Exhibit No. 99
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MID-STATE TRUST XI
Issuer
and
WACHOVIA BANK, NATIONAL ASSOCIATION
Indenture Trustee
INDENTURE
Dated June 26, 2003
Relating to
$200,780,000.00 4.864% Asset-Backed Notes, Class A
$51,840,000.00 5.598% Asset-Backed Notes, Class M-1
$26,330,000.00 6.573% Asset-Backed Notes, Class M-2
$35,390,000.00 8.221% Asset-Backed Notes, Class B
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
SECTION 1.01 General Definitions............................................
ARTICLE II
THE NOTES
SECTION 2.01 Forms Generally................................................
SECTION 2.02 Forms of Notes and Certificate of Authentication...............
SECTION 2.03 Notes; General Provisions with Respect to Principal and
Interest Payments...........................................
SECTION 2.04 Denominations..................................................
SECTION 2.05 Execution, Authentication, Delivery and Dating.................
SECTION 2.06 Temporary Notes................................................
SECTION 2.07 Registration, Registration of Transfer and Exchange............
SECTION 2.08 Mutilated, Destroyed, Lost or Stolen Notes.....................
SECTION 2.09 Payments of Principal and Interest.............................
SECTION 2.10 Persons Deemed Owners..........................................
SECTION 2.11 Cancellation...................................................
SECTION 2.12 Authentication and Delivery of Notes...........................
SECTION 2.13 Tax Treatment..................................................
ARTICLE III
COVENANTS; REPRESENTATIONS AND WARRANTIES
SECTION 3.01 Payment of Notes...............................................
SECTION 3.02 Maintenance of Office or Agency................................
SECTION 3.03 Money for Note Payments to Be Held in Trust....................
SECTION 3.04 Existence of Issuer............................................
SECTION 3.05 Protection of Trust Estate.....................................
SECTION 3.06 Opinions as to Trust Estate....................................
SECTION 3.07 Performance of Obligations; Servicing Agreement................
SECTION 3.08 Negative Covenants.............................................
SECTION 3.09 Annual Statement as to Compliance..............................
SECTION 3.10 Recording of Assignments.......................................
SECTION 3.11 Representations and Warranties Concerning the Accounts.........
SECTION 3.12 Indenture Trustee's Review of Account Documents................
SECTION 3.13 Trust Estate; Account Documents................................
SECTION 3.14 Amendments to Servicing Agreement..............................
SECTION 3.15 Servicer as Agent and Bailee of Indenture Trustee..............
SECTION 3.16 Investment Company Act.........................................
SECTION 3.17 Business Activity..............................................
SECTION 3.18 Liability of Owner Trustee.....................................
SECTION 3.19 Exculpation of the Indenture Trustee...........................
SECTION 3.20 Owner Trustee Agrees Not to File for Bankruptcy of the
Issuer......................................................
SECTION 3.21 Reports to the Commission......................................
SECTION 3.22 Representations and Warranties Regarding the Trust
Estate......................................................
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01 Satisfaction and Discharge of Indenture........................
SECTION 4.02 Application of Trust Money.....................................
ARTICLE V
DEFAULTS AND REMEDIES
SECTION 5.01 Event of Default...............................................
SECTION 5.02 Acceleration of Maturity; Rescission and Annulment.............
SECTION 5.03 Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee...........................................
SECTION 5.04 Remedies.......................................................
SECTION 5.05 Optional Preservation of Trust Estate..........................
SECTION 5.06 Indenture Trustee May File Proofs of Claim.....................
SECTION 5.07 Indenture Trustee May Enforce Claims Without Possession
of Notes....................................................
SECTION 5.08 Application of Money Collected.................................
SECTION 5.09 Limitation on Suits............................................
SECTION 5.10 Unconditional Rights of Noteholders to Receive Principal
and Interest................................................
SECTION 5.11 Restoration of Rights and Remedies.............................
SECTION 5.12 Rights and Remedies Cumulative.................................
SECTION 5.13 Delay or Omission Not Waiver...................................
SECTION 5.14 Control by the Noteholders.....................................
SECTION 5.15 Waiver of Past Defaults........................................
SECTION 5.16 Undertaking for Costs..........................................
SECTION 5.17 Waiver of Stay or Extension Laws...............................
SECTION 5.18 Sale of Trust Estate...........................................
SECTION 5.19 Action on Notes................................................
SECTION 5.20 Allocation of Realized Loss Amount.............................
ARTICLE VI
THE Indenture TRUSTEE
SECTION 6.01 Duties of Indenture Trustee....................................
SECTION 6.02 Notice of Default..............................................
SECTION 6.03 Rights of Indenture Trustee....................................
SECTION 6.04 Not Responsible for Recitals or Issuance of Notes..............
SECTION 6.05 May Hold Notes.................................................
SECTION 6.06 Money Held in Trust............................................
SECTION 6.07 Compensation and Reimbursement.................................
SECTION 6.08 Eligibility; Disqualification..................................
SECTION 6.09 Indenture Trustee's Capital and Surplus........................
SECTION 6.10 Resignation and Removal; Appointment of Successor..............
SECTION 6.11 Acceptance of Appointment by Successor.........................
SECTION 6.12 Merger, Conversion, Consolidation or Succession to
Business of Indenture Trustee...............................
SECTION 6.13 Preferential Collection of Claims Against Issuer...............
SECTION 6.14 Co-trustees and Separate Indenture Trustees....................
SECTION 6.15 Authenticating Agents..........................................
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.01 Issuer to Furnish Indenture Trustee Names and Addresses
of Noteholders..............................................
SECTION 7.02 Preservation of Information; Communications to
Noteholders.................................................
SECTION 7.03 Reports by Indenture Trustee...................................
SECTION 7.04 Compliance by Issuer with TIAss. 314(a)........................
ARTICLE VIII
ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, RELEASES AND
ADDITIONAL TRANSFERS
SECTION 8.01 Collection of Moneys...........................................
SECTION 8.02 Collection Account.............................................
SECTION 8.03 Capitalized Interest Account, Interest Reserve Account
and Pre-Funding Account.....................................
SECTION 8.04 General Provisions Regarding the Collection Account............
SECTION 8.05 Reports by Indenture Trustee to Noteholders....................
SECTION 8.06 Reports by Indenture Trustee...................................
SECTION 8.07 Reports by Independent Accountants.............................
SECTION 8.08 Reports by the Servicer........................................
SECTION 8.09 Additional Transfers...........................................
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01 Supplemental Indentures without Consent of Noteholders.........
SECTION 9.02 Supplemental Indentures with Consent of Noteholders............
SECTION 9.03 Execution of Supplemental Indentures...........................
SECTION 9.04 Effect of Supplemental Indentures..............................
SECTION 9.05 Conformity with Trust Indenture Act............................
SECTION 9.06 Reference in Notes to Supplemental Indentures..................
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.01 Optional Redemption of Notes...................................
SECTION 10.02 Form of Redemption Notice......................................
SECTION 10.03 Notes Payable on Redemption Date...............................
ARTICLE XI
MISCELLANEOUS
SECTION 11.01 Compliance Certificates and Opinions...........................
SECTION 11.02 Form of Documents Delivered to Indenture Trustee...............
SECTION 11.03 Acts of Noteholders............................................
SECTION 11.04 Notices, etc., to Indenture Trustee and Issuer.................
SECTION 11.05 Notices and Reports to Noteholders; Waiver of Notices..........
SECTION 11.06 Rules by Indenture Trustee and Agents..........................
SECTION 11.07 Conflict with Trust Indenture Act..............................
SECTION 11.08 Effect of Headings and Table of Contents.......................
SECTION 11.09 Successors and Assigns.........................................
SECTION 11.10 Separability...................................................
SECTION 11.11 Benefits of Indenture..........................................
SECTION 11.12 Governing Law..................................................
SECTION 11.13 Counterparts...................................................
SECTION 11.14 Recording of Indenture.........................................
SECTION 11.15 Issuer Obligations.............................................
SECTION 11.16 Inspection.....................................................
EXHIBIT A - Form of Face of Class A Certificate
EXHIBIT B - Form of Face of Class M-1 Certificate
EXHIBIT C - Form of Face of Class M-2 Certificate
EXHIBIT D - Form of Face of Class B Certificate
EXHIBIT E - Form of Additional Transfer Agreement
EXHIBIT F - Form of Certification to be Provided with Form 10-K
EXHIBIT G - Form of Certification to be Provided by the Indenture Trustee
Schedule I - Schedule of Accounts
INDENTURE, dated June 26, 2003 (herein, as amended or supplemented
from time to time as permitted hereby, called this "Indenture"), between
MID-STATE TRUST XI (the "Issuer"), a Delaware statutory trust and WACHOVIA BANK,
NATIONAL ASSOCIATION, a national banking association, as indenture trustee
(herein, together with its permitted successors in the trusts hereunder, called
the "Indenture Trustee").
PRELIMINARY STATEMENT
The Issuer is a statutory trust created by a Trust Agreement dated
June 24, 2003 as amended, restated, supplemented or otherwise modified from time
to time, between Wilmington Trust Company (in its capacity as Owner Trustee
thereunder, the "Owner Trustee"), and Mid-State Homes, Inc., as Grantor. The
Issuer will act at all times through the Owner Trustee. The Issuer has duly
authorized the execution and delivery of this Indenture to provide for the
issuance of its 4.864% Asset-Backed Notes, Class A (the "Class A Notes"), 5.598%
Asset-Backed Notes, Class M-1 (the "Class M-1 Notes"), 6.573% Asset-Backed
Notes, Class M-2 (the "Class M-2 Notes") and 8.221% Asset-Backed Notes, Class B
(the "Class B Notes," and, together with the Class A Notes, Class M-1 Notes and
Class M-2 Notes, the "Notes"), 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 Notes and for the benefit and security of the
Indenture Trustee, in its individual capacity, to the extent of its interest.
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 CLAUSES
The Issuer hereby Grants to the Indenture Trustee, for the exclusive
benefit of the Holders of the Notes, all of the Issuer's right, title and
interest in and to (a) the Initial Accounts listed in the Schedule of Accounts
delivered to the Indenture Trustee pursuant to this Indenture, all Additional
Accounts added to the Schedule of Accounts as delivered from time to time to the
Indenture Trustee pursuant to this Indenture, all property acquired in respect
of the Accounts, including the related Account Documents and all Monthly
Payments that have not been received prior to the Cut-Off Date or each
Additional Transfer Date, as applicable, regardless of the Due Date for such
Monthly Payment, (b) the Servicing Agreement (including the right to compel
performance by the Sub-Servicer), (c) the Purchase and Sale Agreement, (d) all
cash, instruments or other property held in the Capitalized Interest Account,
the Interest Reserve Account and the Pre-Funding Account, including all
investments made with funds in each account and all income on such investments,
(e) all cash, instruments or other property held or required to be deposited in
the Collection Account and the Holding Account, including all investments made
with funds in the Collection Account and the Holding Account and all income from
investments made with funds in the Collection Account and the Holding Account,
(f) all new Accounts originated in connection with the sale of property acquired
in respect of Accounts, (g) all "accounts," "general intangibles,"
"instruments," "chattel paper," "deposit accounts" and "investment property" (as
such terms are defined in the Uniform Commercial Code) constituting or relating
to the foregoing, and (h) all proceeds in any way derived from any of the
foregoing, including all proceeds of the conversion, voluntary or involuntary,
of any of the foregoing into cash or other assets, including, without
limitation, all insurance proceeds and condemnation awards.
Such Grants are made, however, in trust to secure the Notes equally
and ratably without priority or discrimination, except as provided in this
Indenture, between any Note and any other Note by reason of difference in time
of issuance or otherwise, and to secure (i) the payment of all amounts due on
the Notes in accordance with their terms, (ii) the payment of all other sums
payable under this Indenture and (iii) 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 Notes as set forth herein may be adequately and effectively protected.
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 and neuter genders of such terms. The term
"including" shall mean "including without limitation." All other terms used
herein that are defined in the Trust Indenture Act (as hereinafter defined),
either directly or by reference herein, have the meanings assigned to them
therein.
"Account": (i) a building contract or instalment sale contract
together with the related Account Note and Mortgage and (ii) any new Account
with a related Account Note and Mortgage entered into in connection with the
liquidation of the items specified in (i) and the sale of property acquired in
respect thereof. The term "Outstanding Accounts" as of any date means the
Accounts other than those which, as of or prior to such date as indicated in any
report of the Servicer delivered to the Indenture Trustee pursuant to Section
3.01 of the Servicing Agreement, have been the subject of a Full Prepayment or
as to which the Servicer has determined that no further amounts can be
recovered. "Accounts" shall include both Initial Accounts and Additional
Accounts.
"Account Documents": With respect to each Account, (i) the building
or instalment sale contract relating to such Account, (ii) the Account Note,
endorsed to the order of the Issuer, without recourse, and endorsed by the
Issuer in blank or to the order of the Indenture Trustee, without recourse,
(iii) the original of the recorded Mortgage and the originals of all other
documents, if any, securing said Account Note, (iv) unrecorded Assignments in
recordable form to the Indenture Trustee, together with originals or certified
copies (to the extent provided below) of any recorded assignment(s) from the
originator of such Account to the Grantor, from the Grantor to Mid-State Trust
IX and from Mid-State Trust IX to the Issuer, (v) the originals of any
assumption agreement, written assurance or substitution agreement required to be
delivered to the Indenture Trustee pursuant to Section 2.10 of the Servicing
Agreement, (vi) all insurance policies, including without limitation fire and
extended hazard insurance policies, related to the Accounts, naming the Issuer,
the Indenture Trustee, the Servicer or the Sub-Servicer as the loss payee of
such policies, and (vii) any and all other documents or instruments in the
possession of the Grantor relating to the Accounts, which evidence, or were
created in connection with the origination of, or necessary for the
administration of the Accounts, including without limitation any credit reports,
copies of deeds, completion certificates, title search reports and loan
applications; if the original copy of any document described in clause (iii),
(iv) or (v) has been retained by the recording office in which such document was
recorded, then a copy thereof certified as true and correct by a duly authorized
representative of such recording office shall be included as part of the Account
Documents for the related Account. Notwithstanding any provision contained
herein, the Indenture Trustee shall have no duty to review, maintain custody of
or take any action with respect to the documents set forth in clauses (vi) and
(vii) above.
"Account Note": The original promissory note or, with respect to
Accounts originated in Texas, retail instalment contract executed by an Obligor
that evidences the indebtedness of such Obligor under an Account.
"Account Number": With respect to any Account, the number assigned
to such Account by the Issuer.
"Accountant": A Person engaged in the practice of accounting who
(except when this Indenture provides that an Accountant must be Independent) may
be employed by or affiliated with the Issuer or an Affiliate of the Issuer.
"Accrual Date": The date upon which interest begins accruing on the
Notes, which date is June 15, 2003.
"Act": With respect to any Noteholder, as defined in Section 11.03.
"Addition Notice": A notice (which may be verbal or written)
provided to the Indenture Trustee pursuant to Section 8.09(b)(i) hereof.
"Additional Account": Any of the Accounts purchased by the Issuer
using funds in the Pre-Funding Account and pledged to the Indenture Trustee, all
pursuant to Section 8.09, such Accounts being identified on the Schedule of
Accounts attached to the Additional Transfer Agreement.
"Additional Transfer Agreement": Each Additional Transfer Agreement
executed by the Indenture Trustee and the Issuer substantially in the form of
Exhibit E hereto, by which Additional Accounts are pledged to the Indenture
Trustee.
"Additional Transfer Date": The date specified in each Additional
Transfer Agreement.
"Affiliate": With respect to any Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agent": Any Note Registrar, Paying Agent or Authenticating Agent.
"Aggregate Outstanding Principal Amount": As of any Payment Date, an
amount equal to the sum of the Outstanding Principal Amounts as of such Payment
Date.
"Aggregate Principal Balance": With respect to the Accounts, the
aggregate of the Principal Balances of all such Accounts at the time of
determination.
"Assignments": Collectively, (i) the original instrument of
assignment of such Mortgage, Account Note and other documents made by Mid-State
Trust IX to the Issuer and (ii) the original instrument of assignment of such
Mortgage, Account Note and other documents made by the Issuer to the Indenture
Trustee (which in either 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 Account Notes as well and which may
also, to the extent permitted by the laws of the state in which the related
Mortgaged Property is located, 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 Indenture Trustee at the request of the Issuer
pursuant to Section 6.15, until any successor Authenticating Agent is named, and
thereafter "Authenticating Agent" shall mean such successor.
"Authorized Officer": In the case of the Owner Trustee, the
President, any Vice-President, Financial Services Officer or Trust Officer or
any other officer of the Owner Trustee who is authorized to act for the Owner
Trustee in respect of the Issuer.
"Available Funds": With respect to any Payment Date, an amount equal
to (A) the sum of (i) the amount of collections on the Accounts on deposit in
the Collection Account at the close of business on the last Business Day of the
related Collection Period, (ii) net reinvestment income earned on funds in the
Collection Account from the date two Business Days prior to the preceding
Payment Date (or, in the case of the first Payment Date, from the Closing Date)
to the date two Business Days prior to such Payment Date, (iii) net reinvestment
income on funds in the Holding Account during the related Collection Period,
(iv) any deposits made by the Indenture Trustee into the Collection Account on
such Payment Date from the Capitalized Interest Account to cover any Capitalized
Interest Shortfalls, (v) any interest or other investment earnings on amounts on
deposit in the Interest Reserve Account and any Pre-Funding Earnings, (vi) with
respect to the first Payment Date following the end of the Pre-Funding Period,
any amounts deposited into the Collection Account from the Pre-Funding Account
(exclusive of any Pre-Funding Earnings), (vii) the proceeds of any insurance
policy relating to the Accounts and (viii) any Reimbursement Amount deposited to
the Collection Account during the Collection Period immediately preceding such
Payment Date minus (B) Issuer Expenses.
"Available Funds Allocation": The allocation of Available Funds
pursuant to Section 8.02(b) hereof.
"Bank": Wilmington Trust Company, a Delaware banking corporation, in
its individual capacity and not as Owner Trustee pursuant to the Trust
Agreement, or any successor in its individual capacity.
"Business Day": Any day that is not a Saturday, Sunday or a day on
which banking institutions in New York City or in the city in which the
Corporate Trust Office of the Indenture Trustee under this Indenture is located
are authorized or obligated by law or executive order to be closed.
"Capitalized Interest Account": The account established and
maintained pursuant to Section 8.03.
"Capitalized Interest Amount": The amount to be paid by the Issuer
to the Indenture Trustee for deposit into the Capitalized Interest Account on
the Closing Date pursuant to Section 8.03, which amount is $156,476.02.
"Capitalized Interest Shortfall": With respect to a Payment Date
through and including the Payment Date immediately following the end of the
Pre-Funding Period, (A) the product of (a) a fraction, the numerator of which is
the balance of the Pre-Funding Account as of such Payment Date and the
denominator of which is the sum of (i) the aggregate Principal Balance of the
Initial Accounts as of the Cut-Off Date, (ii) the Aggregate Principal Balance of
any Additional Accounts purchased by the Issuer from the Depositor on the
Closing Date with funds from the Pre-Funding Account and (iii) the amount of any
funds on deposit in the Pre-Funding Account on the Closing Date after the
purchase of any Additional Accounts and (b) the aggregate Interest Accrual
Amount for the Notes for the related Interest Accrual Period plus Issuer
Expenses, minus (B) any Pre-Funding Earnings for such Collection Period.
"Class": Any one of the classes of Notes issued pursuant to this
Indenture.
"Class A Initial Principal Amount": $200,780,000.00.
"Class A Optimal Principal Amount": As to any Payment Date, the
greater of (A) an amount which, when paid to the Holders of the Class A Notes,
will result in the Current Class Percentage for the Class A Notes equaling the
Original Class Percentage for the Class A Notes; and (B) the product of (i) the
Optimal Principal Amount for such Payment Date and (ii) a fraction, the
numerator of which is the Class A Outstanding Principal Amount for such Payment
Date and the denominator of which is the Aggregate Outstanding Principal Amount
for such Payment Date; such product not to exceed the Class A Outstanding
Principal Amount.
"Class A Outstanding Principal Amount": As of any Payment Date, the
Class A Initial Principal Amount reduced by (i) all payments, if any, on the
Class A Notes in reduction of their principal amount made on all prior Payment
Dates and (ii) all Class A Realized Loss Amounts allocated thereto with respect
to prior Payment Dates.
"Class A Realized Loss Amount": With respect to any Payment Date, an
amount equal to the excess of (i) the Class A Outstanding Principal Amount as of
such Payment Date (after application of the Class A Optimal Principal Amount,
but prior to the application of losses on such Payment Date) over (ii) the sum
of the Aggregate Principal Balance of the Accounts and the amount of any funds
in the Pre-Funding Account immediately following the Collection Period related
to such Payment Date, not to exceed the Class A Outstanding Principal Amount.
"Class B Initial Principal Amount": $35,390,000.00.
"Class B Optimal Principal Amount": As to any Payment Date, the
greater of (A) an amount which, when paid to the holders of the Class B Notes,
will result in the Current Class Percentage for the Class B Notes equaling the
Original Class Percentage for the Class B Notes; and (B) the product of (i) the
Optimal Principal Amount for such Payment Date and (ii) a fraction, the
numerator of which is the Class B Outstanding Principal Amount for such Payment
Date and the denominator of which is the Aggregate Outstanding Principal Amount
for such Payment Date; such product not to exceed the Class B Outstanding
Principal Amount.
"Class B Outstanding Principal Amount": As of any Payment Date, the
Class B Initial Principal Amount reduced by (i) all payments, if any, on the
Class B Notes in reduction of their principal amount made on all prior Payment
Dates and (ii) all Class B Realized Loss Amounts with respect to prior Payment
Dates.
"Class B Realized Loss Amount": With respect to any Payment Date, an
amount equal to the excess of (i) the sum of (a) the Class A Outstanding
Principal Amount as of such Payment Date (after application of the Class A
Optimal Principal Amount, but prior to the application of losses on such Payment
Date), (b) the Class M-1 Outstanding Principal Amount as of such Payment Date
(after application of the Class M-1 Optimal Principal Amount, but prior to the
application of losses on such Payment Date), (c) the Class M-2 Outstanding
Principal Amount as of such Payment Date (after application of the Class M-2
Optimal Principal Amount, but prior to the application of losses on such Payment
Date) and (d) the Class B Outstanding Principal Amount as of such Payment Date
(after application of the Class B Optimal Principal Amount, but prior to the
application of losses on such Payment Date) over (ii) the sum of the Aggregate
Principal Balance of the Accounts and the amount of any funds in the Pre-Funding
Account immediately following the Collection Period related to such Payment
Date, not to exceed the Class B Outstanding Principal Amount.
"Class Interest Shortfall": With respect to a Class of Notes on any
Payment Date, an amount equal to the excess, if any, of the Interest Accrual
Amount for such Class of Notes over Available Funds (less any interest paid on
such Payment Date on each Class of Notes senior to such Class of Notes);
provided, however, that such amount shall not include interest due and payable
with respect to unreimbursed Realized Loss Amounts.
"Class M-1 Initial Principal Amount": $51,840,000.00.
"Class M-1 Optimal Principal Amount": As to any Payment Date, the
greater of (A) an amount which, when paid to the Holders of the Class M-1 Notes,
will result in the Current Class Percentage for the Class M-1 Notes equaling the
Original Class Percentage for the Class M-1 Notes; and (B) the product of (i)
the Optimal Principal Amount for such Payment Date and (ii) a fraction, the
numerator of which is the Class M-1 Outstanding Principal Amount for such
Payment Date and the denominator of which is the Aggregate Outstanding Principal
Amount for such Payment Date; such product not to exceed the Class M-1
Outstanding Principal Amount.
"Class M-1 Outstanding Principal Amount": As of any Payment Date,
the Class M-1 Initial Principal Amount reduced by (i) all payments, if any, on
the Class M-1 Notes in reduction of their principal amount made on all prior
Payment Dates and (ii) all Class M-1 Realized Loss Amounts with respect to prior
Payment Dates.
"Class M-1 Realized Loss Amount": With respect to any Payment Date,
an amount equal to the excess of (i) the sum of (a) the Class A Outstanding
Principal Amount as of such Payment Date (after application of the Class A
Optimal Principal Amount, but prior to the application of losses on such Payment
Date) and (b) the Class M-1 Outstanding Principal Amount as of such Payment Date
(after application of the Class M-1 Optimal Principal Amount, but prior to the
application of losses on such Payment Date) over (ii) the sum of the Aggregate
Principal Balance of the Accounts and the amount of any funds in the Pre-Funding
Account immediately following the Collection Period related to such Payment
Date, not to exceed the Class M-1 Outstanding Principal Amount.
"Class M-2 Initial Principal Amount": $26,330,000.00.
"Class M-2 Optimal Principal Amount": As to any Payment Date, the
greater of (A) an amount which, when paid to the Holders of the Class M-2 Notes,
will result in the Current Class Percentage for the Class M-2 Notes equaling the
Original Class Percentage for the Class M-2 Notes; and (B) the product of (i)
the Optimal Principal Amount for such Payment Date and (ii) a fraction, the
numerator of which is the Class M-2 Outstanding Principal Amount for such
Payment Date and the denominator of which is the Aggregate Outstanding Principal
Amount for such Payment Date; such product not to exceed the Class M-2
Outstanding Principal Amount.
"Class M-2 Outstanding Principal Amount": As of any Payment Date,
the Class M-2 Initial Principal Amount reduced by (i) all payments, if any, on
the Class M-2 Notes in reduction of their principal amount made on all prior
Payment Dates and (ii) all Class M-2 Realized Loss Amounts with respect to prior
Payment Dates.
"Class M-2 Realized Loss Amount": With respect to any Payment Date,
an amount equal to the excess of (i) the sum of (a) the Class A Outstanding
Principal Amount as of such Payment Date (after application of the Class A
Optimal Principal Amount, but prior to the application of losses on such Payment
Date), (b) the Class M-1 Outstanding Principal Amount as of such Payment Date
(after application of the Class M-1 Optimal Principal Amount, but prior to the
application of losses on such Payment Date) and (c) the Class M-2 Outstanding
Principal Amount as of such Payment Date (after application of the Class M-2
Optimal Principal Amount, but prior to the application of losses on such Payment
Date) over (ii) the sum of the Aggregate Principal Balance of the Accounts and
the amount of any funds in the Pre-Funding Account immediately following the
Collection Period related to such Payment Date, not to exceed the Class M-2
Outstanding Principal Amount.
"Closing Date": June 26, 2003.
"Code": The Internal Revenue Code of 1986, as amended.
"Collection Account": The trust account or accounts created and
maintained pursuant to Section 8.02.
"Collection Period": With respect to any Payment Date, the one-month
period ending on the close of business on the last day of the month preceding
the month in which the related Payment Date occurs.
"Commission": The Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, as
amended, or if at any time such Commission is not existing and performing the
duties now assigned 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.
"Corporate Trust Office": The designated corporate trust office of
the Indenture Trustee located at 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000-0000 or at such other address as the Indenture Trustee may
designate from time to time by notice to the Noteholders and the Issuer, or the
principal corporate trust office of any successor Indenture Trustee.
"Coupon Rate": The per annum rate a which an Account accrues finance
charges.
"Cumulative Actual Net Losses": With respect to any Payment Date,
the cumulative excess as of the end of the related Collection Period of (A) the
Principal Balance of all Accounts that have been charged off, written off or
otherwise reduced, in whole or in part, without any repossession less (B) the
Net Liquidation Proceeds, if any, of such Accounts, any new Account that is part
of such Net Liquidation Proceeds being valued for this purpose at its Principal
Balance, and the remaining Outstanding Principal Balance of any Account that has
been charged-off, written-off or reduced for any reason, in part but not in
whole.
"Current Class Percentage": With respect to any Class of Notes and
any Payment Date (following the Available Funds Allocation and the allocation of
any Realized Loss Amounts with respect to such Payment Date), the percentage
produced by dividing such Class' Outstanding Principal Amount by the Aggregate
Outstanding Principal Amount.
"Cut-Off Date": With respect to each Initial Account, May 31, 2003.
"Debt Service Requirement Determination Date": The date prior to
each Payment Date as of which the Indenture Trustee is required to compute the
amount due and payable on the Notes on such Payment Date; such date is the third
Business Day prior to a Payment Date.
"Default": Any occurrence which is, or with notice or the lapse of
time or both would become, an Event of Default.
"Defective Account": As defined in Section 3.11(b) and Section
3.12(b).
"Deleted Account": As defined in Section 3.11(b) and Section
3.12(b).
"Delinquency Ratio": The ratio (expressed as a percentage), computed
for any Payment Date of (i) the Aggregate Principal Balance of Accounts at the
end of the related Collection Period for which the Monthly Payment thereon
remains unpaid for 60 days or more after the Due Date thereof to (ii) the
Aggregate Principal Balance at the end of such Collection Period.
"Due Date": With respect to any Account, the date each month on
which the Monthly Payment is payable.
"Eligible Account": (a) A segregated account or accounts maintained
with a depository institution or trust company whose long-term unsecured debt
obligations are rated at least "AA-" by S&P and at least "A1" by Moody's at the
time of any deposit therein or whose short-term unsecured debt obligations are
rated at least "A-1+" by S&P and at least "P-1" by Moody's (or, if such
obligations are, at the time of such deposit, not rated by both S&P and Moody's,
then such rating shall be from any of S&P or Moody's) or (b) a segregated trust
account or accounts maintained with a federal or state chartered depository
institution subject to regulations regarding fiduciary funds on deposit
substantially similar to 12 C.F.R. Section 9.10(b).
"Eligible Investments": Any one or more of the following obligations
or securities:
(a) (i) direct obligations of, and obligations fully guaranteed as
to timely payment by, the United States of America or any agency or
instrumentality of the United States of America, the obligations of which are
backed by the full faith and credit of the United States of America and (ii)
direct obligations of, and obligations guaranteed as to timely payment by,
Xxxxxx Mae or Xxxxxxx Mac only if, at the time of investment, they are assigned
the Highest Credit Rating by the Rating Agencies;
(b) demand and time deposits in, certificates of deposit of, or
banker's acceptances issued by any depository institution or trust company
incorporated under the laws of the United States of America (including the
Indenture Trustee or any agent of the Indenture Trustee acting in their
respective commercial capacities) or any State and subject to supervision and
examination by federal and/or State banking authorities; provided that (1) the
commercial paper and/or the debt obligations of such depository institution (or,
in the case of the principal depository institution in a holding company system,
the commercial paper or debt obligations of such holding company) at the time of
such investment or contractual commitment providing for such investment is
assigned the Highest Credit Rating by the Rating Agencies or (2) the long-term
debt securities of such depository institutions are rated "AAA" and "Aaa" or
better by S&P and Moody's respectively;
(c) repurchase obligations pursuant to a written agreement with
respect to (i) any security described in clause (a) above or (ii) any other
security issued or guaranteed by an agency or instrumentality of the United
States of America, in either case entered into with an entity whose debt
obligations are assigned the Highest Credit Rating by the Rating Agencies
(including, if applicable, the Indenture Trustee or any agent of the Indenture
Trustee acting in their respective commercial capacities) and in each case where
the Indenture Trustee has taken delivery of such security;
(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 whose debt obligations are assigned the Highest Credit Rating by the
Rating Agencies at the time of such investment or contractual commitment
providing for such investment; provided, however, that securities issued by any
particular corporation will not be Eligible Investments to the extent that such
an investment therein will cause the then outstanding principal amount of
securities issued by such corporation and held as part of the Trust Estate for
the Notes to exceed 10% of the Trust Estate for the Notes;
(e) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a specified
date not more than one year after the date of issuance thereof) which have been
assigned the Highest Credit Rating by the Rating Agencies at the time of such
investment;
(f) certificates or receipts representing ownership interests in
future interest or principal payments on obligations described in clause (a)
above which are held by a custodian on behalf of the holders of such
certificates or receipts; and
(g) any other demand or time deposit, obligation, security or
investment provided that the Issuer shall have given prior written notice of
such other investment to the Rating Agencies, and the Indenture Trustee shall
have received written confirmation from each of the Rating Agencies that no
reduction, withdrawal or qualification in the rating on the Notes by either such
Rating Agency will result from the addition of such Eligible Investment.
"Eligible Moneys": Any moneys on deposit in trust with the Indenture
Trustee for the benefit of the Noteholders with respect to which the Indenture
Trustee has received an Opinion of Counsel nationally recognized as expert in
bankruptcy acceptable to the Indenture Trustee that payment of such amounts to
the Noteholders would not constitute avoidable preferences under Section 547 of
the United States Bankruptcy Code in the event of the filing of a petition for
relief under the United States Bankruptcy Code by or against the Issuer or any
borrower or the person from whom the money is received, if other than the Issuer
or the borrower.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"Event of Default": As defined in Section 5.01.
"Exchange Act": As defined in Section 3.21(a).
"Full Prepayment": Payment to the Servicer, whether by the Obligor
or through Insurance Proceeds, of an amount with respect to an Account such that
the full amount due with respect to such Account has been paid.
"Grant": A Grant of an Account and the related Account Documents, an
Eligible Investment, the Servicing Agreement or any other instrument means to
mortgage, pledge, assign or grant a security interest in such instrument and
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, collect and receive payments in respect of the
Account or Eligible Investment, insurance proceeds, condemnation awards,
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 which the Granting party is or may be entitled to do or receive
thereunder or with respect thereto.
"Grantor": Mid-State Homes, Inc., a Florida corporation, in its
capacity as grantor of the Trust, and as otherwise defined in the Trust
Agreement.
"Hazard Insurance Policy": With respect to each Account, the policy
of fire and extended coverage insurance required to be maintained for the
related Mortgaged Property, as provided in Section 2.13 of the Servicing
Agreement, and which, as provided in said Section 2.13, may be a blanket
mortgage impairment policy maintained by the Servicer in accordance with the
terms and conditions of said Section 2.13.
"Hazard Insurer": The named insurer in any Hazard Insurance Policy.
"Highest Credit Rating": With respect to Moody's, "P-1" or "Aaa" and
with respect to S&P, "A-1+" or "AAA."
"Holding Account": The account created and maintained pursuant to
the Holding Account Agreement.
"Holding Account Agreement": The Holding Account Agreement dated
June 26, 2003 among Wachovia Bank, National Association, as custodian for the
Indenture Trustee, the Servicer and the Issuer.
"Indenture" or "this Indenture": This instrument as originally
executed and, if from time to time supplemented or amended by one or more
indentures supplemental hereto entered into pursuant to the applicable
provisions hereof, as so supplemented or amended. All references in this
instrument to designated "Articles," "Sections," "Subsections" and other
subdivisions are to the designated Articles, Sections, Subsections and other
subdivisions of this instrument as originally executed. The words "herein,"
"hereof," "hereunder" and other words of similar import refer to this Indenture
as a whole and not to any particular Article, Section, Subsection or other
subdivision.
"Indenture Maturity Date": July 15, 2038.
"Indenture Trustee": Wachovia Bank, National Association, a national
banking association, 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.
"Independent": When used with respect to any specified Person means
such a Person who (1) is in fact independent of the Issuer, any Affiliate of the
Issuer, any other obligor upon the Notes and any Affiliate of any such other
obligor, (2) does not have any direct financial interest or any material
indirect financial interest in the Issuer or in any such other obligor or in an
Affiliate of the Issuer or such other obligor, and (3) is not connected with the
Issuer, any Affiliate of the Issuer, any such other obligor or any Affiliate of
any such other obligor as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions. Whenever it is herein
provided that any Independent Person's opinion or certificate shall be furnished
to the Indenture Trustee, such Person shall be appointed by an Issuer Order and
approved by the Indenture Trustee in the exercise of reasonable care and such
opinion or certificate shall state that the signer has read this definition and
that the signer is Independent within the meaning thereof.
"Individual Note": A Note of an initial principal amount of $1,000;
a Note of an original principal amount in excess of $1,000 shall be deemed to be
a number of Individual Notes equal to the quotient obtained by dividing such
initial principal amount by $1,000.
"Initial Account": Any of the Accounts purchased pursuant to the
Purchase and Sale Agreement listed in the Schedule of Accounts delivered to the
Indenture Trustee pursuant to this Indenture as of the Closing Date.
"Initial Principal Amount": Any of the Class A Initial Principal
Amount, the Class M-1 Initial Principal Amount, the Class M-2 Initial Principal
Amount or the Class B Initial Principal Amount.
"Initial Reserve Account Deposit": The initial deposit into the
Interest Reserve Account equal to 0.50% of the sum of the Aggregate Principal
Balance of the Initial Accounts as of the Cut-Off Date, the Aggregate Principal
Balance of any Additional Accounts purchased by the Issuer from the Grantor on
the Closing Date and the amount of any funds on deposit in the Pre-Funding
Account on the Closing Date (less any amounts used to purchase Additional
Accounts on the Closing Date).
"Insolvency Proceeding": As defined in Section 5.06.
"Insurance Proceeds": Amounts paid by a Hazard Insurer with respect
to a particular Mortgaged Property pursuant to any related Hazard Insurance
Policy or paid by any other insurer with respect to a particular Mortgaged
Property pursuant to any other related insurance policy.
"Insured Expenses": Expenses incurred by the Servicer in connection
with an Account under which the mortgagor is in default which are covered by any
related Hazard Insurance Policy and are paid by the Hazard Insurer under any
such policy.
"Interest Accrual Amount": As to any Class of Notes for any Payment
Date, an amount equal to the interest accrued on the Outstanding Principal
Amount of such Class of Notes (after giving effect to payments and allocations
of losses on the preceding Payment Date) during the Interest Accrual Period
ending on the day prior to the Payment Date at the applicable Note Interest Rate
for such Class of Notes; provided, however, that such amount shall not include
interest due and payable with respect to unreimbursed Realized Loss Amounts.
"Interest Accrual Period": With respect to any Payment Date, the
period beginning on the 15th day of the month preceding the month in which such
Payment Date occurs and ending on the 14th day of the month in which such
Payment Date occurs. Interest will be calculated on the basis of a 360-day year
consisting of twelve 30-day months. Interest on the Notes will be payable from
any funds on deposit in the Collection Account on such Payment Date.
"Interest Reserve Account": The trust account created and maintained
pursuant to Section 8.03.
"Interest Reserve Account Withdrawal Amount": The amount, if any,
with respect to any Payment Date, which remains unpaid after the application of
Available Funds pursuant to priorities first through eighth, tenth, thirteenth,
sixteenth and nineteenth pursuant to Section 8.02(b), such amount not to exceed
the amount on deposit in the Interest Reserve Account on such Payment Date.
"Issuer": Mid-State Trust XI, a Delaware statutory trust created
pursuant to the Trust Agreement, until a successor Person shall have become the
Issuer pursuant to the applicable provisions of this Indenture, and thereafter
"Issuer" shall mean such successor Person.
"Issuer Expenses": All operating expenses of the Issuer (exclusive
of interest on the Notes, but including the fees and expenses of the Owner
Trustee and the Indenture Trustee (including, without limitation, amounts to
which the Indenture Trustee is entitled under Section 6.07), the Standby
Servicer Fee and the Servicing Fee (which includes amounts payable to the
Sub-Servicer)).
"Issuer Order" and "Issuer Request": A written order or request
signed in the name of the Issuer by an Authorized Officer, and delivered to the
Indenture Trustee.
"Liquidation Expenses": Expenses incurred by the Servicer in
connection with the liquidation of any Account which is in default and the sale
of any property acquired in respect thereof which are not recoverable as Insured
Expenses and are otherwise reimbursable to the Servicer in accordance with
Sections 2.07(c), 2.11 and 2.15 of the Servicing Agreement.
"Liquidation Proceeds": Cash and new Account Notes with related
security instruments received by the Servicer (before reimbursement of the
Servicer for Liquidation Expenses) in connection with the liquidation of any
Account which is in default and the sale of any property acquired in respect
thereof, whether as Insurance Proceeds or through trustee's sale, foreclosure
sale or otherwise.
"Maturity": With respect to the Notes, the date on which the entire
unpaid principal amount of the Notes becomes due and payable as therein or
herein provided, whether at the date specified therefor in the Notes or, if
earlier, by declaration of acceleration, call for redemption or otherwise.
"Maturity Date": With respect to any Account, the date on which the
last payment of principal of such Account shall be due and payable.
"Mid-State Trust IX": Mid-State Trust IX, a Delaware statutory
trust, as seller under the Purchase and Sale Agreement.
"Monthly Payment": With respect to any Account, the scheduled
monthly payment payable to the holder of such Account in accordance with the
terms of the related Account Note.
"Moody's": Xxxxx'x Investors Service, Inc. and its successors and
assigns.
"Mortgage": With respect to an Account, the original mortgage, deed
of trust, mechanic's lien contract or other security instrument executed by an
Obligor which creates a lien on real property and improvements thereon securing
an Account Note, or any Trust Mortgage.
"Mortgaged Property": The real property and improvements thereon
that are subject to a Mortgage.
"Net Liquidation Proceeds": With respect to any Account, the amount
derived by subtracting the related Liquidation Expenses from the Liquidation
Proceeds of such Account.
"Note Interest Rate": With respect to each Class, the annual rate at
which interest accrues on such Class of Notes, as specified in such Class of
Notes and in Section 2.03.
"Note Register" and "Note Registrar": As defined in Section 2.07.
"Notes": Any notes authorized by, and authenticated and delivered
under, this Indenture.
"Noteholder" or "Holder": The Person in whose name a Note is
registered in the Note Register.
"Obligor": Each Person who is indebted under an Account Note or who
has acquired real property subject to the Mortgage securing an Account Note.
"Officer's Certificate": A certificate signed by an Authorized
Officer.
"Opinion of Counsel": A written opinion of counsel who may, except
as otherwise expressly provided in this Indenture, be counsel for the Issuer and
who shall be satisfactory to the Indenture Trustee.
"Optimal Principal Amount": An amount equal to (A) on any Payment
Date on which there exists an uncured Trigger Event, the Remaining Available
Funds; and (B) on any Payment Date on which there does not exist an uncured
Trigger Event, the amount which, when paid as principal on the Notes, will
result in an Overcollateralization Amount equal to the Target
Overcollateralization Level; provided that in no event will the Optimal
Principal Amount for any Payment Date exceed the Remaining Available Funds for
such Payment Date or the Aggregate Outstanding Principal Amount.
"Original Class Percentage" With respect to any Class of Notes, the
percentage produced by dividing such Class' Initial Principal Amount by the
aggregate Initial Principal Amount for all Classes of Notes.
"Outstanding": As of the date of determination, all Notes
theretofore authenticated and delivered under this Indenture except:
(i) Notes theretofore canceled by the Note Registrar or delivered
to the Note Registrar for cancellation;
(ii) Notes or portions thereof for whose payment or redemption
money (complying with Section 4.01) 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 Notes; provided, however, that if such Notes
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; and
(iii) Notes in exchange for or in lieu of which other Notes have
been authenticated and delivered pursuant to this Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Notes are held
by a Holder in due course;
provided, however, that in determining whether the Holders of the requisite
percentage of the Voting Rights of the Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Notes owned by
the Issuer, any other obligor upon the Notes or any Affiliate of the Issuer or
such other obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Indenture Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent, or
waiver, only Notes which the Indenture Trustee knows to be so owned shall be so
disregarded. Notes so owned which 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 Notes and
that the pledgee is not the Issuer, any other obligor upon the Notes or any
Affiliate of the Issuer or such other obligor.
"Outstanding Principal Amount": Any of the Class A Outstanding
Principal Amount, the Class M-1 Outstanding Principal Amount, the Class M-2
Outstanding Principal Amount and Class B Outstanding Principal Amount, as
applicable.
"Overcollateralization Amount": With respect to any Payment Date, an
amount equal to (a) the sum of (i) the Aggregate Principal Balance of the
Accounts on the last day of the related Collection Period and (ii) the amount,
if any, on deposit in the Pre-Funding Account on the last day of the related
Collection Period less (b) the Aggregate Outstanding Principal Amount of the
Notes after giving effect to the payments to be made on such Payment Date and
the allocation of Realized Loss Amounts.
"Owner Trustee": Wilmington Trust Company, acting not in its
individual capacity but solely as owner trustee with respect to the Issuer, or
such successor Person as shall become owner trustee pursuant to applicable
provisions of this Indenture and shall be owner trustee under, or become owner
trustee pursuant to applicable provisions of 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 Notes on behalf of the
Issuer.
"Payment Date": The 15th day of each month beginning July 15, 2003
or, if such date is not a Business Day, the next Business Day thereafter.
"Payment Date Statement": As defined in Section 2.09(d).
"Person": Any individual, corporation, partnership, limited
liability company, national banking association, joint venture, association,
joint stock company, trust (including any beneficiary thereof), unincorporated
organization or government or any agency or political subdivision thereof.
"Pool Delinquency Rate": With respect to any calendar month, a
fraction, expressed as a percentage, (x) the numerator of which is the Aggregate
Principal Balances of all Accounts 60 or more days delinquent as of the close of
business on the last day of such month; and (y) the denominator of which is the
Aggregate Principal Balance as of the close of business on the last day of such
month.
"Predecessor Notes": With respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.08 in lieu of a lost, destroyed or
stolen Note shall be deemed to evidence the same debt as the lost, destroyed or
stolen Note.
"Preference Claim": As defined in Section 5.06.
"Pre-Funded Amount": With respect to any date, the amount on deposit
in the Pre-Funding Account as of such date (net of any reinvestment earnings
thereon).
"Pre-Funding Account": The account established and maintained
pursuant to Section 8.03.
"Pre-Funding Earnings": With respect to each Payment Date, the
actual investment earnings earned on amounts on deposit in the Pre-Funding
Account during the period from the preceding Payment Date (or the Closing Date,
in the case of the first Payment Date) to the current Payment Date.
"Pre-Funding Period": The period beginning on the Closing Date and
ending on the earlier of (a) the date on which the amount on deposit in the
Pre-Funding Account is less than $100,000 or (b) the close of business on August
26, 2003.
"Principal Balance": With respect to any Account, as of any date,
the amount financed at its origination, less the sum of scheduled and
unscheduled principal payments made on such Account.
"Proceeding": Any suit in equity, action at law or other judicial or
administrative proceeding.
"Purchase and Sale Agreement": The Purchase and Sale Agreement,
dated June 26, 2003 among Mid-State Homes, Inc., Mid-State Trust IX and
Mid-State Trust XI which provides for, among other things, the purchase by
Mid-State Trust XI of all interest of Mid-State Trust IX in the Initial
Accounts.
"Qualified Substitute Account" means an account substituted by the
Issuer for a Deleted Account which must, on the date of such substitution, (i)
have an outstanding Principal Balance, after deduction of all scheduled payments
due in the month of substitution, not less than the Principal Balance of the
Deleted Account (unless the amount of any shortfall will be deposited into the
Collection Account by the Issuer, pursuant to Section 3.11(b), for distribution
to Noteholders in the month following the month of substitution), (ii) have an
Coupon Rate not less than the Coupon Rate of the Deleted Account, (iii) comply
with each representation and warranty set forth in Section 3.11(a), (iv)
generally be of like quality and type as the Deleted Account and (v) have an
original term to maturity which shall not cause such Account to mature later
than April 2038. In the event that either one account is substituted for more
than one Deleted Account, or more than one account is substituted for one or
more Deleted Accounts, then the amount described in clause (i) hereof shall be
determined on the basis of aggregate Principal Balances.
"Rating Agencies": Each of S&P and Moody's.
"Realized Loss Amount": Any of the Class A Realized Loss Amount, the
Class M-1 Realized Loss Amount, the Class M-2 Realized Loss Amount and Class B
Realized Loss Amount, as applicable.
"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
Notes (or notice of a payment in full of principal) due and payable on such
Payment Date are determined; such date shall be the day immediately prior to
such Payment Date.
"Redemption Date": Any Payment Date on which Notes are to be
redeemed at the option of the Grantor pursuant to Article X.
"Redemption Price": With respect to any Notes to be redeemed
pursuant to Article X hereof, an amount equal to 100% of the Aggregate
Outstanding Principal Amount of the Notes (prior to allocations of any Realized
Loss Amounts), together with interest on such amount and interest on any unpaid
interest or unreimbursed Realized Loss Amounts at the applicable Note Interest
Rate from the latest date to which interest has been paid to the applicable
Redemption Date.
"Reimbursement Amount": As defined in Section 3.11(b).
"Remaining Available Funds": With respect to any Payment Date, the
Available Funds for such Payment Date reduced by the amount of interest due on
the Notes on such Payment Date (excluding interest on any Realized Loss
Amounts).
"Remittance": With respect to any one or more Accounts for any
particular date or period, the net amount with respect to collections or
receipts on such Account or Accounts for such date or period that is required to
be remitted by the Servicer to the Indenture Trustee for deposit in the
Collection Account.
"Remittance Date": The first Remittance Date shall be the Closing
Date and thereafter the first Business Day of each week following the end of
each Collection Period.
"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.
"S&P": Standard & Poor's, a division of The XxXxxx-Xxxx Companies,
Inc., and its successors and assigns.
"Sale": As defined in Section 5.18.
"Schedule of Accounts": Collectively, the list of Initial Accounts
being Granted to the Indenture Trustee as part of the Trust Estate on the
Closing Date appearing on a magnetic media delivered to the Indenture Trustee on
the Closing Date, as supplemented by each schedule of Additional Accounts
attached to an Additional Transfer Agreement, which list shall set forth the
following information as of the Cut-Off Date or Additional Transfer Date, as
applicable, with respect to each such Account in numbered columns.
Column Number Information
------------- -----------
1 Account Number
2 Zip Code
3 First Payment Date
4 Total Number of Payments to be Made
5 Monthly Payment
6 Original Principal Balance of the Note
7 Coupon Rate
8 Paid-Through Date
9 Status Code (e.g. Foreclosure, Bankruptcy, Open, Etc.)
10 Resale or New Home Sale
11 Amount of Late Charges Due
12 Date of Last Payment Received
13 Current Principal Balance
14 Taxes, Insurance and late (or other) Charge Due
"Seller": Mid-State Homes, Inc., a Florida corporation.
"Servicer": Mid-State Homes, Inc., a Florida corporation, as
servicer under the Servicing Agreement, and its permitted successors and assigns
thereunder, including any successor servicer appointed pursuant to Section
3.07(d).
"Servicer Reporting Date": The date each month on which the Servicer
is required pursuant to Section 3.01 of the Servicing Agreement to report to the
Issuer, the Successor Servicer and the Indenture Trustee information concerning
the Accounts, including all collections on the Accounts received by it during
the related Collection Period (as defined in the Servicing Agreement), which
date shall be the 10th day of each month following such Collection Period or, if
such day is not a Business Day, the next preceding Business Day.
"Servicer Termination Delinquency Rate Trigger": As of any Payment
Date commencing with the second Payment Date, if the percentage equal to the
average of the Pool Delinquency Rate for each of the three immediately preceding
calendar months with respect to the Accounts exceeds 8.75%.
"Servicer Termination Loss Trigger": With respect to any Payment
Date, if Cumulative Actual Net Losses, determined as of such Payment Date,
exceed the percentage set forth below of the Aggregate Principal Balance as of
the Cut-Off Date:
Percentage of Aggregate Principal
Payment Date Occurring In Balance as of the Cut-Off Date
------------------------- ------------------------------
July 2008 through June 2009 5.50%
July 2009 through June 2010 6.25%
July 2010 through June 2011 7.25%
July 2011 through June 2012 7.75%
July 2012 and thereafter 8.75%
"Servicing Account": As defined in Section 2.08(b) of the Servicing
Agreement.
"Servicing Agreement": The Servicing Agreement, dated June 26, 2003,
among the Issuer, the Servicer and the Indenture Trustee, providing, among other
things, for the servicing of the Accounts, as said 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
pursuant to Section 3.07(d) hereof.
"Servicing Default": Any default by the Servicer under the Servicing
Agreement that is an "Event of Default" under the Servicing Agreement, as
specified in Section 5.01 thereof.
"Servicing Fee": With respect to any Account, other than an Account
with respect to which (i) the related Mortgaged Property has been repossessed or
(ii) the related Principal Balance is zero pursuant to the proviso of the
definition of "Principal Balance," the fee payable to the Servicer under the
Servicing Agreement, which fee shall be the product of 0.60% per annum (60 basis
points) and the Principal Balance of such Account as of the beginning of the
immediately preceding Collection Period.
"Servicing Officer": Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Accounts whose name
appears on a list of servicing officers furnished to the Issuer and the
Indenture Trustee by the Servicer, as such list may be amended or supplemented
from time to time.
"Similar Law": As defined in Section 2.07 hereof.
"Standby Servicer Fee": The fee payable to the Successor Servicer
pursuant to the Standby Servicing Agreement.
"Standby Servicing Agreement": The Standby Servicing Agreement dated
June 26, 2003 by and among the Servicer, the Issuer and the Successor Servicer.
"Sub-Servicer": As defined in the Servicing Agreement.
"Successor Servicer": The Person appointed, or required to act as,
Successor Servicer pursuant to Section 3.07 hereof.
"Target Overcollateralization Level": As of any Payment Date, 6.00%
of the sum of (a) Aggregate Principal Balance of the Initial Accounts as of the
Cut-Off Date, (b) the Aggregate Principal Balance of any Additional Accounts
purchased on the Closing Date and (c) the amount on deposit in the Pre-Funding
Account as of the Closing Date after the purchase of any Additional Accounts.
"Trigger Event": The occurrence of any of the following events:
(a) the Issuer fails to make a payment due hereunder and such
failure continues for two Business Days;
(b) the Servicer fails to make a required payment or deposit due
under the Servicing Agreement and such failure continues for four Business Days;
(c) An Event of Default (as defined in the Servicing Agreement)
occurs under Section 5.01(a)(iii), (iv), (v) or (vi) of the Servicing Agreement;
(d) a breach of any covenant of the Servicer in the Servicing
Agreement which may have a materially adverse effect on the Servicer or its
performance under the Servicing Agreement is not cured within 60 days after the
Servicer becomes aware thereof or after notice thereof from any Person;
(e) any representation or warranty by Mid-State Homes, Inc. in the
Purchase and Sale Agreement, or any representation or warranty by the Issuer
herein, is incorrect and such breach may have a materially adverse effect on the
Issuer or the Noteholders and is not cured, or the related Account is not
substituted for or repurchased by Mid-State Homes, Inc. and in either case
released from the lien of this Indenture, within 90 days after notice thereof
from the Indenture Trustee;
(f) there shall occur 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;
(g) there shall occur 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;
(h) the Purchase and Sale Agreement, the Servicing Agreement or this
Indenture ceases to be in full force and effect;
(i) the lien of this Indenture ceases to be effective or ceases to
be of a first priority; or
(j) the occurrence of a Servicer Termination Delinquency Rate
Trigger or a Servicer Termination Loss Trigger.
"Trust": The trust established by the Trust Agreement.
"Trust Agreement": The trust agreement dated June 24, 2003, and as
restated, supplemented or otherwise modified from time to time, between the Bank
and the Grantor.
"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
Holders of the Notes as of any particular time (including all property and
interests Granted to the Indenture Trustee in the Granting Clauses of this
Indenture), including all proceeds thereof, and all right, title and interest of
the Indenture Trustee in, to and under the Servicing Agreement and all money and
property received by the Indenture Trustee pursuant thereto in respect of the
Accounts.
"Trust Indenture Act" or "TIA": The Trust Indenture Act of 1939, as
amended, as in force at the Closing Date, unless otherwise specifically
provided.
"Trust Mortgage": Any mortgage, deed of trust or similar security
instrument from the Issuer to the Indenture Trustee encumbering a Mortgaged
Property owned by the Issuer whether as part of an Account transferred on the
Closing Date or pursuant to a foreclosure or repossession of Mortgaged Property.
"Voting Rights": With respect to a Class of Notes, a fraction,
expressed as a percentage, the numerator of which is equal to the Outstanding
Principal Amount of such Class of Notes and the denominator of which is equal to
the Aggregate Outstanding Principal Amount of all Classes of Notes. Each Holder
of a Note will have Voting Rights equal to the product of the Voting Rights to
which the related Class is entitled and the percentage interest in such Class
represented by such Holder's Notes based on Outstanding Principal Amount.
ARTICLE II
THE NOTES
SECTION 2.01 Forms Generally.
The Notes and the Indenture Trustee's certificate of authentication
shall be in substantially the forms set forth in this Article, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture, and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon as
may be required to comply with the rules of any securities exchange on which the
Notes may be listed, or as may, consistently herewith, be determined by the
officers executing such Notes, as evidenced by their execution thereof. Any
portion of the text of any Note may be set forth on the reverse thereof with an
appropriate reference on the face of the Notes.
The definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods or may be produced in
any other manner permitted by the rules of any securities exchange on which the
Notes may be listed, all as determined by the officers executing such Notes, as
evidenced by their execution thereof.
SECTION 2.02 Forms of Notes and Certificate of Authentication.
The form of the Class A Notes, the Class M-1 Notes, the Class M-2
Notes and the Class B Notes shall be as set forth respectively as Exhibits A, B,
C and D hereto.
SECTION 2.03 Notes; General Provisions with Respect to
Principal and Interest Payments.
The aggregate principal amount of Notes that may be authenticated
and delivered under the Indenture is limited to $314,340,000.00, except for
Notes authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Notes pursuant to Sections 2.06, 2.07, 2.08
or 9.06 of this Indenture. The Notes shall be divided into four Classes having
the designations, Initial Principal Amounts, Note Interest Rates and Indenture
Maturity Dates as follows:
--------------------------------------------------------------------------------
Designation Initial Principal Note Interest Indenture Maturity
Amount Rate Date
--------------------------------------------------------------------------------
Class A Notes $200,780,000.00 4.864% July 15, 2038
--------------------------------------------------------------------------------
Class M-1 Notes $51,840,000.00 5.598% July 15, 2038
--------------------------------------------------------------------------------
Class M-2 Notes $26,330,000.00 6.573% July 15, 2038
--------------------------------------------------------------------------------
Class B Notes $35,390,000.00 8.221% July 15, 2038
--------------------------------------------------------------------------------
The principal of each Note shall be payable in instalments ending no
later than the Indenture Maturity Date unless the unpaid principal of such Note
becomes due and payable at an earlier date by declaration of acceleration or
call for redemption or otherwise.
Interest on the Notes of each Class shall be payable on each Payment
Date in the amount of the sum of (i) the Interest Accrual Amount for such Class
of Notes and (ii) all Class Interest Shortfalls for such Class of Notes that
have not previously been paid, together with accrued interest on such Class
Interest Shortfalls at the related Note Interest Rate to the extent permitted by
law. All payments made with respect to any Note shall be applied as set forth in
Section 8.02(b) or 5.08, as applicable. All computations of interest accrued on
any Note shall be made as if each year consisted of twelve months of thirty days
each.
All payments of principal of and interest on any Note shall be made
in the manner specified in Section 2.09 and in the amounts prescribed in Section
5.08 or 8.02(b), as the case may be.
Notwithstanding any of the foregoing provisions with respect to
payments of principal of and interest on the Notes, if the Notes 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 and the provisions of Section 5.05(a) are not applicable, then payments
of principal of and interest on the Notes shall be made in accordance with
Section 5.08.
All Notes of the same Class shall be identical in all respects
except for the denominations, Note numbers and dates thereof. All Notes of the
same Class issued under this Indenture shall be in all respects equally and
ratably entitled to the benefits hereof without preference, priority or
distinction on account of the actual time or times of authentication and
delivery, all in accordance with the terms and provisions of this Indenture.
SECTION 2.04 Denominations.
The Notes shall be issuable only as registered Notes in minimum
denominations of $1,000 and in integral multiples thereof.
SECTION 2.05 Execution, Authentication, Delivery and Dating.
The Notes shall be executed on behalf of the Issuer by its
Authorized Officer. The signature of any of these officers on the Notes may be
manual or facsimile.
Notes bearing the manual or facsimile signature of individuals who
were at any time Authorized Officers shall bind the Issuer, notwithstanding that
such individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Notes or did not hold such offices at the
date of such Notes.
The Notes which are authenticated and delivered by the Indenture
Trustee to or upon the order of the Issuer on the Closing Date shall be dated
the Closing Date. All other Notes which are authenticated after the Closing Date
for any other purpose hereunder shall be dated the date of their authentication.
The Notes may be authenticated by the Indenture Trustee either at
the Corporate Trust Office or at the Indenture Trustee's office or agency in the
Borough of Manhattan, City and State of New York.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for in the
related exhibit hereto executed by the Indenture Trustee or by any
Authenticating Agent by the manual signature of one of its authorized officers,
employees or signatories, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder.
SECTION 2.06 Temporary Notes.
Pending the preparation of definitive Notes, the Issuer may execute,
and upon Issuer Order the Indenture Trustee shall authenticate and deliver,
temporary Notes which are printed, lithographed, type-written, mimeographed or
otherwise produced, in any authorized denomination, substantially of the tenor
of the definitive Notes in lieu of which they may be so issued and with such
variations as the officers executing such Notes may determine, as evidenced by
their execution of such Notes.
If temporary Notes are issued, the Issuer will cause definitive
Notes to be prepared without unreasonable delay. After the preparation of
definitive Notes, the temporary Notes shall be exchangeable for definitive Notes
upon surrender of the temporary Notes at the office or agency of the Issuer to
be maintained as provided in Section 3.02, without charge to the Holder. Upon
surrender or cancellation of any one or more temporary Notes, the Issuer shall
execute and the Indenture Trustee shall authenticate and deliver and exchange
therefor a like principal amount of definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as definitive Notes.
SECTION 2.07 Registration, Registration of Transfer and
Exchange.
The Issuer shall cause to be kept a register (the "Note Register")
in which, subject to such reasonable regulations as it may prescribe, the Issuer
shall provide for the registration of Notes and the registration of transfers of
Notes. The Indenture Trustee is hereby initially appointed "Note Registrar" for
the purpose of registering Notes and transfers of Notes as herein provided. Upon
any resignation of any Note Registrar appointed by the Issuer, the Issuer shall
promptly appoint a successor or, in the absence of such appointment, shall
assume the duties of Note Registrar.
At any time at which the Indenture Trustee is not also the Note
Registrar, the Indenture Trustee shall be a co-Note Registrar. The Indenture
Trustee, if it shall ever be serving as co-Note Registrar, shall furnish the
Note Registrar promptly after each authentication of a Note by the Indenture
Trustee appropriate information with respect thereto for entry by the Note
Registrar into the Note Register. If the Indenture Trustee shall at any time not
be authorized to keep and maintain the Note Register, the Indenture Trustee
shall have the right to inspect such Note Register at all reasonable times and
to rely conclusively upon a certificate of the Person in charge of the Note
Register as to the names and addresses of the holders of the Notes and the
principal amounts and numbers of such Notes so held.
Upon surrender for registration of transfer of any Note at the
office or agency of the Issuer to be maintained as provided in Section 3.02, the
Issuer shall execute, and the Indenture Trustee shall authenticate and deliver,
in the name of the designated transferee or transferees, one or more new Notes
of any authorized denominations, and of the same Class and a like aggregate
principal amount.
At the option of the Holder, Notes may be exchanged for other Notes
of the same Class of any authorized denominations and of a like aggregate
initial principal amount, upon surrender of the Notes to be exchanged at such
office or agency. Whenever any Notes are so surrendered for exchange, the Issuer
shall execute, and the Indenture Trustee shall authenticate and deliver, the
Notes which the Noteholder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note 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 Indenture Trustee duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Issuer 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 Notes, other than exchanges pursuant
to Section 2.08 not involving any transfer.
The Notes will initially be represented by certificated Notes
registered in the name of Cede & Co., as nominee of the Depository Trust Company
("DTC"). No person acquiring a beneficial interest in a Note will be entitled to
receive a certificated Note, except as described in the next paragraph of this
Section 2.07.
The Notes will be issued to and registered in the Note Register in
the name of a person acquiring a beneficial interest in such Notes only if the
Indenture Trustee receives a written notice from the Issuer that (i) DTC is no
longer willing or able to discharge properly its responsibilities as depository
with respect to the Notes and the Issuer is unable to locate a qualified
successor, (ii) the Issuer, at its option, elects to terminate the book-entry
system through DTC or (iii) after the occurrence of an Event of Default, the
holders of a majority of the aggregate Voting Rights of all Classes voting
together as a single Class advise DTC in writing that the continuation of a
book-entry system through DTC (or a successor thereto) to the exclusion of any
physical notes being issued to Noteholders is no longer in the best interest of
the Noteholders. Upon the occurrence of either event described in clauses (i)
and (ii) above, the Indenture Trustee shall notify DTC of the occurrence of
either such event. Upon surrender by DTC of the certificated Notes and
satisfaction of the conditions set forth in this Section 2.07 of the Indenture
for the registration of transfer and receipt by the Indenture Trustee of a list
of the names and addresses of the beneficial owners of the Notes in whose name
the Notes are to be registered, new Notes shall be delivered pursuant to this
Section 2.07.
Each purchaser of a beneficial interest in a Note will be deemed to
represent either that (i) it is not, and is not purchasing its interest in a
Note on behalf of, or with the assets of, a retirement plan or other employee
benefit plan or arrangement subject to Title I of ERISA, Section 4975 of the
Code or any materially similar provisions of applicable federal, state or local
law ("Similar Law") or (ii) its purchase of its interest in a Note will not
result in a non-exempt prohibited transaction under ERISA or the Code or a
similar violation of Similar Law.
SECTION 2.08 Mutilated, Destroyed, Lost or Stolen Notes.
If (1) any mutilated Note is surrendered to the Indenture Trustee or
the Indenture Trustee receives evidence to its satisfaction of the destruction,
loss or theft of any Note, and (2) there is delivered to the Indenture Trustee
such security or indemnity as may be required by the Indenture Trustee to save
each of the Indenture Trustee and the Issuer harmless, then, in the absence of
notice to the Issuer or the Indenture Trustee that such Note has been acquired
by a protected purchaser, the Issuer shall execute and upon its direction the
Indenture Trustee shall authenticate and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Note, a new Note or Notes of the
same Class, tenor and aggregate initial principal amount bearing a number not
contemporaneously outstanding; provided, however, that if any such mutilated,
destroyed, lost or stolen Note 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 Note, the Issuer may pay such Note without surrender thereof,
except that any mutilated Note shall be surrendered. If, after the delivery of
such new Note or payment of a destroyed, lost or stolen Note pursuant to the
proviso to the preceding sentence, a protected purchaser of the original Note in
lieu of which such new Note was issued presents for payment such original Note,
the Issuer and the Indenture Trustee shall be entitled to recover such new Note
(or such payment) from the Person to whom it was delivered or any Person taking
such new Note from such Person, except a protected purchaser, and shall be
entitled to recover upon the security or indemnity provided therefor to the
extent of any loss, damage, cost or expense incurred by the Issuer or the
Indenture Trustee in connection therewith.
Upon the issuance of any new Note under this Section, the Issuer 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) connected therewith.
Except to the extent provided in the first paragraph of this Section
2.08, every new Note issued pursuant to this Section in lieu of any destroyed,
lost or stolen Note shall constitute an original additional contractual
obligation of the Issuer, whether or not the destroyed, lost or stolen Note
shall be at any time enforceable by anyone, and shall be entitled to all the
benefits of this Indenture equally and proportionately, to the extent provided
herein, with any and all other Notes 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 Notes.
SECTION 2.09 Payments of Principal and Interest.
(a) Any instalment of interest or principal payable on any Note
which is punctually paid or duly provided for by the Issuer on the applicable
Payment Date shall be paid to the Person in whose name such Note (or one or more
Predecessor Notes) is registered at the close of business on the Record Date for
such Payment Date by check mailed to such Person's address as it appears in the
Note Register on such Record Date, except that with respect to a Note registered
in the name of the nominee of a 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 in writing at least two Business
Days prior to such Payment Date and except for the final instalment of principal
payable with respect to such Note (or the Redemption Price for any Note called
for redemption), which shall be payable as provided in subsection (b) of this
Section 2.09.
(b) All reductions in the principal amount of a Note (or one or more
Predecessor Notes) effected by means of an allocation of the Realized Loss
Amount or by payments of instalments of principal made on any Payment Date shall
be binding upon all Holders of such Note and of any Note issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof,
whether or not such payment is noted on such Note. The final instalment of
principal of each Note (including the Redemption Price of any Note called for
redemption pursuant to Section 10.01) shall be payable only upon presentation
and surrender thereof on or after the Payment Date or Redemption Date therefor
at the Corporate Trust Office or at the office or agency of the Issuer
maintained by it for such purpose set forth in Section 3.02.
Whenever, on the basis of Remittances on the Accounts received and
expected to be received during the related Collection Periods or on the related
Payment Date, as applicable, the Issuer expects that the entire remaining unpaid
principal amount of the Notes will become due and payable on the next Payment
Date, it shall, no later than five days prior to such Payment Date, mail or
cause to be mailed to each Person in whose name a Note to be so retired is
registered at the close of business on the Record Date that would otherwise be
applicable to such Payment Date a notice to the effect that:
(i) the Issuer expects that funds sufficient to pay such final
instalment will be available in the Collection Account on such Payment
Date, and
(ii) if such funds are available, (A) such final instalment will be
payable on such Payment Date, but only upon presentation and surrender of
such Note at the Corporate Trust Office or at the office or agency of the
Issuer maintained for such purpose pursuant to Section 3.02 (the addresses
of which shall be set forth in such notice), and (B) no interest shall
accrue on such Note after such Payment Date.
Notices in connection with redemptions of Notes shall contain the
information set forth in, and be mailed in accordance with, Section 10.02.
(c) Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to unpaid principal and
interest that were carried by such other Note. Any checks mailed pursuant to
subsection (a) or (b) of this Section 2.09 and returned undelivered shall be
held in accordance with Section 3.03.
(d) Not later than each Debt Service Requirement Determination Date,
the Indenture Trustee shall prepare and deliver to the Issuer a statement with
respect to the following Payment Date (a "Payment Date Statement") setting
forth:
(i) the amount of Issuer Expenses paid or due to be paid in respect
of the related Collection Period;
(ii) the amount of the Available Funds for such Payment Date;
(iii) the amount of interest then due and payable on the Notes then
Outstanding (stated separately as to each Class);
(iv) the Optimal Principal Amount for each Class for such Payment
Date;
(v) whether the Available Funds for such Payment Date will be
sufficient to pay on such Payment Date all amounts specified in clause
(iii) and, if not, the percentages of such amount which may be paid in
accordance with the priorities set forth in Section 8.02(b) from the
amounts expected to be available in the Collection Account;
(vi) the Class Interest Shortfall (stated separately as to each
Class);
(vii) the amounts included in such statement pursuant to clauses
(iii) and (iv), expressed in each case per Individual Note, to be paid on
such Payment Date;
(viii) the amount, if any, to be released to the Issuer pursuant to
clause twenty-second of Section 8.02(b);
(ix) the total Realized Loss Amount for such Payment Date and the
amount allocated to each Class of Notes;
(x) the unpaid principal amount of each Class of Notes which will
remain after giving effect to the payments to be made on such Payment Date
expressed both on an aggregate basis and per Individual Note;
(xi) the Cumulative Actual Net Losses as of the end of the related
Collection Period;
(xii) the Principal Balance as of the end of the related Collection
Period of Accounts with respect to which there is a material breach of any
representation or warranty made in Section 3.11 or as to which there is a
material defect in the related Account Documents in accordance with
Section 3.12(b);
(xiii) the Overcollateralization Amount;
(xiv) the cumulative unreimbursed Realized Loss Amounts and the
amount of interest accrued thereon;
(xv) the Aggregate Principal Balance of the Accounts at immediately
following the end of the related Collection Period;
(xvi) the number and Aggregate Principal Balance of all Accounts 30,
60 and 90 or more days past due and in repossession, foreclosure or
bankruptcy;
(xvii) the amount on deposit in the Capitalized Interest Account, if
any;
(xviii) the amount of any Capitalized Interest Shortfall, if any;
(xix) the amount on deposit in the Interest Reserve Account;
(xx) the amount on deposit in the Pre-Funding Account, if any; and
(xxi) the Pre-Funding Earnings at the end of the related Collection
Period.
Each Payment Date Statement shall be delivered by the Indenture
Trustee to the Issuer, each designee of the Issuer specified in writing to the
Indenture Trustee, Banc of America Securities LLC, S&P, Xxxxx'x and, upon
request, to the firm of Independent Accountants appointed by the Issuer pursuant
to Section 8.07(a) and/or the beneficial owners of the Notes.
SECTION 2.10 Persons Deemed Owners.
Prior to due presentment for registration of transfer of any Note,
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 Note is
registered as the absolute owner of such Note for all purposes whatsoever,
whether or not such Note is overdue, and neither 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 2.11 Cancellation.
All Notes surrendered for payment, registration of transfer,
exchange or redemption shall, if surrendered to any Person other than the
Indenture Trustee, be delivered to the Indenture Trustee, and such Notes,
together with all such Notes so surrendered directly to the Indenture Trustee,
shall be promptly canceled by it. The Issuer may at any time deliver to the
Indenture Trustee for cancellation any Note previously authenticated and
delivered hereunder which the Issuer may have acquired in any manner whatsoever,
and all Notes so delivered shall be promptly canceled by the Indenture Trustee.
No Notes shall be authenticated in lieu of or in exchange for any Notes canceled
as provided in this Section, except as expressly permitted by this Indenture.
All canceled Notes held by the Indenture Trustee shall be held by the Indenture
Trustee in accordance with its standard retention policy, unless the Issuer
shall direct by an Issuer Order that they be destroyed or returned to it.
SECTION 2.12 Authentication and Delivery of Notes.
The Notes may be executed by the Issuer and delivered to the
Indenture Trustee for authentication, and thereupon the same shall be
authenticated and delivered by the Indenture Trustee, upon Issuer Request and
upon receipt by the Indenture Trustee of the following items required to be
delivered to the Indenture Trustee in connection with the initial authentication
and delivery of the Notes on the Closing Date:
(a) an Issuer Order authorizing the authentication and delivery of
the Notes;
(b) an Officer's Certificate of the Issuer, complying with the
requirements of Section 11.01, stating that:
(i) the Issuer is not in Default under this Indenture and the
issuance of the Notes will not result in any breach of any of the terms,
conditions or provisions of, or constitute a default under, the Trust
Agreement or any other constituent documents of the Issuer, 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 all conditions precedent provided in this Indenture relating
to the authentication and delivery of the Notes have been complied with;
(ii) the Issuer is the owner of and has good title to each Account,
has not assigned any interest or participation in any such Account (or, if
any such interest or participation has been assigned, it has been
released) and has the right to Grant each such Account to the Indenture
Trustee, and no other Person has any lien on, security interest in or
other rights to any such Account;
(iii) the Issuer has Granted to the Indenture Trustee all of its
right, title, and interest in each Account Granted to the Indenture
Trustee by it to secure the Notes;
(iv) the information set forth in the Schedule of Accounts to this
Indenture is correct;
(v) attached thereto are true and correct copies of letters signed
by the Rating Agencies confirming that the Class A Notes have been rated
"AAA" by S&P and "Aaa" by Xxxxx'x, the Class M-1 Notes have been rated
"AA" by S&P and "Aa2" by Xxxxx'x, the Class M-2 Notes have been rated "A"
by S&P and "A2" by Xxxxx'x and the Class B Notes have been rated "BBB" by
S&P and "Baa2" by Xxxxx'x; and
(vi) each of the Accounts satisfies the requirements of subsection
(c) below;
(c) all of the Accounts and all Account Documents (except that (A)
in lieu of delivering the Account Documents for any Account which has been the
subject of a Full Prepayment received by the Servicer after the Cut-Off Date but
no later than five Business Days prior to the Closing Date, the Issuer may
deliver, or cause to be delivered, as indicated in the Officer's Certificate
from the Servicer delivered pursuant to subsection (e) of this Section 2.12, the
cash proceeds of such Full Prepayment, (B) in lieu of delivering the Account
Documents for any Account with respect to which foreclosure proceedings have
been commenced and such Account Documents are required in connection with the
prosecution of such proceedings, the Issuer may deliver a trust receipt pursuant
to Section 3.13(c) of this Indenture and (C) the Indenture Trustee's review of
such Account Documents pursuant to Section 3.12 need not be completed until 90
days following the Closing Date), which Accounts:
(i) shall have an Aggregate Principal Balance at least equal to
$309,137,793.93 as of the Cut-Off Date, and
(ii) shall satisfy each of the representations and warranties with
respect to such Accounts set forth in Section 3.11 of this Indenture;
(d) an executed counterpart of the Servicing Agreement and an
executed counterpart of the Standby Servicing Agreement;
(e) an Officer's Certificate from the Servicer, dated as of the
Closing Date, certifying that all Monthly Payments (net of the Servicing Fee) on
the Initial Accounts due after the Cut-Off Date and received more than five
Business Days prior to the Closing Date plus the proceeds of each Full
Prepayment of any such Initial Account (including any related payment of
interest) received by the Servicer after the Cut-Off Date but more than five
Business Days prior to the Closing Date have been remitted to the Indenture
Trustee for deposit in the Collection Account in accordance with Section 2.08 of
the Servicing Agreement, setting forth (i) the amount which represents a Full
Prepayment received by the Servicer after the Cut-Off Date but more than five
Business Days prior to the Closing Date and (ii) the aggregate amount so
remitted;
(f) a letter, addressed to the Indenture Trustee, of a firm of
Independent Accountants of recognized national reputation to the effect that:
(1) they have performed the following procedures (which need
not constitute an examination in accordance with generally accepted
auditing standards), including randomly selecting a sample of the
Initial Accounts, and comparing the Account number, the total number
of Monthly Payments to be made under the Account during its term,
the total finance charge over the term of the related Account Note,
Monthly Payment, amount financed and the original principal balance
set forth in the related Account Documents to the corresponding item
in the Schedule of Accounts; and
(2) based upon the above-specified procedures, such firm has
determined that they are 95% confident that the particular
attributes of the Accounts tested by them as described in paragraph
(1)(A) above will not vary from the corresponding information set
forth on the Schedule of Accounts attached hereto for more than 3%
of all of the Accounts.
(g) cash in the amount equal to the amount, if any, required to be
remitted to the Indenture Trustee pursuant to Section 2.08 of the Servicing
Agreement (as indicated by the Officer's Certificate from the Servicer delivered
pursuant to subsection (e) of this Section 2.12) and deposited in the Collection
Account and held by the Indenture Trustee and applied in accordance with Section
8.02;
(h) an executed copy of the Purchase and Sale Agreement;
(i) an executed copy of the Trust Agreement;
(j) an executed copy of the Holding Account Agreement;
(k) a copy of the fidelity bond required pursuant to Section 4.05 of
the Servicing Agreement; and
(l) an Opinion of Counsel in the form required by the underwriting
agreement among Mid-State Homes, Inc., Banc of America Securities LLC and Xxxxxx
Brothers Inc.
SECTION 2.13 Tax Treatment.
The Issuer has entered into this Indenture, and the Notes will be
issued, with the intention that, for all purposes including federal, state and
local tax purposes, the Notes will qualify as indebtedness secured by the Trust
Estate. The Issuer, by entering into this Indenture, and each purchaser of a
beneficial interest in a Note, agree to treat the Notes for all purposes
including federal, state and local tax purposes as indebtedness of the Issuer.
ARTICLE III
COVENANTS; REPRESENTATIONS AND WARRANTIES
SECTION 3.01 Payment of Notes.
The Issuer will pay or cause to be duly and punctually paid the
principal of and interest on the Notes in accordance with the terms of the Notes
and this Indenture.
SECTION 3.02 Maintenance of Office or Agency.
The Issuer will maintain in the Borough of Manhattan, the City of
New York, the State of New York and in the city where the Corporate Trust Office
is located an office or agency where Notes may be presented or surrendered for
payment or may be surrendered for registration of transfer or exchange, and
where notices and demands to or upon the Issuer in respect of the Notes and this
Indenture may be served. The Issuer will give prompt written notice to the
Indenture Trustee of the location and any change in the location of such office
or agency. Until written notice of any change in the location of such office or
agency is delivered to the Indenture Trustee or if at any time the Issuer shall
fail to maintain any such required office or agency or shall fail to furnish the
Indenture Trustee with the address thereof, Notes may be so presented or
surrendered, and such notices and demands may be made or served, at the office
of Wachovia Bank, National Association, 00 Xxxxx Xxxxxx, 0xx Xxxxx - Xxxxx 000,
Xxx Xxxx, New York 10004, and at the Corporate Trust Office.
The Issuer may also from time to time designate one or more other
offices or agencies (in or outside the City of New York or the city where the
Corporate Trust Office is located) where the Notes may be presented or
surrendered for any or all such purposes and where notices and demands may be
served 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 City of New
York, for the purposes set forth in the preceding paragraph and (ii) any
designation of an office or agency for payment of Notes 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 Note Payments to Be Held in Trust.
All payments of amounts due and payable with respect to any Notes
which are to be made from amounts withdrawn from the Collection Account pursuant
to Section 8.02(b) or Section 5.08 shall be made on behalf of the Issuer by the
Indenture Trustee or by another Paying Agent, and no amounts so withdrawn from
the Collection Account for payments of Notes shall be paid over to the Issuer
under any circumstances except as provided in this Section 3.03 or in Section
5.08 or 8.02.
If the Issuer shall have a Paying Agent that is not also the Note
Registrar, it shall furnish, or cause the Note Registrar to furnish no later
than the third Business 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 Notes and of the number of Individual Notes 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 all amounts then becoming due (to the extent
funds are then available for such purpose in the Collection 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 Notes 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 the Indenture Trustee is hereby appointed, and the
Indenture Trustee hereby accepts such appointment, as initial Paying Agent. The
Issuer shall not appoint any Paying Agent which is not, at the time of such
appointment, a depository institution or trust company. 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
Notes on each Payment Date among such Holders in the proportion
specified in the Payment Date Statement, to the extent permitted by
applicable law;
(2) hold all sums held by it for the payment of amounts due
with respect to the Notes 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
Notes 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 Notes) in the making of any payment required
to be made with respect to any Notes;
(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
(6) comply with all requirements of the Code and all
regulations thereunder, with respect to the withholding from any
payments made by it on any Notes 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 the Notes, the Issuer has
provided the calculations pertaining thereto to the Indenture
Trustee.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Paying Agent, if other than the 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 Note and remaining
unclaimed for two years after such amount has become due and payable to the
Holder of such Note shall be discharged from such trust and paid to the Issuer;
and the Holder of such Note 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 cease upon such
payment. 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 Notes 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.
The Issuer will keep in full effect its existence, rights and
franchises as a statutory trust under the laws of the State of Delaware (unless
it becomes, or any successor Issuer hereunder is or becomes, organized under the
laws of any other State or of the United States of America, in which case the
Issuer will keep in full effect its existence, rights and franchises under the
laws of such other jurisdiction) 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
Notes, the Trust Estate and each instrument or agreement included in the Trust
Estate.
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
(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 Account Documents,
(v) preserve and defend title to the Trust Estate and the rights of
the Indenture Trustee and of the Noteholders in the Account Documents and
the other property held as part of the Trust Estate against the claims of
all persons and parties, or
(vi) pay all taxes or assessments levied or assessed upon the Trust
Estate when due.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to file any financing statement or continuation statement and
execute and/or file any other instrument required pursuant to this Section 3.05;
provided, however, that such designation shall not be deemed to create a duty in
the Indenture Trustee to monitor the compliance of the Issuer with the foregoing
covenants and provided, further, that the duty of the Indenture Trustee to
execute any instrument required pursuant to this Section 3.05 shall arise only
if the Indenture Trustee has knowledge of any failure of the Issuer to comply
with provisions of this Section 3.05. The Issuer shall execute a power of
attorney coupled with an interest which shall be irrevocable, and the Issuer
hereby ratifies and confirms all that the Indenture Trustee may do by virtue
thereof.
(b) Except as otherwise provided herein and in the Servicing
Agreement, 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 Independent Counsel delivered pursuant to Section 3.06 (or
from the jurisdiction in which it was held as described in the Opinion of
Counsel delivered at the Closing Date pursuant to Section 2.12(l), if no Opinion
of Independent Counsel has yet been delivered pursuant to Section 3.06) unless
the Indenture Trustee shall have first received an Opinion of Independent
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 May 15 in each calendar year, beginning in 2004, the
Issuer shall furnish to the Indenture Trustee an Opinion of Independent Counsel
either stating that, in the opinion of such counsel, such action has been taken
as is necessary to perfect and to maintain the lien and security interest
created by this Indenture with respect to the Trust Estate and reciting the
details of such action or stating that in the opinion of such counsel no such
action is necessary to maintain such lien and security interest. Such Opinion of
Counsel shall also address any other matter reasonably requested by the
Indenture Trustee with respect to the Trust Estate and 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 15 in the following calendar year. The Issuer shall be
required to take whatever action set forth in the Opinion of Independent Counsel
to perfect or maintain the lien and security interest in the Trust Estate
created by this Indenture.
SECTION 3.07 Performance of Obligations; Servicing Agreement.
(a) The Issuer will punctually perform and observe all of its
obligations and agreements contained in the Servicing Agreement.
(b) The Issuer will not take any action or permit any action to be
taken by others which would release any Person from any of such Person's
covenants or obligations under any of the Account Documents or under any
instrument included in the Trust Estate, or which would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any of the Account Documents, or any such
instrument, except for such actions that are expressly provided for in the
Servicing Agreement.
(c) If the Issuer shall have knowledge of the occurrence a Servicing
Default, the Issuer shall promptly notify the Indenture Trustee thereof, and
shall specify in such notice the action, if any, the Issuer is taking in respect
of such Servicing Default. If any Servicing Default arises from the failure of
the Servicer to perform any of its duties or obligations under the Servicing
Agreement with respect to the Accounts, the Issuer may remedy such failure,
provided that if any Servicing Default arises from the failure by the Servicer
to comply with requirements imposed upon it under Section 2.12 of the Servicing
Agreement regarding advances for taxes, assessments and other charges against
the Mortgaged Property or under Section 2.13 of the Servicing Agreement with
respect to hazard insurance for the Mortgaged Properties, the Issuer shall
promptly pay such taxes, assessments or other charges or such premiums or obtain
substitute insurance coverage meeting the requirements of said Section 2.13. So
long as any Servicing Default shall be continuing, the Indenture Trustee may,
and upon the direction of the Holders of Notes entitled to more than 50% of the
aggregate Voting Rights of all Classes voting together as a single class shall,
terminate all of the rights and powers of the Servicer under the Servicing
Agreement pursuant to Section 5.01 of the Servicing Agreement or take any other
action with respect to such Servicing Default as is permitted under said Section
5.01. Unless granted or permitted by the Holders of Notes to the extent provided
above, the Issuer may not waive any such Servicing Default or terminate the
rights and powers of the Servicer under the Servicing Agreement.
(d) Upon any termination of the Servicer's rights and powers
pursuant to Section 5.01 of the Servicing Agreement, the Indenture Trustee shall
appoint, or shall petition a court of competent jurisdiction to appoint, a
successor servicer or upon the occurrence of a Trigger Event, the Indenture
Trustee may appoint such successor servicer (the "Successor Servicer"). Upon the
termination of the Servicer's rights and powers pursuant to Section 5.01 of the
Servicing Agreement, pending the appointment of a Successor Servicer, Xxxxxx
Loan Servicing LP, a Delaware limited partnership, shall be the Successor
Servicer (subject to and in accordance with the Standby Servicing Agreement).
Upon any termination of the Servicer's rights and powers pursuant to Section
5.01 of the Servicing Agreement or upon the occurrence of a Trigger Event, all
rights, powers, duties and responsibilities of the Servicer with respect to the
Accounts shall vest in and be assumed by the Successor Servicer, and the
Successor Servicer shall be the successor in all respects to the Servicer in its
capacity as servicer with respect to the Accounts under the Servicing Agreement.
If the Indenture Trustee has appointed a Successor Servicer upon the occurrence
of a Trigger Event, no such termination of the Servicer's rights and powers
shall be effective until a Successor Servicer has assumed all the rights,
powers, duties and responsibilities of the Servicer with respect to the
Accounts. Upon any such termination, the Successor Servicer, or if the Indenture
Trustee so elects upon a Trigger Event, the Indenture Trustee, is hereby
authorized to mail a notice to each Obligor directing each such Obligor to mail
all Monthly Payments to the Successor Servicer or its agent at the address
specified in such notice. 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, and the Issuer shall enter into an agreement
with such successor for the servicing of the Accounts, such agreement to be
substantially similar to the Servicing Agreement or otherwise acceptable to the
Indenture Trustee.
(e) The Issuer may enter into contracts with other Persons for the
performance of the Issuer's obligations hereunder, and performance of such
obligations by such Persons shall be deemed to be performance of such
obligations by the Issuer.
SECTION 3.08 Negative Covenants.
The Issuer will not:
(i) sell, transfer, exchange or otherwise dispose of any portion of
the Trust Estate except as expressly permitted by this Indenture;
(ii) obtain or carry insurance relating to the Accounts separate
from that required by the Servicing Agreement, unless the Indenture
Trustee shall have the same rights with respect thereto as it has with
respect to the insurance required by the Servicing Agreement;
(iii) claim any credit on, or make any deduction from, the principal
of, or interest on, any of the Notes by reason of the payment of any taxes
levied or assessed upon any portion of the Trust Estate;
(iv) engage in any business or activity other than in connection
with, or relating to, the issuance of the Notes or the preservation of the
Trust Estate and the release of assets therefrom pursuant to this
Indenture and the Trust Agreement;
(v) dissolve or liquidate in whole or in part;
(vi) (1) permit the validity or effectiveness of this Indenture to
be impaired, or permit the lien of this Indenture to be 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) 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) except as permitted hereby, permit the lien of
this Indenture not to constitute a valid and perfected first priority
security interest in the Trust Estate;
(vii) cause or permit any Affiliate to petition or otherwise invoke
the process of any court or government authority for the purpose of
commencing or sustaining a case against the Issuer under any Federal or
state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequester or other similar
official of the Issuer or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the Issuer; or
(viii) amend the Trust Agreement without the consent of the
Indenture Trustee.
SECTION 3.09 Annual Statement as to Compliance.
On or before 120 days after the first anniversary of the Closing
Date and each subsequent anniversary date of the Closing Date, the Issuer shall
deliver to the Indenture Trustee a written statement, signed by two Authorized
Officers, stating, as to each signer thereof, that
(1) a review of the fulfillment by the Issuer during such year
of its obligations under this Indenture has been made under such
officer's supervision; and
(2) to the best of such officer's knowledge, based on such
review, the Issuer has fulfilled all its obligations under this
Indenture throughout such year or, if there has been a Default in
the fulfillment of any such obligation, specifying each such Default
known to such officer and the nature and status thereof.
SECTION 3.10 Recording of Assignments.
The Issuer shall use reasonable best efforts to record substantially
all Assignments and Trust Mortgages within 21 days of the Closing Date and in
any event all Assignments and Trust Mortgages shall be duly recorded not later
than 90 days after the date of the Grant of the related Account unless the
recordation of an Assignment or Trust Mortgage is not required by either Rating
Agency in order to obtain the initial ratings on the Notes on the Closing Date.
SECTION 3.11 Representations and Warranties Concerning the
Accounts.
(a) The Issuer represents and warrants to the Indenture Trustee,
with respect to each Account, that as of the Closing Date (and the Issuer shall
be deemed to have made such representations and warranties at the time of the
transfer thereof to the Indenture Trustee with respect to each Additional
Account pledged to the Indenture Trustee during the Pre-Funding Period and each
new Account originated in connection with the sale of property acquired in
respect of an Account):
(i) the information set forth with respect to such Account in the
Schedule of Accounts attached hereto, or to the applicable Additional
Transfer Agreement, as applicable, is true and correct as of the date as
of which such information is given;
(ii) the related building or instalment sale contract, as the case
may be, has been duly executed by the parties thereto and the duties to be
performed thereunder prior to the date the first payment in connection
with such contract is due have been performed;
(iii) the Account Documents have been duly executed by the related
Obligor and the Mortgage has been duly executed by the Obligor and, to the
extent required under local law for recordation or enforcement, properly
acknowledged;
(iv) the Mortgage has been properly recorded as required by law. The
Mortgage constitutes a valid first priority lien upon and secures title to
the real property and improvements thereon described therein, which
include a single family detached dwelling, and such Mortgage and the
Account Note secured thereby are fully enforceable in accordance with
their terms except as enforceability thereof may be limited by bankruptcy,
insolvency, moratorium and other laws affecting creditors' rights
generally and by general principles of equity (whether applied in a
proceeding in law or at equity);
(v) the Issuer is the sole owner of each Account and has good title
to such Account and full right and authority to transfer such Account and
to Grant such Account to the Indenture Trustee and, upon delivery of the
related Account Documents to the Indenture Trustee, the Indenture Trustee
will have a valid and perfected lien or security interest in such Account;
(vi) all costs, fees, intangible, documentary and recording taxes
and expenses incurred in making, closing, and recording each Account and
in connection with the issuance of the Notes have been paid;
(vii) no part of the Mortgaged Property purporting to secure any
Account Note has been, or shall have been, released from the lien or
security title of the Mortgage securing such Account Note except for
Mortgaged Property securing Account Notes which have been prepaid in full
between the Cut-Off Date and the Closing Date, the amount of such
prepayments received more than five days prior to the Closing Date to be
deposited in the Collection Account on or before the Closing Date;
(viii) except to the extent permitted by the Servicing Agreement, no
term or provision of any Account has been or will be altered, changed or
modified in any way by the Servicer or the Issuer without the consent of
the Indenture Trustee;
(ix) the Grantor, Mid-State Trust IX and the Issuer acquired title
to the Accounts in good faith, for value and without notice of any adverse
claim. Except to the extent permitted by the Servicing Agreement, no term
or provision of any Account has been or will be altered, changed or
modified in any way by the Grantor, Mid-State Trust IX or the Issuer;
(x) the Account Notes evidence accounts bearing a fixed finance
charge rate and fully amortizing level monthly payments. Each Account Note
has an original term to maturity not in excess of 30 years;
(xi) as of the Closing Date, or as of the related Additional
Transfer Date, as applicable, there is no right of rescission, setoff,
defense or counterclaim to any Account Note or Mortgage, including both
the obligation of the Obligor to pay the unpaid cash price or finance
charge on such Account Note and the defense of usury; furthermore, neither
the operation of any of the terms of the Account Note and the Mortgage nor
the exercise of any right thereunder will render the Account Note or the
Mortgage unenforceable, in whole or in part, or subject such Account Note
or Mortgage to any right of rescission, setoff, counterclaim or defense,
including the defense of usury, and no such right of rescission, setoff,
counterclaim or defense has been asserted with respect thereto;
(xii) there are no mechanics' liens or claims for work, labor or
material (and to the best of the Issuer's knowledge, no rights or claims
are outstanding that under law could give rise to such lien) affecting any
Mortgaged Property which are or may be a lien prior to, or equal with, the
lien of such Mortgage;
(xiii) any and all requirements of any federal, state or local law
with respect to the origination and servicing of the Accounts including,
without limitation, usury, truth in lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity,
predatory and abusive lending laws or disclosure laws applicable to the
Accounts have been complied with, and consummation of the transactions
contemplated by the Purchase and Sale Agreement and hereby will not
violate any such laws;
(xiv) no Account is a "high cost" Account as defined under any
federal, state or local laws applicable to such Account at the time of its
origination and no Account originated in the State of Georgia is subject
to the Georgia Fair Lending Act as in effect from October 1, 2002 through
March 6, 2003;
(xv) with respect to each Mortgage constituting a deed of trust, a
trustee, duly qualified under applicable law to serve as such, is properly
designated, serving and named in such Mortgage;
(xvi) there has been no fraud, dishonesty, misrepresentation or
negligence on the part of the originator in connection with the
origination of any Account Note or in connection with the sale of the
related Account;
(xvii) to the best knowledge of the Issuer, except Mortgaged
Properties for which Insurance Proceeds are available, each Mortgaged
Property is in good condition and free of damage which materially and
adversely affects the value thereof;
(xviii) to the best knowledge of the Issuer, there is no proceeding
pending for the total or partial condemnation and no eminent domain
proceedings pending affecting any Mortgaged Property;
(xix) each Account obligates the Obligor thereunder to maintain a
hazard insurance policy in an amount at least equal to the unpaid
Principal Balance of the Account at the Obligor's cost and expense;
(xx) no Account contains provisions pursuant to which monthly
payments are (1) paid or partially paid with funds deposited in any
separate account established by the Servicer, the Obligor, or anyone on
behalf of the Obligor, (2) paid by any source other than the Obligor or
(3) contains any other similar provisions which may constitute a "buydown"
provision. No Account is a graduated payment Account and no Account has a
shared appreciation or other contingent interest feature;
(xxi) the Issuer used no selection procedures that identified the
Accounts as being less desirable or valuable than other comparable
accounts acquired by the Issuer;
(xxii) the Accounts comply in all material respects to the
description set forth under the heading "THE ASSETS OF THE TRUST-Total
Accounts Comprising the Mortgage Collateral" in the Issuer's Prospectus
Supplement, dated June 24, 2003;
(xxiii) each Account, at the time of its origination, conformed to
the applicable originator's origination guidelines;
(xxiv)the related Account File contains each of the documents and
instruments specified;
(xxv) each Account is being serviced in accordance with the
Servicer's servicing procedures; and
(xxvi) other than the Accounts identified in the Issuer's Prospectus
Supplement, dated June 24, 2003, as 31-60 days past due, there is no
default, breach, violation or event of acceleration existing under the
Mortgage or Account Note and no event which, with the passage of time or
with notice and the expiration of any grace or cure period, would
constitute a default, breach, violation or event of acceleration.
(b) If any of the representations, warranties or covenants with
respect to any Account set forth in this Section 3.11 are found to be incorrect
as of the time made in any respect which materially and adversely affects the
interest of the Indenture Trustee or the Noteholders in the Account, the Issuer
or the Servicer shall notify the Indenture Trustee immediately after obtaining
knowledge thereof, and the Issuer shall use its best efforts to eliminate or
otherwise cure the circumstances or conditions in respect of which such
representation, warranty or covenant was incorrect as of the time made within 90
days of such notice to the Indenture Trustee. If such breach is not or cannot be
cured within such 90-day period or, with the prior written consent of a
Responsible Officer of the Indenture Trustee, such longer period as specified in
such consent, the Issuer shall either (i) deposit in the Collection Account an
amount equal to 100% of the then current Principal Balance of the affected
Account (a "Defective Account"), at which time the Defective Account shall be
released from the lien of the Indenture or (ii) remove such Account from the
Trust Estate and substitute one or more Qualified Substitute Accounts (in which
case the removed Account shall become a "Deleted Account"). The Issuer shall
promptly reimburse the Servicer and the Indenture Trustee for any reasonable
expenses (including without limitation reasonable attorney's fees) incurred by
the Servicer and the Indenture Trustee, respectively, in respect of any such
breach. In addition to the foregoing, in the case of a breach of the
representation set forth in Section 3.11(a)(xiii) above, the Issuer shall
reimburse the Trust Estate, the Servicer or the Indenture Trustee for all costs
or damages incurred by the Trust Estate, the Servicer or the Indenture Trustee,
as applicable, as a result of the violation of such law (such amount, the
"Reimbursement Amount"). The Reimbursement Amount shall be delivered to the
Indenture Trustee for deposit into the Collection Account within 10 days from
the date the Issuer was notified by the Indenture Trustee of the amount of such
costs and damages.
As to any Deleted Account for which the Issuer substitutes a
Qualified Substitute Account or Qualified Substitute Accounts, the Issuer shall
effect such substitution by delivery to the Indenture Trustee of the Account
Notes for such Qualified Substitute Account or Qualified Substitute Accounts and
such other Account Documents related thereto, with each such Account Note
endorsed to the order of the Issuer, without recourse, and endorsed by the
Issuer in blank or to the order of the Indenture Trustee, without recourse.
Monthly Payments due with respect to Qualified Substitute Accounts in the month
of substitution are not part of the Trust Estate and will be retained by the
Issuer. Available Funds will include the Monthly Payment due on any Deleted
Account in the month of substitution, and the Issuer shall deposit such amount
in the Collection Account if received by it subsequent to the month of
substitution. The Issuer shall be entitled to receive all amounts due subsequent
to the month of substitution in respect of such Deleted Account. The Issuer
shall give or cause to be given written notice to the Indenture Trustee and the
Rating Agencies that such substitution has taken place. Upon such substitution,
such Qualified Substitute Account or Qualified Substitute Accounts shall be
subject to the terms of this Indenture in all respects, and the Issuer shall be
deemed to have made with respect to such Qualified Substitute Account or
Qualified Substitute Accounts, as of the date of substitution, the
representations and warranties set forth in this Section 3.11. The Indenture
Trustee shall at the direction of the Issuer immediately effect the release of
the lien of this Indenture with respect to such Deleted Account, the form of the
instruments effecting such release being specified in such direction.
For any month in which the Issuer substitutes one or more Qualified
Substitute Accounts for one or more Deleted Accounts, the Issuer will determine
the amount (if any) by which the aggregate outstanding Principal Balance of all
such Qualified Substitute Accounts as of the date of substitution is less than
the aggregate outstanding Principal Balance of all such Deleted Accounts. On the
date of such substitution, the Issuer will deposit from its own funds into the
Collection Account an amount equal to the amount of such shortfall, if any,
without reimbursement therefor.
It is understood and agreed that the obligations of the Issuer set
forth in this Section 3.11(b) to cure, substitute for or deposit funds in the
Collection Account in connection with an Account constitute the sole remedies
available to the Indenture Trustee, the Servicer and the Noteholders (or to the
Indenture Trustee on their behalf) respecting a breach of the representations
and warranties set forth in Section 3.11(a).
SECTION 3.12 Indenture Trustee's Review of Account Documents.
(a) The Indenture Trustee agrees, for the benefit of the holders of
the Notes, to review within 90 days after the Closing Date (or other date of
transfer to the Trust of an Account or substitution of a Qualified Substitute
Account), the Account Documents delivered to it on or prior to the Closing Date
(or other date of transfer to the Trust of an Account or substitution of a
Qualified Substitute Account) in connection with the Grant of the Accounts
listed on the Schedule of Accounts as security for the Notes. Such review shall
be limited to a determination that all documents referred to in the definition
of the term Account Documents have been delivered with respect to each such
Account (other than the documents related to (i) any Account so listed which has
been subject to a Full Prepayment, the proceeds of which have been deposited in
the Collection Account in lieu of delivery of the applicable Account Documents
and (ii) any Account with respect to which the related Mortgaged Property was
foreclosed, repossessed or otherwise converted subsequent to the Cut-Off Date
and prior to the Closing Date or with respect to which foreclosure proceedings
have been commenced and the related Account Documents are required in connection
with the prosecution of such foreclosure proceedings and the Issuer has
delivered a trust receipt called for by Section 3.13(c)), that all such
documents have been executed, and that all such documents relate to the Accounts
listed on the Schedule of Accounts; provided, however, that with respect to the
review made of the Accounts in connection with the Closing Date, assumption or
substitution agreements shall not be considered Account Documents. In performing
such review, the Indenture Trustee may rely upon the purported genuineness and
due execution of any such document and on the purported genuineness of any
signature thereon.
(b) If any Account Document is defective in any material respect
which may materially and adversely affect the value of the related Account, the
priority of the related Mortgage or the interest of the Indenture Trustee or the
Noteholders in such Account or if any document required to be delivered to the
Indenture Trustee has not been delivered or if any documents so delivered does
not relate to an Account listed on the Schedule of Accounts, the Indenture
Trustee shall notify the Issuer and the Servicer immediately after obtaining
knowledge thereof. Within 90 days of the earlier of discovery by or notice to
the Issuer that any Account Document is missing or defective and such omission
or defect materially and adversely affects the interest of the Noteholders in an
Account, the Issuer is required to use its best efforts to cure such omission or
defect. If such omission or defect is not or cannot be cured within such 90-day
period or, with the prior written consent of a Responsible Officer of the
Indenture Trustee, such longer period as specified in such consent, the Issuer
shall either (i) deposit in the Collection Account an amount equal to 100% of
the then current Principal Balance of the affected Account (a "Defective
Account"), at which time the Defective Account shall be released from the lien
of the Indenture or (ii) remove such Account from the Trust Estate and
substitute one or more Qualified Substitute Accounts (in which case the removed
Account shall become a "Deleted Account"). The Issuer shall promptly reimburse
the Servicer and the Indenture Trustee for any reasonable expenses (including
without limitation reasonable attorney's fees) incurred by the Servicer and the
Indenture Trustee, respectively, in respect of any such defect or omission;
provided, however, except for the review by the Indenture Trustee pursuant to
Section 3.12(a), the foregoing shall not impose an obligation on the Indenture
Trustee to discover defects in the Account Documents or to ascertain the
priority of the related Mortgage.
As to any Deleted Account for which the Issuer substitutes a
Qualified Substitute Account or Qualified Substitute Accounts, the Issuer shall
effect such substitution by delivery to the Indenture Trustee of the Account
Note(s) for such Qualified Substitute Account or Qualified Substitute Accounts
and such other Account Documents related thereto, with each such Account Note
endorsed to the order of the Issuer, without recourse, and endorsed by the
Issuer in blank or to the order of the Indenture Trustee, without recourse.
Monthly Payments due with respect to Qualified Substitute Accounts in the month
of substitution are not part of the Trust Estate and will be retained by the
Issuer. Available Funds will include the Monthly Payment due on any Deleted
Account in the month of substitution, and the Issuer shall deposit such amount
in the Collection Account if received by it subsequent to the month of
substitution. The Issuer shall be entitled to receive all amounts due subsequent
to the month of substitution in respect of such Deleted Account. The Issuer
shall give or cause to be given written notice to the Indenture Trustee and the
Rating Agencies that such substitution has taken place. Upon such substitution,
such Qualified Substitute Account or Qualified Substitute Accounts shall be
subject to the terms of this Indenture in all respects, and the Issuer shall be
deemed to have made with respect to such Qualified Substitute Account or
Qualified Substitute Accounts, as of the date of substitution, the
representations and warranties set forth in Section 3.11. The Indenture Trustee
shall at the direction of the Issuer immediately effect the release of the lien
of this Indenture with respect to such Deleted Account, the form of the
instruments effecting such release being specified in such direction.
For any month in which the Issuer substitutes one or more Qualified
Substitute Accounts for one or more Deleted Accounts, the Issuer will determine
the amount (if any) by which the aggregate outstanding Principal Balance of all
such Qualified Substitute Accounts as of the date of substitution is less than
the aggregate outstanding Principal Balance of all such Deleted Accounts. On the
date of such substitution, the Issuer will deposit from its own funds into the
Collection Account an amount equal to the amount of such shortfall, if any,
without reimbursement therefor.
It is understood and agreed that the obligations of the Issuer set
forth in this Section 3.12(b) to cure, substitute for or deposit funds in the
Collection Account in connection with an Account constitute the sole remedies
available to the Noteholders or to the Indenture Trustee on their behalf
respecting an omission or defect set forth in Section 3.12(a).
SECTION 3.13 Trust Estate; Account Documents.
(a) When required by the provisions of this Indenture, the Indenture
Trustee shall execute instruments 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 which 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 III 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) In order to facilitate the servicing of the Accounts by the
Servicer, the Servicer is hereby authorized in the name and on behalf of the
Indenture Trustee and the Issuer, to execute assumption agreements, substitution
agreements, and instruments of satisfaction or cancellation, or of partial or
full release or discharge, and other comparable instruments with respect to the
Accounts and with respect to the Mortgaged Properties subject to the Mortgages
(and the Indenture Trustee shall execute any such documents on request of the
Servicer), subject to the obligations of the Servicer under the Servicing
Agreement. If from time to time the Servicer shall deliver to the Indenture
Trustee copies of any written assurance, assumption agreement or substitution
agreement or other similar agreement pursuant to Section 2.10 of the Servicing
Agreement, the Indenture Trustee shall check that each of such documents
purports to be an original executed copy and, if so, shall file such documents
with the related Account Documents. If any such documents submitted by the
Servicer do not meet the above qualifications, such documents shall promptly be
returned by the Indenture Trustee to the Servicer, with a direction to the
Servicer to forward the correct documentation.
(c) Upon Issuer Request accompanied by an Officer's Certificate of
the Servicer pursuant to Section 2.15 of the Servicing Agreement to the effect
that an Account has been the subject of a Full Prepayment or that all
Liquidation Proceeds which have been determined by the Servicer in its
reasonable judgment to be finally recoverable, have been recovered and upon
deposit to the Holding Account of such final Monthly Payment, an amount that
satisfies the definition of Full Prepayment with respect to such Account or, if
applicable, Liquidation Proceeds, the Indenture Trustee shall promptly release
the related Account Documents to or upon the order of the Issuer, along with
such documents as the Servicer or the Obligor may request to evidence
satisfaction and discharge of such Account. If from time to time and as
appropriate for the servicing or foreclosure of any Account, the Servicer
requests the Indenture Trustee to release the related Account Documents and
delivers to the Indenture Trustee a trust receipt reasonably satisfactory to the
Indenture Trustee and signed by a Servicing Officer, the Indenture Trustee shall
release the related Account Documents to the Servicer. If such Account 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.
(d) The Indenture Trustee shall, at such time as there are no Notes
Outstanding, release all of the Trust Estate to the Issuer (other than any cash
held for the payment of the Notes pursuant to Section 3.03 or 4.01), subject,
however, to the rights of the Indenture Trustee under Section 6.07.
SECTION 3.14 Amendments to Servicing Agreement.
The Indenture Trustee may enter into any amendment or supplement to
the Servicing Agreement only in accordance with Section 7.02 of the Servicing
Agreement; provided, however, at any time, the Indenture Trustee may, without
the consent of the Noteholders, enter into an amendment to the Servicing
Agreement modifying the repossession, foreclosure and liquidation procedures if
such modifications are likely to minimize payments in connection with any filing
or recording required in any jurisdiction where any Mortgaged Properties are
located. The Indenture Trustee may, in its discretion, decline to enter into or
consent to any such supplement or amendment if its own rights, duties or
immunities shall be adversely affected.
SECTION 3.15 Servicer as Agent and Bailee of Indenture Trustee.
In order to facilitate the servicing of the Accounts by the
Servicer, the Servicer shall retain, in accordance with the provisions of the
Servicing Agreement and this Indenture, the moneys to be deposited in each
Servicing Account. Solely for purposes of perfection under Section 9-313 of the
Uniform Commercial Code of the state in which such property is held by the
Servicer, the Indenture Trustee hereby acknowledges that the Servicer is acting
as agent and bailee for the benefit of the Indenture Trustee in holding such
moneys pursuant to Section 2.09 of the Servicing Agreement, as well as agent and
bailee for its benefit in holding any Account Documents released to the Servicer
pursuant to Section 3.13(c), and any other items constituting a part of the
Trust Estate which from time to time come into the possession of the Servicer.
It is intended that, by the Servicer's acceptance of such agency pursuant to
Section 2.09 of the Servicing Agreement, the Indenture Trustee, as a secured
party, will be deemed to have possession of such Account Documents, such moneys
and such other items for purposes of Section 9-313 of the Uniform Commercial
Code of the state in which such property is held by the Servicer.
SECTION 3.16 Investment Company Act.
The Issuer shall not become an "investment company" as defined in
the Investment Company Act of 1940, as amended (or any successor or amendatory
statute), and the rules and regulations thereunder (taking into account not only
the general definition of the term "investment company" but also any available
exceptions to such general definition); provided, however, that the Issuer shall
be in compliance with this Section 3.16 if it shall have obtained an order
exempting it from regulation as an "investment company" so long as it is in
compliance with the conditions imposed in such order.
SECTION 3.17 Business Activity.
(a) The Issuer shall furnish to the Indenture Trustee copies of the
form of each proposed amendment to the Trust Agreement at least 60 days prior to
the proposed date of adoption of any such proposed amendment.
(b) The Issuer will at all times hold itself out to the public,
including creditors of any entity owning more than a 50% undivided interest in
the Issuer (hereinafter referred to as a "Majority Owner" of the Issuer), under
the Issuer's own name and as a separate and distinct entity from Xxxxxx
Industries, Inc. or any of its Affiliates.
(c) The Issuer will at all times be responsible for the payment of
all its obligations and indebtedness, will at all times maintain a business
office, records, books of account, and funds separate from its Majority Owner
and will observe all customary formalities of independent existence.
(d) To the extent such compliance involves questions of law, the
Issuer shall be deemed in compliance with the requirements of any provision of
this Section 3.17 if it is acting in accordance with an Opinion of Counsel as to
such requirements.
(e) The Issuer represents, warrants and covenants that its chief
executive office is and shall be located in the State of Delaware.
SECTION 3.18 Liability of Owner Trustee.
It is expressly understood and agreed by the parties hereto that (a)
this Indenture is executed and delivered by Wilmington Trust Company, not
individually or personally but solely as Owner Trustee under the Trust
Agreement, in the exercise of the powers and authority conferred and vested in
it as the Owner Trustee, (b) each of the representations, undertakings and
agreements herein made on the part of the Issuer is made and intended not as
personal representations, undertakings and agreements by Wilmington Trust
Company but is made and intended for the purpose for binding only the Trust
Estate, (c) nothing herein contained shall be construed as creating any
liability on Wilmington Trust Company, individually or personally, to perform
any covenant either expressed or implied contained herein, all such liability,
if any, being expressly waived by the Indenture Trustee and the Noteholders and
by any Person claiming by, through or under the Indenture Trustee and the
Noteholders and (d) under no circumstances shall Wilmington Trust Company be
personally liable for the payment of any indebtedness or expenses of the Issuer
or be liable for the breach or failure of any obligation, representation,
warranty or covenant made or undertaken by the Issuer under this Indenture.
SECTION 3.19 Exculpation of the Indenture Trustee.
By entering into this Indenture and agreeing to perform the duties
of the Indenture Trustee as set forth herein, the Indenture Trustee makes no
implied or express representation or warranty to the Noteholders with respect to
the sufficiency or the adequacy in any respect whatsoever of the terms of this
Indenture and the documents executed in connection herewith. Under no
circumstances shall the Indenture Trustee have any liability of any kind
whatsoever for the failure of any Noteholder adequately to review and evaluate
to the full satisfaction of such Noteholder the terms and provisions of this
Indenture, the Notes, the Servicing Agreement, the Sub-Servicing Agreement, and
the other documents executed in connection with this Indenture. The Indenture
Trustee shall in no way be liable for the decision of any Noteholder to purchase
any Notes.
SECTION 3.20 Owner Trustee Agrees Not to File for Bankruptcy of
the Issuer.
Prior to one year after payment in full of all the Notes, the Owner
Trustee will not cause or consent to the filing of a petition in bankruptcy
against the Issuer for any reason without the written consent of all the
Noteholders.
SECTION 3.21 Reports to the Commission.
(a) The Indenture Trustee shall reasonably cooperate with the Issuer
in connection with the Issuer's satisfying the reporting requirements under the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder (the "Exchange Act"). Without limiting the generality
of the foregoing, the Indenture Trustee shall prepare on behalf of the Issuer
any monthly Current Reports on Form 8-K (each, a "Monthly Form 8-K") and Annual
Reports on Form 10-K customary for similar securities as required by the
Exchange Act and the rules and regulations of the Securities and Exchange
Commission thereunder, and the Indenture Trustee shall sign (other than any
Annual Reports on Form 10-K) and file (via the Commission's Electronic Data
Gathering and Retrieval System) such forms on behalf of the Issuer. The Grantor
shall sign any Annual Reports on Form 10-K.
(b) Each Monthly Form 8-K shall be filed by the Indenture Trustee
within 15 days after each Payment Date (commencing on the Payment Date occurring
in July 2003 and ending with the Payment Date following the filing of the Form
15 Suspension Notification as set forth in Section 3.21(g) hereof), including a
copy of the Payment Date Statement for such Payment Date as an exhibit thereto.
Prior to March 30th of each year (or such earlier date as may be required by the
Exchange Act and the rules and regulations of the Commission), the Indenture
Trustee shall file a Form 10-K, in substance as required by applicable law or
applicable Commission staff's interpretations. Such Form 10-K shall include as
exhibits the Servicer's annual statement of compliance described under Section
3.02 of the Servicing Agreement and the accountant's report described under
Section 3.03 of the Servicing Agreement, in each case to the extent they have
been timely delivered to the Indenture Trustee. If they are not so timely
delivered, the Indenture Trustee shall file an amended Form 10-K including such
documents as exhibits reasonably promptly after they are delivered to the
Indenture Trustee. The Form 10-K shall also include a certification in the form
attached hereto as Exhibit F (the "Certification"), which shall be signed by the
senior officer of the Servicer in charge of servicing.
(c) The Indenture Trustee shall sign a certification (in the form
attached hereto as Exhibit G) for the benefit of the Servicer and its officers,
directors and Affiliates (provided, however, that the Indenture Trustee shall
not undertake an analysis of the accountant's report attached as an exhibit to
the Form 10-K). No later than the 20th day prior to the latest date on which the
Form 10-K is permitted to be filed, without regard to extension (or if such day
is not a Business Day, the immediately preceding Business Day), the Indenture
Trustee shall deliver to the Servicer (i) such certification and (ii) a
completed Form 10-K to be executed by the Servicer. No later than the 10th day
prior to the latest date on which the Form 10-K is permitted to be filed,
without regard to extension (or if such day is not a Business Day, the
immediately preceding Business Day), the Servicer shall deliver the signed Form
10-K and the signed Certification to be filed to the Indenture Trustee. In
addition, the Indenture Trustee shall indemnify and hold harmless the Servicer
and its officers, directors and Affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses arising out of the Indenture
Trustee's failure to deliver the certification (in the form attached hereto as
Exhibit G) pursuant to this Section 3.21(c) or any inaccuracy in such
certification, other than any losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments and other costs
and expenses arising out of the Servicer's breach of its obligations under this
Agreement. If the indemnification provided for herein is unavailable or
insufficient to hold harmless the Servicer and its officers, directors and
Affiliates, then the Indenture Trustee shall contribute to the amount paid or
payable by the Servicer, its officers, directors or Affiliates as a result of
the losses, claims, damages or liabilities of the Servicer, its officers,
directors or Affiliates in such proportion as is appropriate to reflect the
relative fault of the Servicer and its officers, directors and Affiliates on the
one hand and the Indenture Trustee on the other.
(d) If the Securities and Exchange Commission issues additional
interpretative guidance or promulgates additional rules or regulations, or if
other changes in applicable law occur, that would require the reporting
arrangements, or the allocation of responsibilities with respect thereto,
described in this Section 3.21, to be conducted differently than as described,
the Issuer and the Indenture Trustee will reasonably cooperate to amend the
provisions of this Section 3.21 in order to comply with such amended reporting
requirements and such amendment of this Section 3.21. Any such Supplemental
Indenture shall be made in accordance with the Section 9.01 without further
consent of the Noteholders and without the requirement to deliver an Opinion of
Counsel delivered to the Servicer and the Indenture Trustee as set forth in
Section 9.03 hereof. Such Supplemental Indenture may result in the reduction of
the reports filed by the Indenture Trustee on behalf of the Issuer under the
Exchange Act. Notwithstanding the foregoing, neither the Issuer nor the
Indenture Trustee shall be obligated to enter into any amendment pursuant to
this Section 3.21 that adversely affects its obligations and immunities under
this Indenture.
(e) In filing any Monthly Form 8-K or Form 10-K, the Indenture
Trustee shall not undertake any analysis of, and shall have no responsibility
for, any financial information, accountant's report, certification or other
matter contained therein, except for computations performed by the Indenture
Trustee and reflected in the Payment Date Statement; provided, however, that all
information provided by the Servicer to the Indenture Trustee under Section
3.01(a) of the Servicing Agreement for inclusion in the Payment Date Statements
has been accurately transcribed.
(f) Upon any filing with the Commission, the Indenture Trustee shall
promptly deliver to the Issuer and the Servicer a copy of any such executed
report, statement or information.
(g) Prior to January 30 of the first year in which the Indenture
Trustee is able to do so under applicable law, the Indenture Trustee shall file
a Form 15 Suspension Notification with respect to the Issuer.
(h) Upon the request of the Indenture Trustee, the Grantor shall
provide to the Indenture Trustee in a timely manner all such information or
documentation as the Indenture Trustee may reasonably request in connection with
the performance of its duties and obligations under this Section 3.21.
SECTION 3.22 Representations and Warranties Regarding the Trust
Estate.
The Issuer represents and warrants as follows:
(a) This Indenture creates a valid and continuing security interest
(as defined in the applicable Uniform Commercial Code) in the Trust Estate in
favor of the Indenture Trustee, which security interest is prior to all other
liens, and is enforceable as such as against creditors of and purchasers from
the Issuer;
(b) The Issuer owns and has good and marketable title to the Trust
Estate free and clear of any lien, claim or encumbrance of any Person;
(c) The Issuer has caused or will have caused, within ten (10) days
of the Closing Date, the filing of all appropriate financing statements in the
proper filing office in the appropriate jurisdictions under applicable law in
order to perfect the security interest in the Trust Estate granted to the
Indenture Trustee hereunder.
(d) Other than the security interest granted to the Indenture
Trustee pursuant to the Indenture, the Issuer has not pledged, assigned, sold,
granted a security interest in, or otherwise conveyed any of the Trust Estate.
The Issuer has not authorized the filing of and is not aware of any filed
financing statement listing the Issuer as debtor that include a description of
collateral covering the Trust Estate. The Issuer is not aware of any judgment or
tax lien filings against the Issuer;
(e) All original executed copies of each Account Note, Mortgage or
other writing constituting an "instrument" (within the meaning of the applicable
Uniform Commercial Code) that constitute or evidence the Trust Estate have been
delivered to the Indenture Trustee.
(f) None of the "instruments" (within the meaning of the applicable
Uniform Commercial Code) that constitute or evidence the Trust Estate has any
marks or notations indicating that they have been pledged, assigned or otherwise
conveyed to any Person other than the Indenture Trustee.
(g) The Issuer has received all consents and approvals required by
the terms of the Trust Estate to the transfer to the Indenture Trustee of its
interest and rights in the Trust Estate hereunder;
(h) Each of the foregoing representations shall, as applicable, be
deemed repeated each time new assets become part of the Trust Estate;
(i) The security interest of the Indenture Trustee in the Trust
Estate shall, until payment in full of the indebtedness secured hereunder and
termination of this Indenture, be a first-priority perfected security interest;
(j) The foregoing representations shall survive termination of this
Indenture; and
(k) The foregoing representations may not be waived, amended or
modified without the prior written consent of S&P.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01 Satisfaction and Discharge of Indenture.
(a) Whenever the following conditions shall have been satisfied:
(1) either
(A) all Notes theretofore authenticated and delivered
(other than (i) Notes which have been destroyed, lost or
stolen and which have been replaced or paid as provided in
Section 2.08, and (ii) Notes 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 Indenture Trustee for cancellation; or
(B) all Notes not theretofore delivered to the Indenture
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at the Maturity
of the final instalment of the principal thereof 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 (i), (ii) or (iii)
above, has deposited or caused to be deposited with the
Indenture Trustee, in trust for such purpose, an amount of
cash (which cash, in the case of clauses (ii) and (iii) above
must constitute Eligible Moneys) sufficient to pay and
discharge the entire indebtedness on such Notes not
theretofore delivered to the Indenture Trustee for
cancellation, for principal and interest to the Maturity of
their entire unpaid principal amount or the applicable
Redemption Date, as the case may be;
(2) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer;
(3) the Issuer has delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that
all conditions precedent herein provided for the satisfaction and
discharge of this Indenture have been complied with and covering
such other matters as the Indenture Trustee may reasonably request;
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 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.
(b) Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Issuer to the Indenture Trustee under Section
6.07, the obligations of the Indenture Trustee to the Issuer and to the Holders
of Notes under Section 3.03, the obligations of the Indenture Trustee to the
Holders of Notes under Section 4.02 and the provisions of Article II with
respect to lost, stolen, destroyed or mutilated Notes, registration of transfers
of Notes, and rights to receive payments of principal of and interest on the
Notes shall survive and the provisions of Section 5.06 as they relate to clause
(a) of Section 5.06 shall continue for one year after such satisfaction and
discharge.
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 Notes 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 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) (i) there shall occur a default in the payment of any
amount due under the Notes by or on the Indenture Maturity Date or
(ii) there shall occur a failure to apply funds in the Collection
Account in accordance with Section 8.02(b) and such failure shall
continue for a period of two days, (iii) there shall occur a default
in the payment when due of interest on any Notes and such default
shall continue for a period of thirty days (provided that neither
the reimbursement of any Realized Loss Amounts nor interest on any
Realized Loss Amounts in respect of any Class of Notes will be
deemed due unless there exist Available Funds sufficient to pay such
amount and all prior amounts under the Available Funds Allocation)
or (iv) there shall occur a failure to pay the Outstanding Principal
Amount of each Class of Notes on the Indenture Maturity Date;
(2) the Issuer shall breach or default in the due observance
of any one or more of the covenants set forth in Section 3.08;
(3) the Issuer shall breach, or default in the due observance
or performance of, any other of its other covenants in this
Indenture, such Default shall continue for a period of five Business
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 Notes entitled to more than
50% of the aggregate Voting Rights of all Classes voting together as
a single class, a written notice specifying such Default and
requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder;
(4) there shall occur 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
(5) there shall occur 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.
Notwithstanding the foregoing, on or prior to the Indenture Maturity
Date, any of the events described in this Section 5.01 will not be an Event of
Default (i) in respect of the Class M-1 Notes until the Class A Notes have been
paid in full, (ii) in respect of the Class M-2 Notes until the Class A Notes and
Class M-1 Notes have been paid in full and (iii) in respect of the Class B Notes
until the Class A Notes, Class M-1 Notes and Class M-2 Notes have been paid in
full.
SECTION 5.02 Acceleration of Maturity; Rescission and
Annulment.
Prior to the Indenture Maturity Date, upon the occurrence of an
Event of Default, the Indenture Trustee or the Holders entitled to at least 66
2/3% of the Voting Rights of the most senior Class of Notes then Outstanding may
declare the principal of the Notes, together with accrued and unpaid interest
thereon through the date of acceleration, to be immediately due and payable by a
notice in writing to the Issuer (and to the Indenture Trustee if given by such
Noteholders); provided, however, that the Holders of such Voting Rights or the
Indenture Trustee may make such declaration only if the Event of Default
affects, and in the case of a default in the payment of the Notes such payment
default relates to, the most senior Class of Notes then Outstanding. Upon such
declaration, the Indenture Trustee may, or at the direction of the Holders
entitled to at least 66 2/3% of the Voting Rights of the most senior Class of
Notes then Outstanding shall, pursue one or more remedies subject to, and in
accordance with the terms of this Indenture, including without limitation,
selling the Accounts at one or more public or private sales. Notwithstanding
such acceleration of the Maturity of the Notes and subject to Section 5.05(a),
the Indenture Trustee shall refrain from selling the Accounts and continue to
apply all amounts received on the Accounts to payments due on the Notes in
accordance with Section 8.02(b) hereof if (i) the Indenture Trustee determines
that anticipated collections on the Accounts would be sufficient to pay the most
senior Class of Notes then Outstanding and (ii) the Indenture Trustee has not
been otherwise directed by the Holders of all the Notes. On or prior to the
Indenture Maturity Date, a Class of Notes which is not the most senior Class
then Outstanding will not have any right to direct the Indenture Trustee to
pursue any remedies or actions hereunder.
On or after the Indenture Maturity Date, if an Event of Default
occurs or shall have occurred, the Indenture Trustee shall declare the principal
of the Notes, together with accrued and unpaid interest thereon through the date
of acceleration, to be immediately due and payable by a notice in writing to the
Issuer. Upon such declaration, the Indenture Trustee may, or at the direction or
with the consent of the Holders entitled to at least a majority of the Voting
Rights of all Classes of Notes voting together as a single class shall pursue
one or more remedies subject to, and in accordance with the terms hereof,
including without limitation, selling the Accounts at one or more public or
private sales. Notwithstanding the acceleration of the Maturity of the Notes and
subject to Section 5.05(a), the Indenture Trustee shall refrain from selling the
Accounts and continue to apply all amounts received on the Accounts to payments
due on the Notes in accordance with Section 8.02(b) hereof if (i) the Indenture
Trustee determines that anticipated collections on the Accounts would be
sufficient to pay all the Classes of Notes then Outstanding and (ii) the
Indenture Trustee has not been otherwise directed by the Holders of all the
Notes.
Notwithstanding the foregoing, the Indenture Trustee may not declare
the Notes to be due and payable pursuant to this Section 5.02 as a result of an
Event of Default arising solely from the Issuer's failure to perform any of its
agreements set forth in Section 6.07.
At any time after such a declaration of acceleration of Maturity of
the Notes 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 entitled to at least 66 2/3% of the Voting Rights of the
most senior Class of Notes then Outstanding (in the event of the occurrence of
an Event of Default prior to the Indenture Maturity Date), or the Holders
entitled to at least a majority of the aggregate Voting Rights of all Classes of
Notes Outstanding voting together as a single class (in the event of the
occurrence of an Event of Default on or after the Indenture Maturity Date), as
the case may be, 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
Notes and all other amounts which would then be due hereunder
or upon such Notes 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 non-payment of the
principal of Notes which have become due solely by such
acceleration, have been cured or waived as provided in Section 5.15.
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.
The Issuer covenants that if an Event of Default shall occur and be
continuing, the Issuer will pay to the Indenture Trustee for the benefit of the
Holders of the Notes:
(1) (A) if the Notes have not been declared due and payable,
the whole amount then due and payable on the Notes in respect of
principal, including Realized Loss Amounts; or
(B) if the Notes have been declared due and payable and
such declaration and its consequences have not been rescinded
and annulled, the Aggregate Outstanding Principal Amount of
all Notes, including Realized Loss Amounts;
(2) (A) if the Notes have not been declared due and payable,
the whole amount then due and payable on the Notes in respect of
interest, including interest on any overdue instalments of principal
at the applicable Note Interest Rate, and, to the extent payment of
such interest on interest shall be legally enforceable, interest on
any overdue instalments of interest at the applicable Note Interest
Rate and interest due and payable with respect to unreimbursed
Realized Loss Amounts; or
(B) if the Notes have been declared due and payable and
such declaration and its consequences has not been rescinded
and annulled, (i) with respect to the period prior to the date
of such declaration, accrued interest to the date of such
declaration, at the applicable Note Interest Rate, on the
Outstanding Principal Amount of each Note and interest to the
date of such declaration at the applicable Note Interest Rate,
on any instalment of interest on each Note that was not paid
when due, but only to the extent that payment of such interest
on interest shall be legally enforceable and interest to the
date of such declaration at the applicable Note Interest Rate,
on any previously unreimbursed Realized Loss Amounts and (ii)
with respect to the period from and including the date of such
declaration, interest to the date such payment is made, at the
applicable Note Interest Rate, on the Outstanding Principal
Amount of each Note and on any instalment of interest on each
Note that was not paid when due, but only to the extent that
payment of such interest on interest shall be legally
enforceable and on any previously unreimbursed Realized Loss
Amounts; and
(3) in addition thereto, such further amounts as shall be
sufficient to cover the costs and expenses of collection, including
the reasonable compensation, expenses, disbursements and advances of
the Indenture Trustee, its agent and counsel.
If the Issuer fails to pay such amounts forthwith upon such demand,
or in any event if an Event of Default under clause (1) of Section 5.01 shall
have occurred, the Indenture Trustee, in its own name and as trustee of an
express trust, may institute a Proceeding for the collection of the sums so due
and unpaid, and may prosecute such Proceeding to judgment or final decree, and
may enforce the same against the Issuer or any other obligor upon the Notes and
collect the moneys adjudged or decreed to be payable in the manner provided by
law; provided, however, in the case of a default under Section 5.01 on the Class
M-1 Notes prior to the Indenture Maturity Date, the Indenture Trustee shall not
institute such Proceeding unless such default affects the Classes of Outstanding
Notes senior thereto or the Outstanding Principal Amount of the Class A Notes
has been reduced to zero; in the case of a default under Section 5.01 on the
Class M-2 Notes prior to the Indenture Maturity Date, the Indenture Trustee
shall not institute such Proceeding unless such default affects the Classes of
Outstanding Notes senior thereto or the Outstanding Principal Amounts of the
Class A and Class M-1 Notes have been reduced to zero; in the case of a default
under Section 5.01 on the Class B Notes prior to the Indenture Maturity Date,
the Indenture Trustee shall not institute such Proceeding unless such default
affects the Classes of Outstanding Notes senior thereto or the Outstanding
Principal Amounts of the Class A, Class M-1 and Class M-2 Notes have been
reduced to zero.
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 Noteholders by such appropriate Proceedings as the Indenture
Trustee shall deem most effective to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or enforce any
other proper remedy, including, without limitation, instituting a Proceeding
prior to any declaration of acceleration of the Maturity of the Notes for the
collection of all amounts then due and unpaid on the Notes, prosecuting such
Proceeding to final judgment or decree, enforcing the same against the Trust
Estate and collecting out of the property, wherever situated, of the Issuer the
moneys adjudged or decreed to be payable in the manner provided by law,
provided, however, that neither the Indenture Trustee nor any owner of any
equity interest in the Issuer, nor any of their respective partners,
beneficiaries, agents, officers, directors, employees or successors or assigns
shall be personally liable for any amounts payable under the Notes or this
Indenture.
SECTION 5.04 Remedies.
If an Event of Default shall have occurred and be continuing and the
Notes have been declared due and payable and such declaration and its
consequences have not been rescinded and annulled, the Indenture Trustee may
(subject to Sections 5.02, 5.05 and 5.18, to the extent applicable) do one or
more of the following:
(a) institute Proceedings for the collection of all amounts then
payable on the Notes, or under this Indenture in respect of Notes, whether such
amounts have become due and payable by declaration of acceleration or otherwise
and all amounts payable under the Servicing Agreement, enforce any judgment
obtained, and collect from the Issuer moneys adjudged due;
(b) 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) file or record all Assignments that have not previously been
recorded;
(d) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture; and
(e) 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 Notes
hereunder.
In the event the Indenture Trustee takes any of the foregoing
actions to protect the Noteholders' rights or interests under the Indenture, the
Indenture Trustee shall be indemnified from the Trust Estate against any loss,
liability or expense arising out of or in connection with any such actions.
SECTION 5.05 Optional Preservation of Trust Estate.
(a) If the Notes have been declared due and payable following an
Event of Default and such declaration and its consequences have not been
rescinded and annulled, the Indenture Trustee shall apply all Remittances and
other amounts receivable with respect to the Trust Estate, first, to the Issuer
Expenses and then to the payment of the principal of and interest on the Notes
as and when such principal and interest would have become due pursuant to the
terms of Section 8.02(b) hereof and to such other purposes as are specified in
this Indenture, with all such Remittances and other amounts being applied as if
there had not been a declaration of acceleration of the Maturity of the Notes,
provided that:
(i) the Indenture Trustee shall have determined that the Remittances
and other amounts receivable with respect to the Trust Estate are
sufficient to provide the funds required to pay the principal of and
interest on the applicable Class or Classes of Notes specified in Section
5.02 hereof;
(ii) all the Holders of the Notes shall not have directed the
Indenture Trustee in accordance with Section 5.14 (subject, however, to
Section 5.18(b)) to sell the Trust Estate securing such Notes;
(iii) there shall have been delivered to the Indenture Trustee an
Opinion of Counsel to the effect that notwithstanding the acceleration of
the Maturity of the Notes, but after giving effect to the provisions of
this Section 5.05;
(A) in accordance with the provisions of this Section 5.05,
the Issuer is legally obligated to make payments of principal of and
interest on the Notes and perform its obligations hereunder in the
same manner and amounts as it was legally obligated to make such
payments prior to the acceleration of the Maturity of the Notes; and
(B) such obligation is legally enforceable under applicable
law, subject to bankruptcy, reorganization, insolvency and other
laws affecting the enforcement of creditors' rights generally and to
general principles of equity (regardless whether such enforceability
is considered in a proceeding in equity or at law).
(iv) unless the Trust Estate has already been acquired by the
Indenture Trustee in a Sale conducted pursuant to Section 5.18 or the lien
of this Indenture has been otherwise foreclosed and all rights of the
Issuer in the Trust Estate have been terminated by such foreclosure, the
Issuer shall not have exercised the Issuer's rights, if any, under
applicable law to compel the Sale of the Trust Estate; and
(v) if the Indenture Trustee shall have acquired the entire Trust
Estate by purchasing it at any public or private Sale conducted pursuant
to Section 5.18, or the lien of this Indenture shall have been otherwise
foreclosed and all rights of the Issuer in the Trust Estate have been
terminated by such foreclosure, there shall have been delivered to the
Indenture Trustee an Opinion of Counsel to the effect that:
(A) the Trust Estate will not as a result of such action be
deemed an association taxable as a corporation under the Code; and
(B) notwithstanding the acquisition of the Trust Estate by the
Indenture Trustee, the rights, powers and duties of the Indenture
Trustee with respect to the Trust Estate (or the proceeds thereof)
and the Noteholders and the rights of the Noteholders shall continue
to be governed by the terms of this Indenture.
(b) The Indenture Trustee may in its sole discretion rely upon an
opinion of an Independent investment banking firm of national reputation as to
the feasibility of any action proposed to be taken in accordance with subsection
(a) of this Section 5.05 and as to the sufficiency of the Remittances and other
amounts receivable with respect to the Trust Estate to make the required
payments of principal of and interest on the Notes, which opinion shall be
conclusive evidence as to such feasibility or sufficiency. Such an opinion may,
but need not, be obtained by the Indenture Trustee in its sole discretion or may
be delivered to the Indenture Trustee by an Independent investment banking firm
of national reputation engaged by the Issuer to prepare and deliver such
opinion.
(c) Pending determination by the Indenture Trustee as to whether the
criteria set forth in subsection (a) of this Section 5.05 are satisfied, all
Remittances and other amounts receivable with respect to the Trust Estate shall
be applied first to payment of Issuer Expenses that consist of the fees and
expenses of, and other amounts payable to, the Owner Trustee, the Indenture
Trustee and the Successor Servicer, and the Servicing Fee and then pursuant to
Section 8.02(b) to the payment of the principal of and interest on the Notes as
and when such principal and interest would have become due pursuant to the terms
hereof and of the Notes if there had not been a declaration of acceleration of
the Maturity of the Notes. The Indenture Trustee shall make its determination
whether the criteria set forth in subsection (a) of this Section 5.05 can be
satisfied as promptly as practicable following any declaration of acceleration
of the Maturity of the Notes.
(d) If the Indenture Trustee determines that the criteria set forth
in subsection (a) of this Section 5.05 are not or cannot be satisfied, then all
amounts collected by the Indenture Trustee pursuant to this Section 5.05 or
otherwise shall be applied in accordance with Section 5.08.
SECTION 5.06 Indenture Trustee May File Proofs of Claim.
(a) The Indenture Trustee shall promptly notify the Noteholders of
(i) the commencement of any of the events or proceedings (individually, an
"Insolvency Proceeding") described in Section 5.01(5) hereof with respect to the
Issuer and (ii) the making of any claim in connection with any Insolvency
Proceeding seeking the avoidance as a preferential transfer (a "Preference
Claim") of any payment of principal of, or interest on, the Notes. The
obligation of the Indenture Trustee to notify the Noteholders of any Insolvency
Proceeding or Preference Claims is expressly limited to such matters of which a
Responsible Officer of the Indenture Trustee has actual knowledge. The Indenture
Trustee, on its behalf and on behalf of the Holders, may, at any time during the
continuation of an Insolvency Proceeding, direct all matters relating to such
Insolvency Proceeding, including, without limitation, (i) all matters relating
to any Preference Claim, (ii) the direction of any appeal of any order relating
to any Preference Claim and (iii) the posting of any surety, supersedeas or
performance bond pending any such appeal;
(b) 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
Notes or the property of the Issuer or of such other obligor or their creditors,
the Indenture Trustee (irrespective of whether the Notes shall then be due and
payable as therein expressed or by declaration or otherwise) shall be entitled
and empowered, by intervention in such Proceeding or otherwise, to
(i) file and prove a claim for the whole amount of principal and
interest owing and unpaid in respect of the Notes and to 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 Noteholders 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 Noteholder
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
Noteholders, 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, and any other amounts due the Indenture Trustee
under Section 6.07.
Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or accept or adopt on behalf of any
Noteholder any plan of reorganization, arrangement, adjustment, or composition
affecting any of the Notes or the rights of any Holder thereof, or to authorize
the Indenture Trustee to vote in respect of the claim of any Noteholder in any
such Proceeding.
SECTION 5.07 Indenture Trustee May Enforce Claims Without
Possession of Notes.
All rights of action and claims under this Indenture or any of the
Notes may be prosecuted and enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any Proceeding
relating thereto, and any such Proceeding instituted by the Indenture Trustee in
accordance with Section 5.03 shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall be for the benefit of the
Holders of the Notes in the priority specified herein. Any surplus shall be
available, in accordance with Section 5.08, for the payment of the reasonable
compensation, expenses, disbursements and advances of the Indenture Trustee, its
agents and counsel.
SECTION 5.08 Application of Money Collected.
If the Notes 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 the Notes
pursuant to this Article or otherwise and any moneys which may then be held or
thereafter received by the Indenture Trustee as security for the Notes shall
(unless such money is being applied in accordance with Section 5.05(a)) be
applied in the following order, at the date or dates fixed by the Indenture
Trustee and, in case of the distribution of the entire amount due on account of
principal of and interest on any Notes, upon presentation and surrender thereof:
First: To the payment of Issuer Expenses;
Second: To the holders of the Class A Notes, in an amount up
to the Interest Accrual Amount thereof;
Third: To the holders of the Class A Notes, in an amount up to
all unreimbursed Class Interest Shortfalls related thereto, together
with accrued interest thereon;
Fourth: To the holders of the Class M-1 Notes, in an amount up
to the Interest Accrual Amount thereof ;
Fifth: To the holders of the Class M-1 Notes, in an amount up
to all unreimbursed Class Interest Shortfalls related thereto,
together with accrued interest thereon;
Sixth: To the holders of the Class M-2 Notes, in an amount up
to the Interest Accrual Amount thereof;
Seventh: To the holders of the Class M-2 Notes, in an amount
up to all unreimbursed Class Interest Shortfalls related thereto,
together with accrued interest thereon;
Eighth: To the holders of the Class B Notes, in an amount up
to the Interest Accrual Amount thereof;
Ninth: To the holders of the Class B Notes, in an amount up to
all unreimbursed Class Interest Shortfalls related thereto, together
with accrued interest thereon;
Tenth: To the holders of the Class A Notes, in an amount up to
the Class A Outstanding Principal Amount, ratably, without
preference or priority of any kind;
Eleventh: To the holders of the Class A Notes, accrued and
unpaid interest at the related Note Interest Rate on the amount of
any unreimbursed Class A Realized Loss Amounts previously allocated
thereto;
Twelfth: To the holders of the Class A Notes, in an amount up
to the amount of any unreimbursed Class A Realized Loss Amounts
previously allocated thereto;
Thirteenth: To the holders of the Class M-1 Notes, in an
amount up to the Class M-1 Outstanding Principal Amount, ratably,
without preference or priority of any kind;
Fourteenth: To the holders of the Class M-1 Notes, accrued and
unpaid interest at the related Note Interest Rate on the amount of
any unreimbursed Class M-1 Realized Loss Amounts previously
allocated thereto;
Fifteenth: To the holders of the Class M-1 Notes, in an amount
up to the amount of any unreimbursed Class M-1 Realized Loss Amounts
previously allocated thereto;
Sixteenth: To the holders of the Class M-2 Notes, in an amount
up to the Class M-2 Outstanding Principal Amount, ratably, without
preference or priority of any kind;
Seventeenth: To the holders of the Class M-2 Notes, accrued
and unpaid interest at the related Note Interest Rate on the amount
of any unreimbursed Class M-2 Realized Loss Amounts previously
allocated thereto;
Eighteenth: To the holders of the Class M-2 Notes, in an
amount up to the amount of any unreimbursed Class M-2 Realized Loss
Amounts previously allocated thereto;
Nineteenth: To the holders of the Class B Notes, in an amount
up to the Class B Outstanding Principal Amount of the Class B Notes,
ratably, without preference or priority of any kind;
Twentieth: To the holders of the Class B Notes, accrued and
unpaid interest at the related Note Interest Rate on the amount of
any unreimbursed Class B Realized Loss Amounts previously allocated
thereto;
Twenty-First: To the holders of the Class B Notes, in an
amount up to the amount of any unreimbursed Class B Realized Loss
Amounts previously allocated thereto; and
Twenty-Second: To the payment of the remainder, if any, to the
Issuer or any other Person legally entitled thereto.
SECTION 5.09 Limitation on Suits.
No Holder of a Note 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 Notes entitled to more than 50% of the
aggregate Voting Rights of all Classes Outstanding voting together
as a single class (or, if there has been a declaration that the
Notes are immediately due and payable, or a sale or foreclosure with
respect to the Accounts, the required holders of the applicable
Class or Classes of Notes as set forth in Section 5.02 hereof) shall
have made written request to the Indenture Trustee to institute such
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 reasonable indemnity 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; and
(5) no direction inconsistent with such written request has
been given to the Indenture Trustee during such 60-day period by the
Holders of Notes entitled to more than 50% of the aggregate Voting
Rights;
it being understood and intended that no one or more Holders of
Notes 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 Notes 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 Notes in the priority specified herein.
SECTION 5.10 Unconditional Rights of Noteholders to Receive
Principal and Interest.
To the extent permitted by applicable law, the Holder of any Note
shall have the right, which right is absolute and unconditional except to the
extent restricted by applicable law, to receive payment of each instalment of
interest when due and payable on such Note on the respective Payment Dates of
such instalments of interest and to receive payment of each instalment of
principal of such Note when due (or in the case of any Note called for
redemption, on the date fixed for such redemption) and to institute suit for the
enforcement of any such payment, and except as otherwise set forth in this
Indenture, such right shall not be impaired without the consent of such Holder.
SECTION 5.11 Restoration of Rights and Remedies.
If the Indenture Trustee or any Noteholder 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 Noteholder, then and in
every such case the Issuer, the Indenture Trustee and the Noteholders 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 Noteholders shall continue as though
no such Proceeding had been instituted.
SECTION 5.12 Rights and Remedies Cumulative.
No right or remedy herein conferred upon or reserved to the
Indenture Trustee or to the Noteholders 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 5.13 Delay or Omission Not Waiver.
No delay or omission of the Indenture Trustee or of any Holder of
any Note 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 or to the Noteholders may be
exercised from time to time, and as often as may be deemed expedient, by the
Indenture Trustee or by the Noteholders, as the case may be.
SECTION 5.14 Control by the Noteholders.
Prior to the Indenture Maturity Date the Holders of Notes entitled
to at least 66 2/3% of the Voting Rights of the most senior Class of Notes then
Outstanding, and on or after the Indenture Maturity Date, the Holders of Notes
entitled to at least a majority of the aggregate Voting Rights of all Classes
voting together as a single class shall 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 Notes entitled to the
percentage of the Voting Rights specified in Section 5.18(b)(1) or
(2), whichever is applicable,
(3) if the conditions to retention of the Trust Estate set
forth in Section 5.05(a) have been satisfied, then any direction by
less than all of the Noteholders to the Indenture Trustee to
undertake a Sale of the Trust Estate shall be of no force and
effect, and
(4) the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee which is not inconsistent with such
direction; provided, however, that, subject to Section 6.01, the
Indenture Trustee need not take action which it determines might
involve it in liability or expense or be unjustly prejudicial to the
Noteholders not consenting.
Notwithstanding anything herein to the contrary, any direction to
the Indenture Trustee to declare the Notes due and payable shall be made by
those Classes of Notes as specified in Section 5.02 hereof.
SECTION 5.15 Waiver of Past Defaults.
The Holders of such Class or Classes of Notes entitled to the Voting
Rights specified in Section 5.02 hereof may, on behalf of the Holders of all the
Notes, waive any past Default hereunder and its consequences, except a Default
(1) in the payment of any instalment of principal of, or
interest on, any Note; or
(2) in respect of a covenant or provision hereof which under
Section 9.02 cannot be modified or amended without the consent of
the Holder of each Outstanding Note 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.
SECTION 5.16 Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Note 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 Noteholder, or group of
Noteholders, holding in the aggregate Notes representing more than 10% of the
Voting Rights, or to any suit instituted by any Noteholder for the enforcement
of the payment of any instalment of interest on any Note on or after the
maturity thereof expressed in such Note or for the enforcement of the payment of
any instalment of principal of any Note when due (or, in the case of a Note
called for redemption, on or after the applicable redemption date) or for the
enforcement of the payment of any instalment of principal of any Note when due
as indicated in the Payment Date Statement prepared and delivered by the
Indenture Trustee pursuant to Section 2.09(d).
SECTION 5.17 Waiver of Stay or Extension Laws.
The Issuer covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants in, or the
performance of, this Indenture; and the Issuer (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Indenture Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
SECTION 5.18 Sale of Trust Estate.
(a) The power to effect any sale or other disposition (a "Sale") of
any portion of the Trust Estate pursuant to Section 5.04 is expressly subject to
the provisions of Section 5.05 and this Section 5.18. The power to effect any
such Sale shall not be exhausted by any one or more Sales as to any portion of
the Trust Estate remaining unsold, but shall continue unimpaired until the
entire Trust Estate shall have been sold or all amounts payable on the Notes and
under this Indenture shall have been paid. To the fullest extent permitted by
law, the Indenture Trustee hereby expressly waives its right to any amount fixed
by law as compensation for any Sale.
(b) The Indenture Trustee shall not in any private or public Sale
sell the Trust Estate, or any portion thereof, unless
(1) prior to the Indenture Maturity Date, the Holders of Notes
entitled to at least 66 2/3% of the Voting Rights of the most senior
Class of Notes then Outstanding, and on or after the Indenture
Maturity Date, the Holders of Notes entitled to at least a majority
of the aggregate Voting Rights of all Classes voting together as a
single class, consent to or direct the Indenture Trustee to make,
such Sale, or
(2) the Indenture Trustee determines, in its sole discretion,
that the conditions for retention of the Trust Estate set forth in
Section 5.05(a)(i), (iii) or (iv) cannot be satisfied (in making any
such determination, the Indenture Trustee may rely upon an opinion
of an Independent investment banking firm obtained and delivered as
provided in Section 5.05(b) unless a contrary opinion is delivered
by an Independent investment banking firm engaged by the Issuer
pursuant to Section 5.05(b), in which event the Indenture Trustee
shall not be protected in relying solely upon either such opinion
but may nevertheless in its discretion make a determination as to
whether the conditions for retention of the Trust Estate set forth
in Section 5.05(a)(i) can or cannot be satisfied), and prior to the
Indenture Maturity Date, the Holders of Notes entitled to at least
66 2/3% of the Voting Rights of the most senior Class of Notes then
Outstanding, and on or after the Indenture Maturity Date, the
Holders of Notes entitled to at least a majority of the aggregate
Voting Rights of all Classes voting together as a single class,
consent to 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 other disposition
thereof for purposes of this Section 5.18(b).
(c) Unless prior to the Indenture Maturity Date, the Holders of
Notes entitled to at least 66 2/3% of the Voting Rights of the most senior Class
of Notes then Outstanding, and on or after the Indenture Maturity Date, the
Holders of Notes entitled to at least a majority of the aggregate Voting Rights
of all Classes voting together as a single class, 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 entire amount
which would be payable to the Holders under the Notes, in full payment thereof
in accordance with Section 5.08 on the Payment Date next succeeding the date of
such Sale has not been established by the Indenture Trustee and no Person bids
an amount equal to or greater than such amount, the Indenture Trustee shall bid
an amount at least $1.00 more than the highest other bid; provided that the
payment for such bid will be limited to the application of the credit as set
forth in Section 5.18(d)(2).
(d) In connection with a Sale of all or any portion of the Trust
Estate,
(1) any Holder or Holders of Notes 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 Notes or claims for interest
thereon in lieu of cash up to the amount which shall, upon
distribution of the net proceeds of such sale, be payable thereon,
and such Notes, 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 Sale thereof, and, subject
to any requirements of, and to the extent permitted by, applicable
law in connection therewith, may purchase all or any portion of the
Trust Estate in a private Sale, and, in lieu of paying cash
therefor, may make settlement for the purchase price by crediting
the gross Sale price against the sum of (A) the amount which would
be distributable to the Holders of the Notes as a result of such
Sale in accordance with Section 5.08 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 Notes in
order to complete any such Sale or in order for the net Sale price
to be credited against such Notes, 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.
SECTION 5.19 Action on Notes.
The Indenture Trustee's right to seek and recover judgment on the
Notes or under this Indenture shall not be affected by the seeking, obtaining or
application of any other relief under or with respect to this Indenture. Neither
the lien of this Indenture nor any rights or remedies of the Indenture Trustee
or the Holders of Notes 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.
SECTION 5.20 Allocation of Realized Loss Amount.
On each Payment Date: any Class A Realized Loss Amount allocated to
the Class A Notes will be applied in reduction of the Class A Outstanding
Principal Amount; any Class M-1 Realized Loss Amount will be applied in
reduction of the Class M-1 Outstanding Principal Amount; any Class M-2 Realized
Loss Amount will be applied in reduction of the Class M-2 Outstanding Principal
Amount; and any Class B Realized Loss Amount will be applied in reduction of the
Class B Outstanding Principal Amount; in each case, until the Outstanding
Principal Amount of such Class has been reduced to zero.
ARTICLE VI
THE Indenture TRUSTEE
SECTION 6.01 Duties of Indenture Trustee.
(a) If an Event of Default known to the Indenture Trustee 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 of the Indenture Trustee shall be
read into this Indenture.
(2) In the absence of bad faith on its part, the Indenture
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates
or opinions furnished to the 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 to the requirements of this Indenture but need not
verify the accuracy of the contents thereof or whether procedures
specified by or pursuant to the provisions of this Indenture have
been followed in the preparation thereof.
(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.
(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.
(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 5.14.
(d) For all purposes under this Indenture, the Indenture Trustee
shall not be deemed to have notice of any Event of Default described in Section
5.01(2) through 5.01(5) or any Default described in Section 5.01(2) through
5.01(5) 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 which 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 Notes, 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; provided, however, that the
Indenture Trustee shall not refuse or fail to perform any of its duties
hereunder solely as a result of non-payment of its normal fees and expenses and,
further provided, that nothing in this Section 6.01(e) shall be construed to
limit the exercise by the Indenture Trustee of any right or remedy permitted
under this Indenture or otherwise in the event of the Issuer's failure to pay
the Indenture Trustee's fees and expenses pursuant to Section 6.07. 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 Sections
6.07 and 8.02(c).
(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 Notes
secured thereby, 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 Holders of
the Notes and the rights of such Noteholders shall continue to be governed by
the terms of this Indenture.
(h) The Indenture Trustee agrees not to consent or cause the filing
of a petition in bankruptcy against the Issuer as a result of any amounts due
and owing the Indenture Trustee in its capacity as trustee hereunder.
SECTION 6.02 Notice of Default.
Upon a Default becoming known to the Indenture Trustee, the
Indenture Trustee shall, within 90 days after the occurrence of such Default
becomes known to the Indenture Trustee, transmit notice of such Default by mail
to all Holders of Notes as to which such Default has occurred and to S&P, 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(1), 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
Notes; 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 Noteholders shall be
given until at least 30 days after the occurrence thereof.
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 the
document.
(b) Before the Indenture Trustee acts or refrains from acting, it
may require an Officer's Certificate or an Opinion of Counsel; provided,
however, that the Indenture Trustee may not, by relying on an Officer's
Certificate or Opinion of Counsel, refrain from making payments of principal or
interest on the Notes or exercise remedies pursuant to Article V. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on the Certificate or Opinion.
(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 which it believes to be authorized or
within its rights or powers as provided herein.
(e) The Indenture Trustee shall not be liable for any action it
takes or omits to take in good faith pursuant to the Indenture at the direction
of Holders of Notes in accordance with the Indenture, after notice to the
Holders of the Notes of a Default under this Indenture.
SECTION 6.04 Not Responsible for Recitals or Issuance of Notes.
The recitals contained herein and in the Notes, except the
certificates of authentication on the Notes, shall be taken as the statements of
the Issuer and the Indenture Trustee 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
Notes. The Indenture Trustee shall not be accountable for the use or application
by the Issuer of Notes 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 Notes.
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
Notes and, subject to Sections 6.08 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 Sections 8.03 and
8.04, by any other provision of 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 which 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 Compensation and Reimbursement.
The Issuer (with respect to clause (1) below) and Mid-State Homes,
Inc. (with respect to clauses (2), (3) and (4) below) agree:
(1) subject to any separate written agreement with the
Indenture Trustee, to pay the Indenture Trustee from time to time
reasonable compensation for all services rendered by it hereunder or
any documents executed in connection herewith (which compensation
shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Indenture Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the
Indenture Trustee in connection with the administration of the Trust
Estate pursuant to the terms of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel incurred in connection with litigation affecting
the Trust Estate or the Indenture Trustee), except any such expense,
disbursement or advance as may be attributable to its negligence or
bad faith;
(3) for so long as Mid-State Homes, Inc. is the Servicer, to
indemnify and hold harmless the Indenture Trustee and its officers,
directors and Affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees
and related costs, judgments and other costs and expenses arising
out of the Servicer's failure to sign and deliver either the
Certification or the Form 10-K within the time frame provided in
Section 3.21(c), other than any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs,
judgments and other costs and expenses arising out of the Indenture
Trustee's breach of its obligations under this Indenture. If the
indemnification provided for herein is unavailable or insufficient
to hold harmless the Indenture Trustee and its officers, directors
and Affiliates, then Mid-State Homes, Inc. shall contribute to the
amount paid or payable by the Indenture Trustee, its officers,
directors or Affiliates as a result of the losses, claims, damages
or liabilities of the Indenture Trustee, its officers, directors or
Affiliates in such proportion as is appropriate to reflect the
relative fault of the Indenture Trustee and its officers, directors
and Affiliates on the one hand and the Servicer on the other; and
(4) to indemnify the Indenture Trustee and its agents for, and
to hold them harmless against, any loss, liability or expense
incurred without negligence or bad faith on their part, arising out
of, or in connection with, the acceptance or administration of this
trust, including the costs and expenses of defending themselves
against any claim in connection with the exercise or performance of
any of their powers or duties hereunder, provided that:
(i) with respect to any such claim, the Indenture
Trustee shall have given Mid-State Homes, Inc. written notice
thereof promptly after the Indenture Trustee shall have
knowledge thereof;
(ii) while maintaining absolute control over its own
defense, the Indenture Trustee shall cooperate and consult
fully with Mid-State Homes, Inc. in preparing such defense;
and
(iii) notwithstanding anything to the contrary in this
Section 6.07(3), Mid-State Homes, Inc. shall not be liable for
settlement of any such claim by the Indenture Trustee entered
into without the prior consent of Mid-State Homes, Inc., which
consent shall not be unreasonably withheld.
The Indenture Trustee shall be entitled to make claims pursuant to
clauses (2), (3) and (4) above only to the extent that such claims do not
exceed, in the aggregate, 100% of the aggregate Principal Balance of the
Accounts from time to time.
As security for the performance of the obligations of the Issuer
under this Section, the Indenture Trustee shall have a lien ranking junior to
the lien of this Indenture for the benefit of the Holders of the Notes (but
senior to all other liens, if any) upon all property and funds held or collected
as part of the Trust Estate by the Indenture Trustee in its capacity as such.
The Indenture Trustee shall not institute any Proceeding seeking the enforcement
of such lien against the Trust Estate unless such Proceeding is in connection
with a Proceeding in accordance with Article V for enforcement of the lien of
this Indenture for the benefit of the Holders of the Notes after the occurrence
of an Event of Default (other than an Event of Default arising solely from the
Issuer's failure to pay amounts due the Indenture Trustee under this Section
6.07) and a resulting declaration of acceleration of Maturity of the Notes which
has not been rescinded and annulled.
SECTION 6.08 Eligibility; Disqualification.
This Indenture shall always have a Indenture Trustee who satisfies
the requirements of TIA ss. 310(a)(1) and who is Independent of the Issuer and
Servicer (except that the Indenture Trustee may serve as Successor Servicer).
The Indenture Trustee shall always have a combined capital and surplus as stated
in Section 6.09. The Indenture Trustee shall be subject to TIA ss. 310(b). The
Indenture Trustee shall have a place of business in the State of Florida. Any
successor Indenture Trustee shall execute the Servicing Agreement and this
Indenture.
SECTION 6.09 Indenture Trustee's Capital and Surplus.
The Indenture Trustee or any successor or substitute trustee shall
at all times have a combined capital and surplus of at least $50,000,000 and the
long-term unsecured debt obligations of which are rated at least "AA-" and "A1"
by S&P and Xxxxx'x and the short-term unsecured debt obligations of which are
rated at least "A-1" by S&P. If the Indenture Trustee publishes annual reports
of condition of the type described in TIA ss. 310(a)(2), its combined capital
and surplus for purposes of this Section 6.09 shall be as set forth in the
latest such report.
SECTION 6.10 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 6.11.
(b) The Indenture Trustee may resign at any time by giving written
notice thereof to the Issuer. 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. The costs and expenses incurred in connection
with the resignation of the Indenture Trustee and any petition filed for
appointment of a Successor Indenture Trustee shall be paid by the Issuer.
(c) The Indenture Trustee may be removed at any time for reasonable
cause by Act of the Holders of Notes entitled to more than 50% of the aggregate
Voting Rights of all Classes voting together as a single class 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 6.08 and shall fail to resign or eliminate
such conflicting interest in accordance with Section 6.08 after
written request therefor by the Issuer or by any Noteholder, or
(2) the Indenture Trustee shall cease to be eligible under
Section 6.09 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 may remove the
Indenture Trustee, or (ii) subject to Section 5.16, any Noteholder who has been
a bona fide Holder of a Note for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent jurisdiction
for the removal of the 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. If within one year after such resignation, removal
or incapability or the occurrence of such vacancy, a successor Indenture Trustee
has not been appointed by the Issuer, then a successor trustee shall be
appointed by Act of the Holders of Notes entitled to more than 50% of the
aggregate Voting Rights of all Classes voting together as a single class
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 or Noteholders or the successor
Indenture Trustee shall not have accepted appointment in the manner hereinafter
provided, any Noteholder who has been a bona fide Holder of a Note for at least
six months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor 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 Noteholders and S&P. Each notice shall include the name of the
successor Indenture Trustee and the address of its Corporate Trust Office.
SECTION 6.11 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
subject nevertheless to its lien, if any, provided for in Section 6.07. 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 6.12 Merger, Conversion, Consolidation or Succession to
Business of Indenture Trustee.
Any entity into which the Indenture Trustee may be merged or
converted or with which it may be consolidated, or any entity resulting from any
merger, conversion or consolidation to which the Indenture Trustee shall be a
party, or any entity 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 entity 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 Notes 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 Notes so
authenticated with the same effect as if such successor Indenture Trustee had
authenticated such Notes.
SECTION 6.13 Preferential Collection of Claims Against Issuer.
The Indenture Trustee shall be subject to TIA ss. 311(a), excluding
any creditor relationship listed in TIA ss. 311(b), and a Indenture Trustee who
has resigned or been removed shall be subject to TIA ss. 311(a) to the extent
indicated in TIA ss. 311(a).
SECTION 6.14 Co-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 or of
the Holders of Notes entitled to more than 50% of the aggregate Voting Rights of
all Classes voting together as a single class, the Issuer shall for such purpose
join 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 Rating Agencies and 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 the Issuer does not join in such appointment within 15 days
after the receipt by it of a request so to do, or in case an Event of Default
has occurred and is continuing, the Indenture Trustee alone shall have power to
make such appointment.
Should any written instrument from the Issuer be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right or power, any such
instrument 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 Notes 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, and the Indenture
Trustee shall not be personally liable by reason of any act or
omission of any co-trustee or other such separate trustee hereunder.
(5) Any Act of Noteholders delivered to the Indenture Trustee
shall be deemed to have been delivered to each such co-trustee and
separate trustee.
SECTION 6.15 Authenticating Agents.
The Indenture Trustee may appoint an Authenticating Agent with power
to act on its behalf and subject to its direction in the authentication and
delivery of the Notes 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 Notes of the authority of an
Authenticating Agent appointed after the initial authentication and delivery of
such Notes) in connection with transfers and exchanges under Sections 2.06 and
2.07 as fully to all intents and purposes as though the Authenticating Agent had
been expressly authorized by those Sections to authenticate and deliver Notes.
For all purposes of this Indenture (other than in connection with the
authentication and delivery of Notes pursuant to Sections 2.05 and 2.12 in
connection with their initial issuance and for purposes of Section 2.08), the
authentication and delivery of Notes by the Authenticating Agent pursuant to
this Section shall be deemed to be the authentication and delivery of Notes "by
the Indenture Trustee." Such Authenticating Agent shall at all times be a Person
that both meets the requirements of Section 6.09 for the Indenture Trustee
hereunder and has its principal office in the City and State of New York.
Any Authenticating Agent shall also serve as Note Registrar or
co-Note Registrar as provided in Section 2.07. Any Authenticating Agent
appointed by the Indenture Trustee pursuant to the terms of this Section 6.15
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 Note Registrar or co-Note
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, Note Registrar or co-Note
Registrar.
Any entity into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any entity resulting from any
merger, consolidation or conversion to which any Authenticating Agent shall be a
party, or any entity succeeding to the corporate trust business of any
Authenticating Agent, shall be the successor of the Authenticating Agent
hereunder, if such successor entity 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 Indenture Trustee and the Issuer. The Indenture
Trustee may at any time terminate the agency of any Authenticating Agent by
giving written notice of termination to such Authenticating Agent and the
Issuer. Upon receiving such a notice of resignation or upon such a termination,
or in case at any time any Authenticating Agent shall cease to be eligible under
this Section, the Indenture Trustee shall promptly appoint a successor
Authenticating Agent, shall give written notice of such appointment to the
Issuer and shall mail notice of such appointment to all Holders of Notes.
The Issuer agrees to pay to any Authenticating Agent from time to
time reasonable compensation for its services. The provisions of Sections 2.10,
6.04 and 6.05 shall be applicable to any Authenticating Agent.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.01 Issuer to Furnish Indenture Trustee Names and
Addresses of Noteholders.
(a) The Issuer will furnish or cause to be furnished to the
Indenture Trustee (i) monthly, not less than 10 days after the Record Date for
each Payment Date, a list, in such form as the Indenture Trustee may reasonably
require, of the names and addresses of the Holders of Notes, 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 Note
Registrar, no such list shall be required to be furnished to the Indenture
Trustee.
(b) In addition to furnishing to the Indenture Trustee the
Noteholder lists, if any, required under subsection (a), the Issuer shall also
furnish all Noteholder 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
Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Holders of Notes
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 Notes
received by the Indenture Trustee in its capacity as Note 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) Noteholders may communicate pursuant to TIA ss. 312(b) with
other Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall
have the protection of TIA ss. 312(c).
SECTION 7.03 Reports by Indenture Trustee.
(a) (i) Within 60 days after May 15 of each year (the "reporting
date"), commencing with the year after the issuance of the Notes, the Indenture
Trustee shall mail to all Holders (together with all other Persons to whom
reports are to be transmitted under TIA ss. 313(c)) a brief report dated as of
such reporting date that complies with TIA ss. 313(a); (ii) the Indenture
Trustee shall also mail to Holders any reports that are required by TIA ss.
313(b)(2) with respect to any advances made by the Indenture Trustee and (iii)
the Indenture Trustee shall also mail to Holders of Notes any reports required
by TIA ss. 313(a)(5) and ss. 313(b)(1) with respect to the release and
substitution of any Accounts. For purposes of the information required to be
included in any such reports pursuant to TIA ss. 313(a)(3), 313(b)(1) or
313(b)(2), the principal amount of indenture securities outstanding on the date
as of which such information is provided shall be the Aggregate Outstanding
Principal Amount of the then Outstanding Notes at the date as of which such
information is presented.
(b) A copy of each report required under this Section 7.03 shall, at
the time of such transmission to Noteholders, be filed by the Indenture Trustee
with the Commission (unless the Indenture Trustee has filed a Form 15 Suspension
Notice as set forth in Section 3.21(g) hereof) and with each securities exchange
upon which the Notes are listed, provided that the Issuer has previously
notified the Indenture Trustee of such listing. The Issuer will notify the
Indenture Trustee when the Notes are listed on any securities exchange.
SECTION 7.04 Compliance by Issuer with TIA ss. 314(a).
The Issuer shall comply with the provisions of TIA ss. 314(a).
ARTICLE VIII
ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, RELEASES AND
ADDITIONAL TRANSFERS
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. Except as otherwise expressly provided in this
Indenture, if any default occurs in the making of any payment or performance
under the Servicing Agreement, or any Hazard Insurance Policy or any other
related insurance policy, the Indenture Trustee may, and upon the request of the
Holders of Notes entitled to more than 50% of the aggregate Voting Rights of all
Classes voting together as a class 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.
SECTION 8.02 Collection Account.
(a) Prior to the initial authentication and delivery of the Notes,
the Issuer shall open, at the Corporate Trust Office, a segregated trust account
(the "Collection Account") in the name of the Indenture Trustee on behalf of the
Noteholders which such account shall be an Eligible Account. All payments to be
made from time to time to the Holders of Notes out of funds in the Collection
Account pursuant to this Indenture shall be made by the Indenture Trustee as the
Paying Agent of the Issuer or, pursuant to Section 3.03, by any other Paying
Agent appointed by the Issuer. All moneys deposited from time to time in the
Collection Account, including the deposits to be made by the Servicer in the
Collection Account pursuant to the Servicing Agreement, and all deposits therein
pursuant to this Indenture, and all investments made with such moneys including
all income or other gain from such investments shall be held by the Indenture
Trustee as part of the Trust Estate as herein provided. So long as no Servicing
Default shall have occurred and be continuing, moneys in the Collection Account
representing collections on the Accounts erroneously deposited therein shall be
subject to withdrawals by the Servicer pursuant to Sections 2.07(c)(i) and 2.11
of the Servicing Agreement.
(b) So long as no Default or Event of Default shall have occurred
and be continuing, all or a portion of the Collection Account shall be invested
and reinvested by the Indenture Trustee at the Issuer's direction in one or more
Eligible Investments bearing interest or sold at discount. No such investment
shall mature later than one Business Day prior to the next Payment Date (or on
such Payment Date, in the case of obligations referred to in clause (a)(i) of
the definition of Eligible Investments and in the case of Eligible Investments
of which the Indenture Trustee is the obligor, so long as at the time of such
investment the long-term unsecured debt securities of the Indenture Trustee are
rated "AAA" and "Aaa" by S&P and Xxxxx'x, respectively).
All income or other gains from investment of moneys deposited in the
Collection Account shall be deposited by the Indenture Trustee in the Collection
Account immediately upon receipt, and any loss resulting from such investment
shall be charged to the Collection Account.
Unless the Notes have been declared due and payable pursuant to
Section 5.02 and moneys collected by the Indenture Trustee with respect to the
Notes are being applied in accordance with Section 5.08, Available Funds for
such Payment Date shall be withdrawn from the Collection Account, in the amounts
required, for application in the following order of priority:
First: To the holders of the Class A Notes, in an amount up to
the Interest Accrual Amount thereof;
Second: To the holders of the Class A Notes, in an amount up
to all unreimbursed Class Interest Shortfalls related thereto,
together with accrued interest thereon;
Third: To the holders of the Class M-1 Notes, in an amount up
to the Interest Accrual Amount thereof ;
Fourth: To the holders of the Class M-1 Notes, in an amount up
to all unreimbursed Class Interest Shortfalls related thereto,
together with accrued interest thereon;
Fifth: To the holders of the Class M-2 Notes, in an amount up
to the Interest Accrual Amount thereof;
Sixth: To the holders of the Class M-2 Notes, in an amount up
to all unreimbursed Class Interest Shortfalls related thereto,
together with accrued interest thereon;
Seventh: To the holders of the Class B Notes, in an amount up
to the Interest Accrual Amount thereof;
Eighth: To the holders of the Class B Notes, in an amount up
to all unreimbursed Class Interest Shortfalls related thereto,
together with accrued interest thereon;
Ninth: To the holders of the Class A Notes, in an amount up to
the Class A Optimal Principal Amount;
Tenth: To the holders of the Class A Notes, accrued and unpaid
interest at the related Note Interest Rate on the amount of any
unreimbursed Class A Realized Loss Amounts previously allocated to
the Class A Notes;
Eleventh: To the holders of the Class A Notes, in an amount up
to amount of any unreimbursed Class A Realized Loss Amounts
previously allocated thereto;
Twelfth: To the holders of the Class M-1 Notes, in an amount
up to the Class M-1 Optimal Principal Amount;
Thirteenth: To the holders of the Class M-1 Notes, accrued and
unpaid interest at the related Note Interest Rate on the amount of
any unreimbursed Class M-1 Realized Loss Amounts previously
allocated to the Class M-1 Notes;
Fourteenth: To the holders of the Class M-1 Notes, in an
amount up to the amount of any unreimbursed Class M-1 Realized Loss
Amounts previously allocated thereto;
Fifteenth: To the holders of the Class M-2 Notes, in an amount
up to the Class M-2 Optimal Principal Amount;
Sixteenth: To the holders of the Class M-2 Notes, accrued and
unpaid interest at the related Note Interest Rate on the amount of
any unreimbursed Class M-2 Realized Loss Amounts previously
allocated to the Class M-2 Notes;
Seventeenth: To the holders of the Class M-2 Notes, in an
amount up to the amount of any unreimbursed Class M-2 Realized Loss
Amounts previously allocated thereto;
Eighteenth: To the holders of the Class B Notes, in an amount
up to the Class B Optimal Principal Amount;
Nineteenth: To the holders of the Class B Notes, accrued and
unpaid interest at the related Note Interest Rate on the amount of
any unreimbursed Class B Realized Loss Amounts previously allocated
to the Class B Notes;
Twentieth: To the holders of the Class B Notes, in an amount
up to the amount of any unreimbursed Class B Realized Loss Amounts
previously allocated thereto;
Twenty-First: To the Interest Reserve Account, if necessary,
such that the amount on deposit therein equals the Initial Reserve
Account Deposit; and
Twenty-Second: To the Issuer, free of the lien of this
Indenture, an amount equal to the excess, if any, of (x) the
Available Funds for such Payment Date over (y) the aggregate of the
amounts applied pursuant to subclauses first through twenty-first in
this Section 8.02(b) for such Payment Date, each such amount being
the amount thereof set forth in the applicable Payment Date
Statement.
In addition to distributions of Available Funds thereto in
accordance with the Available Funds Allocation, on each Payment Date the
Indenture Trustee shall apply any Interest Reserve Account Withdrawal Amount in
the order of priority of the Available Funds Allocation to cover any Class
Interest Shortfalls or any unpaid interest at the related Note Interest Rate on
any unreimbursed Realized Loss Amounts.
On any Payment Date on which the Grantor may, but fails to, exercise
its option to redeem the Notes pursuant to Section 10.01 hereof, any amounts
that would be paid pursuant to priority Twenty-Second above will instead be paid
as principal, pro rata, to the Notes then Outstanding, based on Outstanding
Principal Amount, until reduced to zero. Any remaining amounts will be
distributed to the Issuer.
(c) Funds on deposit in the Collection Account shall be withdrawn
therefrom and applied on each Payment Date to the payment of Issuer Expenses
(or, in the case of fees payable to the Servicer, to the extent not paid in
accordance with the Servicing Agreement); provided that (i) funds shall not be
withdrawn from the Collection Account for such purpose during the period from
the end of each Collection Period through the next Payment Date if such
withdrawal would result in the funds on deposit in the Collection Account on
such Payment Date being less than the Available Funds for such Payment Date as
set forth in the related Payment Date Statement and (ii) such Issuer Expenses,
to the extent not paid on such Payment Date because of clause (i), shall be paid
as soon as possible after such Payment Date.
(d) After the entire principal amount of and accrued and unpaid
interest on the Notes and any unreimbursed Realized Loss Amounts have been paid
or provided for as provided in Section 4.01, the cash balance, if any, then
remaining in the Collection Account shall be withdrawn from such Collection
Account by the Indenture Trustee, released from the lien of this Indenture and
paid to the Issuer.
SECTION 8.03 Capitalized Interest Account, Interest Reserve
Account and Pre-Funding Account.
(a) On the Closing Date, the Issuer shall open at the Corporate
Trust Office, a segregated trust account (the "Pre-Funding Account") in the name
of the Indenture Trustee on behalf of the Noteholders, which account shall be an
Eligible Account.
(b) On the Closing Date, the Issuer shall open at the Corporate
Trust Office, a segregated trust account (the "Capitalized Interest Account") in
the name of the Indenture Trustee on behalf of the Noteholders, which account
shall be an Eligible Account.
(c) On the Closing Date, the Issuer shall open at the Corporate
Trust Office, a segregated trust account (the "Interest Reserve Account") in the
name of the Indenture Trustee on behalf of the Noteholders, which account shall
be an Eligible Account.
(d) The amounts on deposit in the Pre-Funding Account, the Interest
Reserve Account and the Capitalized Interest Account shall be invested in
Eligible Investments in the same manner as amounts in the Collection Account as
set forth in Sections 8.02(b) and 8.04 hereof.
(e) On the Closing Date, the Issuer shall cause to be deposited in
the Pre-Funding Account the amount of $20,018,253.56, shall cause to be
deposited in the Interest Reserve Account the amount of $1,645,780.24, and shall
cause to be deposited in the Capitalized Interest Account the amount of
$156,476.02.
(f) On each Additional Transfer Date, upon satisfaction of the
conditions set forth in Section 8.09 hereof and the related Additional Transfer
Agreement, the Indenture Trustee shall withdraw from the Pre-Funding Account an
amount equal to 100% of the Aggregate Principal Balance of the Additional
Accounts pledged to the Indenture Trustee by the Issuer on such Additional
Transfer Date and pay such amount upon the order of the Issuer.
(g) On the Business Day prior to each Payment Date, the Indenture
Trustee shall transfer from the Interest Reserve Account to the Collection
Account the Interest Reserve Account Withdrawal Amount, if any, applicable to
such Payment Date and shall distribute such amount to the Noteholders on such
Payment Date pursuant to Section 8.02 hereof.
(h) On the Business Day prior to the Payment Date immediately
following the Collection Period in which the Pre-Funding Period ends, the
Indenture Trustee shall (i) withdraw the unutilized Pre-Funded Amount, if any,
from the Pre-Funding Account, (ii) promptly deposit such amount in the
Collection Account net of Pre-Funding Earnings.
(i) On the Business Day prior to each Payment Date, through the
Payment Date immediately following the Collection Period in which the
Pre-Funding Period ends, the Indenture Trustee shall transfer from the
Capitalized Interest Account to the Collection Account the amount of the
Capitalized Interest Shortfall, if any, applicable to such Payment Date and
promptly deposit such amount in the Collection Account.
(j) All interest and any other earnings from Eligible Investments of
amounts on deposit in the Capitalized Interest Account will be retained in the
Capitalized Interest Account. Any amounts remaining in the Capitalized Interest
Account not needed to cover any Capitalized Interest Shortfalls on the Payment
Date following the end of the Pre-Funding Period will be withdrawn therefrom by
the Indenture Trustee and remitted to the Issuer, free and clear of the lien of
this Indenture.
SECTION 8.04 General Provisions Regarding the Collection
Account.
(a) The Collection Account shall relate solely to the Notes and to
the Accounts, Eligible Investments and other property securing the Notes. Funds
and other property in the Collection Account shall not be commingled with any
other moneys or property of the Issuer or any Affiliate thereof.
(b) The Issuer will not direct the Indenture Trustee to make any
investment of any funds in the Collection Account or to sell any investment held
in the Collection Account except under the following terms and conditions:
(i) each such investment shall be made in the name of the Indenture
Trustee (in its capacity as such) or in the name of a nominee of the
Indenture Trustee (or, if, as indicated by an Opinion of Counsel delivered
to the Indenture Trustee, applicable law provides for perfection of
pledges of an investment not evidenced by a certificate or other
instrument through registration of such pledge on books maintained by or
on behalf of the issuer of such investment, such pledge may be so
registered),
(ii) the Indenture Trustee shall have sole control over such
investment, the income thereon and the proceeds thereof,
(iii) any certificate or other instrument evidencing such investment
shall be delivered directly to the Indenture Trustee or its agent, and
(iv) the proceeds of each sale of such an investment shall be
remitted by the purchaser thereof directly to the Indenture Trustee for
deposit in the Collection Account.
(c) If any amounts are needed for disbursement from the Collection
Account and sufficient uninvested funds are not available therein to make such
disbursement, in the absence of an Issuer Order for the liquidation of
investments held therein in an amount sufficient to provide the required funds,
the Indenture Trustee shall cause to be sold or otherwise converted to cash a
sufficient amount of the investments in the Collection Account.
(d) The Indenture Trustee shall not in any way be held liable by
reason of any insufficiency in the Collection Account except for its liability
on investments which are liabilities of the Indenture Trustee in its commercial
capacity as an obligor of any Eligible Investment.
(e) All investments of funds in the Collection Account and all sales
of investments held in the Collection Account shall, except as provided below,
be made by the Indenture Trustee in accordance with an Issuer Order; provided,
however, such Issuer Order shall specify investment of such funds only in
Eligible Investments. Subject to compliance with the requirements of Sections
8.02(b) and 8.04(b), such Issuer Order may authorize the Indenture Trustee to
make the specific investments set forth therein, to make investments from time
to time consistent with the general instructions set forth therein, or to make
specific investments pursuant to written, telegraphic or telephonic instructions
of the employees or agents of the Issuer identified therein, in each case only
in Eligible Investments and in such amounts as such Issuer Order shall specify.
In the event that:
(i) the Issuer shall have failed to give investment directions to
the Indenture Trustee by 10:30 a.m. Eastern Time on the Business Day prior
to any day on which funds are due to be deposited in the Collection
Account (whether with respect to Remittances or payments of principal of
or interest on Eligible Investments) authorizing the Indenture Trustee to
invest such funds,
(ii) a Default or Event of Default shall have occurred and be
continuing but the Notes shall not have been declared due and payable
pursuant to Section 5.02, or if such Notes shall have been declared due
and payable following an Event of Default, amounts collected or receivable
from the Trust Estate are being applied in accordance with Section 5.05,
or
(iii) an Event of Default shall have occurred and be continuing, the
Notes shall have been declared due and payable pursuant to Section 5.02
and amounts collected or receivable from the Trust Estate are being
applied in accordance with Section 5.08, the Indenture Trustee shall
invest and reinvest the funds then in the Collection Account to the
fullest extent practicable, in such manner as the Indenture Trustee shall
from time to time determine, but only in Eligible Investments described in
paragraph (a) of the definition thereof. In determining the practicability
of making any investment required by this Section 8.04(e), the Indenture
Trustee shall be entitled to take into account the availability to it, in
the normal course of its corporate trust business, of investments of the
required maturity and in the amounts available to be invested. All
investments made pursuant to clause (i) above shall mature on the next
Business Day following the date of such investment, all such investments
made pursuant to clause (ii) above shall mature no later than the maturity
date therefor permitted by Section 8.02(b), and all investments made
pursuant to this clause (iii) shall mature no later than the first date
following the date of such investment on which the Indenture Trustee
proposes to make a distribution to Holders of Notes pursuant to Section
5.08.
(f) Subject to the restriction on the maturity of investments set
forth in Section 8.02(b) and notwithstanding subsection (e) above, the Issuer
will give appropriate and timely investment directions to the Indenture Trustee
such that at the close of business on not more than two Business Days in any one
calendar year not more than an aggregate of $25,000 of funds in the Collection
Account are not invested pursuant, directly or indirectly, to an Issuer Order in
Eligible Investments bearing interest or sold at a discount which mature on or
after the opening of business on the next Business Day.
SECTION 8.05 Reports by Indenture Trustee to Noteholders.
On each Payment Date the Indenture Trustee shall deliver to the
Noteholders a written report based upon the Payment Date Statement for such
Payment Date setting forth the amount of such payment which represents principal
and the amount which represents interest (in each case on a per Individual Note
basis), and the principal amount of an Individual Note after giving effect to
the payment of principal made on such Payment Date.
SECTION 8.06 Reports by Indenture Trustee.
In addition to any statement required to be delivered or prepared by
the Indenture Trustee pursuant to Section 2.09, 8.02 or 10.01, the Indenture
Trustee shall deliver to the Issuer, the Servicer and, if appointed pursuant to
Section 8.07, the Independent Accountants, within two Business Days after the
request of the Issuer or such Independent Accountants, a written report setting
forth the amount of the Collection Account established hereunder and the
identity of the investments included therein. Without limiting the generality of
the foregoing, the Indenture Trustee shall, upon the request of the Issuer,
promptly transmit to the Issuer copies of all accountings of, and information
with respect to, Remittances furnished it by the Servicer and shall promptly
notify the Issuer if, on the fifth day after any Remittance Date, any Remittance
then due or any portion thereof has not been received by the Indenture Trustee.
SECTION 8.07 Reports by Independent Accountants.
(a) At the Closing Date the Issuer shall appoint the firm of
Independent Accountants to prepare and deliver the certificate or opinion
required to be delivered under Section 2.12(f), and prior to the time any report
or certificate pursuant to Section 8.07(b) is required to be delivered, the
Issuer will appoint a firm of Independent Accountants as its Independent
Accountants for purposes of preparing and delivering the reports or certificates
required by Section 8.07(b). Upon any resignation by such firm the Issuer shall
promptly appoint a successor thereto that shall also be a firm of Independent
Accountants of recognized national reputation. If the Issuer shall fail to
appoint a successor to a firm of Independent Accountants which has resigned
within fifteen days after such resignation, the Issuer shall promptly notify the
Indenture Trustee of such failure in writing. If the Issuer shall not have
appointed a successor within ten days thereafter, the Indenture Trustee shall
promptly appoint a successor firm of Independent Accountants of recognized
national reputation. The fees of such successor shall be payable by the Issuer,
and any fees not so paid by the Issuer may be paid by the Indenture Trustee on
behalf of the Issuer, from amounts otherwise payable to the Issuer from the
related Collection Account pursuant to Section 8.02(d).
(b) If the Indenture Trustee shall fail to deliver to the Issuer any
Payment Date Statement by the due date therefor, the Issuer shall, at the
opening of business on the next Business Day after such due date, direct the
firm of Independent Accountants appointed pursuant to subsection (a) to prepare
and deliver to the Indenture Trustee such Payment Date Statement at the expense
of the Indenture Trustee, no later than 2:00 p.m. on the Business Day following
the day on which such direction was given. Any fees of such Independent
Accountants not paid by the Issuer may be paid by the Indenture Trustee, on
behalf of the Issuer (unless such fees are for the account of the Indenture
Trustee), from amounts otherwise payable to the Issuer from the Collection
Account pursuant to Section 8.02(d).
SECTION 8.08 Reports by the Servicer.
In the Servicing Agreement the Servicer has agreed to deliver to the
Indenture Trustee at the time specified therein the information called for by
Section 3.01(a) of the Servicing Agreement.
SECTION 8.09 Additional Transfers.
(a) Subject to the satisfaction of the conditions set forth in
paragraph (b) below and pursuant to the terms of the related Additional Transfer
Agreement, in consideration of the Indenture Trustee's delivery on each
Additional Transfer Date to or upon the order of the Issuer of all or a portion
of the balance of funds in the Pre-Funding Account, the Issuer shall on such
Additional Transfer Date Grant to the Indenture Trustee, for the exclusive
benefit of the Holders of the Notes, all of the Issuer's right, title and
interest in and to each related Additional Account listed in the Schedule of
Accounts attached to such Additional Transfer Agreement delivered by the Issuer
on such Additional Transfer Date for inclusion in the Trust Estate, including
all property acquired in respect of the Accounts, including the related Account
Documents and all Monthly Payments that have not been received prior to the
Additional Transfer Date, as applicable, regardless of the Due Date for such
Monthly Payment and all proceeds in any way derived from any of the foregoing,
including all proceeds of the conversion, voluntary or involuntary, of any of
the foregoing into cash or other assets, including, without limitation, all
insurance proceeds and condemnation awards.
(b) The Indenture Trustee shall withdraw from the Pre-Funding
Account funds in an amount equal to the purchase price for the Additional
Accounts to be pledged to the Indenture Trustee and deliver such cash to, or at
the direction of, the Issuer for the purchase of the Additional Accounts by the
Issuer from the Grantor only upon the satisfaction of each of the following
conditions on or prior to each Additional Transfer Date:
(i) the Issuer shall have provided the Indenture Trustee with an
Addition Notice, which notice shall be given not less than two Business
Days prior to such Additional Transfer Date and shall designate the
Additional Accounts to be pledged to the Indenture Trustee and the
Aggregate Principal Balance of such Additional Accounts;
(ii) the Issuer shall have delivered an Officer's Certificate to the
Indenture Trustee confirming that, as of each Additional Transfer Date,
the Grantor was not insolvent, nor would it be made insolvent by the sale
of such Additional Accounts to the Issuer, nor was it aware of any pending
insolvency of the Grantor;
(iii) the Pre-Funding Period shall not have ended;
(iv) the Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate confirming the satisfaction of each condition
precedent specified in this paragraph (b) and in the related Additional
Transfer Agreement;
(v) the Issuer shall have delivered an Officer's Certificate to the
Indenture Trustee confirming that the representations and warranties of
the Issuer pursuant to Section 3.11 hereof are true and correct with
respect to the Additional Accounts as of the Additional Transfer Date;
(vi) At the end of the Pre-Funding Period, the addition of the
Additional Accounts to the Trust will not cause the Accounts in the
aggregate to fail to meet the following requirements: (i) no more than
0.50% of the Accounts may have obligors in bankruptcy or similar
proceedings; (ii) none of the Accounts may be over 60 days delinquent;
(iii) no Account may have a remaining term to maturity less than 120
months or greater than 360 months; (iv) no Account may have a Coupon Rate
greater than 11.50% or less than 7.25% and the weighted average Coupon
Rate for the Accounts must be at least 8.75%; (v) no more than 1.00% of
the Accounts may be secured by homes that have been repossessed and
resold; (vi) no State may account for more than 35.00% of the Accounts;
(vii) "90% complete" units must account for at least 87.25% of the
Accounts; and (viii) no more than 0.50% of the Accounts may be subject, at
the time of purchase by the Issuer, to the interest rate limitations and
other provisions of the Soldiers' and Sailors' Civil Relief Act of 1940,
as amended; and
(vii) in connection with the pledge of the Additional Accounts, the
Issuer shall have delivered all the documents referred to in the
definition of the term Account Documents.
(c) The Indenture Trustee shall acknowledge receipt on each
Additional Transfer Date of the Additional Accounts delivered to it on such date
and within five Business Days after such receipt shall, as specified in Section
3.12 hereof, review the Account Documents required to be delivered pursuant to
this Indenture (or shall cause such documents to be reviewed).
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01 Supplemental Indentures without Consent of
Noteholders.
Without the consent of the Holders of any Notes and with notice to
Moody's and S&P, the Issuer and the Indenture Trustee when authorized by an
Issuer Order, 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 required to be subjected to the lien of this Indenture, or to
subject to the lien of this Indenture additional property;
(2) to evidence the succession of another Person to the
Issuer, and the assumption by any such successor of the covenants of
the Issuer herein and in the Notes contained;
(3) to add to the covenants of the Issuer, for the benefit of
the Holders of all Notes, or to surrender any right or power herein
conferred upon the Issuer;
(4) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any
other provision herein, or to make any other provisions with respect
to matters or questions arising under this Indenture, which shall
not be materially inconsistent with the other provisions of this
Indenture, provided that such action shall not adversely affect in
any material respect the interests of the Holders of the Notes; or
(5) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under TIA or under any similar
federal statute hereafter enacted, and to add to this Indenture such
other provisions as may be expressly required by TIA.
SECTION 9.02 Supplemental Indentures with Consent of
Noteholders.
With the consent of the Holders of Notes entitled to at least 50% of
the aggregate Voting Rights of all Classes voting together as a single class and
with notice to S&P and Moody's, by Act of said Holders delivered to the Issuer
and the Indenture Trustee, the Issuer, when authorized by an Issuer Order, 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 Notes under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent of the
Holder of each Outstanding Note affected thereby:
(1) change the final instalment of principal of, or any
instalment of interest on, any Note or reduce the principal amount
thereof, the Note Interest Rate thereon or the Redemption Price with
respect thereto, change the Note Redemption Date, change any place
of payment where, or the coin or currency in which, any Note or any
interest thereon is payable, or impair the right to institute suit
for the enforcement of the payment of any instalment of interest due
on any Note on or after the date such payment is due or for the
enforcement of the payment of the entire remaining unpaid principal
amount of any Note on or after the Maturity of the final instalment
of the principal thereof (or, in the case of redemption, on or after
the applicable Redemption Date);
(2) reduce the percentage of the Voting Rights or waive
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 9.02, Section
5.14 or Section 5.18(b) or 5.18(c), except to increase any
percentage specified therein or to provide that certain other
provisions of this Indenture cannot be modified or waived without
the consent of the Holder of each Outstanding Note 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 ranking prior to or on a
parity with the lien of this Indenture with respect to any part of
the Trust Estate or terminate the lien of this Indenture on any
property at any time subject hereto or deprive the Holder of any
Note of the security afforded by the lien this Indenture; or
(6) modify any of the provisions of this Indenture in such
manner as to affect the calculation of the principal or interest for
any Payment Date on any Notes (including the calculation of any of
the individual components of such Debt Service Requirement) or to
affect the rights of the Holders of Notes to the benefits of any
provisions contained herein for the mandatory payment of principal.
The Indenture Trustee may in its discretion determine whether or not
any Notes would be affected by any supplemental indenture pursuant to this
Section 9.02 or Section 9.01(4) hereof and any such determination shall be
conclusive upon the Holders of all Notes, 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 Noteholders under this
Section 9.02 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 Issuer shall mail to
the Holders of the Notes to which such supplemental indenture relates a notice
setting forth in general terms the substance of such supplemental indenture. Any
failure of the Issuer to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture.
SECTION 9.03 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 (except to the extent required in the case of a supplemental indenture
entered into under Section 9.01(5)) be obligated to, enter into any such
supplemental indenture which 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 Notes to which such supplemental indenture relates which 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 Section shall
conform to the requirements of the TIA as then in effect, so long as this
Indenture shall then be qualified under the TIA.
SECTION 9.06 Reference in Notes to Supplemental Indentures.
Notes 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 Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture
which relates to the Notes may be prepared and executed by the Issuer and
authenticated and delivered by the Indenture Trustee in exchange for Outstanding
Notes.
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.01 Optional Redemption of Notes.
The Notes are subject to redemption in whole and not in part at the
option of the Grantor on any Payment Date following the Payment Date on which
the Aggregate Outstanding Principal Amount of the Notes is reduced to 10% or
less of the aggregate Initial Principal Amount of the Notes.
Payment on the Notes pursuant to any optional redemption may be made
only with Eligible Moneys. If the Grantor elects to so redeem all Notes then
Outstanding, it shall, no later than 35 days prior to the Payment Date selected
for such redemption, deliver notice of such election to the Indenture Trustee
and cause the delivery of an Issuer Order directing the Indenture Trustee to
effect such redemption and the aggregate Redemption Price due on such Payment
Date for deposit into the Collection Account. Notwithstanding the foregoing, the
Grantor may not elect to redeem all Notes then Outstanding unless any
Reimbursement Amount owed to the Trust Estate, the Servicer or the Indenture
Trustee pursuant to Section 3.11(b) hereof has been paid. All such Notes shall
be due and payable on such Payment Date upon the giving of the notice thereof
required by Section 10.02.
SECTION 10.02 Form of Redemption Notice.
Notices of redemptions of Notes shall be given by the Indenture
Trustee in the name and at the expense of the Issuer and shall be mailed no
later than 10 days (or, in the event that DTC is the Holder of the Notes, 30
days) prior to the Redemption Date to the Persons who were Holders of such Notes
on the Record Date that would otherwise be applicable to the Payment Date on
which such notes are to be redeemed.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price and
(3) the place where such Notes 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 Note for any period after the date
fixed for redemption.
Failure to give notice of redemption, or any defect therein, to any
Holder of any Note selected for redemption shall not impair or affect the
validity of the redemption of any other Note.
SECTION 10.03 Notes Payable on Redemption Date.
Notice of redemption having been given as provided in Section 10.02,
the Notes so to be redeemed shall, on the applicable Redemption Date, become due
and payable at the Redemption Price and (unless the Grantor shall default in the
payment of the Redemption Price) no interest shall accrue on such Redemption
Price for any period after such Redemption Date. Upon surrender of such Notes
for redemption in accordance with said notice such Notes shall be paid by or on
behalf of the Issuer at the Redemption Price.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01 Compliance Certificates and Opinions.
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 Officer's Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with and an Opinion of Counsel stating that
in the opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (including one furnished
pursuant to specific requirements of this Indenture relating to a particular
application or request) shall include to the extent applicable:
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such
covenant or condition has been complied with;
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with; and
(5) if the signer of such certificate or opinion is required
to be Independent, the statement required by the definition of the
term "Independent."
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 an officer of the Issuer may be based,
insofar as it relates to legal matters, upon a certificate or opinion of
counsel, unless such officer knows, or in the exercise of reasonable care should
know, that the certificate or opinion with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such certificate or Opinion
of Counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Owner Trustee, the Grantor or any other Person, stating that the information
with respect to such factual matters is in the possession of such Person, unless
such officer or counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous. Any Opinion of Counsel may be based on the written
opinion of other counsel, in which event such Opinion of Counsel shall be
accompanied by a copy of such other counsel's opinion and shall include a
statement to the effect that such counsel believes that such counsel and the
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, 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).
Wherever 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).
SECTION 11.03 Acts of Noteholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by agent
duly appointed in writing; and, except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the 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
Noteholders 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 Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of every
Note 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 Notes.
SECTION 11.04 Notices, etc., to Indenture Trustee and Issuer.
(a) Any request, demand, authorization, direction, notice, consent
waiver or Act of Noteholders 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 Noteholder or by the Issuer
shall be sufficient for every purpose hereunder if filed in writing
and mailed by registered mail to the Indenture Trustee at 000 Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000, Attention:
Corporate Trust Department, or
(2) the Issuer by the Indenture Trustee or by any Noteholder
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 c/o Wilmington
Trust Company, as Owner Trustee, Corporate Financial Services
Division, Xxxxxx Xxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxx 00000,
Attention: Corporate Trust Administration, or at any other address
previously furnished in writing to the Indenture Trustee by the
Issuer.
(b) Notices required under this Indenture to be sent to Noteholders
with respect to material amendments to the Indenture, the Trust Agreement or the
Servicing Agreement, satisfaction and discharge of the Indenture and any
reports, statements, or other notices required hereunder shall in addition be
sent to each Rating Agency; to Moody's at its address at 00 Xxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, and to S&P at its address at 00 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000.
SECTION 11.05 Notices and Reports to Noteholders; Waiver of
Notices.
Where this Indenture provides for notice to Noteholders of any event
or the mailing of any report to Noteholders, such notice or report shall be
sufficiently given (unless otherwise herein expressly provided) if mailed,
first-class postage prepaid, to each Noteholder affected by such event or to
whom such report is required to be mailed, at the address of such Noteholder as
it appears on the Note 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 Noteholders 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 Noteholder
shall affect the sufficiency of such notice or report with respect to other
Noteholders, and any notice or report which is mailed in the manner herein
provided shall be conclusively presumed to have been duly given or provided.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders 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 Noteholders 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 and Agents.
The Indenture Trustee may make reasonable rules for any meeting of
Noteholders. Any Agent may make reasonable rules and set reasonable requirements
for its functions.
SECTION 11.07 Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Indenture by, or which
is deemed to be included in this Indenture (an "incorporated provision") by
operation of, any of the provisions of TIA, such required provision or
incorporated 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 Notes 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 Notes, 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 Noteholders any benefit or any legal or equitable right, remedy or claim
under this Indenture.
SECTION 11.12 Governing Law.
This Indenture and each Note 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 11.13 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 11.14 Recording of Indenture.
This Indenture is subject to recording in any appropriate public
recording offices, such recording to be effected by the Issuer and at its
expense in compliance with any Opinion of Counsel delivered pursuant to Section
2.12(l) or 3.06.
SECTION 11.15 Issuer Obligations.
No recourse may be taken, directly or indirectly, against (i) the
Owner Trustee in its individual capacity, (ii) any incorporator, subscriber to
the capital stock, stockholder, officer, director, employee or agent of the
Owner Trustee or of any predecessor or successor of the Owner Trustee in its
individual capacity, (iii) any holder of a beneficial interest in the Issuer,
(iv) any partner, beneficiary, agent, officer, director, employee, or successor
or assign of a holder of a beneficial interest in the Issuer, or (v) any
incorporator, subscriber to the capital stock, stockholder, officer, director or
employee of the Indenture Trustee or any predecessor or successor of the
Indenture Trustee with respect to the Issuer's obligations with respect to the
Notes or the obligation of the Issuer or the Indenture Trustee under this
Indenture or any certificate or other writing delivered in connection herewith
or therewith.
SECTION 11.16 Inspection.
The Issuer and the Note Registrar will agree that, on reasonable
prior notice, they will permit any representative of the Indenture Trustee,
during normal business hours, to examine all of the books of account, records,
reports and other papers in its possession relating to the Notes, to make copies
and extracts therefrom in the case of the Issuer, 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
Independent 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 11.16 shall be borne by the Issuer.
IN WITNESS WHEREOF, the Owner Trustee on behalf of the Issuer and
the Indenture Trustee have caused this Indenture to be duly executed by their
respective officers thereunto duly authorized and the seal of the Owner Trustee
and of the Indenture Trustee to be hereunto affixed, all as of the day and year
first above written.
MID-STATE TRUST XI
By: Wilmington Trust Company, not in
its individual capacity, but
solely as Owner Trustee of
Mid-State Trust XI
By:
-------------------------------------
Authorized Officer
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Indenture Trustee
By:
-------------------------------------
Authorized Signatory
Acknowledged and Agreed to with respect to Sections 3.21 and 6.07 herein:
MID-STATE HOMES, INC.,
By:
-------------------------------------
Authorized Signatory
STATE OF DELAWARE )
: ss.:
COUNTY OF ___________ )
On the 26th day of June, 2003, before me, a notary public in and for
said State, personally appeared __________________, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person who
executed the within instrument on behalf of one of the corporations therein
named, and acknowledged to me that such corporation executed it.
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
STATE OF NORTH CAROLINA )
: ss.:
COUNTY OF MECKLENBURG )
On the 26th day of June, 2003 before me, a notary public in and for
said State, personally appeared ____________, personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person who executed the
within instrument on behalf of one of the corporations therein named, and
acknowledged to me that such national banking association executed it.
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
EXHIBIT A
[FORM OF CLASS A NOTE]
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND 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.
PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THE ACTUAL OUTSTANDING PRINCIPAL
AMOUNT OF THIS NOTE MAY BE ASCERTAINED ONLY BY OBTAINING A WRITTEN CONFIRMATION
THEREOF FROM THE INDENTURE TRUSTEE NAMED HEREIN.
EACH PURCHASER OF A BENEFICIAL INTEREST IN THIS NOTE WILL BE DEEMED TO REPRESENT
EITHER THAT (I) IT IS NOT AND IS NOT PURCHASING ITS INTEREST IN THIS NOTE ON
BEHALF OF OR WITH THE ASSETS OF A RETIREMENT PLAN OR OTHER EMPLOYEE BENEFIT PLAN
OR ARRANGEMENT SUBJECT TO TITLE I OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR
LAW OR (II) ITS PURCHASE OF ITS INTEREST IN THIS NOTE WILL NOT RESULT IN A
NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA OR THE CODE OR A SIMILAR VIOLATION
OF SIMILAR LAW.
MID-STATE TRUST XI
4.864% CLASS A ASSET-BACKED NOTE
DUE: JULY 15, 2038
ACCRUAL DATE: JUNE 15, 2003
CUSIP: 59549W AA 1
$ No. __
Mid-State Trust XI (the "Issuer"), a Delaware statutory trust
governed by a Trust Agreement dated June 24, 2003 (the "Trust Agreement"), for
value received, hereby promises to pay to Cede & Co. or registered assigns, the
principal sum of $[________] Dollars in monthly instalments on the 15th day of
each month, or if such date is not a Business Day, the next Business Day
thereafter (the "Payment Dates") in each year, commencing on July 15, 2003 and
ending on or before July 15, 2038 (the "Maturity" of such final instalment of
principal) and to pay interest accrued during the period beginning on the
immediately preceding Payment Date (the "Interest Accrual Period"), until the
principal amount of this Note is paid in full, at the rate of 4.864% per annum,
such interest being computed on the basis of a 360-day year of twelve 30-day
months and payable monthly on each Payment Date. Instalments of principal of
this Note are due and payable in the amounts and on the dates described on the
reverse hereof.
The principal of, and interest on, this Note 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 Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note. Any instalment of principal or interest which is not paid when and as due
shall bear interest at the rate of interest borne by the principal of this Note
from the date due to the date of payment thereof, but only to the extent that
the payment of such interest shall be lawful and enforceable.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee by manual signature, this Note shall not be entitled to
any benefit under the Indenture referred to on the reverse hereof, or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, Mid-State Trust XI has caused this instrument to
be duly executed by and under the corporate seal of Wilmington Trust Company,
not in its individual capacity but solely as Owner Trustee under the Trust
Agreement.
Dated: MID-STATE TRUST XI
By: Wilmington Trust Company,
not in its individual
capacity but solely in
its capacity as Owner
Trustee under the Trust
Agreement
[SEAL]
By:
----------------------------------
Title:
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its 4.864% Class A Asset-Backed Notes (herein called the "Notes").
The Notes are issued and will be issued under an Indenture dated June 26, 2003
(herein called the "Indenture"), between the Issuer and Wachovia Bank, National
Association, as Indenture Trustee (the "Indenture Trustee," which term includes
any successor Indenture Trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights thereunder of the Issuer, the Indenture Trustee and the
Holders of the Notes and the terms upon which the Notes are, and are to be,
authenticated and delivered. Also issued under the Indenture are the 5.598%
Asset-Backed Notes, Class M-1, 6.573% Asset-Backed Notes, Class M-2 and 8.221%
Asset-Backed Notes, Class B. The Notes are secured by the collateral pledged as
security therefor to the extent provided in the Indenture. All terms used in
this Note which are defined in the Indenture shall have the meanings assigned to
them in the Indenture.
An instalment of principal shall be paid on the Notes on each
Payment Date in the amount equal to the amount available to be paid thereon as
principal pursuant to and subject to the priorities set forth in Section 8.02(b)
of the Indenture on such Payment Date; provided that the unpaid principal shall
be due and payable on the Payment Date occurring in July 2038. Each payment of
principal of the Notes shall be allocated among the Notes in proportion to their
then remaining unpaid principal amounts. The unpaid principal amount of this
Class A Note may be reduced by the allocation to it (in accordance with Section
5.20 of the Indenture) of Class A Realized Loss Amounts without any
corresponding payment.
Payment of the then remaining unpaid principal amount of this Note
on the Maturity of its final instalment of principal or on such earlier date as
the Issuer shall be required to apply payments received with respect to the
collateral securing the Notes to payment of the then remaining unpaid principal
amount of this Note or to payment of the Redemption Price payable on any date as
of which this Note has been called for redemption in full shall be made upon
presentation of this Note to the office or agency of the Issuer maintained for
such purpose. Payments of interest on this Note due and payable on each Payment
Date, together with any instalment of principal of this Note due and payable on
each Payment Date which is also a Payment Date for this Note, shall be made by
check mailed to the Person whose name appears as the registered Holder of this
Note (or one or more Predecessor Notes) on the Note Register as of the Record
Date preceding such Payment Date, except that with respect to a Note registered
in the name of the nominee of a 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.
Checks for amounts due on this Note shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment and checks returned undelivered will be held
for payment to the Person entitled thereto, subject to the terms of the
Indenture, at the office or agency in the United States of America designated by
the Issuer for such purpose pursuant to the Indenture. Any reduction in the
principal amount of this Note (or any one or more Predecessor Notes) effected by
any payments made on any Payment Date or by any allocation of a Class A Realized
Loss Amount shall be binding upon all Holders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange herefor or in
lieu hereof, whether or not 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 Note
on a Payment Date which is prior to the Maturity of the final instalment of
principal hereof, then the Indenture Trustee, on behalf of the Issuer, will
notify the Person who was the registered Holder hereof on the day immediately
preceding such Payment Date, and the amount then due and payable shall, if
sufficient funds therefor are available, be payable only upon presentation of
this Note to the office or agency of the Issuer maintained for such purpose.
If an Event of Default shall occur and be continuing with respect to
the Notes, the Notes may become or be declared due and payable in the manner and
with the effect provided in the Indenture. Reference is hereby made to Article V
of the Indenture which sets forth certain events which constitute Events of
Default. If any such acceleration of maturity occurs prior to the Maturity of
the final instalment of principal of this Note, the amount payable to the Holder
of this Note will be equal to the aggregate unpaid principal amount of this Note
on the date this Note becomes so due and payable, together with accrued interest
on such unpaid principal amount to the date of payment thereof. The Indenture
provides that, notwithstanding the acceleration of the maturity of the Notes,
under certain circumstances specified therein all amounts collected as proceeds
of the collateral securing the Notes or otherwise shall continue to be applied
to payments of principal of and interest on the Notes as if they had not been
declared due and payable. In such event, interest on the then unpaid principal
amount of all Notes and on any overdue instalments of interest on the Notes
following the acceleration of the maturity of the Notes shall accrue and be
payable at the Note Interest Rate, but only to the extent that the payment
thereof shall be lawful and enforceable.
The Notes are not prepayable or redeemable at the option or
direction of the Issuer except that all of the outstanding Notes may be called
for redemption in whole at the option of the Grantor on any Payment Date
following the Payment Date on which the Aggregate Outstanding Principal Amount
of the Notes is reduced to 10% or less of the aggregate Initial Principal Amount
of the Notes, at a redemption price equal to 100% of the aggregate unpaid
principal balance of the Notes plus accrued and unpaid interest to the date set
for redemption.
As provided in the Indenture the transfer of this Note may be
registered on the Note Register of the Issuer, upon surrender of this Note 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 his attorney duly authorized in writing, and
thereupon one or more new Notes, of authorized denominations and in the same
aggregate initial principal amount will be issued to the designated transferee
or transferees.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note is registered (i)
on any Record Date, for purposes of making payments, and (ii) on any other date
for any other purpose, as the owner hereof, whether or not this Note be overdue,
and neither the Issuer, the Indenture Trustee nor any such agent shall be
affected by written 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 Notes under the Indenture at any
time by the Issuer, and the Holders of Notes entitled to more than 50% of the
aggregate Voting Rights of all Classes voting together as a single class. The
Indenture also contains provisions that permit the Holders of the percentage of
the Class or Classes of Notes specified in Section 5.02 of the Indenture, on
behalf of the Holders of all the Notes, to waive compliance by the Issuer with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder, at
the time of the giving thereof, of this Note (or any one or more Predecessor
Notes) shall be conclusive and binding upon such Holder and upon all future
holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent or waiver is made upon this Note.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Notes are issuable only in registered form in the denominations
provided in the Indenture and subject to certain limitations therein set forth.
The Notes are exchangeable for a like aggregate initial principal amount of
Notes of different authorized denominations, as requested by the Holder
surrendering the same, pursuant to the terms and conditions set forth in the
Indenture.
The Issuer has entered into this Indenture and this Note with the
intention that, for all purposes including federal, state and local tax
purposes, the Notes will qualify as indebtedness secured by the Trust Estate.
The Issuer, by entering into this Indenture, and each purchaser of a beneficial
interest in a Note, agree to treat the Notes for all purposes including federal,
state and local tax purposes as indebtedness of the Issuer.
As provided in the Indenture, this Note and the Indenture 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.
No reference herein to the Indenture and no provision of this Note
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 Note at
the times, place and rate, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, neither the Owner
Trustee in its individual capacity, any beneficial owner of the Issuer, the
Indenture Trustee nor 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 and interest on, or performance of, or omission to perform, any of
the covenants, obligations or indemnifications contained in, this Note or the
Indenture, it being expressly understood that said covenants, obligations and
indemnifications have been made by the Owner Trustee for the sole purpose of
binding the respective interests of the beneficial owners of the Issuer and the
Owner Trustee in the assets of the Issuer. The Holder of this Note by the
acceptance hereof agrees that 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 the enforcement against, the
assets of the Issuer for any and all liabilities, obligations and undertakings
contained in the Indenture or in this Note.
The Owner Trustee has executed this Note on behalf of the Issuer,
not in its individual capacity but solely as owner trustee under the Trust
Agreement and the Owner Trustee shall be liable hereunder only in respect of the
assets of the Trust created by such Trust Agreement.
The remedies of the Holder hereof as provided herein and in the
Indenture, shall be cumulative and concurrent and may be pursued solely against
the assets of the Trust created by the Trust Agreement pledged under the
Indenture as security for the Notes. No failure on the part of the holder in
exercising any right or remedy hereunder shall operate as a waiver or release
thereof, nor shall any single or partial exercise of any right or remedy
preclude any further exercise thereof or the exercise of any other right or
remedy hereunder.
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A Notes referred to in the within-mentioned
Indenture.
Wachovia Bank, National Association,
as Indenture Trustee
By:
------------------------------------
Authorized Signatory
EXHIBIT B
[FORM OF CLASS M-1 NOTE]
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND 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.
PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THE ACTUAL OUTSTANDING PRINCIPAL
AMOUNT OF THIS NOTE MAY BE ASCERTAINED ONLY BY OBTAINING A WRITTEN CONFIRMATION
THEREOF FROM THE INDENTURE TRUSTEE NAMED HEREIN.
THE RIGHTS OF THE CLASS M-1 NOTEHOLDERS TO RECEIVE PAYMENTS IN RESPECT OF
PRINCIPAL AND INTEREST ON THE CLASS M-1 NOTES ARE SUBORDINATE TO THE RIGHTS OF
THE CLASS A NOTEHOLDERS TO RECEIVE PAYMENTS OF PRINCIPAL AND INTEREST TO THE
EXTENT DESCRIBED IN THE INDENTURE.
EACH PURCHASER OF A BENEFICIAL INTEREST IN THIS NOTE WILL BE DEEMED TO REPRESENT
EITHER THAT (I) IT IS NOT AND IS NOT PURCHASING ITS INTEREST IN THIS NOTE ON
BEHALF OF OR WITH THE ASSETS OF A RETIREMENT PLAN OR OTHER EMPLOYEE BENEFIT PLAN
OR ARRANGEMENT SUBJECT TO TITLE I OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR
LAW OR (II) ITS PURCHASE OF ITS INTEREST IN THIS NOTE WILL NOT RESULT IN A
NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA OR THE CODE OR A SIMILAR VIOLATION
OF SIMILAR LAW.
MID-STATE TRUST XI
5.598% CLASS M-1 ASSET-BACKED NOTE
DUE: JULY 15, 2038
ACCRUAL DATE: JUNE 15, 2003
CUSIP: 59549W AB 9
$[________] No. __
Mid-State Trust XI (the "Issuer"), a Delaware statutory trust
governed by a Trust Agreement dated June 24, 2003 (the "Trust Agreement"), for
value received, hereby promises to pay to Cede & Co. or registered assigns, the
principal sum of $[________] Dollars in monthly instalments on the 15th day of
each month, or if such date is not a Business Day, the next Business Day
thereafter (the "Payment Dates") in each year, commencing on July 15, 2003 and
ending on or before July 15, 2038 (the "Maturity" of such final instalment of
principal) and to pay interest accrued during the period beginning on the
immediately preceding Payment Date (the "Interest Accrual Period"), until the
principal amount of this Note is paid in full, at the rate of 5.598% per annum,
such interest being computed on the basis of a 360-day year of twelve 30-day
months and payable monthly on each Payment Date. Instalments of principal of
this Note are due and payable in the amounts and on the dates described on the
reverse hereof.
The principal of, and interest on, this Note 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 Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note. Any instalment of principal or interest which is not paid when and as due
shall bear interest at the rate of interest borne by the principal of this Note
from the date due to the date of payment thereof, but only to the extent that
the payment of such interest shall be lawful and enforceable.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee by manual signature, this Note shall not be entitled to
any benefit under the Indenture referred to on the reverse hereof, or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, Mid-State Trust XI has caused this instrument to
be duly executed by and under the corporate seal of Wilmington Trust Company,
not in its individual capacity but solely as Owner Trustee under the Trust
Agreement.
Dated: MID-STATE TRUST XI
By: Wilmington Trust Company,
not in its individual
capacity but solely in
its capacity as Owner
Trustee under the Trust
Agreement
[SEAL]
By:
----------------------------------
Title:
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its 5.598% Class M-1 Asset-Backed Notes (herein called the
"Notes"). The Notes are issued and will be issued under an Indenture dated June
26, 2003 (herein called the "Indenture"), between the Issuer and Wachovia Bank,
National Association, as Indenture Trustee (the "Indenture Trustee," which term
includes any successor Indenture Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights thereunder of the Issuer, the Indenture
Trustee and the Holders of the Notes and the terms upon which the Notes are, and
are to be, authenticated and delivered. Also issued under the Indenture are the
4.864% Asset-Backed Notes, Class A, 6.573% Asset-Backed Notes, Class M-2 and
8.221% Asset-Backed Notes, Class B. The Notes are secured by the collateral
pledged as security therefor to the extent provided in the Indenture. All terms
used in this Note which are defined in the Indenture shall have the meanings
assigned to them in the Indenture.
An instalment of principal shall be paid on the Notes on each
Payment Date in the amount equal to the amount available to be paid thereon as
principal pursuant to and subject to the priorities set forth in Section 8.02(b)
of the Indenture on such Payment Date; provided that the unpaid principal shall
be due and payable on the Payment Date occurring in July 2038. Each payment of
principal of the Notes shall be allocated among the Notes in proportion to their
then remaining unpaid principal amounts. The unpaid principal amount of this
Class M-1 Note may be reduced by the allocation to it (in accordance with
Section 5.20 of the Indenture) of Class M-1 Realized Loss Amounts without any
corresponding payment.
The rights of the Class M-1 Noteholders to receive payments in
respect of principal and interest on the Class M-1 Notes are subordinate to the
rights of the Class A Noteholders to receive payments of principal and interest
to the extent described in the Indenture.
Payment of the then remaining unpaid principal amount of this Note
on the Maturity of its final instalment of principal or on such earlier date as
the Issuer shall be required to apply payments received with respect to the
collateral securing the Notes to payment of the then remaining unpaid principal
amount of this Note or to payment of the Redemption Price payable on any date as
of which this Note has been called for redemption in full shall be made upon
presentation of this Note to the office or agency of the Issuer maintained for
such purpose. Payments of interest on this Note due and payable on each Payment
Date, together with any instalment of principal of this Note due and payable on
each Payment Date which is also a Payment Date for this Note, shall be made by
check mailed to the Person whose name appears as the registered Holder of this
Note (or one or more Predecessor Notes) on the Note Register as of the Record
Date preceding such Payment Date, except that with respect to a Note registered
in the name of the nominee of a 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.
Checks for amounts due on this Note shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment and checks returned undelivered will be held
for payment to the Person entitled thereto, subject to the terms of the
Indenture, at the office or agency in the United States of America designated by
the Issuer for such purpose pursuant to the Indenture. Any reduction in the
principal amount of this Note (or any one or more Predecessor Notes) effected by
any payments made on any Payment Date or by any allocation of a Class M-1
Realized Loss Amount shall be binding upon all Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange herefor or
in lieu hereof, whether or not 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 Note
on a Payment Date which is prior to the Maturity of the final instalment of
principal hereof, then the Indenture Trustee, on behalf of the Issuer, will
notify the Person who was the registered Holder hereof on the day immediately
preceding such Payment Date, and the amount then due and payable shall, if
sufficient funds therefor are available, be payable only upon presentation of
this Note to the office or agency of the Issuer maintained for such purpose.
If an Event of Default shall occur and be continuing with respect to
the Notes, the Notes may become or be declared due and payable in the manner and
with the effect provided in the Indenture. Reference is hereby made to Article V
of the Indenture which sets forth certain events which constitute Events of
Default. If any such acceleration of maturity occurs prior to the Maturity of
the final instalment of principal of this Note, the amount payable to the Holder
of this Note will be equal to the aggregate unpaid principal amount of this Note
on the date this Note becomes so due and payable, together with accrued interest
on such unpaid principal amount to the date of payment thereof. The Indenture
provides that, notwithstanding the acceleration of the maturity of the Notes,
under certain circumstances specified therein all amounts collected as proceeds
of the collateral securing the Notes or otherwise shall continue to be applied
to payments of principal of and interest on the Notes as if they had not been
declared due and payable. In such event, interest on the then unpaid principal
amount of all Notes and on any overdue instalments of interest on the Notes
following the acceleration of the maturity of the Notes shall accrue and be
payable at the Note Interest Rate, but only to the extent that the payment
thereof shall be lawful and enforceable.
The Notes are not prepayable or redeemable at the option or
direction of the Issuer except that all of the outstanding Notes may be called
for redemption in whole at the option of the Grantor on any Payment Date
following the Payment Date on which the Aggregate Outstanding Principal Amount
of the Notes is reduced to 10% or less of the aggregate Initial Principal Amount
of the Notes, at a redemption price equal to 100% of the aggregate unpaid
principal balance of the Notes plus accrued and unpaid interest to the date set
for redemption.
As provided in the Indenture the transfer of this Note may be
registered on the Note Register of the Issuer, upon surrender of this Note 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 his attorney duly authorized in writing, and
thereupon one or more new Notes, of authorized denominations and in the same
aggregate initial principal amount will be issued to the designated transferee
or transferees.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note is registered (i)
on any Record Date, for purposes of making payments, and (ii) on any other date
for any other purpose, as the owner hereof, whether or not this Note be overdue,
and neither the Issuer, the Indenture Trustee nor any such agent shall be
affected by written 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 Notes under the Indenture at any
time by the Issuer, and the Holders of Notes entitled to more than 50% of the
aggregate Voting Rights of all Classes voting together as a single class. The
Indenture also contains provisions that permit the Holders of the percentage of
the Class or Classes of Notes specified in Section 5.02 of the Indenture, on
behalf of the Holders of all the Notes, to waive compliance by the Issuer with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder, at
the time of the giving thereof, of this Note (or any one or more Predecessor
Notes) shall be conclusive and binding upon such Holder and upon all future
holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent or waiver is made upon this Note.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Notes are issuable only in registered form in the denominations
provided in the Indenture and subject to certain limitations therein set forth.
The Notes are exchangeable for a like aggregate initial principal amount of
Notes of different authorized denominations, as requested by the Holder
surrendering the same, pursuant to the terms and conditions set forth in the
Indenture.
The Issuer has entered into this Indenture and this Note with the
intention that, for all purposes including federal, state and local tax
purposes, the Notes will qualify as indebtedness secured by the Trust Estate.
The Issuer, by entering into this Indenture, and each purchaser of a beneficial
interest in a Note, agree to treat the Notes for all purposes including federal,
state and local tax purposes as indebtedness of the Issuer.
As provided in the Indenture, this Note and the Indenture 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.
No reference herein to the Indenture and no provision of this Note
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 Note at
the times, place and rate, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, neither the Owner
Trustee in its individual capacity, any beneficial owner of the Issuer, the
Indenture Trustee nor 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 and interest on, or performance of, or omission to perform, any of
the covenants, obligations or indemnifications contained in, this Note or the
Indenture, it being expressly understood that said covenants, obligations and
indemnifications have been made by the Owner Trustee for the sole purpose of
binding the respective interests of the beneficial owners of the Issuer and the
Owner Trustee in the assets of the Issuer. The Holder of this Note by the
acceptance hereof agrees that 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 the enforcement against, the
assets of the Issuer for any and all liabilities, obligations and undertakings
contained in the Indenture or in this Note.
The Owner Trustee has executed this Note on behalf of the Issuer,
not in its individual capacity but solely as owner trustee under the Trust
Agreement and the Owner Trustee shall be liable hereunder only in respect of the
assets of the Trust created by such Trust Agreement.
The remedies of the Holder hereof as provided herein and in the
Indenture, shall be cumulative and concurrent and may be pursued solely against
the assets of the Trust created by the Trust Agreement pledged under the
Indenture as security for the Notes. No failure on the part of the holder in
exercising any right or remedy hereunder shall operate as a waiver or release
thereof, nor shall any single or partial exercise of any right or remedy
preclude any further exercise thereof or the exercise of any other right or
remedy hereunder.
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class M-1 Notes referred to in the
within-mentioned Indenture.
Wachovia Bank, National Association,
as Indenture Trustee
By:
------------------------------------
Authorized Signatory
EXHIBIT C
[FORM OF CLASS M-2 NOTE]
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND 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.
PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THE ACTUAL OUTSTANDING PRINCIPAL
AMOUNT OF THIS NOTE MAY BE ASCERTAINED ONLY BY OBTAINING A WRITTEN CONFIRMATION
THEREOF FROM THE INDENTURE TRUSTEE NAMED HEREIN.
THE RIGHTS OF THE CLASS M-2 NOTEHOLDERS TO RECEIVE PAYMENTS IN RESPECT OF
PRINCIPAL AND INTEREST ON THE CLASS M-2 NOTES ARE SUBORDINATE TO THE RIGHTS OF
THE CLASS A NOTEHOLDERS AND THE CLASS M-1 NOTEHOLDERS TO RECEIVE PAYMENTS OF
PRINCIPAL AND INTEREST TO THE EXTENT DESCRIBED IN THE INDENTURE.
EACH PURCHASER OF A BENEFICIAL INTEREST IN THIS NOTE WILL BE DEEMED TO REPRESENT
EITHER THAT (I) IT IS NOT AND IS NOT PURCHASING ITS INTEREST IN THIS NOTE ON
BEHALF OF OR WITH THE ASSETS OF A RETIREMENT PLAN OR OTHER EMPLOYEE BENEFIT PLAN
OR ARRANGEMENT SUBJECT TO TITLE I OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR
LAW OR (II) ITS PURCHASE OF ITS INTEREST IN THIS NOTE WILL NOT RESULT IN A
NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA OR THE CODE OR A SIMILAR VIOLATION
OF SIMILAR LAW.
MID-STATE TRUST XI
6.573% CLASS M-2 ASSET-BACKED NOTE
DUE: JULY 15, 2038
ACCRUAL DATE: JUNE 15, 2003
CUSIP: 59549W AC 7
$[________] No. __
Mid-State Trust XI (the "Issuer"), a Delaware statutory trust
governed by a Trust Agreement dated June 24, 2003 (the "Trust Agreement"), for
value received, hereby promises to pay to Cede & Co. or registered assigns, the
principal sum of $[________] Dollars in monthly instalments on the 15th day of
each month, or if such date is not a Business Day, the next Business Day
thereafter (the "Payment Dates") in each year, commencing on July 15, 2003 and
ending on or before July 15, 2038 (the "Maturity" of such final instalment of
principal) and to pay interest accrued during the period beginning on the
immediately preceding Payment Date (the "Interest Accrual Period"), until the
principal amount of this Note is paid in full, at the rate of 6.573% per annum,
such interest being computed on the basis of a 360-day year of twelve 30-day
months and payable monthly on each Payment Date. Instalments of principal of
this Note are due and payable in the amounts and on the dates described on the
reverse hereof.
The principal of, and interest on, this Note 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 Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note. Any instalment of principal or interest which is not paid when and as due
shall bear interest at the rate of interest borne by the principal of this Note
from the date due to the date of payment thereof, but only to the extent that
the payment of such interest shall be lawful and enforceable.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee by manual signature, this Note shall not be entitled to
any benefit under the Indenture referred to on the reverse hereof, or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, Mid-State Trust XI has caused this instrument to
be duly executed by and under the corporate seal of Wilmington Trust Company,
not in its individual capacity but solely as Owner Trustee under the Trust
Agreement.
Dated: MID-STATE TRUST XI
By: Wilmington Trust Company,
not in its individual
capacity but solely in
its capacity as Owner
Trustee under the Trust
Agreement
[SEAL]
By:
----------------------------------
Title:
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its 6.573% Class M-2 Asset-Backed Notes (herein called the
"Notes"). The Notes are issued and will be issued under an Indenture dated June
26, 2003 (herein called the "Indenture"), between the Issuer and Wachovia Bank,
National Association, as Indenture Trustee (the "Indenture Trustee," which term
includes any successor Indenture Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights thereunder of the Issuer, the Indenture
Trustee and the Holders of the Notes and the terms upon which the Notes are, and
are to be, authenticated and delivered. Also issued under the Indenture are the
4.864% Asset-Backed Notes, Class A, 5.598% Asset-Backed Notes, Class M-1 and
8.221% Asset-Backed Notes, Class B. The Notes are secured by the collateral
pledged as security therefor to the extent provided in the Indenture. All terms
used in this Note which are defined in the Indenture shall have the meanings
assigned to them in the Indenture.
An instalment of principal shall be paid on the Notes on each
Payment Date in the amount equal to the amount available to be paid thereon as
principal pursuant to and subject to the priorities set forth in Section 8.02(b)
of the Indenture on such Payment Date; provided that the unpaid principal shall
be due and payable on the Payment Date occurring in July 2038. Each payment of
principal of the Notes shall be allocated among the Notes in proportion to their
then remaining unpaid principal amounts. The unpaid principal amount of this
Class M-2 Note may be reduced by the allocation to it (in accordance with
Section 5.20 of the Indenture) of Class M-2 Realized Loss Amounts without any
corresponding payment.
The rights of the Class M-2 Noteholders to receive payments in
respect of principal and interest on the Class M-2 Notes are subordinate to the
rights of the Class A Noteholders and the Class M-1 Noteholders to receive
payments of principal and interest to the extent described in the Indenture.
Payment of the then remaining unpaid principal amount of this Note
on the Maturity of its final instalment of principal or on such earlier date as
the Issuer shall be required to apply payments received with respect to the
collateral securing the Notes to payment of the then remaining unpaid principal
amount of this Note or to payment of the Redemption Price payable on any date as
of which this Note has been called for redemption in full shall be made upon
presentation of this Note to the office or agency of the Issuer maintained for
such purpose. Payments of interest on this Note due and payable on each Payment
Date, together with any instalment of principal of this Note due and payable on
each Payment Date which is also a Payment Date for this Note, shall be made by
check mailed to the Person whose name appears as the registered Holder of this
Note (or one or more Predecessor Notes) on the Note Register as of the Record
Date preceding such Payment Date, except that with respect to a Note registered
in the name of the nominee of a 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.
Checks for amounts due on this Note shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment and checks returned undelivered will be held
for payment to the Person entitled thereto, subject to the terms of the
Indenture, at the office or agency in the United States of America designated by
the Issuer for such purpose pursuant to the Indenture. Any reduction in the
principal amount of this Note (or any one or more Predecessor Notes) effected by
any payments made on any Payment Date or by any allocation of a Class M-2
Realized Loss Amount shall be binding upon all Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange herefor or
in lieu hereof, whether or not 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 Note
on a Payment Date which is prior to the Maturity of the final instalment of
principal hereof, then the Indenture Trustee, on behalf of the Issuer, will
notify the Person who was the registered Holder hereof on the day immediately
preceding such Payment Date, and the amount then due and payable shall, if
sufficient funds therefor are available, be payable only upon presentation of
this Note to the office or agency of the Issuer maintained for such purpose.
If an Event of Default shall occur and be continuing with respect to
the Notes, the Notes may become or be declared due and payable in the manner and
with the effect provided in the Indenture. Reference is hereby made to Article V
of the Indenture which sets forth certain events which constitute Events of
Default. If any such acceleration of maturity occurs prior to the Maturity of
the final instalment of principal of this Note, the amount payable to the Holder
of this Note will be equal to the aggregate unpaid principal amount of this Note
on the date this Note becomes so due and payable, together with accrued interest
on such unpaid principal amount to the date of payment thereof. The Indenture
provides that, notwithstanding the acceleration of the maturity of the Notes,
under certain circumstances specified therein all amounts collected as proceeds
of the collateral securing the Notes or otherwise shall continue to be applied
to payments of principal of and interest on the Notes as if they had not been
declared due and payable. In such event, interest on the then unpaid principal
amount of all Notes and on any overdue instalments of interest on the Notes
following the acceleration of the maturity of the Notes shall accrue and be
payable at the Note Interest Rate, but only to the extent that the payment
thereof shall be lawful and enforceable.
The Notes are not prepayable or redeemable at the option or
direction of the Issuer except that all of the outstanding Notes may be called
for redemption in whole at the option of the Grantor on any Payment Date
following the Payment Date on which the Aggregate Outstanding Principal Amount
of the Notes is reduced to 10% or less of the aggregate Initial Principal Amount
of the Notes, at a redemption price equal to 100% of the aggregate unpaid
principal balance of the Notes plus accrued and unpaid interest to the date set
for redemption.
As provided in the Indenture the transfer of this Note may be
registered on the Note Register of the Issuer, upon surrender of this Note 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 his attorney duly authorized in writing, and
thereupon one or more new Notes, of authorized denominations and in the same
aggregate initial principal amount will be issued to the designated transferee
or transferees.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note is registered (i)
on any Record Date, for purposes of making payments, and (ii) on any other date
for any other purpose, as the owner hereof, whether or not this Note be overdue,
and neither the Issuer, the Indenture Trustee nor any such agent shall be
affected by written 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 Notes under the Indenture at any
time by the Issuer, and the Holders of Notes entitled to more than 50% of the
aggregate Voting Rights of all Classes voting together as a single class. The
Indenture also contains provisions that permit the Holders of the percentage of
the Class or Classes of Notes specified in Section 5.02 of the Indenture, on
behalf of the Holders of all the Notes, to waive compliance by the Issuer with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder, at
the time of the giving thereof, of this Note (or any one or more Predecessor
Notes) shall be conclusive and binding upon such Holder and upon all future
holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent or waiver is made upon this Note.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Notes are issuable only in registered form in the denominations
provided in the Indenture and subject to certain limitations therein set forth.
The Notes are exchangeable for a like aggregate initial principal amount of
Notes of different authorized denominations, as requested by the Holder
surrendering the same, pursuant to the terms and conditions set forth in the
Indenture.
The Issuer has entered into this Indenture and this Note with the
intention that, for all purposes including federal, state and local tax
purposes, the Notes will qualify as indebtedness secured by the Trust Estate.
The Issuer, by entering into this Indenture, and each purchaser of a beneficial
interest in a Note, agree to treat the Notes for all purposes including federal,
state and local tax purposes as indebtedness of the Issuer.
As provided in the Indenture, this Note and the Indenture 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.
No reference herein to the Indenture and no provision of this Note
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 Note at
the times, place and rate, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, neither the Owner
Trustee in its individual capacity, any beneficial owner of the Issuer, the
Indenture Trustee nor 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 and interest on, or performance of, or omission to perform, any of
the covenants, obligations or indemnifications contained in, this Note or the
Indenture, it being expressly understood that said covenants, obligations and
indemnifications have been made by the Owner Trustee for the sole purpose of
binding the respective interests of the beneficial owners of the Issuer and the
Owner Trustee in the assets of the Issuer. The Holder of this Note by the
acceptance hereof agrees that 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 the enforcement against, the
assets of the Issuer for any and all liabilities, obligations and undertakings
contained in the Indenture or in this Note.
The Owner Trustee has executed this Note on behalf of the Issuer,
not in its individual capacity but solely as owner trustee under the Trust
Agreement and the Owner Trustee shall be liable hereunder only in respect of the
assets of the Trust created by such Trust Agreement.
The remedies of the Holder hereof as provided herein and in the
Indenture, shall be cumulative and concurrent and may be pursued solely against
the assets of the Trust created by the Trust Agreement pledged under the
Indenture as security for the Notes. No failure on the part of the holder in
exercising any right or remedy hereunder shall operate as a waiver or release
thereof, nor shall any single or partial exercise of any right or remedy
preclude any further exercise thereof or the exercise of any other right or
remedy hereunder.
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class M-2 Notes referred to in the
within-mentioned Indenture.
Wachovia Bank, National Association,
as Indenture Trustee
By:
------------------------------------
Authorized Signatory
EXHIBIT D
[FORM OF CLASS B NOTE]
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND 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.
PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THE ACTUAL OUTSTANDING PRINCIPAL
AMOUNT OF THIS NOTE MAY BE ASCERTAINED ONLY BY OBTAINING A WRITTEN CONFIRMATION
THEREOF FROM THE INDENTURE TRUSTEE NAMED HEREIN.
THE RIGHTS OF THE CLASS B NOTEHOLDERS TO RECEIVE PAYMENTS IN RESPECT OF
PRINCIPAL AND INTEREST ON THE CLASS B NOTES ARE SUBORDINATE TO THE RIGHTS OF THE
CLASS A NOTEHOLDERS, THE CLASS M-1 NOTEHOLDERS AND THE CLASS M-2 NOTEHOLDERS TO
RECEIVE PAYMENTS OF PRINCIPAL AND INTEREST TO THE EXTENT DESCRIBED IN THE
INDENTURE.
EACH PURCHASER OF A BENEFICIAL INTEREST IN THIS NOTE WILL BE DEEMED TO REPRESENT
EITHER THAT (I) IT IS NOT AND IS NOT PURCHASING ITS INTEREST IN THIS NOTE ON
BEHALF OF OR WITH THE ASSETS OF A RETIREMENT PLAN OR OTHER EMPLOYEE BENEFIT PLAN
OR ARRANGEMENT SUBJECT TO TITLE I OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR
LAW OR (II) ITS PURCHASE OF ITS INTEREST IN THIS NOTE WILL NOT RESULT IN A
NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA OR THE CODE OR A SIMILAR VIOLATION
OF SIMILAR LAW.
MID-STATE TRUST XI
8.221% CLASS B ASSET-BACKED NOTE
DUE: JULY 15, 2038
ACCRUAL DATE: JUNE 15, 2003
CUSIP: 59549W AD 5
$[________] No. __
Mid-State Trust XI (the "Issuer"), a Delaware statutory trust
governed by a Trust Agreement dated June 24, 2003 (the "Trust Agreement"), for
value received, hereby promises to pay to Cede & Co. or registered assigns, the
principal sum of $[________] Dollars in monthly instalments on the 15th day of
each month, or if such date is not a Business Day, the next Business Day
thereafter (the "Payment Dates") in each year, commencing on July 15, 2003 and
ending on or before July 15, 2038 (the "Maturity" of such final instalment of
principal) and to pay interest accrued during the period beginning on the
immediately preceding Payment Date (the "Interest Accrual Period"), until the
principal amount of this Note is paid in full, at the rate of 8.221% per annum,
such interest being computed on the basis of a 360-day year of twelve 30-day
months and payable monthly on each Payment Date. Instalments of principal of
this Note are due and payable in the amounts and on the dates described on the
reverse hereof.
The principal of, and interest on, this Note 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 Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note. Any instalment of principal or interest which is not paid when and as due
shall bear interest at the rate of interest borne by the principal of this Note
from the date due to the date of payment thereof, but only to the extent that
the payment of such interest shall be lawful and enforceable.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee by manual signature, this Note shall not be entitled to
any benefit under the Indenture referred to on the reverse hereof, or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, Mid-State Trust XI has caused this instrument to
be duly executed by and under the corporate seal of Wilmington Trust Company,
not in its individual capacity but solely as Owner Trustee under the Trust
Agreement.
Dated: MID-STATE TRUST XI
By: Wilmington Trust Company,
not in its individual
capacity but solely in
its capacity as Owner
Trustee under the Trust
Agreement
[SEAL]
By:
----------------------------------
Title:
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its 8.221% Class B Asset-Backed Notes (herein called the "Notes").
The Notes are issued and will be issued under an Indenture dated June 26, 2003
(herein called the "Indenture"), between the Issuer and Wachovia Bank, National
Association, as Indenture Trustee (the "Indenture Trustee," which term includes
any successor Indenture Trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights thereunder of the Issuer, the Indenture Trustee and the
Holders of the Notes and the terms upon which the Notes are, and are to be,
authenticated and delivered. Also issued under the Indenture are the 4.864%
Asset-Backed Notes, Class A, 5.598% Asset-Backed Notes, Class M-1 and 6.573%
Asset-Backed Notes, Class M-2. The Notes are secured by the collateral pledged
as security therefor to the extent provided in the Indenture. All terms used in
this Note which are defined in the Indenture shall have the meanings assigned to
them in the Indenture.
An instalment of principal shall be paid on the Notes on each
Payment Date in the amount equal to the amount available to be paid thereon as
principal pursuant to and subject to the priorities set forth in Section 8.02(b)
of the Indenture on such Payment Date; provided that the unpaid principal shall
be due and payable on the Payment Date occurring in July 2038. Each payment of
principal of the Notes shall be allocated among the Notes in proportion to their
then remaining unpaid principal amounts. The unpaid principal amount of this
Class B Note may be reduced by the allocation to it (in accordance with Section
5.20 of the Indenture) of Class B Realized Loss Amounts without any
corresponding payment.
The rights of the Class B Noteholders to receive payments in respect
of principal and interest on the Class B Notes are subordinate to the rights of
the Class A Noteholders, the Class M-1 Noteholders and the Class M-2 Noteholders
to receive payments of principal and interest to the extent described in the
Indenture.
Payment of the then remaining unpaid principal amount of this Note
on the Maturity of its final instalment of principal or on such earlier date as
the Issuer shall be required to apply payments received with respect to the
collateral securing the Notes to payment of the then remaining unpaid principal
amount of this Note or to payment of the Redemption Price payable on any date as
of which this Note has been called for redemption in full shall be made upon
presentation of this Note to the office or agency of the Issuer maintained for
such purpose. Payments of interest on this Note due and payable on each Payment
Date, together with any instalment of principal of this Note due and payable on
each Payment Date which is also a Payment Date for this Note, shall be made by
check mailed to the Person whose name appears as the registered Holder of this
Note (or one or more Predecessor Notes) on the Note Register as of the Record
Date preceding such Payment Date, except that with respect to a Note registered
in the name of the nominee of a 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.
Checks for amounts due on this Note shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment and checks returned undelivered will be held
for payment to the Person entitled thereto, subject to the terms of the
Indenture, at the office or agency in the United States of America designated by
the Issuer for such purpose pursuant to the Indenture. Any reduction in the
principal amount of this Note (or any one or more Predecessor Notes) effected by
any payments made on any Payment Date or by any allocation of a Class B Realized
Loss Amount shall be binding upon all Holders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange herefor or in
lieu hereof, whether or not 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 Note
on a Payment Date which is prior to the Maturity of the final instalment of
principal hereof, then the Indenture Trustee, on behalf of the Issuer, will
notify the Person who was the registered Holder hereof on the day immediately
preceding such Payment Date, and the amount then due and payable shall, if
sufficient funds therefor are available, be payable only upon presentation of
this Note to the office or agency of the Issuer maintained for such purpose.
If an Event of Default shall occur and be continuing with respect to
the Notes, the Notes may become or be declared due and payable in the manner and
with the effect provided in the Indenture. Reference is hereby made to Article V
of the Indenture which sets forth certain events which constitute Events of
Default. If any such acceleration of maturity occurs prior to the Maturity of
the final instalment of principal of this Note, the amount payable to the Holder
of this Note will be equal to the aggregate unpaid principal amount of this Note
on the date this Note becomes so due and payable, together with accrued interest
on such unpaid principal amount to the date of payment thereof. The Indenture
provides that, notwithstanding the acceleration of the maturity of the Notes,
under certain circumstances specified therein all amounts collected as proceeds
of the collateral securing the Notes or otherwise shall continue to be applied
to payments of principal of and interest on the Notes as if they had not been
declared due and payable. In such event, interest on the then unpaid principal
amount of all Notes and on any overdue instalments of interest on the Notes
following the acceleration of the maturity of the Notes shall accrue and be
payable at the Note Interest Rate, but only to the extent that the payment
thereof shall be lawful and enforceable.
The Notes are not prepayable or redeemable at the option or
direction of the Issuer except that all of the outstanding Notes may be called
for redemption in whole at the option of the Grantor on any Payment Date
following the Payment Date on which the Aggregate Outstanding Principal Amount
of the Notes is reduced to 10% or less of the aggregate Initial Principal Amount
of the Notes, at a redemption price equal to 100% of the aggregate unpaid
principal balance of the Notes plus accrued and unpaid interest to the date set
for redemption.
As provided in the Indenture the transfer of this Note may be
registered on the Note Register of the Issuer, upon surrender of this Note 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 his attorney duly authorized in writing, and
thereupon one or more new Notes, of authorized denominations and in the same
aggregate initial principal amount will be issued to the designated transferee
or transferees.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note is registered (i)
on any Record Date, for purposes of making payments, and (ii) on any other date
for any other purpose, as the owner hereof, whether or not this Note be overdue,
and neither the Issuer, the Indenture Trustee nor any such agent shall be
affected by written 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 Notes under the Indenture at any
time by the Issuer, and the Holders of Notes entitled to more than 50% of the
aggregate Voting Rights of all Classes voting together as a single class. The
Indenture also contains provisions that permit the Holders of the percentage of
the Class or Classes of Notes specified in Section 5.02 of the Indenture, on
behalf of the Holders of all the Notes, to waive compliance by the Issuer with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder, at
the time of the giving thereof, of this Note (or any one or more Predecessor
Notes) shall be conclusive and binding upon such Holder and upon all future
holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent or waiver is made upon this Note.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Notes are issuable only in registered form in the denominations
provided in the Indenture and subject to certain limitations therein set forth.
The Notes are exchangeable for a like aggregate initial principal amount of
Notes of different authorized denominations, as requested by the Holder
surrendering the same, pursuant to the terms and conditions set forth in the
Indenture.
The Issuer has entered into this Indenture and this Note with the
intention that, for all purposes including federal, state and local tax
purposes, the Notes will qualify as indebtedness secured by the Trust Estate.
The Issuer, by entering into this Indenture, and each purchaser of a beneficial
interest in a Note, agree to treat the Notes for all purposes including federal,
state and local tax purposes as indebtedness of the Issuer.
As provided in the Indenture, this Note and the Indenture 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.
No reference herein to the Indenture and no provision of this Note
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 Note at
the times, place and rate, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, neither the Owner
Trustee in its individual capacity, any beneficial owner of the Issuer, the
Indenture Trustee nor 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 and interest on, or performance of, or omission to perform, any of
the covenants, obligations or indemnifications contained in, this Note or the
Indenture, it being expressly understood that said covenants, obligations and
indemnifications have been made by the Owner Trustee for the sole purpose of
binding the respective interests of the beneficial owners of the Issuer and the
Owner Trustee in the assets of the Issuer. The Holder of this Note by the
acceptance hereof agrees that 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 the enforcement against, the
assets of the Issuer for any and all liabilities, obligations and undertakings
contained in the Indenture or in this Note.
The Owner Trustee has executed this Note on behalf of the Issuer,
not in its individual capacity but solely as owner trustee under the Trust
Agreement and the Owner Trustee shall be liable hereunder only in respect of the
assets of the Trust created by such Trust Agreement.
The remedies of the Holder hereof as provided herein and in the
Indenture, shall be cumulative and concurrent and may be pursued solely against
the assets of the Trust created by the Trust Agreement pledged under the
Indenture as security for the Notes. No failure on the part of the holder in
exercising any right or remedy hereunder shall operate as a waiver or release
thereof, nor shall any single or partial exercise of any right or remedy
preclude any further exercise thereof or the exercise of any other right or
remedy hereunder.
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class B Notes referred to in the within-mentioned
Indenture.
Wachovia Bank, National Association,
as Indenture Trustee
By:
------------------------------------
Authorized Signatory
EXHIBIT E
FORM OF ADDITIONAL TRANSFER AGREEMENT
Additional Transfer Agreement, dated ____________, 200 , between
Mid-State Trust XI, a Delaware statutory trust (the "Issuer"), as pledgor (in
such capacity, the "Pledgor"), and Wachovia Bank, National Association, as
indenture trustee (the "Indenture Trustee").
WITNESSETH:
WHEREAS, Mid-State Trust XI (in its capacity as Issuer) and the
Indenture Trustee are parties to that certain indenture dated June 26, 2003 (as
amended or supplemented, the "Indenture") relating to the Mid-State Trust XI,
Asset-Backed Notes, Class A, Class M-1, Class M-2 and Class B; and
WHEREAS, as contemplated in the Indenture, the Pledgor desires to
convey certain Additional Accounts (as hereinafter defined) to the Indenture
Trustee.
NOW, THEREFORE, the parties hereto hereby agree as follows:
Section 1.01. Defined Terms. Capitalized terms used herein that are
not otherwise defined shall have the meanings ascribed thereto in the Indenture.
"Agreement" means this Additional Transfer Agreement and all
amendments hereof and supplements hereto.
"Additional Accounts" means the Accounts identified on the Schedule
of Accounts specified in Section 1.02 hereof.
"Additional Transfer Date" means, with respect to the Additional
Accounts conveyed hereby, _______________ ___, 200_.
Section 1.02. Schedule of Accounts. Annexed hereto is a supplement
to Schedule I to the Indenture listing the Additional Accounts to be conveyed by
the Pledgor to the Indenture Trustee pursuant to this Agreement on the
Additional Transfer Date.
Section 1.03. Pledge of Additional Accounts by the Pledgor. Subject
to the conditions set forth in Section 1.05, in consideration of the Indenture
Trustee's delivery upon the order of the Pledgor of an amount equal to $________
(i.e., ___% of the Aggregate Principal Balance of the Additional Accounts as of
the Additional Transfer Date) to Mid-State Homes, Inc., the Pledgor does hereby
Grant its right, title and interest in and to (a) the Additional Accounts listed
in the Schedule of Accounts attached hereto, all property acquired in respect of
the Additional Accounts, including the related Account Documents and all Monthly
Payments that have not been received prior to the Additional Transfer Date,
regardless of the Due Date for such Monthly Payment, (b) all new Accounts
originated in connection with the sale of property acquired in respect of
Additional Accounts and (c) all proceeds in any way derived from any of the
foregoing, including all proceeds of the conversion, voluntary or involuntary,
of any of the foregoing into cash or other assets, including, without
limitation, all insurance proceeds and condemnation awards.
Section 1.04. Representations and Warranties of Pledgor. The Pledgor
does hereby reaffirm the representations and warranties set forth in Section
3.11 of the Indenture for the benefit of the Indenture Trustee.
Section 1.05. Conditions Precedent. The obligation of the Indenture
Trustee to accept the Additional Accounts is subject to the satisfaction, on or
prior to the Additional Transfer Date, of the conditions precedent set forth in
Section 8.09(b) of the Indenture.
The Indenture Trustee shall not be required to investigate or
otherwise verify satisfaction of the conditions listed in Section 8.09(b) of the
Indenture, but shall be entitled to conclusively rely upon one or more Officer's
Certificates confirming such fulfillment.
Section 1.06. Reaffirmation of Indenture. All terms, conditions and
provisions of the Indenture are hereby reaffirmed and incorporated by reference
by the Pledgor as to the Additional Accounts.
Section 1.07. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York and the obligations, rights
and remedies of the parties under this Agreement shall be determined in
accordance with such laws.
IN WITNESS WHEREOF, the Owner Trustee on behalf of the Pledgor and
the Indenture Trustee have caused this Additional Transfer Agreement to be duly
executed by their respective officers thereunto duly authorized and the seal of
the Owner Trustee and of the Indenture Trustee to be hereunto affixed, all as of
the day and year first above written.
MID-STATE TRUST XI
By: Wilmington Trust Company, not in
its individual capacity, but
solely as Owner Trustee of
Mid-State Trust XI
By:
----------------------------------
Authorized Officer
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Indenture Trustee
By:
----------------------------------
Authorized Signatory
EXHIBIT F
Form of Certification
CERTIFICATION TO BE PROVIDED WITH FORM 10-K
-------------------------------------------
MID-STATE TRUST XI
I, [identify the certifying individual], certify that:
1. I have reviewed this annual report on Form 10-K, and all reports on Form
8-K containing a copy of the Payment Date Statement (as defined in the
Indenture, dated June 26, 2003, between Mid-State Trust XI, a Delaware
statutory trust (the "Issuer"), and Wachovia Bank, National Association,
as indenture trustee (the "Indenture Trustee")), filed in respect of
periods included in the year covered by this annual report, of Mid-State
Trust XI;
2. Based on my knowledge, the information in these reports, taken as a whole,
does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of
the last day of the period covered by this annual report;
3. Based on my knowledge, the distribution or servicing information required
to be provided to the Indenture Trustee by the Servicer under the
Indenture and the Servicing Agreement, dated June 26, 2003 (the
"Agreement"), among the Issuer, Mid-State Homes, Inc., as servicer (the
"Servicer") and the Indenture Trustee, for inclusion in these reports is
included in these reports;
4. I am responsible for reviewing the activities performed by the Servicer
under the Agreement and based upon my knowledge and the annual compliance
review required under the Agreement, and except as disclosed in the
reports, the Servicer has fulfilled its obligations under the Agreement;
and
5. The reports disclose all significant deficiencies relating to the
Servicer's compliance with the minimum servicing standards based upon the
report provided by an independent public accountant, after conducting a
review in compliance with the Uniform Single Attestation Program for
Mortgage Bankers or similar procedure, as set forth in the Agreement, that
is included in these reports.
6. In giving the certifications above, I have reasonably relied on
information provided to me by the following unaffiliated parties: Wachovia
Bank, National Association.
By:
-------------------------------------
Name:
Title:
EXHIBIT G
Form of Certification to be Provided by the Indenture Trustee
MID-STATE TRUST XI
Reference is made to the Indenture, dated June 26, 2003 (the "Indenture"),
between Mid-State Trust XI, a Delaware statutory trust (the "Issuer"), and
Wachovia Bank, National Association, as indenture trustee (the "Indenture
Trustee"). The Indenture Trustee hereby certifies to the Servicer and its
officers, directors and affiliates, and with the knowledge and intent that they
will rely upon this certification, that:
1. The Indenture Trustee has reviewed the annual report on Form 10-K for the
calendar year [____], and all reports on Form 8-K containing Payment Date
Statements (as defined in the Indenture) filed in respect of periods
included in the year covered by that annual report, relating to Mid-State
Trust XI;
2. The distribution information in the Payment Date Statements (as defined in
the Indenture) contained in all monthly Form 8-K's included in the year
covered by the annual report on Form 10-K for the calendar year [___],
taken as a whole, does not contain any untrue statement of a material fact
or omit to state a material fact required by the Indenture to be included
therein and necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of
the last day of the period covered by that annual report;
3. The distribution information required to be provided by the Indenture
Trustee under the Indenture is included in these reports; and
4. All information provided by the Servicer to the Indenture Trustee under
Section 3.01(a) of the Servicing Agreement for inclusion in the Payment
Date Statements has been accurately transcribed.
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Indenture Trustee
By:
------------------------------------
Name:
Title:
Schedule I
Schedule of Accounts
(Intentionally Omitted)
