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TRUST INDENTURE
BETWEEN
PMC JOINT VENTURE, L.P. 2003-1,
A DELAWARE LIMITED PARTNERSHIP
AND
THE BANK OF NEW YORK,
AS TRUSTEE
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DATED AS OF SEPTEMBER 16, 2003
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$92,893,169
PMC JOINT VENTURE, L.P. 2003-1
LOAN-BACKED FLOATING 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.)
Page
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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.............................................3
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.......................................................................12
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.......................................................18
3.4 Release and Exchange of Loans..............................................................20
ARTICLE IV REDEMPTION PROVISIONS......................................................................21
4.1 Optional Redemption of the Notes...........................................................21
4.2 Notice of Redemption.......................................................................21
4.3 Redemption Payments........................................................................22
4.4 Cancellation...............................................................................22
ARTICLE V COVENANTS OF ISSUER........................................................................22
5.1 Payment of Principal and Interest..........................................................22
5.2 Performance of Covenants...................................................................22
5.3 Instruments of Further Assurance...........................................................22
5.4 Recording and Filing.......................................................................23
5.5 Existence..................................................................................23
5.6 Access to Records; Discussions With Officers...............................................23
5.7 Notice of Material Events..................................................................23
5.8 Maintenance of Licenses; Rating............................................................24
5.9 Use of Funds...............................................................................24
5.10 Negative Covenants of the Issuer...........................................................24
5.11 Opinions as to Loans and Trust Estate......................................................26
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5.12 Maintenance of Office......................................................................26
5.13 Restrictions on Issuer's Actions...........................................................26
5.14 Insurance Coverage.........................................................................28
5.15 Financial Statements and Accountants' Reports..............................................28
ARTICLE VI REVENUES AND ACCOUNTS......................................................................29
6.1 Creation of Accounts.......................................................................29
6.2 Deposits to the Collection Account.........................................................29
6.3 Deposits in Spread Account; Permitted Withdrawals from Spread Account......................29
6.4 Distributions..............................................................................30
6.5 Moneys To Be Held in Trust.................................................................31
6.6 Amounts Remaining in Funds and Accounts....................................................32
6.7 Accounts and Reports.......................................................................32
6.8 Tax Reporting..............................................................................32
ARTICLE VII INVESTMENT OF MONEYS.......................................................................32
ARTICLE VIII DISCHARGE OF INDENTURE.....................................................................33
ARTICLE IX DEFAULT PROVISIONS AND REMEDIES OF TRUSTEE
AND NOTEHOLDERS............................................................................34
9.1 Events of Default..........................................................................34
9.2 Remedies; Rights of Noteholders............................................................35
9.3 Right of Noteholders To Direct Proceedings.................................................36
9.4 Appointment of Receivers...................................................................36
9.5 Application of Moneys......................................................................36
9.6 Remedies Vested in Trustee.................................................................37
9.7 Rights and Remedies of Noteholders.........................................................37
9.8 Termination of Proceedings.................................................................38
9.9 Waivers of Events of Default...............................................................38
ARTICLE X TRUSTEE....................................................................................39
10.1 Acceptance of the Trusts...................................................................39
10.2 Fees, Charges and Expenses of Trustee......................................................42
10.3 Notice to Noteholders if Default Occurs....................................................42
10.4 Intervention by Trustee....................................................................42
10.5 Merger or Consolidation of Trustee.........................................................42
10.6 Resignation by Trustee.....................................................................42
10.7 Removal of Trustee.........................................................................43
10.8 Appointment of Successor Trustee; Temporary Trustee........................................43
10.9 Concerning Any Successor Trustee...........................................................43
10.10 Designation and Succession of Paying Agents................................................44
10.11 Appointment of Co-Trustee..................................................................44
ARTICLE XI SUPPLEMENTAL INDENTURES....................................................................45
11.1 Supplemental Indentures; Consent of Noteholders............................................45
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11.2 Copy of Supplemental Indentures............................................................47
11.3 Amendments to Transaction Documents........................................................47
ARTICLE XII MISCELLANEOUS..............................................................................47
12.1 Consents, etc., of Noteholders.............................................................47
12.2 Limitation of Rights; Non-recourse Obligations.............................................48
12.3 Severability...............................................................................48
12.4 Notices....................................................................................48
12.5 Payments Due on Saturdays, Sundays and Holidays............................................48
12.6 Counterparts...............................................................................48
12.7 Applicable Provisions of Law...............................................................49
12.8 Captions...................................................................................49
SCHEDULE 1 DEFINITIONS
SCHEDULE 2 FEES
EXHIBIT A FORM OF NOTE
EXHIBIT B LOAN SCHEDULE
EXHIBIT B-1 SUBSTITUTE 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
September 16, 2003 by and between PMC JOINT VENTURE, L.P. 2003-1, a Delaware
limited partnership (the "ISSUER"), and THE BANK OF NEW YORK, a New York 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,
WITNESSETH:
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 Floating 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
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:
TRUST INDENTURE - Page 1
(a) the Loans, the Related Assets and any REO Property, including all
payments with respect thereto (other than the Prepayment Premiums) 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, investments or investment property 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 thereof 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 Supervisory 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 Supervisory Servicing Agreement, the Contribution
Agreement or the other Transaction Documents, whether payable pursuant to the
Servicing Agreement, the Supervisory Servicing Agreement, the Contribution
Agreement or the other Transaction Documents, or otherwise, to bring actions and
proceedings under the Servicing Agreement, the Supervisory 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 Supervisory 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, 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;
TRUST INDENTURE - Page 2
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 $92,893,169.
2.2 ISSUANCE OF NOTES; DENOMINATIONS; FORM OF NOTES.
(a) The Notes shall be designated the "PMC Joint Venture, L.P.
2003-1 Loan-Backed Floating Rate Notes" and shall be issued in an initial
aggregate principal amount equal to $92,893,169.
TRUST INDENTURE - Page 3
The Notes shall mature on the Maturity Date, and shall accrue interest
during each Interest Accrual Period at the Applicable 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 Applicable Remittance 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, except as otherwise provided herein, 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 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.
TRUST INDENTURE - Page 4
(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 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.
TRUST INDENTURE - Page 5
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 the resolutions of the managers of the General Partner
authorizing the issuance of the Notes by the Issuer and the execution and
delivery of this Indenture by the General Partner in it capacity as general
partner of the Issuer;
(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 and the Initial Purchaser, addressed to, among
others, the Trustee, the Initial Purchaser 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 each of PMC and PMCT to the Issuer
constitutes a "true sale" and will result in the Loans not being deemed
property of PMC's or PMCT's estate, as applicable, pursuant to 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 authorized the filing of a UCC
termination statement or
TRUST INDENTURE - Page 6
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 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 authorized 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 The Bank of New York, as Trustee under
the Trust Indenture, dated as of September 16, 2003, for the benefit of the
holders of PMC Joint Venture, L.P. 2003-1 Loan-Backed Floating 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
TRUST INDENTURE - Page 7
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 which case
the Issuer shall execute and deliver to the appropriate public office for
recording or filing within six (6) months after the Closing Date, 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: "The
Bank of New York, as the Trustee under the Trust Indenture, dated as of
September 16, 2003" 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, or if an original is
unavailable, copies thereof certified by PMC or PMCT, as applicable, to be true
and complete;
(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.
The Issuer will cause to be recorded or filed each assignment of a Loan
to the Trustee in the appropriate public office for real property records within
six (6) months 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. The Issuer shall confirm the
recordation or filing of the assignments of the loans in writing to the Trustee
and the Noteholders within thirty (30) days following such six (6) month period.
TRUST INDENTURE - Page 8
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 and Principal Prepayments
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 and the Initial Purchaser, 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 applicable Servicer, the Rating Agency, the Initial
Purchaser, PMCT and PMC, and the Trustee, as assignee under the 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 applicable
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, the Initial
Purchaser and the Trustee shall take such reasonable action as the Required
Noteholders direct in writing, at the expense of the applicable Servicer if such
Servicer is an Affiliate of the Issuer.
TRUST INDENTURE - Page 9
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
360-day year and the actual number of days elapsed during the period from and
including the immediately preceding Payment Date to but excluding such Payment
Date. 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 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 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.
TRUST INDENTURE - Page 10
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 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 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, PMC, PMCT 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
TRUST INDENTURE - Page 11
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.
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.
TRUST INDENTURE - Page 12
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 certificate of limited partnership or 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 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
TRUST INDENTURE - Page 13
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; and
(h) the Issuer acquired title to the Loans in good faith,
without notice of any adverse claim.
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:
(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 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. The Issuer 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
TRUST INDENTURE - Page 14
Mortgage, or the exercise of any right thereunder in accordance with the terms
thereof, render the Underlying Note or 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 or the security interest of any applicable security agreement or
chattel mortgage, in whole or in part, nor has any instrument been executed that
would effect any such release, cancellation, subordination or rescission.
(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.
TRUST INDENTURE - Page 15
(xiii) No Loan is a 30-Day Delinquent Loan.
(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.
(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.
TRUST INDENTURE - Page 16
(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.
(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.
TRUST INDENTURE - Page 17
(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) 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. The Mortgage obligates the Obligor to
maintain all such insurance at its cost and expense, and on the Obligor's
failure to do so, authorizes the holder of the Mortgage to maintain such
insurance and obtain reimbursement therefore from the Obligor
(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.
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, 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
TRUST INDENTURE - Page 18
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 or cause to be purchased the
affected Loan at a price equal to the Takeout Price, or (iii) if such defect or
breach occurs within two (2) years of the Closing Date, deliver to the Trustee,
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 (i) 150 days contractually
past due, or (ii) a Charged-Off Loan, PMC or PMCT, as the case may be, may at
its option, but without obligation, purchase such Loan at a price equal to the
Takeout Price or cause or permit such 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 at its option, but without obligation, purchase 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; provided, however, the aggregate principal balance of all Loans that
become Refinancable Loans and that may be purchased pursuant to this Section
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 exceed 20% of the aggregate Cut-Off Date Principal Balance of the
Loans on a cumulative basis.
(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 with respect to the
Substitute Loan in substantially the form of Exhibit B-1 attached hereto and any
required documentation must be delivered 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
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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
(iii) on each Payment Date, the Trustee shall release
all Loans 150 days contractually past due, Charged-Off Loans and Refinancable
Loans from the Lien of this Indenture and deliver to the Issuer the deleted
Loans 150 days contractually past due, Charged-Off Loans and Refinancable Loans;
provided, however, that the Trustee shall release any Loans 150 days
contractually past due, Charged-Off Loan or Refinancable Loan from the Lien of
this Indenture only if (x) there then exists no Event of Default, (y) all
outstanding amounts due and payable with respect to the Loans 150 days
contractually past due, Charged-Off Loan or Refinancable Loan have been paid to
the Noteholders as Required Principal Distribution Amounts or the Takeout Price
has been paid for the Loans 150 days contractually past due, Charged-Off Loan or
Refinancable 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.
TRUST INDENTURE - Page 20
(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, assign, transfer, pledge, distribute or otherwise dispose of the Loans as
a whole or in part after the Closing Date other than as provided in the
Transaction Documents.
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. Following the occurrence of a
Redemption Trigger Event, the Notes will bear interest at a per annum rate equal
to the Remittance Rate, plus the Post Optional Redemption Remittance Margin.
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 Applicable 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 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.
TRUST INDENTURE - Page 21
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 in accordance with the priorities set forth in Section
6.4 herein.
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
accrued and unpaid interest on the Notes, plus accrued and unpaid fees and
expenses of the Trustee, the Servicers and the Supervisory Servicer. 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 in accordance with the priorities set forth in Section 6.4
herein, 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.
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
TRUST INDENTURE - Page 22
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.
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;
TRUST INDENTURE - Page 23
(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 or PMCT (except any acquisition by PMCT or PMC of the other,
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.
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 or in accordance with the Transaction
Documents.
5.10 NEGATIVE COVENANTS OF THE ISSUER. The Issuer hereby agrees that as
long as any Notes remain Outstanding:
TRUST INDENTURE - Page 24
(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 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.
TRUST INDENTURE - Page 25
(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) the Trustee, for the benefit of the Noteholders, 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
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, 2004,
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 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:
TRUST INDENTURE - Page 26
(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 five (5) years preceding such
appointment (i) a stockholder (whether direct, indirect or beneficial), member,
partner, director, manager (except Independent Manager), officer or employee of
the General Partner, the Issuer or their Affiliates; (ii) affiliated with a
significant customer or supplier of the General Partner, the Issuer or their
Affiliates; (iii) a spouse, parent, sibling or child of any person described by
(i) or (ii) above; or (iv) a trustee, conservator or receiver of any Affiliate
(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) and shall
maintain adequate capital in light of its contemplated business operations.
(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 and shall comply with its
agreement of 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.
(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 or hold out
its credit as being available to satisfy the obligations of others.
(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 and correct
any known misunderstanding regarding its separate identity.
(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
TRUST INDENTURE - Page 27
service provided to the Issuer by such Affiliate (other than the Servicers
pursuant to the terms of the Servicing Agreement) and shall allocate fairly and
reasonably any overhead for shared office space.
(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.
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:
(a) 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
(b) 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.
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.
TRUST INDENTURE - Page 28
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 if the Trustee is a depository
institution that is not rated at least "P-1" or the equivalent by the Rating
Agency. The Collection Account shall be entitled "Collection Account--The Bank
of New York, as Trustee, in trust for registered Holders of $92,893,169 PMC
Joint Venture, L.P. 2003-1 Loan-Backed Floating Rate Notes" and the Spread
Account shall be entitled "Spread Account--The Bank of New York, as Trustee, in
trust for registered Holders of $92,893,169 PMC Joint Venture, L.P. 2003-1
Loan-Backed Floating Rate Notes." If the Trustee is a depository institution
rated at least "P-1" or the equivalent by the Rating Agency, the Collection
Account and the Spread Account may be established as deposit accounts. 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 by the Trustee:
(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
(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.
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(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 Required Principal Distribution
Amount and the Carry Forward Amount, if any, exceed (b) the Amount Available for
such Payment Date; 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 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 Amount
Available from the Collection 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 Regular Interest Distribution Amount;
TRUST INDENTURE - Page 30
(iii) Third, to the Noteholders, in an amount up to
the sum of (a) the Required 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 Noteholders, in an amount up to the
difference of (1) the Interest Distribution Amount, minus (2) the Regular
Interest Distribution Amount;
(vi) Sixth, 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;
(vii) Seventh, provided no Event of Default 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 an Event of Default then exists, no amount
shall be paid to the Issuer on such Payment Date pursuant to this clause
6.4(b)(vii); and
(viii) Eighth, provided no Event of Default or
Redemption Trigger 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 an Event of
Default then exists, no amount shall be paid to the Issuer on such Payment Date
pursuant to this clause 6.4(b)(viii); and provided further, notwithstanding the
foregoing, in the event a Redemption Trigger 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)(viii) shall be paid to the Noteholders and
applied to the outstanding principal balance of the Notes until the Notes are
paid in full.
(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 Noteholder's percentage of the Outstanding Note Amount
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 (including, without limitation, Prepayment Premiums)
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.
TRUST INDENTURE - Page 31
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.
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
TRUST INDENTURE - Page 32
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 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.
TRUST INDENTURE - Page 33
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
Required 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;
(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
TRUST INDENTURE - Page 34
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.
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.
TRUST INDENTURE - Page 35
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
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 Applicable Remittance Rate to the
TRUST INDENTURE - Page 36
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.
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
TRUST INDENTURE - Page 37
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
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 Applicable Remittance 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.
TRUST INDENTURE - Page 38
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 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
TRUST INDENTURE - Page 39
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 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
TRUST INDENTURE - Page 40
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 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.
TRUST INDENTURE - Page 41
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 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
TRUST INDENTURE - Page 42
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, 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 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 Servicers, 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
TRUST INDENTURE - Page 43
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" or its equivalent, as applicable.
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" or its equivalent, as applicable, 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
TRUST INDENTURE - Page 44
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.
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:
(i) 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;
(ii) 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;
TRUST INDENTURE - Page 45
(iii) 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 or conferred and which are not
contrary to or inconsistent with this Indenture as theretofore in effect;
(iv) 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;
(v) 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;
(vi) 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;
(vii) To amend or modify any provisions of this
Indenture required by the Rating Agency to maintain the rating of the Notes;
(viii) 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
(ix) 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 Applicable Remittance Rate, 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 ratings 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 all
conditions to its entry have been satisfied, and the Trustee shall be fully
protected in its
TRUST INDENTURE - Page 46
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. If, within sixty (60) days or such longer period as
shall be prescribed by the Issuer following the final distribution of such
notice, the Required Noteholders at the time of the execution of any such
supplemental indenture shall have consented to and approved the execution
thereof as herein provided (other than where a unanimous consent is required as
described above), no owner of any Note shall have any right to object to any of
the terms and provisions contained herein, or the operation thereof, or in any
manner to question the propriety of the execution thereof, or to enjoin or
restrain the Trustee or the Issuer from executing the same or from taking any
action pursuant to the provisions thereof. 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 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.
TRUST INDENTURE - Page 47
(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.
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 48
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 49
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. 2003-1
By: PMC Joint Venture LLC 2003-1,
its General Partner
By: /s/ Xxx X. Xxxxx
------------------------------
Xxx X. Xxxxx, Executive Vice
President
THE BANK OF NEW YORK,
as Trustee
By: /s/ Xxxx X. Xxxxxxx
------------------------------
Name: /s/ Xxxx X. Xxxxxxx
----------------------------
Title: Agent
---------------------------
TRUST INDENTURE - Page 50
