Exhibit 4.1
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MID-STATE TRUST 199 - ,
Issuer
and
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Trustee
INDENTURE
Dated as of _________, 199_
Relating to
$_____________ [ ]% Asset Backed Notes, Class A-1
$_____________ [ ]% Asset Backed Notes, Class A-2
$_____________ [ ]% Asset Backed Notes, Class A-3
$_____________ [ ]% Asset Backed Notes, Class A-4
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
SECTION 1.01. General Definitions.................................................................................2
ARTICLE II
THE NOTES
SECTION 2.01. Forms Generally....................................................................................21
SECTION 2.02. Forms of Notes and Certificate of Authentication...................................................22
SECTION 2.03. Notes; General Provisions with Respect to Principal and Interest Payments; Allocation
of Realized Loss Amounts............................................................22
SECTION 2.04. Denominations......................................................................................23
SECTION 2.05. Execution, Authentication, Delivery and Dating.....................................................23
SECTION 2.06. Temporary Notes....................................................................................24
SECTION 2.07. Registration, Registration of Transfer and Exchange................................................24
SECTION 2.08. Mutilated, Destroyed, Lost or Stolen Notes.........................................................26
SECTION 2.09. Payments of Principal and Interest.................................................................26
SECTION 2.10. Persons Deemed Owners..............................................................................29
SECTION 2.11. Cancellation.......................................................................................29
SECTION 2.12. Authentication and Delivery of Notes...............................................................29
SECTION 2.13. Non-Petition.......................................................................................32
ARTICLE III
COVENANTS; REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Payment of Notes...................................................................................32
SECTION 3.02. Maintenance of Office or Agency....................................................................32
SECTION 3.03. Money for Note Payments to Be Held in Trust........................................................33
SECTION 3.04. Existence of Issuer................................................................................35
SECTION 3.05. Protection of Trust Estate.........................................................................35
SECTION 3.06. Opinions as to Trust Estate........................................................................36
SECTION 3.07. Performance of Obligations; Servicing Agreement....................................................36
SECTION 3.08. Negative Covenants.................................................................................38
SECTION 3.09. Annual Statement as to Compliance..................................................................39
SECTION 3.10. Recording of Assignments...........................................................................39
SECTION 3.11. Representations and Warranties Concerning the Accounts.............................................39
SECTION 3.12. Trustee's Review of Account Documents..............................................................42
SECTION 3.13. Trust Estate; Account Documents....................................................................44
SECTION 3.14. Amendments to Servicing Agreement..................................................................45
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SECTION 3.15. Servicer as Agent and Bailee of Trustee............................................................45
SECTION 3.16. Investment Company Act.............................................................................46
SECTION 3.17. Business Activity..................................................................................46
SECTION 3.18. Liability of Owner Trustee.........................................................................46
SECTION 3.19. Exculpation of the Trustee.........................................................................47
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01. Satisfaction and Discharge of Indenture............................................................47
SECTION 4.02. Application of Trust Money.........................................................................48
ARTICLE V
DEFAULTS AND REMEDIES
SECTION 5.01. Event of Default...................................................................................49
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment.................................................50
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by Trustee....................................50
SECTION 5.04. Remedies...........................................................................................52
SECTION 5.05. Optional Preservation of Trust Estate..............................................................53
SECTION 5.06. Trustee May File Proofs of Claim...................................................................55
SECTION 5.07. Trustee May Enforce Claims Without Possession of Notes.............................................56
SECTION 5.08. Application of Money Collected.....................................................................56
SECTION 5.09. Limitation on Suits................................................................................58
SECTION 5.10. Unconditional Rights of Noteholders to Receive Principal and Interest..............................58
SECTION 5.11. Restoration of Rights and Remedies.................................................................59
SECTION 5.12. Rights and Remedies Cumulative.....................................................................59
SECTION 5.13. Delay or Omission Not Waiver.......................................................................59
SECTION 5.14. Control by the Noteholders.........................................................................59
SECTION 5.15. Waiver of Past Defaults............................................................................60
SECTION 5.16. Undertaking for Costs..............................................................................60
SECTION 5.17. Waiver of Stay or Extension Laws...................................................................60
SECTION 5.18. Sale of Trust Estate...............................................................................61
SECTION 5.19. Action on Notes....................................................................................62
ARTICLE VI
THE TRUSTEE
SECTION 6.01. Duties of Trustee..................................................................................62
SECTION 6.02. Notice of Default..................................................................................64
SECTION 6.03. Rights of Trustee..................................................................................64
SECTION 6.04. Not Responsible for Recitals or Issuance of Notes..................................................65
SECTION 6.05. May Hold Notes.....................................................................................65
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SECTION 6.06. Money Held in Trust................................................................................65
SECTION 6.07. Compensation and Reimbursement.....................................................................65
SECTION 6.08. Eligibility; Disqualification......................................................................66
SECTION 6.09. Trustee's Capital and Surplus......................................................................67
SECTION 6.10. Resignation and Removal; Appointment of Successor..................................................67
SECTION 6.11. Acceptance of Appointment by Successor.............................................................68
SECTION 6.12. Merger; Conversion, Consolidation or Succession to Business of Trustee.............................68
SECTION 6.13. Preferential Collection of Claims Against Issuer...................................................69
SECTION 6.14. Co-trustees and Separate Trustees..................................................................69
SECTION 6.15. Authenticating Agents..............................................................................70
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.01. Issuer to Furnish Trustee Names and Addresses of Noteholders.......................................71
SECTION 7.02. Preservation of Information; Communications to Noteholders.........................................72
SECTION 7.03. Reports by Trustee.................................................................................72
SECTION 7.04. Reports by Issuer..................................................................................72
ARTICLE VIII
ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES
SECTION 8.01. Collection of Moneys...............................................................................73
SECTION 8.02. Collection Account.................................................................................73
SECTION 8.03. General Provisions Regarding the Collection Account................................................76
SECTION 8.04. Reports by Trustee to Noteholders..................................................................78
SECTION 8.05. Reports by Trustee.................................................................................78
SECTION 8.06. Reports by Independent Accountants.................................................................78
SECTION 8.07. Reports by the Servicer............................................................................79
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures without Consent of Noteholders.............................................79
SECTION 9.02. Supplemental Indentures with Consent of Noteholders................................................80
SECTION 9.03. Execution of Supplemental Indentures...............................................................81
SECTION 9.04. Effect of Supplemental Indentures..................................................................82
SECTION 9.05. Conformity with Trust Indenture Act................................................................82
SECTION 9.06. Reference in Notes to Supplemental Indentures......................................................82
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ARTICLE X
REDEMPTION OF NOTES
SECTION 10.01. Optional Redemption of Notes......................................................................82
SECTION 10.02. Form of Redemption Notice.........................................................................82
SECTION 10.03. Notes Payable on Redemption Date..................................................................83
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Compliance Certificates and Opinions..............................................................83
SECTION 11.02. Form of Documents Delivered to Trustee............................................................84
SECTION 11.03. Acts of Noteholders...............................................................................85
SECTION 11.04. Notices, etc., to Trustee and Issuer..............................................................86
SECTION 11.05. Notices and Reports to Noteholders; Waiver of Notices.............................................86
SECTION 11.06. Rules by Trustee and Agents.......................................................................87
SECTION 11.07. Conflict with Trust Indenture Act.................................................................87
SECTION 11.08. Effect of Headings and Table of Contents..........................................................87
SECTION 11.09. Successors and Assigns............................................................................87
SECTION 11.10. Separability......................................................................................87
SECTION 11.11. Benefits of Indenture.............................................................................87
SECTION 11.12. Legal Holidays....................................................................................88
SECTION 11.13. Governing Law.....................................................................................88
SECTION 11.14. Counterparts......................................................................................88
SECTION 11.15. Recording of Indenture............................................................................88
SECTION 11.16. Issuer Obligations................................................................................88
SECTION 11.17. Inspection........................................................................................88
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INDENTURE, dated as of ____________, 199_ (herein, as amended or
supplemented from time to time as permitted hereby, called this "Indenture"),
between MID-STATE TRUST 199 - (the "Issuer"), a Delaware business trust and
_______________________, a _________________, as trustee (herein, together with
its permitted successors in the trusts hereunder, called the "Trustee").
PRELIMINARY STATEMENT
The Issuer is a business trust created by a Trust Agreement dated
_________, 199_ between _____________ (in its capacity as 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 [ ]%
Asset Backed Notes, Class A-1 (the "Class A-1 Notes"), [ ]% Asset Backed Notes,
Class A-2 (the "Class A-2 Notes"), [ ]%, Asset Backed Notes, Class A-3 (the
"Class A-3 Notes") and [ ]% Asset Backed Notes, Class A-4 (the "Class A-4
Notes", and together with the Class A-1 Notes, Class A-2 Notes and Class A-3
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 Trustee, in its
individual capacity, to the extent of its interest. The Issuer is entering into
this Indenture, and the 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 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 Accounts listed in the Schedule of Accounts delivered to the Trustee
pursuant to this Indenture and property acquired in respect thereof, including
the related Account Documents and all Monthly Payments that have not been
received prior to the Cut-Off Date hereof regardless of the Due Date for such
Monthly Payment, (b) the Servicing Agreement (including the right to compel
performance by the Subservicer), (c) the Purchase and Sale Agreement, (d) 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,
(e) the Software Rights and (f) 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 new Accounts originated in connection with the sale of property
acquired in respect of Accounts, all insurance proceeds and condemnation awards.
Such Grants are made, however, in trust to secure the Notes equally and ratably
without priority or discrimination 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 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
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 installment 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 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.
"Account Documents": With respect to each Account (i) the building or
installment 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 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 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 and from the Grantor to the Issuer, (v) the originals of
any assumption agreement, written assurance or substitution agreement required
to be delivered to the 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
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Issuer, the Trustee, the Servicer or the Subservicer 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 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 note, building or installment sale
contract or other evidence of indebtedness 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 _________, 199_.
"Act": With respect to any Noteholder, as defined in Section 11.03.
"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 Current Principal Amount": With respect to the Notes, the
aggregate of the Current Principal Amounts of all Notes Outstanding at the time
of determination.
"Aggregate Economic Balance": With respect to the Accounts, the
aggregate of the Economic Balances of all such Accounts at the time of
determination.
"Aggregate Outstanding Principal Balance": As of any Payment Date, an
amount equal to the sum of the Outstanding Principal Balances as of such Payment
Date.
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"Assignments": Collectively, (i) the original instrument of assignment
of such Mortgage, Account Note and other documents made by the Grantor to the
Issuer and (ii) the original instrument of assignment of such Mortgage, Account
Note and other documents made by the Issuer to the 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 Trustee).
"Authenticating Agent": The Person, if any, appointed as Authenticating
Agent by the 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, 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 Due Period, plus
(ii) net reinvestment income earned on funds in the Collection Account from the
date two Business Days prior to the preceding Payment Date to the date two
Business Days prior to such Payment Date.
Available Funds will be net of any Issuer Expenses.
"Available Funds Allocation": The allocation of Available Funds
pursuant to Section 8.02(c)(ii) hereof.
"Bank": _____________, a __________________, 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 other day on
which commercial banking institutions in the City of New York or in the city in
which the Corporate Trust Office is located are authorized or obligated by law
or executive order to be closed.
"Class" Any one of the classes of Notes issued pursuant to this
Indenture.
"Class A-1 Initial Principal Balance": An amount equal to $___________.
"Class A-1 Optimal Principal Amount": An amount equal to ___________%
of the Optimal Principal Amount, not to exceed the unpaid principal balance of
the Class A-1 Notes.
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"Class A-1 Outstanding Principal Balance": As of any Payment Date, an
amount equal to the Class A-1 Initial Principal Balance reduced by (i) all
payments, if any, made on the Class A-1 Notes, in reduction of principal balance
made on all prior Payment Dates and (ii) all Class A-1 Realized Loss Amounts
with respect to prior Payment Dates.
"Class A-1 Realized Loss Amount": As of any Payment Date, an amount
equal to the excess of (i) the Class A-1 Outstanding Principal Balance as of
such Payment Date (after application of the Class A-1 Optimal Principal Amount,
but prior to the application of losses on such Payment Date) over (ii) the
Aggregate Economic Balance of the Accounts immediately following the Collection
Period related to such Payment Date.
"Class A-2 Initial Principal Balance": An amount equal to $___________.
"Class A-2 Optimal Principal Amount": An amount equal to __________% of
the Optimal Principal Amount, not to exceed the unpaid principal balance of the
Class A-2 Notes.
"Class A-2 Outstanding Principal Balance": As of any Payment Date, an
amount equal to Class A-2 Initial Principal Balance reduced by (i) all payments,
if any, made on the Class A-2 Notes, in reduction of principal balance made on
all prior Payment Dates and (ii) all Class A-2 Realized Loss Amounts with
respect to prior Payment Dates.
"Class A-2 Realized Loss Amount": As of any Payment Date, an amount
equal to the excess of (i) the sum of (a) the Class A-1 Outstanding Principal
Balance as of such Payment Date (after application of the Class A-1 Optimal
Principal Amount, but prior to the application of losses on such Payment Date)
and (b) Class A-2 Outstanding Principal Balance as of such Payment Date (after
application of the Class A-2 Optimal Principal Amount, but prior to the
application of losses on such Payment Date) over (ii) the Aggregate Economic
Balance of the Accounts immediately following the Collection Period related to
such Payment Date.
"Class A-3 Initial Principal Balance": An amount equal to
$_____________.
"Class A-3 Optimal Principal Amount": An amount equal to ___________%
of the Optimal Principal Amount, not to exceed the unpaid principal balance of
the Class A-3 Notes.
"Class A-3 Outstanding Principal Balance": As of any Payment Date, an
amount equal to Class A-3 Initial Principal Balance reduced by (i) all payments,
if any, made on the Class A-3 Notes, in reduction of principal balance made on
all prior Payment Dates and (ii) all Class A-3 Realized Loss Amounts with
respect to prior Payment Dates.
"Class A-3 Realized Loss Amount": As of any Payment Date, an amount
equal to the excess of (i) the sum of (a) the Class A-1 Outstanding Principal
Balance as of such Payment Date (after application of the Class A-1 Optimal
Principal Amount, but prior to the application of losses on such Payment Date),
(b) the Class A-2 Outstanding Principal Balance
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as of such Payment Date (after application of the Class A-2 Optimal Principal
Amount, but prior to the application of losses on such Payment Date) and (c) the
Class A-3 Outstanding Principal Balance as of such Payment Date (after
application of the Class A-3 Optimal Principal Amount, but prior to the
application of losses on such Payment Date) over (ii) the Aggregate Economic
Balance of the Accounts immediately following the Collection Period related to
such Payment Date.
"Class A-4 Initial Principal Balance": An amount equal to
$____________.
"Class A-4 Optimal Principal Amount": An amount equal to ___________%
of the Optimal Principal Amount, not to exceed the unpaid principal balance of
the Class A-4 Notes.
"Class A-4 Outstanding Principal Balance": As of any Payment Date, an
amount equal to Class A-4 Initial Principal Balance reduced by (i) all payments,
if any, made on the Class A-4 Notes, in reduction of principal balance made on
all prior Payment Dates and (ii) all Class A-4 Realized Loss Amounts with
respect to prior Payment Dates.
"Class A-4 Realized Loss Amount": As of any Payment Date, an amount
equal to the excess of (i) the sum of (a) the Class A-1 Outstanding Principal
Balance as of such Payment Date (after application of the Class A-1 Optimal
Principal Amount, but prior to the application of losses on such Payment Date),
(b) the Class A-2 Outstanding Principal Balance as of such Payment Date (after
application of the Class A-2 Optimal Principal Amount, but prior to the
application of losses on such Payment Date), (c) the Class A-3 Outstanding
Principal Balance as of such Payment Date (after application of the Class A-3
Optimal Principal Amount, but prior to the application of losses on such Payment
Date) and (d) the Class A-4 Outstanding Principal Balance as of such Payment
Date (after application of the Class A-4 Optional Principal Amount, but prior to
the application of losses on such Payment Date) over (ii) the Aggregate Economic
Balance of the Accounts immediately following the Collection Period related to
such Payment Date.
"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 Optimal Principal Amount": With respect to a Class of Notes on
any Payment Date, the Class A-1 Optimal Principal Amount, the Class A-2 Optimal
Principal Amount, the Class A-3 Optimal Principal Amount and the Class A-4
Optimal Principal Amount, as applicable.
"Closing Date": The date on which the Notes are first executed,
authenticated and delivered pursuant to Section 2.12.
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"Collateral Deficiency Amount": With respect to a Payment Date, the
amount, if any, by which the Aggregate Current Principal Amount of the Notes
(after giving effect to the principal payment, if any, funded out of Remaining
Available Funds on such Payment Date) exceeds the Aggregate Economic Balance of
the Accounts as of the first day of the month preceding the month of such
Payment Date.
"Collection Account": The trust account or accounts created and
maintained pursuant to Section 8.02.
"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
Trustee located at _______________________________________ or at such other
address as the Trustee may designate from time to time by notice to the
Noteholders and the Issuer, or the principal corporate trust office of any
successor Trustee.
"Cumulative Actual Net Economic Losses": With respect to any Payment
Date, the cumulative excess as of the end of the related Due Period of (A) the
Economic Balance of all Accounts that have been repossessed or that have been
charged off, written off or otherwise reduced, in whole or in part, without any
repossession over (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 Economic Balance, and the remaining Outstanding Economic
Balance of any Account that has been charged-off, written-off or reduced for any
reason, in part but not in whole.
"Current Principal Amount": With respect to any Note as of any date of
determination, the original principal amount of such Note reduced by (i) all
prior payments, if any, made with respect to principal of such Note and (ii) all
Realized Loss Amounts previously allocated to such Note. Reimbursements of
Realized Loss Amounts to a Note pursuant to Section 8.02(c)(ii) shall not reduce
its Current Principal Amount.
"Cut-Off Date": _________, 199_.
"Debt Service Requirement Determination Date": The date prior to each
Payment Date as of which the Trustee is required to compute the amount due and
payable on the Notes on such Payment Date; such date is the fifth 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": The meaning specified in Section 3.11(b) and
Section 3.12(b).
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"Deleted Account": The meaning specified in Section 3.11(b) and Section
3.12(b).
"Due Date": With respect to any Account, the date each month on which
the Monthly Payment is -------- payable.
"Due Period": With respect to a Payment Date, the three-month period
beginning immediately following the end of the preceding Due Period (or, in the
case of the Due Period which is applicable to the first Payment Date, beginning
on the day after the Cut-Off Date) and ending at the close of business on the
last Business Day in the second month prior to the month in which such Payment
Date occurs.
["DCR": Duff & Xxxxxx Credit Rating Co., and its successors.]
"Economic Balance": With respect to any Account, the present value of
all remaining Monthly Payments from the date of determination discounted monthly
at a rate equal to the Effective Financing Rate; provided, however, that
Accounts with any of the following characteristics on the Cut-Off Date shall be
deemed to have an Economic Balance of zero:
(i) the sum of all Monthly Payments and all other amounts due under such
Account is $____ or less.
(ii) an Economic Balance determined in the manner provided above of zero or
less than zero.
(iii) an Effective Financing Rate of below __% per annum or above _____%
per annum.
(iv) a total number of Monthly Payments greater than 360.
(v) secured by Mortgaged Properties that are not located in Alabama,
Arizona, Arkansas, Florida, Georgia, Illinois, Indiana, Kansas,
Kentucky, Louisiana, Maryland, Mississippi, Missouri, New Mexico, North
Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee,
Texas, Virginia or West Virginia.
"Effective Financing Rate": A discount rate which, when applied in a
present value calculation with respect to any Account using monthly compounding,
results in the present value of all originally scheduled Monthly Payments on
such Account being equal to the amount financed stated on the related building
or installment sale contract or other applicable instrument prior to any Monthly
Payments having been made on such Account.
"Eligible Account" (a) A segregated account or accounts maintained with
a depository institution or trust company whose long-term unsecured debt
obligations are rated by S&P and Moody's at the time of any deposit therein in
one of the three highest rating
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categories (or, if such obligations are, at the time of such deposit, not rated
by S&P or 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 Federal Home Loan Mortgage
Corporation 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 Trustee or any agent of the 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 "Aa2" 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 Trustee or any agent of
the Trustee acting in their respective commercial capacities) and in
each case where the 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
9
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;
(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 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; and
(h) Eurodollar denominated certificates of deposit or time deposits issued
by a foreign depository institution or a depository institution
organized under the laws of the United States or any state thereof so
long as at the time of such investment or contractual commitment
providing for such investment (1) the commercial paper or other
short-term debt obligations of such depository institution (or, in the
case of a depository institution which is the principal subsidiary of a
holding company, the commercial paper or other short-term debt
obligations of such holding company) have the Highest Credit Ratings
available from the Rating Agencies; or (2) the long-term debt
securities of such depository institution are rated "AAA" and "Aa2" or
better by S&P and Moody's, respectively.
"Eligible Moneys": Any moneys on deposit in trust with the Trustee for
the benefit of the Noteholders with respect to which the Trustee has received an
unqualified opinion of counsel nationally recognized as expert in bankruptcy
acceptable to the Trustee that payment of such amounts to the Noteholders would
not constitute avoidable preferences under Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx
Bankruptcy Code or similar state laws with avoidable preference provisions in
the event of the filing of a petition for relief under the United States
Bankruptcy Code or similar state laws with avoidable preference provisions 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.
"Event of Default": The meaning specified in Section 5.01.
"Stated Maturity Date": _________, 20__.
10
"Final Scheduled Payment Date": The Payment Date on ________, __.
["Fitch": Fitch IBCA, Inc., and its successors.]
"FHLMC": Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
"FNMA": Xxxxxx Xxx, a federally chartered and privately owned
corporation organized and existing under the Federal National Mortgage
Association Charter Act, or any successor thereto.
"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": To mortgage, pledge, assign and grant a security interest in.
A Grant of an Account and the related Account Documents, an Eligible Investment,
a Servicing Agreement or any other instrument shall include all rights, powers
and options (but none of the obligations) of the Granting party thereunder,
including without limitation the immediate and continuing right to claim,
collect, receive and receipt for 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, A1+ or AAA.
"Holding Account": The account created and maintained pursuant to the
Holding Account Agreement.
11
"Holding Account Agreement": The Holding Account Agreement dated as of
_______, 199_ among ______________________, as custodian for the 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.
"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 Trustee, such Person shall be appointed by an Issuer Order and approved
by the 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.
"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
Balance 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.
12
"Interest Accrual Period": The three-month period ending on the day
prior to such Payment Date.
"Interest Payment Date": Each January 1, April 1, July 1 and October 1
commencing __________, 199_.
"Issuer": Mid-State Trust 199 - , a Delaware business 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,
the Trustee, the Successor Servicer and the Servicing Fee).
"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
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 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.
"Minimum Target Overcollateralization Amount": For any Payment Date,
(a) an amount equal to the greater of (i) the product of (x) 10% and (y) the
Aggregate Economic Balance of the Accounts as of the first day of the month
preceding the month of such Payment Date and (ii) $_________ or (b) in the event
that(i) Mid-State Homes, Inc. is no longer the Servicer, (ii) the cumulative
losses on the Accounts exceed _____%, _____%, _____%, _____% and _____% of the
Aggregate Economic Balance as of the Cut-Off Date at the end of four, five, six,
seven, and eight years after the Cut-Off Date, respectively, or exceed _____%
thereafter, or (iii) the Average 60 Day Delinquency Ratio Test as of any Payment
Date
13
exceeds _____%, and such event is continuing, an amount equal to the greater of
(a) the Aggregate Outstanding Principal Balance of the Notes and (b) the
Aggregate Economic Balance of the Accounts as of the month preceding the month
of such Payment Date.
"Month of Closing": The month in which the Closing Date occurs.
"Monthly Cut-Off Date": As defined in the Servicing 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.
"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 from the Liquidation Proceeds of such Account the related
Liquidation Expenses.
"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.
"Officers' Certificate": A Certificate signed by two Authorized
Officers.
"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 Trustee.
14
"Optimal Principal Amount": An amount equal to (A) on any Payment Date
(i) on or prior to the Target Overcollateralization Date or (ii) after the
Target Overcollateralization Date and on which there exists an uncured Trigger
Event, the Remaining Available Funds; and (B) on any Payment Date after the
Target Overcollateralization Date on which there does not exist an uncured
Trigger Event, the amount which, when paid as principal on the Notes, will
result in achieving or maintaining 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 Balance of the Notes.
"Outstanding": As of the date of determination, all Notes theretofore
authenticated and delivered under this Indenture except: (i) Notes theretofore
cancelled 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 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 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 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 Aggregate Current Principal Amount of the
Outstanding 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 Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent, or waiver, only
Notes which the 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 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 Balance": Any of the Class A-1 Outstanding
Principal Balance, Class A-2 Outstanding Principal Balance, Class A-3
Outstanding Principal Balance, and Class A-4 Outstanding Principal Balance.
"Overcollateralization Amount": With respect to a Payment Date, the
amount equal to (a) the Aggregate Economic Balance of the Accounts on the first
day of the month preceding the month of such Payment Date less (b) the sum of
the Aggregate Outstanding Principal Balance and all unreimbursed Realized Loss
Amounts, in each case after giving effect to the payments made; but prior to the
allocation of losses thereon on such Payment Date.
"Overcollateralization Percentage": A fraction expressed as a
percentage the numerator of which is equal to the excess of (i) the Aggregate
Economic Balance of the
15
Accounts as of the first day of the month preceding the month in which the
Target Overcollateralization Date occurs over (ii) the Aggregate Outstanding
Principal Balance of all Classes of Notes and all unreinbursed Realized Loss
Amounts with respect to all Classes of Notes on the Target Overcollateralization
Date (after giving effect to payments and allocations of losses on the Target
Overcollateralization Date) and the denominator of which is the Aggregate
Economic Balance of the Accounts as of the first day of the month preceding the
month in which the Target Overcollateralization Date occurs.
"Owner Trustee": ________________, 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 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": Any date which is an Interest Payment Date or Principal
Payment Date for the Notes.
"Payment Date Statement": As defined in Section 2.09(e).
"Person": Any individual, corporation, partnership, limited liability
company, joint venture, association, joint stockcompany, trust (including any
beneficiary thereof), unincorporated organization or government or any agency or
political subdivision thereof.
"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.
"Principal Payment Date": One of the fixed dates on which an
installment of principal is due and payable on the Notes; such dates are each
January 1, April 1, July 1 and October 1 beginning _________, 199_.
"Proceeding": Any suit in equity, action at law or other judicial or
administrative Proceeding.
"Purchase and Sale Agreement": The Purchase and Sale Agreement, dated
as of ____________, 199_, between Mid-State Homes, Inc. and Mid-State Trust 199
- which provides for, among other things, the purchase by Mid-State Trust 199 -
of all interest of Mid-State Homes, Inc. in the 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
16
Economic Balance, after deduction of all scheduled payments due in the month of
substitution, not less than the Economic Balance of the Deleted Account (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 Effective Financing
Rate not less than (and not more than one percentage point greater than) the
Effective Financing Rate of the Deleted Account, and (iii) comply with each
representation and warranty set forth in Section 3.11(a). 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 Economic Balances.
"Rating Agencies": Each of [S&P][Xxxxx'x][Fitch][DCR].
"Realized Loss Amounts": Any of the Class A-1 Realized Loss Amount,
Class A-2 Realized Loss Amount, Class A-3 Realized Loss Amount and Class A-4
Realized Loss Amount.
"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 15th day of the month preceding the
month of such Payment Date.
"Redemption Date": Any Principal Payment Date on which Notes are to be
redeemed at the option of the Issuer pursuant to Article X.
"Redemption Price": With respect to any Note to be redeemed pursuant to
Article X hereof, an amount equal to 100% of the Current Principal Amount of the
Note to be so redeemed (prior to allocations of any Realized Loss Allocation
Amounts), together with interest on such amount at the applicable Note Interest
Rate from the latest date to which interest has been paid to the applicable
Redemption Date.
"Remaining Available Funds": With respect to any Payment Date, an
amount (which shall not be less than zero) equal to (i) the Available Funds for
such Payment Date reduced by (ii) the amount of interest due and payable on the
unpaid principal Balance of 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 Trustee for deposit in the Collection
Account.
"Remittance Date": The first Business Day of each week, beginning with
the week after the Closing Date and the first Business Day following the end of
each Due Period.
"Responsible Officer": With respect to the Trustee, the chairman or
vice-chairman of the board of directors, the chairman or vice-chairman of the
executive committee
17
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 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 Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc. and its successors.
"Sale": As defined in Section 5.18.
"Schedule of Accounts": Collectively, the list of Accounts being
Granted to the Trustee as part of the Trust Estate on the Closing Date appearing
on a magnetic tape delivered to the Trustee on the Closing Date which list shall
set forth the following information as of the Cut-Off Date 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 amount of the note
7 Total finance charge over the term of the note
8 Paid-through date
9 Status code
10 Resale or original
11 Amount of late charges due
12 Date of last payment received
13 Account balance
14 Taxes due
15 Insurance due
16 Late charges due
17 Other charges due
18 Rebate method
"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, the Accountants and the Trustee information
concerning the Accounts,
18
including all collections on the Accounts received by it during the related
Remittance Period (as defined in the Servicing Agreement), which date shall be
the 20th day of each month following such Remittance Period or, if such day is
not a Business Day, the next preceding Business Day.
"Servicing Account": As defined in Section 2.08(b) of the Servicing
Agreement.
"Servicing Agreement": The Servicing Agreement, dated as of the date of
this Indenture, among the Issuer, the Servicer and the 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 Economic Balance is zero pursuant to the proviso of the
definition of "Economic Balance", the fee payable to the Servicer under the
Servicing Agreement, which fee shall be $____ annually, payable in equal monthly
installments.
"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 Trustee
by the Servicer, as such list may be amended or supplemented from time to time.
"Software Rights": All rights and interests in various software
programs, any equipment or other property necessary or appropriate to service
the Accounts whether such rights and interests are now owned, held, or after
acquired by Mid-State as contemplated by the License and Assignment of Rights in
Servicing Property attached as Exhibit E to the Servicing Agreement.
"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 Date": The Payment Date occurring in
___________.
"Target Overcollateralization Level": As of any Payment Date, the level
of overcollateralization that would exist if the Overcollateralization Amount
were equal to the greater of (i) the product of (x) the Overcollateralization
Percentage and (y) the Aggregate
19
Economic Balance of the Accounts as of the first day of the month preceding the
month of such Payment Date and (ii) the Minimum Target Overcollateralization
Amount.
"Trigger Event": Any one 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), (vi) or (vii) 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 material 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 and in either case released from the
lien of the Indenture, within 90 days after notice thereof from the 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 cease to be in full force and effect; or
20
(i) the lien of the Indenture ceases to be effective or ceases to be of
a first priority.
"Trust": The trust established by the Trust Agreement.
"Trust Agreement": The trust agreement, dated as of ________, 199_
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 Trustee in the Granting Clauses of this Indenture),
including all proceeds thereof, and all right, title and interest of the Trustee
in, to and under the Servicing Agreement and all money and property received by
the 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 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.
"Trustee": _________________, a ___________________, until a successor
Person shall have become the Trustee pursuant to the applicable provisions of
this Indenture, and thereafter "Trustee" shall mean such successor Person.
"Vice President": With respect to the Trustee, any vice president,
whether or not designated by a number or a word or words added before or after
the title "vice president".
"Voting Rights": With respect to a Class of Notes, a fraction,
expressed as a percentage, the numerator of which is equal to the Aggregate
Current Principal Amount of such Class of Notes and the denominator of which is
equal to the Aggregate Current Principal Amount of all Classes of Notes.
ARTICLE II
THE NOTES
SECTION 2.01. Forms Generally.
The Notes and the 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
21
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.
(a) The form of the Class A-1 Notes, the Class A-2 Notes, the
Class A-3 Notes and the Class A-4 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; Allocation of Realized Loss Amounts.
(a) The aggregate principal amount of Notes that may be authenticated
and delivered under the Indenture is limited to $___________, 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 designations,
original principal amounts, Note Interest Rates and Maturity Dates as follows:
Original
Designation Principal Amount Note Interest Rate Maturity Date
----------- ---------------- ------------------ -------------
Class A-1 Notes $ [ ] [ ]
Class A-2 Notes $ [ ] [ ]
Class A-3 Notes $ [ ] [ ]
Class A-4 Notes $ [ ] [ ]
The principal of each Note shall be payable in installments ending no
later than the Maturity of the final installment of the principal thereof 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 Interest
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
first to the interest then due and payable on the current principal amount
outstanding on such
22
Note and then to the principal thereof. All computations of interest accrued on
any Note shall be made as if each year consisted of twelve months of thirty days
each.
On each Payment Date, any Class A-1 Realized Loss Amount will be
applied in reduction of the Class A-1 Outstanding Principal Balance; any Class
A-2 Realized Loss Amount will be applied in reduction of the Class A-2
Outstanding Principal Balance; any Class A-3 Realized Loss Amount will be
applied in reduction of the Class A-3 Outstanding Principal Balance; any Class
A-4 Realized Loss Amount will be applied in reduction of the Class A-4
Outstanding Principal Balance; in each case, until the Outstanding Principal
Balance of such Class has been reduced to zero.
All payments of principal of and interest on any Note shall be made in
the manner specified in Section 2.09 and the amounts prescribed in Section 5.08.
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.
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 Trustee to or
upon the order of the Issuer on the Closing Date shall be dated the Accrual
Date. All other Notes which are authenticated after the Closing Date for any
other purpose hereunder shall be dated the date of their authentication.
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The Notes may be authenticated by the Trustee either at the Corporate
Trust Office or at the 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 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 Trustee shall authenticate and deliver, temporary
Notes which are printed, lithographed, typewritten, 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 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 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 Trustee is not also the Note Registrar, the
Trustee shall be a co-Note Registrar. The 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 Trustee appropriate information with respect
thereto for entry by the Note Registrar into the Note Register. If the Trustee
shall at any time not be authorized to keep and maintain the Note Register, the
Trustee shall have the right to inspect such Note Register at all reasonable
times
24
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 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 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 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 (i) the
Trustee receives a written notice from the Issuer that 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 or (ii) the
Issuer, at its option, elects to terminate the book-entry system through DTC.
Upon the occurrence of either event described in clauses (i) and (ii) above, the
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 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.
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SECTION 2.08. Mutilated, Destroyed, Lost or Stolen Notes.
If (1) any mutilated Note is surrendered to the Trustee or the Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (2) there is delivered to the Trustee such security or indemnity as
may be required by the Trustee to save each of the Trustee and the Issuer
harmless, then, in the absence of notice to the Issuer or the Trustee that such
Note has been acquired by a bona fide purchaser, the Issuer shall execute and
upon its direction the 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 bona fide purchaser of the
original Note in lieu of which such new Note was issued presents for payment
such original Note, the Issuer and the 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 bona fide purchaser, and
shall be entitled to recover upon the security or indemnity provided therefor to
the extent of any loss, damage, cost or expense incurred by the Issuer or the
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 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 installment 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
26
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
installment 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. Any installment of interest or principal
not punctually paid or duly provided for shall be payable in the manner and to
the Persons specified in subsection (c) 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
Allocation Amount or by payments of installments 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
installment 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 Due 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 Principal
Payment Date, it shall, no later than ten days prior to such Principal 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 Principal Payment Date a notice to the effect
that:
(i) the Issuer expects that funds sufficient to pay such final
installment will be available in the Collection Account on such Principal
Payment Date, and
(ii) if such funds are available, (A) such final installment will be
payable on such Payment Date, but only upon presentation and surrender of
such 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 Principal 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) of this Section 2.09 and returned undelivered shall be held in
accordance with Section 3.03.
27
(d) Not later than each Debt Service Requirement Determination Date,
the 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 Due 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;
(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(c) from the
amounts expected to be available in the Collection Account;
(vi) the Class Interest Shortfall (stated separately as to each Class);
(vii) the Collateral Deficiency Amount, if any;
(viii) 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;
(ix) the amount, if any, to be released to the Issuer pursuant to
clause twenty-first of Section 8.02(c)(ii);
(x) the total Realized Loss Amounts and amount allocated to each Class
of Notes and interest thereon;
(xi) 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;
(xii) the Cumulative Actual Net Economic Losses as of the end of the
related Due Period;
(xiii) the Economic Balance as of the end of the related Due 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);
(xiv) the Minimum Target Overcollateralization Amount; and
28
(xv) cumulative unreimbursed Realized Loss Amounts
Each Payment Date Statement shall be delivered by the Trustee to the
Issuer, each designee of the Issuer specified in writing to the Trustee, S&P,
the firm of Independent Accountants appointed by the Issuer pursuant to Section
8.06(a) and, upon request, to 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 Trustee, any Agent and any other agent of the Issuer or the 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 Trustee, any Agent nor any other agent of the Issuer
or the 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 Trustee, be
delivered to the Trustee, and such Notes, together with all such Notes so
surrendered directly to the Trustee, shall be promptly cancelled by it. The
Issuer may at any time deliver to the 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
cancelled by the Trustee. No Notes shall be authenticated in lieu of or in
exchange for any Notes cancelled as provided in this Section, except as
expressly permitted by this Indenture. All cancelled Notes held by the Trustee
shall be held by the 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 Trustee
for authentication, and thereupon the same shall be authenticated and delivered
by the Trustee, upon Issuer Request and upon receipt by the Trustee of the
following items required to be delivered to the 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 Officers' 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
29
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 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 Trustee all of its right, title,
and interest in each Account Granted to the 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-1 Notes have been rated
[AAA by S&P] [Aaa by Xxxxx'x][AAA by DCR][AAA by Fitch], the Class A-2
Notes have been rated at least [AA by S&P][Aa2 by Xxxxx'x][AA by DCR][AA by
Fitch], the Class A-3 Notes have been rated at least [A by S&P][A2 by
Xxxxx'x][A by DCR][A by Fitch] and the Class A-4 Notes have been rated at
least [BBB by S&P][Baa2 by Xxxxx'x][BBB by DCR][BBB by Fitch]; and
(vi) each of the Accounts satisfies the requirements of subsection (c)
below;
(c) all of the Accounts (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 Officers' 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 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 shall have an aggregate Economic Balance at least
equal to $[ ] as of the Cut-Off Date, and 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;
30
(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
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
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 Trustee for deposit in the Collection Account in
accordance with Section 2.08 of the Servicing Agreement and setting forth the
aggregate amount so remitted representing a Full Prepayment received by the
Servicer after the Cut-Off Date but more than five Business Days prior to the
Closing Date;
(f) a letter, addressed to the Trustee and complying with the
requirements of Section 11.01, 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):
(A) they have randomly selected a sample of
the Accounts, and compared 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;
(B) they recalculated the Economic Balance
for each Account and compared the Economic Balance calculated
by the Issuer to the Economic Balances calculated by them for
each Account and compared the aggregate Economic Balance for
all Accounts calculated by them to the aggregate initial
principal amount of the Notes proposed to be authenticated and
delivered;
(2) based upon the above-specified procedures, such firm has
determined that:
(A) 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 for more than [3%] of all of the Accounts;
(B) the Economic Balance calculated by the
Issuer for the Accounts does not exceed the Economic Balance
for the Accounts as calculated by them in accordance with the
definition of the term "Economic Balance" and the aggregate of
the Economic Balances calculated by them for all Accounts is
not less than [ ]% of the
31
aggregate initial principal amount of the Notes proposed to be
authenticated and delivered;
(g) cash in the amount equal to the amount, if any, required to be
remitted to the Trustee pursuant to Section 2.08 of the Servicing Agreement (as
indicated by the Officers' Certificate from the Servicer delivered pursuant to
subsection (e) of this Section 2.12) and deposited in the Collection Account and
held by the 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; and
(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., Xxxxxx Industries, Inc. and the
underwriter[s] named therein.
SECTION 2.13. Non-Petition.
Each Holder of any Note by his acceptance thereof shall be deemed to
have agreed not to petition or 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.
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
32
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 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 Trustee or if at any time
the Issuer shall fail to maintain any such required office or agency or shall
fail to furnish the 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 _______________________________ at ____________________________, 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 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(c) or Section 5.08 shall be made on behalf of the Issuer by the
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.
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 fifth 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 Trustee,
it will, on or before the Business Day next preceding each Payment Date, direct
the 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 Trustee for application in accordance with
Article VIII.
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Any Paying Agent shall be appointed by Issuer Order. 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 Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee (and if the 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 Trustee, immediately resign as a
Paying Agent and forthwith pay to the 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 Trustee, give the 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 Trustee, at any time during the
continuance of any such Default, upon the written request of the Trustee,
forthwith pay to the Trustee all sums so held in trust by such Paying
Agent; and
(6) comply with all requirements of the Internal Revenue Code of 1986,
as amended (or any successor or amendatory statutes), 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 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 Trustee, to pay to the Trustee
all sums held in trust by such Paying Agent, such sums to be held by the 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 Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Any money held by the 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
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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 Trustee or such Paying Agent with respect to such trust
money shall cease upon such payment. The 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 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 business 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
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.
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The Issuer hereby designates the Trustee its agent and attorney-in-fact
to execute any financing statement, continuation statement or other instrument
required pursuant to this Section 3.05; provided, however, that such designation
shall not be deemed to create a duty in the Trustee to monitor the compliance of
the Issuer with the foregoing covenants and provided, further, that the duty of
the Trustee to execute any instrument required pursuant to this Section 3.05
shall arise only if the 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 Trustee may do by virtue thereof.
(b) Except as otherwise provided herein and in the Servicing Agreement,
the 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(b), if no Opinion of Independent Counsel
has yet been delivered pursuant to Section 3.06) unless the 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 199_, the
Issuer shall furnish to the 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 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
36
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 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 securing the Mortgage
Loans, 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
Trustee may, and upon the direction of the Holders of Notes entitled to more
than 50% of the Voting Rights the Trustee 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 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 Trustee may appoint such successor
servicer (the "Successor Servicer"). The Trustee may appoint itself Successor
Servicer. Pending the appointment of a Successor Servicer as provided above, the
Trustee shall be the Successor Servicer. 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. Upon any such
termination, the Successor Servicer, or if the Trustee so elects upon a Trigger
Event, the 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 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 Trustee; provided that any such
compensation of the Successor Servicer shall not be in excess of [ ]% of the
Servicing Fee payable to the Servicer under the Servicing Agreement.
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(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 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 Trustee.
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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 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.
SECTION 3.11. Representations and Warranties Concerning the Accounts.
(a) The Issuer represents and warrants to the 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 Trustee with respect to 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 is true and correct as of the date as
of which such information is given;
(ii) the related building or installment 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 secure 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'
39
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 Trustee and, upon delivery of the related Account
Documents to the Trustee, the 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
Trustee;
(ix) the Grantor and the Issuer acquired title to the Accounts in good
faith, for value and without notice of any adverse claim;
(x) the Account Notes evidence accounts bearing a fixed rate of finance
charge and fully amortizing level monthly payments due on the 5th or the
15th day of each month. Each Account Note has an original term to maturity
not in excess of 30 years. No less than ___% of the Account Notes with
respect to Accounts that have an Economic Balance greater than zero were
originated from _________ through _______________, with the exception of
Account Notes which represent subsequent resales of repossessed houses that
secured Account Notes originated during such period. Each Account Note bears
a finance charge rate of not less than [ ]% and not more than [ ]% per
annum;
(xi) as of the Closing Date, 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
40
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) each Account Note at origination complied in all material
respects with applicable local, state and federal laws, including, without
limitation, usury, equal credit opportunity, real estate settlement
procedures, truth-in-lending and disclosure laws, and consummation of the
transactions contemplated by the Purchase and Sale Agreement and hereby will
not involve the violation of any such laws;
(xiv) 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;
(xv) 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;
and
(xvi) to the best knowledge of the Issuer, except Mortgaged Property
for which Insurance Proceeds are available, the Mortgaged Property is free
of damage which materially and adversely affects the value thereof.
(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 Trustee or the Noteholders in the Account, the Issuer or the Servicer
shall notify the 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
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 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 Economic
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 Trustee for
any reasonable expenses (including without limitation reasonable attorney's
fees) incurred by the Servicer and the Trustee, respectively, in respect of any
such breach.
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
41
delivery to the Trustee for such Qualified Substitute Account or Qualified
Substitute Accounts the Account Note and such other Account Documents related
thereto, with 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 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 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 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 Economic Balance of all
such Qualified Substitute Accounts as of the date of substitution is less than
the aggregate outstanding Economic 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 Noteholders or to the Trustee on their behalf respecting a
breach of the representations and warranties set forth in Section 3.11(a).
SECTION 3.12. Trustee's Review of Account Documents.
(a) The Trustee agrees, for the benefit of the holders of the Notes, to
review within 90 days after the Closing Date, the Account Documents delivered to
it on or prior to the Closing Date 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
42
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 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 Trustee or the
Noteholders in such Account or if any document required to be delivered to the
Trustee has not been delivered or if any documents so delivered does not relate
to an Account listed on the Schedule of Accounts, the 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 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 Economic 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 Trustee for any
reasonable expenses (including without limitation reasonable attorney's fees)
incurred by the Servicer and the Trustee, respectively, in respect of any such
defect or omission; provided, however, except for the review by the Trustee
pursuant to Section 3.12(a), the foregoing shall not impose an obligation on the
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 Trustee for such Qualified Substitute
Account or Qualified Substitute Accounts the Account Note and such other Account
Documents related thereto, with 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 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
43
such Deleted Account. The Issuer shall give or cause to be given written notice
to the 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
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 Economic Balance of all
such Qualified Substitute Accounts as of the date of substitution is less than
the aggregate outstanding Economic 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 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 Trustee
shall execute instruments to release property from the lien of this Indenture,
or convey the 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 Trustee as provided in this
Article III shall be bound to ascertain the Trustee's authority, inquire into
the satisfaction of any conditions precedent or see to the application of any
moneys.
(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
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 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 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
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
44
documents shall promptly be returned by the Trustee to the Servicer, with a
direction to the Servicer to forward the correct documentation.
(c) Upon Issuer Request accompanied by an Officers' Certificate of the
Servicer pursuant to Section 2.16 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 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 Trustee to release the related Account
Documents and delivers to the Trustee a trust receipt reasonably satisfactory to
the Trustee and signed by a Servicing Officer, the Trustee shall release the
related Account Documents to the Servicer. If such Account shall be liquidated
and the Trustee receives a certificate from the Servicer as provided above,
then, upon request of the Issuer, the Trustee shall release the trust receipt to
or upon the order of the Issuer.
(d) The 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 Trustee under Section 6.07.
SECTION 3.14. Amendments to Servicing Agreement.
The 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 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 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 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 9-305 of the Uniform
Commercial Code of the state in which such property is held by the Servicer, the
Trustee hereby acknowledges that the Servicer is acting as agent and bailee of
the Trustee in holding such moneys pursuant to Section 2.09 of the Servicing
Agreement, as well as its agent and bailee 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
45
Servicer's acceptance of such agency pursuant to Section 2.09 of the Servicing
Agreement, the 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
9-305 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 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.
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 __________________, 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 ______________ 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 _________________,
individually or personally, to perform any covenant either expressed or implied
contained herein, all such liability, if any,
46
being expressly waived by the Trustee and the Noteholders and by any Person
claiming by, through or under the Trustee and the Noteholders and (d) under no
circumstances shall ________________ 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 Trustee.
By entering into this Indenture and agreeing to perform the duties of
the Trustee as set forth herein, the 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
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 Trustee shall in no way be liable for the
decision of any Noteholder to purchase any Notes.
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 Trustee for cancellation; or
(b) all Notes not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at the
Maturity of the final installment of the principal thereof
within one year, or
(iii) are to be called for redemption within
one year under irrevocable arrangements satisfactory to the
Trustee for the giving of notice of redemption by the Trustee
in the name, and at the expense of
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the Issuer, and the Issuer, in the case of clauses (i), (ii)
or (iii) above, has deposited or caused to be deposited with
the 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 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; and
(3) the Issuer has delivered to the Trustee an Officers'
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 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 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 Trustee under Section 6.07, the obligations
of the Trustee to the Issuer and to the Holders of Notes under Section 3.03, the
obligations of the 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 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 Trustee may determine, to the Persons entitled thereto, of
the principal and interest for whose payment such money has been deposited with
the Trustee.
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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 the Maturity Date or (ii) there shall occur a failure to
apply funds in the Collection Account in accordance with Section 8.02(c) and
such failure shall continue for a period of two days or (iii) there shall
occur a default in the payment when due of interest on any Class of Notes
and such default shall continue for a period of 30 days;
(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 30 days after there shall have been
given, by registered or certified mail, to the Issuer by the Trustee or to
the Issuer and the Trustee by the Holders of Notes entitled to at least 40%
of the Voting Rights, 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.
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Notwithstanding the foregoing, prior to the Maturity Date, any of the
events set forth in (1) through (5) above will not be an Event of Default (i) in
respect of the Class A-2 Notes until the Class A-1 Notes have been paid in full,
(ii) in respect of the Class A-3 Notes until the Class A-1 Notes and Class A-2
Notes have been paid in full and (iii) in respect of the Class A-4 Notes until
the Class A-1 Notes, Class A-2 Notes and Class A-3 Notes have been paid in full.
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default occurs and is continuing, then and in every such
case, the Trustee or the Holders of Notes entitled to at least 40% of the Voting
Rights may declare all the Notes to be immediately due and payable, by a notice
in writing to the Issuer (and to the Trustee if given by the Noteholders), and
upon any such declaration such Notes, in an amount equal to the Aggregate
Current Principal Amount of such Notes, together with accrued and unpaid
interest thereon to the date of such acceleration, shall become immediately due
and payable. Notwithstanding the foregoing, the 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 Trustee as hereinafter in this Article provided, the
Holders of Notes entitled to at least 50% of the Voting Rights, by written
notice to the Issuer and the Trustee, may rescind and annul such declaration and
its consequences if
(1) the Issuer has paid or deposited with the 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 Trustee
hereunder and the reasonable compensation, expenses, disbursements and
advances of the 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
Trustee.
The Issuer covenants that if an Event of Default shall occur
and be continuing, the Issuer will pay to the Trustee for the benefit of the
Holders of the Notes:
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(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; 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 Current Principal Amount of all Outstanding Notes;
(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 installments 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 installments of interest at
the applicable Note Interest Rate and interest due and payable with respect
to unreimbursed Realized Loss Allocation Amounts; or
(b) if the Notes have been declared due and payable and such
declaration and its consequences have 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 Current Principal Amount of each Note and interest to the date
of such declaration at the applicable Note Interest Rate, on any installment
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 Allocation 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 Current Principal Amount of each Note and on any
installment of interest on such Note that was not paid when due, but V-3
only to the extent that payment of such interest on interest shall be
legally enforceable and on any previously unreimbursed Realized Loss
Allocation 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 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 (2) of Section 5.01 shall have
occurred, the 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 A-2 Notes, the
Trustee shall not institute such Proceeding unless the Current Principal Amount
of the Class A-1 Notes has been reduced to zero; in the case of a default under
Section 5.01 on the Class A-3 Notes, the Trustee shall not institute such
Proceeding unless the Current Principal Amount of the Class A-1 and Class A-2
Notes has been reduced to zero; in the case of a default under
51
Section 5.01 on the Class A-4 Notes, the Trustee shall not institute such
Proceeding unless the Current Principal Amount of the Class A-1, Class A-2 and
Class A-3 Notes have been reduced to zero.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Noteholders by such appropriate Proceedings as the Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture 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 Bank
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 Trustee may (subject to
Sections 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 Trustee or the Holders of the Notes
hereunder.
In the event the Trustee takes any of the foregoing actions to
protect the Noteholder's rights or interests under the Indenture, the Trustee
shall be indemnified from the
52
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 Trustee may 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 hereof and of the Notes
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 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 such
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;
(ii) the Holders of the Notes shall not have directed the 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 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 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;
53
(v) there shall be no uncured Event of Default of the type described in
Section 5.01(2) or (3); and
(vi) if the 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 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
Internal Revenue Code of 1986 (or any successor federal income tax
statute) and
(b) notwithstanding the acquisition of the Trust
Estate by the Trustee, the rights, powers and duties of the 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.
(c) The 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 Trustee in its sole discretion or may
be delivered to the 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 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 in
accordance with Section 5.05(a) first to payment of 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 hereof and of
the Notes if there had not been a declaration of acceleration of the Maturity of
the Notes. The 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 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 Trustee pursuant to this Section 5.05 or otherwise shall be
applied in accordance with Section 5.08.
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SECTION 5.06. Trustee May File Proofs of Claim.
(a) The 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) or (6) 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 Trustee to notify the Noteholders of any Insolvency Proceeding
or Preference Claims is expressly limited to such matters of which the Trustee
has actual knowledge. The 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, and the
Trustee on its behalf and on behalf of each Holder shall delegate and assign, to
the fullest extent permitted by law, the rights of the Trustee (exclusive of the
Trustee's rights under Section 6.07) and each Holder in the conduct of any
Insolvency Proceeding, including, without limitation, all rights of any party to
an adversary proceeding action with respect to any court order issued in
connection with any such Insolvency Proceeding; provided, however, that nothing
in this Section 5.06(a) shall be deemed to in any way limit the Trustee's rights
under Section 5.06(b)(i);
(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 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 Trustee (including any
claim for the reasonable compensation, expenses, disbursements and advances of
the 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 Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Noteholders, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 6.07.
Nothing herein contained shall be deemed to authorize the 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 Trustee to vote
in respect of the claim of any Noteholder in any such Proceeding.
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SECTION 5.07. 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 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 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 ratable benefit of the Holders of the
Notes. Any surplus shall be available, in accordance with Section 5.08, for the
payment of the reasonable compensation, expenses, disbursements and advances of
the 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 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 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 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-1 Notes, in an amount up to the
Interest Accrual Amount thereof;
Third: To the holders of the Class A-1 Notes, in an amount up to all
unreimbursed Class Interest Shortfalls related thereto, together with accrued
interest thereon to the extent legally enforceable;
Fourth: To the holders of the Class A-2 Notes, in an amount up to the
Interest Accrual Amount thereof ;
Fifth: To the holders of the Class A-2 Notes, in an amount up to all
unreimbursed Class Interest Shortfalls related thereto, together with accrued
interest thereon to the extent legally enforceable;
Sixth: To the holders of the Class A-3 Notes, in an amount up to the
Interest Accrual Amount thereof;
Seventh: To the holders of the Class A-3 Notes, in an amount up to all
unreimbursed Class Interest Shortfalls related thereto, together with accrued
interest thereon to the extent legally enforceable;
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Eighth: To the holders of the Class A-4 Notes, in an amount up to the
Interest Accrual Amount thereof;
Ninth: To the holders of the Class A-4 Notes, in an amount up to all
unreimbursed Class Interest Shortfalls related thereto, together with accrued
interest thereon to the extent legally enforceable;
Tenth: To the holders of the Class A-1 Notes, in an amount up to the
aggregate Current Principal Amount of the Class A-1 Notes, based upon their
respective Current Principal Amounts, ratably, without preference or priority of
any kind;
Eleventh: To the holders of the Class A-1 Notes, accrued and unpaid
interest at the related Note Interest Rate on the amount of any unreimbursed
Class A-1 Realized Loss Amounts previously allocated to the Class A-1 Notes;
Twelfth: To the holders of the Class A-1 Notes, in an amount up to the
amount of any unreimbursed Class A-1 Realized Loss Amounts previously allocated
thereto (including any Class A-1 Realized Loss Amount allocated thereto on such
Payment Date);
Thirteenth: To the holders of the Class A-2 Notes, in an amount up to
the aggregate Current Principal Amount of the Class A-2 Notes, based upon their
respective Current Principal Amounts, ratably, without preference or priority of
any kind;
Fourteenth: To the holders of the Class A-2 Notes, accrued and unpaid
interest at the related Note Interest Rate on the amount of any unreimbursed
Class A-2 Realized Loss Amounts previously allocated to the Class A-2 Notes;
Fifteenth: To the holders of the Class A-2 Notes, in an amount up to
the amount of any unreimbursed Class A-2 Realized Loss Amounts previously
allocated thereto (including any Class A-2 Realized Loss Amount allocated
thereto on such Payment Date);
Sixteenth: To the holders of the Class A-3 Notes, in an amount up to
the aggregate Current Principal Amount of the Class A-3 Notes, based upon their
respective Current Principal Amounts, ratably, without preference or priority of
any kind;
Seventeenth: To the holders of the Class A-3 Notes, accrued and unpaid
interest at the related Note Interest Rate on the amount of any unreimbursed
Class A-3 Realized Loss Amounts previously allocated to the Class A-3 Notes;
Eighteenth: To the holders of the Class A-3 Notes, in an amount up to
the amount of any unreimbursed Class A-3 Realized Loss Amounts previously
allocated thereto (including any Class A-3 Realized Loss Amount allocated
thereto on such Payment Date);
Nineteenth: To the holders of the Class A-4 Notes, in an amount up to
the aggregate Current Principal Amount of the Class A-4 Notes, based upon their
respective Current Principal Amounts, ratably, without preference or priority of
any kind;
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Twentieth: To the holders of the Class A-4 Notes, accrued and unpaid
interest at the related Note Interest Rate on the amount of any unreimbursed
Realized Loss Amounts previously allocated to the Class A-4 Notes;
Twenty-First: To the holders of the Class A-4 Notes, in an amount up to
the amount of any unreimbursed Class A-4 Realized Loss Amounts previously
allocated thereto (including any Class A-4 Realized Loss Amount allocated
thereto on such Payment Date); 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 Trustee of a continuing Event of
Default; (2) the Holders of Notes entitled to at least 40% of the Voting Rights
shall have made written request to the Trustee to institute Proceedings in
respect of such Event of Default in its own name as Trustee hereunder; (3) such
Holder or Holders have offered to the Trustee reasonable indemnity against the
costs, expenses and liabilities to be incurred in compliance with such request;
(4) the 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 Trustee during such
60-day period by the Holders of Notes entitled to more than 50% of the 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.
SECTION 5.10. Unconditional Rights of Noteholders to Receive Principal
and Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Note shall have the right, to the extent permitted by applicable law, which
right is absolute and unconditional except to the extent restricted by
applicable law, to receive payment of each installment of interest when due and
payable on such Note on the respective Payment Dates of such installments of
interest and to receive payment of each installment 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 such right shall not be impaired without the consent of such
Holder.
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SECTION 5.11. Restoration of Rights and Remedies.
If the 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 Trustee or to such Noteholder, then and in every such case the Issuer, the
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 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 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 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 Trustee or to the Noteholders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Noteholders, as the
case may be.
SECTION 5.14. Control by the Noteholders.
The Holders of Notes entitled to more than 50% of the Voting Rights,
shall have the right to direct the time, method and place of conducting any
Proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee; provided that (1) such direction shall not be in
conflict with any rule of law or with this Indenture, (2) unless Section
5.18(b)(2) is applicable, any direction to the 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 (3), 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 Trustee to undertake a Sale of the Trust Estate shall be of
no force and effect, and (4) the Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with such direction; provided, however,
that, subject to Section 6.01, the Trustee need not take action which it
determines might involve it in liability or expense or be unjustly prejudicial
to the Noteholders not consenting.
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SECTION 5.15. WAIVER OF PAST DEFAULTS.
The Holders of Notes entitled to more than 50% of the Voting Rights
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 installment 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 Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
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 installment of interest on any Note on or after the maturity thereof
expressed in such Note or for the enforcement of the payment of any installment
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 installment of principal of any Note when due as indicated
in the Payment Date Statement prepared and delivered by the Trustee pursuant to
Section 2.09(e).
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 Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
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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. The Trustee hereby expressly waives its
right to any amount fixed by law as compensation for any Sale.
(b) The Trustee shall not in any private Sale sell the Trust Estate, or
any portion thereof, unless (1) the Holders of all Outstanding Notes consent to
or direct the Trustee to make, such Sale, or (2) the proceeds of such Sale would
be not less 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, or (3) the 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 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 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 the Holders of Notes entitled to at
least 66 2/3% of the Voting Rights consent to such Sale. The purchase by the
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 the Holders of all Outstanding Notes have otherwise
consented or directed the Trustee, at any public Sale of all or any portion of
the Trust Estate at which a minimum bid equal to or greater than the amount
described in paragraph (2) of subsection (b) of this Section 5.18 has not been
established by the Trustee and no Person bids an amount equal to or greater than
such amount, the 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
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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 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 Trustee shall be held and dealt with by it in accordance with the
provisions of this Indenture;
(3) the Trustee shall execute and deliver an appropriate instrument of
conveyance transferring its interest in any portion of the Trust Estate in
connection with a Sale thereof;
(4) the 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 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 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 Trustee or the Holders of Notes
shall be impaired by the recovery of any judgment by the Trustee against the
Issuer or by the levy of any execution under such judgment upon any portion of
the Trust Estate.
ARTICLE VI
THE TRUSTEE
SECTION 6.01. DUTIES OF TRUSTEE.
(a) If an Event of Default known to the Trustee has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would
62
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 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 Trustee shall be read into this Indenture.
(2) In the absence of bad faith on its part, the 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 Trustee and conforming to the requirements of this Indenture. The
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 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 Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts.
(3) The 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 Trustee shall not be
deemed to have notice of any Event of Default described in Section 5.01(1) or
5.01(3) through 5.01(6) or any Default described in Section 5.01(1) or 5.01(3)
through 5.01(6) unless a Responsible Officer assigned to and working in the
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 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 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 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 Trustee
of any right or remedy permitted under this Indenture or otherwise
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in the event of the Issuer's failure to pay the Trustee's fees and expenses
pursuant to Section 6.07. In determining that such repayment or indemnity is not
reasonably assured to it, the 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(d).
(f) Every provision of this Indenture that in any way relates to the
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 Trustee or
otherwise, the rights, powers and duties of the 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.
SECTION 6.02. NOTICE OF DEFAULT.
Upon a Default becoming known to the Trustee, the Trustee shall, within
90 days after the occurrence of such Default becomes known to the 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(2), the 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 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(4) or 5.01(5) no such notice to
Noteholders shall be given until at least 30 days after the occurrence thereof.
SECTION 6.03. RIGHTS OF TRUSTEE.
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel; provided, however, that the
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 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 Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
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(d) The 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 Trustee shall not be liable for any action it takes or omits to
take in good faith pursuant to Section 5.14 hereof at the direction of Holders
of Notes entitled to more than 50% of the Voting Rights, 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 Trustee assumes no responsibility for their correctness. The 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 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 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
Trustee, Agent, or such other agent.
SECTION 6.06. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by Section 8.03, by any other
provision of this Indenture or by law. The 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 Trustee, in its commercial capacity, and income or
other gain actually received by the Trustee on investments which are obligations
of others.
SECTION 6.07. Compensation and Reimbursement.
The Issuer agrees
(1) subject to any separate written agreement with the Trustee, to pay
the 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);
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(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the 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 Trustee), except any such expense, disbursement or
advance as may be attributable to its negligence or bad faith; and
(3) to indemnify the 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 Trustee shall have given
the Issuer written notice thereof promptly after the Trustee shall have
knowledge thereof;
(ii) while maintaining absolute control over its own defense, the
Trustee shall cooperate and consult fully with the Issuer in preparing
such defense; and
(iii) notwithstanding anything to the contrary in this Section
6.07(3), the Issuer shall not be liable for settlement of any such
claim by the Trustee entered into without the prior consent of the
Issuer, which consent shall not be unreasonably withheld. As security
for the performance of the obligations of the Issuer under this
Section, the 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 Trustee in its capacity as
such. The 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 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 Trustee who satisfies the
requirements of TIA ss. 310(a)(1). The Trustee shall always have a combined
capital and surplus as stated in Section 6.09. The Trustee shall be subject to
TIA ss. 310(b), including the optional provision permitted by the second
sentence of TIA ss. 310(b)(9). The Trustee shall have a place of
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business in the State of Florida. Any successor Trustee shall execute the
Servicing Agreement and this Indenture.
SECTION 6.09. Trustee's Capital and Surplus.
The Trustee or any successor or substitute trustee shall at all times
have a combined capital and surplus of at least $50,000,000. If the 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 Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.11.
(b) The Trustee may resign at any time by giving written notice thereof
to the Issuer. If an instrument of acceptance by a successor Trustee shall not
have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee. The costs and expenses
incurred in connection with the resignation of the Trustee and any petition
filed for appointment of a Successor Trustee shall be paid by the Issuer.
(c) The Trustee may be removed at any time for reasonable cause by Act
of the Holders of Notes entitled to more than 50% of the Voting Rights delivered
to the Trustee and to the Issuer.
(d) If at any time:
(1) the 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 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 Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the 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 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 Trustee and the appointment of a
successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of the Trustee for any cause,
the Issuer by an Issuer Order shall promptly appoint a successor Trustee. If
within one year after such resignation,
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removal or incapability or the occurrence of such vacancy, a successor 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 Voting
Rights delivered to the Issuer and the retiring Trustee. The successor Trustee
so appointed shall, forthwith upon its acceptance of such appointment, become
the successor Trustee and supersede the successor Trustee appointed by the
Issuer. If no successor Trustee shall have been so appointed by the Issuer or
Noteholders or the successor 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 Trustee.
(f) The Issuer shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee to the Noteholders
and S&P. Each notice shall include the name of the successor Trustee and the
address of its Corporate Trust Office.
SECTION 6.11. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Issuer and the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee. Notwithstanding the foregoing, on request of the
Issuer or the successor Trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an Instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee, and shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder subject nevertheless to its lien,
if any, provided for in Section 6.07. Upon request of any such successor
Trustee, the Issuer shall execute and deliver any and all instruments for more
fully and certainly vesting in and confirming to such successor Trustee all such
rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 6.12. Merger; Conversion, Consolidation or Succession to
Business of Trustee.
Any entity into which the 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 Trustee shall be a party, or any entity
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the 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 Trustee then in office, any successor by merger, conversion or consolidation
to such authenticating Trustee may adopt
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such authentication and deliver the Notes so authenticated with the same effect
as if such successor Trustee had authenticated such Notes.
SECTION 6.13. Preferential Collection of Claims Against Issuer.
The Trustee shall be subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b), and a Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated.
SECTION 6.14. Co-trustees and Separate 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 Trustee shall have power to appoint, and,
upon the written request of the Trustee or of the Holders of Notes entitled to
more than 50% of the Voting Rights, the Issuer shall for such purpose join with
the 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 Trustee either to act as co-trustee, jointly with the
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 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 Trustee hereunder, shall be exercised, solely
by the Trustee.
(2) The rights, powers, duties and obligations hereby conferred or
imposed upon the Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed by
the Trustee or by the 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 Trustee
shall be incompetent or unqualified to perform such act, in which event such
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rights, powers, duties and obligations shall be exercised and performed by
such co-trustee or separate trustee.
(3) The 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 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 Trustee, the
Issuer shall join with the 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 Trustee, or any other such
trustee hereunder, and the 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 Trustee shall be deemed to
have been delivered to each such co-trustee and separate trustee.
SECTION 6.15. Authenticating Agents.
The 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 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 Trustee". Such Authenticating
Agent shall at all times be a Person that both meets the requirements of Section
6.09 for the 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
Trustee pursuant to the terms of this Section 6.15 shall deliver to the 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 Trustee for and holding
the Trustee harmless against, any loss, liability or
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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 Trustee and the Issuer. The 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 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 Trustee Names and Addresses of
Noteholders.
(a) The Issuer will furnish or cause to be furnished to the Trustee (i)
semi-annually, not less than 45 days nor more than 60 days after the Record Date
for each April 1 and October 1 Payment Date, a list, in such form as the Trustee
may reasonably require, of the names and addresses of the Holders of Notes, and
(ii) at such other times, as the 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 Trustee is the Note Registrar,
no such list shall be required to be furnished to the Trustee.
(b) In addition to furnishing to the 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.
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SECTION 7.02. Preservation of Information; Communications to
Noteholders.
(a) The 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 Trustee as provided in Section 7.01
and the names and addresses of the Holders of Notes received by the Trustee in
its capacity as Note Registrar. The 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 Trustee and the Note Registrar shall have the
protection of TIA ss. 312(c).
SECTION 7.03. Reports by 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 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 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 Trustee and (iii) the 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)(2), 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 Current 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 Trustee with the
Commission and with each securities exchange upon which the Notes are listed,
provided that the Issuer has previously notified the Trustee of such listing.
The Issuer will notify the Trustee when the Notes are listed on any securities
exchange.
SECTION 7.04. Reports by Issuer.
The Issuer (a) shall file with the Trustee within 15 days after it
files them with the Commission copies of the annual reports and of the
information, documents, and other reports (or copies of such portions of any of
the foregoing as the Commission may by rules and regulations prescribe) which
the Issuer is required to file with the Commission pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 and (b) shall also comply with the
other provisions of TIA ss. 314(a).
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ARTICLE VIII
ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND
RELEASES
SECTION 8.01. Collection of Moneys.
Except as otherwise expressly provided herein, the 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 Trustee pursuant to this
Indenture. The 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 Trustee
may, and upon the request of the Holders of Notes entitled to more than 50% of
the then Voting Rights, the Trustee 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") 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 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 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 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 two Business Days 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 Trustee is the obligor, so long as at the time of such investment the
long-term unsecured debt securities of the Trustee are rated "AAA" and "Aaa" by
S&P and Moody's, respectively). Notwithstanding the foregoing, any investment
(including repurchase agreements) on which
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the Trustee, in its commercial capacity, is the obligor, may mature on a Payment
Date if, under this Section 8.02, such investment could otherwise mature on the
Business Day immediately preceding such Payment Date.
All income or other gains from investment of moneys deposited in the
Collection Account shall be deposited by the Trustee in the Collection Account
immediately upon receipt, and any loss resulting from such investment shall be
charged to the Collection Account.
(c) Unless the Notes have been declared due and payable pursuant to
Section 5.02 and moneys collected by the Trustee with respect to the Notes are
being applied in accordance with Section 5.08, the amount on deposit in the
Collection Account on any Payment Date shall, after payment of Issuer Expenses
in accordance with Subsection (d), be withdrawn from the Collection Account, in
the amounts required, for application as follows:
On each Payment Date, interest and principal payments on the Notes will
be made from Available Funds in the following amounts and order of priority:
First: To the holders of the Class A-1 Notes, in an amount up to the
Interest Accrual Amount thereof;
Second: To the holders of the Class A-1 Notes, in an amount up to all
unreimbursed Class Interest Shortfalls related thereto, together with accrued
interest thereon to the extent legally enforceable;
Third: To the holders of the Class A-2 Notes, in an amount up to the
Interest Accrual Amount thereof;
Fourth: To the holders of the Class A-2 Notes, in an amount up to all
unreimbursed Class Interest Shortfalls related thereto, together with accrued
interest thereon to the extent legally enforceable;
Fifth: To the holders of the Class A-3 Notes, in an amount up to the
Interest Accrual Amount thereof;
Sixth: To the holders of the Class A-3 Notes, in an amount up to all
unreimbursed Class Interest Shortfalls related thereto, together with accrued
interest thereon to the extent legally enforceable;
Seventh: To the holders of the Class A-4 Notes, in an amount up to the
Interest Accrual Amount thereof;
Eighth: To the holders of the Class A-4 Notes, in an amount up to all
unreimbursed Class Interest Shortfalls related thereto, together with accrued
interest thereon to the extent legally enforceable;
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Ninth: To the holders of the Class A-1 Notes, in an amount up to the
Class A-1 Optimal Principal Amount;
Tenth: To the holders of the Class A-1 Notes, accrued and unpaid
interest at the related Note Interest Rate on the amount of any unreimbursed
Class A-1 Realized Loss Amounts previously allocated to the Class A-1 Notes;
Eleventh: To the holders of the Class A-1 Notes, in an amount up to the
amount of any unreimbursed Class A-1 Realized Loss Amounts previously allocated
thereto (including any Class A-1 Realized Loss Amount allocated thereto on such
Payment Date);
Twelfth: To the holders of the Class A-2 Notes, in an amount up to the
Class A 2 Optimal Principal Amount;
Thirteenth: To the holders of the Class A-2 Notes, accrued and unpaid
interest at the related Note Interest Rate on the amount of any unreimbursed
Class A-2 Realized Loss Amounts previously allocated to the Class A-2 Notes;
Fourteenth: To the holders of the Class A-2 Notes, in an amount up to
the amount of any unreimbursed Class A-2 Realized Loss Amounts previously
allocated thereto (including any Class A-2 Realized Loss Amount allocated
thereto on such Payment Date);
Fifteenth: To the holders of the Class A-3 Notes, in an amount up to
the Class A-3 Optimal Principal Amount;
Sixteenth: To the holders of the Class A-3 Notes, accrued and unpaid
interest at the related Note Interest Rate on the amount of any unreimbursed
Class A-3 Realized Loss Amounts previously allocated to the Class A-3 Notes;
Seventeenth: To the holders of the Class A-3 Notes, in an amount up to
the amount of any unreimbursed Class A-3 Realized Loss Amounts previously
allocated thereto (including any Class A-3 Realized Loss Amount allocated
thereto on such Payment Date);
Eighteenth: To the holders of the Class A-4 Notes, in an amount up to
the Class A-4 Optimal Principal Amount;
Nineteenth: To the holders of the Class A-4 Notes, accrued and unpaid
interest at the related Note Interest Rate on the amount of any unreimbursed
Class A-4 Realized Loss Amounts previously allocated to the Class A-4 Notes;
Twentieth: To the holders of the Class A-4 Notes, in an amount up to
the amount of any unreimbursed Class A-4 Realized Loss previously allocated
thereto (including any Class A-4 Realized Loss Amount allocated thereto on such
Payment Date); and
Twenty-First, 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
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the amounts applied pursuant to subclauses first through twentieth in this
clause (ii) for such Payment Date, each such amount being the amount thereof set
forth in the Payment Date Statement. Any funds remaining in the Collection
Account shall be invested in accordance with Section 8.02(b).
(d) Funds on deposit in the Collection Account shall be withdrawn
therefrom and applied on each Payment Date to the payment of Issuer Expenses;
provided that (i) funds shall not be withdrawn from the Collection Account for
such purpose during the period from the end of each Due 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.
(e) 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 Trustee, released from the lien of this Indenture and paid to the
Issuer.
SECTION 8.03. 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 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 Trustee
(in its capacity as such) or in the name of a nominee of the Trustee
(or, if, as indicated by an Opinion of Counsel delivered to the
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 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 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 Trustee for deposit in the
Collection Account.
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(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 Trustee shall cause to be sold or otherwise converted to cash a sufficient
amount of the investments in the Collection Account.
(d) The 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 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 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
8.03(b), such Issuer Order may authorize the 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 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 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 Trustee shall invest
and reinvest the funds then in the Collection Account to the fullest
extent practicable, in such manner as the 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 8.03(e), the 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
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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 clause (iii)
above shall mature no later than the first date following the date of
such investment on which the 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 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 8.04. Reports by Trustee to Noteholders.
On each Payment Date the Trustee shall deliver to the Noteholders a
written report based upon the Payment Date Statement for such Payment Date as
reviewed by a firm of Independent Accountants pursuant to Section 8.06(b)
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 8.05. Reports by Trustee.
In addition to any statement required to be delivered or prepared by
the Trustee pursuant to Section 2.09, 8.02 or 10.01, the Trustee shall deliver
to the Issuer, the Servicer and the Independent Accountants appointed pursuant
to Section 8.06, 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 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 Trustee.
SECTION 8.06. 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 8.06(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 8.06(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
Trustee of such failure in writing. If the Issuer shall not have appointed a
successor within ten days thereafter, the Trustee shall promptly appoint a
successor firm of Independent
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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 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 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
Trustee such Payment Date Statement at the expense of the 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 Trustee, on behalf of the Issuer (unless such fees are for the
account of the Trustee), from amounts otherwise payable to the Issuer from the
Collection Account pursuant to Section 8.02(d).
SECTION 8.07. Reports by the Servicer.
In the Servicing Agreement the Servicer has agreed to deliver to the
Trustee at the time specified therein the information called for by Section
3.01(a) of the Servicing Agreement.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures without Consent of Noteholders.
Without the consent of the Holders of any Notes, the Issuer and the
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 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 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;
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(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 Voting Rights, by Act of said Holders delivered to the Issuer and the
Trustee, the Issuer, when authorized by an Issuer Order, and the 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 installment of principal of, or any installment 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
installment 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
installment 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, the consent of the
Holders of which is required for any such supplemental indenture, or the
consent of the Holders of which is required for any waiver of compliance
with provisions of this Indenture or Defaults hereunder and their
consequences provided for in this Indenture;
(3) modify any of the provisions of this Section 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";
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(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 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 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 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 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 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 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.
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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
Trustee shall, bear a notation in form approved by the 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 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
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 Issuer on any Payment Date at the Redemption Price therefor if
before or after giving effect to the payment of principal otherwise required to
be made on such Payment Date the Current Principal Amount of each Class of Notes
outstanding (prior to allocations of any Realized Loss Amounts) equals 10% or
less of the initial principal amount of such Class of Notes.
Payment on the Notes pursuant to any optional redemption may be made
only with Eligible Moneys. If the Issuer elects to so redeem all Notes then
Outstanding, it shall, no later than 30 days prior to the Payment Date selected
for such redemption, deliver notice of such election to the Trustee, together
with an Issuer Order directing the Trustee to effect such redemption and the
Aggregate Redemption Price due on such Payment Date for deposit into the
Collection Account. 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 Trustee in the
name and at the expense of the Issuer and shall be mailed no later than 10 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:
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(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 Issuer shall default in the
payment of the Redemption Price) no interest shall accrue on such Redemption
Price for any period after such Redemption Date. 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 Trustee to take
any action under any provision of this Indenture, the Issuer shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
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;
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(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 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
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 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
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such certificate or report. The foregoing shall not, however, be construed to
affect the 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 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 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 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 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 Trustee or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Notes.
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SECTION 11.04. Notices, etc., to 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 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 Trustee at __________________________________________________:
Corporate Trust Department with a copy sent to
______________________________________________________, or
(2) the Issuer by the 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 _________________, as Owner Trustee,
_________________________________, Attention: ______________________, or at
any other address previously furnished in writing to the 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], [S&P at its address at 00 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
00000], [DCR at its address at 00 Xxxx Xxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxxxxx
00000], [Fitch at its address at Xxx Xxxxx Xxxxxx Xxxxx, 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
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Noteholders shall be filed with the Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon such
waiver.
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 Trustee shall be deemed to be a
sufficient giving of such notice.
SECTION 11.06. Rules by Trustee and Agents.
The 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 any of
the provisions of TIA, such required provision shall control.
SECTION 11.08. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 11.09. Successors and Assigns.
All covenants and agreements in this Indenture by the Issuer shall bind
its successors and assigns, whether so expressed or not.
SECTION 11.10. Separability.
In case any provision in this Indenture or in the 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. Legal Holidays.
In any case where the date of any Payment Date, Redemption Date, or any
other date on which principal of or interest on any Note is proposed to be paid
shall not be a
87
Business Day, then (notwithstanding any other provision of the Notes or this
Indenture) payment need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the nominal
date of any such Payment Date, Redemption Date, or other date for the payment of
principal of or interest on any Note, and no interest shall accrue for the
period from and after any such nominal date, provided such payment is made in
full on such next Succeeding Business Day.
SECTION 11.13. 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 11.14. Counterparts.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument
SECTION 11.15. Recording of Indenture.
This Indenture is subject to recording in any appropriate public
recording offices, such recording to be effected by the Issuer and at its
expense in compliance with any Opinion of Counsel delivered pursuant to Section
2.12(b) or 3.06.
SECTION 11.16. 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 or director 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 Trustee or any predecessor or successor of the Trustee with respect to the
Issuer's obligations with respect to the Notes or the obligation of the Issuer
or the Trustee under this Indenture or any certificate or other writing
delivered in connection herewith or therewith.
SECTION 11.17. Inspection.
The Issuer and the Note Registrar will agree that, on reasonable prior
notice, they will permit any representative of 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 Trustee, and to discuss its affairs, finances and
accounts with its officers, employees and Independent Accountants (and by this
provision
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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 Trustee of any right under this Section 11.17 shall be borne by
the Issuer.
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IN WITNESS WHEREOF, the Owner Trustee on behalf of the Issuer and the
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
Trustee, duly attested, to be hereunto affixed, all as of the day and year first
above written
MID-STATE TRUST 199
--
By: ,
-------------------------------
not in its individual capacity,
but solely as Owner Trustee
of Mid-State Trust 199
--
By:
------------------------------
Authorized Officer
Attest:
-------------------
Authorized Officer
, as Trustee
-----------------
By:
------------------------------
Authorized Officer
90
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the ___ day of _____, ____ 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 NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the ___ day of _____, ____, 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
91
EXHIBIT A
UNLESS THIS CLASS A-1 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
CERTIFICATE 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 CLASS A-1 NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS A-1
NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THE
ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS A-1 NOTE MAY BE ASCERTAINED
ONLY BY OBTAINING A WRITTEN CONFIRMATION THEREOF FROM THE TRUSTEE NAMED HEREIN.
THE RIGHTS OF A HOLDER OF THIS CLASS A-1 NOTE ARE SUBJECT TO THE PROVISIONS OF
THE WITHIN-REFERENCED INDENTURE.
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MID-STATE TRUST 199 -
_____% ASSET BACKED NOTE, CLASS A-1 DUE: [ ]
ACCRUAL DATE: [ ] $ No.
----------------------------- -------------------
Mid-State Trust 199 - (the "Issuer"), a Delaware business trust
governed by a Trust Agreement dated as of ______ __, 199_ (the "Trust
Agreement"), for value received, hereby promises to pay to ________________ or
registered assigns, the principal sum of ________ Dollars in quarterly
installments on January 1, April 1, July 1, and October 1 (the "Principal
Payment Dates") in each year, commencing on ________, 199_ and ending on or
before [ ] (the "Maturity" of such final installment of principal) and to pay
interest (computed on the basis of a 360-day year of twelve 30-day months) on
the unpaid principal amount of this Class A-1 Note outstanding from time to time
from [ ] (the "Accrual Date"), or such later date to which interest has been
paid, until the principal amount of this Class A-1 Note is paid in full, at the
rate of __________ percent (_____%) per annum, such interest being payable
quarterly on January 1, April 1, July 1, and October 1 in each year, commencing
on ______, 199_ (the "Interest Payment Dates"). Installments of principal of
this Class A-1 Note are due and payable in the amounts and on the dates
described on the reverse hereof.
The principal of, and interest on, this Class A-1 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 Class A-1 Note shall be applied first to
interest due and payable on this Class A-1 Note as provided above and then to
the unpaid principal of this Class A-1 Note. Any installment 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 Class A-1 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 Trustee by manual signature, this Class A-1 Note shall not be entitled to
any benefit under the Indenture referred to below, or be valid or obligatory for
any purpose.
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IN WITNESS WHEREOF, Mid-State Trust 199 - has caused this instrument to
be duly executed by ___________________, not in its individual capacity but
solely as Owner Trustee under the Trust Agreement.
Dated:
-----------------
MID-STATE TRUST 199
--
By: ,
-------------------------------
not in its individual capacity,
but solely in its capacity as
Owner Trustee under the
Trust Agreement
By:
------------------------------
[Title]
94
This Class A-1 Note is one of a duly authorized issue of Notes of the
Issuer, designated as its [ ]% Asset Backed Notes, Class A-1 (herein called the
"Class A-1 Notes"). The Class A-1 Notes are issued and will be issued under an
Indenture dated as of April __, 1997 (herein called the "Indenture"), between
the Issuer and ___________________, as Trustee (the "Trustee", which term
includes any successor 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 Trustee and the Holders of the
Class A-1 Notes and the terms upon which the Class A-1 Notes are, and are to be,
authenticated and delivered. Also issued under the Indenture are the [ ]% Asset
Backed Notes, Class A-2, [ ]% Asset Backed Notes, Class A-3 and [ ]% Asset
Backed Notes, Class A-4. The Class A-1 Notes are secured by the collateral
pledged as security therefor to the extent provided in the Indenture. All terms
used in this Class A-1 Note which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.
An installment of principal shall be paid on the Class A-1 Notes on
each Principal Payment Date in the amount equal to the amount available to be
paid thereon pursuant to Section 8.02(c)(ii) of the Indenture on such Principal
Payment Date; provided that the unpaid principal amount of this Class A-1 Note
shall be due and payable on the Principal Payment Date in ________. Each payment
of principal of the Class A-1 Notes shall be allocated among the Class A-1 Notes
in proportion to their then remaining unpaid principal amounts. The unpaid
principal amount of this Class A-1 Note may be reduced by the allocation to it
(in accordance with Section 2.09 of the Indenture) of Realized Loss Allocation
Amounts without any corresponding payment.
Payment of the then remaining unpaid principal amount of this Class A-1
Note on the Maturity of its final installment of principal or on such earlier
date as the Issuer shall be required to apply payments received with respect to
the collateral securing the Class A-1 Notes to payment of the then remaining
unpaid principal amount of this Class A-1 Note or to payment of the Redemption
Price payable on any date as of which this Class A-1 Note has been called for
redemption in full shall be made upon presentation of this Class A-1 Note to the
office or agency of the Issuer maintained for such purpose. Payments of interest
on this Class A-1 Note due and payable on each Interest Payment Date, together
with any installment of principal of this Class X- 0 Note due and payable on
each Interest Payment Date which is also a Principal Payment Date for this Class
A-1 Note, shall be made by check mailed to the Person whose name appears as the
registered Holder of this Class A-1 Note (or one or more Predecessor Notes) in
the Note Register as of the Record Date preceding such Interest Payment Date,
except that with respect to a Class A-1 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 Class A-1 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 Class A-1
Note be submitted for notation of
95
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 Class
A-1 Note (or any one or more Predecessor Notes) effected by any payments made on
any Principal Payment Date or by any allocation of a Realized Loss Amounts shall
be binding upon all Holders of this Class A-1 Note and of any Class A-1 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 Class
A-1 Note on a Principal Payment Date which is prior to the Maturity of the final
installment of principal hereof, then the Trustee, on behalf of the Issuer, will
notify the Person who was the registered Holder hereof on the 15th day of the
month prior to the month in which such Principal Payment Date occurs, by notice
mailed no later than ten days prior to such Principal Payment Date, and the
amount then due and payable shall, if sufficient funds therefor are available,
be payable only upon presentation of this Class A-1 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 Class A-1 Notes, the Class A-1 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 installment of principal of this Class A-1
Note, the amount payable to the Holder of this Class A-1 Note will be equal to
the aggregate unpaid principal amount of this Class A-1 Note on the date this
Class A-1 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 Class A-1
Notes, under certain circumstances specified therein all amounts collected as
proceeds of the collateral securing the Class A-1 Notes or otherwise shall
continue to be applied to payments of principal of and interest on the Class A-1
Notes as if they had not been declared due and payable. In such event, interest
on the then unpaid principal amount of all Class A-1 Notes and on any overdue
installments of interest on the Class A-1 Notes following the acceleration of
the maturity of the Class A-1 Notes shall accrue and be payable at the
applicable Note Interest Rate, but only to the extent that the payment thereof
shall be lawful and enforceable.
The Class A-1 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 Issuer on any Payment Date, if,
either before or after giving effect to the payment of principal otherwise
required to be made on such Payment Date, each Class of Notes shall be in an
aggregate Current Principal Amount which is 10% or less of the original
principal amount of such Class of Notes, at 100% of the outstanding principal
amount thereof together with interest accrued and unpaid to the date set for
redemption.
96
As provided in the Indenture the transfer of this Class A-1 Note may be
registered on the Note Register of the Issuer, upon surrender of this Class A-1
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 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 Class
A-1 Note, the Issuer, the Trustee and any agent of the Issuer or the Trustee may
treat the Person in whose name this Class A-1 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 Class A-1 Note be
overdue, and neither the Issuer, the 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 Class A-1 Notes under the Indenture
at any time by the Issuer, and the Holders of Notes entitled to more than 50% of
the Voting Rights at the time Outstanding. The Indenture also contains
provisions that permit the Holders of Notes entitled to more than 50% of the
Voting Rights, 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 Class A-1 Note (or any one or
more Predecessor Notes) shall be conclusive and binding upon such Holder and
upon all future holders of this Class A-1 Note and of any Class A-1 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 Class
A-1 Note.
The term "Issuer" as used in this Class A-1 Note includes any successor
to the Issuer under the Indenture.
The Class A-1 Notes are issuable only in registered form in the
denominations provided in the Indenture and subject to certain limitations
therein set forth. The Class A-1 Notes are exchangeable for a like aggregate
initial principal amount of Class A-1 Notes of different authorized
denominations, as requested by the Holder surrendering the same, pursuant to the
terms and conditions set forth in the Indenture.
As provided in the Indenture, this Class A-1 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 Class A-1
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 Class A-1 Note at the times, place and rate, and in the coin or currency,
herein prescribed.
97
Anything herein to the contrary notwithstanding, neither the Owner
Trustee in its individual capacity, any beneficial owner of the Issuer, the
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 Class A-1 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 Class A-1 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 of any and all liabilities, obligations and undertakings
contained in the Indenture or in this Class A-1 Note.
The Owner Trustee has executed this Class A-1 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 Class A-1 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.
98
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A-1 Notes referred to in the within-mentioned
Indenture.
--------------------,
as Trustee
By:
------------------------------
Authorized Officer
99
EXHIBIT B
UNLESS THIS CLASS A-2 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
CERTIFICATE 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 CLASS A-2 NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS A-2
NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THE
ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS A-2 NOTE MAY BE ASCERTAINED
ONLY BY OBTAINING A WRITTEN CONFIRMATION THEREOF FROM THE TRUSTEE NAMED HEREIN.
THE RIGHTS OF A HOLDER OF THIS CLASS A-2 NOTE ARE SUBJECT TO THE PROVISIONS OF
THE WITHINREFERENCED INDENTURE.
THE RIGHTS OF THE CLASS A-2 NOTEHOLDERS TO RECEIVE PAYMENTS IN RESPECT
OF PRINCIPAL AND INTEREST ON THE CLASS A-2 NOTES ARE SUBORDINATE TO THE RIGHTS
OF THE CLASS A-1 NOTEHOLDERS TO RECEIVE PAYMENTS OF PRINCIPAL AND INTEREST.
100
MID-STATE TRUST 199 -
_____% ASSET BACKED NOTE, CLASS A-2 DUE: [ ]
ACCRUAL DATE: [ ] $ No.
-------------------------- ------------------
Mid-State Trust 199 - (the "Issuer"), a Delaware business trust
governed by a Trust Agreement dated as of ________ __, 199_ (the "Trust
Agreement"), for value received, hereby promises to pay to ________________ or
registered assigns, the principal sum of ________ Dollars in quarterly
installments on January 1, April 1, July 1, and October 1 (the "Principal
Payment Dates") in each year, commencing on ________, 199_ and ending on or
before [ ] (the "Maturity" of such final installment of principal) and to pay
interest (computed on the basis of a 360-day year of twelve 30-day months) on
the unpaid principal amount of this Class A-2 Note outstanding from time to time
from [ ] (the "Accrual Date"), or such later date to which interest has been
paid, until the principal amount of this Class A-2 Note is paid in full, at the
rate of __________ percent (_____%) per annum, such interest being payable
quarterly on January 1, April 1, July 1, and October 1 in each year, commencing
on ______, 199_ (the "Interest Payment Dates"). Installments of principal of
this Class A-2 Note are due and payable in the amounts and on the dates
described on the reverse hereof.
The principal of, and interest on, this Class A-2 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 Class A-2 Note shall be applied first to
interest due and payable on this Class A-2 Note as provided above and then to
the unpaid principal of this Class A-2 Note. Any installment 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 Class A-2 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 Trustee by manual signature, this Class A-2 Note shall not be entitled to
any benefit under the Indenture referred to below, or be valid or obligatory for
any purpose.
101
IN WITNESS WHEREOF, Mid-State Trust 199 - has caused this instrument to
be duly executed by _______________, not in its individual capacity but solely
as Owner Trustee under the Trust Agreement.
Dated:
----------------
MID-STATE TRUST 199
--
By: ,
-------------------------------
not in its individual capacity,
but solely in its capacity as
Owner Trustee under the
Trust Agreement
By:
------------------------------
[Title]
102
This Class A-2 Note is one of a duly authorized issue of Notes of the
Issuer, designated as its [ ]% Asset Backed Notes, Class A-2 (herein called the
"Class A-2 Notes"). The Class A-2 Notes are issued and will be issued under an
Indenture dated as of April __, 1997 (herein called the "Indenture"), between
the Issuer and ____________________, as Trustee (the "Trustee", which term
includes any successor 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 Trustee and the Holders of the
Class A-2 Notes and the terms upon which the Class A-2 Notes are, and are to be,
authenticated and delivered. Also issued under the Indenture are the [ ]% Asset
Backed Notes, Class A-1, [ ]% Asset Backed Notes, Class A-3 and [ ]% Asset
Backed Notes, Class A-4. The Class A-2 Notes are secured by the collateral
pledged as security therefor to the extent provided in the Indenture. All terms
used in this Class A-2 Note which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.
An installment of principal shall be paid on the Class A-2 Notes on
each Principal Payment Date in the amount equal to the amount available to be
paid thereon pursuant to Section 8.02(c)(ii) of the Indenture on such Principal
Payment Date; provided that the unpaid principal amount of this Class A-2 Note
shall be due and payable on the Principal Payment Date in _____. Each payment of
principal of the Class A-2 Notes shall be allocated among the Class A-2 Notes in
proportion to their then remaining unpaid principal amounts. The unpaid
principal amount of this Class A-2 Note may be reduced by the allocation to it
(in accordance with Section 2.09 of the Indenture) of Realized Loss Allocation
Amounts without any corresponding payment.
The rights of the Class A-2 Noteholders to receive payments in respect
of principal and interest on the Class A-2 Notes are subordinate to the rights
of the Class A-1 Noteholders to receive payments of principal and interest.
Payment of the then remaining unpaid principal amount of this Class A-2
Note on the Maturity of its final installment of principal or on such earlier
date as the Issuer shall be required to apply payments received with respect to
the collateral securing the Class A-2 Notes to payment of the then remaining
unpaid principal amount of this Class A-2 Note or to payment of the Redemption
Price payable on any date as of which this Class A-2 Note has been called for
redemption in full shall be made upon presentation of this Class A-2 Note to the
office or agency of the Issuer maintained for such purpose. Payments of interest
on this Class A-2 Note due and payable on each Interest Payment Date, together
with any installment of principal of this Class X- 0 Note due and payable on
each Interest Payment Date which is also a Principal Payment Date for this Class
A-2 Note, shall be made by check mailed to the Person whose name appears as the
registered Holder of this Class A-2 Note (or one or more Predecessor Notes) in
the Note Register as of the Record Date preceding such Interest Payment Date,
except that with respect to a Class A-2 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.
103
Checks for amounts due on this Class A-2 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 Class A-2
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 Class A-2 Note (or any one or more Predecessor Notes)
effected by any payments made on any Principal Payment Date or by any allocation
of a Realized Loss Amounts shall be binding upon all Holders of this Class A-2
Note and of any Class A-2 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 Class
A-2 Note on a Principal Payment Date which is prior to the Maturity of the final
installment of principal hereof, then the Trustee, on behalf of the Issuer, will
notify the Person who was the registered Holder hereof on the 15th day of the
month prior to the month in which such Principal Payment Date occurs, by notice
mailed no later than ten days prior to such Principal Payment Date, and the
amount then due and payable shall, if sufficient funds therefor are available,
be payable only upon presentation of this Class A-2 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 Class A-2 Notes, the Class A-2 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 installment of principal of this Class A-2
Note, the amount payable to the Holder of this Class A-2 Note will be equal to
the aggregate unpaid principal amount of this Class A-2 Note on the date this
Class A-2 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 Class A-2
Notes, under certain circumstances specified therein all amounts collected as
proceeds of the collateral securing the Class A-2 Notes or otherwise shall
continue to be applied to payments of principal of and interest on the Class A-2
Notes as if they had not been declared due and payable. In such event, interest
on the then unpaid principal amount of all Class A-2 Notes and on any overdue
installments of interest on the Class A-2 Notes following the acceleration of
the maturity of the Class A-2 Notes shall accrue and be payable at the
applicable Note Interest Rate, but only to the extent that the payment thereof
shall be lawful and enforceable.
The Class A-2 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 Issuer on any Payment Date, if,
either before or after giving effect to the payment of principal otherwise
required to be made on such Payment Date, each Class of Notes shall be in an
aggregate Current Principal Amount which is 10% or less of the original
104
principal amount of such Class of Notes, at 100% of the outstanding principal
amount thereof together with interest accrued and unpaid to the date set for
redemption.
As provided in the Indenture the transfer of this Class A-2 Note may be
registered on the Note Register of the Issuer, upon surrender of this Class A-2
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 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 Class
A-2 Note, the Issuer, the Trustee and any agent of the Issuer or the Trustee may
treat the Person in whose name this Class A-2 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 Class A-2 Note be
overdue, and neither the Issuer, the 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 Class A-2 Notes under the Indenture
at any time by the Issuer, and the Holders of Notes entitled to more than 50% of
the Voting Rights at the time Outstanding. The Indenture also contains
provisions that permit the Holders of Notes entitled to more than 50% of the
Voting Rights, 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 Class A-2 Note (or any one or
more Predecessor Notes) shall be conclusive and binding upon such Holder and
upon all future holders of this Class A-2 Note and of any Class A-2 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 Class
A-2 Note.
The term "Issuer" as used in this Class A-2 Note includes any successor
to the Issuer under the Indenture.
The Class A-2 Notes are issuable only in registered form in the
denominations provided in the Indenture and subject to certain limitations
therein set forth. The Class A-2 Notes are exchangeable for a like aggregate
initial principal amount of Class A-2 Notes of different authorized
denominations, as requested by the Holder surrendering the same, pursuant to the
terms and conditions set forth in the Indenture.
As provided in the Indenture, this Class A-2 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.
105
No reference herein to the Indenture and no provision of this Class A-2
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 Class A-2 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
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 Class A-2 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 Class A-2 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 of any and all liabilities, obligations and undertakings
contained in the Indenture or in this Class A-2 Note.
The Owner Trustee has executed this Class A-2 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 Class A-2 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.
106
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A-2 Notes referred to in the within-mentioned
Indenture.
--------------------,
as Trustee
By:
-------------------------------
Authorized Officer
107
EXHIBIT C
UNLESS THIS CLASS A-3 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
CERTIFICATE 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 CLASS A-3 NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS A-3
NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THE
ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS A-3 NOTE MAY BE ASCERTAINED
ONLY BY OBTAINING A WRITTEN CONFIRMATION THEREOF FROM THE TRUSTEE NAMED HEREIN.
THE RIGHTS OF A HOLDER OF THIS CLASS A-3 NOTE ARE SUBJECT TO THE PROVISIONS OF
THE WITHINREFERENCED INDENTURE.
THE RIGHTS OF THE CLASS A-3 NOTEHOLDERS TO RECEIVE PAYMENTS IN RESPECT
OF PRINCIPAL AND INTEREST ON THE CLASS A-3 NOTES ARE SUBORDINATE TO THE RIGHTS
OF THE CLASS A-1 NOTEHOLDERS AND CLASS A-2 NOTEHOLDERS TO RECEIVE PAYMENTS OF
PRINCIPAL AND INTEREST.
108
MID-STATE TRUST 199 -
_____% ASSET BACKED NOTE, CLASS A-3 DUE: [ ]
ACCRUAL DATE: [ ] $ No.
--------------------- ----------------
Mid-State Trust 199 - (the "Issuer"), a Delaware business trust
governed by a Trust Agreement dated as of _______ __, 199_ (the "Trust
Agreement"), for value received, hereby promises to pay to ________________ or
registered assigns, the principal sum of ________ Dollars in quarterly
installments on January 1, April 1, July 1, and October 1 (the "Principal
Payment Dates") in each year, commencing on __________, 199_ and ending on or
before [ ] (the "Maturity" of such final installment of principal) and to pay
interest (computed on the basis of a 360-day year of twelve 30-day months) on
the unpaid principal amount of this Class A-3 Note outstanding from time to time
from [ ] (the "Accrual Date"), or such later date to which interest has been
paid, until the principal amount of this Class A-3 Note is paid in full, at the
rate of __________ percent (_____%) per annum, such interest being payable
quarterly on January 1, April 1, July 1, and October 1 in each year, commencing
on _______, 199_ (the "Interest Payment Dates"). Installments of principal of
this Class A-3 Note are due and payable in the amounts and on the dates
described on the reverse hereof.
The principal of, and interest on, this Class A-3 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 Class A-3 Note shall be applied first to
interest due and payable on this Class A-3 Note as provided above and then to
the unpaid principal of this Class A-3 Note. Any installment 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 Class A-3 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 Trustee by manual signature, this Class A-3 Note shall not be entitled to
any benefit under the Indenture referred to below, or be valid or obligatory for
any purpose.
109
IN WITNESS WHEREOF, Mid-State Trust 199 - has caused this instrument to
be duly executed by ______________, not in its individual capacity but solely as
Owner Trustee under the Trust Agreement. Dated:
---------------
MID-STATE TRUST 199
--
By: ,
-------------------------------
not in its individual capacity,
but solely in its capacity as
Owner Trustee under the
Trust Agreement
By:
------------------------------
[Title]
110
This Class A-3 Note is one of a duly authorized issue of Notes of the
Issuer, designated as its [ ]% Asset Backed Notes, Class A-3 (herein called the
"Class A-3 Notes"). The Class A-3 Notes are issued and will be issued under an
Indenture dated as of April __, 1997 (herein called the "Indenture"), between
the Issuer and ______________________, as Trustee (the "Trustee", which term
includes any successor 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 Trustee and the Holders of the
Class A-3 Notes and the terms upon which the Class A-3 Notes are, and are to be,
authenticated and delivered. Also issued under the Indenture are the [ ]% Asset
Backed Notes, Class A-1, [ ]% Asset Backed Notes, Class A-2 and [ ]% Asset
Backed Notes, Class A-4. The Class A-3 Notes are secured by the collateral
pledged as security therefor to the extent provided in the Indenture. All terms
used in this Class A-3 Note which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.
An installment of principal shall be paid on the Class A-3 Notes on
each Principal Payment Date in the amount equal to the amount available to be
paid thereon pursuant to Section 8.02(c)(ii) of the Indenture on such Principal
Payment Date; provided that the unpaid principal amount of this Class A-3 Note
shall be due and payable on the Principal Payment Date in _______. Each payment
of principal of the Class A-3 Notes shall be allocated among the Class A-3 Notes
in proportion to their then remaining unpaid principal amounts. The unpaid
principal amount of this Class A-3 Note may be reduced by the allocation to it
(in accordance with Section 2.09 of the Indenture) of Realized Loss Allocation
Amounts without any corresponding payment.
The rights of the Class A-3 Noteholders to receive payments in respect
of principal and interest on the Class A-3 Notes are subordinate to the rights
of the Class A-1 Noteholders and Class A-2 Noteholders to receive payments of
principal and interest.
Payment of the then remaining unpaid principal amount of this Class A-3
Note on the Maturity of its final installment of principal or on such earlier
date as the Issuer shall be required to apply payments received with respect to
the collateral securing the Class A-3 Notes to payment of the then remaining
unpaid principal amount of this Class A-3 Note or to payment of the Redemption
Price payable on any date as of which this Class A-3 Note has been called for
redemption in full shall be made upon presentation of this Class A-3 Note to the
office or agency of the Issuer maintained for such purpose. Payments of interest
on this Class A-3 Note due and payable on each Interest Payment Date, together
with any installment of principal of this Class X- 0 Note due and payable on
each Interest Payment Date which is also a Principal Payment Date for this Class
A-3 Note, shall be made by check mailed to the Person whose name appears as the
registered Holder of this Class A-3 Note (or one or more Predecessor Notes) in
the Note Register as of the Record Date preceding such Interest Payment Date,
except that with respect to a Class A-3 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.
111
Checks for amounts due on this Class A-3 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 Class A-3
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 Class A-3 Note (or any one or more Predecessor Notes)
effected by any payments made on any Principal Payment Date or by any allocation
of a Realized Loss Amounts shall be binding upon all Holders of this Class A-3
Note and of any Class A-3 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 Class
A-3 Note on a Principal Payment Date which is prior to the Maturity of the final
installment of principal hereof, then the Trustee, on behalf of the Issuer, will
notify the Person who was the registered Holder hereof on the 15th day of the
month prior to the month in which such Principal Payment Date occurs, by notice
mailed no later than ten days prior to such Principal Payment Date, and the
amount then due and payable shall, if sufficient funds therefor are available,
be payable only upon presentation of this Class A-3 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 Class A-3 Notes, the Class A-3 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 installment of principal of this Class A-3
Note, the amount payable to the Holder of this Class A-3 Note will be equal to
the aggregate unpaid principal amount of this Class A-3 Note on the date this
Class A-3 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 Class A-3
Notes, under certain circumstances specified therein all amounts collected as
proceeds of the collateral securing the Class A-3 Notes or otherwise shall
continue to be applied to payments of principal of and interest on the Class A-3
Notes as if they had not been declared due and payable. In such event, interest
on the then unpaid principal amount of all Class A-3 Notes and on any overdue
installments of interest on the Class A-3 Notes following the acceleration of
the maturity of the Class A-3 Notes shall accrue and be payable at the
applicable Note Interest Rate, but only to the extent that the payment thereof
shall be lawful and enforceable.
The Class A-3 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 Issuer on any Payment Date, if,
either before or after giving effect to the payment of principal otherwise
required to be made on such Payment Date, each Class of Notes shall be in an
aggregate Current Principal Amount which is 10% or less of the original
112
principal amount of such Class of Notes, at 100% of the outstanding principal
amount thereof together with interest accrued and unpaid to the date set for
redemption.
As provided in the Indenture the transfer of this Class A-3 Note may be
registered on the Note Register of the Issuer, upon surrender of this Class A-3
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 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 Class
A-3 Note, the Issuer, the Trustee and any agent of the Issuer or the Trustee may
treat the Person in whose name this Class A-3 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 Class A-3 Note be
overdue, and neither the Issuer, the 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 Class A-3 Notes under the Indenture
at any time by the Issuer, and the Holders of Notes entitled to more than 50% of
the Voting Rights at the time Outstanding. The Indenture also contains
provisions that permit the Holders of Notes entitled to more than 50% of the
Voting Rights, 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 Class A-3 Note (or any one or
more Predecessor Notes) shall be conclusive and binding upon such Holder and
upon all future holders of this Class A-3 Note and of any Class A-3 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 Class
A-3 Note.
The term "Issuer" as used in this Class A-3 Note includes any successor
to the Issuer under the Indenture.
The Class A-3 Notes are issuable only in registered form in the
denominations provided in the Indenture and subject to certain limitations
therein set forth. The Class A-3 Notes are exchangeable for a like aggregate
initial principal amount of Class A-3 Notes of different authorized
denominations, as requested by the Holder surrendering the same, pursuant to the
terms and conditions set forth in the Indenture.
As provided in the Indenture, this Class A-3 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.
113
No reference herein to the Indenture and no provision of this Class A-3
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 Class A-3 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
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 Class A-3 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 Class A-3 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 of any and all liabilities, obligations and undertakings
contained in the Indenture or in this Class A-3 Note.
The Owner Trustee has executed this Class A-3 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 Class A-3 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.
114
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A-3 Notes referred to in the within-mentioned
Indenture.
----------------------,
as Trustee
By:
-----------------------------
Authorized Signatory
115
EXHIBIT D
UNLESS THIS CLASS A-4 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
CERTIFICATE 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 CLASS A-4 NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS A-4
NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THE
ACTUAL OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS A-4 NOTE MAY BE ASCERTAINED
ONLY BY OBTAINING A WRITTEN CONFIRMATION THEREOF FROM THE TRUSTEE NAMED HEREIN.
THE RIGHTS OF A HOLDER OF THIS CLASS A-4 NOTE ARE SUBJECT TO THE PROVISIONS OF
THE WITHINREFERENCED INDENTURE.
THE RIGHTS OF THE CLASS A-4 NOTEHOLDERS TO RECEIVE PAYMENTS IN RESPECT
OF PRINCIPAL AND INTEREST ON THE CLASS A-4 NOTES ARE SUBORDINATE TO THE RIGHTS
OF THE CLASS A-1 NOTEHOLDERS, CLASS A-2 NOTEHOLDERS AND CLASS A-3 NOTEHOLDERS TO
RECEIVE PAYMENTS OF PRINCIPAL AND INTEREST.
116
MID-STATE TRUST 199 -
_____% ASSET BACKED NOTE, CLASS A-4 DUE: [ ]
ACCRUAL DATE: [ ] $ No.
----------------------- ------------------
Mid-State Trust 199 - (the "Issuer"), a Delaware business trust
governed by a Trust Agreement dated as of ________ __, 199_ (the "Trust
Agreement"), for value received, hereby promises to pay to ________________ or
registered assigns, the principal sum of ________ Dollars in quarterly
installments on January 1, April 1, July 1, and October 1 (the "Principal
Payment Dates") in each year, commencing on __________, 199_ and ending on or
before [ ] (the "Maturity" of such final installment of principal) and to pay
interest (computed on the basis of a 360-day year of twelve 30-day months) on
the unpaid principal amount of this Class A-4 Note outstanding from time to time
from [ ] (the "Accrual Date"), or such later date to which interest has been
paid, until the principal amount of this Class A-4 Note is paid in full, at the
rate of __________ percent (_____%) per annum, such interest being payable
quarterly on January 1, April 1, July 1, and October 1 in each year, commencing
on ______, 199_ (the "Interest Payment Dates"). Installments of principal of
this Class A-4 Note are due and payable in the amounts and on the dates
described on the reverse hereof.
The principal of, and interest on, this Class A-4 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 Class A-4 Note shall be applied first to
interest due and payable on this Class A-4 Note as provided above and then to
the unpaid principal of this Class A-4 Note. Any installment 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 Class A-4 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 Trustee by manual signature, this Class A-4 Note shall not be entitled to
any benefit under the Indenture referred to below, or be valid or obligatory for
any purpose.
117
IN WITNESS WHEREOF, Mid-State Trust 199 - has caused this instrument to
be duly executed by _________________, not in its individual capacity but solely
as Owner Trustee under the Trust Agreement. Dated: ---------------
MID-STATE TRUST 199
--
By: ,
-------------------------------
not in its individual capacity,
but solely in its capacity as
Owner Trustee under the
Trust Agreement
By:
------------------------------
[Title]
118
This Class A-4 Note is one of a duly authorized issue of Notes of the
Issuer, designated as its [ ]% Asset Backed Notes, Class A-4 (herein called the
"Class A-4 Notes"). The Class A-4 Notes are issued and will be issued under an
Indenture dated as of April __, 1997 (herein called the "Indenture"), between
the Issuer and _____________________, as Trustee (the "Trustee", which term
includes any successor 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 Trustee and the Holders of the
Class A-4 Notes and the terms upon which the Class A-4 Notes are, and are to be,
authenticated and delivered. Also issued under the Indenture are the [ ]% Asset
Backed Notes, Class A-1, [ ]% Asset Backed Notes, A-2 and [ ]% Asset Backed
Notes, Class A-3. The Class A-4 Notes are secured by the collateral pledged as
security therefor to the extent provided in the Indenture. All terms used in
this Class A-4 Note which are defined in the Indenture shall have the meanings
assigned to them in the Indenture.
An installment of principal shall be paid on the Class A-4 Notes on
each Principal Payment Date in the amount equal to the amount available to be
paid thereon pursuant to Section 8.02(c)(ii) of the Indenture on such Principal
Payment Date; provided that the unpaid principal amount of this Class A-4 Note
shall be due and payable on the Principal Payment Date in _____. Each payment of
principal of the Class A-4 Notes shall be allocated among the Class A-4 Notes in
proportion to their then remaining unpaid principal amounts. The unpaid
principal amount of this Class A-4 Note may be reduced by the allocation to it
(in accordance with Section 2.09 of the Indenture) of Realized Loss Allocation
Amounts without any corresponding payment.
The rights of the Class A-4 Noteholders to receive payments in respect
of principal and interest on the Class A-4 Notes are subordinate to the rights
of the Class A-1 Noteholders, Class A-2 Noteholders and Class A-3 Noteholders to
receive payments of principal and interest.
Payment of the then remaining unpaid principal amount of this Class A-4
Note on the Maturity of its final installment of principal or on such earlier
date as the Issuer shall be required to apply payments received with respect to
the collateral securing the Class A-4 Notes to payment of the then remaining
unpaid principal amount of this Class A-4 Note or to payment of the Redemption
Price payable on any date as of which this Class A-4 Note has been called for
redemption in full shall be made upon presentation of this Class A-4 Note to the
office or agency of the Issuer maintained for such purpose. Payments of interest
on this Class A-4 Note due and payable on each Interest Payment Date, together
with any installment of principal of this Class X- 0 Note due and payable on
each Interest Payment Date which is also a Principal Payment Date for this Class
A-4 Note, shall be made by check mailed to the Person whose name appears as the
registered Holder of this Class A-4 Note (or one or more Predecessor Notes) in
the Note Register as of the Record Date preceding such Interest Payment Date,
except that with respect to a Class A-4 Note registered in the name of the
nominee of a clearing agency (initially, such nominee to be Cede & Co.) payments
will be
119
made by wire transfer in immediately available funds to the account designated
by such nominee.
Checks for amounts due on this Class A-4 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 Class A-4
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 Class A-4 Note (or any one or more Predecessor Notes)
effected by any payments made on any Principal Payment Date or by any allocation
of a Realized Loss Amounts shall be binding upon all Holders of this Class A-4
Note and of any Class A-4 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 Class
A-4 Note on a Principal Payment Date which is prior to the Maturity of the final
installment of principal hereof, then the Trustee, on behalf of the Issuer, will
notify the Person who was the registered Holder hereof on the 15th day of the
month prior to the month in which such Principal Payment Date occurs, by notice
mailed no later than ten days prior to such Principal Payment Date, and the
amount then due and payable shall, if sufficient funds therefor are available,
be payable only upon presentation of this Class A-4 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 Class A-4 Notes, the Class A-4 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 installment of principal of this Class A-4
Note, the amount payable to the Holder of this Class A-4 Note will be equal to
the aggregate unpaid principal amount of this Class A-4 Note on the date this
Class A-4 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 Class A-4
Notes, under certain circumstances specified therein all amounts collected as
proceeds of the collateral securing the Class A-4 Notes or otherwise shall
continue to be applied to payments of principal of and interest on the Class A-4
Notes as if they had not been declared due and payable. In such event, interest
on the then unpaid principal amount of all Class A-4 Notes and on any overdue
installments of interest on the Class A-4 Notes following the acceleration of
the maturity of the Class A-4 Notes shall accrue and be payable at the
applicable Note Interest Rate, but only to the extent that the payment thereof
shall be lawful and enforceable.
The Class A-4 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
120
the option of the Issuer on any Payment Date, if, either before or after giving
effect to the payment of principal otherwise required to be made on such Payment
Date, each Class of Notes shall be in an aggregate Current Principal Amount
which is 10% or less of the original principal amount of such Class of Notes, at
100% of the outstanding principal amount thereof together with interest accrued
and unpaid to the date set for redemption.
As provided in the Indenture the transfer of this Class A-4 Note may be
registered on the Note Register of the Issuer, upon surrender of this Class A-4
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 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 Class
A-4 Note, the Issuer, the Trustee and any agent of the Issuer or the Trustee may
treat the Person in whose name this Class A-4 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 Class A-4 Note be
overdue, and neither the Issuer, the 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 Class A-4 Notes under the Indenture
at any time by the Issuer, and the Holders of Notes entitled to more than 50% of
the Voting Rights at the time Outstanding. The Indenture also contains
provisions that permit the Holders of Notes entitled to more than 50% of the
Voting Rights, 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 Class A-4 Note (or any one or
more Predecessor Notes) shall be conclusive and binding upon such Holder and
upon all future holders of this Class A-4 Note and of any Class A-4 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 Class
A-4 Note.
The term "Issuer" as used in this Class A-4 Note includes any successor
to the Issuer under the Indenture.
The Class A-4 Notes are issuable only in registered form in the
denominations provided in the Indenture and subject to certain limitations
therein set forth. The Class A-4 Notes are exchangeable for a like aggregate
initial principal amount of Class A-4 Notes of different authorized
denominations, as requested by the Holder surrendering the same, pursuant to the
terms and conditions set forth in the Indenture.
121
As provided in the Indenture, this Class A-4 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 Class A-4
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 Class A-4 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
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 Class A-4 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 Class A-4 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 of any and all liabilities, obligations and undertakings
contained in the Indenture or in this Class A-4 Note.
The Owner Trustee has executed this Class A-4 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 Class A-4 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.
122
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A-4 Notes referred to in the within-mentioned
Indenture.
------------------------,
as Trustee
By:
------------------------------
Authorized Signatory
123
