4 APPOINTMENT OF RECEIVERS. Upon the occurrence of an Event of
Default, and upon the filing of a suit or other commencement of judicial
proceedings to enforce the rights of the Trustee and of the Noteholders under
this Indenture, the Trustee shall be entitled, as a matter of right, to the
appointment of a receiver or receivers of the Trust Estate and of the revenues,
issues, earnings, income, products and profits thereof, pending such
proceedings, with such powers as the court making such appointment shall confer.
9.5 APPLICATION OF MONEYS. All moneys received by the Trustee pursuant
to any right given or action taken under the provisions of this Article shall,
after payment of any fees and expenses, including any extraordinary fees and
expenses, due and payable to the Trustee and the Supervisory Servicer (so long
as the Supervisory Servicer is, the same corporate entity as the Trustee or an
Affiliate thereof) hereunder or under the Servicing Agreement or the Supervisory
Servicing Agreement, be deposited in the Collection Account and all moneys in
the Collection Account (other than moneys held for redemption of the Notes duly
called for redemption) shall be applied as follows:
FIRST--To the payment to the Persons entitled thereto of all
interest then due on the Notes, in the order of the maturity of such interest,
with interest on unpaid principal and, to the extent permitted by applicable
law, accrued interest at the Default Rate to the extent such amount has not been
distributed to the Noteholders when due, and, if the amount available shall not
be sufficient to pay in full said amount, then to the payment ratably, according
to the amounts due to the Persons entitled thereto, without any discrimination
or privilege;
SECOND-- To the payment to the Persons entitled thereto of any
unpaid principal of the Notes which shall have become due in order of maturity
and, if the amount available shall not be sufficient to pay in full such
principal due on any particular date, then to the payment ratably, according to
the amount of principal due on such date, to the Persons entitled thereto
without any discrimination or privilege;
THIRD--To be held for the payment to the Persons entitled thereto as
the same shall become due.
Whenever moneys are to be applied pursuant to the provisions of this
Section, such moneys shall be applied at such times, and from time to time, as
the Trustee shall determine, having due regard for the amount of such moneys
available for application and the likelihood of additional moneys becoming
available for such application in the future. Whenever the Trustee shall apply
such funds, it shall fix the date upon which such application is to be made. The
Trustee shall give such notice as it may deem appropriate of the deposit with it
of any such moneys and of the fixing of any such date.
TRUST INDENTURE - Page 38
Whenever all principal of and interest on all Notes and all other
amounts due and owing hereunder and under the Notes have been paid under the
provisions of this Section, any balance remaining in the Collection Account and
the Spread Account shall be released to the Issuer.
9.6 REMEDIES VESTED IN TRUSTEE. All rights of action (including the
right to file proof of claims) under this Indenture or under any of the Notes
may be enforced by the Trustee without the possession of any of the Notes or the
production thereof in any trial or other proceeding related thereto and any such
suit or proceeding instituted by the Trustee shall be brought in its name as the
Trustee without the necessity of joining as plaintiffs or defendants any Holder
of the Notes, and any recovery of judgment shall be for the equal and ratable
benefit of the Holders of the Outstanding Notes.
9.7 RIGHTS AND REMEDIES OF NOTEHOLDERS. No Holder of any Note shall
have any right to institute any suit, action or proceeding at law or in equity
for the enforcement of this Indenture or for the execution of any trust hereof
or for the appointment of a receiver or any other remedy hereunder or
thereunder, unless (a) an Event of Default has occurred of which the Trustee has
been notified by such Holder as provided in Section 10.1(l) hereof, or of which
by said subsection it is deemed to have notice, (b) the Holders of not less than
25% of the Outstanding Note Amount shall have given written notice to the
Trustee and shall have offered it reasonable opportunity either to proceed to
exercise the powers herein before granted or to institute such action, suit or
proceeding in their own name or names, (c) Noteholders have offered to the
Trustee indemnity as provided in Section 10.1(p) hereof, and (d) the Trustee
shall thereafter fail or refuse to exercise the powers herein before granted
within thirty (30) days thereafter, or to institute such action, suit or
proceeding in its own name; and such notification, request and offer of
indemnity are hereby declared in every case at the option of the Trustee to be
conditions precedent to the execution of the powers and trusts of this
Indenture, and to any action or cause of action for the enforcement of this
Indenture, or for the appointment of a receiver or for any other remedy
hereunder or thereunder; it being understood and intended that no one or more
Holders of the Notes shall have any right in any manner whatsoever to affect,
disturb or prejudice the Lien of this Indenture by its, his or their action or
to enforce any right hereunder except in the manner herein provided, and that
all proceedings at law or in equity shall be instituted, had and maintained in
the manner herein provided and for the equal and ratable benefit of the Holders
of all Notes Outstanding. However, nothing contained in this Indenture shall
affect or impair the right of any Noteholders to enforce the payment of the
principal of and interest on any Note at and after the Maturity Date thereof, or
the obligation of the Issuer to pay the principal of and interest on each of the
Notes issued hereunder to the respective Holders thereof at the time, place,
from the source and in the manner in the Notes expressed.
9.8 TERMINATION OF PROCEEDINGS. In case the Trustee shall have
proceeded to enforce any right under this Indenture by the appointment of a
receiver or otherwise, and such proceedings shall have been discontinued or
abandoned for any reason, or shall have been determined adversely, then and in
every such case the Issuer, the Trustee and the Noteholders shall be restored to
their former positions and rights hereunder and thereunder, respectively, with
TRUST INDENTURE - Page 39
regard to the property herein subject to this Indenture, and all rights,
remedies and powers of the Trustee shall continue as if no such proceedings had
been taken.
9.9 WAIVERS OF EVENTS OF DEFAULT. The Trustee may waive any Event of
Default that has been remedied and any Event of Default (and its consequences)
relating to a default in the performance or observance of any covenant,
agreement or condition contained in the Indenture, or a breach of a
representation or warranty made by the Issuer in the Indenture or in any
certificate or report furnished under the Indenture, or the occurrence of any
"event of default" under the contracts and related documents governing the
transfer and servicing of the Loans and other matters relating to the issuance
of the Notes. The Trustee may waive any other Event of Default that has occurred
and is continuing only upon the written request of the Required Noteholders;
provided, however, that there shall not be waived (x) any Event of Default in
the payment of the principal of any outstanding Notes when due or (y) any
default in the payment when due of the interest on any such Notes unless, prior
to such waiver or rescission, all arrears of interest or all arrears of payments
of principal when due, with interest on overdue principal and, to the extent
permitted by applicable law, interest at the Default Rate, and all expenses of
the Trustee in connection with such Event of Default shall have been paid or
provided for, and in case of any such waiver or rescission, or in case any
proceedings taken by the Trustee on account of any such Event of Default shall
have been discontinued or abandoned or determined adversely, then and in every
such case the Issuer, the Trustee and the Noteholders shall be restored to their
former positions and rights hereunder, respectively, but no such waiver or
rescission shall extend to any subsequent or other Event of Default or impair
any right consequent thereon. Any waivers made by the Trustee pursuant to this
Section shall be in writing and shall specify the nature of the Event of Default
and the effective date of the waiver and the Trustee shall send a copy of all
such waivers to the Noteholders and the Rating Agency.
ARTICLE X
TRUSTEE
10.1 ACCEPTANCE OF THE TRUSTS. The Trustee hereby accepts the trusts
imposed upon it by this Indenture, and agrees to perform said trusts and to
continue to perform, provided that the Trustee may, in accordance with Section
10.6 hereof, exercise its right to resign from the trusts created hereby; and
provided further that the acceptance by the Trustee of the trusts imposed under
this Indenture and the agreement to perform said trusts are subject to the
following express terms and conditions:
(a) The Trustee agrees to accept receipt, subject to review as
stated herein, of the Loans and other assets in the Trust Estate and declares
that it holds and will hold the Loans and other assets in the Trust Estate in
trust for the benefit of the Noteholders.
(b) The Trustee, prior to the occurrence of an Event of Default
and after the curing of all Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Indenture, and no implied duties shall be read
TRUST INDENTURE - Page 40
into this Indenture against the Trustee. In case an Event of Default has
occurred (which has not been cured or waived), the Trustee shall exercise such
of the rights and powers vested in it by this Indenture, and use the same degree
of care and skill in their exercise, as a prudent man would exercise or use
under the circumstances in the conduct of his own affairs.
(c) The Trustee shall not be liable for its acts or omissions in
carrying out its duties hereunder, except for its own negligence or willful
misconduct. The Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the Trustee
was negligent in ascertaining the pertinent facts.
(d) The Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
directions of the Required Noteholders relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee under this Indenture.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(f) The Trustee may execute any of the trusts or powers hereunder
and perform any of its duties hereunder either directly or by or through agents
or attorneys or a custodian or nominee and the Trustee shall not be responsible
for any misconduct or negligence on the part of any such party appointed in good
faith with due care by it hereunder. The Trustee may consult with counsel,
including Issuer's counsel, concerning all matters of trusts hereof and the
duties hereunder, and may in all cases pay such reasonable compensation to all
such attorneys, agents, receivers and employees as may reasonably be employed in
connection with the trusts hereof. The Trustee may act or refrain from acting
upon the opinion or advice of any attorneys approved by the Trustee in the
exercise of reasonable care. The Trustee shall not be responsible for any loss
or damage resulting from any action or inaction in good faith in reliance upon
such opinion or advice.
(g) The recitals contained herein and in the Notes, other than the
certificate of authentication, shall be taken as statements of the Issuer, and
the Trustee assumes no responsibility for their correctness. The Trustee makes
no representation as to the validity or sufficiency of this Indenture or of the
Notes or of any Loans or related document. The Trustee shall not be accountable
for the use or application by the Issuer of any of the proceeds of any of the
Notes, or for the use or application of any funds deposited in or withdrawn from
the Collection Account or the Spread Account or any other account by or on
behalf of the Issuer. The Trustee shall not be responsible for the accuracy or
content of any resolution, certificate, statement, opinion, report, document,
order or other instrument furnished by the Issuer and accepted by the Trustee in
good faith, pursuant to this Indenture. The Trustee shall have no duty to
monitor the performance of the Issuer and Servicers, nor shall it have any
liability in
TRUST INDENTURE - Page 41
connection with the malfeasance or nonfeasance by the Issuer and Servicers
except for its obligations under the Supervisory Servicing Agreement; provided,
however, if the Trustee has assumed the role of a Servicer it shall be liable
for its own malfeasance or nonfeasance in acting as Servicer. The Trustee shall
have no liability in connection with compliance by the Issuer and Servicers with
statutory or regulatory requirements related to the Indenture and the Notes.
(h) The Trustee shall not be accountable for the use of any Notes
authenticated or delivered hereunder. The Trustee may in good faith buy, sell,
own and hold any of the Notes and may join in any action which any Holder of
Notes may be entitled to take with like effect as if the Trustee were not a
party to this Indenture. The Trustee may also engage in or be interested in any
financial or other transaction with the Issuer or any Holder, provided that if
the Trustee determines that any such relationship is in conflict with its duties
under this Indenture, it shall eliminate the conflict or resign as the Trustee.
(i) The Trustee may rely and shall be protected in acting or
refraining from acting to the extent such action or inaction is directed by any
notice, request, consent, certificate, order, affidavit, letter, telegram or
other paper or document believed to be genuine and correct and to have been
signed or sent by the proper person or persons. Any action taken by the Trustee
pursuant to this Indenture upon the request or authority or consent of any
person who at the time of making such request or giving such authority or
consent is the Holder of any Note, shall be conclusive and binding upon all
future Holders of the same Note and upon Notes issued in exchange therefor or in
place thereof.
(j) As to the existence or nonexistence of any fact or as to the
sufficiency or validity of any instrument, paper or proceeding, the Trustee
shall be entitled to rely upon a certificate signed by an Authorized Officer of
the Issuer as sufficient evidence of the facts therein contained and prior to
the occurrence of an Event of Default of which the Trustee has been notified as
provided in subsection (l) of this Section, or of which by said subsection it is
deemed to have notice, shall also be at liberty to accept a similar certificate
to the effect that any particular dealing, transaction or action is necessary or
expedient, but may, at its discretion, secure such further evidence deemed
necessary or advisable, but shall in no case be bound to secure the same. The
Trustee may accept a certificate of an Authorized Officer of the Issuer to the
effect that a resolution in the form therein set forth has been adopted by the
Issuer as conclusive evidence that such resolution has been duly adopted, and is
in full force and effect.
(k) The permissive right of the Trustee to do things enumerated in
this Indenture shall not be construed as a duty and it shall not be answerable
for other than its negligence or willful misconduct.
(l) The Trustee shall not be required to take or be charged with
notice or be deemed to have notice of any Event of Default hereunder, except any
Event of Default described in Sections 9.1(a) and (b) or the failure of the
Issuer to file with the Trustee any document required by this Indenture, or of
the Servicers to file with the Trustee any document required by the Servicing
Agreement to be so filed subsequent to the issuance of the Notes, unless the
TRUST INDENTURE - Page 42
Trustee shall be specifically notified in writing of such Event of Default by
the Issuer, the Servicers, the Supervisory Servicer or any Holder, and all
notices or other instruments required by this Indenture to be delivered to the
Trustee must, in order to be effective, be delivered at the Corporate Trust
Office of the Trustee, and, in the absence of such delivery, the Trustee may
conclusively assume there is no Event of Default except as aforesaid.
(m) At any and all reasonable times the Trustee, and its duly
authorized agents, attorneys, experts, engineers, accountants and
representatives, shall have the right fully to inspect any and all of the
property herein conveyed, including all books, papers and records of the Issuer
and the Servicers pertaining to the revenues and receipts under the Loans and
the Underlying Notes, and to take such notes from and in regard thereto as may
be desired.
(n) The Trustee shall not be required to give any bond or surety
in respect of the execution of the said trusts and powers or otherwise in
respect of the premises.
(o) Notwithstanding anything elsewhere in this Indenture
contained, the Trustee shall have the right, but shall not be required, to
demand, in respect of the authentication of any Notes, the withdrawal of any
cash, or any action whatsoever within the purview of this Indenture, any
showings, certificates, opinions, appraisals or other information, or corporate
action or evidence thereof, in addition to that by the terms hereof required as
a condition of such action by the Trustee deemed desirable for the purpose of
establishing the right of the Issuer to the authentication of any Notes, the
withdrawal of any cash, or the taking of any other action by the Trustee.
(p) Before taking the action referred to in Article IX hereof, the
Trustee may require that a satisfactory indemnity bond be furnished for the
reimbursement of all expenses to which the Trustee may be put and to protect it
against all liability, except liability which is adjudicated to have resulted
from its negligence or willful misconduct by reason of any action so taken.
(q) All moneys received by the Trustee or any Paying Agent shall,
until used or applied or invested as herein provided, be held in trust for the
purposes for which they were received and shall be segregated from other funds
and accounts and not commingled with any other funds.
10.2 FEES, CHARGES AND EXPENSES OF TRUSTEE. The Trustee shall be
entitled to payment and reimbursement for the Trustee's Fee and all reasonable
counsel fees and other out-of-pocket expenses reasonably incurred by the Trustee
to third parties in connection with such services from moneys available therefor
in accordance with the priority set forth in Section 6.4 hereof and the Trustee
shall have the first Lien with right of payment prior to payment on any Note
upon the Trust Estate for the amount of the Trustee's Fee. The Trustee shall
have no claims against the Trust Estate for amounts owed to it hereunder other
than as specified above. The Issuer agrees to indemnify and hold the Trustee and
its officers, directors, agents and employees harmless from any loss, claim,
demand, liability or expense (including, without limitation, fees and expenses
of its attorneys) arising from or related to the acceptance of and
TRUST INDENTURE - Page 43
performance of its duties under this Indenture which do not result from the
Trustee's negligence or willful misconduct. This Section 10.2 shall survive the
termination of this Indenture or resignation or removal of the Trustee. Such
indemnity shall not be payable from the Trust Estate, except as provided in
Section 6.4, and the Trustee shall not institute any legal action, including a
bankruptcy proceeding against the Issuer to enforce such indemnity while the
Notes are outstanding.
10.3 NOTICE TO NOTEHOLDERS IF DEFAULT OCCURS. If an Event of Default
occurs of which the Trustee is by Section 10.1(l) hereof required to take notice
or if notice of an Event of Default be given as in Section 10.1(l) hereof
provided, then the Trustee shall promptly, and in any event, within three
Business Days, give written notice thereof by overnight mail to the Holders of
all Notes Outstanding, shown by the list of Noteholders required by Section 2.9
hereof to be kept at the office of the Trustee.
10.4 INTERVENTION BY TRUSTEE. In any judicial proceeding concerning the
issuance or the payment of the Notes to which the Issuer is a party and which in
the opinion of the Trustee and its counsel has a substantial bearing on the
interests of the Holders of the Notes, the Trustee may intervene on behalf of
Noteholders and shall do so if requested in writing by the owners of at least
25% of the Outstanding Note Amount, subject to receipt of satisfactory indemnity
as contemplated by Section 10.1(p).
10.5 MERGER OR CONSOLIDATION OF TRUSTEE. Any corporation or association
into which the Trustee may be converted or merged, or with which it may be
consolidated, or to which it may sell or transfer its trust business and assets
as a whole or substantially as a whole, or any corporation or association
resulting from any such conversion, sale, merger, consolidation or transfer to
which it is a party, ipso facto, shall be and become successor Trustee hereunder
and vested with all of the title to the Trust Estate and all the trusts, powers,
discretions, immunities, privileges and all other matters as was its
predecessor, without the execution or filing of any instrument or any further
act, deed or conveyance on the part of any of the parties hereto, anything
herein to the contrary notwithstanding; provided such successor Trustee accepts
the duties and responsibilities hereunder and is eligible pursuant to Section
10.9.
10.6 RESIGNATION BY TRUSTEE. The Trustee and any successor Trustee may
at any time resign from the trusts hereby created by giving sixty (60) days'
written notice by registered or certified mail to the Issuer, the Servicers, the
Supervisory Servicer, the Noteholders, the Rating Agency and by first-class mail
(postage prepaid) to the Holders of the Notes and such resignation shall take
effect upon the appointment of a successor Trustee by the Issuer pursuant to
Section 10.8 and in accordance with Section 10.9 hereof. Upon receiving such
notice of resignation, the Issuer shall promptly appoint a successor Trustee
approved by the Servicers, the Supervisory Servicer and the Required
Noteholders, such consent not to be unreasonably withheld or delayed. If no
successor Trustee shall have been so appointed and have accepted appointment
within sixty (60) days of the mailing of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee. Such court may
TRUST INDENTURE - Page 44
thereupon, after such notice, if any, as it may deem proper and prescribed,
appoint a successor Trustee.
10.7 REMOVAL OF TRUSTEE. The Trustee may be removed at any time, by the
Issuer, provided no Event of Default then exists and is continuing, by an
instrument or concurrent instruments in writing delivered to the Trustee, the
Supervisory Servicer, the Rating Agency, and the Noteholders.
10.8 APPOINTMENT OF SUCCESSOR TRUSTEE; TEMPORARY TRUSTEE. In case the
Trustee hereunder shall resign or be removed, or be dissolved, or shall be in
course of dissolution or liquidation, or otherwise become incapable of acting
hereunder, or in case it shall be taken under the control of any public officer
or officers, or of a receiver appointed by a court, a successor may be appointed
by the Issuer with the written consent of the Servicer, the Supervisory Servicer
and the Required Noteholders, such consent not to be unreasonably withheld or
delayed by an instrument in writing signed by the Issuer and a copy of which
shall be delivered personally or sent by registered mail to the Noteholders.
Nevertheless, in case of such vacancy, the Issuer by resolution may appoint a
temporary Trustee to fill such vacancy until a successor Trustee shall be
appointed in the manner above provided; and any such temporary Trustee so
appointed by the Issuer shall immediately and without further act be superseded
by the Trustee so appointed. Notice of the appointment of a successor Trustee
shall be given in the same manner as provided by Section 10.6 hereof with
respect to the resignation of a Trustee; provided in each case any successor
Trustee shall meet the eligibility requirements of Section 10.9.
10.9 CONCERNING ANY SUCCESSOR TRUSTEE. Every successor Trustee
appointed hereunder shall execute, acknowledge and deliver to its or his
predecessor and also to the Issuer, the Servicers, the Supervisory Servicer, the
Noteholders and the Rating Agency an instrument in writing accepting such
appointment hereunder, and thereupon such successor, without any further act,
deed or conveyance, shall become fully vested with all the estates, properties,
rights, powers, trusts, duties and obligations of its predecessors; but such
predecessor shall, nevertheless, on the written request of the Issuer, or of its
successor, execute and deliver an instrument transferring to such successor
Trustee all the estates, properties, rights, powers and trusts of such
predecessor hereunder; and every predecessor Trustee shall deliver all
securities and moneys held by it as the Trustee hereunder to its or his
successor, including, but not limited to, a transfer of the Loans and the
Trustee Loan Files. Should any instrument in writing from the Issuer be required
by any successor Trustee for more fully and certainly vesting in such successor
the estate, rights, powers and duties hereby vested or intended to be vested in
the predecessor, any and all such instruments in writing shall, on request, be
executed, acknowledged and delivered by the Issuer. The resignation of any
Trustee and the instrument or instruments removing any Trustee and appointing a
successor hereunder, together with all other instruments provided for in this
Article, shall be filed or recorded by the successor Trustee in each recording
office where this Indenture shall have been filed or recorded. Any successor
Trustee shall be required to (i) have corporate trust powers, (ii) have not less
than $100,000,000 in capital and surplus, (iii) be a member of the Federal
Deposit Insurance Corporation, and (iv) have a long-term unsecured debt rating
from the Rating Agency of at least "Baa3".
TRUST INDENTURE - Page 45
10.10 DESIGNATION AND SUCCESSION OF PAYING AGENTS. The Paying Agent for
the Notes shall be the Trustee. Any bank or trust company with or into which any
Paying Agent may be merged or consolidated, or to which the assets and business
of such Paying Agent may be sold, shall be deemed the successor of such Paying
Agent for the purposes of this Indenture. If the position of Paying Agent shall
become vacant for any reason, the Issuer shall, within thirty (30) days
thereafter, appoint a bank or trust company having corporate trust powers and
having a long-term unsecured debt rating from the Rating Agency of at least
"Baa3" to fill such vacancy; provided, however, that if the Issuer shall fail to
appoint such Paying Agent within said period, the Trustee shall make such
appointment, subject to the foregoing eligibility requirements. Other Paying
Agents or fiscal agents may be appointed pursuant to this Section 10.10 by the
Issuer if in its discretion additional Paying Agents or fiscal agents are deemed
advisable.
The Paying Agents shall enjoy the same protective provisions in the
performance of their duties hereunder as are specified in Section 10.1 hereof
with respect to the Trustee insofar as such provisions may be applicable.
Notice of the appointment of additional Paying Agents or fiscal agents
shall be given in the same manner as provided by Section 10.8 hereof with
respect to the appointment of a successor Trustee.
10.11 APPOINTMENT OF CO-TRUSTEE. It is the purpose of this Indenture
that there shall be no violation of any law of any jurisdiction denying or
restricting the right of banking corporations or associations to transact
business as the Trustee in such jurisdiction. It is recognized that, in case of
litigation under this Indenture, the Loans and, in particular, in case of the
enforcement thereof on default, or in case the Trustee deems that by reason of
any present or future law of any jurisdiction it may not exercise any of the
powers, rights or remedies herein granted to the Trustee or hold title to the
properties, in trust, as herein granted, or take any other action which may be
desirable or necessary in connection therewith, it may be necessary that the
Trustee appoint an additional individual or institution as a separate or
Co-Trustee.
Therefore, the Trustee shall have the right to appoint one or more
persons to act as its Co-Trustee or Co-Trustees, jointly with the Trustee, of
all or any part of the Trust Estate, and to vest in such person or persons, in
such capacity, such title to the Trust Estate, or any part thereof, and, subject
to the other provisions of this Section 10.11, such powers, duties, obligation,
rights and trusts as the Trustee may consider necessary or desirable.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the Co-Trustees, as effectively as if given
to each of them. Every instrument appointing any Co-Trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument or appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Indenture,
specifically including every provision of this Indenture relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
TRUST INDENTURE - Page 46
Any Co-Trustee may, at any time, constitute the Trustee, its agent or
attorney-in-fact, with full power and authority, to the extent not prohibited by
law, to do any lawful act under or in respect of this Agreement on its behalf
and in its name. If any Co-Trustee shall die, become incapable of acting, resign
or be removed, all of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Trustee, to the extent permitted by law, without
the appointment of a new or successor Trustee. No Co-Trustee shall be required
to satisfy the eligibility requirements for a successor Trustee set forth in
Section 10.9 hereunder and no notice to the Noteholders of the appointment of a
Co-Trustee shall be required.
In the event that the Trustee appoints an additional individual or
institution as a separate or Co-Trustee, each and every remedy, power, right,
claim, demand, cause of action, immunity, estate, title, interest and Lien
expressed or intended by this Indenture to be exercised by or vested in or
conveyed to the Trustee with respect thereto shall be exercisable by and vest in
such separate or Co-Trustee but only to the extent necessary to enable such
separate or Co-Trustee to exercise such powers, rights and remedies, and every
covenant and obligation necessary to the exercise thereof by such separate or
Co-Trustee shall run to and be enforceable by either of them.
Should any instrument in writing from the Issuer be required by the
separate or Co-Trustee so appointed by the Trustee for more fully and certainly
vesting in and confirming to him or it such properties, rights, powers, trusts,
duties and obligations, any and all such instruments in writing shall, on
request, be executed, acknowledged and delivered by the Issuer. In case any
separate or Co-Trustee, or a successor to either, shall die, become incapable of
acting, resign or be removed, all the estates, properties, rights, powers,
trusts, duties and obligations of such separate or Co-Trustee, so far as
permitted by law, shall vest in and be exercised by the Trustee until the
appointment of a new Trustee or successor to such separate or Co-Trustee.
ARTICLE XI
SUPPLEMENTAL INDENTURES
11.1 SUPPLEMENTAL INDENTURES; CONSENT OF NOTEHOLDERS. (a) The Issuer
and the Trustee may, with notice to all of the Noteholders and the Rating
Agency, enter into an indenture or indentures supplemental to this Indenture for
the following purposes:
(1) To specify and determine any matters and things relative to
the Notes which are not contrary to or inconsistent with this Indenture
and which shall not materially adversely affect the interests of the
Noteholders;
(2) To cure any defect, omission, conflict, or ambiguity in this
Indenture or between the terms and provisions hereof and any other
document executed or delivered in connection herewith;
(3) To grant to or confer upon the Trustee for the benefit of the
Noteholders any additional rights, remedies, powers, authority, or
security which may lawfully be granted
TRUST INDENTURE - Page 47
or conferred and which are not contrary to or inconsistent with this
Indenture as theretofore in effect;
(4) To add to the covenants and agreements of the Issuer in this
Indenture other covenants and agreements to be observed by the Issuer
which are not contrary to or inconsistent with this Indenture as
theretofore in effect;
(5) To add to the limitations and restrictions in this Indenture
other limitations and restrictions to be observed by the Issuer which
are not contrary to or inconsistent with this Indenture as theretofore
in effect;
(6) To confirm, as further assurance, any pledge under, and the
subjection to any claim, Lien or pledge created or to be created by
this Indenture of the revenues arising from the pledge of any moneys,
securities, funds or other parts of the Trust Estate;
(7) To amend or modify any provisions of this Indenture required
by the Rating Agency to maintain the rating of the Notes;
(8) To amend or modify any provisions of this Indenture required
by the Trustee, DTC or DTC's Nominee to facilitate the book entry
issuance of the Notes or the issuance of Definitive Notes as
contemplated herein; or
(9) To amend or modify any provisions of this Indenture, so long
as such amendment or modification does not materially adversely affect
the interests of the Noteholders (which may be evidenced by an Opinion
of Independent Counsel delivered to the Trustee).
(b) The Issuer and the Trustee may, with the written consent of
the Required Noteholders and notice to all of the Noteholders and the Rating
Agency, enter into an indenture or indentures supplemental to this Indenture for
purposes other than those specified in Section 11.1(a); provided, however, that
nothing contained in this Section shall permit, or be construed as permitting,
without the consent of the Holders of all Notes Outstanding, any change of the
Maturity Date or other due date of the principal of or any installment of the
interest on any Note issued hereunder, or a reduction in the principal amount of
any Note or the Remittance Rate or Default Rate thereon, or a privilege or
priority of any Note or Notes over any other Note or Notes, a reduction in the
Outstanding Note Amount required for consent to such supplemental indenture or
for any waiver of compliance with the provisions of this Indenture or Events of
Default and their consequences, any modification of this Section 11.1(b) or
Section 11.1(c) or any modification of this Indenture that would cause the
Rating Agency to downgrade the rating of the Notes unless the Noteholders have
unanimously consented to such modification and downgrade.
(c) With respect to each supplemental indenture, the Trustee shall
be provided a certificate of an Authorized Officer of the Issuer and, if
requested by the Trustee, an Opinion of Counsel to the effect that the
supplemental indenture is duly authorized under this Article XI and
TRUST INDENTURE - Page 48
all conditions to its entry have been satisfied, and the Trustee shall be fully
protected in its execution and delivery of the supplemental indenture in
reliance on such certificate and, if requested, by the Trustee, such opinion. If
at any time the Issuer shall request the Trustee to enter into any such
supplemental indenture for any of the purposes of Section 11.1(b), the Trustee
shall, upon being satisfactorily indemnified with respect to expenses, cause
notice of the proposed execution of such supplemental indenture to be mailed by
registered or certified mail to each Holder of a Note as shown on the list of
Noteholders required by Section 2.9 hereof. Such notice shall briefly set forth
the nature of the proposed supplemental indenture and shall include a copy of
the proposed supplemental indenture. Upon the execution of any supplemental
indenture as in this Section permitted and provided, this Indenture shall be and
be deemed to be modified and amended in accordance therewith.
11.2 COPY OF SUPPLEMENTAL INDENTURES. The Trustee shall provide within
five (5) Business Days following the effective date thereof a copy of any
Supplemental Indenture executed to each of the Servicers, the Supervisory
Servicer, the Noteholders and the Rating Agency.
11.3 AMENDMENTS TO TRANSACTION DOCUMENTS. The Trustee may not enter
into or consent to an amendment to any other Transaction Document, except as
expressly permitted therein, without the consent of the Required Noteholders.
ARTICLE XII
MISCELLANEOUS
12.1 CONSENTS, ETC., OF NOTEHOLDERS. Any consent, request, direction,
approval, objection or other instrument required by this Indenture to be signed
and executed by the Noteholders may be in any number of concurrent writings of
similar tenor and may be signed or executed by such Noteholders in person or by
agent thereof appointed in writing. Proof of the execution of any such consent,
request, direction, approval, objection or other instrument or of the writing
appointing any such agent and of the ownership of Notes, if made in the
following manner, shall be sufficient for any of the purposes of this Indenture,
and shall be conclusive in favor of the Trustee and any Paying Agent with regard
to any action taken by it under such request or other instrument, namely:
(a) The fact and date of the execution by any person of any such
writing may be proved by the certificate of any officer in any jurisdiction who
by law has power to take acknowledgments within such jurisdiction that the
person signing such writing acknowledged before him the execution thereof, or by
an affidavit of any witness to such execution.
(b) The fact of ownership of Notes and the amount or amounts,
numbers and other identification of Notes, and the date of holding the same
shall be proved by the registration books of the Issuer maintained by the
Trustee pursuant to Section 2.9 hereof.
TRUST INDENTURE - Page 49
12.2 LIMITATION OF RIGHTS; NON-RECOURSE OBLIGATIONS. With the exception
of rights herein expressly conferred, nothing expressed or mentioned in or to be
implied from this Indenture or the Notes is intended or shall be construed to
give to any Person other than the parties hereto, and the Holders of the Notes,
any legal or equitable right, remedy or claim under or in respect to this
Indenture or any covenants, conditions and provisions herein contained; this
Indenture and all of the covenants, conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of the parties
hereto and the Holders of the Notes as herein provided. THE NOTES ARE
NON-RECOURSE OBLIGATIONS OF THE ISSUER AND NEITHER THE TRUSTEE NOR THE
NOTEHOLDERS SHALL HAVE ANY RIGHTS TO ENFORCE THE PAYMENT OR PERFORMANCE OF THE
ISSUER'S OBLIGATIONS HEREUNDER OR UNDER THE TRANSACTION DOCUMENTS AGAINST THE
PARTNERS OR AFFILIATES OF THE ISSUER OR THEIR RESPECTIVE ASSETS. NO OFFICER,
AGENT OR EMPLOYEE OF THE ISSUER OR OF ANY AFFILIATE OF THE ISSUER, SHALL IN ANY
EVENT BE SUBJECT TO ANY PERSONAL LIABILITY FOR ANY PAYMENTS OR OTHER AMOUNTS DUE
IN RESPECT OF THE NOTES OR IN RESPECT OF ANY OBLIGATIONS OF THE PARTIES UNDER
ANY OF THE TRANSACTION DOCUMENTS.
12.3 SEVERABILITY. If any one or more of the covenants, agreements,
provisions or terms of this Indenture shall be held invalid for any reason
whatsoever, then such covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or terms of this
Indenture and shall in no way affect the validity or enforceability of the other
covenants, agreements, provisions or terms of this Indenture. The parties hereto
further agree that the holding by any court of competent jurisdiction that any
remedy pursued by the Trustee hereunder is unavailable or unenforceable shall
not affect in any way the ability of the Trustee to pursue any other remedy
available to it.
12.4 NOTICES. Any notice, request, complaint, demand, communication or
other paper shall be in writing and sufficiently given if addressed to the
appropriate Notice Address and delivered by hand delivery or sent by nationally
recognized express courier, or mailed by registered mail, postage prepaid, or
transmitted by telecopy and shall be effective upon receipt, except when
telecopied, in which case, any such communication shall be effective upon
telecopy against receipt of answer back or written confirmation thereof. The
Issuer and the Trustee may, by notice given hereunder, designate any further or
different addresses to which subsequent notices, certificates or other
communications shall be sent.
12.5 PAYMENTS DUE ON SATURDAYS, SUNDAYS AND HOLIDAYS. In any case where
the due date of interest on or principal of the Notes or the date fixed for
redemption of any Note shall be other than a Business Day, then payment of
interest or principal may be made on the next Business Day with the same force
and effect as if made on the due date or the date fixed for redemption.
12.6 COUNTERPARTS. This Indenture may be simultaneously executed in
several counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
TRUST INDENTURE - Page 50
12.7 APPLICABLE PROVISIONS OF LAW. THIS INDENTURE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
12.8 CAPTIONS. The captions or headings in this Indenture are for
convenience only and in no way define, limit or describe the scope or intent of
any provisions or Sections of this Indenture.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
TRUST INDENTURE - Page 51
IN WITNESS WHEREOF, the Issuer has caused this Indenture to be executed
on its behalf by its General Partner and the Trustee, to evidence its acceptance
of the trusts created hereunder, has caused this Indenture to be executed as of
the date first written above.
PMC JOINT VENTURE, L.P. 2002-1
By: PMC Joint Venture LLC 2002-1,
its General Partner
By:
--------------------------------------------
Xxx X. Xxxxx, Executive Vice President
BNY MIDWEST TRUST COMPANY,
as Trustee
By:
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
TRUST INDENTURE - Page 52
EXHIBIT A
TO TRUST INDENTURE
FORM OF NOTE
THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION ("BLUE SKY LAWS") OF THE UNITED STATES. BY ITS ACCEPTANCE OF THIS
NOTE THE HOLDER OF THIS NOTE IS DEEMED TO REPRESENT TO THE TRUSTEE THAT IT (I)
IS A "QUALIFIED INSTITUTIONAL BUYER" WITHIN THE MEANING OF RULE 144A UNDER THE
ACT (A "QIB") AND IS ACQUIRING SUCH NOTE FOR ITS OWN ACCOUNT (AND NOT FOR THE
ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE
QIBS) TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A OR (II) IS OTHERWISE ACQUIRING THIS NOTE IN A TRANSACTION EXEMPT FROM
THE ACT AND APPLICABLE BLUE SKY LAWS.
NO RESALE, PLEDGE OR OTHER TRANSFER OF THIS NOTE MAY BE MADE BY ANY PERSON
UNLESS (I) SO LONG AS THIS NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE ACT, SUCH RESALE, PLEDGE OR OTHER TRANSFER IS MADE TO A PERSON WHOM
THE TRANSFEROR REASONABLY BELIEVES AFTER DUE INQUIRY IS A QIB ACTING FOR ITS OWN
ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT FOR
OTHERS (WHICH OTHERS ALSO ARE QIBS) TO WHOM NOTICE IS GIVEN THAT THE RESALE,
PLEDGE OR TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A OR (II) SUCH RESALE,
PLEDGE OR OTHER TRANSFER IS OTHERWISE MADE IN A TRANSFER EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE ACT AND APPLICABLE BLUE SKY LAWS, IN WHICH CASE
(A) THE TRUSTEE SHALL REQUIRE THAT BOTH THE PROSPECTIVE TRANSFEROR AND THE
PROSPECTIVE TRANSFEREE CERTIFY TO THE ISSUER IN WRITING THE FACTS SURROUNDING
SUCH TRANSFER, WHICH CERTIFICATION SHALL BE IN THE FORM OF EITHER EXHIBIT D-1 OR
EXHIBIT D-2 TO THE INDENTURE OR OTHERWISE IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE ISSUER, AND (B) IF THE CERTIFICATE IS NOT IN THE FORM OF
EXHIBIT D-1 OR EXHIBIT D-2 TO THE INDENTURE, THE TRUSTEE MAY REQUEST A WRITTEN
OPINION OF COUNSEL (WHICH SHALL NOT BE AT THE EXPENSE OF THE TRUSTEE)
SATISFACTORY TO
EXHIBIT A
Form of Note - Page 1
THE TRUSTEE TO THE EFFECT THAT SUCH TRANSFER WILL NOT VIOLATE THE ACT OR
APPLICABLE BLUE SKY LAWS. ANY ATTEMPTED TRANSFER IN CONTRAVENTION OF THE
IMMEDIATELY PRECEDING RESTRICTIONS WILL BE VOID AB INITIO AND THE PURPORTED
TRANSFEROR WILL CONTINUE TO BE TREATED AS THE OWNER OF THE NOTES FOR ALL
PURPOSES.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No.: __________ $[ ]
PMC JOINT VENTURE, L.P. 2002-1
LOAN-BACKED FIXED RATE NOTES
CUSIP
MATURITY DATE ISSUE DATE NOTE RATE NUMBER
------------- ---------- --------- ------
April 15, 2023 April __, 2002 6.67% 69345G AA 1
REGISTERED HOLDER:
PRINCIPAL SUM: $[ ]
PMC JOINT VENTURE, L.P. 2002-1, a Delaware limited partnership (herein
called the "ISSUER"), for value received, hereby promises to pay to the
registered owner identified above or registered assigns (the "HOLDER" or
"NOTEHOLDER"), on or before the Maturity Date set forth above (subject to any
right of prior payment hereinafter mentioned), the principal sum identified
above in lawful money of the United States of America, and to pay interest
thereon in like money, until payment of such principal sum, as set forth herein.
Pursuant to the terms of the Trust Indenture dated as of April 3, 2002 (as the
same may be amended and supplemented, the "INDENTURE") between the Issuer and
BNY MIDWEST TRUST COMPANY, as Trustee (the "TRUSTEE"), the Issuer shall pay the
Holder on the fifteenth day of each month, commencing on April 15, 2002 and
ending on the Maturity Date set forth above or the date this Note is due upon
EXHIBIT A
Form of Note - Page 2
acceleration (each such date herein called a "PAYMENT DATE"), the Principal
Distribution Amount (as defined in the Indenture) and accrued and unpaid
interest thereon. To the extent not otherwise defined herein, all capitalized
terms shall have the meanings set forth in the Indenture. In accordance with the
terms of the Indenture, this Note will bear interest at a per annum rate equal
to 6.67%. The term "INTEREST ACCRUAL PERIOD" means, with respect to a Payment
Date, the period from and including the immediately prior Payment Date to but
excluding the Payment Date first referred to in this definition (or, in the case
of the first Payment Date, from and including the Closing Date to but excluding
the first Payment Date). Principal and interest payments will be made on each
Payment Date from funds on deposit under the Indenture.
Payments to the Holder shall be made by wire transfer of immediately
available funds to the account of such Noteholder and without presentation of
the Note or the making of any notations thereon.
This Note is one of a duly authorized issue of notes of the Issuer
designated as PMC Joint Venture, L.P. 2002-1 Loan-Backed Fixed Rate Notes
(herein called the "NOTES"), in the initial aggregate principal amount of
$63,453,688 issued under and secured by the Indenture. Reference is hereby made
to the Indenture and all indentures supplemental thereto for a description of
the rights thereunder of the owners of the Notes, of the nature and extent of
the security, of the rights, duties and immunities of the Trustee and of the
rights and obligations of the Issuer thereunder, to all of the provisions of
which Indenture the holder of this Note, by acceptance hereof, assents and
agrees.
The Issuer hereby certifies that all of the conditions, things and acts
required to exist, to have happened and to have been performed precedent to and
in the issuance of this Note do exist, have happened and have been performed in
due time, form and manner as required by the applicable laws.
This Note shall not be entitled to any benefit under the Indenture, or
become valid or obligatory for any purpose, until the certificate of
authentication hereon endorsed shall have been signed by the Trustee.
The Notes are issuable only as fully registered Notes without coupons.
Subject to the limitations and upon payment of the charges, if any, provided in
the Indenture, Notes may be exchanged at the Corporate Trust Office of the
Trustee for a like aggregate principal amount of Notes of the same series of
other authorized denominations.
The owner of this Note shall have no right to enforce the provisions of
the Indenture or to institute action to enforce the covenants therein, or to
take any action with respect to any Event of Default under the Indenture, or to
institute, appear in or defend any suit or other proceeding with respect
thereto, except as provided in the Indenture.
EXHIBIT A
Form of Note - Page 3
The Notes are subject to redemption on any Payment Date on or after the
date on which the then Outstanding Note Amount is less than 10% of the
Outstanding Note Amount on the Closing Date, in whole, but not in part, at the
option of the Issuer at a redemption price equal to 100% of the Outstanding Note
Amount plus accrued and unpaid interest thereon to the date of redemption at the
Remittance Rate to the redemption date.
If an Event of Default shall occur and be continuing with respect to
the Notes, and if the Required Noteholders have requested the Trustee to
accelerate the Notes, the Trustee shall declare the outstanding principal of all
the Notes, accrued and unpaid interest thereon to be immediately due and
payable, by a notice in writing to the Issuer, the Noteholders, the Servicers
and the Supervisory Servicer, and upon any such declaration such principal and
interest shall become immediately due and payable. Under certain circumstances
specified in the Indenture, such amounts shall immediately become due and
payable without any such declaration. The Trustee may sell the Trust Estate or
retain the Trust Estate intact, in either case in the manner and with the effect
provided in the Indenture.
The Indenture permits the amendment thereof and the modification of the
rights and obligations of the Issuer and the rights of Holders of the Notes
under the Indenture at any time by the Issuer with the consent of the Required
Noteholders (as defined in the Indenture) and in certain instances only with the
consent of all Noteholders. The Indenture also contains provisions permitting
Holders of specified percentages in aggregate outstanding principal amount, on
behalf of Holders of all the Notes, to waive compliance by the Issuer with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note (or any one or more predecessor Notes) shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent or waiver is made upon this Note.
The Indenture contains provisions permitting the Issuer and the Trustee
to execute supplemental indentures adding provisions to, or changing or
eliminating any of the provisions of, the Indenture, subject to the limitations
set forth in the Indenture.
The term "ISSUER" as used in this Note includes any successor to the
Issuer under the Indenture. This Note is nonrecourse to the Issuer's partners.
This Note is transferable by the registered owner hereof, in person, or
by its attorney duly authorized in writing, at the Corporate Trust Office of the
Trustee, but only in the manner, subject to the limitations and upon payment of
the charges provided in the Indenture, and upon surrender and cancellation of
this Note. Upon such transfer a new fully registered Note or Notes, of the same
series and of authorized denomination or denominations, for the same aggregate
principal amount, will be issued to the transferee in exchange herefor. The
Issuer and the
EXHIBIT A
Form of Note - Page 4
Trustee may treat the registered owner hereof as the absolute owner hereof for
all purposes, and the Issuer and the Trustee shall not be affected by any notice
to the contrary.
THIS NOTE IS A NON-RECOURSE OBLIGATION OF THE ISSUER AND NEITHER THE
TRUSTEE NOR THE NOTEHOLDERS SHALL HAVE ANY RIGHTS TO ENFORCE THE PAYMENT OR
PERFORMANCE OF THE ISSUER'S OBLIGATIONS HEREUNDER OR UNDER THE TRANSACTION
DOCUMENTS AGAINST THE PARTNERS OR AFFILIATES OF THE ISSUER OR THEIR RESPECTIVE
ASSETS. NO OFFICER, AGENT OR EMPLOYEE OF THE ISSUER OR OF ANY AFFILIATE OF THE
ISSUER, SHALL IN ANY EVENT BE SUBJECT TO ANY PERSONAL LIABILITY FOR ANY PAYMENTS
OR OTHER AMOUNTS DUE IN RESPECT OF THE NOTES OR IN RESPECT OF ANY OBLIGATIONS OF
THE PARTIES UNDER ANY OF THE TRANSACTION DOCUMENTS.
THIS NOTE AND THE INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF TEXAS AND THE APPLICABLE LAWS OF THE UNITED STATES.
IN WITNESS WHEREOF, PMC JOINT VENTURE, L.P. 2002-1 has caused this Note
to be executed in its name by the manual or facsimile signature of the
President, any Executive Vice President or the Chief Financial Officer of its
General Partner and attested by the manual or facsimile signature of the
Secretary or Assistant Secretary of its General Partner, all as of the Issue
Date set forth above.
PMC JOINT VENTURE, L.P. 2002-1
By: PMC Joint Venture LLC 2002-1,
its General Partner
By: ___________________________________
Xxxxx X. Xxxxxx
Chief Financial Officer
Attest:
By:________________________________
Xxx X. Xxxxx, Assistant Secretary
EXHIBIT A
Form of Note - Page 5
CERTIFICATE OF AUTHENTICATION
This is one of the Notes described in the within-mentioned Indenture
and has been authenticated on this date: ________, _______.
BNY MIDWEST TRUST COMPANY,
as Trustee
By:
--------------------------------------
Authorized Signatory
EXHIBIT A
Form of Note - Page 6
[FORM OF ASSIGNMENT]
For value received, the undersigned do(es) hereby sell, assign and
transfer unto ________________________________ the within Note and do(es) hereby
irrevocably constitute and appoint ____________________________ attorney, to
transfer the same on the books of the Trustee, with full power of substitution
in the premises.
Dated:
------------------- -----------------------------------
(Signature)
Social Security Number,
Taxpayer Identification
Number or other Identifying
Number of Assignee:
---------------------------------
Notice: The signature(s) to this Assignment must correspond with the
name(s) as written on the face of the within Note in every particular, without
alteration or enlargement or any change whatsoever.
EXHIBIT A
Form of Note - Page 7
EXHIBIT B
TO
TRUST INDENTURE
LOAN SCHEDULE
EXHIBIT B
LOAN SCHEDULE - Page 1
EXHIBIT B-1
TO
TRUST INDENTURE
SUBSTITUTE LOAN SCHEDULE
Servicer
LOAN #
Business Description
Business Name
City
ST
Original Principal Balance
Current Principal Balance
Interest Rate
Monthly Payment
Property Value at Origination
Original LTV
Current LTV
DSCR
Original Loan Date
Maturity Date
Remaining Maturity
Original Term to Maturity
Seasoning
EXHIBIT B
LOAN SCHEDULE - Page 2
EXHIBIT C
TO
TRUST INDENTURE
FORM OF MONTHLY TRUSTEE REPORT
EXHIBIT C
FORM OF MONTHLY TRUSTEE REPORT - Page 1
EXHIBIT D-1
TO
TRUST INDENTURE
FORM OF TRANSFEREE'S LETTER
[TRANSFEREE'S LETTERHEAD]
[DATE]
Ladies and Gentlemen:
The undersigned purchaser (the "PURCHASER") understands that the
purchase of the above-referenced Notes may be made only by institutions which
are "Accredited Investors" under Regulation D, as promulgated under the
Securities act of 1933, as amended (the "SECURITIES ACT"), which includes banks,
savings and loan associations, registered brokers and dealers, insurance
companies, investment companies and organizations described in Section 501(c)(3)
of the Internal Revenue Code of 1986, as amended (the "CODE"), corporations,
business trusts and partnerships, not formed for the specific purpose of
acquiring the Notes offered, with total assets in excess of $5,000,000. The
undersigned represents on behalf of the Purchaser that the Purchaser is an
"Accredited Investor" within the meaning of such definition. The Purchaser is
urged to review carefully the responses, representations and warranties it is
making herein.
Representations and Warranties
The Purchaser makes the following representations and warranties in
order to permit PMC Joint Venture, L.P. 2002-1 (the "ISSUER"), PMC Capital, Inc.
("PMC"), PMC Commercial Trust ("PMCT") and Banc One Capital Markets, Inc. (the
"PLACEMENT AGENT") to determine the Purchaser's suitability as a purchaser of
Notes and to determine that the exemption from registration relied upon by the
Issuer under Section 4(2) of the Securities Act is available to it.
1. The Purchaser understands that the Notes have not been, and
throughout their term will not be, registered or qualified under the Securities
Act or the securities law of any state and may by resold (which resale is not
currently contemplated) only if registered pursuant to the provisions of the
Securities Act or if an exemption from registration under the Securities and
other applicable state securities laws are available, that none of the Issuer,
the Trustee or the Sellers is required to register the Notes under the
Securities Act or any applicable state securities laws and that any transfer
must comply with Section 2.9 of the Trust Indenture, dated as of April 3, 2002
(the "INDENTURE"), between the Issuer and the Trustee.
EXHIBIT D-1
FORM OF TRANSFEREE'S LETTER - Page 1
2. The Purchaser will comply with all applicable federal and state
securities laws in connection with any subsequent resale of the Notes.
3. The Purchaser is an "accredited investor" within the meaning of Rule
501(a) under the Securities Act and a sophisticated institutional investor and
has knowledge and experience in financial and business matters (and, in
particular, in such matters related to securities similar to the Notes) and is
capable of evaluating the merits and risks of its investment in the Notes and is
able to bear the economic risk of such investment. The Purchaser has been given
such information concerning the Notes, the Issuer, the Servicers and the Trustee
as it has requested.
4. The Purchaser is acquiring the Notes as principal for its own
account (or for the account of one or more other sophisticated institutional
investors for which it is acting as duly authorized fiduciary or agent) for the
purpose of investment and not with a view to or for sale in connection with any
distribution thereof, subject nevertheless to any requirement of law that the
disposition of the Purchaser's property shall at all times be and remain within
its control.
5. Neither the Purchaser nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of any Notes, any interest in
any Notes or any other similar security of the Issuer to, or solicited any offer
to buy or accept a transfer, pledge or other disposition of any Notes, any
interest in any Notes or any other similar security of the Issuer with, any
person in any manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other actions which would
constitute a distribution of the Notes under the Securities Act or which would
render the disposition of any Notes a violation of Section 5 of the Securities
Act or any state securities law, require registration or qualification pursuant
thereto, or require registration of the Issuer under the 1940 Act nor will it
act, nor has it authorized or will it authorize any person to act in such manner
with respect to the Notes.
6. The Purchaser has reviewed the Private Placement Memorandum with
respect to the Notes dated April 3, 2002, (the "Private Placement Memorandum"),
and the agreements and other materials referred to therein, and has had the
opportunity to ask questions and receive answers concerning the terms and
conditions of the transaction contemplated by the Private Placement Memorandum
and to obtain additional information necessary to verify the accuracy and
completeness of any information furnished to the Purchaser or to which the
Purchaser had access.
7. [The Purchaser will not acquire the Notes with the assets of any
"employee benefit plan" as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") which is subject to Title I of
ERISA or any "plan" as defined in Section 4975 of the Code] [In the event that
the Purchaser is using funds to purchase the Notes that constitute assets of one
or more employee benefit plans, such Purchaser shall advise the Issuer in
writing of such source of funds and the Issuer shall advise the Purchaser in
writing
EXHIBIT D-1
FORM OF TRANSFEREE'S LETTER - Page 2
whether the Issuer is or is not a party in interest with respect to any
employee benefit plan disclosed to the Issuer by the Purchaser.](1)
8. The Purchaser understands that the Notes will bear a legend
substantially as set forth in the form of Note included as Exhibit A to the
Indenture.
9. The Purchaser understands that there is no market, nor is there any
assurance that a market will develop, for the Notes and that neither the Issuer
nor any other Person has any obligation to make or facilitate any such market
(or to otherwise repurchase the Notes from the Purchaser) under any
circumstances.
10. The Purchaser has consulted with its own legal counsel, independent
accountants and financial advisors to the extent it deems necessary regarding
the tax consequences to it of ownership of the Notes, and is not purchasing the
Notes in reliance on any representations of the Issuer, the Sellers, the
Placement Agent or any other Person or its counsel with respect to tax matters
except for the tax opinion delivered pursuant to Section 2.6(a)(iv).
11. The Purchaser agrees that it will obtain from any subsequent
purchaser of the Notes substantially the same representations, warranties and
agreements contained in the foregoing paragraphs 1 through 10 and in this
paragraph 11.
Capitalized terms used herein that are not otherwise defined shall have
the meanings ascribed thereto in the Indenture or the Private Placement
Memorandum, as the case may be.
The representations and warranties contained herein shall be binding
upon the successors of the undersigned.
Executed at _________________, this ____ day of ____________, _______.
Purchaser's Name (Print)
By:
-----------------------------------
Name:
-----------------------------
Title:
----------------------------
-------------
(1) Purchaser required to select applicable sentence.
EXHIBIT D-1
FORM OF TRANSFEREE'S LETTER - Page 3
-----------------------------------------
Address of Purchaser
-----------------------------------------
Purchaser's Taxpayer Identification Number
EXHIBIT D-1
FORM OF TRANSFEREE'S LETTER - Page 4
EXHIBIT D-2
TO
TRUST INDENTURE
FORM OF TRANSFEREE'S LETTER
[TRANSFEREE'S LETTERHEAD]
[DATE]
Ladies and Gentlemen:
The undersigned purchaser (the "PURCHASER") is today purchasing in a
private resale from _____________________ (the "TRANSFEROR") $_____________
aggregate principal amount of the above-captioned Notes, issued pursuant to the
Indenture, dated as of April 3, 2002 (the "INDENTURE"), between PMC Joint
Venture, L.P. 2002-1 (the "ISSUER") and BNY Midwest Trust Company, as trustee
(the "TRUSTEE").
In connection with the purchase of the Notes, the Purchaser hereby
represents and warrants to each of you as follows:
1. The Purchaser understands that the Notes have not been registered
under the Securities Act of 1933, as amended (the "SECURITIES ACT"), or the
securities laws of any state.
2. The Purchaser is acquiring the Notes for its own account only for
investment and not for any other person, and not with a view to, or for resale
in connection with, a distribution that would constitute a violation of the
Securities Act or any state securities laws (subject to the understanding that
disposition of the Purchaser's property will remain at all times within its
control). The Purchaser is not an affiliate of PMC Capital, Inc. ("PMC"), PMC
Commercial Trust ("PMCT"), the Issuer, the Trustee, any custodian of the Notes
or any of their respective affiliates.
3. The Purchaser agrees that the Notes must be held indefinitely by it
unless (i) the Notes are subsequently registered under the Securities Act or
(ii) an exemption from the registration requirements of the Securities Act is
available.
4. The Purchaser agrees that if at some time it wishes to dispose of or
exchange any of the Notes, it will not transfer or exchange any of the Notes
unless such transfer or exchange is in accordance with the provisions of Section
2.9 of the Indenture.
EXHIBIT D-2
FORM OF TRANSFEREE'S LETTER - Page 1
5. The Purchaser is a "qualified institutional buyer" as defined in
Rule 144A of the Securities Act and has completed and is delivering herewith
either of the forms of certification to that effect attached as Annexes hereto,
it is aware that the sale to it is being made in reliance on Rule 144A, it is
acquiring the Notes for its own account or for the account of a qualified
institutional buyer and it understands that such Notes may be resold, pledged or
transferred only (i) to a person who the Transferor reasonably believes is a
qualified institutional buyer that purchasers for its own account or for the
account of a qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A or (ii)
pursuant to another exemption from registration under the Securities Act and
applicable state securities laws.
6. Neither the Purchaser nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of any Notes, any interest in
any Notes or any other similar security of the Issuer to, or solicited any offer
to buy or accept a transfer, pledge or other disposition of any Notes, any
interest in any Notes or any other similar security of the Issuer with, any
person in any manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action, which would
constitute a distribution of the Notes under the Securities Act or which would
render the disposition of any Notes a violation of Section 5 of the Securities
Act or which would render the disposition of any Note a violation of Section 5
of the Securities Act or any state securities law, require registration or
qualification pursuant thereto, or require registration of the Issuer, the
Sellers or the Transferor as an "investment company" under the Investment
Company Act of 1940, as amended, nor will it act, nor has it authorized or will
it authorize any person to act in such manner with respect to the Notes.
7. [The Purchaser will not acquire the Notes with the assets of any
"employee benefit plan" as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") which is subject to Title I of
ERISA or any "plan" as defined in Section 4975 of the Code.] [In the event that
the Purchaser is using funds to purchase the Notes that constitute assets of one
or more employee benefit plans, such Purchaser shall advise the Issuer in
writing of such source of funds and the Issuer shall advise the Purchaser in
writing whether the Issuer is or is not a party in interest with respect to any
employee benefit plan disclosed to the Issuer by the Purchaser.] (1)
8. The Purchaser understands that there is no market, nor is there any
assurance that a market will develop, for the Notes and that neither the Issuer,
PMC, PMCT nor the Transferor
--------------
(1) Purchaser required to select applicable sentence.
EXHIBIT D-2
FORM OF TRANSFEREE'S LETTER - Page 2
has any obligation to make or facilitate any such market (or to otherwise
repurchase the Notes from the Purchaser) under any circumstances.
9. The Purchaser has consulted with its own legal counsel, independent
accountants and financial advisors to the extent it deems necessary regarding
the tax consequences to it of ownership of the Notes, is aware that its taxable
income with respect to the Notes in any accounting period may not correspond to
the cash flow (if any) from the Notes for such period, and is not purchasing the
Notes in reliance on any representations of the Issuer, PMC, PMCT, or their
counsel with respect to tax matters except for the tax opinion delivered
pursuant to Section 2.6(a)(iv).
10. The Purchaser has reviewed the Private Placement Memorandum with
respect to the Notes dated April 3, 2002, (the "PRIVATE PLACEMENT MEMORANDUM"),
and the agreements and other materials referred to therein, and has had the
opportunity to ask questions and receive answers concerning the terms and
conditions of the transaction contemplated by the Private Placement Memorandum
and to obtain additional information necessary to verify the accuracy and
completeness of any information furnished to the Purchaser or to which the
Purchaser had access.
11. The Purchaser understands that the Notes will bear a legend
substantially as set forth in the form of Note included as Exhibit A, as the
case may be, to the Indenture.
12. The Purchaser hereby further agrees to be bound by all the terms
and conditions of the Notes as provided in the Indenture.
13. If the Purchaser sells any of the Notes, the Purchaser will obtain
from any subsequent purchaser substantially the same representations contained
in this Representation Letter.
Capitalized term used herein that are not otherwise defined shall have
the meanings ascribed thereto in the Indenture or the Private Placement
Memorandum, as the case may be.
The representations and warranties contained herein shall be binding
upon the successors of the undersigned.
Executed at ___________________, this ____ day of ___________, ______.
-------------------------------------------
Purchaser's Name (Print)
EXHIBIT D-2
FORM OF TRANSFEREE'S LETTER - Page 3
By:
---------------------------------------
Name:
---------------------------------
Title:
--------------------------------
-----------------------------------------
Address of Purchaser
-----------------------------------------
Purchaser's Taxpayer Identification Number
EXHIBIT D-2
FORM OF TRANSFEREE'S LETTER - Page 4
ANNEX 1
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[FOR TRANSFEREES OTHER THAN REGISTERED INVESTMENT COMPANIES]
The undersigned (the "PURCHASER") hereby certifies as follows to the
addressees of the Rule 144A Representation Letter to which this certification is
attached with respect to the Notes described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Purchaser.
2. In connection with purchases by the Purchaser, the Purchaser is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("RULE 144A") because (i) the Purchaser owned
and/or invested on a discretionary basis $__________(1) in securities (except
for the excluded securities referred to below) as of the end of the Purchaser's
most recent fiscal year (such amount being calculated in accordance with Rule
144A) and (ii) the Purchaser satisfies the criteria in the category marked
below.
____ Corporation etc. The Purchaser is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
____ Bank. The Purchaser (a) is a national bank or banking
institution organized under the laws of any State, territory
or the District of Columbia, the business of which is
substantially confined to banking and is supervised by the
State or territorial banking commission or similar official or
is a foreign bank or equivalent institution, and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which are
attached hereto.
____ Savings and Loan. The Purchaser (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar
--------
(1) Purchaser must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Purchaser is a dealer, and, in that
case, Purchaser must own and/or invest on a discretionary basis at
least $10,000,000 in securities unless such dealer is acting in a
riskless principal transaction on behalf of a qualified institutional
buyer.
EXHIBIT D-2
FORM OF TRANSFEREE'S LETTER - Page 5
institution, which is supervised and examined by a State or
Federal authority having supervision over any such
institutions or is a foreign savings and loan association or
equivalent institution and (b) has an audited net worth of at
least $25,000,000 as demonstrated in its latest annual
financial statements, a copy of which are attached hereto.
____ Dealer. The Purchaser is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934 acting other
than in a riskless principal transaction on behalf of a
qualified institutional buyer.
____ Dealer (Riskless Principal Transaction). The Purchaser is a
dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934 acting in a riskless principal
transaction on behalf of a qualified institutional buyer.
____ Insurance Company. The Purchaser is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State,
territory or the District of Columbia.
____ State or Local Plan. The Purchaser is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
____ ERISA Plan. The Purchaser is an employee benefit plan within
the meaning of Title I of the Employee Retirement Income
Security Act of 1974.
____ Investment Advisor. The Purchaser is an investment advisor
registered under the Investment Advisors Act of 1940.
____ Small Business Investment Company. The Purchaser is a small
business investment company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958.
____ Business Development Company. The Purchaser is a business
development company as defined in Section 202(a) (22) of the
Investment Advisors Act of 1940.
____ Trust Fund. The Purchaser is a trust fund whose trustee is a
bank or trust company and whose participants are exclusively
State or Local Plans or ERISA
EXHIBIT D-2
FORM OF TRANSFEREE'S LETTER - Page 6
Plans as defined above, and no participant of the Purchaser is
an individual retirement account or an H.R. 10 (Xxxxx) plan.
3. The term "SECURITIES" as used herein does not include (i) securities
of issuers that are affiliated with the Purchaser, (ii) securities that are part
of an unsold allotment to or subscription by the Purchaser, if the Purchaser is
a dealer, (iii) bank deposit notes and certificates of deposit, (iv) loan
participations, (v) repurchase agreements, (vi) securities owned but subject to
a repurchase agreement and (vii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Purchaser, the Purchaser used
the cost of such securities to the Purchaser and did not include any of the
securities referred to in the preceding paragraph, except (i) where the
Purchaser reported its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market. Further, in
determining such aggregate amount, the Purchaser may have included securities
owned by subsidiaries of the Purchaser, but only if such subsidiaries are
consolidated with the Purchaser in its financial statements prepared in
accordance with generally accepted accounting principles and if the investments
of such subsidiaries are managed under the Purchaser's direction. However, such
securities were not included if the Purchaser is a majority owned, consolidated
subsidiary of another enterprise and the Purchaser is not itself a reporting
company under the Securities Exchange Act of 1934, as amended.
5. The Purchaser acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Notes are
relying and will continue to rely on the statements made herein because one or
more sales to the Purchaser may be in reliance on Rule 144A.
6. Until the date of purchase of the Notes, the Purchaser will notify
each of the parties to which this certification is made of any changes in the
information and conclusions herein. Until such notice is given, the Purchaser's
purchase of the Notes will constitute a reaffirmation of this certification as
of the date of such purchase. In addition if the Purchaser is a bank or savings
and loan as provided above, the Purchaser agrees that it will furnish to such
parties updated annual financial statements promptly after they become
available.
----------------------------------------
Name of Purchaser or Adviser
EXHIBIT D-2
FORM OF TRANSFEREE'S LETTER - Page 7
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
--------------------------------------
EXHIBIT D-2
FORM OF TRANSFEREE'S LETTER - Page 8
ANNEX 2
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[FOR TRANSFEREES THAT ARE REGISTERED INVESTMENT COMPANIES]
The undersigned (the "PURCHASER") hereby certifies as follows to the
addressees of the Rule 144A Representation Letter which this certification is
attached with respect to the Transferor Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Purchaser or, if the Purchaser
is a "qualified institutional buyer" as that term is defined in Rule 144A under
the Securities Act of 1933, as amended ("RULE 144A") because the Purchaser is
part of a Family of Investment Companies (as defined below), is such an officer
of the Adviser.
2. In connection with purchases by the Purchaser, the Purchaser is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Purchaser is an investment company registered under the Investment Company Act
of 1940, as amended and (ii) as marked below, the Purchaser alone, or the
Purchaser's Family of Investment Companies, owned at least $100,000,000 in
securities (other than the excluded securities referred to below) as of the end
of the Purchaser's most recent fiscal year. For purposes of determining the
amount of securities owned by the Purchaser or the Purchaser's Family of
Investment Companies, the cost of such securities was used, except (i) where the
Purchaser or the Purchaser's Family of Investment Companies reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market.
____ The Purchaser owned $__________ in securities (other than the
excluded securities referred to below) as of the end of the
Purchaser's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
____ The Purchaser is part of a Family of Investment Companies
which owned in the aggregate $__________ in securities (other
than the excluded securities referred to below) as of the end
of the Purchaser's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or
EXHIBIT D-2
FORM OF TRANSFEREE'S LETTER - Page 9
investment advisers that are affiliated (by virtue of being majority owned
subsidiaries of the same parent or because one investment adviser is a majority
owned subsidiary of the other).
4. The term "SECURITIES" as used herein does not include (i) securities
of issuers that are affiliated with the Purchaser or are part of the Purchaser's
Family of Investment Companies, (ii) bank deposit notes and certificates of
deposit, (iii) loan participations, (iv) repurchase agreements, (v) securities
owned but subject to a repurchase agreement and (vi) currency, interest rate and
commodity swaps.
5. The Purchaser is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Representation Letter to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Purchaser will be in reliance on
Rule 144A. In addition, the Purchaser will only purchase for the Purchaser's own
account.
6. Until the date of purchase of the Notes, the undersigned will notify
the parties to which this certification is made of any changes in the
information and conclusions herein. Until such notice is given, the Purchaser's
purchase of the Notes will constitute a reaffirmation of this certification by
the undersigned as of the date of such purchase.
Name of Purchaser or Adviser
By:
---------------------------------------
Name:
---------------------------------
Title:
--------------------------------
Date:
-------------------------------------
IF AN ADVISER:
------------------------------------------
Name of Purchaser
Date:
-------------------------------------
EXHIBIT D-2
FORM OF TRANSFEREE'S LETTER - Page 10
EXHIBIT E
TO
TRUST INDENTURE
FORM OF RELEASE OF LIENS
THE STATE OF __________ )
)
COUNTY OF ____________ )
THAT BNY MIDWEST TRUST COMPANY, as Trustee (the "TRUSTEE") under the
Trust Indenture dated as of April 3, 2002 between PMC Joint Venture, L.P. 2002-1
and the Trustee, with its principal corporate trust office located in Chicago,
Illinois, the legal and equitable owner and holder of the promissory notes, more
particularly described in the Deeds of Trust or Mortgages referred to in Exhibit
"A" attached hereto and made a part hereof for all purposes (the "NOTES"), for
and in consideration of the full and final payment of all indebtedness secured
by the aforesaid liens, the receipt of which is hereby acknowledged, has
released and discharged, and by these presents hereby releases and discharges,
the above described property from all liens held by the undersigned securing
said Notes.
EXECUTED this _______ day of ____________, ______.
BNY MIDWEST TRUST COMPANY,
as Trustee
By:
-------------------------------------
Name:
-------------------------------
Title:
------------------------------
THE STATE OF ________ )
)
COUNTY OF _________ )
This instrument was acknowledged before me on _______________________,
_____, by _________________________________ of
_________________________________, on behalf of said company.
EXHIBIT D-2
FORM OF TRANSFEREE'S LETTER - Page 11
Notary Public in and for the State of
---------------
My Commission Expires:
-------------------------- ------------------------------------------
Printed Name
EXHIBIT D-2
FORM OF TRANSFEREE'S LETTER - Page 12
SCHEDULE 1
Definitions
The following words and phrases shall have the following meanings:
"Act" means the Securities Act of 1933, as amended.
"Affiliate" means, with respect to any Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Aggregate Note Principal Balance" means as of any date of
determination, the Original Note Principal Balance less the sum of all amounts
previously distributed to the Noteholders in respect of principal.
"Annual Statement" means the Annual Statement to be provided by the
Servicers pursuant to Section 5.1(b) of the Servicing Agreement.
"Asset Substitution Shortfall" has the meaning provided in Section
3.3(d) of the Indenture.
"Authorized Officer" means (i) with respect to the Issuer, the
president, any executive vice president, the general counsel, the chief
financial officer, or the financial reporting manager of the General Partner,
(ii) with respect to the Trustee or Supervisory Servicer, any Responsible
Officer of the Trustee or Supervisory Servicer, and (iii) with respect to the
Servicers, the president, any executive vice president, chief financial officer
of the Servicers or other authorized employee of the Servicers denoted as such
in writing by the Servicers.
"Available Funds" means with respect to each Payment Date, the sum of
(i) the amount then on deposit in the Collection Account and (ii) the amount
then on deposit in the Spread Account.
"Available Moneys" means any moneys on deposit in the Collection
Account with respect to which the Trustee has received an unqualified Opinion of
Independent Counsel qualified in bankruptcy matters acceptable to the Rating
Agency to the effect that the use by the Trustee of such moneys in accordance
with this Indenture would not constitute a voidable preference under the Federal
Bankruptcy Code, in the event a petition in bankruptcy is filed by or against
the entity depositing such moneys.
"Beneficial Owner" shall mean the person considered to be the
beneficial owner of any Note pursuant to the arrangements for book-entry
determination of ownership applicable to DTC or its successors or assigns.
"Business Day" means any day other than a Saturday or a Sunday or a day
on which banking institutions in the city in which either the Servicers or the
principal corporate trust office of the Trustee is located are authorized or
obligated by law or executive order to be closed.
"Carry-Forward Amount" means the amount, if any, by which (i) the
Principal Distribution Amount with respect to any preceding Payment Date
exceeded (ii) the amount of the actual principal distribution to the Noteholders
on such Payment Date.
"Charged-Off Loan" means a Loan (i) which the Servicer has written-off
as uncollectible, in accordance with the Servicer's customary credit and
collection policies, (ii) which is more than 365 days contractually past due, or
(iii) with respect to which the Servicer is preparing to initiate or has
initiated a foreclosure or similar proceeding or to accept or has accepted a
deed in lieu of foreclosure.
"Closing Date" means April 12, 2002, the date on which the Notes are
originally authenticated and delivered.
"Code" means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder.
"Collection Account" means the account by that name created pursuant to
Section 6.1 of the Indenture.
"Collection Period" means, with respect to any Payment Date, the period
commencing on the first (1st) day of the calendar month immediately preceding
the month in which the Payment Date occurs (or in the case of the first
Collection Period, from the Cut-Off Date) and ending on the last day of the
calendar month immediately preceding the month in which the Payment Date occurs.
"Collections" means all payments including, without limitation, Monthly
Payments, Principal Prepayments, Liquidation Proceeds and insurance proceeds,
but excluding Prepayment Penalties received by or on behalf of the Servicers in
respect of the Loans.
"Company" means PMC or PMCT and "Companies" means PMC and PMCT
collectively.
"Company Party" means either Company, any officer, director, agent or
employee of either Company and any other Person who controls either Company
within the meaning of the Securities Law.
"Contribution Agreement" means the Contribution Agreement dated as of
April 3, 2002, among the Issuer, PMCT and PMC, pursuant to which the Loans are
contributed and sold by PMC and PMCT to the Issuer, as the same may be amended
or otherwise modified from time to time.
"Contribution Date" means the Closing Date.
SCHEDULE 1
Definitions - Page 2
"Corporate Trust Office" means the principal corporate trust office of
the Trustee located at 0 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx
00000 Attention: Structured Finance Services, or at such other address as the
Trustee may designate from time to time by notice to the Noteholders, the
Issuer, the Servicers and the Supervisory Servicer or the principal corporate
trust office of any successor Trustee.
"Cut-Off Date" means February 28, 2002.
"Cut-Off Date Principal Balance" means, with respect to each Loan, the
Loan Principal Balance as of the Cut-Off Date, after deducting the principal
portion of all Monthly Payments received on or prior to the Cut-Off Date.
"Default Rate" means the lesser of (i) the weighted average Loan Rate
of the Loans less the sum of the Servicing Fee, the Trustee's Fee and the
Supervisory Servicer's Fee, if any, or (ii) the Remittance Rate plus 2%.
"Defective Loan" has the meaning set forth in Section 8(a) of the
Contribution Agreement.
"Definitive Notes" means Notes issued in fully registered, certificated
form to Beneficial Owners or their respective nominees rather than to DTC or
DTC's Nominee.
"Deleted Mortgage Loan" means a Loan replaced pursuant to Section 8 of
the Contribution Agreement or Section 3.3(a) of the Indenture by a Substitute
Loan.
"Determination Date" means, with respect to a Payment Date, the close
of business on the last day of the related Collection Period.
"Determination Date Report" means, with respect to a Payment Date, the
report required to be provided by the Servicers pursuant to Section 5.1 of the
Servicing Agreement.
"DTC" means The Depository Trust Company, New York, New York, a limited
purpose trust company organized under laws of the State of New York.
"DTC's Nominee" means the entity nominated for DTC in whose name the
Notes will be registered. The initial DTC's Nominee shall be Cede & Co.
"DTC Participant" means those securities brokers or dealers, banks,
trust companies, clearing corporations, and various other entities for which DTC
holds securities from time to time as a securities depository.
"Eligible Investments" means any one or more of the following
obligations or securities:
(i) direct obligations of, and obligations fully guaranteed by, the
United States of America or any agency or instrumentality of the United
States of America the obligations of which are backed by the full faith
and credit of the United States of America, excluding any
principal-only or interest-only stripped mortgage pass-throughs and
SCHEDULE 1
Definitions - Page 3
provided that any obligations of any such agency or instrumentality
must be guaranteed as to timely payment of principal and interest;
(ii) demand and time deposits in, certificates of deposits of, or
bankers' acceptances issued by, any depository institution or trust
company (including the Trustee or any affiliate of the Trustee, acting
in their respective commercial capacities) incorporated under the laws
of the United States of America or any state thereof and subject to
supervision and examination by federal or state banking authorities, so
long as at the time of such investment or contractual commitment
providing for such investment the commercial paper or other short-term
debt obligations of such depository institution or trust company (or,
in the case of a depository institution which is the principal
subsidiary of a holding company, the commercial paper or other
short-term debt obligations of such holding company) have a credit
rating not lower than the second highest rating category from Moody's;
(iii) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America
or any state thereof which securities have a credit rating not lower
than the second highest rating category from Moody's at the time of
such investment or contractual commitment providing for such
investment; provided, however, that securities issued by any particular
corporation will not be Eligible Investments to the extent that
investment therein will cause the then outstanding principal amount of
securities issued by such corporation and held as part of the Trust
Estate to exceed 10% of the sum of the outstanding principal amount of
the Notes and the aggregate principal amount of all Eligible
Investments held as part of the Trust Estate;
(iv) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than 270 days after the date of issuance
thereof) having the highest commercial paper rating from Moody's;
(v) certificates or receipts representing ownership interests in future
interest or principal payments on obligations of the United States of
America or its agencies or instrumentalities (which obligations are
backed by the full faith and credit of the United States of America)
held by a custodian on behalf of the holders of such receipts;
(vi) money market funds (including a fund of the Trustee) registered
under the Investment Company Act of 1940, as amended, having a credit
rating, at the time of such investment, not lower than the highest
rating category from Moody's;
(vii) a collective investment fund (including a fund of the Trustee)
that is maintained by a national banking association rated at least
"P-1" by Moody's and is created pursuant to Regulation 9 of the Office
of the Comptroller of the Currency and that is invested solely in one
or more obligations of the types described in clauses (i) and (ii) of
this definition; and
SCHEDULE 1
Definitions - Page 4
(viii) any repurchase agreement with any bank or trust company
organized under the laws of any state of the United States or any
national banking association or government bond dealer reporting to,
and recognized as a primary dealer by the Federal Reserve Bank of New
York, which agreement is secured by any one or more of the securities
described in (i), (ii) or (iii) above, and with the securities
delivered to and held by an agent designated by the Trustee, as
custodian for purposes of perfecting the Trustee's first priority
security interest in such securities; provided, however, that no
obligation or security shall be an Eligible Investment if (x) such
obligation or security evidences a right to receive only interest
payments or only principal payments, or (y) the stated interest on such
obligation or security is in excess of 120% of the yield to maturity
produced by the price at which such obligation or security was
purchased.
"Eligible Loan" is a Loan that meets the following requirements as of
the date of its transfer by either Company to the Partnership:
(a) the Underlying Note provides for level monthly payments
except as set forth on the Loan Schedule;
(b) the Loan is payable in United States Dollars and is
secured by a Mortgage on real property located in the United States;
(c) the Underlying Note relating to such Loan, according to
its original or amended terms, provides that the amount payable
thereunder will be due not more than 280 months following the
origination date of such Loan;
(d) the Loan is not payable by an obligor which is located
within the meaning of Section 9.307 of the Uniform Commercial Code as
enacted in the State of Texas, in any jurisdiction outside of the
United States and is not the United States of America or any state or
agency, department or instrumentality of the United States of America
or any state thereof;
(e) the Loan is not more than thirty (30) days delinquent as
of the Cut-Off Date;
(f) the Loan is evidenced by one original executed copy of the
Underlying Note;
(g) the Loan and the Loan documents are consistent with
underwriting and credit policies of PMC or PMCT, as the case may be;
and
(h) the representations and warranties contained in the
Transaction Documents regarding the Loans are true on the substitution
date if such Loan is a Substitute Loan.
"Eligible Servicer" means PMC, PMCT, BNY Midwest Trust Company, one of
its Affiliates or any other Person which (a) is legally qualified and has the
capacity to service the Loans, (b) has demonstrated the ability to
professionally and competently service a portfolio of
SCHEDULE 1
Definitions - Page 5
contracts or similar loans in accordance with high standards of skill and care,
and (c) has a short-term debt obligation rating from the Rating Agency in its
highest short-term category or such Person is otherwise acceptable to the Rating
Agency in order to maintain a rating on the Notes of at least "Aaa" as confirmed
in writing by the Rating Agency and (d) is approved by the Trustee (with the
Required Noteholders' consent).
"Environmental Law " means any and all federal, state and local
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment including, without limitation, ambient air, surface water, ground
processing, distribution, use, treatment, storage, disposal, transport, or
handling of pollutants, contaminants, chemicals, or industrial, toxic or
hazardous substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended and the rules and regulations promulgated thereunder.
"Event of Default" means any occurrence or event specified as an "Event
of Default" in Section 9.1 of the Indenture.
"Federal Bankruptcy Code" means Title 11 of the United States Code, as
amended.
"Fidelity Bond" has the meaning set forth in Section 2.4 of the
Servicing Agreement.
"Financial Institution" means a bank the deposits of which are fully
insured by the Bank Insurance Fund of the Federal Deposit Insurance Corporation.
"Funds Retention Event" means the existence of an Event of Default
under the Indenture.
"General Partner" means PMC Joint Venture LLC 2002-1, a Delaware
limited liability company, in its capacity as general partner of the Issuer.
"Holder" or "Noteholder" means each Person in whose name a Note is
registered.
"Indenture" means the Trust Indenture dated as of April 3, 2002,
between the Issuer and the Trustee, as the Trust Indenture shall be amended and
supplemented from time to time.
"Independent," when used with respect to any specified Person, means
the Person (a) is in fact independent of the Issuer and the Servicers and of any
affiliate of the Issuer or the Servicers, (b) does not have and has not had in
the prior two (2) years any direct financial interest or any material indirect
financial interest in the Issuer or the Servicers or in any affiliate of the
Issuer or the Servicers and (c) is not connected and for the prior two (2) years
has not been connected with the Issuer or the Servicers as an officer, employee,
promoter, underwriter, trustee, partner, director or person performing similar
functions.
"Independent Manager" has the meaning set forth in Section 5.13(a) of
the Indenture.
SCHEDULE 1
Definitions - Page 6
"Initial Deposit" means, a deposit of $2,820,164 required to be made
into the Spread Account on the Closing Date, such deposit being equal to 4% of
the aggregate Cut-Off Date Principal Balance of all Loans.
"Initial Purchaser" means Banc One Capital Markets, Inc.
"Interest Accrual Period" means, with respect to each Payment Date for
the Notes, the period from and including the immediately prior Payment Date to
but excluding the Payment Date first referred to in this definition (or in the
case of the first Payment Date, from and including the Closing Date to but
excluding the first Payment Date).
"Interest Distribution Amount" means with respect to each Payment Date,
the sum of (i) the interest accrued for the related Interest Accrual Period at
the Remittance Rate on the Aggregate Note Principal Balance outstanding
immediately prior to such Payment Date and (ii) the amount of the shortfall, if
any, of any interest that the Notes were entitled to receive on a preceding
Payment Date pursuant to Section 6.4(b)(ii) of the Indenture, but did not
receive, plus to the extent permitted by applicable law, interest thereon at the
Default Rate compounded monthly.
"Issuer" or "Partnership" means PMC Joint Venture, L.P. 2002-1, a
Delaware limited partnership.
"Law" means all statutes, rules, regulations, ordinances, orders or
decrees of any federal or state government or political subdivision, agency or
public official thereof that apply to or affect a Loan or Mortgaged Property or
the services and obligations of the Servicers under the Servicing Agreement.
"Lien" means any lien, mortgage, security interest, pledge, charge or
encumbrance of any kind whatsoever except the liens granted under the
Contribution Agreement and under the Indenture with respect to the Loans.
"Liquidated Loan" means any Charged-Off Loan as to which the Servicer
with respect to such Loan has certified to the Trustee that all amounts which it
expects to recover from or on account of such Loan and related Mortgaged
Property (including REO Property) have been recovered and that no further
Liquidation Proceeds will be received in connection therewith.
"Liquidation Expenses" means, with respect to Loans being liquidated
and REO Properties, expenses paid or incurred by or for the account of the
Servicer with respect to such Loan for (i) property protection expenses, (ii)
property sales expenses, (iii) foreclosure costs, including court costs and
reasonable attorneys' fees, and (iv) similar expenses reasonably paid or
incurred in connection with liquidation.
"Liquidation Proceeds" means amounts received by the Servicer with
respect to such Loan in connection with the liquidation of a Loan, whether from
(i) proceeds from a trustee's sale or judicial foreclosure; (ii) condemnation
proceeds received from any taking of the property by condemnation or otherwise;
or (iii) any final disposition of REO Property, in each case net of
SCHEDULE 1
Definitions - Page 7
related Liquidation Expenses and any amounts required to be returned to the
applicable Obligor pursuant to applicable law.
"Loan" means collectively, a loan originated or purchased by PMC, PMCT
or one of their Affiliates to a Person to finance or refinance the acquisition,
construction, development or renovation of real or personal property by such
Person, each of which is evidenced by an Underlying Note and a Mortgage and
which is listed in the aggregate with any other loans to such Person on the Loan
Schedule (which after the Closing Date may include any Charged-Off Loans and
Loans with respect to which the related Mortgaged Property has become REO
Property).
"Loan File" means, with respect to a Loan, the Servicer Loan File and
the Trustee Loan File, taken together.
"Loan Pool" means collectively, the Loans at any time and from time to
time pledged to the Trustee pursuant to the Indenture.
"Loan Principal Balance" means, with respect to a Loan, the outstanding
principal balance of such Loan remaining to be paid by the related Obligor as of
the date of determination, or, with respect to a REO Property, the principal
balance of the related Loan at the date of acquisition of the related Mortgaged
Property by the Trustee minus all amounts recovered with respect to such REO
Property and applied by the applicable Servicer as a recovery of principal in
accordance with Section 4.4 of the Servicing Agreement.
"Loan Rate" means, as of any date of determination, the then applicable
rate at which interest accrues on an Underlying Note.
"Loan Schedule" means the schedule of Loans attached as Exhibit B to
the Indenture and Exhibit A to the Contribution Agreement, as such schedule may
be amended from time to time in accordance with the terms of the Indenture and
the Contribution Agreement. The Loan Schedule specifies the aggregate Cut-Off
Date Principal Balance of the Loans and, with respect to each Loan: (i) the loan
number; (ii) the name and address of the Obligor and address of the Mortgaged
Property; (iii) the original principal balance; (iv) the current Loan Rate; (v)
the amount of the current Monthly Payment and any step-up in the Monthly
Payment; (vi) the scheduled maturity date; (vii) any waiver, impairment,
alteration or modification of the terms of the Underlying Note or Mortgage or
the release, in whole or in part of any Obligor or Mortgaged Property; (viii)
any Mortgage not constituting a first lien; (ix) whether such Loan is secured by
any property other than the primary real estate collateral; (x) any material
changes that would render information previously provided to the Noteholders
untrue or misleading in a material respect; and (xi) the Servicer of the Loan.
"Lockbox Account" means the bank account into which the Obligors are
directed by the Servicers to make payments in respect of the Loans, which
account is maintained at Bank One, Texas N.A. or another Financial Institution
having a long-term unsecured debt rating of at least A-2 or the equivalent by
the Rating Agency.
SCHEDULE 1
Definitions - Page 8
"LTV" or "Loan to Value" means, with respect to any Loan, the
percentage determined by dividing (i) the Cut-Off Date Principal Balance by (ii)
the "value" of the Mortgaged Property securing such Loan (which value shall
equal the lesser of the cost or the appraised value of such Mortgaged Property,
or, in the case of refinancings or financing of renovations, the value
determined by PMC, PMCT or the Issuer, as the case may be, taking into account
original property cost, cost of renovation, insured values and/or property
assessments in each case), as of the origination date of such Loan.
"Maturity Date" means, with respect to the Notes, April 15, 2023.
"Monthly Payment" means, with respect to any Loan, each scheduled
monthly payment of principal and interest on such Loan which is payable by an
Obligor from time to time under the related Underlying Note.
"Monthly Trustee Report" has the meaning set forth in Section 6.7 of
the Indenture.
"Moody's" means Xxxxx'x Investors Service, Inc., its successors and
assigns.
"Mortgage" means collectively, any and all mortgages, deeds of trust,
security agreements, assignments of leases and rents or other instruments given
as security for an Underlying Note, together with any and all riders, addenda,
written modifications and amendments thereto.
"Mortgaged Property" means all real property, including all buildings,
structures, improvements or fixtures thereon and all appurtenances, water
rights, privileges and benefits appertaining thereto, and all personal property
that is conveyed, pledged or mortgaged, or in which a security interest is
granted, under a Mortgage to secure the payment of all sums and the performance
of all covenants and obligations that are to be paid or performed by a Obligor
under the terms of such Obligor's Loan.
"Mortgagee" means the mortgagee or secured party under a Mortgage.
"Note Register" means the register of Noteholders maintained by the
Registrar pursuant to Section 2.9 of the Indenture.
"Noteholder" or "Holder" means each Person in whose name a Note is
registered.
"Note" means any Note executed by the Issuer and authenticated by the
Trustee substantially in the form of Exhibit A to the Indenture.
"Notice Address" means the following until a different address is
provided in writing to the Trustee:
SCHEDULE 1
Definitions - Page 9
(a) With respect to the Issuer:
PMC Joint Venture, L.P. 2002-1
00000 Xxxxxxx Xxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(b) With respect to the Trustee:
BNY Midwest Trust Company
0 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Structured Finance Services
Telephone: 312/000-0000
Telecopy: 312/827-8562
(c) With respect to the Placement Agent:
Banc One Capital Markets, Inc.
1 Bank Xxx Xxxxx, XX0-0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(d) With respect to the Supervisory Servicer:
BNY Midwest Trust Company
0 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Structured Finance Services
Telephone: 000-000-0000
Telecopy: 000-000-0000
(e) With respect to the Noteholders:
The address of the Noteholders shown by the list
required by Section 2.9 of the Indenture to be kept
at the office of the Trustee.
SCHEDULE 1
Definitions - Page 10
(f) With respect to Moody's:
Xxxxx'x Investors Service
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: ABS Monitoring Department
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(g) With respect to the U.S. Small Business
Administration:
U.S. Small Business Administration
000 0xx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxxxxx, X.X. 00000
Attention: Director of Office of SBIC Operations
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
"Obligor" means any obligor on an Underlying Note or any Person that
has acquired a Mortgaged Property and assumed the obligations of the obligor
under the Underlying Note and the Mortgage.
"Officer's Certificate" means a certificate delivered to the Trustee
signed by an Authorized Officer of the applicable Servicer.
"Opinion of Counsel" means a written opinion of counsel who shall, and
which opinion shall, be satisfactory to the Issuer and the Trustee (who, except
when required to be Independent, may be employed by or of counsel to the Issuer
or the applicable Servicer). Such counsel (other than an employee or a Person of
counsel to the Issuer or the applicable Servicer) shall be a reputable firm of
attorneys who have attorneys licensed to practice in the state in which such
firm maintains an office, and, if the opinion is with respect to an
interpretation of federal tax laws or regulations, such firm shall be
Independent.
"Opinion of Independent Counsel" means an Opinion of Counsel delivered
by Independent counsel.
"Original Note Principal Balance" means an amount equal to $63,453,688.
"Outstanding" or "Notes Outstanding" means all Notes which have been
authenticated and delivered by the Trustee under the Indenture, except:
(a) Notes canceled because of payment at or redemption prior
to maturity; and
(b) Notes in lieu of which other Notes have been authenticated
under Sections 2.8 and 2.9 of the Indenture;
provided, however, that in determining whether the Holders of the requisite
principal amount of Notes Outstanding are present at a meeting of Holders of
Notes for quorum purposes or have
SCHEDULE 1
DEFINITIONS - Page 11
taken or concurred in any action under this Indenture, including the making of
any request, demand, authorization, direction, notice, consent or waiver
hereunder, Notes owned by the Issuer or any Affiliate of the Issuer shall be
disregarded. The Issuer shall not acquire and shall cause none of its Affiliates
to acquire any of the Notes.
"Outstanding Note Amount" means, with respect to any date, an amount
equal to (a) the aggregate initial principal amount of the Notes Outstanding
minus (b) the aggregate amounts paid as principal to the Noteholders of the
Notes since the Closing Date.
"Partnership" or "Issuer" means PMC Joint Venture, L.P. 2002-1, a
Delaware limited partnership.
"Partnership Party" means the Partnership, any officer, director,
employee or agent of the Partnership, and any person who controls the
Partnership within the meaning of the Securities Law.
"Paying Agent" means any bank or trust company designated pursuant to
the Indenture to serve as a paying agent or place of payment for the Notes, and
any successors designated pursuant to the Indenture.
"Payment Date" means, with respect to the Notes, the fifteenth (15th)
day of each month or if such fifteenth (15th) day is not a Business Day, on the
first Business Day immediately following such fifteenth (15th) day, commencing
April 15, 2002, or the date that the Notes are due upon acceleration.
"Person" means an individual, corporation, partnership, limited
liability company, trust, unincorporated association, joint venture or
government or any agency or political subdivision thereto.
"Placement Agent" means Banc One Capital Markets, Inc., its successors
and assigns.
"PMC" means PMC Capital, Inc., a Florida corporation, a contributor of
the Loans pursuant to the Contribution Agreement.
"PMCT" means PMC Commercial Trust, a Texas real estate investment
trust, a contributor of the Loans pursuant to the Contribution Agreement.
"Prepayment Date" means any date on which the Notes are to be prepaid
pursuant to Sections 4.1 or 9.2 of the Indenture.
"Prepayment Penalties" means, in connection with any voluntary
prepayments of principal on the Underlying Notes, the specified charges or yield
maintenance premiums required to be paid by the Obligors pursuant to the terms
of the loan documents evidencing the Loans.
"Principal Collections" means all Collections allocable to payments of
principal on the Loans, including Principal Prepayments and Takeout Price and
payments received with respect to REO Property and allocable to principal
applying such payments to interest and principal due
SCHEDULE 1
DEFINITIONS - Page 12
on the related Loan immediately prior to the acquisition of the REO Property in
accordance with the terms of the loan documents evidencing the Loan but
excluding amounts received relating to Charged-Off Loans as to which the
principal portions of such Loans have been previously included as a part of a
Principal Distribution Amount.
"Principal Distribution Amount" means with respect to each Payment
Date, an amount equal to the sum of (a) the Principal Collections received
during the related Collection Period and (b) the aggregate outstanding principal
amount of Loans which became Charged-Off Loans during the related Collection
Period (determined as of the end of the related Collection Period after giving
effect to all Principal Collections) and which were not substituted with new
Loans pursuant to Section 3.3 of the Indenture on or before the end of such
Collection Period.
"Principal Prepayment" means any Obligor payment of principal or other
recovery of principal (whether in the form of Liquidation Proceeds or otherwise)
on a Loan which is received in advance of its scheduled due date and which is
not accompanied by an amount of interest representing the full amount of
scheduled interest due on any date or dates in any month or months subsequent to
the month of prepayment, including, without limitation, any Takeout Price and
Asset Substitution Shortfall.
"Private Placement Memorandum" means the Private Placement Memorandum
dated April 3, 2002, relating to the Notes.
"Purchase Agreement" means the agreement dated April 3, 2002 between
the Issuer and the Initial Purchaser relating to the initial purchase of the
Notes.
"Rating Agency" means, with respect to the Notes and to Eligible
Investments, Xxxxx'x.
"Realized Loss" means, with respect to each Liquidated Loan, an amount
(not less than zero or greater than the related Loan Principal Balance as of the
date of the final liquidation) equal to the Loan Principal Balance of the Loan
as of the date of such liquidation, minus the Liquidation Proceeds relating to
such Liquidated Loan applied to principal (such Liquidation Proceeds to be
applied first to unpaid interest due on the Liquidated Loan and then to the
principal balance of the Liquidated Loan).
"Record Date" means, with respect to a Payment Date, the twelfth (12th)
day of the calendar month in which the Payment Date occurs or, in the case of
the first Payment Date, April 12, 2002.
"Refinancable Loan" means, a Loan with respect to which the related
Obligor has given notice to the applicable Servicer that such Obligor has been
issued a written loan commitment from a third party lender to refinance such
Loan and that such Obligor intends to refinance such Loan with such third party
lender; provided, however, the aggregate principal balance of all Loans that may
become Refinancable Loans and subject to the repurchase provisions of Section
3.3 of the Indenture shall not exceed 10% of the aggregate Cut-Off Date
Principal Balance of all Loans without the prior written consent of the Required
Noteholders, and in no event shall ever exceed 20% of the aggregate Cut-Off Date
Principal Balance of the Loans on a cumulative basis.
SCHEDULE 1
DEFINITIONS - Page 13
"Registrar" means the registrar for the Notes appointed pursuant to
Section 2.9 of the Indenture.
"Related Assets" means, with respect to a Loan, all documents in the
related Loan File, all other documents held by the Servicer or any subservicer
with respect to the Loan, and any other assets related to the Loan.
"Remittance Rate" means the lesser of (a) the weighted average Loan
Rate of the Loans less the sum of the Servicing Fee, the Trustee's Fee and the
Supervising Servicer's Fee, if any, or (b) a rate equal to 6.67% per annum.
"REO Property" means a Mortgaged Property acquired by a Servicer on
behalf of the Trustee through foreclosure or deed in lieu of foreclosure,
pursuant to Section 4.4 of the Servicing Agreement.
"Required Noteholders" means (i) for so long as the Beneficial Owners
as of the Closing Date (other than the Initial Purchaser) continue to own
beneficially at least sixty-six and two thirds percent (66 2/3%) of the
Aggregate Note Principal Balance, the Holders of not less than sixty-six and
two-thirds percent (66 2/3%) of the Aggregate Note Principal Balance, and (ii)
thereafter, the Holders of not less than a majority of the Aggregate Note
Principal Balance.
"Required Rating" has the meaning specified in Section 3.3(a) of the
Servicing Agreement.
"Responsible Officer" means, when used with respect to the Trustee or
Supervisory Servicer, any officer within the Corporate Trust Office including
any vice president, managing director, assistant vice president, secretary,
assistant secretary, treasurer or assistant treasurer or any other officer of
the Trustee or Supervisory Servicer customarily performing functions similar to
those performed by any of the above designated officers and also any officer of
the Trustee or Supervisory Servicer to whom such matter is referred because of
such officer's knowledge of and familiarity with the particular subject.
"Securities Law" means the Securities Act of 1933, the Securities
Exchange Act of 1934, the Trust Indenture Act of 1939, the Investment Company
Act of 1940, the Investment Advisers Act of 1940 and the Public Utility Holding
Company Act of 1935, each as amended from time to time, and any rule or
regulation in effect from time to time under any such Act.
"Servicer" means either PMC Capital, Inc., a Florida corporation, or
PMC Commercial Trust, a Texas real estate investment trust, in its capacity as
Servicer under the Servicing Agreement, and its successors and assigns in such
capacity.
"Servicer Default" means any event described in Section 6.1 of the
Servicing Agreement.
"Servicer Employees" has the meaning set forth in Section 2.4 of the
Servicing Agreement.
SCHEDULE 1
DEFINITIONS - Page 14
"Servicer Loan File" means, with respect to a Loan, all documents
related to the Loan, other than those documents constituting the Trustee Loan
File, held in trust for the Trustee by the applicable Servicer pursuant to
Section 3.1 of the Servicing Agreement.
"Servicing Agreement" means the Servicing Agreement, dated as of April
3, 2002, by and among the Issuer, the Supervisory Servicer, the Servicers and
the Trustee, as the same may be amended or otherwise modified from time to time.
"Servicing Expenses" shall have the meaning set forth in Section 3.8 of
the Servicing Agreement.
"Servicing Fee" means an amount payable monthly in arrears on each
Payment Date, equal, for each month during the term of the Indenture, to
one-twelfth of .30% times the aggregate outstanding Loan Principal Balance on
the immediately preceding Determination Date.
"Servicing Officer" means any officer or other authorized employee of
the Servicers involved in, or responsible for, the administration and servicing
of the Loans whose name appears on an incumbency certificate of servicing
officers and employees furnished to the Trustee and the Supervisory Servicer by
the Servicers, as such certificate may from time to time be amended.
"Servicing Standard" means to service and administer the Loans with the
same care, skill and diligence with which prudent institutional commercial
mortgage lenders and loan servicers service comparable mortgage loans, and with
a view to the timely collection of all scheduled payments of principal and
interest under the Loans or, if a default under a Loan occurs and continues and
no satisfactory arrangements can be made for the collection of the delinquent
payments, the maximization of the recovery of such Loan to the Noteholders (as a
collective whole) on a present value basis.
"Specified Spread Account Requirement" means, the maximum amount
required to be on deposit at any time in the Spread Account, which, with respect
to any Payment Date, shall be equal to a maximum amount equal to the sum of
without duplication (a) the greater of (i) 6% of the aggregate Loan Principal
Balance (exclusive of Charged-Off Loans the principal portions of which have
been previously included as a part of a Principal Distribution Amount)
outstanding on such Payment Date or (ii) 2% of the aggregate Cut-Off Date
Principal Balance of all Loans, plus (b) 25% of aggregate Loan Principal Balance
of all Loans (exclusive of Charged-Off Loans the principal portions of which
have been previously included as a part of a Principal Distribution Amount) 90
days or more contractually past due on such Payment Date, plus (c) 50% of the
aggregate Loan Principal Balance of all Loans (exclusive of Charged-Off Loans
the principal portions of which have been previously included as a part of a
Principal Distribution Amount) 120 days or more contractually past due on such
Payment Date, plus (d) 75% of the aggregate Loan Principal Balance of all Loans
(exclusive of Charged-Off Loans the principal portions of which have been
previously included as a part of a Principal Distribution Amount) 150 days or
more contractually past due on such Payment Date, plus (e) the aggregate Loan
Principal Balance of all Loans (exclusive of Charged-Off Loans the principal
portions of which
SCHEDULE 1
DEFINITIONS - Page 15
have been previously included as a part of a Principal Distribution Amount) more
than 180 days or more contractually past due on such Payment Date.
"Spread Account" means the fund by that name created pursuant to
Section 6.1 of the Indenture.
"Spread Account Excess" has the meaning set forth in Section 6.3(b)(ii)
of the Indenture.
"Substitute Loan" means a Loan which meets the requirements of Section
3.3 of the Indenture, and the substitution of which meets the requirements of
Section 3.3 of the Indenture, which is delivered to the Trustee pursuant to
Section 3.3 of the Indenture.
"Successor Servicer" means a successor servicer pursuant to Section 3.5
of the Supervisory Servicing Agreement.
"Summary Determination Date Report" means the report required to be
provided by the Supervisory Servicer pursuant to Section 3.3 of the Supervisory
Servicing Agreement.
"Supervisory Servicer" means BNY Midwest Trust Company, an Illinois
state banking corporation, its successors and assigns as supervisory and standby
servicer under the Supervisory Servicing Agreement.
"Supervisory Servicer Default" means any event described in Section 5.1
of the Supervisory Servicing Agreement.
"Supervisory Servicer's Fee" means the fee described in Schedule 2 to
the Indenture.
"Supervisory Servicing Agreement" means the Supervisory Servicing
Agreement, dated as of April 3, 2002, among the Supervisory Servicer, the
Issuer, the Servicers and the Trustee.
"Takeout Price" means, with respect to any Loan or REO Property
purchased hereunder, an amount equal to the sum of (i) 100% of the Loan
Principal Balance thereof as of the date of purchase, (ii) accrued interest
thereon at the applicable Loan Rate or Loan Rates from the date to which
interest was last paid by the Obligor to the next date on which a Monthly
Payment is due under the Mortgage following the date of purchase, (iii) any
Servicing Expenses or unpaid Servicing Fees due to the Servicer with respect to
the Loan or REO Property under the Servicing Agreement and (iv) expenses
reasonably incurred or to be incurred by the Servicer or the Trustee in respect
of the breach or defect giving rise to the purchase obligation, including any
expenses arising out of the enforcement of the purchase obligation.
"Tax Returns" has the meaning set forth in Section 6.8 of the
Indenture.
"Transaction Documents" means the Contribution Agreement, the Notes,
the Indenture, the Servicing Agreement, the Supervisory Servicing Agreement, any
agreements relating to the Lockbox Account and the other documents delivered in
connection therewith, as supplemented and amended in accordance with the terms
thereof.
SCHEDULE 1
Definitions - Page 16
"Trust Estate" means all the property, rights, moneys, securities and
other amounts pledged and assigned to the Trustee pursuant to the GRANTING
CLAUSES contained in the Indenture.
"Trust Receipt" means an appropriately completed receipt, substantially
in the form attached to the Servicing Agreement as Exhibit A, required for
release of all or a portion of a Trustee Loan File to the Servicer.
"Trustee" means BNY Midwest Trust Company, an Illinois state banking
corporation, in its capacity as trustee under the Indenture or its successor in
interest, or any successor trustee appointed as provided in the Indenture.
"Trustee Loan File" means the loan documents listed in Section 2.6(b)
of the Indenture pertaining to a particular Loan and any additional documents
required to be added to the Trustee Loan File pursuant to the Indenture.
"Trustee's Fee" means the fee described in Schedule 2 to the Indenture.
"Underlying Note" means the promissory note, deed of trust note or
other evidence of indebtedness evidencing the indebtedness of an Obligor under a
Loan, including any modification or amendment thereto.
SCHEDULE 1
Definitions - Page 17
