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EXHIBIT 4.1
FORM OF INDENTURE
BETWEEN
FUND AMERICA INVESTORS TRUST 1997-NMC1,
AS ISSUER,
AND
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
AS INDENTURE TRUSTEE
Dated as of September 1, 1997
Relating to
FUND AMERICA INVESTORS TRUST 1997-NMC1
COLLATERALIZED MORTGAGE OBLIGATIONS, SERIES 1997-NMC1
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.............................................................................................2
Section 1.01. General Definitions.......................................................................2
ARTICLE II THE BONDS.............................................................................................20
Section 2.01. Forms Generally..........................................................................20
Section 2.02. Forms of Certificate of Authentication...................................................20
Section 2.03. General Provisions With Respect to Principal and Interest Payments.......................20
Section 2.04. Denominations............................................................................21
Section 2.05. Execution, Authentication, Delivery and Dating...........................................21
Section 2.06. Registration, Registration of Transfer and Exchange......................................21
Section 2.07. Mutilated, Destroyed, Lost or Stolen Bonds...............................................22
Section 2.08. Payments of Principal and Interest.......................................................23
Section 2.09. Persons Deemed Owners....................................................................24
Section 2.10. Cancellation.............................................................................24
Section 2.11. Authentication and Delivery of Bonds.....................................................24
Section 2.12. Book-Entry Bonds.........................................................................26
Section 2.13. Termination of Book Entry System.........................................................26
ARTICLE III COVENANTS............................................................................................27
Section 3.01. Payment of Bonds.........................................................................27
Section 3.02. Maintenance of Office or Agency..........................................................27
Section 3.03. Money for Bond Payments to Be Held In Trust..............................................27
Section 3.04. Existence of Issuer......................................................................29
Section 3.05. Protection of Trust Estate...............................................................29
Section 3.06. Opinions as to Trust Estate..............................................................30
Section 3.07. Performance of Obligations; Servicing Agreement..........................................30
Section 3.08. Investment Company Act...................................................................30
Section 3.09. Negative Covenants.......................................................................30
Section 3.10. Annual Statement as to Compliance........................................................31
Section 3.11. Restricted Payments......................................................................31
Section 3.12. Treatment of Bonds as Debt for Tax Purposes..............................................32
Section 3.13. Notice of Events of Default..............................................................32
Section 3.14. Further Instruments and Acts.............................................................32
ARTICLE IV SATISFACTION AND DISCHARGE............................................................................32
Section 4.01. Satisfaction and Discharge of Indenture..................................................32
Section 4.02. Application of Trust Money...............................................................33
ARTICLE V DEFAULTS AND REMEDIES..................................................................................33
Section 5.01. Event of Default.........................................................................33
Section 5.02. Acceleration of Maturity; Rescission and Annulment.......................................34
Section 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee................35
Section 5.04. Remedies.................................................................................35
Section 5.05. Indenture Trustee May File Proofs of Claim...............................................36
Section 5.06. Indenture Trustee May Enforce Claims Without Possession of Bonds.........................36
Section 5.07. Application of Money Collected...........................................................36
Section 5.08. Limitation on Suits......................................................................37
Section 5.09. Unconditional Rights of Bondholders to Receive Principal and Interest....................37
Section 5.10. Restoration of Rights and Remedies.......................................................38
Section 5.11. Rights and Remedies Cumulative...........................................................38
Section 5.12. Delay or Omission Not Waiver.............................................................38
Section 5.13. Control by Bondholders...................................................................38
Section 5.14. Waiver of Past Defaults..................................................................38
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Section 5.15. Undertaking for Costs....................................................................39
Section 5.16. Waiver of Stay or Extension Laws.........................................................39
Section 5.17. Sale of Trust Estate.....................................................................39
Section 5.18. Action on Bonds..........................................................................40
Section 5.19. No Recourse to Other Trust Estates or Other Assets of the Issuer.........................41
Section 5.20. Application of the Trust Indenture Act...................................................41
ARTICLE VI THE INDENTURE TRUSTEE.................................................................................41
Section 6.01. Duties of Indenture Trustee..............................................................41
Section 6.02. Notice of Default........................................................................42
Section 6.03. Rights of Indenture Trustee..............................................................42
Section 6.04. Not Responsible for Recitals or Issuance of Bonds........................................43
Section 6.05. May Hold Bonds...........................................................................43
Section 6.06. Money Held in Trust......................................................................43
Section 6.07. Eligibility; Disqualification............................................................43
Section 6.08. Indenture Trustee's Capital and Surplus..................................................43
Section 6.09. Resignation and Removal; Appointment of Successor........................................44
Section 6.10. Acceptance of Appointment by Successor...................................................45
Section 6.11. Merger, Conversion, Consolidation or Succession to Business of Indenture Trustee.........45
Section 6.12. Preferential Collection of Claims Against Issuer.........................................45
Section 6.13. Co-Indenture Trustees and Separate Indenture Trustees....................................45
Section 6.14. Authenticating Agents....................................................................46
Section 6.15. Review of Mortgage Files.................................................................47
ARTICLE VII BONDHOLDERS' LISTS AND REPORTS.......................................................................49
Section 7.01. Issuer to Furnish Indenture Trustee Names and Addresses of Bondholders...................49
Section 7.02. Preservation of Information; Communications to Bondholders...............................49
Section 7.03. Reports by Indenture Trustee.............................................................49
Section 7.04. Reports by Issuer........................................................................50
ARTICLE VIII ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES..........................................50
Section 8.01. Collection of Moneys.....................................................................50
Section 8.02. Bond Account.............................................................................51
Section 8.03. Payments on the MBIA Insurance Policy....................................................52
Section 8.04. General Provisions Regarding the Indenture Accounts and Mortgage Loans...................54
Section 8.05. Releases of Defective Mortgage Loans.....................................................55
Section 8.06. Reports by Indenture Trustee to Bondholders; Access to Certain Information...............55
Section 8.07. Trust Estate Mortgage Files..............................................................56
Section 8.08. Amendment to Servicing Agreement.........................................................56
Section 8.09. Delivery of the Mortgage Files Pursuant to Servicing Agreement...........................56
Section 8.10. Records..................................................................................57
Section 8.11. Servicer as Agent........................................................................57
Section 8.12. Termination of Servicer..................................................................57
Section 8.13. Opinion of Counsel.......................................................................57
Section 8.14. Appointment of Custodians................................................................57
Section 8.15. Rights of the Bond Insurer to Exercise Rights of Bondholders.............................58
Section 8.16. Trust Estate and Accounts Held for Benefit of the Bond Insurer...........................58
Section 8.17. Bond Insurer Option to Purchase Mortgage Loans...........................................58
ARTICLE IX SUPPLEMENTAL INDENTURES...............................................................................58
Section 9.01. Supplemental Indentures Without Consent of Bondholders...................................58
Section 9.02. Supplemental Indentures With Consent of Bondholders......................................59
Section 9.03. Execution of Supplemental Indentures.....................................................60
Section 9.04. Effect of Supplemental Indentures........................................................60
Section 9.05. Conformity With Trust Indenture Act......................................................60
Section 9.06. Reference in Bonds to Supplemental Indentures............................................61
Section 9.07. Amendments to Governing Documents........................................................61
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ARTICLE X REDEMPTION OF BONDS....................................................................................61
Section 10.01. Redemption..............................................................................61
Section 10.02. Form of Redemption Notice...............................................................62
Section 10.03. Bonds Payable on Optional Redemption....................................................62
ARTICLE XI MISCELLANEOUS.........................................................................................62
Section 11.01. Compliance Certificates and Opinions....................................................62
Section 11.02. Form of Documents Delivered to Indenture Trustee........................................63
Section 11.03. Acts of Bondholders.....................................................................64
Section 11.04. Notices, etc. to Indenture Trustee and Issuer...........................................64
Section 11.05. Notices and Reports to Bondholders; Waiver of Notices...................................64
Section 11.06. Rules by Indenture Trustee..............................................................65
Section 11.07. Conflict With Trust Indenture Act.......................................................65
Section 11.08. Effect of Headings and Table of Contents................................................65
Section 11.09. Successors and Assigns..................................................................65
Section 11.10. Separability............................................................................65
Section 11.11. Benefits of Indenture...................................................................65
Section 11.12. Legal Holidays..........................................................................65
Section 11.13. Governing Law...........................................................................66
Section 11.14. Counterparts............................................................................66
Section 11.15. Recording of Indenture..................................................................66
Section 11.16. Issuer Obligation.......................................................................66
Section 11.17. Inspection..............................................................................66
Section 11.18. Usury...................................................................................66
Section 11.19. Third Party Beneficiary; Rating.........................................................67
Section 11.20. Notice to Bond Insurer..................................................................67
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SCHEDULES AND EXHIBITS
Schedule I Mortgage Loan Schedule
Exhibit A Form of Bond
Exhibit B Mortgage Loan Sale Agreement
Exhibit C Mortgage Loan Contribution Agreement
Exhibit D Letter of Representations to The Depository Trust Company
Exhibit E-1 Form of Indenture Trustee's Initial Certification
Exhibit E-2 Form of Indenture Trustee's Final Certification
Exhibit F MBIA Insurance Policy
Exhibit G Form of Notice of Claim
Exhibit H Servicing Agreement
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CROSS-REFERENCE TABLE
Cross-reference sheet showing the location in the Indenture of the
provisions inserted pursuant to Sections 310 through 318(a) inclusive of the
Trust Indenture Act of 1939.*
Trust Indenture Act of 1939 Indenture Section
--------------------------- -----------------
Section 310
(a) (1)...................................... 6.07
(a) (2)...................................... 6.07, 6.08
(a) (3)...................................... 6.13
(a) (4)...................................... Not Applicable
(a) (5)...................................... 6.07
(b).......................................... 6.07, 6.09
(c).......................................... Not Applicable
Section 311
(a).......................................... 6.12
(b).......................................... 6.12
(c).......................................... Not Applicable
Section 312
(a).......................................... 7.01(a), 7.02(a)
(b).......................................... 7.02(b)
(c).......................................... 7.02(c)
Section 313
(a).......................................... 7.03(a)
(b).......................................... 7.03(a)
(c).......................................... 11.05
(d).......................................... 7.03(b)
Section 314
(a)(1)....................................... 7.04
(a)(2)....................................... 7.04
(a)(3)....................................... 7.04
(a)(4)....................................... 7.04
(b)(1)....................................... 2.11(c), 11.01
(b)(2)....................................... 3.06
(c)(1)....................................... 2.11(d), 4.01,
8.02(d), 11.01
(c)(2)....................................... 2.11(c), 4.01,
8.02(d), 11.01
(c)(3)....................................... 8.02(d)
(d)(1)....................................... 11.01(a)
(d)(2)....................................... 11.01(a)
(d)(3)....................................... 11.01(a)
(e).......................................... 11.01(b)
Section 315
(a).......................................... 6.01(b), 6.01(c)(1)
(b).......................................... 6.02, 11.05
(c).......................................... 6.01(a)
(d)(1)....................................... 6.01(b), 6.01(c)
(d)(2)....................................... 6.01(c)(2)
--------
* This Cross-Reference Table is not part of the Indenture.
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(d)(3)....................................... 6.01(c)(3)
(e).......................................... 5.15
Section 316
(a).......................................... 5.20
(b).......................................... 5.09
(c).......................................... 5.20
Section 317
(a)(1)....................................... 5.03
(a)(2)....................................... 5.05
(b).......................................... 3.03
Section 318
(a).......................................... 11.07
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THIS INDENTURE, dated as of September 1, 1997 (as amended or
supplemented from time to time as permitted hereby, this "Indenture"), is
between FUND AMERICA INVESTORS TRUST 1997-NMC1, a Delaware business trust
(together with its permitted successors and assigns, the "Issuer") and NORWEST
BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking association, as trustee
(together with its permitted successors in the trusts hereunder, the "Indenture
Trustee").
PRELIMINARY STATEMENT
The Issuer has duly authorized the execution and delivery of this
Indenture to provide for its Collateralized Mortgage Obligations, Series
1997-NMC1 (the "Bonds"), issuable as provided in this Indenture. All covenants
and agreements made by the Issuer herein are for the benefit and security of the
Holders of the Bonds. The Issuer is entering into this Indenture, and the
Indenture Trustee is accepting the trusts created hereby, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged.
All things necessary to make this Indenture a valid agreement of the
Issuer in accordance with its terms have been done.
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee, for the exclusive
benefit of the Holders of the Bonds and the Bond Insurer, all of the Issuer's
right, title and interest in and to (a) the Mortgage Loans listed in Schedule I
to this Indenture, including the related Mortgage Files that the Issuer causes
to be delivered to the Indenture Trustee pursuant to the Mortgage Loan Sale
Agreement, all payments of principal received, collected or otherwise recovered
on or after the applicable Cut-off Date for each Mortgage Loan, all payments of
interest accruing on each Mortgage Loan on or after the applicable Cut-off Date
therefor whenever received and all other proceeds received in respect of such
Mortgage Loans, and any Qualified Replacement Mortgage Loan, (b) the MBIA
Insurance Policy, (c) the Servicing Agreement, (d) the Mortgage Loan Sale
Agreement, (e) the Mortgage Loan Contribution Agreement, (f) the Insurance
Policies, (g) all cash, instruments or other property held or required to be
deposited in the Collection Account, the Bond Account and the Policy Payments
Account, including all investments made with funds in such accounts (but not
including any income on funds deposited in, or investments made with funds
deposited in, the Collection Account, which income shall belong to and be for
the account of the Servicer, and not including any income on funds deposited in,
or investments made with funds deposited in the Bond Account, which income shall
belong to and be for the account of the Issuer), and (h) all proceeds of the
conversion, voluntary or involuntary, of any of the foregoing into cash or other
liquid assets, including, without limitation, all insurance proceeds and
condemnation awards. Such Grants are made, however, in trust, to secure the
Bonds equally and ratably without prejudice, priority or distinction between any
Bond and any other Bond by reason of difference in time of issuance or
otherwise, and to secure (x) the payment of all amounts due on the Bonds in
accordance with their terms, (y) the payment of all other sums payable under
this Indenture and (z) compliance with the provisions of this Indenture, all as
provided in this Indenture. All terms used in the foregoing granting clauses
that are defined in Section 1.01 are used with the meanings given in said
Section.
The Indenture Trustee acknowledges such Grant, accepts the trusts
hereunder in accordance with the provisions of this Indenture and agrees to
perform the duties herein required to the end that the interests of the Holders
of the Bonds may be adequately and effectively protected.
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ARTICLE I
DEFINITIONS
SECTION 1.01. GENERAL DEFINITIONS.
Except as otherwise specified or as the context may otherwise require,
the following terms have the respective meanings set forth below for all
purposes of this Indenture, and the definitions of such terms are applicable to
the singular as well as to the plural forms of such terms and to the masculine
as well as to the feminine genders of such terms. Whenever reference is made
herein to an Event of Default or a Default known to the Indenture Trustee or of
which the Indenture Trustee has notice or knowledge, such reference shall be
construed to refer only to an Event of Default or Default of which the Indenture
Trustee is deemed to have notice or knowledge pursuant to Section 6.01(d). All
other terms used herein that are defined in the Trust Indenture Act (as
hereinafter defined), either directly or by reference therein, have the meanings
assigned to them therein.
"ACCOUNTANT": A Person engaged in the practice of accounting who
(except when this Indenture provides that an Accountant must be Independent) may
be employed by or affiliated with the Issuer or an Affiliate of the Issuer.
"ACT": With respect to any Bondholder, as defined in Section 11.03.
"ADMINISTRATIVE FEE AMOUNT": For any Payment Date, the sum of the
Monthly Servicing Fee, the Indenture Trustee's Fee, the Bond Insurer Premium and
Owner Trustee Fee, each for such Payment Date.
"AFFILIATE": With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract, relation to individuals or otherwise, and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"AGENT": Any Bond Registrar, Paying Agent, Authenticating Agent or
Custodian.
"AGGREGATE PRINCIPAL BALANCE": With respect to any Payment Date, the
aggregate of the Principal Balances of the Mortgage Loans as of the preceding
Determination Date.
"ASSIGNMENTS": Collectively (i) the original instrument of assignment
of a Mortgage, the Mortgage Note secured thereby and all other documents
securing such Mortgage Note, including any interim assignments from the
originator or any other holder of any Mortgage Loan to the Issuer, (ii) the
original instrument of assignment of each agreement creating any leases, rents,
income or profits derived from the ownership, operation or disposition of all or
a portion of the related Mortgaged Property (if such item is separate from the
Mortgage) and (iii) the original instrument of assignment of such Mortgage,
Mortgage Note and other documents (described in clauses (i) and (ii)) made by
the Issuer to the Indenture Trustee (that in each case may, to the extent
permitted by the laws of the state in which the related Mortgaged Property is
located, be a blanket instrument of assignment covering other Mortgages and
Mortgage Notes as well and that may also be an instrument of assignment running
directly from the mortgagee of record under the related Mortgage to the
Indenture Trustee).
"AUTHENTICATING AGENT": The Person, if any, appointed as Authenticating
Agent by the Issuer pursuant to Section 6.14, until any successor Authenticating
Agent for the Bonds is named, and thereafter "Authenticating Agent" shall mean
such successor. The initial Authenticating Agent shall be the Indenture Trustee.
"AUTHORIZED OFFICER": With respect to any Person, the Chairman, Chief
Operating Officer, President or any Vice President of such Person.
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"AVAILABLE FUNDS": With respect to the Bonds and any Payment Date, the
sum of the amounts described in clauses (a) through (g) below, less (i) the
Administrative Fee Amount in respect of such Payment Date, (ii) Monthly Advances
and Servicing Advances previously made that are reimbursable to the Servicer
(other than those included in liquidation expenses for any Liquidated Mortgage
Loan and reimbursed from the related Liquidation Proceeds) in the related
Collection Period to the extent permitted by the Servicing Agreement and (iii)
the aggregate amounts (A) deposited into the Collection Account or Bond Account
that may not be withdrawn therefrom pursuant to a final and nonappealable order
of a United States bankruptcy court of competent jurisdiction imposing a stay
pursuant to Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code and that would
otherwise have been included in Available Funds on such Payment Date and (B)
received by the Indenture Trustee that are recoverable and sought to be
recovered from the Issuer as a voidable preference by a trustee in bankruptcy
pursuant to the United States Bankruptcy Code in accordance with a final
nonappealable order of a court of competent jurisdiction:
(a) all scheduled payments of interest received with respect
to the Mortgage Loans and due during the related Due Period and all
other interest payments on or in respect of the Mortgage Loans received
by or on behalf of the Servicer during the related Collection Period,
net of amounts representing interest accrued on such Mortgage Loans in
respect of any period prior to the applicable Cut-off Dates, plus any
Compensating Interest payments made by the Servicer in respect of the
related Mortgage Loans and any net income from related REO Properties
for such Collection Period.
(b) all scheduled payments of principal received with respect
to the Mortgage Loans and due during the related Due Period and all
other principal payments (including Principal Prepayments, but
excluding amounts described elsewhere in this definition) received or
deemed to be received during the related Collection Period in respect
of the Mortgage Loans;
(c) the aggregate of any Trust Insurance Proceeds collected by
the Servicer during the related Collection Period;
(d) the aggregate of any Net Liquidation Proceeds collected by
the Servicer during the related Collection Period;
(e) the aggregate of the Purchase Prices received in respect
of any Mortgage Loans that are required or permitted to be repurchased,
released, removed or substituted by the Mortgage Loan Seller during or
in respect of the related Collection Period, to the extent such amounts
are received by the Indenture Trustee on or before the related Deposit
Date;
(f) the amount of any Monthly Advances made by the Servicer
for such Payment Date; and
(g) the aggregate of amounts deposited in the Bond Account by
the Issuer or the Servicer, as the case may be, during such Collection
Period in connection with redemption of the Bonds pursuant to Article
X.
"AVAILABLE FUNDS CAP": The annualized weighted average of the Mortgage
Interest Rates on the Mortgage Loans as of the first day of the related Due
Period less a per annum rate equal to the percentage equivalent of the fraction
obtained by dividing the Administrative Fee Amount by the Aggregate Principal
Balance of the Mortgage Loans as of the first day of the related Due Period.
"AVAILABLE FUNDS CAP CARRY FORWARD AMOUNT": For any Payment Date for
which the Bond Interest Rate was equal to the Available Funds Cap, the
difference between the amount of Bond Interest that would have accrued had the
Bond Interest Rate equalled the Bond Formula Rate, minus the amount of Bond
Interest that did accrue for such Payment Date, plus interest accrued on such
difference from such Payment Date at the Bond Interest Rate for each successive
Interest Period to but excluding the Payment Date on which such amount, with
interest, is paid in full.
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"BASIC DOCUMENTS": This Agreement, the Trust Agreement, the Servicing
Agreement, the Mortgage Loan Sale Agreement, and the Mortgage Loan Contribution
Agreement.
"BEST EFFORTS": Efforts determined to be in good faith and reasonably
diligent by the Person performing such efforts, specifically the Issuer or the
Servicer, as the case may be, in its reasonable discretion. Such efforts do not
require the Issuer or the Servicer, as the case may be, to enter into any
litigation, arbitration or other legal or quasi-legal proceeding, nor do they
require the Issuer or the Servicer, as the case may be, to advance or expend
fees or sums of money in addition to those specifically set forth in this
Indenture and the Servicing Agreement.
"BOND ACCOUNT": The segregated trust account, which shall be an
Eligible Account, established and maintained pursuant to Section 8.02 and
entitled "Norwest Bank Minnesota, National Association, as Indenture Trustee for
Fund America Investors Trust 1997-NMC1 Collateralized Mortgage Obligations,
Series 1997-NMC1, Bond Account".
"BOND BALANCE": With respect to all of the Bonds, the aggregate of the
Current Bond Balances of all Bonds Outstanding at the time of determination.
"BONDHOLDER" or "HOLDER": The Person in whose name a Bond is registered
in the Bond Register, except that, solely for the purpose of taking any action
under Section 5.02 or giving of any consent pursuant to this Indenture, any Bond
registered in the name of the Issuer, the Mortgage Loan Seller, the Servicer or
the Transferor or any Persons actually known by a Responsible Officer of the
Indenture Trustee to be an Affiliate of the Issuer, the Mortgage Loan Seller,
the Servicer or the Transferor shall be deemed not to be Outstanding and the
percentage interest evidenced thereby shall not be taken into account in
determining whether Holders of the requisite percentage interests necessary to
take any such action or effect any such consent have acted or consented unless
the Issuer, the Mortgage Loan Seller, the Servicer, the Transferor or any such
Person is an owner of record of all of the Bonds.
"BOND FORMULA RATE": For any Payment Date prior to the Redemption Date,
a per annum rate equal to LIBOR plus 0.21% and, for any Payment Date thereafter,
a per annum rate equal to LIBOR plus 0.42%.
"BOND INSURER": MBIA Insurance Corporation, a New York stock insurance
company, and any successors thereto.
"BOND INSURER DEFAULT": The existence and continuance of any of the
following:
(a) the failure by the Bond Insurer to make a payment required
under the MBIA Insurance Policy in accordance with its terms;
(b) the entry by a court having jurisdiction in the premises
of (i) a decree or order for relief in respect of the Bond Insurer in
an involuntary case or proceeding under any applicable United States
federal or state bankruptcy, insolvency, rehabilitation, reorganization
or other similar law of (ii) a decree or order adjudging the Bond
Insurer bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization, rehabilitation, arrangement,
adjustment or composition of or in respect of the Bond Insurer under
any applicable United States federal or state law, or appointing a
custodian, receiver, liquidator, rehabilitator, assignee, trustee,
sequestrator or other similar official of the Bond Insurer or of any
substantial part of its property, or ordering the winding-up or
liquidation of its affairs, and the continuance of any such decree or
order for relief or any such other decree or order unstayed and in
effect for a period of 60 consecutive days; or
(c) the commencement by the Bond Insurer of a voluntary case
or proceeding under any applicable United States federal or state
bankruptcy, insolvency, reorganization or other similar law or of any
other case or proceeding to be adjudicated bankrupt or insolvent, or
the consent of the Bond Insurer to the entry of a decree or order for
relief in respect of the Bond Insurer in an involuntary case or
proceeding
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under any applicable United States federal or state bankruptcy,
insolvency case or proceeding against the Bond Insurer, or the filing
by the Bond Insurer of a petition or answer or consent seeking
reorganization or relief under any applicable United States federal or
state law, or the consent by the Bond Insurer to the filing of such
petition or to the appointment of or the taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or
similar official of the Bond Insurer or of any substantial part of its
property, or the failure by the Bond Insurer to pay debts generally as
they become due, or the admission by the Bond Insurer in writing of its
inability to pay its debts generally as they become due, or the taking
of corporate action by the Bond Insurer in furtherance of any such
action.
Notwithstanding anything to the contrary contained herein, upon the
existence and continuance of a Bond Insurer Default, the consent by the Bond
Insurer shall not be required to any action or inaction hereunder and the Bond
Insurer shall not have any rights with respect thereto.
"BOND INSURER PREMIUM": The premium due to the Bond Insurer on each
Payment Date, which amount shall be equal to 1/12 of the product of the
applicable Bond Insurer Premium Rate and the Bond Balance immediately prior to
such Payment Date.
"BOND INSURER PREMIUM RATE": [_____]% per annum.
"BOND INTEREST": As to any Payment Date, the amount of interest payable
to Holders of the Bonds on such Payment Date, which amount shall be equal to (a)
with respect to the initial Interest Period, interest for the number of days in
the period commencing on the Closing Date and ending on the day prior to such
Payment Date at the Bond Interest Rate on the Original Bond Balance, and (b)
with respect to any subsequent Interest Period, interest for the number of days
in such Interest Period at the Bond Interest Rate on the Bond Balance as of the
preceding Payment Date (after giving effect to the payment, if any, in reduction
of principal made on the Bonds on such preceding Payment Date). All calculations
of interest on the Bonds will be computed on the basis of the actual number of
days elapsed in the related Interest Period and in a year of 360 days.
"BOND INTEREST RATE": With respect to the Interest Period relating to
the October 1997 Payment Date, [_____]% per annum. With respect to each Interest
Period thereafter, a per annum rate equal to the lesser of (a) the Bond Formula
Rate and (b) the Available Funds Cap.
"BOND OWNER": With respect to a Book-Entry Bond, the Person who is the
beneficial owner of such Bond as reflected on the books of the Clearing Agency
for the Bonds or on the books of a Person maintaining an account with such
Clearing Agency (directly or as an indirect participant, in accordance with the
rules of such Clearing Agency).
"BOND REGISTER": As defined in Section 2.06.
"BOND REGISTRAR": As defined in Section 2.06.
"BONDS": Any bonds authorized by, and authenticated and delivered
under, this Indenture.
"BOOK-ENTRY BONDS": Any Bonds registered in the name of the Clearing
Agency or its nominee, ownership of which is reflected on the books of the
Clearing Agency or on the books of a person maintaining an account with such
Clearing Agency (directly or as an indirect participant in accordance with the
rules of such Clearing Agency).
"BOOK-ENTRY TERMINATION": The time at which the book-entry registration
of the Book-Entry Bonds shall terminate, as specified in Section 2.13.
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"BUSINESS DAY": Any day other than (i) a Saturday or Sunday or (ii) a
day that is either a legal holiday or a day on which banking institutions in the
State of Colorado, State of New York, the State of Minnesota, or the State of
Delaware are authorized or obligated by law, regulation or executive order to be
closed.
"CERTIFICATE DISTRIBUTION ACCOUNT": As defined in the Trust Agreement.
"CERTIFICATEHOLDERS": As defined in the Trust Agreement.
"CLEAN-UP CALL DATE": The first Payment Date on which the aggregate of
the Principal Balances of the Mortgage Loans is less than 10% of the Pool
Balance as of the Cut-Off Date.
"CLEARING AGENCY": An organization registered as a "clearing agency"
pursuant to Section 17A of the Securities and Exchange Act of 1934, as amended,
and the regulations of the Commission thereunder and shall initially be The
Depository Trust Company of New York, the nominee for which is Cede & Co.
"CLEARING AGENCY PARTICIPANTS": The entities for whom the Clearing
Agency will maintain book-entry records of ownership and transfer of Book-Entry
Bonds, which may include securities brokers and dealers, banks and trust
companies and clearing corporations and certain other organizations.
"CLOSING DATE": September [30], 1997, the date of initial issuance of
the Bonds.
"CODE": The Internal Revenue Code of 1986, as amended, and as may be
further amended from time to time, as successor statutes thereto, and applicable
U.S. Department of Treasury regulations issued pursuant thereto in temporary or
final form and proposed regulations thereunder to the extent that, by reason of
their proposed effective date, such proposed regulations would apply.
"COLLECTION ACCOUNT": The segregated trust account established by the
Servicer and maintained pursuant to Section 2.02(b) of the Servicing Agreement.
"COLLECTION PERIOD": As to any Payment Date, the period beginning on
the first day of the calendar month immediately preceding the month in which
such Payment Date occurs (except that, in the case of the first Payment Date,
the related Collection Period will commence on the applicable Cut-off Date for
each Mortgage Loan) and ending on the last day of such calendar month.
"COMMISSION": The Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, or if at
any time such Commission is not existing and performing the duties now assigned
to it under the Trust Indenture Act, then the body performing such duties at
such time under the Trust Indenture Act or similar legislation replacing the
Trust Indenture Act.
"COMPENSATING INTEREST". As defined in Article I of the Servicing
Agreement.
"CORPORATE TRUST OFFICE": The principal office of the Indenture Trustee
at which at any particular time its corporate trust business with respect to
this Indenture shall be principally administered, which office at the date of
the execution of this Indenture is located at Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx,
Xxxxxxxxxxx, XX 00000, Attention: Fund America Investors Trust 1997-NMC1, Series
1997-NMC1.
"CURRENT BOND BALANCE": With respect to any Bond as of any date of
determination, the original principal amount of such Bond, reduced by all prior
payments, if any, made with respect to principal of such Bond.
"CUSTODIAN": A Person who is at any time appointed by the Indenture
Trustee pursuant to Section 8.14 as a document custodian for the Mortgage Files,
which Person shall not be the Issuer or an Affiliate of the Issuer.
"CUT-OFF DATE": For each Mortgage Loan, the date specified as such in
the Mortgage Loan Schedule.
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"DEFAULT": Any occurrence that is, or with notice or the lapse of time
or both would become, an Event of Default.
"DEFECTIVE MORTGAGE LOAN": Any Mortgage Loan that is required to be
repurchased or substituted by the Mortgage Loan Seller pursuant to the Mortgage
Loan Sale Agreement.
"DEFINITIVE BONDS": Bonds other than Book-Entry Bonds.
"DELETED MORTGAGE LOAN": A Mortgage Loan replaced or to be replaced by
a Qualified Replacement Mortgage Loan.
"DELINQUENCY AMOUNT": As of any Payment Date, the product of the Pool
Delinquency Percentage for the preceding Collection Period and the Aggregate
Principal Balance of the Mortgage Loans for such Payment Date.
"DEPOSIT DATE": The date each month on which funds on deposit in the
Collection Account are remitted by the Servicer to the Indenture Trustee for
deposit into the Bond Account, which date shall be with respect to any Payment
Date, the 18th day of the month in which such Payment Date occurs, or the next
[succeeding] Business Day, if such 18th day is not a Business Day.
"DETERMINATION DATE": As to any Deposit Date, the last day of the
calendar month immediately preceding the calendar month in which such Deposit
Date occurs.
"DUE PERIOD": With respect to any Payment Date, the period commencing
on the second day of the calendar month immediately preceding the calendar month
in which such Payment Date occurs (or, with respect to the first Payment Date,
commencing the day following the applicable Cut-off Date for each Mortgage Loan)
and ending on the first day of the calendar month in which such Payment Date
occurs.
"ELIGIBLE ACCOUNT": Either (A) a segregated account or accounts
maintained with an institution the deposits of which are insured by the Bank
Insurance Fund or the Savings Association Insurance Fund of the FDIC, the
unsecured and uncollateralized debt obligations of which shall be rated "A" or
better by Standard & Poor's and "A2" or better by Moody's and in the highest
short term rating category by Standard & Poor's and Moody's, and that is either
(i) a federal savings and loan association duly organized, validly existing and
in good standing under the federal banking laws, (ii) an institution duly
organized, validly existing and in good standing under the applicable banking
laws of any state, (iii) a national banking association duly organized, validly
existing and in good standing under the federal banking laws, (iv) a principal
subsidiary of a bank holding company, and (v) approved in writing by the Bond
Insurer or (B) a trust account maintained with the trust department of a federal
or state chartered depository institution or trust company, having capital and
surplus of not less than $50,000,000, acting in its fiduciary capacity, the
unsecured and uncollateralized debt obligations of which shall be rated "Baa3"
or better by Moody's. Any Eligible Accounts maintained with the Indenture
Trustee shall conform to the preceding clause (B).
"EVENT OF DEFAULT": As defined in Section 5.01.
"EXCESS CASH": With respect to any Payment Date, the amount, if any, by
which Available Funds for such Payment Date exceed the sum of (i) any amounts
payable to the Bond Insurer for Insured Payments paid on prior Payment Dates and
not yet reimbursed with interest thereon at the "Late Payment Rate" (as defined
in the agreement), (ii) the Bond Interest for the related Payment Date, (iii)
the Monthly Principal for the related Payment Date, (iv) any Available Funds Cap
Carry Forward Amount payable on such Payment Date, and (v) any other amounts
payable to the Bond Insurer under the Insurance Agreement.
"EXCESS CASH PAYMENT". As defined in clause fourth of Section 8.01.(c).
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"FDIC": The Federal Deposit Insurance Corporation and its successors in
interest.
"FINAL CERTIFICATION": A certification as to the completeness of each
Mortgage File provided by the Indenture Trustee on or before the first
anniversary of the Closing Date pursuant to Section 6.15(b).
"FINAL MATURITY DATE": The Payment Date in April 2029.
"FULL PREPAYMENT": With respect to any Mortgage Loan, when any one of
the following occurs: (i) payment is made by the Mortgagor to the Servicer of
100% of the outstanding principal balance of such Mortgage Loan, together with
all accrued and unpaid interest thereon at the Mortgage Interest Rate on such
Mortgage Loan, (ii) payment is made to the Indenture Trustee of the Purchase
Price of such Mortgage Loan in connection with the purchase of such Mortgage
Loan by the Mortgage Loan Seller, the Servicer or the Bond Insurer or (iii)
payment is made to the Servicer of all Insurance Proceeds and Liquidation
Proceeds, and other payments, if any, that have been determined by the Servicer
in accordance with the provisions of the Servicing Agreement to be finally
recoverable, in the Servicer's reasonable judgment, in respect of such Mortgage
Loan.
"GRANT": To assign, transfer, mortgage, pledge, create and grant a
security interest in, deposit, set-over and confirm. A Grant of a Mortgage Loan
and related Mortgage Files, a Permitted Investment, the Servicing Agreement, the
Mortgage Loan Sale Agreement, the Mortgage Loan Contribution Agreement, an
Insurance Policy or any other instrument shall include all rights, powers and
options (but none of the obligations) of the Granting party thereunder,
including without limitation the immediate and continuing right to claim for,
collect, receive and give receipts for principal and interest payments
thereunder, insurance proceeds, Purchase Prices and all other moneys payable
thereunder and all proceeds thereof, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all rights and
options, to bring Proceedings in the name of the Granting party or otherwise,
and generally to do and receive anything that the Granting party is or may be
entitled to do or receive thereunder or with respect thereto.
"GROSS MARGIN": As defined in the Servicing Agreement.
"HIGHEST LAWFUL RATE": As defined in Section 11.18.
"INDENTURE": This instrument as originally executed and, if from time
to time supplemented or amended by one or more indentures supplemental hereto
entered into pursuant to the applicable provisions hereof, as so supplemented or
amended. All references in this instrument to designated "Articles", "Sections",
"Subsections" and other subdivisions are to the designated Articles, Sections,
Subsections and other subdivisions of this instrument as originally executed.
The words "herein", "hereof", "hereunder" and other words of similar import
refer to this Indenture as a whole and not to any particular Article, Section,
Subsection or other subdivision.
"INDENTURE ACCOUNTS": The Bond Account and the Policy Payments
Account.
"INDENTURE TRUSTEE": Norwest Bank Minnesota, National Association, a
national banking association, and any Person resulting from or surviving any
consolidation or merger to which it may be a party until a successor Person
shall have become the Indenture Trustee pursuant to the applicable provisions of
this Indenture, and thereafter "Indenture Trustee" shall mean such successor
Person.
"INDENTURE TRUSTEE'S FEE": The Indenture Trustee's monthly fee, equal
to 0.0125% per annum of the Aggregate Principal Balance of the Mortgage Loans as
of the first day of the related Due Period.
"INDEPENDENT": When used with respect to any specified Person means
such a Person who (i) is in fact independent of the Issuer and any other obligor
upon the Bonds, (ii) does not have any direct financial interest or any material
indirect financial interest in the Issuer or in any such other obligor or in an
Affiliate of the Issuer or such other obligor, and (iii) is not connected with
the Issuer or any such other obligor as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
Whenever it is herein
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provided that any Independent Person's opinion or certificate shall be furnished
to the Indenture Trustee, such Person shall be appointed by an Issuer Order and
such opinion or certificate shall state that the signer has read this definition
and that the signer is Independent within the meaning hereof.
"INDIVIDUAL BOND": A Bond of an original principal amount of $1,000; a
Bond of an original principal amount in excess of $1,000 shall be deemed to be a
number of Individual Bonds equal to the quotient obtained by dividing such
original principal amount by $1,000.
"INITIAL CERTIFICATION": A certification as to the completeness of each
Mortgage File provider by the Indenture Trustee within 45 days of the Closing
Date pursuant to Section 6.15(a).
"INSURANCE AGREEMENT": The Insurance Agreement, dated as of September
1, 1997, among the Bond Insurer, the Issuer, the Servicer and Mortgage Loan
Seller, the Transferor, and the Indenture Trustee.
"INSURANCE POLICIES": All insurance policies insuring any Mortgage Loan
or Mortgaged Property, to the extent the Issuer or the Indenture Trustee has any
interest therein.
"INSURED PAYMENTS": As to any Payment Date, the amount to be paid by
the Bond Insurer under the MBIA Insurance Policy pursuant to a Notice of Claim
presented by the Indenture Trustee (in the manner described in Section 8.05).
The Insured Payments as of any Payment Date shall be equal to the sum of (i) the
Bond Interest for such Payment Date and (ii) the Overcollateralization Deficit,
if any, with respect to the related Payment Date (after taking into account any
payments in reduction of the Bond Balance on such Payment Date) over (b)
Available Funds (net of any portion of such Available Funds applied to reduce
the bond Balance on such Payment Date) and (ii) any shortfall in the amount
required to pay a Preference Amount from any source other than the Insurance
Policy.
"INSURANCE PROCEEDS": As defined in Article I of the Servicing
Agreement.
"INTEREST PERIOD": With respect to the first Payment Date, the period
beginning on the Closing Date and ending on the day preceding the Payment Date
in October 1997 and, as to any subsequent Payment Date, the period beginning on
the immediately preceding Payment Date and ending on the day prior to the
related Payment Date.
"ISSUER": Fund America Investors Trust 1997-NMC1, a Delaware business
trust.
"ISSUER ORDER" and "ISSUER REQUEST": A written order or request of the
Issuer signed on behalf of the Issuer by an Authorized Officer of the Owner
Trustee or, in the case of such order or request required by Section 2.11, by an
Authorized Officer of the holder of the Residual Certificate and delivered to
the Indenture Trustee or the Authenticating Agent, as applicable.
"LETTER AGREEMENT": The Letter of Representations to The Depository
Trust Company from the Indenture Trustee and the Issuer dated September 30,
1997, attached hereto as Exhibit D.
"LIBOR": With respect to the October 1997 Payment Date, [________]% per
annum. With respect to any subsequent Payment Date, the per annum rate
determined by the Indenture Trustee on the related LIBOR Determination Date on
the basis of the offered rates of the Reference Banks for one-month U.S. dollar
deposits as such rates appear on the Reuters Screen LIBO Page as of 11:00 a.m.
(London time) on such LIBOR Determination Date. On each LIBOR Determination
Date, LIBOR will be established by the Indenture Trustee as follows:
(a) if on such LIBOR Determination Date two or more Reference
Banks provide such offered quotations, LIBOR shall be the arithmetic
mean (rounded upwards if necessary to the nearest whole multiple of
0.0625%) of such offered quotations; or
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(b) if on such LIBOR Determination Date, fewer than two
Reference Banks provide such offered quotations, LIBOR shall be the
greater of (x) LIBOR as determined on the previous LIBOR Determination
Date or (y) the Reserve Interest Rate.
"LIBOR DETERMINATION DATE": With respect to any Interest Period after
the first Interest Period, the second London Business Day immediately preceding
the first day of such Interest Period.
"LIQUIDATED MORTGAGE LOAN": As defined in Article I of the Servicing
Agreement.
"LIQUIDATION DATE": With respect to any Mortgage Loan, the date of the
final receipt of all Liquidation Proceeds, Insurance Proceeds or other payments
with respect to such Mortgage Loan.
"LIQUIDATION PROCEEDS": As defined in Article I of the Servicing
Agreement.
"LOAN-TO-VALUE RATIO": As defined in the Mortgage Loan Sale Agreement.
"LONDON BUSINESS DAY": A Business Day on which banks are open for
dealing in foreign currency and exchange in London and New York City.
"MATURITY": With respect to any Bond, the date on which the entire
unpaid principal amount of such Bond becomes due and payable as therein or
herein provided, whether at the Final Maturity Date or by declaration of
acceleration, call for redemption or otherwise.
"MBIA INSURANCE POLICY": The MBIA Insurance Policy (No.
[_______________]), dated [_______________], 1997, including any endorsements
thereto, issued by the Bond Insurer for the benefit of the Bondholders, pursuant
to which the Bond Insurer guarantees payment of Insured Amounts. A copy of the
MBIA Insurance Policy is attached hereto as Exhibit G.
"MINIMUM RATE": As defined in Article I of the Servicing Agreement.
"MONTHLY ADVANCE": As defined in Article I of the Servicing Agreement.
"MONTHLY PAYMENT": With respect to any Mortgage Note, the amount of
each monthly payment payable under such Mortgage Note in accordance with its
terms, including one month's accrued interest on the related Principal Balance
at the then applicable Mortgage Interest Rate, but net of any portion of such
monthly payment that represents late payment charges, prepayment or extension
fees or collections allocable to payments to be made by Mortgagors for payment
of insurance premiums or similar items.
"MONTHLY PRINCIPAL": For any Payment Date, an amount equal to (a) the
aggregate of (i) all scheduled payments of principal received or advanced with
respect to the Mortgage Loans and due during the related Due Period and all
other amounts collected, received or otherwise recovered in respect of principal
on the Mortgage Loans (including Principal Prepayments, but not including
Payments Ahead that are not allocable to principal for the related Due Period)
during or in respect of the related Collection Period, and (ii) the aggregate of
the amounts allocable to principal deposited in the Bond Account on the related
Deposit Date by the Issuer, the Transferor, the Servicer or the Bond Insurer in
connection with a repurchase, release, removal or substitution of any Mortgage
Loans pursuant to this Indenture, reduced by (b) the amount of any
Overcollateralization Surplus with respect to such Payment Date.
"MONTHLY SERVICING FEE": As defined in Article I of the Servicing
Agreement.
"MOODY'S": Xxxxx'x Investors Service, Inc. and its successors in
interest.
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"MORTGAGE": The mortgage, deed of trust or other instrument creating a
first lien on an estate in fee simple in real property securing a Mortgage Loan.
"MORTGAGE FILE": As defined in the Mortgage Loan Sale Agreement.
"MORTGAGE INTEREST RATE": With respect to each Mortgage Loan, the
adjustable rate per annum set forth in the related Mortgage Note from time to
time at which interest accrues on such Mortgage Loan as of the most recent
interest rate adjustment pursuant to the related Mortgage Note, in each case
after giving effect to any modification of a Mortgage Loan for any period in
connection with a bankruptcy or similar proceeding involving the related
Mortgagor or a modification, waiver or amendment of such Mortgage Loan granted
or agreed to by the Servicer in accordance with the Servicing Agreement.
"MORTGAGE LOAN": Each of the mortgage loans Granted to the Indenture
Trustee under this Indenture as security for the Bonds and that from time to
time comprise part of the Trust Estate. The Mortgage Loans are listed on the
Mortgage Loan Schedule annexed hereto as Schedule I.
"MORTGAGE LOAN CONTRIBUTION AGREEMENT": That certain agreement, dated
as of September 1, 1997, between the Transferor and the Issuer pursuant to which
the Mortgage Loans will be acquired from the Transferor by the Issuer for
inclusion in the Trust Estate, a copy of which agreement is attached hereto as
Exhibit C.
"MORTGAGE LOAN SALE AGREEMENT": That certain agreement, dated as of
September 1, 1997, between the Mortgage Loan Seller and the Transferor pursuant
to which the Mortgage Loans will be acquired from the Mortgage Loan Seller by
the Transferor for inclusion in the Trust Estate, a copy of which agreement is
attached hereto as Exhibit B.
"MORTGAGE LOAN SCHEDULE": As of any date, the schedule of mortgage
loans included in the Trust Estate. Schedule I hereto identifies the Mortgage
Loans being Granted to the Indenture Trustee on the Closing Date. The Mortgage
Loan Schedule will be supplemented from time to time during the Funding Period
by any Additional Mortgage Loan Schedule to reflect the addition of the related
Additional Mortgage Loans to the Trust Estate and may be amended as appropriate
from time to time to reflect the deletion and substitution of Mortgage Loans.
The Mortgage Loan Schedule shall identify each Mortgage Loan by the Servicer's
loan number and address (including the state) of the related Mortgaged Property
and shall set forth as to each Mortgage Loan the initial Loan-to-Value Ratio,
the Principal Balance as of the Cut-off Date, the Cut-off Date, the Index, the
Gross Margin, the currently Monthly Payment amount and the stated maturity date
of the related Mortgage Note. The Mortgage Loan Schedule shall be delivered to
the Indenture Trustee in both physical and computer-readable form.
"MORTGAGE LOAN SELLER": National Mortgage Corporation, a Colorado
corporation.
"MORTGAGE NOTE": The note or other instrument evidencing the
indebtedness of a Mortgagor under the related Mortgage Loan.
"MORTGAGED PROPERTY": The underlying property securing a Mortgage Note.
"MORTGAGOR": The obligor under a Mortgage Note.
"NET LIQUIDATION PROCEEDS": As defined in Article I of the Servicing
Agreement.
"NONRECOVERABLE ADVANCE": As defined in Article I of the Servicing
Agreement.
"NOTICE OF CLAIM": The notice required to be furnished by the Indenture
Trustee to the Bond Insurer in the event an Insured Amount is required to be
paid under the MBIA Insurance Policy with respect to any Payment Date, in the
form set forth as Exhibit G hereto.
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"OFFICERS' CERTIFICATE": A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, Chief Operating Officer or
a Vice President of the Mortgage Loan Seller, the Transferor, the Servicer or,
in the case of the Issuer, an authorized signatory of the Owner Trustee, as the
case may be, and delivered to the Indenture Trustee, Bond Insurer or each Rating
Agency, as the case may be.
"OPINION OF COUNSEL": A written opinion of counsel reasonably
acceptable to the Indenture Trustee and, in the case of opinions delivered to
the Bond Insurer, reasonably acceptable to it, who may be in-house counsel for
the Mortgage Loan Seller, the Transferor, the Issuer, or the Servicer or
in-house counsel of an affiliate of any of the foregoing. Any expense related to
obtaining an Opinion of Counsel for an action requested by a party shall be
borne by the party required to obtain such opinion or seeking to effect the
action that requires the delivery of such Opinion of Counsel, except in such
instances where such opinion is at the request of the Indenture Trustee, in
which case such expense shall be an expense of the holder of the Residual
Certificate.
"ORDER": As defined in Section 8.03(b).
"ORIGINAL BOND BALANCE": The principal balance of the Bonds at the
issue date thereof, equal to $[_____________].
"OUTSTANDING": As of the date of determination, all Bonds theretofore
authenticated and delivered under this Indenture except:
(i) Definitive Bonds theretofore canceled by the Bond
Registrar or delivered to the Bond Registrar for cancellation;
(ii) Bonds or portions thereof for whose payment or redemption
money in the necessary amount has been theretofore deposited with the
Indenture Trustee or any Paying Agent (other than the Issuer) in trust
for the Holders of such Bonds; provided, however, that if such Bonds
are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor, satisfactory to the
Indenture Trustee, has been made;
(iii) Bonds in exchange for or in lieu of which other Bonds
have been authenticated and delivered pursuant to this Indenture unless
proof satisfactory to the Indenture Trustee is presented that any such
Bonds are held by a bona fide purchaser (as defined by the Uniform
Commercial Code of the applicable jurisdiction); and
(iv) Bonds alleged to have been destroyed, lost or stolen that
have been paid as provided for in Section 2.07;
provided, however, that in determining whether the Holders of the requisite
percentage of the Bond Balance of the Outstanding Bonds have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, Bonds
owned by the Issuer, any other obligor upon the Bonds or any Affiliate of the
Issuer, the Mortgage Loan Seller, the Servicer or the Transferor or such other
obligor shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Indenture Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Bonds that the Indenture Trustee knows to be so owned shall be so disregarded.
Bonds so owned that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Indenture
Trustee the pledgee's right so to act with respect to such Bonds and that the
pledgee is not the Issuer, any other obligor upon the Bonds or any Affiliate of
the Issuer, the Mortgage Loan Seller, the Servicer or the Transferor or such
other obligor.
"OVERCOLLATERALIZATION AMOUNT": As to any Payment Date, the amount, if
any, by which the (x) Aggregate Principal Balance of the Mortgage Loans as of
the end of the related Due Period exceeds (y) the Bond Balance for such Payment
Date, after taking into account the Monthly Principal (disregarding any
permitted reduction thereof in Monthly Principal due to an Overcollateralization
Surplus made on such Payment Date) to be
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applied in reduction of the Bond Balance on such Payment Date. If the Aggregate
Principal Balance of the Mortgage Loans is less than the Bond Balance for such
Payment Date, determined as provided above, the Overcollateralization Amount for
such Payment Date shall be zero.
"OVERCOLLATERALIZATION DEFICIT": As to any Payment Date, the amount, if
any, by which the Bond Balance on such Payment Date (after taking into account
any payments to be paid on such Payment Date in reduction of the Bond Balance)
exceeds the Aggregate Principal Balance of the Mortgage Loans as of the end of
the related Due Period. If the Aggregate Principal Balance of the Mortgage Loans
as determined pursuant to the preceding sentence is greater than the Bond
Balance for such Payment Date determined as provided above, the
Overcollateralization Deficit for such Payment Date shall be zero.
"OVERCOLLATERALIZATION SURPLUS": As to any Payment Date, the amount, if
any, by which (x) the Overcollateralization Amount on such Payment Date exceeds
(y) their applicable Required Overcollateralization Amount.
"OWNER TRUSTEE": Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity, but solely as owner trustee under
the Trust Agreement, and any successor owner trustee thereunder.
"OWNER TRUSTEE FEE": As defined in the Trust Agreement.
"PAYING AGENT": The Indenture Trustee or any other depository
institution or trust company that is authorized by the Issuer pursuant to
Section 3.03 to pay the principal of, or interest on, any Bonds on behalf of the
Issuer.
"PAYMENT AHEAD": As defined in Article I of the Servicing Agreement.
"PAYMENT DATE": The 25th day of each month or, if any such day is not a
Business Day, the Business Day immediately following such 25th day, beginning
October 27, 1997.
"PAYMENT DATE STATEMENT": The statement prepared pursuant to Section
2.08(d) with respect to collection on or in respect of the Mortgage Loans and
other assets of the Trust Estate and payments on or in respect of the Bonds,
based upon the information contained in the Servicer Remittance Report prepared
pursuant to the Servicing Agreement and setting forth the following information
with respect to each Payment Date:
(i) the amount of such payment to Bondholders allocable to (x)
Monthly Principal and (y) any Excess Cash Payment;
(ii) the amount of such payment to Bondholders allocable to
Bond Interest;
(iii) the Bond Balance, after giving effect to the payment of
Monthly Principal and any Excess Cash Payment on such Payment Date;
(iv) the Aggregate Principal Balance of the Mortgage Loans as
of the end of the related Due Period;
(v) the amount of unreimbursed Monthly Advances and/or
Servicing Advances, if any, separately identifying the amount, if any,
of funds withdrawn from the Collection Account on the preceding Deposit
Date with respect to Monthly Advances and/or Servicing Advances;
(vi) the number and aggregate of the Principal Balances of
Mortgage Loans (including the Principal Balances of all Mortgage Loans
in foreclosure) contractually delinquent (i) one month, (ii) two months
and (iii) three or more months, as of the end of the related Collection
Period (including Mortgage Loans in foreclosure or other similar
proceedings);
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(vii) the number and aggregate of the Principal Balances of
the Mortgage Loans in foreclosure or other similar proceedings, and the
number and aggregate of the Principal Balance of Mortgage Loans, the
Mortgagor of which is known by the Servicer to be in bankruptcy as of
the end of the related Collection Period;
(viii) the book value of any real estate acquired through
foreclosure, grant of a deed in lieu of foreclosure or otherwise and
the number and the aggregate of the Principal Balances of the Mortgage
Loans relating thereto;
(ix) the Overcollateralization Amount, the applicable Required
Overcollateralization Amount, the Overcollateralization Surplus, if
any, and the Overcollateralization Deficit, if any;
(x) the amount of any Insured Payments for such Payment Date;
(xi) Available Funds for such Payment Date;
(xii) the number and aggregate of the Principal Balances of
all Mortgage Loans that were the subject of a Principal Prepayment
during the related Collection Period, the aggregate amount of Principal
Prepayments collected or deemed collected during the related Collection
Period and the amount of any partial Principal Prepayment collected or
deemed collected during the related Collection Period;
(xiii) the weighted average maturity of the Mortgage Loans and
weighted average Mortgage Interest Rate of the Mortgage Loans, as of
the end of the related Collection Period;
(xiv) the number of Mortgage Loans as of the beginning and the
end of the related Collection Period;
(xv) Realized Losses incurred during the Collection Period and
cumulative Realized Losses incurred since the Closing Date, including
the number of Mortgage Loans and the aggregate of the Principal Balance
of the Mortgage Loans pertaining to the Realized Losses that occurred
during the related Collection Period;
(xvi) the Bond Insurer Premium for the related Collection
Period;
(xvii) the aggregate amount of the Monthly Servicing Fee paid
to or retained by the Servicer for the related Collection Period; and
(xviii) such other information as the Bond Insurer may
reasonably request to the extent such information is available to the
Paying Agent from the Servicer and is produced by the Servicer in the
ordinary course of the Servicer's business.
In the case of information furnished pursuant to subclauses (i) and
(ii) above, the amounts shall be expressed as a dollar amount per Bond
with a $1,000 principal denomination.
"PERCENTAGE INTEREST": With respect to a Bond, the undivided percentage
interest (carried to eight places rounded down) obtained by dividing the
original principal balance of such Bond by the Original Bond Balance and
multiplying the result by 100.
"PERMITTED INVESTMENTS": One or more of the following obligations,
instruments and securities:
(a) direct general obligations of, or obligations fully
guaranteed by, the United States of America, the Federal Home Loan
Mortgage Corporation, Federal National Mortgage Corporation, the
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Federal Home Loan Banks or any agency or instrumentality of the United
States of America, the obligations of which are backed by the full
faith and credit of the United States of America;
(b) (i) demand and time deposits in, certificates of deposit
of, banker's acceptances issued by, or federal funds sold by any
depository institution or trust company (including the Indenture
Trustee or its agent acting in their respective commercial capacities)
incorporated under the laws of the United States of America or any
state thereof and subject to supervision and examination by federal
and/or state authorities, so long as, at the time of such investment or
contractual commitment providing for such investment, such depository
institution or trust company or its ultimate parent has a short-term
uninsured debt rating in one of the two highest available rating
categories of Standard & Poor's and the highest rating category of
Xxxxx'x and provided that each such investment has an original maturity
of no more than 365 days and (ii) any other demand or time deposit or
deposit which is fully insured by the FDIC;
(c) repurchase obligations with a term not to exceed 30 days
with respect to any security described in clause (a) above and entered
into with a depository institution or trust company (acting as a
principal) rated A or higher by S&P and rated A2 or higher by Xxxxx'x;
provided, however, that collateral transferred pursuant to such
repurchase obligation must be of the type described in clause (a) above
and must (i) be valued daily at current market price plus accrued
interest, (ii) pursuant to such valuation, be equal, at all times, to
105% of the cash transferred by the Indenture Trustee in exchange for
such collateral and (iii) be delivered to the Indenture Trustee or, if
the Indenture Trustee is supplying the collateral, an agent for the
Indenture Trustee, in such a manner as to accomplish perfection of a
security interest in the collateral by possession of certified
securities.
(d) securities bearing interest or sold at a discount issued
by any corporation incorporated under the laws of the United States of
America or any state thereof which has a long-term unsecured debt
rating in the highest available rating category of each of the Rating
Agencies at the time of such investment;
(e) commercial paper having an original maturity of less than
365 days and issued by an institution having a short-term unsecured
debt rating in the highest available rating category of each of the
Rating Agencies at the time of such investment;
(f) a guaranteed investment contract approved by each of the
Rating Agencies and the Bond Insurer and issued by an insurance company
or other corporation having a long-term unsecured debt rating in the
highest available rating category of each of the Rating Agencies at the
time of such investment;
(g) money market funds having ratings in the highest available
rating category of Xxxxx'x and one of the two highest available rating
categories of S&P at the time of such investment which invest only in
other Permitted Investments, any such money market funds which provide
for demand withdrawals being conclusively deemed to satisfy any
maturity requirements for Permitted Investments set forth herein; and
(h) any investment approved in writing by the Bond Insurer and
written evidence that any such investment will not result in a
downgrading or withdrawal of the rating by each Rating Agency on the
Bonds.
The Indenture Trustee may purchase from or sell to itself or an
affiliate, as principal or agent, the Permitted Investments listed above. All
Permitted Investments in a trust account under the Indenture shall be made in
the name of the Indenture Trustee for the benefit of the Bondholders and the
Bond Insurer.
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"PERSON": Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or political subdivision
thereof.
"POLICY PAYMENTS ACCOUNT": The segregated trust account, which shall be
an Eligible Account, established and maintained pursuant to Section 8.03 and
entitled "Norwest Bank Minnesota, National Association., as Indenture Trustee
for Fund America Investors Trust 1997-NMC1 Collateralized Mortgage Obligations,
Policy Payments Account".
"POOL BALANCE": As of any Determination Date, the aggregate of the
Principal Balance of the Mortgage Loans.
"POOL DELINQUENCY PERCENTAGE": For any Collection Period, the
percentage equivalent of the fraction obtained by dividing (1) the aggregate of
the Principal Balances of all Mortgage Loans that were 90 days contractually
delinquent or REO Property or in foreclosure as of the end of such Collection
Period, by (2) the aggregate of the Principal Balances of all the Mortgage Loans
as of the end of such Collection Period.
"PREDECESSOR BONDS": With respect to any particular Bond, every
previous Bond evidencing all or a portion of the same debt as that evidenced by
such particular Bond; and, for the purpose of this definition, any Bond
authenticated and delivered under Section 2.07 in lieu of a lost, destroyed or
stolen Bond shall be deemed to evidence the same debt as the lost, destroyed or
stolen Bond.
"PREFERENCE AMOUNT": With respect to any Payment Date, any amounts
included in previous payments to Bondholders as Bond Interest, Monthly Principal
and Excess Cash Payments or in respect of a Overcollateralization Deficit that
is recovered from such Bondholders as a voidable preference by a trustee in
bankruptcy pursuant to the United States Bankruptcy Code in accordance with a
final, nonappealable order of a court having competent jurisdiction and that
have not theretofore been repaid to such Bondholders; provided such Bondholders
have complied with the provisions of Section 8.03(b).
"PRINCIPAL BALANCE": As to any Mortgage Loan and any Determination
Date, the actual outstanding principal amount thereof as of the close of
business on the Determination Date in the preceding month (or, in the case of
the first Payment Date, as of the applicable Cut-off Date) less (i) the
principal portion of the Monthly Payment due during the Due Period which
includes such Determination Date [and due during previous Due Periods]; (ii) any
Principal Payments received in respect of such Mortgage Loan during the related
Collection Period, (iii) Net Liquidation Proceeds and Trust Insurance Proceeds
allocable to principal recovered or collected in respect of such Mortgage Loan
during the related Collection Period, (iv) the portion of the Purchase Price
allocable to principal to be remitted by the Mortgage Loan Seller or the
Servicer to the Bond Account on the next succeeding Deposit Date in connection
with a purchase or repurchase of such Mortgage Loan pursuant to the Servicing
Agreement or Section 8.05 hereof, to the extent such amount is actually
deposited in the Bond Account on such Deposit Date, (v) the amount to be
remitted by the Mortgage Loan Seller to the Trustee on the next succeeding
Deposit Date in connection with a substitution of a Qualified Replacement
Mortgage Loan for such Mortgage Loan pursuant to Section 8.05 hereof, to the
extent such amount is actually deposited in the Bond Account on such Deposit
Date, and (vi) the amount to be remitted by the Bond Insurer to the Trustee on
the next succeeding Remittance Date in connection with a purchase of such
Mortgage Loan pursuant to Section 8.17; provided, however that a Mortgage Loan
that has become a Liquidated Mortgage Loan since the end of the immediately
preceding Collection Period (or, in the case of the first Payment Date following
the transfer of such Mortgage Loan to the Issuer, since the applicable Cut-off
Date) will be deemed to have a Principal Balance of zero on the current
Determination Date.
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"PRINCIPAL PAYMENT": As to any Mortgage Loan and Collection Period, all
amounts received or, in the case of the principal portion of any Payment Ahead,
deemed to have been received by the Servicer from or on behalf of the related
Mortgagor during such Collection Period (including Principal Prepayments) that,
at the time of receipt or, in the case of any Payment Ahead, at the time such
Payment Ahead is deemed to have been received, were applied or were required to
be applied by the Servicer in reduction of the Principal Balance of such
Mortgage Loan.
"PRINCIPAL PREPAYMENT": As to any Mortgage Loan and Collection Period,
any payment by a Mortgagor or other recovery in respect of principal on a
Mortgage Loan (including Net Liquidation Proceeds and Trust Insurance Proceeds)
that, in the case of a payment by a Mortgagor, is received in advance of its
scheduled due date and is not a Payment Ahead.
"PROCEEDING": Any suit in equity, action at law or other judicial or
administrative proceeding.
"PURCHASE PRICE": With respect to any Defective Mortgage Loan, an
amount equal to (i) the sum of (A) the Principal Balance of such Defective
Mortgage Loan as of the beginning of the Collection Period next preceding the
Remittance Date on which such repurchase or purchase is required to occur, (B)
interest computed at the applicable Mortgage Interest Rate on such Principal
Balance from the date to which interest was last paid by the Mortgagor to the
last day of the Collection Period immediately preceding the Remittance Date on
which such repurchase occurs and (C) any previously unreimbursed Servicing
Advances made on or in respect of such Defective Mortgage Loan, less (ii) any
payments of principal and interest in respect of such Defective Mortgage Loan
made by or on behalf of the related Mortgagor during such Collection Period.
"QUALIFIED REPLACEMENT MORTGAGE LOAN": A Mortgage Loan that is
substituted for a Deleted Mortgage Loan pursuant to Section 8.05 that must, at
the end of the Collection Period preceding the date of such substitution, (i)
have an outstanding principal balance (when taken together with any other
Qualified Replacement Mortgage Loan being substituted for such Deleted Mortgage
Loan), not in excess of and not substantially less than the unpaid principal
balance of the Deleted Mortgage Loan at the end of the Collection Period
preceding the date of substitution, (ii) have the Mortgage Interest Rate
computed on substantially the same basis as the Mortgage Interest Rate on the
related Mortgage Loan, utilizing the same Index and having a Gross Margin or
Minimum Rate not less than (and not more than one percentage point in excess of)
the Gross Margin and Minimum Rate applicable to the Deleted Mortgage Loan, (iii)
have a remaining term to maturity not greater than (and not more than one year
less than) that of the Deleted Mortgage Loan, (iv) have a Loan-to-Value Ratio
equal to or lower than the Loan-to- Value Ratio of the Deleted Mortgage Loan,
(v) have a first lien priority, (vi) comply as of the date of substitution with
each representation and warranty set forth in Section 4(b) of the Mortgage Loan
Sale Agreement, (vii) have the same or better property type as the Deleted
Mortgage Loan and (viii) have the same or better occupancy status. In the event
that one or more mortgage loans are proposed to be substituted for one or more
Deleted Mortgage Loans, the foregoing tests may be met on a weighted average
basis or other aggregate basis acceptable to the Certificate Insurer, except
that the requirements of clauses (v), (vi), (vii) and (viii) hereof must be
satisfied as to each Qualified Replacement Mortgage Loan.
"RATING AGENCIES": Standard & Poor's and Xxxxx'x (each, a "Rating
Agency"). If either such agency or a successor is no longer in existence,
"Rating Agency" shall be such nationally recognized statistical credit rating
agency, or other comparable Person, designated by the Servicer, notice of which
designation shall be given to the Indenture Trustee.
"REALIZED LOSS": As defined in Article I of the Servicing Agreement.
"RECORD DATE": With respect to any Payment Date, the date on which the
Persons entitled to receive any payment of principal of or interest on any Bonds
(or notice of a payment in full of principal) due and payable on such Payment
Date are determined; such date shall be the last Business Day of the month
preceding the month of such Payment Date. With respect to a vote of Bondholders
required or allowed hereunder, the Record Date shall be
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the later of (i) 30 days prior to the first solicitation of consents or (ii) the
date of the most recent list of Bondholders furnished to the Indenture Trustee
pursuant to Section 7.01(a) prior to such solicitation.
"REDEMPTION DATE": Each Payment Date for which the Aggregate Principal
Balance of the Mortgage Loans is less than 10% as of the respective Cut-off
Dates.
"REDEMPTION PRICE": With respect to any Bond to be redeemed in whole or
in part, an amount equal to 100% of the Current Bond Balance of the Bond to be
so redeemed, together with accrued and unpaid interest on such amount at the
Bond Interest Rate through the last day of the month preceding the month in
which the applicable Redemption Date occurs.
"REFERENCE BANKS": Bankers Trust Company, Xxxxxxx'x Bank PLC and
National Westminster Bank PLC; provided that, if any of the foregoing banks are
deemed by the Servicer (as indicated in writing to the Indenture Trustee) not
suitable to serve as a Reference Bank, then any leading banks selected by the
Indenture Trustee and engaged in transactions in Eurodollar deposits in the
international Eurocurrency market (i) with an established place of business in
London, (ii) whose quotations appear on the Reuters Screen LIBO Page on the
LIBOR Determination Date in question, (iii) that have been designated as such by
the Indenture Trustee and (iv) not controlling, controlled by, or under common
control with the Issuer, the Mortgage Loan Seller, the Transferor, the Servicer
or any originator.
"REMITTABLE FUNDS": As defined in Article I of the Servicing Agreement.
"REO PROPERTY": As defined in Article I of the Servicing Agreement.
"REQUIRED OVERCOLLATERALIZATION AMOUNT" means:
(a) for any Payment Date occurring during the period
commencing on the Closing Date and ending on the later of the thirtieth
Payment Date following the Closing Date and the date upon which
principal in the amount of one-half of the Aggregate Principal Balance
of the Mortgage Loans as of the respective Cut-off Dates has been
received by the Noteholders, the greater of: (i) the Original
Overcollateralization Amount, and (ii) 60% of the Delinquency Amount.
(b) for any Payment Date occurring after the end of the period
described in clause (a) above, the greatest of (i) two times the
Original Overcollateralization Amount stated as a percentage of the
Aggregate Principal Balance of the Mortgage Loans as of the respective
Cut-off Dates times the Aggregate Principal Balance for the current
Payment Date, (ii) 60% of the Delinquency Amount, (iii) 0.75% of the
Aggregate Principal Balance of the Mortgage Loans as of the respective
Cut-off Dates, and (iv) the sum of the Principal Balances of the three
largest loans.
(c) Provided, however, for any Payment Date occurring after
the end of the period described in clause (a) above, if 70% of the
Delinquency Amount exceeds the Required Overcollateralization Amount as
calculated in clause (b)(i) above, the Required Overcollateralization
Amount shall be no less than the Required Overcollateralization Amount
as of the previous Payment Date.
The Bond Insurer may, in its sole discretion, at the request
of the holders of 50% or more of the ownership interests of the Issuer,
modify clause (a)(ii) or (b)(ii) above for the purpose of reducing or
eliminating, in whole or in part, the application of clause (a)(ii) or
(b)(ii) above, if the Indenture Trustee and each Rating Agency shall
have been notified in writing of such modification prior to the related
Payment Date and each Rating Agency shall have confirmed that such
modification shall not result in a downgrading of the then-current
ratings on the Bonds.
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"REQUIRED PAYMENT AMOUNT": With respect to any Payment Date, the Bond
Interest for such Payment Date plus the amount of any Overcollateralization
Deficit for such Payment Date, and with respect to the Payment Date occurring on
the Final Maturity Date, the remaining Bond Balance.
"RESERVE INTEREST RATE": With respect to any LIBOR Determination Date,
the rate per annum that the Indenture Trustee determines to be either (i) the
arithmetic mean (rounded upwards if necessary to the nearest whole multiple of
0.0625%) of the one-month U.S. dollar lending rates that New York City banks
selected by the Indenture Trustee are quoting on the relevant LIBOR
Determination Date to the principal London offices of leading banks in the
London interbank market or (ii) in the event that the Indenture Trustee can
determine no such arithmetic mean, the lowest one-month U.S. dollar lending rate
that New York City banks selected by the Indenture Trustee are quoting on such
LIBOR Determination Dates to leading European banks.
["RESIDUAL CERTIFICATE": As defined in the Trust Agreement.]
"RESPONSIBLE OFFICER": With respect to the Indenture Trustee, the
chairman or vice-chairman of the board of directors, the chairman or
vice-chairman of the executive committee of the board of directors, the
president, any vice president, any assistant vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
trust officer or assistant trust officer, the controller, any assistant
controller or any other officer of the Indenture Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of his knowledge of and familiarity with
the particular subject.
"ROLLING POOL DELINQUENCY PERCENTAGE": For any Payment Date, the
average of the Pool Delinquency Percentages as of the last day of each of the
three (or one or two, in the case of the first tow Payment Dates, as applicable)
most recently ended Collection Periods.
"REUTERS SCREEN LIBO PAGE": The display designated as page "LIBO" on
the Reuters Monitor Money Rates Service (or such other page as may replace the
LIBO page on that servicer for the purpose of displaying London interbank
offered rates of major banks).
"SALE": The meaning specified in Section 5.17.
"SERVICER": With respect to any Mortgage Loan, National Mortgage
Corporation, a Colorado corporation, as Servicer under the Servicing Agreement,
and its permitted successors and assigns thereunder, including any successor
servicers appointed pursuant to Section 6.02 of the Servicing Agreement.
"SERVICER REMITTANCE REPORT": As defined in Article I of the Servicing
Agreement.
"SERVICING ADVANCE": As defined in Article I of the Servicing
Agreement.
"SERVICING AGREEMENT": The servicing agreement, dated as of September
1, 1997, among the Issuer, the Servicer and the Indenture Trustee, providing,
among other things, for the servicing of the Mortgage Loans, as such agreement
may be amended or supplemented from time to time as permitted hereby and
thereby. Such term shall also include any servicing agreement entered into with
a successor servicer. A copy of the Servicing Agreement as in effect as of the
date hereof is attached hereto as Exhibit I.
"SERVICING FEE RATE": 0.50% per annum.
"STANDARD & POOR'S": Standard & Poor's Rating Services, a division of
The XxXxxx-Xxxx Companies, Inc., and its successors in interest.
"TRANSFEROR": Fund America Investors Corporation II.
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"TRUST AGREEMENT": That certain trust agreement, dated as of September
1, 1997, among the Transferor, as Depositor (as such term is defined therein),
the Owner Trustee and Norwest Bank Minnesota, National Association as Trust
Paying Agent thereunder.
"TRUST ESTATE": All money, instruments and other property subject or
intended to be subject to the lien of this Indenture for the benefit of the
Bondholders as of any particular time (including, without limitation, all
property and interests Granted to the Indenture Trustee, including all proceeds
thereof).
"TRUST INDENTURE ACT" or "TIA": The Trust Indenture Act of 1939 as it
may be amended from time to time.
"TRUST INSURANCE PROCEEDS": As defined in Article I of the Servicing
Agreement.
"TRUST PAYING AGENT": The entity appointed to act as paying agent
pursuant to the Trust Agreement with respect to amounts on deposit from time to
time in the Certificate Distribution Account and distributions thereof to
Certificateholders. The initial Trust Paying Agent is Norwest Bank Minnesota,
National Association.
"U.S. BANKRUPTCY CODE" shall mean the United States Bankruptcy Code, 11
U.S.C. Sections 101, et seq., as amended or supplemented from time to time.
"VICE PRESIDENT": Any vice president, whether or not designated by a
number or a word or words added before or after the title "vice president".
ARTICLE II
THE BONDS
SECTION 2.01. FORMS GENERALLY.
The Bonds shall be in substantially the form set forth on Exhibit A
attached hereto. Each Bond may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange on which the Bonds
may be listed, or as may, consistently herewith, be determined by the Authorized
Officers of the Owner Trustee executing such Bonds, as evidenced by their
execution thereof. Any portion of the text of any Bond may be set forth on the
reverse thereof with an appropriate reference on the face of the Bond.
The Definitive Bonds may be produced in any manner determined by the
Authorized Officers of the Owner Trustee executing such Bonds, as evidenced by
their execution thereof.
SECTION 2.02. FORMS OF CERTIFICATE OF AUTHENTICATION.
The form of the Authenticating Agent's certificate of authentication is
as follows:
This is one of the Bonds referred to in the within-mentioned Indenture.
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Authenticating Agent
By: _____________________________________
Authorized Signatory
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SECTION 2.03. GENERAL PROVISIONS WITH RESPECT TO PRINCIPAL AND
INTEREST PAYMENTS.
The Bonds shall be designated generally as the "Collateralized Mortgage
Obligations, Series 1997-NMC1" of the Issuer.
The aggregate principal amount of Bonds that may be authenticated and
delivered under the Indenture is limited to $[_____________], except for the
Bonds authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Bonds pursuant to Sections 2.06, 2.07, or
9.06 of this Indenture. The Bonds shall consist of one and only one class having
an Original Bond Balance, Bond Interest Rate for the initial Interest Period and
Final Maturity Date as follows:
Bond Interest
Original Bond Rate for the initial Final
Designation Balance Interest Period Maturity Date
----------- ------- --------------- -------------
Series 1997-1 [______________] [___________] [___________]
The Bonds shall be issued in the form specified in Section 2.01.
Subject to the provisions of Section 3.01, Section 5.09 and Section
8.02(d), the principal of the Bonds shall be payable in installments ending no
later than the Final Maturity Date unless the unpaid principal of such Bonds
become due and payable at an earlier date by declaration of acceleration or call
for redemption or otherwise.
All payments made with respect to any Bond shall be applied first to
the interest then due and payable on such Bond and then to the principal
thereof. All computations of interest accrued on any Bond shall be made on the
basis of the actual number of days elapsed in the related Interest Period in a
year of 360 days.
Interest on the Bonds shall accrue at the Bond Interest Rate during
each Interest Period on the Current Bond Balance of each Outstanding Bond at the
end of such Interest Period. Interest accrued during an Interest Period shall be
payable on the next following Payment Date.
All payments of principal of and interest on any Bond shall be made in
the manner specified in Section 2.08.
Notwithstanding any of the foregoing provisions with respect to
payments of principal of and interest on the Bonds, if the Bonds have become or
been declared due and payable following an Event of Default and such
acceleration of maturity and its consequences have not been rescinded and
annulled, then payments of principal of and interest on the Bonds shall be made
in accordance with Section 5.07.
SECTION 2.04. DENOMINATIONS.
The Bonds shall be issuable only as registered Bonds in the minimum
denomination of $[_________] and integral multiples of $[_____] in excess
thereof.
SECTION 2.05. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Bonds shall be executed on behalf of the Issuer by an Authorized
Officer of the Owner Trustee. The signature of such Authorized Officer of the
Owner Trustee on the Bonds may be manual or by facsimile.
Bonds bearing the manual or facsimile signature of an individual who
was at any time an Authorized Officer of the Owner Trustee shall bind the
Issuer, notwithstanding that such individual has ceased to be an Authorized
Officer of the Owner Trustee prior to the authentication and delivery of such
Bonds or was not an Authorized Officer of the Owner Trustee at the date of such
Bonds.
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At any time and from time to time after the execution and delivery of
this Indenture, the Issuer may deliver Bonds executed on behalf of the Issuer to
the Authenticating Agent for authentication; and the Authenticating Agent shall
authenticate and deliver such Bonds as in this Indenture provided and not
otherwise.
Each Bond authenticated on the Closing Date shall be dated the Closing
Date. All other Bonds that are authenticated after the Closing Date for any
other purpose hereunder shall be dated the date of their authentication.
No Bond shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Bond a
certificate of authentication substantially in the form provided for herein
executed by the Authenticating Agent by the manual signature of one of its
authorized officers or employees, and such certificate upon any Bond shall be
conclusive evidence, and the only evidence, that such Bond has been duly
authenticated and delivered hereunder.
SECTION 2.06. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Issuer shall cause to be kept a register (the "Bond Register") in
which, subject to such reasonable regulations as it may prescribe, the Issuer
shall provide for the registration of Bonds and the registration of transfers of
Bonds. The Indenture Trustee is hereby initially appointed "Bond Registrar" for
the purpose of registering Bonds and transfers of Bonds as herein provided. Upon
any resignation of any Bond Registrar appointed by the Issuer, the Issuer shall
promptly appoint a successor or, in the absence of such appointment, shall
assume the duties of Bond Registrar.
At any time the Indenture Trustee is not also the Bond Registrar, the
Indenture Trustee shall be a co-Bond Registrar. The Issuer shall cause each
co-Bond Registrar to furnish the Bond Registrar promptly after each
authentication of a Bond by it appropriate information with respect thereto for
entry by the Bond Registrar into the Bond Register. If the Indenture Trustee
shall at any time not be authorized to keep and maintain the Bond Register, the
Indenture Trustee shall have the right to inspect such Bond Register at all
reasonable times and to rely conclusively upon a certificate of the Person in
charge of the Bond Register as to the names and addresses of the Holders of the
Bonds and the principal amounts and numbers of such Bonds as held.
Upon surrender for registration of transfer of any Bond at the office
or agency of the Issuer to be maintained as provided in Section 3.02, the Issuer
shall execute, and the Authenticating Agent shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new Bonds of
any authorized denominations and of a like aggregate principal amount.
At the option of the Holder, Bonds may be exchanged for other Bonds of
any authorized denominations, and of a like aggregate initial principal amount,
upon surrender of the Bonds to be exchanged at such office or agency. Whenever
any Bonds are so surrendered for exchange, the Owner Trustee shall execute, and
the Authenticating Agent shall authenticate and deliver, the Bonds that the
Bondholder making the exchange is entitled to receive.
All Bonds issued upon any registration of transfer or exchange of Bonds
shall be the valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Bonds surrendered
upon such registration of transfer or exchange.
Every Bond presented or surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Bond Registrar duly executed by the Holder
thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Bonds, but the Issuer and the Bond Registrar may require payment of
a sum sufficient to cover any tax or other governmental charge as may be imposed
in connection with any registration of transfer or exchange of Bonds, other than
exchanges pursuant to Section 2.07 not involving any transfer.
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SECTION 2.07. MUTILATED, DESTROYED, LOST OR STOLEN BONDS.
If (1) any mutilated Bond is surrendered to the Bond Registrar or the
Bond Registrar receives evidence to its satisfaction of the destruction, loss or
theft of any Bond, and (2) there is delivered to the Bond Registrar such
security or indemnity as may be required by the Bond Registrar to save each of
the Issuer and the Bond Registrar harmless, then, in the absence of notice to
the Issuer or the Bond Registrar that such Bond has been acquired by a bona fide
purchaser, the Owner Trustee shall execute and upon its request the Bond
Registrar shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Bond, a new Bond or Bonds of the same tenor
and aggregate initial principal amount bearing a number not contemporaneously
outstanding. If, after the delivery of such new Bond, a bona fide purchaser of
the original Bond in lieu of which such new Bond was issued presents for payment
such original Bond, the Issuer and the Bond Registrar shall be entitled to
recover such new Bond from the person to whom it was delivered or any person
taking therefrom, except a bona fide purchaser, and shall be entitled to recover
upon the security or indemnity provided therefor to the extent of any loss,
damage, cost or expenses incurred by the Issuer or the Bond Registrar in
connection therewith. If any such mutilated, destroyed, lost or stolen Bond
shall have become or shall be about to become due and payable, or shall have
become subject to redemption in full, instead of issuing a new Bond, the Issuer
may pay such Bond without surrender thereof, except that any mutilated Bond
shall be surrendered.
Upon the issuance of any new Bond under this Section, the Issuer or the
Bond Registrar may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
reasonable expenses (including the fees and expenses of the Indenture Trustee or
the Bond Registrar) connected therewith.
Every new Bond issued pursuant to this Section in lieu of any
destroyed, lost or stolen Bond shall constitute an original additional
contractual obligation of the Issuer, whether or not the destroyed, lost or
stolen Bond shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Indenture equally and proportionately with any and all
other Bonds duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Bonds.
SECTION 2.08. PAYMENTS OF PRINCIPAL AND INTEREST.
(a) Payments on Bonds issued as Book-Entry Bonds will be made
by or on behalf of the Indenture Trustee to the Clearing Agency or its
nominee. Any installment of interest or principal payable on any
Definitive Bonds that is punctually paid or duly provided for by the
Issuer on the applicable Payment Date shall be paid to the Person in
whose name such Bond (or one or more Predecessor Bonds) is registered
at the close of business on the Record Date for such Payment Date by
either (i) check mailed to such Person's address as it appears in the
Bond Register on such Record Date, or (ii) by wire transfer of
immediately available funds to the account of a Bondholder, if such
Bondholder (A) is the registered holder of Definitive Bonds having an
initial principal amount of at least $1,000,000 and (B) has provided
the Indenture Trustee with wiring instructions in writing by five
Business Days prior to the related Record Date or has provided the
Indenture Trustee with such instructions for any previous Payment Date,
except for the final installment of principal payable with respect to
such Bond (or the Redemption Price for any Bond called for redemption,
if such redemption will result in payment of the then entire unpaid
principal amount of such Bond), which shall be payable as provided in
subsection (b) below of this Section 2.08. A fee may be charged by the
Indenture Trustee to a Bondholder of Definitive Bonds for any payment
made by wire transfer. Any installment of interest or principal not
punctually paid or duly provided for shall be payable as soon as funds
are available to the Indenture Trustee for payment thereof, or if
Section 5.07 applies, pursuant to Section 5.07.
(b) All reductions in the principal amount of a Bond (or one
or more Predecessor Bonds) effected by payments of installments of
principal made on any Payment Date shall be binding upon all Holders of
such Bond and of any Bond issued upon the registration of transfer
thereof or in exchange
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therefor or in lieu thereof, whether or not such payment is noted on
such Bond. The final installment of principal of each Bond (including
the Redemption Price of any Bond called for optional redemption, if
such optional redemption will result in payment of the entire unpaid
principal amount of such Bond) shall be payable only upon presentation
and surrender thereof on or after the Payment Date therefor at the
Indenture Trustee's presenting office in the Borough of Manhattan, the
City of New York, State of New York, pursuant to Section 3.02.
Whenever the Indenture Trustee expects that the entire remaining unpaid
principal amount of any Bond will become due and payable on the next
Payment Date other than pursuant to a redemption pursuant to Section
10.02, it shall, no later than two days prior to such Payment Date,
telecopy or hand deliver to each Person in whose name a Bond to be so
retired is registered at the close of business on such otherwise
applicable Record Date a notice to the effect that:
(i) the Indenture Trustee expects that funds sufficient to pay
such final installment will be available in the Bond Account on such
Payment Date; and
(ii) if such funds are available, (A) such final installment
will be payable on such Payment Date, but only upon presentation and
surrender of such Bond at the office or agency of the Bond Registrar
maintained for such purpose pursuant to Section 3.02 (the address of
which shall be set forth in such notice) and (B) no interest shall
accrue on such Bond after such Payment Date.
A copy of such form of notice shall be sent to the Bond
Insurer by the Indenture Trustee.
Notices in connection with redemptions of Bonds shall be
mailed to Bondholders in accordance with Section 10.02.
(c) Subject to the foregoing provisions of this Section, each
Bond delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Bond shall carry the rights to
unpaid principal and interest that were carried by such other Bond. Any
checks mailed pursuant to subsection (a) of this Section 2.08 and
returned undelivered shall be held in accordance with Section 3.03.
(d) Each Payment Date Statement, prepared by the Paying Agent
based on the Servicer Remittance Report delivered to the Paying Agent
pursuant to the Servicing Agreement shall be delivered by the Paying
Agent to the Bond Insurer, the Rating Agencies, the Owner Trustee and
each Bondholder as the statement required pursuant to Section 8.06. The
Paying Agent shall have no responsibility to recalculate, verify or
recompute information contained in any such Servicer Remittance Report.
Within 90 days after the end of each calendar year, the Paying Agent
will be required to furnish to each person who at any time during the
calendar year was a Bondholder a statement containing the information
set forth in subclauses (i) and (ii) in the definition of "Payment Date
Statement," aggregated for such calendar year or the applicable portion
thereof during which such person was a Bondholder. Such obligation will
be deemed to have been satisfied to the extent that substantially
comparable information is provided pursuant to any requirements of the
Code as are from time to time in force.
SECTION 2.09. PERSONS DEEMED OWNERS.
Prior to due presentment for registration of transfer of any Bond, the
Issuer, the Indenture Trustee, any Agent and any other agent of the Issuer or
the Indenture Trustee may treat the Person in whose name any Bond is registered
as the owner of such Bond (a) on the applicable Record Date for the purpose of
receiving payments of the principal of and interest on such Bond and (b) on any
other date for all other purposes whatsoever, and neither
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the Issuer, the Indenture Trustee, any Agent nor any other agent of the Issuer
or the Indenture Trustee shall be affected by notice to the contrary.
SECTION 2.10. CANCELLATION.
All Bonds surrendered for payment, registration of transfer, exchange
or redemption shall, if surrendered to any Person other than the Bond Registrar,
be delivered to the Bond Registrar and shall be promptly canceled by it. The
Issuer may at any time deliver to the Bond Registrar for cancellation any Bond
previously authenticated and delivered hereunder which the Issuer may have
acquired in any manner whatsoever, and all Bonds so delivered shall be promptly
canceled by the Bond Registrar. No Bonds shall be authenticated in lieu of or in
exchange for any Bonds canceled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Bonds held by the Bond Registrar shall
be held by the Bond Registrar in accordance with its standard retention policy,
unless the Issuer shall direct by an Issuer Order that they be destroyed or
returned to it.
SECTION 2.11. AUTHENTICATION AND DELIVERY OF BONDS.
The Bonds may be executed by an Authorized Officer of the Owner Trustee
and delivered to the Authenticating Agent for authentication, and thereupon the
same shall be authenticated and delivered by the Authenticating Agent, upon
Issuer Request and upon receipt by the Authenticating Agent of the following:
(a) an Issuer Order authorizing the execution, authentication
and delivery of the Bonds and specifying the Final Maturity Date, the
principal amount and the Bond Interest Rate (or the manner in which
such Bond Interest Rate is to be determined) of such Bonds to be
authenticated and delivered;
(b) an Issuer Order authorizing the execution and delivery of
this Indenture; and
(c) one or more Opinions of Counsel addressed to the
Authenticating Agent, complying with the requirements of Section 11.01,
reasonably satisfactory in form and substance to the Authenticating
Agent and the Bond Insurer.
In rendering the opinions set forth above, such counsel may
rely upon officer's certificates of the Issuer, the Owner Trustee, the
Servicer and the Indenture Trustee, without independent confirmation or
verification with respect to factual matters relevant to such opinions.
In rendering the opinions set forth above, such counsel need express no
opinion as to (A) the existence of, or the priority of the security
interest created by the Indenture against, any liens or other interests
that arise by operation of law and that do not require any filing or
similar action in order to take priority over a perfected security
interest or (B) the priority of the security interest created by this
Indenture with respect to any claim or lien in favor of the United
States or any agency or instrumentality thereof (including federal tax
liens and liens arising under Title IV of the Employee Retirement
Income Security Act of 1974).
The acceptability to the Bond Insurer of the Opinion of
Counsel delivered to the Indenture Trustee at the Closing Date shall be
conclusively evidenced by the delivery on the Closing Date of the MBIA
Insurance Policy.
(d) an Officers' Certificate complying with the requirements
of Section 11.01 and stating that:
(i) the Issuer is not in Default under this Indenture
and the issuance of the Bonds will not result in any breach of
any of the terms, conditions or provisions of, or constitute a
default under, the Issuer's Certificate of Trust or any
indenture, mortgage, deed of trust or other agreement or
instrument to which the Issuer is a party or by which it is
bound, or any order of any court or administrative agency
entered in any proceeding to which the Issuer is a party or by
which it may be bound or to which it may be subject, and that
all conditions precedent provided
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in this Indenture relating to the authentication and delivery
of the Bonds have been complied with;
(ii) the Issuer is the owner of each Mortgage Loan,
free and clear of any lien, security interest or charge, has
not assigned any interest or participation in any such
Mortgage Loan (or, if any such interest or participation has
been assigned, it has been released) and has the right to
Grant each such Mortgage Loan to the Indenture Trustee;
(iii) the information set forth in the Mortgage Loan
Schedule attached as Schedule I to this Indenture is correct;
(iv) the Issuer has Granted to the Indenture Trustee
all of its right, title and interest in each Mortgage Loan;
(v) as of the Closing Date, no lien in favor of the
United States described in Section 6321 of the Code, or lien
in favor of the Pension Benefit Guaranty Corporation described
in Section 4068(a) of the Employee Retirement Income Security
Act of 1974, as amended, has been filed as described in
subsections 6323(f) and 6323(g) of the Code upon any property
belonging to the Issuer; and
(vi) attached thereto is a true and correct copy of
letters signed by each Rating Agency confirming that the Bonds
have been rated in the highest rating category of such Rating
Agency.
(e) An executed counterpart of the Servicing Agreement.
(f) An executed counterpart of the Mortgage Loan Sale
Agreement.
(g) An executed counterpart of the Mortgage Loan Contribution
Agreement.
SECTION 2.12. BOOK-ENTRY BONDS.
The Bonds will be issued initially as one or more certificates in the
name of the Cede & Co., as nominee for the Clearing Agency maintaining
book-entry records with respect to ownership and transfer of such Bonds, and
registration of the Bonds may not be transferred by the Bond Registrar except
upon Book-Entry Termination. In such case, the Bond Registrar shall deal with
the Clearing Agency as representatives of the Bond Owners of such Bonds for
purposes of exercising the rights of Bondholders hereunder. Each payment of
principal of and interest on a Book-Entry Bond shall be paid to the Clearing
Agency, which shall credit the amount of such payments to the accounts of its
Clearing Agency Participants in accordance with its normal procedures. Each
Clearing Agency Participant shall be responsible for disbursing such payments to
the Bond Owners of the Book-Entry Bonds that it represents and to each indirect
participating brokerage firm (a "brokerage firm" or "indirect participating
firm") for which it acts as agent. Each brokerage firm shall be responsible for
disbursing funds to the Bond Owners of the Book-Entry Bonds that it represents.
All such credits and disbursements are to be made by the Clearing Agency and the
Clearing Agency Participants in accordance with the provisions of the Bonds.
None of the Indenture Trustee, the Bond Registrar, if any, the Issuer, or any
Agents shall have any responsibility therefor except as otherwise provided by
applicable law. Requests and directions from, and votes of, such representatives
shall not be deemed to be inconsistent if they are made with respect to
different Bond Owners.
SECTION 2.13. TERMINATION OF BOOK ENTRY SYSTEM.
(a) The book-entry system through the Clearing Agency with
respect to the Book-Entry Bonds may be terminated upon the happening of
any of the following:
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(i) The Clearing Agency or the Issuer advises the
Indenture Trustee that the Clearing Agency is no longer
willing or able to discharge properly its responsibilities as
nominee and depositary with respect to the Bonds and the
Issuer and the Indenture Trustee are unable to locate a
qualified successor clearing agency satisfactory to the
Issuer;
(ii) The Issuer, in its sole discretion, elects to
terminate the book-entry system by notice to the Clearing
Agency and the Indenture Trustee; or
(iii) After the occurrence of an Event of Default (at
which time the Indenture Trustee shall use all reasonable
efforts to promptly notify each Bond Owner through the
Clearing Agency of such Event of Default), the Bond Owners of
no less than 51% of the Bond Balance of the Book-Entry Bonds
advise the Indenture Trustee in writing, through the related
Clearing Agency Participants and the Clearing Agency, that the
continuation of a book-entry system through the Clearing
Agency to the exclusion of any Definitive Bonds being issued
to any person other than the Clearing Agency or its nominee is
no longer in the best interests of the Bond Owners.
(b) Upon the occurrence of any event described in subsection
(a) above, the Indenture Trustee shall use all reasonable efforts to
notify all Bond Owners, through the Clearing Agency, of the occurrence
of such event and of the availability of Definitive Bonds to Bond
Owners requesting the same, in an aggregate Current Bond Balance
representing the interest of each, making such adjustments and
allowances as it may find necessary or appropriate as to accrued
interest and previous calls for redemption. Definitive Bonds shall be
issued only upon surrender to the Indenture Trustee of the global Bond
by the Clearing Agency, accompanied by registration instructions for
the Definitive Bonds. Neither the Issuer nor the Indenture Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such
instructions. Upon issuance of the Definitive Bonds, all references
herein to obligations imposed upon or to be performed by the Clearing
Agency shall cease to be applicable and the provisions relating to
Definitive Bonds shall be applicable.
ARTICLE III
COVENANTS
SECTION 3.01. PAYMENT OF BONDS.
The Issuer will pay or cause to be duly and punctually paid the
principal of, and interest on, the Bonds in accordance with the terms of the
Bonds and this Indenture. The Bonds shall be non-recourse obligations of the
Issuer and shall be limited in right of payment to amounts available from the
Trust Estate as provided in this Indenture and the Issuer shall not otherwise be
liable for payments on the Bonds. No person shall be personally liable for any
amounts payable under the Bonds. If any other provision of this Indenture
conflicts or is deemed to conflict with the provisions of this Section 3.01, the
provisions of this Section 3.01 shall control.
SECTION 3.02. MAINTENANCE OF OFFICE OR AGENCY.
The Issuer will cause the Bond Registrar to maintain its corporate
trust office at a location where Bonds may be surrendered for registration of
transfer or exchange, and where notices and demands to or upon the Issuer in
respect of the Bonds and this Indenture may be served.
The Issuer may also from time to time at its own expense designate one
or more other offices or agencies (in or outside the City of New York) where the
Bonds may be presented or surrendered for any or all such purposes and may from
time to time rescind such designations; provided, however, that (i) no such
designation or rescission shall in any manner relieve the Issuer of its
obligation to maintain an office or agency in the Borough of Manhattan, the City
of New York, the State of New York, for the purposes set forth in the preceding
paragraph,
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(ii) presentations or surrenders of Bonds for payment may be made only in the
City of New York, the State of New York and (iii) any designation of an office
or agency for payment of Bonds shall be subject to Section 3.03. The Issuer will
give prompt written notice to the Indenture Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.
SECTION 3.03. MONEY FOR BOND PAYMENTS TO BE HELD IN TRUST.
All payments of amounts due and payable with respect to any Bonds that
are to be made from amounts withdrawn from the Bond Account pursuant to Section
8.02(c) or Section 5.07 shall be made on behalf of the Issuer by the Paying
Agent, and no amounts so withdrawn from the Bond Account for payments of Bonds
shall be paid over to the Issuer under any circumstances except as provided in
this Section 3.03 or in Section 5.07 or Section 8.02.
If the Issuer shall have a Paying Agent that is not also the Bond
Registrar, it shall furnish, or cause the Bond Registrar to furnish, no later
than the fifth calendar day after each Record Date, a list, in such form as such
Paying Agent may reasonably require, of the names and addresses of the Holders
of Bonds and of the number of Individual Bonds held by each such Holder.
Whenever the Issuer shall have a Paying Agent other than the Indenture
Trustee, it will, on or before the Business Day next preceding each Payment Date
direct the Indenture Trustee to deposit with such Paying Agent an aggregate sum
sufficient to pay the amounts then becoming due (to the extent funds are then
available for such purpose in the Bond Account), such sum to be held in trust
for the benefit of the Persons entitled thereto. Any moneys deposited with a
Paying Agent in excess of an amount sufficient to pay the amounts then becoming
due on the Bonds with respect to which such deposit was made shall, upon Issuer
Order, be paid over by such Paying Agent to the Indenture Trustee for
application in accordance with Article VIII.
Any Paying Agent other than the Indenture Trustee shall be appointed by
Issuer Order and at the expense of the Issuer. The Issuer shall not appoint any
Paying Agent (other than the Indenture Trustee) that is not, at the time of such
appointment, a depository institution or trust company whose obligations would
be Permitted Investments pursuant to clause (c) of the definition of the term
Permitted Investments. The Issuer will cause each Paying Agent other than the
Indenture Trustee to execute and deliver to the Indenture Trustee an instrument
in which such Paying Agent shall agree with the Indenture Trustee (and if the
Indenture Trustee acts as Paying Agent, it hereby so agrees), subject to the
provisions of this Section, that such Paying Agent will:
(1) allocate all sums received for payment to the Holders of
Bonds on each Payment Date among such Holders in the proportion
specified in the applicable Payment Date Statement, in each case to the
extent permitted by applicable law;
(2) hold all sums held by it for the payment of amounts due
with respect to the Bonds in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided;
(3) if such Paying Agent is not the Indenture Trustee,
immediately resign as a Paying Agent and forthwith pay to the Indenture
Trustee all sums held by it in trust for the payment of the Bonds if at
any time it ceases to meet the standards set forth above required to be
met by a Paying Agent at the time of its appointment;
(4) if such Paying Agent is not the Indenture Trustee, give
the Indenture Trustee notice of any Default by the Issuer (or any other
obligor upon the Bonds) in the making of any payment required to be
made with respect to any Bonds for which it is acting as Paying Agent;
(5) if such Paying Agent is not the Indenture Trustee, at any
time during the continuance of any such Default, upon the written
request of the Indenture Trustee, forthwith pay to the Indenture
Trustee all sums so held in trust by such Paying Agent; and
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(6) comply with all requirements of the Code, and all
regulations thereunder, with respect to the withholding taxes from any
payments made by it on any Bonds of any applicable withholding taxes
imposed thereon and with respect to any applicable reporting
requirements in connection therewith; provided, however, that with
respect to withholding and reporting requirements applicable to
original issue discount (if any) on any of the Bonds, the Issuer has
provided the calculations pertaining thereto to the Indenture Trustee
and the Paying Agent.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or any other purpose, by Issuer
Order direct any Paying Agent, if other than the Indenture Trustee, to pay to
the Indenture Trustee all sums held in trust by such Paying Agent, such sums to
be held by the Indenture Trustee upon the same trusts as those upon which such
sums were held by such Paying Agent; and upon such payment by any Paying Agent
to the Indenture Trustee, such Paying Agent shall be released from all further
liability with respect to such money.
Any money held by the Indenture Trustee or any Paying Agent in trust
for the payment of any amount due with respect to any Bond and remaining
unclaimed for two and one-half years after such amount has become due and
payable to the Holder of such Bond (or if earlier, three months before the date
on which such amount would escheat to a governmental entity under applicable
law) shall be discharged from such trust and paid to the Issuer; and the Holder
of such Bond shall thereafter, as an unsecured general creditor, look only to
the Issuer for payment thereof (but only to the extent of the amounts so paid to
the Issuer), and all liability of the Indenture Trustee or such Paying Agent
with respect to such trust money shall thereupon cease. The Indenture Trustee
may adopt and employ, at the expense of the Issuer, any reasonable means of
notification of such repayment (including, but not limited to, mailing notice of
such repayment to Holders whose Bonds have been called but have not been
surrendered for redemption or whose right to or interest in moneys due and
payable but not claimed is determinable from the records of the Indenture
Trustee or any Agent, at the last address of record for each such Holder).
SECTION 3.04. EXISTENCE OF ISSUER.
(a) Subject to Sections 3.04(b) and (c), the Issuer will keep
in full effect its existence, rights and franchises as a business trust
under the laws of the State of Delaware or under the laws of any other
state or the United States of America, and will obtain and preserve its
qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Bonds, the Servicing Agreement
and the Mortgage Loan Contribution Agreement.
(b) Subject to Section 3.09(vii), any entity into which the
Issuer may be merged or with which it may be consolidated, or any
entity resulting from any merger or consolidation to which the Issuer
shall be a party, shall be the successor Issuer under this Indenture
without the execution or filing of any paper, instrument or further act
to be done on the part of the parties hereto, anything in any agreement
relating to such merger or consolidation, by which any such Issuer may
seek to retain certain powers, rights and privileges therefore
obtaining for any period of time following such merger or consolidation
to the contrary notwithstanding (other than Section 3.09(vii)).
(c) Upon any consolidation or merger of or other succession to
the Issuer in accordance with this Section 3.04, the Person formed by
or surviving such consolidation or merger (if other than the Issuer)
may exercise every right and power of, the Issuer under this Indenture
with the same effect as if such Person had been named as the Issuer
herein.
SECTION 3.05. PROTECTION OF TRUST ESTATE.
(a) The Issuer will from time to time execute and deliver all
such supplements and amendments hereto and all such financing
statements, continuation statements, instruments of further assurance
and other instruments, and will take such other action as may be
necessary or advisable to:
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(i) Grant more effectively all or any portion of the
Trust Estate;
(ii) maintain or preserve the lien of this Indenture
or carry out more effectively the purposes hereof;
(iii) perfect, publish notice of or protect the
validity of any Grant made or to be made by this Indenture;
(iv) enforce any of the Mortgage Loans, the Servicing
Agreement or the Mortgage Loan Contribution Agreement; or
(v) preserve and defend title to the Trust Estate and
the rights of the Indenture Trustee, and of the Bondholders,
in the Mortgage Loans and the other property held as part of
the Trust Estate against the claims of all Persons and
parties.
(b) The Indenture Trustee shall not remove any portion of the
Trust Estate that consists of money or is evidenced by an instrument,
certificate or other writing from the jurisdiction in which it was held
at the date of the most recent Opinion of Counsel delivered pursuant to
Section 3.06 (or from the jurisdiction in which it was held, or to
which it is intended to be removed, as described in the Opinion of
Counsel delivered at the Closing Date pursuant to Section 2.11(c), if
no Opinion of Counsel has yet been delivered pursuant to Section 3.06)
or cause or permit ownership or the pledge of any portion of the Trust
Estate that consists of book-entry securities to be recorded on the
books of a Person located in a different jurisdiction from the
jurisdiction in which such ownership or pledge was recorded at such
time unless the Indenture Trustee shall have first received an Opinion
of Counsel to the effect that the lien and security interest created by
this Indenture with respect to such property will continue to be
maintained after giving effect to such action or actions.
SECTION 3.06. OPINIONS AS TO TRUST ESTATE.
On or before April 30th in each calendar year, beginning with the first
calendar year commencing after the Closing Date, the Issuer shall furnish to the
Indenture Trustee an Opinion of Counsel reasonably satisfactory in form and
substance to the Indenture Trustee either stating that, in the opinion of such
counsel, such action has been taken as is necessary to maintain the lien and
security interest created by this Indenture and reciting the details of such
action or stating that in the opinion of such counsel no such action is
necessary to maintain such lien and security interest. Such Opinion of Counsel
shall also describe all such action, if any, that will, in the opinion of such
counsel, be required to be taken to maintain the lien and security interest of
this Indenture with respect to the Trust Estate until May 1st in the following
calendar year.
SECTION 3.07. PERFORMANCE OF OBLIGATIONS; SERVICING AGREEMENT.
(a) The Issuer shall not take any action and will use its Best
Efforts not to permit any action to be taken by others that would
release any Person from any of such Person's covenants or obligations
under any of the Mortgage Files or under any instrument included in the
Trust Estate, or that would result in the amendment, hypothecation,
subordination, termination or discharge of, or impair the validity or
effectiveness of, any of the documents or instruments contained in the
Mortgage Files, except as expressly permitted in this Indenture, the
Servicing Agreement or such document included in the Mortgage File or
other instrument or unless such action will not adversely affect the
interests of the Holders of the Bonds.
(b) If the Issuer shall have knowledge of the occurrence of a
default under the Servicing Agreement, the Issuer shall promptly notify
the Indenture Trustee, the Bond Insurer and the Rating Agencies
thereof, and shall specify in such notice the action, if any, the
Issuer is taking with respect to such default.
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(c) Upon any termination of the Servicer's rights and powers
pursuant to the Servicing Agreement, the rights and powers of the
Servicer with respect to the Mortgage Loans shall vest in the Indenture
Trustee, and the Indenture Trustee shall be the successor in all
respects to the Servicer in its capacity as Servicer with respect to
such Mortgage Loans under the Servicing Agreement, until the Indenture
Trustee shall have appointed, with the consent of the Issuer, the Bond
Insurer and the Rating Agencies, a new servicer to serve as successor
to the Servicer under the Servicing Agreement. Upon appointment of a
successor Servicer, the Indenture Trustee, the Issuer and such Servicer
shall enter into a Servicing Agreement in a form substantially similar
to the Servicing Agreement. In connection with any such appointment,
the Indenture Trustee may make such arrangements for the compensation
of such successor as it and such successor shall agree, but in no event
shall such compensation of the successor Servicer (including the
Indenture Trustee) be in excess of that payable to the original
Servicer under the Servicing Agreement.
(d) Upon any termination of the Servicer's rights and powers
pursuant to the Servicing Agreement, the Indenture Trustee shall
promptly notify the Rating Agencies. As soon as any successor Servicer
is appointed, the Indenture Trustee shall notify the Rating Agencies,
specifying in such notice the name and address of such successor
Servicer.
SECTION 3.08. INVESTMENT COMPANY ACT.
The Issuer shall at all times conduct its operations so as not to be
subject to, or shall comply with, the requirements of the Investment Company Act
of 1940, as amended (or any successor statute), and the rules and regulations
thereunder.
SECTION 3.09. NEGATIVE COVENANTS.
The Issuer shall not:
(i) sell, transfer, exchange or otherwise dispose of any
portion of the Trust Estate except as expressly permitted by this
Indenture or the Servicing Agreement;
(ii) claim any credit on, or make any deduction from, the
principal of, or interest on, any of the Bonds by reason of the payment
of any taxes levied or assessed upon any portion of the Trust Estate;
(iii) engage in any business or activity other than as
permitted by the Trust Agreement or other than in connection with, or
relating to, the issuance of the Bonds pursuant to this Indenture or
amend the Trust Agreement, as in effect on the Closing Date, other than
in accordance with Section 11.01;
(iv) incur, issue, assume or otherwise become liable for any
indebtedness other than the Bonds;
(v) incur, assume, guaranty or agree to indemnify any Person
with respect to any indebtedness of any Person, except for such
indebtedness as may be incurred by the Issuer in connection with the
issuance of the Bonds pursuant to this Indenture;
(vi) dissolve or liquidate in whole or in part;
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(vii) (1) permit the validity or effectiveness of this
Indenture or any Grant to be impaired, or permit the lien of this
Indenture to be impaired, amended, hypothecated, subordinated,
terminated or discharged, or permit any Person to be released from any
covenants or obligations under this Indenture, except as may be
expressly permitted hereby, (2) permit any lien, charge, security
interest, mortgage or other encumbrance (other than the lien of this
Indenture or any Permitted Encumbrance) to be created on or extend to
or otherwise arise upon or burden the Trust Estate or any part thereof
or any interest therein or the proceeds thereof, or (3) permit the lien
of this Indenture not to constitute a valid perfected first priority
security interest in the Trust Estate; or
(viii) take any other action or fail to take any action that
may cause the Issuer to be taxable as (a) an association pursuant to
Section 7701 of the Code or (b) as a taxable mortgage pool pursuant to
Section 7701(i) of the Code.
SECTION 3.10. ANNUAL STATEMENT AS TO COMPLIANCE.
On or before September 30, 1998, and each September 30th thereafter,
the Issuer shall deliver to the Indenture Trustee a written statement, signed by
an Authorized Officer of the Owner Trustee, stating that:
(1) a review of the fulfillment by the Issuer during such year
of its obligations under this Indenture has been made under such
Authorized Officer's supervision; and
(2) to the best of such Authorized Officer's knowledge, based
on such review, the Issuer has complied with all conditions and
covenants under this Indenture throughout such year, or, if there has
been a Default in the fulfillment of any such covenant or condition,
specifying each such Default known to such Authorized Officer and the
nature and status thereof.
SECTION 3.11. RESTRICTED PAYMENTS.
The Issuer shall not, directly or indirectly, (i) pay any dividend or
make any distribution (by reduction of capital or otherwise), whether in cash,
property, securities or a combination thereof, to the Owner Trustee or any owner
of a beneficial interest in the Issuer or otherwise with respect to any
ownership or equity interest or security in or of the Issuer or to the Servicer,
(ii) redeem, purchase, retire or otherwise acquire for value any such ownership
or equity interest or security or (iii) set aside or otherwise segregate any
amounts for any such purpose; provided, however, that the Issuer may make, or
cause to be made, distributions to the Servicer, the Indenture Trustee, the
Owner Trustee and the Certificateholders as contemplated by, and to the extent
funds are available for such purpose under, the Servicing Agreement or the Trust
Agreement and the Issuer will not, directly or indirectly, make or cause to be
made payments to or distributions from the Bond Account except in accordance
with this Indenture.
SECTION 3.12. TREATMENT OF BONDS AS DEBT FOR TAX PURPOSES.
The Issuer shall treat the Bonds as indebtedness for all federal and
state tax purposes.
SECTION 3.13. NOTICE OF EVENTS OF DEFAULT.
The Issuer shall give the Indenture Trustee, the Bond Insurer and the
Rating Agencies prompt written notice of each Event of Default hereunder, each
default on the part of the Servicer of its obligations under the Servicing
Agreement and each default on the part of the Mortgage Loan Seller of its
obligations under the Mortgage Loan Sale Agreement.
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SECTION 3.14. FURTHER INSTRUMENTS AND ACTS.
Upon request of the Indenture Trustee or the Bond Insurer, the Issuer
will execute and deliver such further instruments and do such further acts as
may be reasonably necessary or proper to carry out more effectively the purpose
of this Indenture.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01. SATISFACTION AND DISCHARGE OF INDENTURE.
Whenever the following conditions shall have been satisfied:
(1) either
(A) all Bonds theretofore authenticated and delivered
(other than (i) Bonds that have been destroyed, lost or stolen
and that have been replaced or paid as provided in Section
2.07, and (ii) Bonds for whose payment money has theretofore
been deposited in trust and thereafter repaid to the Issuer,
as provided in Section 3.03) have been delivered to the Bond
Registrar for cancellation; or
(B) all Bonds not theretofore delivered to the Bond
Registrar for cancellation
(i) have become due and payable, or
(ii) will become due and payable at the
Final Maturity Date within one year, or
(iii) are to be called for redemption within
one year under irrevocable arrangements satisfactory
to the Indenture Trustee for the giving of notice of
redemption by the Indenture Trustee in the name, and
at the expense, of the Issuer,
and the Issuer, in the case of clauses (B)(i), (B)(ii) or
(B)(iii) above, has irrevocably deposited or caused to be
deposited with the Indenture Trustee, in trust for such
purpose, an amount sufficient to pay and discharge the entire
indebtedness on such Bonds not theretofore delivered to the
Indenture Trustee for cancellation, for principal and interest
to the Final Maturity Date or to the applicable Redemption
Date, as the case may be, and in the case of Bonds that were
not paid at the Final Maturity Date of their entire unpaid
principal amount, for all overdue principal and all interest
payable on such Bonds to the next succeeding Payment Date
therefor;
(2) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer (including, without limitation, any
amounts due the Bond Insurer hereunder); and
(3) the Issuer has delivered to the Indenture Trustee an
Officers' Certificate and an Opinion of Counsel satisfactory in form
and substance to the Indenture Trustee each stating that all conditions
precedent herein providing for the satisfaction and discharge of this
Indenture have been complied with;
then, upon Issuer Request, this Indenture and the lien, rights and interests
created hereby and thereby shall cease to be of further effect, and the
Indenture Trustee and each co-trustee and separate trustee, if any, then acting
as such hereunder shall, at the expense of the Issuer, execute and deliver all
such instruments as may be necessary to acknowledge the satisfaction and
discharge of this Indenture and shall pay, or assign or transfer and deliver, to
the
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Issuer or upon Issuer Order all cash, securities and other property held by
it as part of the Trust Estate remaining after satisfaction of the conditions
set forth in clauses (1) and (2) above.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Indenture Trustee to the Issuer and the Holders of Bonds
under Section 3.03, the obligations of the Indenture Trustee to the Holders of
Bonds under Section 4.02 and the provisions of Section 2.07 with respect to
lost, stolen, destroyed or mutilated Bonds, registration of transfers of Bonds
and rights to receive payments of principal of and interest on the Bonds shall
survive.
SECTION 4.02. APPLICATION OF TRUST MONEY.
All money deposited with the Indenture Trustee pursuant to Sections
3.03 and 4.01 shall be held in trust and applied by it, in accordance with the
provisions of the Bonds and this Indenture, to the payment, either directly or
through any Paying Agent, as the Indenture Trustee may determine, to the Persons
entitled thereto, of the principal and interest for whose payment such money has
been deposited with the Indenture Trustee.
ARTICLE V
DEFAULTS AND REMEDIES
SECTION 5.01. EVENT OF DEFAULT.
"Event of Default", wherever used herein, means, with respect to Bonds
issued hereunder, any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) if the Issuer shall
(A) default in the payment on any Payment Date, after
payment of any Insured Payments in respect of such Payment
Date, of any Required Payment Amount on any Bond or a failure
to pay the Bonds in full on or before the Final Maturity Date
(and in the case of any such default, such default or failure
shall continue for a period of 10 days unremedied); or
(B) default in the payment of the Redemption Price of
the Bonds after the Issuer shall have given notice of
redemption pursuant to Article X;
(2) if the Issuer shall breach or default in the due
observance of any one or more of the covenants set forth in clauses (i)
through (viii) of Section 3.09;
(3) if the Issuer shall breach, or default in the due
observance or performance of, any other of its covenants in this
Indenture, and such Default shall continue for a period of 60 days
after there shall have been given, by registered or certified mail, to
the Issuer by the Indenture Trustee, or to the Issuer and the Indenture
Trustee by the Holders of Bonds representing at least 25% of the Bond
Balance of the Outstanding Bonds, a written notice specifying such
Default and requiring it to be remedied and stating that such notice is
a "Notice of Default" hereunder;
(4) if any representation or warranty of the Issuer made in
this Indenture or any certificate or other writing delivered by the
Issuer pursuant hereto or in connection herewith shall prove to be
incorrect in any material respect as of the time when the same shall
have been made and, within 30 days after there shall have been given,
by registered or certified mail, written notice thereof to the Issuer
by the Indenture Trustee, or to the Issuer and the Indenture Trustee by
the Holders of Bonds representing at least 25% of the Bond Balance of
the Outstanding Bonds, the circumstance or condition in respect of
which
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such representation or warranty was incorrect shall not have been
eliminated or otherwise cured; provided, however, that in the event
that there exists a remedy with respect to any such breach that
consists of a purchase obligation, repurchase obligation or right to
substitute under the Basic Documents, then such purchase obligation,
repurchase obligation or right to substitute shall be the sole remedy
with respect to such breach and shall not constitute an Event of
Default hereunder;
(5) the entry of a decree or order for relief by a court
having jurisdiction in respect of the Issuer in an involuntary case
under the federal bankruptcy laws, as now or hereafter in effect, or
any other present or future federal or state bankruptcy, insolvency or
similar law, or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Issuer or of
any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Issuer and the continuance of any
such decree or order unstayed and in effect for a period of 60
consecutive days; or
(6) the commencement by the Issuer of a voluntary case under
the federal bankruptcy laws, as now or hereafter in effect, or any
other present or future federal or state bankruptcy, insolvency or
similar law, or the consent by the Issuer to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Issuer or of
any substantial part of its property or the making by the Issuer of an
assignment for the benefit of creditors or the failure by the Issuer
generally to pay its debts as such debts become due or the taking of
corporate action by the Issuer in furtherance of any of the foregoing.
The payment by the Bond Insurer of any Insured Amount in an amount
sufficient to cover the related Required Payment Amount pursuant to the MBIA
Insurance Policy in respect of any Payment Date shall not constitute an Event of
Default with respect to the Bonds.
SECTION 5.02. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default occurs and is continuing, then and in every such
case, but with the consent of the Bond Insurer in the absence of a failure by
the Bond Insurer to have paid any Insured Amount, the Indenture Trustee may, and
on request of the Holders of Bonds representing not less than 50% of the Bond
Balance of the Outstanding Bonds, shall, declare all the Bonds to be immediately
due and payable by a notice in writing to the Issuer (and to the Indenture
Trustee if given by Bondholders), and upon any such declaration such Bonds, in
an amount equal to the Bond Balance of such Bonds, together with accrued and
unpaid interest thereon to the date of such acceleration, shall become
immediately due and payable, all subject to the prior written consent of the
Bond Insurer in the absence of a Bond Insurer Default.
At any time after such a declaration of acceleration of maturity of the
Bonds has been made and before a judgment or decree for payment of the money due
has been obtained by the Indenture Trustee as hereinafter in this Article
provided, the Holders of Bonds representing more than 50% of the Bond Balance of
the Outstanding Bonds, by written notice to the Issuer and the Indenture
Trustee, may rescind and annul such declaration and its consequences if:
(1) the Issuer has paid or deposited with the Indenture
Trustee a sum sufficient to pay:
(A) all payments of principal of, and interest on,
all Bonds and all other amounts that would then be due
hereunder or upon such Bonds if the Event of Default giving
rise to such acceleration had not occurred; and
(B) all sums paid or advanced by the Indenture
Trustee hereunder and the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee, its
agents and counsel; and
(2) all Events of Default, other than the nonpayment of the
principal of Bonds that have become due solely by such acceleration,
have been cured or waived as provided in Section 5.14.
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No such rescission shall affect any subsequent Default or impair any
right consequent thereon.
SECTION 5.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
INDENTURE TRUSTEE.
Subject to the provisions of Section 3.01 and the following sentence,
if an Event of Default occurs and is continuing, the Indenture Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Bondholders and the Bond Insurer by any Proceedings the Indenture Trustee deems
appropriate to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or enforce any other proper remedy. Any
proceedings brought by the Indenture Trustee on behalf of the Bondholders or any
Bondholder against the Issuer shall be limited to the preservation, enforcement
and foreclosure of the liens, assignments, rights and security interests under
the Indenture and no attachment, execution or other unit or process shall be
sought, issued or levied upon any assets, properties or funds of the Issuer,
other than the Trust Estate relative to the Bonds in respect of which such Event
of Default has occurred. If there is a foreclosure of any such liens,
assignments, rights and security interests under this Indenture, by private
power of sale or otherwise, no judgment for any deficiency upon the indebtedness
represented by the Bonds may be sought or obtained by the Indenture Trustee or
any Bondholder against the Issuer. The Indenture Trustee shall be entitled to
recover the costs and expenses expended by it pursuant to this Section 5.03
including reasonable compensation, expenses, disburse advances of the Indenture
Trustee, its agents and counsel.
SECTION 5.04. REMEDIES.
If an Event of Default shall have occurred and be continuing and the
Bonds have been declared due and payable and such declaration and its
consequences have not been rescinded and annulled, the Indenture Trustee
(subject to Section 5.17, to the extent applicable) may, for the benefit of the
Bondholders and the Bond Insurer, do one or more of the following:
(a) institute Proceedings for the collection of all amounts
then payable on the Bonds, or under this Indenture, whether by
declaration or otherwise, enforce any judgment obtained, and collect
from the Issuer moneys adjudged due, subject in all cases to the
provisions of Sections 3.01 and 5.03;
(b) in accordance with Section 5.17, sell the Trust Estate or
any portion thereof or rights or interest therein, at one or more
public or private Sales called and conducted in any manner permitted by
law;
(c) institute Proceedings from time to time for the complete
or partial foreclosure of this Indenture with respect to the Trust
Estate;
(d) exercise any remedies of a secured party under the Uniform
Commercial Code and take any other appropriate action to protect and
enforce the rights and remedies of the Indenture Trustee or the Holders
of the Bonds hereunder; and
(e) refrain from selling the Trust Estate and apply all
Remittable Funds pursuant to Section 5.07.
SECTION 5.05. INDENTURE TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, composition or other judicial
Proceeding relative to the Issuer or any other obligor upon any of the Bonds or
the property of the Issuer or of such other obligor or their creditors, the
Indenture Trustee (irrespective of whether the Bonds shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Indenture Trustee shall have made any demand on the Issuer for the
payment of any overdue principal or interest) shall be entitled and empowered,
by intervention in such Proceeding or otherwise to:
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(i) file and prove a claim for the whole amount of principal
and interest owing and unpaid in respect of the Bonds and file such
other papers or documents as may be necessary or advisable in order to
have the claims of the Indenture Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Indenture Trustee, its agents and counsel) and of the Bondholders
allowed in such Proceeding, and
(ii) collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same; and any
receiver, assignee, trustee, liquidator, or sequestrator (or other
similar official) in any such Proceeding is hereby authorized by each
Bondholder to make such payments to the Indenture Trustee and, in the
event that the Indenture Trustee shall consent to the making of such
payments directly to the Bondholders, to pay to the Indenture Trustee
any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee, its agents and
counsel.
Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or accept or adopt on behalf of any
Bondholder any plan of reorganization, arrangement, adjustment or composition
affecting any of the Bonds or the rights of any Holder thereof, or to authorize
the Indenture Trustee to vote in respect of the claim of any Bondholder in any
such Proceeding.
SECTION 5.06. INDENTURE TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION
OF BONDS.
All rights of action and claims under this Indenture or any of the
Bonds may be prosecuted and enforced by the Indenture Trustee without the
possession of any of the Bonds or the production thereof in any Proceeding
relating thereto, and any such Proceeding instituted by the Indenture Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall be for the ratable benefit of the Holders of the
Bonds in respect of which such judgment has been recovered after payment of
amounts required to be paid pursuant to Section 5.07, Clause First.
SECTION 5.07. APPLICATION OF MONEY COLLECTED.
If the Bonds have been declared due and payable following an Event of
Default and such declaration and its consequences have not been rescinded and
annulled, any money collected by the Indenture Trustee with respect to such
Bonds pursuant to this Article or otherwise and any other monies that may then
be held or thereafter received by the Indenture Trustee as security for such
Bonds shall be applied in the following order, at the date or dates fixed by the
Indenture Trustee and, in case of the payment of the entire amount due on
account of principal of, and interest on, such Bonds, upon presentation and
surrender thereof:
First: To the payment of amounts then due and unpaid to the
Bond Insurer in respect of Bond Insurer Premiums and unreimbursed
Insured Amounts (including any accrued interest thereon);
Second: To the payment of amounts then due and unpaid upon the
Outstanding Bonds for interest on the Bond Balance of such Bonds
through the end of the Interest Period preceding the date on which such
payment is made at the Bond Interest Rate;
Third: To the payment of the Bond Balance of the Bonds, up to
the amount of their respective Current Bond Balances, ratably, without
preference or priority of any kind;
Fourth: To the payment of the entire outstanding Available
Funds Cap Carry Forward Amount; and
Fifth: To the payment of the remainder, if any, to the Issuer
or any other Person legally entitled thereto.
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SECTION 5.08. LIMITATION ON SUITS.
No Holder of a Bond shall have any right to institute any Proceedings,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(2) the Holders of Bonds representing not less than 25% of the
Bond Balance of the Outstanding Bonds shall have made written request
to the Indenture Trustee to institute Proceedings in respect of such
Event of Default in its own name as Indenture Trustee hereunder;
(3) such Holder or Holders have offered to the Indenture
Trustee indemnity in full against the costs, expenses and liabilities
to be incurred in compliance with such request;
(4) the Indenture Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has failed to institute any
such Proceeding;
(5) no direction inconsistent with such written request has
been given to the Indenture Trustee during such 60-day period by the
Holders of Bonds representing more than 50% of the Bond Balance of the
Outstanding Bonds; and
(6) the consent of the Bond Insurer shall have been obtained;
it being understood and intended that no one or more Holders of Bonds
shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb or
prejudice the rights of any other Holders of Bonds or to obtain or to
seek to obtain priority or preference over any other Holders or to
enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders of
Bonds.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of Bonds,
each representing less than 50% of the Bond Balances of the Outstanding Bonds,
the Indenture Trustee in its sole discretion may determine what action, if any,
shall be taken notwithstanding any other provision herein to the contrary.
SECTION 5.09. UNCONDITIONAL RIGHTS OF BONDHOLDERS TO RECEIVE
PRINCIPAL AND INTEREST.
Subject to the provisions in this Indenture (including Sections 3.01
and 5.03) limiting the right to recover amounts due on a Bond to recovery from
amounts in the Trust Estate, the Holder of any Bond shall have the right, to the
extent permitted by applicable law, which right is absolute and unconditional,
to receive payment of each installment of interest on such Bond on the
respective Payment Date for such installments of interest, to receive payment of
each installment of principal of such Bond when due (or, in the case of any Bond
called for redemption, on the date fixed for such redemption) and to institute
suit for the enforcement of any such payment, and such right shall not be
impaired without the consent of such Holder.
SECTION 5.10. RESTORATION OF RIGHTS AND REMEDIES.
If the Indenture Trustee or any Bondholder has instituted any
Proceeding to enforce any right or remedy under this Indenture and such
Proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Indenture Trustee or to such Bondholder, then and in
every such case the Issuer, the Indenture Trustee and the Bondholders shall,
subject to any determination in such Proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter all rights and
remedies of the Indenture Trustee and the Bondholders shall continue as though
no such Proceeding had been instituted.
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SECTION 5.11. RIGHTS AND REMEDIES CUMULATIVE.
No right or remedy herein conferred upon or reserved to the Indenture
Trustee or to the Bondholders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 5.12. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Indenture Trustee, the Bond Insurer or of
any Holder of any Bond to exercise any right or remedy accruing upon any Event
of Default shall impair any such right or remedy or constitute a waiver of any
such Event of Default or an acquiescence therein. Every right and remedy given
by this Article or by law to the Indenture Trustee, the Bond Insurer or to the
Bondholders may be exercised from time to time, and as often as may be deemed
expedient, by the Indenture Trustee, the Bond Insurer or by the Bondholders, as
the case may be.
SECTION 5.13. CONTROL BY BONDHOLDERS.
The Holders of Bonds representing more than 50% of the Bond Balance of
the Outstanding Bonds on the applicable Record Date shall, with the consent of
the Bond Insurer, have the right to direct the time, method and place of
conducting any Proceeding for any remedy available to the Indenture Trustee or
exercising any trust or power conferred on the Indenture Trustee; provided that:
(1) such direction shall not be in conflict with any rule of
law or with this Indenture;
(2) any direction to the Indenture Trustee to undertake a Sale
of the Trust Estate shall be by the Holders of Bonds representing the
percentage of the Bond Balance of the Outstanding Bonds specified in
Section 5.17(b) (1), unless Section 5.17(b) (2) is applicable; and
(3) the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee that is not inconsistent with such
direction; provided, however, that, subject to Section 6.01, the
Indenture Trustee need not take any action that it determines might
involve it in liability or be unjustly prejudicial to the Bondholders
not consenting.
SECTION 5.14. WAIVER OF PAST DEFAULTS.
The Holders of Bonds representing more than 50% of the Bond Balance of
the Outstanding Bonds on the applicable Record Date may on behalf of the Holders
of all the Bonds, and with the consent of the Bond Insurer, waive any past
Default hereunder and its consequences, except a Default:
(1) in the payment of principal or any installment of interest
on any Bond; or
(2) in respect of a covenant or provision hereof that under
Section 9.02 cannot be modified or amended without the consent of the
Holder of each Outstanding Bond affected.
Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
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SECTION 5.15. UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Bond by his
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Indenture Trustee for any action
taken, suffered or omitted by it as Indenture Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to any suit instituted by the
Indenture Trustee, to any suit instituted by any Bondholder, or group of
Bondholders, holding in the aggregate Bonds representing more than 10% of the
Bond Balance of the Outstanding Bonds, or to any suit instituted by any
Bondholder for the enforcement of the payment of any Required Payment Amount on
any Bond on or after the related Payment Date or for the enforcement of the
payment of principal of any Bond on or after the Final Maturity Date (or, in the
case of any Bond called for redemption, on or after the applicable Redemption
Date).
SECTION 5.16. WAIVER OF STAY OR EXTENSION LAWS.
The Issuer covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension of law wherever enacted,
now or at any time hereafter in force, that may affect the covenants in, or the
performance of, this Indenture; and the Issuer (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Indenture Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
SECTION 5.17. SALE OF TRUST ESTATE.
(a) The power to effect any sale (a "Sale") of any portion of
the Trust Estate pursuant to Section 5.04 shall not be exhausted by any
one or more Sales as to any portion of the Trust Estate remaining
unsold, but shall continue unimpaired until the entire Trust Estate
shall have been sold or all amounts payable on the Bonds and under this
Indenture with respect thereto shall have been paid. The Indenture
Trustee may from time to time postpone any public Sale by public
announcement made at the time and place of such Sale.
(b) To the extent permitted by law, the Indenture Trustee
shall not in any private Sale sell or otherwise dispose of the Trust
Estate, or any portion thereof, unless:
(1) the Holders of Bonds representing not less than
50% of the Bond Balance of the Bonds then Outstanding consent
to or direct the Indenture Trustee to make such Sale; or
(2) the proceeds of such Sale would be not less than
the entire amount that would be payable to the Holders of the
Bonds, in full payment thereof in accordance with Section
5.07, on the Payment Date next succeeding the date of such
Sale.
The purchase by the Indenture Trustee of all or any portion of
the Trust Estate at a private Sale shall not be deemed a Sale or
disposition thereof for purposes of this Section 5.17(b). In the
absence of a Bond Insurer Default, no sale hereunder shall be effective
without the consent of the Bond Insurer.
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(c) Unless the Holders of all Outstanding Bonds have otherwise
consented or directed the Indenture Trustee, at any public Sale of all
or any portion of the Trust Estate at which a minimum bid equal to or
greater than the amount described in paragraph (2) of subsection (b) of
this Section 5.17 has not been established by the Indenture Trustee and
no Person bids an amount equal to or greater than such amount, the
Indenture Trustee, acting in its capacity as Indenture Trustee on
behalf of the Bondholders, shall prevent such sale and bid an amount
(which shall include the Indenture Trustee's right, in its capacity as
Indenture Trustee, to credit bid) at least $1.00 more than the highest
other bid in order to preserve the Trust Estate on behalf of the
Bondholders.
(d) In connection with a Sale of all or any portion of the
Trust Estate:
(1) any Holder or Holders of Bonds may bid for and
purchase the property offered for Sale, and upon compliance
with the terms of sale may hold, retain and possess and
dispose of such property, without further accountability, and
may, in paying the purchase money therefor, deliver any
Outstanding Bonds or claims for interest thereon in lieu of
cash up to the amount that shall, upon distribution of the net
proceeds of such Sale, be payable thereon, and such Bonds, in
case the amounts so payable thereon shall be less than the
amount due thereon, shall be returned to the Holders thereof
after being appropriately stamped to show such partial
payment;
(2) the Indenture Trustee may bid for and acquire the
property offered for Sale in connection with any public Sale
thereof, and, in lieu of paying cash therefor, may make
settlement for the purchase price by crediting the gross Sale
price against the sum of (A) the amount that would be payable
to the Holders of the Bonds as a result of such Sale in
accordance with Section 5.07 on the Payment Date next
succeeding the date of such Sale and (B) the expenses of the
Sale and of any Proceedings in connection therewith which are
reimbursable to it, without being required to produce the
Bonds in order to complete any such Sale or in order for the
net Sale price to be credited against such Bonds, and any
property so acquired by the Indenture Trustee shall be held
and dealt with by it in accordance with the provisions of this
Indenture;
(3) the Indenture Trustee shall execute and deliver
an appropriate instrument of conveyance transferring its
interest in any portion of the Trust Estate in connection with
a Sale thereof;
(4) the Indenture Trustee is hereby irrevocably
appointed the agent and attorney-in-fact of the Issuer to
transfer and convey its interest in any portion of the Trust
Estate in connection with a Sale thereof, and to take all
action necessary to effect such Sale; and
(5) no purchaser or transferee at such a Sale shall
be bound to ascertain the Indenture Trustee's authority,
inquire into the satisfaction of any conditions precedent or
see to the application of any moneys.
(e) Notwithstanding anything in this Indenture to the
contrary, if an Event of Default specified in Section 5.01(l) is the
Event of Default, or one of the Events of Default, on the basis of
which the Bonds have been declared due and payable with the consent of
the Bond Insurer, then the Indenture Trustee may, in its sole
discretion, sell the Trust Estate without compliance with this Section
5.17.
SECTION 5.18. ACTION ON BONDS.
The Indenture Trustee's right to seek and recover judgment under this
Indenture shall not be affected by the seeking, obtaining or application of any
other relief under or with respect to this Indenture. Neither the lien of this
Indenture nor any rights or remedies of the Indenture Trustee or the Holders of
Bonds shall be impaired by the recovery of any judgment by the Indenture Trustee
against the Issuer or by the levy of any execution under such judgment upon any
portion of the Trust Estate.
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SECTION 5.19. NO RECOURSE TO OTHER TRUST ESTATES OR OTHER ASSETS OF
THE ISSUER.
The Trust Estate Granted to the Indenture Trustee as security for the
Bonds serves as security only for the Bonds. Holders of the Bonds shall have no
recourse against the trust estate granted as security for any other series of
bonds issued by the Issuer, and no judgment against the Issuer for any amount
due with respect to the Bonds may be enforced against either the trust estate
securing any other series or any other assets of the Issuer, nor may any
prejudgment lien or other attachment be sought against any such other trust
estate or any other assets of the Issuer.
SECTION 5.20. APPLICATION OF THE TRUST INDENTURE ACT.
Pursuant to Section 316(a) of the TIA, all provisions automatically
provided for in Section 316(a) are hereby expressly excluded.
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.01. DUTIES OF INDENTURE TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Indenture 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.
(b) Except during the continuance of an Event of Default:
(1) The Indenture Trustee need perform only those
duties that are specifically set forth in this Indenture and no others
and no implied covenants or obligations shall be read into this
Indenture against the Indenture Trustee; and
(2) In the absence of bad faith on its part, the
Indenture Trustee may request and conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein,
upon certificates or opinions furnished to the Indenture Trustee and
conforming to the requirements of this Indenture. The Indenture Trustee
shall, however, examine such certificates and opinions to determine
whether they conform on their face to the requirements of this
Indenture.
(c) The Indenture Trustee may not be relieved from liability
for its own negligent action, its own negligent failure to act or its
own willful misconduct, except that:
(1) This paragraph does not limit the effect of
subsection (b) of this Section 6.01;
(2) The Indenture Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer, unless
it is proved that the Indenture Trustee was negligent in ascertaining
the pertinent facts; and
(3) The Indenture Trustee shall not be liable with
respect to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section 5.13 or
5.17 or exercising any trust or power conferred upon the Indenture
Trustee under this Indenture.
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(d) Except with respect to duties of the Indenture Trustee
prescribed by the TIA, as to which this Section 6.01(d) shall not
apply, for all purposes under this Indenture, the Indenture Trustee
shall not be deemed to have notice or knowledge of any Event of Default
described in Section 5.01(2), 5.01(5) or 5.01(6) or any Default
described in Section 5.01(3) or 5.01(4) or of any event described in
Section 3.05 unless a Responsible Officer assigned to and working in
the Indenture Trustee's corporate trust department has actual knowledge
thereof or unless written notice of any event that is in fact such an
Event of Default or Default is received by the Indenture Trustee at the
Corporate Trust Office, and such notice references the Bonds generally,
the Issuer, the Trust Estate or this Indenture.
(e) No provision of this Indenture shall require the Indenture
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. In determining that such repayment or indemnity is not
reasonably assured to it, the Indenture Trustee must consider not only
the likelihood of repayment or indemnity by or on behalf of the Issuer
but also the likelihood of repayment or indemnity from amounts payable
to it from the Trust Estate pursuant to Section 8.02(d).
(f) Every provision of this Indenture that in any way relates
to the Indenture Trustee is subject to the provisions of this Section.
(g) Notwithstanding any extinguishment of all right, title and
interest of the Issuer in and to the Trust Estate following an Event of
Default and a consequent declaration of acceleration of the Maturity of
the Bonds, whether such extinguishment occurs through a Sale of the
Trust Estate to another Person, the acquisition of the Trust Estate by
the Indenture Trustee or otherwise, the rights, powers and duties of
the Indenture Trustee with respect to the Trust Estate (or the proceeds
thereof) and the Bondholders and the rights of Bondholders shall
continue to be governed by the terms of this Indenture.
(h) The Indenture Trustee or the Custodian appointed pursuant
to Section 8.16 shall at all times retain possession of the Mortgage
Files in the State of Minnesota, except for those Mortgage Files or
portions thereof released to the Servicer pursuant to this Indenture or
the Servicing Agreement.
SECTION 6.02. NOTICE OF DEFAULT.
Within 90 days after the occurrence of any Default known to the
Indenture Trustee, the Indenture Trustee shall transmit by mail to all Holders
of Bonds notice of each such Default, unless such Default shall have been cured
or waived; provided, however, that except in the case of a Default of the type
described in Section 5.01(l), the Indenture Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee or a trust committee of directors and/or Responsible Officers of the
Indenture Trustee in good faith determine that the withholding of such notice is
in the interests of the Holders of the Bonds; and provided, further, that in the
case of any Default of the character specified in Section 5.01(3) or 5.01(4) no
such notice to Holders of the Bonds shall be given until at least 30 days after
the occurrence thereof. Concurrently with the mailing of any such notice to the
Holders of the Bonds, the Indenture Trustee shall transmit by mail a copy of
such notice to the Rating Agencies.
SECTION 6.03. RIGHTS OF INDENTURE TRUSTEE.
(a) The Indenture Trustee may rely on any document believed by
it to be genuine and to have been signed or presented by the proper
Person. The Indenture Trustee need not investigate any fact or matter
stated in any such document.
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(b) Before the Indenture Trustee acts or refrains from acting,
it may require an Officers' Certificate or an Opinion of Counsel
reasonably satisfactory in form and substance to the Indenture Trustee.
The Indenture Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on any such Officer's
Certificate or Opinion of Counsel.
(c) The Indenture Trustee may act through agents and shall not
be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Indenture Trustee shall not be liable for any action
it takes or omits to take in good faith that it believes to be
authorized or within its rights or powers.
SECTION 6.04. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF BONDS.
The recitals contained herein and in the Bonds, except the certificates
of authentication on the Bonds, shall be taken as the statements of the Issuer,
and the Indenture Trustee and the Authenticating Agent assumes no responsibility
for their correctness. The Indenture Trustee makes no representations with
respect to the Trust Estate or as to the validity or sufficiency of this
Indenture or of the Bonds. The Indenture Trustee shall not be accountable for
the use or application by the Issuer of the Bonds or the proceeds thereof or any
money paid to the Issuer or upon Issuer Order pursuant to the provisions hereof.
SECTION 6.05. MAY HOLD BONDS.
The Indenture Trustee, any Agent, or any other agent of the Issuer, in
its individual or any other capacity, may become the owner or pledgee of Bonds
and, subject to Sections 6.07 and 6.13, may otherwise deal with the Issuer or
any Affiliate of the Issuer with the same rights it would have if it were not
Indenture Trustee, Agent or such other agent.
SECTION 6.06. MONEY HELD IN TRUST.
Money held by the Indenture Trustee in trust hereunder need not be
segregated from other funds except to the extent required by this Indenture or
by law. The Indenture Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Issuer and
except to the extent of income or other gain on investments that are obligations
of the Indenture Trustee, in its commercial capacity, and income or other gain
actually received by the Indenture Trustee on investments, which are obligations
of others.
SECTION 6.07. ELIGIBILITY; DISQUALIFICATION.
Irrespective of whether this Indenture is qualified under the TIA, this
Indenture shall always have a Indenture Trustee who satisfies the requirements
of TIA Sections 310(a)(1) and 310(a)(5). The Indenture Trustee shall always have
a combined capital and surplus as stated in Section 6.08. The Indenture Trustee
shall be subject to TIA Section 310(b).
SECTION 6.08. INDENTURE TRUSTEE'S CAPITAL AND SURPLUS.
The Indenture Trustee shall at all times have a combined capital and
surplus of at least $100,000,000 or shall be a member of a bank holding company
system, the aggregate combined capital and surplus of which is at least
$100,000,000 and shall at all times be rated "BBB" or better by Standard &
Poor's and "Baa2" by Moody's; provided, however, that the Indenture Trustee's
separate capital and surplus shall at all times be at least the amount required
by TIA Section 310(a)(2). If the Indenture Trustee publishes annual reports of
condition of the type described in TIA Section 310(a)(1), its combined capital
and surplus for purposes of this Section 6.08 shall be as set forth in the
latest such report. If at any time the Indenture Trustee shall cease to be
eligible in accordance with the provisions of this Section 6.08 and TIA Section
310(a)(2), it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
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SECTION 6.09. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Indenture Trustee and no
appointment of a successor Indenture Trustee pursuant to this Article
shall become effective until the acceptance of appointment by the
successor Indenture Trustee under Section 6.10.
(b) The Indenture Trustee may resign at any time by giving
written notice thereof to the Issuer, the Bond Insurer and each Rating
Agency. If an instrument of acceptance by a successor Indenture Trustee
shall not have been delivered to the Indenture Trustee within 30 days
after the giving of such notice of resignation, the resigning Indenture
Trustee may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.
(c) The Indenture Trustee may be removed at any time with the
consent of the Bond Insurer by Act of the Holders representing more
than 50% of the Bond Balance of the Outstanding Bonds, delivered to the
Indenture Trustee and to the Issuer.
(d) If at any time:
(1) the Indenture Trustee shall have a conflicting
interest prohibited by Section 6.07 and shall fail to resign
or eliminate such conflicting interest in accordance with
Section 6.07 after written request therefor by the Issuer or
by any Bondholder; or
(2) the Indenture Trustee shall cease to be eligible
under Section 6.08 or shall become incapable of acting or
shall be adjudged a bankrupt or insolvent, or a receiver of
the Indenture Trustee or of its property shall be appointed,
or any public officer shall take charge or control of the
Indenture Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation;
then, in any such case, (i) the Issuer by an Issuer Order, with the
consent of the Bond Insurer, may remove the Indenture Trustee, and the
Issuer shall join with the Indenture Trustee in the execution, delivery
and performance of all instruments and agreements necessary or proper
to appoint a successor Indenture Trustee acceptable to the Bond Insurer
and to vest in such successor Indenture Trustee any property, title,
right or power deemed necessary or desirable, subject to the other
provisions of this Indenture; provided, however, if the Issuer and the
Bond Insurer do not join in such appointment within fifteen (15) days
after the receipt by it of a request to do so, or in case an event of
default has occurred and is continuing, the Indenture Trustee may
petition a court of competent jurisdiction to make such appointment, or
(ii) subject to Section 5.15, and, in the case of a conflicting
interest as described in clause (1) above, unless the Indenture
Trustee's duty to resign has been stayed as provided in TIA Section
310(b), the Bond Insurer or any Bondholder who has been a bona fide
Holder of a Bond for at least six months may, on behalf of himself and
all others similarly situated, with the consent of the Bond Insurer,
petition any court of competent jurisdiction for the removal of the
Indenture Trustee and the appointment of a successor Indenture Trustee.
(e) If the Indenture Trustee shall resign, be removed or
become incapable of acting, or if a vacancy shall occur in the office
of the Indenture Trustee for any cause, the Issuer, by an Issuer Order
shall promptly appoint a successor Indenture Trustee acceptable to the
Bond Insurer. If within one year after such resignation, removal or
incapability or the occurrence of such vacancy a successor Indenture
Trustee shall be appointed by the Bond Insurer or, with the consent of
the Bond Insurer, by Act of the Holders of Bonds representing more than
50% of the Bond Balance of the Outstanding Bonds delivered to the
Issuer and the retiring Indenture Trustee, the successor Indenture
Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Indenture Trustee and supersede the
successor Indenture Trustee appointed by the Issuer. If no successor
Indenture Trustee shall have been so appointed by the Issuer, the Bond
Insurer or Bondholders and shall have accepted appointment in the
manner hereinafter provided, any Bondholder who has been a bona fide
Holder of a Bond for at least six
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months may, on behalf of himself and all others similarly situated,
with the consent of the Bond Insurer, petition any court of competent
jurisdiction for the appointment of a successor Indenture Trustee.
(f) The Issuer shall give notice of each resignation and each
removal of the Indenture Trustee and each appointment of a successor
Indenture Trustee to the Holders of Bonds. Each notice shall include
the name of the successor Indenture Trustee and the address of its
Corporate Trust Office.
SECTION 6.10. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
Every successor Indenture Trustee appointed hereunder shall execute,
acknowledge and deliver to the Issuer and the retiring Indenture Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Indenture Trustee shall become effective and such successor
Indenture Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Indenture
Trustee. Notwithstanding the foregoing, on request of the Issuer or the
successor Indenture Trustee, such retiring Indenture Trustee shall, upon payment
of its charges, execute and deliver an instrument transferring to such successor
Indenture Trustee all the rights, powers and trusts of the retiring Indenture
Trustee, and shall duly assign, transfer and deliver to such successor Indenture
Trustee all property and money held by such retiring Indenture Trustee
hereunder. Upon request of any such successor Indenture Trustee, the Issuer
shall execute and deliver any and all instruments for more fully and certainly
vesting in and confirming to such successor Indenture Trustee all such rights,
powers and trusts.
No successor Indenture Trustee shall accept its appointment unless at
the time of such acceptance such successor Indenture Trustee shall be qualified
and eligible under this Article.
SECTION 6.11. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS OF INDENTURE TRUSTEE.
Any corporation into which the Indenture Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Indenture Trustee
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of the Indenture Trustee, shall be the successor of
the Indenture Trustee hereunder, provided such corporation shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto. In case
any Bonds have been authenticated, but not delivered, by the Indenture Trustee
then in office, any successor by merger, conversion or consolidation to such
authenticating Indenture Trustee may adopt such authentication and deliver the
Bonds so authenticated with the same effect as if such successor Indenture
Trustee had authenticated such Bonds.
SECTION 6.12. PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER.
The Indenture Trustee (and any co-trustee or separate trustee) shall be
subject to TIA Section 311(a), excluding any creditor relationship listed in TIA
Section 311(b), and an Indenture Trustee (and any co-trustee or separate
trustee) who has resigned or been removed shall be subject to TIA Section 311(a)
to the extent indicated.
SECTION 6.13. CO-INDENTURE TRUSTEES AND SEPARATE INDENTURE TRUSTEES.
At any time or times, for the purpose of meeting the legal requirements
of the TIA or of any jurisdiction in which any of the Trust Estate may at the
time be located, the Issuer and the Indenture Trustee shall have power to
appoint, and, upon the written request of the Indenture Trustee, of the Bond
Insurer or of the Holders of Bonds representing more than 50% of the Bond
Balance of the Outstanding Bonds with respect to which a co-trustee or separate
trustee is being appointed, the Issuer shall for such purpose jointly with the
Indenture Trustee in the execution, delivery and performance of all instruments
and agreements necessary or proper to appoint, one or more Persons approved by
the Indenture Trustee either to act as co-trustee, jointly with the Indenture
Trustee, of all or any part of the Trust Estate, or to act as separate trustee
of any such property, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such Person or Persons in the capacity
aforesaid, any property, title, right or power deemed necessary or desirable,
subject to the other provisions of this Section. If
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the Issuer does not join in such appointment within 15 days after the receipt
by it of a request to do so, or in case an Event of Default has occurred and is
continuing, the Indenture Trustee alone shall have power to make such
appointment. All fees and expenses of any co-trustee or separate trustee shall
be payable by the Issuer.
Should any written instrument from the Issuer be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right or power, any and all
such instruments shall, on request, be executed, acknowledged and delivered by
the Issuer.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms:
(1) The Bonds shall be authenticated and delivered and all
rights, powers, duties and obligations hereunder in respect of the
custody of securities, cash and other personal property held by, or
required to be deposited or pledged with, the Indenture Trustee
hereunder, shall be exercised, solely by the Indenture Trustee.
(2) The rights, powers, duties and obligations hereby
conferred or imposed upon the Indenture Trustee in respect of any
property covered by such appointment shall be conferred or imposed upon
and exercised or performed by the Indenture Trustee or by the Indenture
Trustee and such co-trustee or separate trustee jointly, as shall be
provided in the instrument appointing such co-trustee or separate
trustee, except to the extent that under any law of any jurisdiction in
which any particular act is to be performed, the Indenture Trustee
shall be incompetent or unqualified to perform such act, in which event
such rights, powers, duties and obligations shall be exercised and
performed by such co-trustee or separate trustee.
(3) The Indenture Trustee at any time, by an instrument in
writing executed by it, with the concurrence of the Issuer evidenced by
an Issuer Order, may accept the resignation of or remove any co-trustee
or separate trustee appointed under this Section, and, in case an Event
of Default has occurred and is continuing, the Indenture Trustee shall
have power to accept the resignation of, or remove, any such co-trustee
or separate trustee without the concurrence of the Issuer upon the
written request of the Indenture Trustee, the Issuer shall join with
the Indenture Trustee in the execution, delivery and performance of all
instruments and agreements necessary or proper to effectuate such
resignation or removal. A successor to any co-trustee or separate
trustee so resigned or removed may be appointed in the manner provided
in this Section.
(4) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Indenture
Trustee, or any other such trustee hereunder.
(5) Any Act of Bondholders delivered to the Indenture Trustee
shall be deemed to have been delivered to each such co-trustee and
separate trustee.
SECTION 6.14. AUTHENTICATING AGENTS.
The Issuer shall appoint an Authenticating Agent with power to act on
its behalf and subject to its direction in the authentication and delivery of
the Bonds designated for such authentication by the Issuer and containing
provisions therein for such authentication (or with respect to which the Issuer
has made other arrangements, satisfactory to the Indenture Trustee and such
Authenticating Agent, for notation on the Bonds of the authority of an
Authenticating Agent appointed after the initial authentication and delivery of
such Bonds) in connection with transfers and exchanges under Section 2.06, as
fully to all intents and purposes as though the Authenticating Agent had been
expressly authorized by that Section to authenticate and deliver Bonds. For all
purposes of this Indenture (other than in connection with the authentication and
delivery of Bonds pursuant to Sections 2.05 and 2.11 in connection with their
initial issuance and for purposes of Section 2.07), the authentication and
delivery of Bonds by the Authenticating Agent pursuant to this Section shall be
deemed to be the authentication and delivery of Bonds "by the Indenture
Trustee." Such Authenticating Agent shall at all times
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be a Person that both meets the requirements of Section 6.07 for the Indenture
Trustee hereunder and has an office for presentation of Bonds in the Borough of
Manhattan, City and State of New York. The Indenture Trustee shall initially be
the Authenticating Agent and shall be the Bond Registrar as provided in Section
2.06. The office from which the Indenture Trustee shall perform its duties as
Bond Registrar and Authenticating Agent shall be the Corporate Trust Office. Any
Authenticating Agent appointed pursuant to the terms of this Section 6.14 or
pursuant to the terms of any supplemental indenture shall deliver to the
Indenture Trustee as a condition precedent to the effectiveness of such
appointment an instrument accepting the trusts, duties and responsibilities of
Authenticating Agent and of Bond Registrar or co-Bond Registrar and indemnifying
the Indenture Trustee for and holding the Indenture Trustee harmless against,
any loss, liability or expense (including reasonable attorneys' fees) incurred
without negligence or bad faith on its part, arising out of or in connection
with the acceptance, administration of the trust or exercise of authority by
such Authenticating Agent, Bond Registrar or co-Bond Registrar.
Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate trust business
of any Authenticating Agent, shall be the successor of the Authenticating Agent
hereunder, if such successor corporation is otherwise eligible under this
Section, without the execution or filing of any further act on the part of the
parties hereto or the Authenticating Agent or such successor corporation.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Issuer. The Issuer may at any time terminate the
agency of any Authenticating Agent by giving written notice of termination to
such Authenticating Agent and the Issuer. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time any
Authenticating Agent shall cease to be eligible under this Section, the Issuer
shall promptly appoint a successor Authenticating Agent, shall give written
notice of such appointment to the Indenture Trustee, and shall mail notice of
such appointment to all Holders of Bonds.
The Indenture Trustee agrees, subject to Section 6.01(e), to pay to any
Authenticating Agent from time to time reasonable compensation for its services
and the Indenture Trustee shall be entitled to be reimbursed for such payments
pursuant to Section 6.05 of the Servicing Agreement. The provisions of Sections
2.09, 6.04 and 6.05 shall be applicable to any Authenticating Agent.
SECTION 6.15. REVIEW OF MORTGAGE FILES.
(a) Initial Certification. The Indenture Trustee shall, for
the benefit of the Bondholders, review each Mortgage File prior to the
Closing Date to ascertain that all documents required to be included in
the Mortgage File are included therein, and shall deliver to the
Mortgage Loan Seller and the Servicer on the Closing Date an Initial
Certification in the form attached hereto as Exhibit E-1 with respect
to each Mortgage Loan to the effect that, except as specifically noted
on a schedule of exceptions thereto, (A) all documents required to be
contained in the Mortgage File are in its possession, (B) such
documents have been reviewed by it and appear regular on their face and
relate to such Mortgage Loan, and (C) based on its examination and only
as to the foregoing documents, the information set forth on the related
Mortgage Loan Schedule accurately reflects information set forth in the
Mortgage File.
It is understood that before making the Initial Certification,
the Indenture Trustee shall examine the related Mortgage Loan Documents
to confirm that:
(1) each Mortgage Note and Mortgage bears an original
signature or signatures purporting to be that of the Person or
Persons named as the maker and mortgagor/trustor or, if
photocopies are permitted, that such copies bear a
reproduction of such signature or signatures;
(2) except for the endorsement to the Indenture
Trustee, neither the Mortgage nor any Assignment, on the face
or the reverse side(s) thereof, contains evidence of any
unsatisfied claims, liens, security interests, encumbrances or
restrictions on transfer;
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(3) the principal amount of the indebtedness secured
by the related Mortgage is identical to the original principal
amount of the related Mortgage Note;
(4) the Assignment of the related Mortgage from the
Mortgage Loan Seller to the Indenture Trustee is in the form
required pursuant to clause (e) of the definition of "Mortgage
Loan Documents" in the Mortgage Loan Sale Agreement, and bears
an original signature of the Mortgage Loan Seller and any
other necessary party (or signatures purporting to be that of
the Mortgage Loan Seller and any such other party) or, if
photocopies are permitted, that such copies bear a
reproduction of such signature or signatures;
(5) if intervening Assignments are included in the
Mortgage File, each such intervening Assignment bears an
original signature of the related mortgagee and/or the
assignee (and any other necessary party) (or signatures
purporting to be that of each such party) or, if photocopies
are permitted, that such copies bear a reproduction of such
signature or signatures;
(6) if either a title insurance policy, a preliminary
title report or a written commitment to issue a title
insurance policy is delivered, the address of the real
property set forth in such policy, report or written
commitment is identical to the real property address contained
in the related Mortgage; and
(7) if any of a title insurance policy, certificate
of title insurance or a written commitment to issue a title
insurance policy is delivered, such policy, certificate or
written commitment is for an amount not less than the original
principal amount of the related Mortgage Note and such title
insurance policy insures that the related Mortgage creates a
first lien, senior in priority to all other deeds of trust,
mortgages, deeds to secure debt, financing statements and
security agreements and to any mechanics' liens, judgment
liens or writs of attachment (or if the title insurance policy
or certificate of title insurance has not been issued, the
written commitment for such insurance obligates the insurer to
issue such policy for an amount not less than the original
principal amount of the related Mortgage Note).
(b) Final Certification. On or before one year following the
Closing Date, the Indenture Trustee shall deliver to the Mortgage Loan
Seller and the Servicer a Final Certification in the form attached
hereto as Exhibit E-2 evidencing the completeness of the Mortgage File
for each Mortgage Loan, except as specifically noted on a schedule of
exceptions thereto.
(c) Certification Generally. In giving each of the Initial
Certification and the Final Certification, the Indenture Trustee shall
be under no duty or obligation (1) to inspect, review or examine any
such documents, instruments, securities or other papers to determine
that they or the signatures thereto are genuine, enforceable, or
appropriate for the represented purpose or that they have actually been
recorded or that they are other than what they purport to be on their
face or (2) to determine whether any Mortgage File should include a
flood insurance policy, any rider, addenda, surety or guaranty
agreement, power of attorney, buy down agreement, assumption agreement,
modification agreement, written assurance or substitution agreement.
(d) Recordation Report. No later than the fifth Business Day
of each third month, commencing in January 1998, the Indenture Trustee
shall deliver to the Servicer a recordation report dated as of the
first day of such month, identifying those Mortgage Loans for which it
has not yet received (1) an original recorded Mortgage or a copy
thereof certified to be true and correct by the public recording office
in possession of such Mortgage or (2) an original recorded Assignment
of the Mortgage to the Indenture Trustee and any required intervening
Assignments or a copy thereof certified to be a true and correct copy
by the public recording office in possession of such Assignment;
provided, however, that the Indenture Trustee shall not be required to
provide a recordation report with respect to the recordation of an
Assignment for any Mortgage Loan for which there has been delivered an
Assignment in recordable form pursuant to Section 2.02(a) hereof unless
the Indenture Trustee has delivered such Assignment to the
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Servicer for recordation, in which case the Indenture Trustee shall
deliver a recordation report as to the status of such Assignment in
accordance with this paragraph commencing in the fourth month following
the delivery of such Assignment to the Servicer for recordation.
ARTICLE VII
BONDHOLDERS' LISTS AND REPORTS
SECTION 7.01. ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND ADDRESSES
OF BONDHOLDERS.
(a) The Issuer shall furnish or cause to be furnished to the
Indenture Trustee (i) semi-annually, not less than 45 days nor more
than 60 days after the Payment Date occurring closest to six months
after the Closing Date and each Payment Date occurring at six-month
intervals thereafter, all information in the possession or control of
the Issuer, in such form as the Indenture Trustee may reasonably
require, as to names and addresses of the Holders of Bonds, and (ii) at
such other times, as the Indenture Trustee may request in writing,
within 30 days after receipt by the Issuer of any such request, a list
of similar form and content as of a date not more than 10 days prior to
the time such list is furnished; provided, however, that so long as the
Indenture Trustee is the Bond Registrar, no such list shall be required
to be furnished.
(b) In addition to furnishing to the Indenture Trustee the
Bondholder lists, if any, required under subsection (a), the Issuer
shall also furnish all Bondholder lists, if any, required under Section
3.03 at the times required by said Section 3.03.
SECTION 7.02. PRESERVATION OF INFORMATION; COMMUNICATIONS TO
BONDHOLDERS.
(a) The Indenture Trustee shall preserve, in as current a form
as is reasonably practicable, the names and addresses of the Holders of
Bonds contained in the most recent list, if any, furnished to the
Indenture Trustee as provided in Section 7.01 and the names and
addresses of the Holders of Bonds received by the Indenture Trustee in
its capacity as Bond Registrar. The Indenture Trustee may destroy any
list furnished to it as provided in Section 7.01 upon receipt of a new
list so furnished.
(b) Bondholders may communicate pursuant to TIA Section 312(b)
with other Bondholders with respect to their rights under this
Indenture or under the Bonds.
(c) The Issuer, the Indenture Trustee and the Bond Registrar
shall have the protection of TIA Section 312(c).
SECTION 7.03. REPORTS BY INDENTURE TRUSTEE.
(a) Within 60 days after December 31 of each year (the
"reporting date"), commencing with the year after the issuance of the
Bonds, (i) the Indenture Trustee shall mail to all Holders a brief
report dated as of such reporting date that complies with TIA Section
313(a); (ii) the Indenture Trustee shall, to the extent not set forth
in the Payment Date Statement pursuant to Section 2.08(d), also mail to
Holders of Bonds with respect to which it has made advances, any
reports with respect to such advances that are required by TIA Section
313(b)(2); and, the Indenture Trustee shall also mail to Holders of
Bonds any reports required by TIA Section 313(b)(1). For purposes of
the information required to be included in any such reports pursuant to
TIA Sections 313(a)(2), 313(b)(1) (if applicable), or 313(b)(2), the
principal amount of indenture securities outstanding on the date as of
which such information is provided shall be the Bond Balance of the
then Outstanding Bonds covered by the report.
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(b) A copy of each report required under this Section 7.03
shall, at the time of such transmission to Holders of Bonds be filed by
the Indenture Trustee with the Commission and with each securities
exchange upon which the Bonds are listed. The Issuer will notify the
Indenture Trustee when the Bonds are listed on any securities exchange.
SECTION 7.04. REPORTS BY ISSUER.
The Issuer (a) shall deliver to the Indenture Trustee within 15 days
after the Issuer is required to file the same with the Commission copies of the
annual reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission may by rules and
regulations prescribe) that the Issuer is required to file with the Commission
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, and (b) shall also comply with the other provisions of TIA Section
314(a).
ARTICLE VIII
ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES
SECTION 8.01. COLLECTION OF MONEYS.
Except as otherwise expressly provided herein, the Indenture Trustee
may demand payment or delivery of, and shall receive and collect, directly and
without intervention or assistance of any fiscal agent or other intermediary,
all money and other property payable to or receivable by the Indenture Trustee
pursuant to this Indenture. The Indenture Trustee shall hold all such money and
property received by it as part of the Trust Estate and shall apply it as
provided in this Indenture.
If the Indenture Trustee shall not have received the Remittable Funds
by close of business on any related Deposit Date, the Indenture Trustee shall,
unless the Issuer shall have made provisions satisfactory to the Indenture
Trustee for delivery to the Indenture Trustee of an amount equal to such
Remittable Funds, deliver a notice to the Issuer and the Servicer of their
failure to remit such Remittable Funds and that such failure, if not remedied by
2:00 p.m. Eastern Time on the Business Day immediately preceding the related
Payment Date shall constitute an Event of Default. If the Indenture Trustee
shall subsequently receive any such Remittable Funds by 2:00 p.m. Eastern Time
on the Business Day immediately preceding the related Payment Date, such Event
of Default shall not be deemed to have occurred. Notwithstanding any other
provision hereof, the Indenture Trustee shall deliver to the Issuer or its
designee or assignee any Remittable Funds received with respect to a Mortgage
Loan after the related Deposit Date to the extent that the Issuer previously
made payment or provision for payment with respect to such Remittable Funds in
accordance with this Section 8.01, and any Remittable Funds shall not be deemed
part of the Trust Estate.
Except as otherwise expressly provided in this Indenture and the
Servicing Agreement, if, following delivery by the Indenture Trustee of the
notice described above, the Servicer shall fail to remit the Remittable Funds on
any Deposit Date, the Indenture Trustee shall deliver a second notice to the
Servicer, the Issuer and the Bond Insurer by 2:00 p.m. Eastern Time on the
Business Day prior to the related Payment Date indicating that an event of
default occurred and is continuing under the Servicing Agreement. Thereupon, the
Indenture Trustee shall make a deposit in the Bond Account of such Remittable
Funds for such Payment Date (provided, however, that the Indenture Trustee's
responsibility to make such deposit shall be limited to the Indenture Trustee's
determination, in its reasonable discretion, that such deposit if made would be
recoverable) and, pursuant to Section 8.12 hereof and Section 6.02 of the
Servicing Agreement, assume, upon the direction of the Bond Insurer, the duties
of the Servicer. In addition, if a default occurs in any other performance
required under the Servicing Agreement or any Insurance Policy, the Indenture
Trustee may, and upon the request of the Bond Insurer or, with the consent of
the Bond Insurer, the Holders of Bonds representing more than 50% of the Bond
Balance of the Outstanding Bonds shall, take such action as may be appropriate
to enforce such payment or performance including the institution and prosecution
of appropriate Proceedings. Any such action shall be without prejudice to any
right to claim a Default or Event of Default under this Indenture and to proceed
thereafter as provided in Article V.
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SECTION 8.02. BOND ACCOUNT.
(a) The Issuer hereby directs the Indenture Trustee to open,
at the Corporate Trust Office one or more accounts that shall
collectively be the "Bond Account" on or before the Closing Date. The
Indenture Trustee shall promptly deposit in the Bond Account (i) all
Remittable Funds received by it from the Servicer pursuant to the
Servicing Agreement, (ii) any other funds from any deposits to be made
by the Servicer pursuant to the Servicing Agreement, (iii) any amount
required to be deposited in the Bond Account pursuant to Section 8.01,
(iv) all amounts received pursuant to Section 8.03, and (v) all other
amounts received for deposit in the Bond Account. All amounts that are
deposited from time to time in the Bond Account, and all investments,
if any, made with such moneys shall be held by the Indenture Trustee in
the Bond Account as part of the Trust Estate as herein provided,
subject to withdrawal by the Indenture Trustee for the purposes set
forth in subsections (c) and (d) of this Section 8.02. All funds
withdrawn from the Bond Account pursuant to subsection (c) of this
Section 8.02 for the purpose of making payments to the Holders of Bonds
shall be applied in accordance with Section 3.03.
(b) So long as no Default or Event of Default shall have
occurred and be continuing, amounts held in the Bond Account shall be
invested in Permitted Investments of the type specified in clause (f)
of the definition of Permitted Investments, which Permitted Investments
shall mature no later than the Business Day preceding the immediately
following Payment Date.
All income or other gains, if any, from investment of moneys
deposited in the Bond Account shall be for the benefit of the Indenture
Trustee, and any loss resulting from such investment shall be
reimbursed immediately as incurred to the Bond Account by the Indenture
Trustee. Subject to Section 6.01 and the preceding sentence, the
Indenture Trustee shall not in any way be held liable by reason of any
insufficiency in the Bond Account.
(c) On each Payment Date, the Indenture Trustee shall withdraw
amounts on deposit in the Bond Account and pay the Bond Insurer
Premium, the Indenture Trustee Fee, the Owner Trustee Fee, and amounts
required to reimburse the Servicer for Monthly Advances and Servicing
Advances previously made by, and not reimbursed to, the Servicer, which
are so reimbursable to the Servicer pursuant to the Servicing Agreement
(as reported in writing by the Servicer to the Indenture Trustee).
After payment of such amounts, unless the Bonds have been declared due
and payable pursuant to Section 5.02 and moneys collected by the
Indenture Trustee are being applied in accordance with Section 5.07,
Available Funds on deposit in the Bond Account on any Payment Date or
Redemption Date shall be withdrawn from the Bond Account, in the
amounts required, for application as follows:
on any Payment Date,
first, to the payment to the Bond Insurer,
as subrogee to the rights of the Bondholders, the
aggregate amount necessary to reimburse the Bond
Insurer for any unreimbursed Insured Amounts paid by
the Bond Insurer on prior Payment Dates, together
with interest thereon at the "Late Payment Rate"
specified in the Insurance Agreement from the date
such Insured Amounts were paid by the Bond Insurer to
such Payment Date and the amount of any unpaid Bond
Insurer Premium for any prior Payment Date together
with interest thereon at the "Late Payment Rate"
specified in the Insurance Agreement from the date
such amounts were due; provided, however, that the
Bond Insurer shall be paid such amounts only after
the Bondholders have received the Required Payment
Amount with respect to such Payment Date;
second, to the Bondholders, the Bond
Interest for such Payment Date;
third, to the Bondholders, the Monthly
Principal for such Payment Date in reduction of the
Bond Balance until such Bond Balance is reduced to
zero;
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fourth, to the Bondholders, in reduction of
the Bond Balance, the amount, if any, equal to the
lesser of (A) Excess Cash with respect to such
Payment Date, and (B) the lesser of (1) the amount
necessary for the Overcollateralization Amount to
equal the Required Overcollateralization Amount on
such Payment Date (after giving effect to application
of Monthly Principal for such Payment Date) and (2)
the amount necessary to reduce the Bond Balance to
zero (the "Excess Cash Payment");
fifth, to the Bondholders, the amount of all
Available Funds Cap Carry Forward Amount outstanding
on such Payment Date; and
sixth, to the Bond Insurer, any amounts due
and owing under the Insurance Agreement that are not
described in clause "first."
(d) On or after each Payment Date, so long as the Indenture
Trustee shall have prepared a Payment Date Statement in respect of such
Payment Date and (1) shall have made, or, in accordance with Section
3.03, set aside from amounts in the Bond Account an amount sufficient
to make, the payments on the Bonds then required to be made as
indicated in such Payment Date Statement, (2) shall have made any
reimbursement required to be made to the Servicer in respect of
Nonrecoverable Advances made by the Servicer and (3) shall have set
aside any amounts that have been deposited in the Bond Account prior to
such time that represent amounts that are to be used to make payments
on the Bonds on the next succeeding Payment Date, the cash balance, if
any, then remaining in the Bond Account, less the amount of Remittable
Funds due with respect to the Mortgage Loans but not received during
the prior Collection Period, shall be withdrawn from the Bond Account
by the Indenture Trustee and, so long as no Default or Event of Default
shall have occurred and be continuing, shall be released from the lien
of this Indenture and paid by the Indenture Trustee to the Issuer:
(i) the Issuer shall have delivered to the Indenture
Trustee an Officers' Certificate stating that all conditions
precedent to such release specified in this subsection (d)
have been satisfied; and
(ii) the Issuer shall have delivered to the Indenture
Trustee in Opinion of Counsel reasonably satisfactory in form
and substance to the Indenture Trustee to the effect that all
Officers' Certificates delivered to the Indenture Trustee in
connection with such release comply as to form with the
requirements of this subsection (d) and all conditions
precedent to such release specified in this subsection (d)
have been satisfied.
Notwithstanding anything to the contrary contained in clauses
(i) and (ii) above, in the event the Issuer delivers to the Indenture
Trustee an Opinion of Counsel, citing an exemptive order or similar
relief of the Commission with respect to compliance with the TIA as to
this Section 8.02(d), from such date forward the Issuer shall no longer
be required to comply with the requirements of clauses (i) or (ii)
above, and the Indenture Trustee shall release funds from the lien of
this Indenture, subject only to compliance with the terms of such
exemptive order or similar relief, if any, and other provisions of this
Section.
(e) Any payments made by the Indenture Trustee to the Issuer
pursuant to this Section 8.02 shall be remitted to the Certificate
Distribution Account established and maintained pursuant to the Trust
Agreement.
SECTION 8.03. PAYMENTS ON THE MBIA INSURANCE POLICY.
(a) On or before the Closing Date, the Issuer shall direct the
Indenture Trustee in writing to open, at the Corporate Trust Office, an
account that shall be the "Policy Payments Account". All amounts that
are deposited in the Policy Payments Account shall be held by the
Indenture Trustee in the Policy Payments Account as part of the Trust
Estate as herein provided. The Indenture Trustee shall hold the Policy
Payments Account as a separate special purpose trust account for the
benefit of the Bondholders
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and the Bond Insurer. The Indenture Trustee shall deposit or cause to
be deposited any Insured Amounts paid under the MBIA Insurance Policy
in the Policy Payments Account and distribute such amounts only for the
purpose of payment to the Bondholders of such Insured Amounts and such
amounts may not be used to satisfy any costs, expenses or liabilities
of the Servicer, the Indenture Trustee or the Issuer. Insured Amounts
deposited in the Policy Payments Account shall not be invested in
Permitted Investments or otherwise, and shall be transferred to the
Bond Account on the related Payment Date and paid by the Indenture
Trustee to the Bondholders in accordance with Section 8.02(c).
As soon as possible, and in no event later than 9:00 a.m. (New
York City time) on the third Business Day immediately preceding the
related Payment Date, the Indenture Trustee shall determine whether an
Insured Amount is required to be paid under the MBIA Insurance Policy
with respect to such Payment Date and, if so, shall immediately notify
the Servicer by telephone, which notice shall be confirmed in writing
by facsimile transmission, of the Indenture Trustee's intention so to
file the applicable Notice of Claim. If by the close of business in New
York City on such date an Insured Amount is still required to be paid
under the MBIA Insurance Policy with respect to such Payment Date, the
Indenture Trustee shall furnish the Bond Insurer with a completed
Notice of Claim in respect of such Insured Amount by 12:00 noon Eastern
time on the next succeeding Business Day and shall provide a copy
thereof to the Servicer at or prior to the time such Notice of Claim is
received by the Bond Insurer. The Notice of Claim shall constitute a
claim therefor pursuant to the MBIA Insurance Policy. In the event any
funds are received by the Indenture Trustee from the Servicer by 2:00
p.m. Eastern time on the Business Day following the transmission of a
Notice of Claim to the Bond Insurer, and such funds reduce the amount
of the Insured Amount to which such Notice of Claim relates, the
Insured Amount to which such Notice of Claim relates shall be reduced
by a corresponding amount, and the Notice of Claim shall be deemed to
have been rescinded to the extent of the reduction of the Insured
Amount. Notification of any such reduction in the Insured Amount shall
be given to the Bond Insurer by the Indenture Trustee by no later than
3:00 p.m. Eastern time on the Business Day prior to the related Payment
Date. The Bond Insurer shall, pursuant to the MBIA Insurance Policy,
pay to the Indenture Trustee the Insured Amount by 2:00 p.m., Eastern
time, on the later of (i) the second Business Day following receipt of
such Notice of Claim and (ii) such Payment Date. The Indenture Trustee
shall deposit or cause to be deposited such Insured Amount in the Bond
Account for distribution pursuant to Section 8.02(c).
(b) Each Bondholder shall promptly notify the Indenture
Trustee in writing upon the receipt of a court order as described in
the definition of Preference Amount and shall enclose a copy of such
order with such notice to the Indenture Trustee. The Indenture Trustee
shall promptly notify the Bond Insurer upon its receipt of any such
court order. If the payment of any portion of Bond Interest, Monthly
Principal, Excess Cash Payment or any payment in respect of
Overcollateralization Deficit for any Payment Date is avoided as a
preference pursuant to a final, nonappealable order under the U.S.
Bankruptcy Code (the "Order"), the Bond Insurer shall cause such
payment to be made on the later of (a) the date when due to be paid
pursuant to the Order or (b) the first to occur of (i) the fourth
Business Day following receipt by the Bond Insurer from the Indenture
Trustee of (A) a copy of the Order to the effect that the Bondholder is
required to return payments on the Bonds during the term of the MBIA
Insurance Policy because such payments were avoidable as preference
payments pursuant to such Order, (B) a certificate of the Bondholder
that the Order has been entered and is not subject to any stay and (C)
an assignment duly executed and delivered by the Bondholder in such
form as is reasonably required by the Bond Insurer and provided to the
Bondholder by the Bond Insurer, irrevocably assigning to the Bond
Insurer all rights and claims of (i) the Bondholders relating to or
arising under the Bonds against the debtor that made such preference
payment or otherwise with respect to such preference payment or (ii)
the date of receipt by the Bond Insurer from the Indenture Trustee of
the items referred to in clauses (A), (B) and (C) above if, at least
four Business Days prior to such date of receipt, the Bond Insurer
shall have received written notice from the Indenture Trustee that such
items were to be delivered on such date and such date was specified in
the notice. Such payment shall be disbursed to the receiver,
conservator, debtor-in-possession or trustee in bankruptcy named in the
Order and not to the Indenture Trustee or any Bondholder directly
(unless a Bondholder has previously paid such amount to the receiver,
conservator, debtor-in-possession or trustee
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in bankruptcy named in the Order, in which case such payment shall be
disbursed to the Indenture Trustee for payment to such Bondholder upon
proof of such payment reasonably satisfactory to the Bond Insurer).
(c) The Indenture Trustee shall receive, as attorney-in-fact
for each Bondholder, any Insured Amount from the Bond Insurer and
disburse the same in accordance with the provisions of Section 8.02.
Any portion of the payments made by the Indenture Trustee in respect of
the Required Payment Amount from proceeds of the MBIA Insurance Policy
shall not be considered payment from the Trust Estate, nor shall such
payments be discharged or otherwise considered as having been made from
the Trust Estate to the Bondholders, and the Bond Insurer shall become
the owner of such unpaid amounts. The Indenture Trustee hereby agrees
on behalf of each Bondholder for the benefit of the Bond Insurer that
it recognizes that to the extent the Bond Insurer pays any Insured
Amounts, either directly or indirectly (as by paying through the
Indenture Trustee), to the Bondholders, the Bond Insurer will be
subrogated to the rights of the Bondholders with respect to such
Insured Amounts, shall be deemed to the extent of the Insured Amounts
so paid, to be a registered Bondholder and shall be entitled to receive
all future payments on the Bonds until all such Insured Amounts
(together with interest thereon at the Bond Interest Rate from the date
paid until the date of reimbursement thereof) have been fully
reimbursed, subject to the following paragraph. To evidence such
subrogation, the Indenture Trustee shall direct the Bond Registrar to
note the Bond Insurer's rights as subrogee on the registration books
maintained by the Bond Registrar. Except as otherwise described herein,
the Bond Insurer shall not acquire any voting rights hereunder as a
result of such subrogation. The effect of the foregoing provisions is
that, to the extent of any Insured Amount made by it on each Payment
Date, the Bond Insurer shall be paid before any other payments are made
to the other Bondholders, subject to the following paragraph.
Notwithstanding the provisions of the preceding paragraph, it is
understood and agreed that the intention of the parties is that the
Bond Insurer shall not be entitled to reimbursement on any Payment Date
for amounts previously paid by it in respect of the Bonds unless on
such Payment Date the Bondholders shall also have received the full
amount of the Required Payment Amount for such Payment Date.
(d) The Indenture Trustee shall be entitled to enforce on
behalf of the Bondholders the obligations of the Bond Insurer under the
MBIA Insurance Policy. The Bondholders are not entitled to institute
proceedings directly against the Bond Insurer. Each Bondholder, by its
purchase of the Bonds, the Servicer, the Issuer and the Indenture
Trustee hereby agree that the Bond Insurer may at any time during the
continuation of any proceeding relating to a preference claim direct
all matters relating to such preference claim, including, without
limitation, the direction of any appeal of any order relating to such
preference claim and the posting of any surety, supersedeas or
performance bond pending any such appeal. In addition and without
limitation of the foregoing, the Bond Insurer shall be subrogated to
the rights of the Servicer, the Issuer, the Indenture Trustee and each
Bondholder in the conduct of any such preference claim, including,
without limitation, all rights of any party to an adversary proceeding
action with respect to any court order issued in connection with any
such preference claim.
(e) The Indenture Trustee shall keep a complete and accurate
record of the amount of interest and principal paid in respect of any
Bond from monies received under the MBIA Insurance Policy. The Bond
Insurer shall have the right to inspect such records at reasonable
times during normal business hours upon one Business Day's notice to
the Indenture Trustee.
SECTION 8.04. GENERAL PROVISIONS REGARDING THE INDENTURE ACCOUNTS AND
MORTGAGE LOANS.
(a) The Indenture Accounts shall relate solely to the Bonds
and to the Mortgage Loans, Permitted Investments and other property
securing the Bonds. Funds and other property in the Indenture Accounts
shall not be commingled with any other moneys or property of the Issuer
or any Affiliate thereof. Notwithstanding the foregoing, the Indenture
Trustee may hold any funds or other property received or held by it as
part of the Indenture Accounts in collective accounts maintained by it
in the normal course of its business and containing funds or property
held by it for other Persons (which may include the Issuer or an
Affiliate), provided that such accounts are under the sole control of
the Indenture
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Trustee and the Indenture Trustee maintains adequate records indicating
the ownership of all such funds or property and the portions thereof
held for credit to the Indenture Accounts.
(b) If any amounts are needed for payment from the Indenture
Accounts (except for the Policy Payments Account) and sufficient
uninvested funds are not available therein to make such payment, the
Indenture Trustee shall cause to be sold or otherwise converted to cash
a sufficient amount of the investments in the related Indenture
Accounts.
(c) The Indenture Trustee shall, at all times while any Bonds
are Outstanding, maintain in its possession, or in the possession of an
agent whose actions with respect to such items are under the sole
control of the Indenture Trustee, all certificates or other
instruments, if any, evidencing any investment of funds in the
Investment Accounts (except for the Policy Payments Account). The
Indenture Trustee shall relinquish possession of such items, or direct
its agent to do so, only for purposes of collecting the final payment
receivable on such investment or certificate or, in connection with the
sale of any investment held in the Indenture Accounts (except for the
Policy Payments Account), against delivery of the amount receivable in
connection with any sale.
(d) The Indenture Trustee shall not invest any part of the
Trust Estate in Permitted Investments that constitute uncertificated
securities (as defined in Section 8-102 of the Uniform Commercial Code,
as enacted in the relevant jurisdiction) or in any other book-entry
securities unless it has received an Opinion of Counsel reasonably
satisfactory in form and substance to the Indenture Trustee setting
forth, with respect to each type of security for which authority to
invest is being sought, the procedures that must be followed to
maintain the lien and security interest created by this Indenture with
respect to the Trust Estate.
SECTION 8.05. RELEASES OF DEFECTIVE MORTGAGE LOANS.
If any of the representations or warranties of the Mortgage Loan Seller
set forth in Section 4(b) of the Mortgage Loan Sale Agreement was materially
incorrect or otherwise misleading with respect to any Mortgage Loan as of the
time made, the Indenture Trustee shall direct the Mortgage Loan Seller to either
(i) within 60 days after the Mortgage Loan Seller receives actual knowledge of
such incorrectness, eliminate or otherwise cure the circumstance or condition in
respect of which such representation or warranty was incorrect as of the time
made, (ii) withdraw such Defective Mortgage Loan from the lien of this Indenture
following the expiration of such 60-day period by depositing to the Bond Account
an amount equal to the Purchase Price for such Mortgage Loan or (iii) substitute
a Qualified Replacement Mortgage Loan for such Defective Mortgage Loan, all as
provided in Section 7 of the Mortgage Loan Sale Agreement. Upon any purchase of
or substitution for a Defective Mortgage Loan by the Mortgage Loan Seller in
accordance with Section 7 of the Mortgage Sale Agreement, the Indenture Trustee
shall deliver the Mortgage File relating to such Defective Mortgage Loan to the
Mortgage Loan Seller, and the Issuer and the Indenture Trustee shall execute
such instruments of transfer as are necessary to convey title to such Defective
Mortgage Loan to the Mortgage Loan Seller from the lien of this Indenture.
Notwithstanding the foregoing, the sole remedy hereunder for a breach by the
Issuer of such obligation shall be enforcement by any party in interest as
against the Mortgage Loan Seller as aforesaid.
SECTION 8.06. REPORTS BY INDENTURE TRUSTEE TO BONDHOLDERS; ACCESS TO
CERTAIN INFORMATION.
On each Payment Date, the Indenture Trustee shall deliver the written
report required by Section 2.08(d) to Bondholders of record as of the related
Record Date (including the Clearing Agency, if any).
The Indenture Trustee shall make available at its Corporate Trust
Office, during normal business hours, for review by any Bondholder or any person
identified to the Indenture Trustee as a prospective Bondholder, originals or
copies of the following items: (a) the Indenture and any amendments thereto, (b)
all Payment Date Statements delivered to the Issuer since the Closing Date, (c)
any Officers' Certificates delivered to the Indenture Trustee since the Closing
Date as described in the Indenture, (d) any Accountants' reports delivered to
the Indenture Trustee since the Closing Date as required under the Servicing
Agreement, (e) any and all modifications,
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waivers and amendments of the terms of a Mortgage Loan entered into by the
Servicer and delivered to the Indenture Trustee and (f) any and all Officers'
Certificates of the Servicer and other evidence delivered to the Indenture
Trustee to support the Servicer's determination that any Servicing Advance was
not or, if made, would not be recoverable. Copies of any and all of the
foregoing items will be available from the Indenture Trustee upon request;
however, the Indenture Trustee will be permitted to require payment of a sum
sufficient to cover the reasonable costs and expenses of providing such copies.
SECTION 8.07. TRUST ESTATE MORTGAGE FILES.
(a) The Indenture Trustee may, and when required by the
provisions of this Indenture shall, execute such instruments or powers
of attorney as are prepared and delivered to it by the Servicer to
release property from the lien of this Indenture, or convey the
Indenture Trustee's interest in the same, in a manner and under
circumstances that are not inconsistent with the provisions of this
Indenture. No party relying upon an instrument executed by the
Indenture Trustee as provided in this Article VIII shall be bound to
ascertain the Indenture Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the application of
any moneys.
(b) Upon request of the Servicer accompanied by an Officers'
Certificate to the effect that a Mortgage Loan has been the subject of
a Full Prepayment (other than a prepayment pursuant to clause (ii) of
the definition of "Full Prepayment") and a release in a form acceptable
to the Indenture Trustee, the Indenture Trustee shall promptly release
the related Mortgage Files as the Servicer may request to evidence
satisfaction and discharge of such Mortgage Loan. In exchange for the
release of the Mortgage Files, the Servicer shall deliver to the
Indenture Trustee a trust receipt reasonably satisfactory to the
Indenture Trustee and signed by an officer of the Servicer. If such
Mortgage Loan shall be liquidated and the Indenture Trustee receives a
certificate from the Servicer as provided above, then, upon request of
the Issuer, the Indenture Trustee shall release the trust receipt to or
upon the order of the Issuer.
(c) The Indenture Trustee shall, at such time as there are no
Bonds outstanding, release all of the Trust Estate to the Issuer (other
than any cash held for the payment of the Bonds pursuant to Section
3.03 or 4.02).
SECTION 8.08. AMENDMENT TO SERVICING AGREEMENT.
The Indenture Trustee may, without the consent of any Holder, enter
into or consent to any amendment or supplement to the Servicing Agreement for
the purpose of increasing the obligations or duties of any party other than the
Indenture Trustee or the Holders of the Bonds. The Indenture Trustee may, in its
discretion, decline to enter into or consent to any such supplement or
amendment: (i) unless the Indenture Trustee receives an Opinion of Counsel for
the Issuer that the position of the Holders would not be materially adversely
affected or (ii) if its own rights, duties or immunities would be adversely
affected.
SECTION 8.09. DELIVERY OF THE MORTGAGE FILES PURSUANT TO SERVICING
AGREEMENT.
As is appropriate for the servicing or foreclosure of any Mortgage
Loan, the Indenture Trustee shall deliver to the Servicer of such Mortgage the
Mortgage Files for such Mortgage Loan upon receipt by the Indenture Trustee on
or prior to the date such release is to be made of:
(a) such Officers' Certificates as are required by the
Servicing Agreement; and
(b) a trust receipt in the form prescribed by the Servicing
Agreement, executed by the Servicer, providing that the Servicer will
hold or retain the Mortgage Files in trust for the benefit of the
Indenture Trustee and the Holders of Bonds.
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SECTION 8.10. RECORDS.
In order to facilitate the servicing of the Mortgage Loans by the
Servicer, the Issuer shall cause Servicer to retain certain records in
accordance with the provisions of the Servicing Agreement and this Indenture.
SECTION 8.11. SERVICER AS AGENT.
In order to facilitate the servicing of the Mortgage Loans by the
Servicer of such Mortgage Loans, the Servicer of the Mortgage Loans has been
appointed by the Issuer to retain, in accordance with the provisions of the
Servicing Agreement and this Indenture, all Remittable Funds on such Mortgage
Loans prior to the time they are deposited into the Bond Account.
SECTION 8.12. TERMINATION OF SERVICER.
In the event of an event of default specified in Section 6.01 of the
Servicing Agreement, the Indenture Trustee may, with the consent of the Bond
Insurer, and shall, upon the direction of the Bond Insurer, terminate the
Servicer as provided in Section 6.01 and Section 6.02 of the Servicing
Agreement. If the Indenture Trustee terminates the Servicer, the Indenture
Trustee shall pursuant to Section 6.02 of the Servicing Agreement assume the
duties of the Servicer or appoint a successor servicer acceptable to the Issuer,
the Bond Insurer and the Rating Agencies and meeting the requirements set forth
in the Servicing Agreement.
SECTION 8.13. OPINION OF COUNSEL.
The Indenture Trustee shall be entitled to receive at least five
Business Days' notice of any action to be taken pursuant to Section 8.07(a)
(other than in connection with releases of Mortgage Loans that were the subject
of a Full Prepayment of the type described in clause (i) of the definition of
the term "Full Prepayment") and 8.08, accompanied by copies of any instruments
involved, and the Indenture Trustee shall be entitled to receive an Opinion of
Counsel, in form and substance reasonably satisfactory to the Indenture Trustee,
stating the legal effect of any such action, outlining the steps required to
complete the same, and concluding that all conditions precedent to the taking of
such action have been complied with. Counsel rendering any such opinion may
rely, without independent investigation, on the accuracy and validity of any
certificate or other instrument delivered to the Indenture Trustee in connection
with any such action.
SECTION 8.14. APPOINTMENT OF CUSTODIANS.
The Indenture Trustee may, at no additional cost to the Issuer, with
the consent of the Issuer, appoint one or more Custodians to hold all or a
portion of the Mortgage Files as agent for the Indenture Trustee. Each Custodian
shall (i) be a financial institution supervised and regulated by the Comptroller
of the Currency, the Board of Governors of the Federal Reserve System, the
Office of Thrift Supervision, or the Federal Deposit Insurance Corporation; (ii)
have combined capital and surplus of at least $10,000,000; (iii) be equipped
with secure, fireproof storage facilities, and have adequate controls on access
to assure the safety and security of the Mortgage Files; (iv) utilize in its
custodial function employees who are knowledgeable in the handling of mortgage
documents and of the functions of a mortgage document custodian; and (v) satisfy
any other reasonable requirements that the Issuer may from time to time deem
necessary to protect the interests of Bondholders in the Mortgage Files. Each
Custodian shall be subject to the same obligations and standard of care as would
be imposed on the Indenture Trustee hereunder assuming the Indenture Trustee
retained the Mortgage Files directly. The appointment of one or more Custodians
shall not relieve the Indenture Trustee from any of its obligations hereunder,
and the Indenture Trustee shall remain responsible for all acts and omissions of
any Custodian. If the Servicer is appointed as a Custodian in accordance with
this Section 8.14, it shall fulfill its servicing and custodial duties and
obligations through separate departments and, if it maintains a trust
department, shall fulfill its custodial duties and obligations through such
trust department.
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SECTION 8.15. RIGHTS OF THE BOND INSURER TO EXERCISE RIGHTS OF
BONDHOLDERS.
By accepting its Bonds, each Bondholder agrees that unless a Bond
Insurer Default exists, the Bond Insurer shall have the right to exercise all
rights of the Bondholders under this Agreement without any further consent of
the Bondholders, including, without limitation:
(i) the right to direct the Indenture Trustee to cause the
Servicer to effect foreclosures upon Mortgage Loans upon failure of the
Servicer to do so;
(ii) the right to require the Mortgage Loan Seller to
repurchase or substitute for Defective Mortgage Loans pursuant to
Section 8.05; and
(iii) the right to direct the actions of the Indenture Trustee
during the continuance of an Event of Default.
In addition, each Bondholder agrees that, unless a Bond Insurer Default
exists, the rights specifically set forth above may be exercised by the
Bondholders only with the prior written consent of the Bond Insurer.
SECTION 8.16. TRUST ESTATE AND ACCOUNTS HELD FOR BENEFIT OF THE BOND
INSURER.
Provided there does not exist a Bond Insurer Default, the Indenture
Trustee shall hold the Trust Estate and the Mortgage Files for the benefit of
the Bondholders and the Bond Insurer and all references in this Agreement and in
the Bonds to the benefit of Holders of the Bonds shall be deemed to include the
Bond Insurer.
All notices, statements, reports, certificates or opinions required by
this Agreement to be sent to any other party hereto or to the Bondholders shall
also be sent to the Bond Insurer.
SECTION 8.17. BOND INSURER OPTION TO PURCHASE MORTGAGE LOANS.
On any date on which Mortgage Loans with aggregate Principal Balances
that equal or exceed 25% of the sum of the aggregate of the Principal Balances
of the Mortgage Loans as of the applicable Cut-off Dates and the Prefunding
Account Deposit have become Liquidated Mortgage Loans, the Bond Insurer may
purchase from the Indenture Trustee all of the Mortgage Loans then remaining in
the Trust Estate at the Purchase Price for each such Mortgage Loan plus the
amount of any outstanding and unpaid fees and expenses of the Servicer by
remitting such amount to the Indenture Trustee for deposit in the Bond Account
on or before the related Remittance Date and the Indenture Trustee shall,
promptly following remittance of such amount, release to the Bond Insurer the
Mortgage Files pertaining to the Mortgage Loans being purchased, and the
Indenture Trustee and the Issuer shall execute and deliver all other documents
necessary to transfer their respective interests in such Mortgage Loans to the
Bond Insurer.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF BONDHOLDERS.
Without the consent of the Holders of any Bonds, the Issuer and the
Indenture Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Indenture Trustee,
for any of the following purposes:
(1) to correct or amplify the description of any property at
any time subject to the lien of this Indenture, or better to assure,
convey and confirm unto the Indenture Trustee any property subject or
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required to be subjected to the lien of this Indenture, or to subject
to the lien of this Indenture additional property;
(2) to add to the conditions, limitations and restrictions on
the authorized amount, terms and purposes of the issuance,
authentication and delivery of any Bonds, as herein set forth,
additional conditions, limitations and restrictions thereafter to be
observed;
(3) to evidence the succession of another Person to the Issuer
to the extent permitted herein, and the assumption by any such
successor of the covenants of the Issuer herein and in the Bonds
contained;
(4) to add to the covenants of the Issuer, for the benefit of
the Holders of all Bonds or to surrender any right or power herein
conferred upon the Issuer;
(5) to cure any ambiguity, to correct or supplement any
provision herein that may be defective or inconsistent with any other
provision herein, or to amend any other provisions with respect to
matters or questions arising under this Indenture, which shall not be
inconsistent with the provisions of this Indenture, provided that such
action shall not adversely affect in any material respect the interests
of the Holders of the Bonds; and provided, further, that the amendment
shall not be deemed to adversely affect in any material respect the
interests of the Holders of the Bonds if the Person requesting the
amendment obtains letters from the Rating Agencies that the amendment
would not result in the downgrading or withdrawal of the ratings then
assigned to the Bonds;
(6) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
federal statute hereafter enacted, and to add to this Indenture such
other provisions as may be expressly required by the TIA.
SECTION 9.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF BONDHOLDERS.
With the consent of the Bond Insurer and with the consent of Holders of
Bonds representing not less than a majority of the Bond Balance of all
Outstanding Bonds by Act of said Holders delivered to the Issuer and the
Indenture Trustee, the Issuer and the Indenture Trustee may enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Holders of
the Bonds under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Bond
affected thereby:
(1) change the any Payment Date or the Final Maturity Date of
the Bonds or reduce the principal amount thereof, the Bond Interest
Rate thereon or the Redemption Price with respect thereto, change the
earliest date on which any Bond may be redeemed at the option of the
Issuer, change any place of payment where, or the coin or currency in
which, any Bond or any interest thereon is payable, or impair the right
to institute suit for the enforcement of the payment of any installment
of interest due on any Bond on or after the Final Maturity Date thereof
or for the enforcement of the payment of the entire remaining unpaid
principal amount of any Bond on or after the Final Maturity Date (or,
in the case of redemption, on or after the applicable Redemption Date);
(2) reduce the percentage of the Bond Balance of the
Outstanding Bonds, the consent of the Holders of which is required for
any such supplemental indenture, or the consent of the Holders of which
is required for any waiver of compliance with provisions of this
Indenture or Defaults hereunder and their consequences provided for in
this Indenture;
(3) modify any of the provisions of this Section, Section 5.13
or Section 5.17(b), except to increase any percentage specified therein
or to provide that certain other provisions of this Indenture
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cannot be modified or waived without the consent of the Holder of each
Outstanding Bond affected thereby;
(4) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(5) permit the creation of any lien other than the lien of
this Indenture with respect to any part of the Trust Estate (except for
Permitted Encumbrances) or terminate the lien of this Indenture on any
property at any time subject hereto or deprive the Holder of any Bond
of the security afforded by the lien of this Indenture;
(6) modify any of the provisions of this Indenture in such
manner as to affect the calculation of the Required Payment Amount for
any Payment Date (including the calculation of any of the individual
components of such Required Payment Amount) or to affect rights of the
Holders of the Bonds to the benefits of any provisions for the
mandatory redemption of Bonds contained herein; or
(7) incur any indebtedness, other than the Bonds, for which
the timing or amount of the payments on such indebtedness are in part
determined by the timing or amount of payments or projected payments on
assets in the Trust Estate or that would cause the Issuer or the Trust
Estate to be treated as a "taxable mortgage pool" within the meaning of
Code Section 7701(i).
The Indenture Trustee may in its discretion determine whether or not
any Bonds would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Bonds, whether
theretofore or thereafter authenticated and delivered hereunder. The Indenture
Trustee shall not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Bondholders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee of
any supplemental indenture pursuant to this Section, the Indenture Trustee shall
mail to the Holders of the Bonds to which such supplemental indenture relates a
notice setting forth in general terms the substance of such supplemental
indenture. Any failure of the Indenture Trustee to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture.
SECTION 9.03. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Indenture Trustee shall be entitled to
receive, and (subject to Section 6.01) shall be fully protected in relying upon,
an Opinion of Counsel stating that the execution of such supplemental indenture
is authorized or permitted by this Indenture. The Indenture Trustee may, but
shall not be obligated to, enter into any such supplemental indenture that
affects the Indenture Trustee's own rights, duties or immunities under this
Indenture or otherwise.
SECTION 9.04. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Bonds to which such supplemental indenture relates that have theretofore been
or thereafter are authenticated and delivered hereunder shall be bound thereby.
SECTION 9.05. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the TIA as then in effect so long as this
Indenture shall then be qualified under the TIA.
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SECTION 9.06. REFERENCE IN BONDS TO SUPPLEMENTAL INDENTURES.
Bonds authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and if required by the
Indenture Trustee shall, bear a notation in form approved by the Indenture
Trustee as to any matter provided for in such supplemental indenture. If the
Issuer shall so determine, new Bonds so modified as to conform, in the opinion
of Indenture Trustee and the Issuer, to any such supplemental indenture may be
prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Bonds.
SECTION 9.07. AMENDMENTS TO GOVERNING DOCUMENTS.
The Indenture Trustee shall, upon Issuer Request, consent to any
proposed amendment to the Issuer's governing documents, or an amendment to or
waiver of any provision of any other document relating to the Issuer's governing
documents, such consent to be given without the necessity of obtaining the
consent of the Holders of any Bonds upon receipt by the Indenture Trustee of:
(i) an Opinion of Counsel to the effect that such amendment or
waiver will not adversely affect the interests of the Holders of the
Bonds or the Bond Insurer and that all conditions precedent to such
consent specified in this Section 9.07 have been satisfied;
(ii) an Officers' Certificate, to which such proposed
amendment or waiver shall be attached, stating that such attached copy
is a true copy of the proposed amendment or waiver and that all
conditions precedent to such consent specified in this Section 9.07
have been satisfied; and
(iii) written confirmation from the Rating Agencies that the
implementation of the proposed amendment or waiver will not adversely
affect their ratings of the Bonds.
Notwithstanding the foregoing, the Indenture Trustee may decline to
consent to a proposed waiver or amendment that adversely affects its own rights,
duties or immunities under this Indenture or otherwise.
Nothing in this Section 9.07 shall be construed to require that any
Person obtain the consent of the Indenture Trustee to any amendment or waiver or
any provision of any document where the making of such amendment or the giving
of such waiver without obtaining the consent of the Indenture Trustee is not
prohibited by this Indenture or by the terms of the document that is the subject
of the proposed amendment or waiver.
ARTICLE X
REDEMPTION OF BONDS
SECTION 10.01. REDEMPTION.
(a) All the Bonds may be redeemed in whole, but not in part,
on each Redemption Date at the Redemption Price at the option of the
holders of a majority of the ownership interest of the Issuer (the
"Residual Majority"), or at the option of the Servicer if the Residual
Majority shall not have exercised its option to redeem the Bonds on
such Redemption Date, provided, however, that funds in an amount equal
to the Redemption Price must have been deposited with the Indenture
Trustee prior to the Indenture Trustee's giving notice of such
redemption pursuant to Section 10.02 or the Issuer shall have complied
with the requirements for satisfaction and discharge of the Bonds
specified in Section 4.01. If the Issuer shall elect to redeem the
Bonds pursuant to this Section 10.01, it shall furnish notice of such
election to the Indenture Trustee not later than thirty (30) days prior
to the Payment Date selected for such redemption, whereupon all such
Bonds shall be due and payable on such Payment Date upon the furnishing
of a notice pursuant to Section 10.02 to each Holder of such Bonds.
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(b) Upon receipt of the notice from Issuer of its election to
redeem the Bonds pursuant to Section 10.01(a), the Indenture Trustee
shall prepare and deliver to the Issuer, no later than the related
Redemption Date, a Payment Date Statement stating therein that it has
determined that the conditions to redemption at the option of the
Issuer have been satisfied and setting forth the amount, if any, to be
withdrawn from the Bond Account and paid to the Servicer as
reimbursement for Nonrecoverable Advances and such other information as
may be required to accomplish such redemption.
SECTION 10.02. FORM OF REDEMPTION NOTICE.
Notice of redemption shall be given by the Indenture Trustee in the
name of and at the expense of the Issuer by first class mail, postage prepaid,
mailed not less than ten days prior to the Redemption Date to each Holder of
Bonds to be redeemed, such Holders being determined as of the Record Date for
such Payment Date
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price at which the Bonds of such Series
will be redeemed,
(3) the fact of payment in full on such Bonds, the place where
such Bonds are to be surrendered for payment of the Redemption Price
(which shall be the office or agency of the Issuer to be maintained as
provided in Section 3.02), and that no interest shall accrue on such
Bond for any period after the date fixed for redemption.
Failure to give notice of redemption, or any defect therein, to any
Holder of any Bond selected for redemption shall not impair or affect the
validity of the redemption of any other Bond.
SECTION 10.03. BONDS PAYABLE ON OPTIONAL REDEMPTION.
Notice of redemption having been given as provided in Section 10.02,
the Bonds to be redeemed shall, on the applicable Redemption Date, become due
and payable at the Redemption Price and (unless the Issuer shall default in the
payment of the Redemption Price) no interest shall accrue on such Redemption
Price for any period after such Redemption Date.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. COMPLIANCE CERTIFICATES AND OPINIONS.
(a) Upon any application or request by the Issuer to the
Indenture Trustee to take any action under any provision of this
Indenture, the Issuer shall furnish to the Indenture Trustee an
Officers' Certificate stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have
been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have
been complied with, except that in the case of any such application or
request as to which the furnishing of such documents is specifically
required by any provision of this Indenture relating to such particular
application or request, no additional certificate or opinion need be
furnished.
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(b) Every certificate, opinion or letter with respect to
compliance with a condition or covenant provided for in this Indenture,
including one furnished pursuant to specific requirements of this
Indenture relating to a particular application or request (other than
certificates provided pursuant to TIA Section 314(a)(4)) shall include
and shall be deemed to include (regardless of whether specifically
stated therein) the following:
(1) a statement that each individual signing such
certificate, opinion or letter has read such covenant or
condition and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of
the examination or investigation upon which the statements or
opinions contained in such certificate, opinion or letter are
based;
(3) a statement that, in the opinion of each such
individual, he has made such examination or investigation as
is necessary to enable him to express an informed opinion as
to whether or not such covenant or condition has been complied
with; and
(4) a statement as to whether, in the opinion of each
such individual, such condition or covenant has been complied
with.
SECTION 11.02. FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of the Issuer may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such officer knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
the matters upon which his certificate or opinion is based are erroneous. Any
Opinion of Counsel may be based on the written opinion of other counsel, in
which event such Opinion of Counsel shall be accompanied by a copy of such other
counsel's opinion and shall include a statement to the effect that such counsel
believes that such counsel and the Indenture Trustee may reasonably rely upon
the opinion of such other counsel.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Wherever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Section 6.01(b)(2).
Whenever in this Indenture it is provided that the absence of the
occurrence and continuation of a Default or Event of Default is a condition
precedent to the taking of any action by the Indenture Trustee at the request or
direction of the Issuer, then, notwithstanding that the satisfaction of such
condition is a condition precedent to the Issuer's right to make such request or
direction, the Indenture Trustee shall be protected in acting in accordance with
such request or direction if it does not have knowledge of the occurrence and
continuation of such Default or Event of Default as provided in Section 6.01(d).
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SECTION 11.03. ACTS OF BONDHOLDERS.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given
or taken by Bondholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Bondholders
in person or by an agent duly appointed in writing; and, except as
herein otherwise expressly provided, such action shall become effective
when such instrument or instruments are delivered to the Indenture
Trustee, and, where it is hereby expressly required, to the Issuer.
Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Bondholders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and (subject to Section
6.01) conclusive in favor of the Indenture Trustee and the Issuer, if
made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness
of such execution or by the certificate of any notary public or other
officer authorized by law to take acknowledgments of deeds, certifying
that the individual signing such instrument or writing acknowledged to
him the execution thereof. Whenever such execution is by an officer of
a corporation or a member of a partnership on behalf of such
corporation or partnership, such certificate or affidavit shall also
constitute sufficient proof of his authority.
(c) The ownership of Bonds shall be proved by the Bond
Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Bonds shall bind
the Holder of every Bond issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof, in respect of
anything done, omitted or suffered to be done by the Indenture Trustee
or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Bonds.
SECTION 11.04. NOTICES, ETC. TO INDENTURE TRUSTEE AND ISSUER.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Bondholders or other documents provided or permitted by this Indenture
to be made upon, given or furnished to, or filed with:
(1) the Indenture Trustee by any Bondholder or by the Issuer
shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with and received by the Indenture
Trustee at its Corporate Trust Office; or
(2) the Issuer by the Indenture Trustee or by any Bondholder
shall be sufficient for every purpose hereunder (except as provided in
Section 5.01(3) and (4)) if in writing and mailed, first-class postage
prepaid, to the Issuer addressed to it at Plaza Tower One, 0000 Xxxxx
Xxxxxxx'x Xxxxx Xxxxxx, Xxxxxxxxx, XX 00000, Attn: Xxxxxx X. Xxxxxxxxx,
or at any other address previously furnished in writing to the
Indenture Trustee by the Issuer.
SECTION 11.05. NOTICES AND REPORTS TO BONDHOLDERS; WAIVER OF NOTICES.
Where this Indenture provides for notice to Bondholders of any event or
the mailing of any report to Bondholders, such notice or report shall be
sufficiently given (unless otherwise herein expressly provided) if mailed,
first-class postage prepaid, to each Bondholder affected by such event or to
whom such report is required to be mailed, at the address of such Bondholder as
it appears on the Bond Register, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice or the mailing
of such report. In any case where a notice or report to Bondholders is mailed in
the manner provided above, neither the failure to mail such notice or report,
nor any defect in any notice or report so mailed, to any particular Bondholder
shall affect the sufficiency of such notice or report with respect to other
Bondholders, and any notice or report that is mailed in the manner herein
provided shall be conclusively presumed to have been duly given or provided.
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Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Bondholders shall be filed with the Indenture
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Bondholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.
SECTION 11.06. RULES BY INDENTURE TRUSTEE.
The Indenture Trustee may make reasonable rules for any meeting of
Bondholders.
SECTION 11.07. CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with another
provision hereof that is required to be included in this Indenture by any of the
provisions of the TIA, such required provision shall control.
SECTION 11.08. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 11.09. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Issuer shall bind
its successors and assigns, whether so expressed or not.
SECTION 11.10. SEPARABILITY.
In case any provision in this Indenture or in the Bonds shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 11.11. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Bonds, expressed or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, any separate trustee or Co-trustee appointed under Section 6.14 and
the Bondholders, any benefit or any legal or equitable right, remedy or claim
under this Indenture.
SECTION 11.12. LEGAL HOLIDAYS.
In any case where the date of any Payment Date, Redemption Date or any
other date on which principal of or interest on any Bond is proposed to be paid
shall not be a Business Day, then (notwithstanding any other provision of the
Bonds or this Indenture) payment need not be made on such date, but may be made
on the next succeeding Business Day with the same force and effect as if made on
the nominal date of any such Payment Date, Redemption Date or other date for the
payment of principal of or interest on any Bond and no interest shall accrue for
the period from and after any such nominal date, provided such payment is made
in full on such next succeeding Business Day.
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SECTION 11.13. GOVERNING LAW.
IN VIEW OF THE FACT THAT BONDHOLDERS ARE EXPECTED TO RESIDE IN MANY
STATES AND OUTSIDE THE UNITED STATES AND THE DESIRE TO ESTABLISH WITH CERTAINTY
THAT THIS INDENTURE WILL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAW OF A STATE HAVING A WELL-DEVELOPED BODY OF COMMERCIAL
AND FINANCIAL LAW RELEVANT TO TRANSACTIONS OF THE TYPE CONTEMPLATED HEREIN, THIS
INDENTURE AND EACH BOND SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED THEREIN.
SECTION 11.14. COUNTERPARTS.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
SECTION 11.15. RECORDING OF INDENTURE.
This Indenture is subject to recording in any appropriate public
recording offices, such recording to be effected by the Issuer and at its
expense in compliance with any Opinion of Counsel delivered pursuant to Section
2.11(c) or 3.06.
SECTION 11.16. ISSUER OBLIGATION.
No recourse may be taken, directly or indirectly, against any
organizer, the Issuer, the Servicer, the Mortgage Loan Seller, the Transferor or
the Indenture Trustee or of any predecessor or successor thereof with respect to
the Issuer's obligations with respect to the Bonds or the obligations of the
Issuer or the Indenture Trustee under this Indenture or any certificate or other
writing delivered in connection herewith or therewith.
SECTION 11.17. INSPECTION.
The Issuer agrees that, on reasonable prior notice, it will permit any
representative of the Indenture Trustee, during the Issuer's normal business
hours, to examine all of books of account, records, reports and other papers of
the Issuer, to make copies and extracts therefrom, to cause such books to be
audited by Independent Accountants selected by the Indenture Trustee, and to
discuss its affairs, finances and accounts with its officers, employees and
Independent Accountants (and by this provision the Issuer hereby authorizes its
Accountants to discuss with such representatives such affairs, finances and
accounts), all at such reasonable times and as often as may be reasonably
requested. Any expense incident to the exercise by the Indenture Trustee of any
right under this Section 11.17 shall be borne by the Issuer.
SECTION 11.18. USURY.
The amount of interest payable or paid on any Bond under the terms of
this Indenture shall be limited to an amount that shall not exceed the maximum
nonusurious rate of interest allowed by the applicable laws of the United States
or the State of California (whichever shall permit the higher rate), that could
lawfully be contracted for, charged or received (the "Highest Lawful Rate"). In
the event any payment of interest on any Bond exceeds the Highest Lawful Rate,
the Issuer stipulates that such excess amount will be deemed to have been paid
as a result of an error on the part of both the Indenture Trustee, acting on
behalf of the Holder of such Bond, and the Issuer, and the Holder receiving such
excess payment shall promptly, upon discovery of such error or upon notice
thereof from the Issuer or the Indenture Trustee, refund the amount of such
excess or, at the option of the Indenture Trustee, apply the excess to the
payment of principal of such Bond, if any, remaining unpaid. In addition, all
sums paid or agreed to be paid to the Indenture Trustee for the benefit of
Holders of Bonds for the use, forbearance or detention of money shall, to the
extent permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full term of such Bonds.
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SECTION 11.19. THIRD PARTY BENEFICIARY; RATING.
The Bond Insurer is intended as a third party beneficiary of this
Indenture. This Indenture shall be binding upon and inure to the benefit of the
Bond Insurer; provided that, notwithstanding the foregoing, for so long as a
Bond Insurer Default is continuing under its obligations under the MBIA
Insurance Policy, the Bondholders shall succeed to the Bond Insurer's rights
hereunder. Without limiting the generality of the foregoing, all covenants and
agreements in this Indenture that expressly confer rights upon the Bond Insurer
shall be for the benefit of and run directly to the Bond Insurer, and the Bond
Insurer shall be entitled to rely on and enforce such covenants to the same
extent as if it were a party to this Indenture.
SECTION 11.20. NOTICE TO BOND INSURER.
Notices to be given hereunder to the Bond Insurer shall be given in
accordance with the Servicing Agreement.
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IN WITNESS WHEREOF, the Issuer and the Indenture Trustee and the have
caused this Indenture to be duly executed by their respective officers thereunto
duly authorized, all as of the day and year first above written.
FUND AMERICA INVESTORS TRUST 1997-NMC1
By: Wilmington Trust Company,
as Owner Trustee
By:
----------------------------
Authorized Signatory
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Indenture Trustee
By:
---------------------------------
Name:
Title:
-00-
00
Xxxxx xx Xxx Xxxx )
) ss.:
County of New York )
On the _________ day of September, 1997 before me, a notary public in
and for said State, personally appeared ______________________________, known to
me to be ______________________ of Wilmington Trust Company, a corporation that
executed the within instrument acting as trustee of Fund America Investors Trust
1997-NMC1, and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
-----------------------------------------
Notary Public
[Notarial Seal]
State of New York )
) ss.:
County of New York )
On the _________ day of September, 1997 before me, a notary public in
and for said State, personally appeared ______________________________, known to
me to be ______________________ of Norwest Bank Minnesota, National Association,
a national banking association that executed the within instrument, and also
known to me to be the person who executed it on behalf of said association, and
acknowledged to me that such association executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
-----------------------------------------
Notary Public
[Notarial Seal]
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SCHEDULE I
MORTGAGE LOAN SCHEDULE
79
EXHIBIT A
FORM OF BOND
80
[SPECIMEN]
UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY BOND ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THE PRINCIPAL OF THIS BOND IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS BOND AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
Date of Indenture: As of September 1, 1997
First Payment Date: October 27, 1997
Denomination: $__________________
Original Bond Balance: $[______________]
CUSIP No.[______________]
Bond No.: ___
FUND AMERICA INVESTORS TRUST 1997-NMC1
COLLATERALIZED MORTGAGE OBLIGATIONS, SERIES 0000-XXX0
Xxxx Xxxxxxx Investors Trust 1997-NMC1, a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to Cede & Co., or
registered assigns, the principal sum of __________________
____________________________________ ($_____________) payable on each Payment
Date in an amount equal to the result obtained by multiplying (i) a fraction the
numerator of which is $_______________ and the denominator of which is
$______________________ (this Bond's "Percentage Interest") by (ii) the
aggregate amount, if any, payable from the Bond Account in respect of principal
on the Bonds pursuant to the Indenture dated as of September 1, 1997, between
the Issuer and Norwest Bank Minnesota, National Association, a national banking
association, as Indenture Trustee (the "Indenture Trustee"); provided, however,
that the entire unpaid principal amount of this Bond shall be due and payable on
the earlier of (i) the Payment Date occurring in April 2029 (the "Final Maturity
Date"), (ii) the Redemption Date, if any, pursuant to Article X of the Indenture
or (iii) the date on which an Event of Default shall have occurred and be
continuing, if the Bonds have been declared to be immediately due and payable in
the manner provided in Section 5.02 of the Indenture. Capitalized terms used but
not defined herein are defined in Article I of the Indenture.
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[SPECIMEN]
Pursuant to the terms of the Indenture, payments will be made on the
25th day of each month or, if such day is not a Business Day, on the Business
Day immediately following such 25th day (the "Payment Date"), commencing on the
first Payment Date specified above, to the Person in whose name this Bond is
registered at the close of business on the applicable Record Date, in an amount
equal to the product of (a) the Percentage Interest evidenced by this Bond and
(b) the sum of the amounts to be paid on the Bonds with respect to such Payment
Date, all as more specifically set forth in the Indenture.
The principal of and interest on this Bond are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Bond shall be applied first to interest due and payable on
this Bond as provided above and then to the unpaid principal of this Bond.
Reference is made to the further provisions of this Bond set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Bond.
Unless the certificate of authentication hereon has been executed by
the Authenticating Agent whose name appears below by manual signature, this Bond
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
[Signatures follow]
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[SPECIMEN]
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer, as of the date set forth
below.
Date:
------------------
FUND AMERICA INVESTORS TRUST 1997-NMC1
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Owner Trustee under the Trust Agreement
By:
------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Bonds designated above and referred to in the
within-mentioned Indenture.
Date:
------------------
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
Authenticating Agent
By:
------------------------------
Authorized Signatory
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[Reverse of Bond]
This Bond is one of a duly authorized issue of Bonds of the Issuer,
designated as its Collateralized Mortgage Obligations, Series 1997-NMC1 (herein
called the "Bonds"), issued under the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the Holders of the Bonds. To the extent that any provision of this
Bond contradicts or is inconsistent with the provisions of the Indenture, the
provisions of the Indenture shall control and supersede such contradictory or
inconsistent provision herein. The Bonds are subject to all terms of the
Indenture.
The Bonds are and will be equally and ratably secured by the collateral
pledged as security therefor as provided in the Indenture.
Principal of the Bonds will be payable on each Payment Date in an
amount described on the face hereof.
As described above, the entire unpaid principal amount of this Bond
shall be due and payable on the earlier of the Final Maturity Date and the
Redemption Date, if any, pursuant to Article X of the Indenture. Notwithstanding
the foregoing, the entire unpaid principal amount of the Bonds shall be due and
payable on the date on which an Event of Default shall have occurred and be
continuing and the Indenture Trustee, at the direction or upon the prior written
consent of MBIA Insurance Corporation (the "Bond Insurer") in the absence of a
Bond Insurer Default, or the Holders of the Bonds representing not less than 50%
of the Bond Balance of the Outstanding Bonds (with the prior written consent of
the Bond Insurer in the absence of a Bond Insurer Default) have declared the
Bonds to be immediately due and payable in the manner provided in Section 5.02
of the Indenture. All principal payments on the Bonds shall be made pro rata to
the Bondholders entitled thereto.
The Bond Insurer has issued a MBIA Insurance Policy in the name of the
Indenture Trustee for the benefit of the Bondholders, which policy guarantees
payments on each Payment Date to the Indenture Trustee for the benefit of the
Bondholders of the related Bondholders' Percentage Interest in the Required
Payment Amount for such Payment Date. Unless a Bond Insurer Default shall be
continuing, subject to Section 8.15 of the Indenture, the Bond Insurer shall be
deemed to be the Holder of 100% of the Bond Balance of the Outstanding Bonds for
the purpose of exercising the rights, including voting rights, of the
Bondholders under the Indenture. In addition, on each Payment Date, after the
Bondholders have been paid all amounts to which they are entitled, the Bond
Insurer will be entitled to be reimbursed for any unreimbursed Insured Amounts
and any other amounts owed under the MBIA Insurance Policy.
Payments of interest on this Bond due and payable on each Payment Date,
together with the installment of principal, if any, to the extent not in full
payment of this Bond, shall be made by check mailed to the Person whose name
appears as the Holder of this Bond (or one or more Predecessor Bonds) on the
Bond Register as of the close of business on each Record Date, except that with
respect to Bonds registered on the Record Date in the name of the nominee of the
Clearing Agency (initially, such nominee to be Cede & Co.), payments will be
made by wire transfer in immediately available funds to the account designated
by such nominee. Such checks shall be mailed to the Person entitled thereto at
the address of such Person as it appears on the Bond Register as of the
applicable Record Date without requiring that this Bond be submitted for
notation of payment. Any reduction in the principal amount of this Bond (or any
one or more Predecessor Bonds) effected by any payments made on any Payment Date
shall be binding upon all future Holders of this Bond and of any Bond issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Bond on a Payment Date, then the Indenture Trustee, in
the name of and on behalf of the Issuer, will notify the Person who was the
Holder hereof as of the Record Date preceding such Payment Date by notice mailed
or transmitted by facsimile prior to such Payment Date, and the amount then due
and payable shall be payable only upon presentation and surrender of this Bond
at the Indenture Trustee's principal Corporate Trust Office or at the office of
the Indenture Trustee's agent appointed for such purposes located in The City of
New York.
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84
As provided in the Indenture, the Bonds may be redeemed in whole, but
not in part, at the option of the Issuer, on any Payment Date on and after the
date on which the Aggregate Principal Balance of the Mortgage Loans is less than
10% of the Aggregate Principal Balance of the Mortgage Loans as of the
respective Cut-off Dates.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Bond may be registered on the Bond Register
upon surrender of this Bond for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or such Holder's attorney
duly authorized in writing, with such signature guaranteed by an "eligible
guarantor institution" meeting the requirements of the Bond Registrar, which
requirements include membership or participation in the Securities Transfer
Agent's Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Bond Registrar in addition to, or in substitution
for, STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended, and thereupon one or more new Bonds of authorized denominations and in
the same aggregate principal amount will be issued to the designated transferee
or transferees. No service charge will be charged for any registration of
transfer or exchange of this Bond, but the transferor may be required to pay a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any such registration of transfer or exchange.
Each Bondholder or Bond Owner, by acceptance of a Bond or, in the case
of a Bond Owner, a beneficial interest in a Bond, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Indenture Trustee on the Bonds or under
the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Indenture Trustee or the Owner Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed and except that any such partner, owner or beneficiary shall be
fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each Bondholder or Bond Owner, by acceptance of a Bond or, in the case
of a Bond Owner, a beneficial interest in a Bond, covenants and agrees by
accepting the benefits of the Indenture that such Bondholder or Bond Owner will
not at any time institute against the Mortgage Loan Seller or the Issuer, or
join in any institution against the Mortgage Loan Seller, the Transferor or the
Issuer of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings under any United States federal or state bankruptcy or
similar law in connection with any obligations relating to the Bonds, the
Indenture, the Mortgage Loan Sale Agreement, the Mortgage Loan Contribution
Agreement, the Additional Mortgage Loan Sale Agreement or the Servicing
Agreement (the "Basic Documents").
The Issuer has entered into the Indenture and this Bond is issued with
the intention that, for federal, state and local income, single business and
franchise tax purposes, the Bonds will qualify as indebtedness of the Issuer
secured by the Trust Estate. Each Bondholder, by acceptance of a Bond (and each
Bond Owner by acceptance of a beneficial interest in a Bond), agrees to treat
the Bonds for federal, state and local income, single business and franchise tax
purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this Bond,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Bond (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Bond be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Bonds under the
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Indenture at any time by the Issuer with the consent of the Bond Insurer and the
Holders of Bonds representing a majority of the Bond Balance of all Outstanding
Bonds. The Indenture also contains provisions permitting the Holders of Bonds
representing specified percentages of the Bond Balance of Outstanding Bonds, on
behalf of the Holders of all the Bonds, to waive compliance by the Issuer with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Bond (or any one or more Predecessor Bonds) shall be conclusive and binding
upon such Holder and upon all future Holders of this Bond and of any Bond issued
upon the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Bond. The
Indenture also permits the amendment thereof, in certain limited circumstances,
or the waiver of certain terms and conditions set forth in the Indenture,
without the consent of Holders of the Bonds issued thereunder.
The term "Issuer" as used in this Bond includes any successor to the
Issuer under the Indenture.
The Bonds are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Bond and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Bond or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Bond at
the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of the Issuer in its individual capacity,
the Owner Trustee in its individual capacity, any owner of a beneficial interest
in the Issuer, or any of their respective partners, beneficiaries, agents,
officers, directors, employees or successors or assigns shall be personally
liable for, nor shall recourse be had to any of them for, the payment of
principal of or interest on this Bond or performance of, or omission to perform,
any of the covenants, obligations or indemnifications contained in the
Indenture. The Holder of this Bond by its acceptance hereof agrees that, except
as expressly provided in the Basic Documents, in the case of an Event of Default
under the Indenture, the Holder shall have no claim against any of the foregoing
for any deficiency, loss or claim therefrom; provided, however, that nothing
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Bond.
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ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto:
--------------------------------------------------------------------------------
(name and address of assignee)
the within Bond and all rights thereunder, and hereby irrevocably constitutes
and appoints ___________________________, attorney, to transfer said Bond on the
books kept for registration thereof, with full power of substitution in the
premises.
Dated: */
--------------------
Signature Guaranteed:
*/
--------------------
*/ NOTICE: The signature to this assignment must correspond with the
name of the registered owner as it appears on the face of the within Bond in
every particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Bond Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Bond Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
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EXHIBIT B
MORTGAGE LOAN SALE AGREEMENT
88
EXHIBIT C
MORTGAGE LOAN CONTRIBUTION AGREEMENT
89
EXHIBIT D
LETTER OF REPRESENTATIONS TO THE DEPOSITORY TRUST COMPANY
90
EXHIBIT E-1
FORM OF INDENTURE TRUSTEE'S INITIAL CERTIFICATION
[Date]
National Mortgage Corporation
Harlequin Plaza, Suite 330 S
0000 Xxxx Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
Re: Indenture, dated as of September 1, 1997 (the "Indenture"), between
Fund America Investors Trust 1997-NMC1 (the "Issuer") and Norwest Bank
Minnesota, National Association, as Trustee (the "Indenture Trustee").
Gentlemen:
In accordance with Section 6.15 of the Indenture, the undersigned, as
Indenture Trustee, hereby certifies that, as to each Mortgage Loan listed in the
Mortgage Loan Schedule to the Indenture (other than any Mortgage Loan paid in
full or listed on the attachment hereto) it has reviewed the Mortgage File and
has determined that, except as noted on the Schedule of Exceptions attached
hereto: (i) all documents required to be included in the Mortgage File (as set
forth in the definition of "Mortgage Loan Documents" in the Mortgage Loan Sale
Agreement referred to in the Indenture) are in its possession; (ii) such
documents have been reviewed by it and appear regular on their face and relate
to such Mortgage Loan; and (iii) based on examination by it, and only as to such
documents, the information set forth on the Mortgage Loan Schedule to the
Indenture accurately reflects the information set forth in the Mortgage File.
The undersigned further certifies that the Indenture Trustee's review of each
Mortgage File included each of the procedures listed in Section 6.15(a) of the
Indenture.
Except as described herein, the Indenture Trustee has not made an
independent examination of any documents contained in any Mortgage File. The
Indenture Trustee makes no representations as to: (i) the validity, legality,
sufficiency, enforceability or genuineness of any documents contained in any
Mortgage File for any of the Mortgage Loans listed on the Mortgage Loan Schedule
to the Indenture, (ii) the collectibility, insurability, effectiveness or
suitability of any such Mortgage Loan or (iii) whether any Mortgage File should
include any flood insurance policy, any rider, addenda, surety or guaranty
agreement, power of attorney, buy down agreement, assumption agreement,
modification agreement, written assurance or substitution agreement.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Indenture.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION, as
Indenture Trustee
By:___________________________
Its:__________________________
91
EXHIBIT E-2
FORM OF INDENTURE TRUSTEE'S FINAL CERTIFICATION
[Date]
National Mortgage Corporation
Harlequin Plaza, Suite 330 S
0000 Xxxx Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
Re: Indenture, dated as of September 1, 1997 (the "Indenture"), between
Fund America Investors Trust 1997-NMC1 (the "Issuer") and Norwest Bank
Minnesota, National Association, as Trustee (the "Indenture Trustee").
Gentlemen:
In accordance with Section 6.15 of the Indenture, the undersigned, as
Indenture Trustee, hereby certifies that, except as noted on the Schedule of
Exceptions attached hereto, for each Mortgage Loan listed in the Mortgage Loan
Schedule to the Indenture (other than any Mortgage Loan paid in full or listed
on the attachment hereto) it has received a complete Mortgage File which
includes each of the documents required to be included in the Mortgage File as
set forth in the definition of "Mortgage Loan Documents" in the Mortgage Loan
Sale Agreement referred to in the Indenture.
The Indenture Trustee on its behalf has made an independent examination
of any documents contained in any Mortgage File beyond the review specifically
required in Section 6.15 of the Indenture. The Indenture Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any documents contained in any Mortgage File for any of the
Mortgage Loans listed on the Mortgage Loan Schedule to the Indenture, (ii) the
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan or (iii) whether any Mortgage File should include any flood insurance
policy, any rider, addenda, surety or guaranty agreement, power of attorney, buy
down agreement, assumption agreement, modification agreement, written assurance
or substitution agreement.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Indenture.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION, as
Indenture Trustee
By:___________________________
Its:__________________________
92
EXHIBIT F
MBIA INSURANCE POLICY
93
EXHIBIT G
FORM OF NOTICE OF CLAIM
94
EXHIBIT H
SERVICING AGREEMENT
