TRUST AGREEMENT
among
ALLEGIANCE FUNDING CORP. I
(the "Depositor")
MANUFACTURERS AND TRADERS TRUST COMPANY
(the "Trustee")
and
POINT WEST CAPITAL CORPORATION
(the "Servicer")
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Dated as of August 1, 1998
TABLE OF CONTENTS
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Page
ARTICLE ONE
DEFINITIONS
Section 1.01 Definitions............................................................................2
Section 1.02 Certain Rules of Construction.........................................................17
Section 1.03 Certain Calculations..................................................................17
ARTICLE TWO
THE CERTIFICATES
Section 2.01 Form Generally........................................................................18
Section 2.02 Series; Denomination..................................................................18
Section 2.03 Formation, Execution, Authentication, Delivery and Dating.............................19
Section 2.04 Temporary Certificates................................................................19
Section 2.05 Registration, Registration of Transfer and Exchange...................................20
Section 2.06 Limitation on Transfer and Exchange...................................................21
Section 2.07 Mutilated, Destroyed, Lost or Stolen Certificate......................................22
Section 2.08 Payment of Principal and Interest.....................................................22
Section 2.09 Persons Deemed Owner..................................................................24
Section 2.10 Cancellation..........................................................................24
Section 2.11 Tax Treatment.........................................................................25
ARTICLE THREE
ISSUANCE OF CERTIFICATES; SUBSTITUTIONS OF COLLATERAL
Section 3.01 Conditions to Initial Issuance of Certificates........................................26
Section 3.02 Issuances of Additional Series of Certificates........................................27
Section 3.03 Perfection of Transfer................................................................28
Section 3.04 Substitution and Repurchase of Loan Assets............................................29
Section 3.05 Releases..............................................................................30
Section 3.06 Trust Estate..........................................................................30
Section 3.07 Notice of Release.....................................................................30
Section 3.08 Nature of Transfer....................................................................31
ARTICLE FOUR
FUNDINGS
Section 4.01 General...............................................................................32
Section 4.02 Funding Amounts.......................................................................32
Section 4.03 Procedures for Obtaining Fundings Under a Revolving Series............................32
Section 4.04 Procedures for Obtaining Fundings Under Term Certificates.............................33
Section 4.05 Obligation of Certificateholders to Make Fundings.....................................33
Section 4.06 Delivery of Loan Files................................................................35
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ARTICLE FIVE
ACCOUNTS, ALLOCATIONS AND DISTRIBUTIONS
Section 5.01 Collections; Collection Account.......................................................36
Section 5.02 Distributions; Distribution Account...................................................38
Section 5.03 Reserve Account.......................................................................38
Section 5.04 Reports by Trustee to Certificateholders..............................................40
ARTICLE SIX
DEFAULTS AND REMEDIES
Section 6.01 Depositor Events of Default...........................................................41
Section 6.02 Remedies..............................................................................42
ARTICLE SEVEN
THE TRUSTEE
Section 7.01 Certain Duties and Responsibilities...................................................43
Section 7.02 Notice of Default and Other Events....................................................44
Section 7.03 Certain Rights of Trustee.............................................................44
Section 7.04 Not Responsible for Recitals or Issuance of Certificates..............................45
Section 7.05 May Hold Certificates.................................................................46
Section 7.06 Money Held in Trust...................................................................46
Section 7.07 Compensation and Reimbursement........................................................46
Section 7.08 Corporate Trustee Required; Eligibility...............................................46
Section 7.09 Resignation and Removal; Appointment of Successor.....................................47
Section 7.10 Acceptance of Appointment by Successor................................................47
Section 7.11 Merger, Conversion, Consolidation or Succession to Business of Trustee................48
Section 7.12 Co-Trustees and Separate Trustees.....................................................48
Section 7.13 Rights with Respect to the Servicer...................................................49
Section 7.14 Trustee to Hold Loans.................................................................49
Section 7.15 Unclaimed Monies Held for Certificate Payments........................................49
Section 7.16 Swap Agreements.......................................................................50
ARTICLE EIGHT
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 8.01 Representations and Warranties of the Depositor.......................................51
Section 8.02 Covenants of the Depositor............................................................52
Section 8.03 Other Matters as to the Depositor.....................................................56
Section 8.04 Representations and Warranties of the Trustee.........................................56
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ARTICLE NINE
AMENDMENTS
Section 9.01 Amendments without Consent of Certificateholders......................................58
Section 9.02 Amendments and Modifications to Agreement with Consent of
Certificateholder.................................................................... 58
Section 9.03 Execution of Amendments...............................................................60
Section 9.04 Effect of Amendments..................................................................60
Section 9.05 Reference in Certificates to Amendments...............................................60
ARTICLE TEN
TERMINATION AND DISCHARGE
Section 10.01 Termination of Trust; Satisfaction and Discharge of Agreement.........................61
Section 10.02 Optional Termination..................................................................61
ARTICLE ELEVEN
PROVISIONS OF GENERAL APPLICATION
Section 11.01 General Provisions....................................................................62
Section 11.02 Acts of Certificateholders............................................................62
Section 11.03 Notices, etc., to Trustee, Depositor, Servicer........................................62
Section 11.04 Notices to Certificateholders; Waiver.................................................63
Section 11.05 Effect of Headings and Table of Contents..............................................64
Section 11.06 Successors and Assigns................................................................64
Section 11.07 Separability..........................................................................64
Section 11.08 Benefits of Agreement.................................................................64
Section 11.09 Legal Holidays........................................................................64
Section 11.10 Governing Law.........................................................................64
Section 11.11 Counterparts..........................................................................64
Section 11.12 Corporate Obligation..................................................................64
Section 11.13 Compliance Certificates and Opinions..................................................65
EXHIBITS
A Form of Escrow Instructions
B Form of Investment and Assumption Letter
C Form of AFI Certificate
D Form of Funding Report
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This TRUST AGREEMENT (this "Agreement"), dated as of August 1, 1998, is
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entered into among Allegiance Funding Corp. I, a Delaware corporation (the
"Depositor"), Manufacturers and Traders Trust Company, a New York banking
corporation, as trustee (the "Trustee"), and Point West Capital Corporation, a
Delaware corporation, as servicer (the "Servicer").
PRELIMINARY STATEMENT
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The Depositor is conveying assets to the Trustee and has duly
authorized the execution and delivery of this Agreement to provide for the
formation of a trust to be known as "Allegiance Capital Trust I" and the
issuance of the Certificates issuable as provided in this Agreement. All
covenants and agreements made by the Depositor, the Trustee, and the Servicer
herein are for the benefit and security of the Holders of the Certificates. The
Depositor, the Trustee and the Servicer are entering into this Agreement, 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 Agreement a valid agreement of the
Depositor, the Trustee and the Servicer in accordance with its terms have been
done.
CONVEYANCE CLAUSE
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The Depositor does hereby transfer, assign, set over, and otherwise
convey to the Trustee, for the ratable benefit of the Holders of the
Certificates, all of the Depositor's rights, title and interest in and to the
following and any and all benefits accruing to the Depositor from (but none of
the obligations under): (a) the Loans and all payments received on or with
respect to the Loans and due after their applicable Cut-Off Dates; (b) the
Depositor's rights and interests in the Loan Collateral; (c) any rights of the
Depositor under each Insurance Policy related to the Loans or the Loan
Collateral and Insurance Proceeds; (d) the Loan Acquisition Agreement, the
Servicing Agreement and any other Transaction Documents to which the Depositor
is a party; (e) all amounts from time to time on deposit in the Collection
Account and the Reserve Account (including any Eligible Investments and other
property in such accounts); (f) the Loan Files; and (g) proceeds of the
foregoing (including all cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, insurance
proceeds, condemnation awards, rights to payment of any and every kind, and
other forms of obligations and receivables which at any time constitute all or
part or are included in the proceeds of any of the foregoing), in each case
whether now owned or hereafter acquired, (all of the foregoing being hereinafter
referred to as the "Trust Estate"). The foregoing transfer, assignment, set over
and conveyance does not constitute and is not intended to result in a creation
or an assumption by the Trustee or any Certificateholder of any obligation of
the Depositor, the Company, the Servicer or any other Person in connection with
the Trust Estate or under any agreement or instrument relating thereto.
The Trustee acknowledges its acceptance on behalf of the
Certificateholders of all right, title and interest previously held by the
Depositor in and to the Trust Estate, and declares that it shall maintain such
right, title and interest in accordance with the provisions hereof and agrees to
perform the duties herein required to the best of its ability so that the
interests of the Certificateholders may be adequately and effectively protected.
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ARTICLE ONE
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DEFINITIONS
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Section 1.01 Definitions.
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Except as otherwise expressly provided herein or in the applicable
Supplement, or unless the context otherwise requires, each of the following
terms has the meaning set forth below for all purposes of this Agreement. Each
capitalized term used herein but not otherwise defined has the meaning assigned
to such term in the Servicing Agreement or the Loan Acquisition Agreement, as
applicable.
"Accrual Period": The period beginning on and including a Payment Date
(or, in the case of the Accrual Period that is applicable to an Initial Payment
Date, beginning on and including the Delivery Date for such Series) and ending
on and including the day before the next Payment Date.
"Acquisition Date": Any Delivery Date, other Funding Date or date of
substitution of a Substitute Loan, as applicable.
"Act": With respect to any Certificateholder, the meaning specified in
Section 11.02.
"Adjustment Amount": As of any date of determination and with respect
to any Defaulted Loan, an amount equal to the valuation of the business and
assets comprising the Loan Collateral for such Defaulted Loan, as prepared by an
Independent Person; provided that in no event shall the Adjustment Amount exceed
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the Loan Balance for such Loan and provided, further, the Adjustment Amount for
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any Defaulted Loan shall be zero if either (a) no such valuation has been done,
(b) the Special Servicer has not received a letter of intent from a bona fide
purchaser with respect to such Loan Collateral within sixty (60) days from the
date such Loan became a Defaulted Loan, or (c) such Loan Collateral is not sold
within one hundred twenty (120) days from the date of the receipt of such letter
of intent. Such valuation shall (y) be net of Recovery Expenses and (z)
generally be performed using the same methods as were used in the most recent
valuation for such Loan.
"Affiliate": With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For 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.
"AFI Certificate": A Certificate delivered by the Depositor in
connection with a Funding, substantially in the form of Exhibit C hereto.
"Agreement": The meaning specified in the introductory paragraph
hereof, as supplemented by the Supplements.
"Available Collections": With respect to any Determination Date and the
related Payment Date, all Collections (including Reinvestment Income thereon but
excluding any Scheduled Payments due after such Determination Date) remaining in
the Collection Account after the disbursements provided for in Section
5.01(f)(i)-(v).
"Benefit Plan Investor": The meaning set forth in 29 C.F.R. ss
2510.3-101.
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"Board of Directors": The managing member, in the case of the Special
Servicer, and in the case of the Depositor or Servicer, the board of directors
of such entity or any duly authorized committee of such board.
"Board Resolution": A copy of a resolution certified by the secretary
or an assistant secretary of the Depositor or of the Servicer (or the managing
member, in the case of the Special Servicer) to have been duly adopted by its
Board of Directors and to be in full force and effect on the date of such
certification and delivered to the Trustee.
"Business Day": Any day other than a Saturday, a Sunday or a day on
which member banks in the federal reserve system, banking institutions in New
York City, London (solely for purposes of determining LIBOR Rate) or in the city
in which the principal place of business of the Depositor or the Servicer or the
Corporate Trust Office of the Trustee under this Agreement is located are
authorized or obligated by law or executive order to close.
"Certificate" or "Certificates": Any one or collectively, all of the
Certificates of any Series or Class, as is consistent with the context in which
such term is used.
"Certificateholder" or "Holder": The Person in whose name a Certificate
is registered in the Certificate Register.
"Certificateholder Agent": The agent for the Holders of the Rated
Certificates, which shall be with respect to any Revolving Series, each of ***
and *** provided that, to the extent that any party receives written
--------
instructions from both ***and *** which are contradictory or incompatible, the
instruction of *** shall control; and with respect to any Term Series, each
of *** and ***, provided that, to the extent that any party receives written
--------
instructions from both *** and *** which are contradictory or incompatible, the
instruction of *** shall control.
"Certificate Interest Rate": The per annum rate, whether fixed or
periodically reset, at which interest shall accrue on a Certificate, as
specified in such Certificate and in the applicable Supplement.
"Certificate Prepayment Fee Amount": As of any Determination Date, the
sum for each Loan prepaid in the related Due Period of the following amounts (a)
50% of the Loan Prepayment Fee collected with respect to such Loan until such
amount equals 1.5% of the Prepaid Principal Amount for such Loan, plus (b) 80%
of the amount of the Loan Prepayment Fee collected with respect to such Loan, if
any, in excess of 3% of the Prepaid Principal Amount for such Loan.
"Certificate Purchase Agreement": Each Certificate Purchase Agreement
between the Depositor and one or more purchasers of Certificates.
"Certificate Register" and "Certificate Registrar": The respective
meanings specified in Section 2.05.
"Class": With respect to each Series of Certificates, the various
classes of Certificates that are specified in the Supplement for such Series,
each such Class having the specific terms identified in this Agreement and in
the related Supplement.
***Confidential information omitted purusant to a request for confidential
treatment filed separately with the Securities and Exchange Commission.
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"Class D Percentage": The ratio of (a) the Outstanding Principal Amount
of the Class D Certificates of a Term Series less all Realized Losses and
Valuation Reductions to the extent not yet distributed to the Holders of such
Certificates or set aside in the Reserve Account with respect to such Term
Series to (b) the Outstanding Principal Amount of all Classes of Certificates in
such Series.
"Code": The Internal Revenue Code of 1986, as amended.
"Collection Account": The trust account or accounts designated as such
and created and maintained pursuant to Section 5.01.
"Collections": All amounts collected with respect to and all proceeds
of the Loans, including all Repurchase Prices, all Scheduled Payments, all
Prepayment Fee Collections, all Guaranty Amounts, all Insurance Proceeds, all
Servicing Charges and all Recoveries, but excluding collections attributable to
amounts due before the Cut-off Date for a Loan and that portion of a Scheduled
Payment due after the Cut-off Date for such Loan but attributable to interest
accrued before the Cut-off Date.
"Company": The meaning specified in the Loan Acquisition Agreement.
"Company Certificate": The meaning specified in the Loan Acquisition
Agreement.
"Controlling Holders": The Holders of not less than 51% of the
Outstanding Principal Amount (or with respect to any Class during the Funding
Period applicable to such Class, the Maximum Series Amount with respect to such
Class) of the most senior Class of Certificates then Outstanding (or Classes, if
more than one Series is Outstanding).
"Corporate Trust Office": The principal corporate trust office of the
Trustee at One M&T Plaza, 7th Floor, Buffalo, New York 14203-2399, or at such
other address as the Trustee may designate from time to time by notice to the
Certificateholders and the Depositor, or the principal corporate trust office of
any successor Trustee.
"Coverage Ratio": With respect to each Loan, the debt service coverage
ratio, fixed charge coverage ratio or other similar measure, as defined under
the terms of such Loan (as provided in the Standard Forms or as was otherwise
agreed to by the Certificateholder Agent on the Funding Report relating to such
Loan).
"Cut-Off Date": With respect to any Loan, the date specified for such
Loan in the related Loan Schedule.
"Default": Any occurrence or circumstance which with notice or the
lapse of time or both would become a Depositor Event of Default, a Servicer
Event of Default, a Special Servicer Event of Default or a Servicing Advisor
Event of Default.
"Defaulted Loan": A Loan shall become a Defaulted Loan upon the earlier
of (a) the date on which such Loan has been delinquent for ninety (90) days or
more, or (b) the date on which the Special Servicer determines in accordance
with its customary practices that such Loan is a Defaulted Loan.
"Delinquent Loan": As of any date of determination, any Loan (a) as to
which all Scheduled Payments due (including any applicable grace period as
provided in the Standard Forms or as was otherwise agreed to by the
Certificateholder Agent on the Funding Report relating to such Loan) prior to
such date have not been received in full.
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"Delivery Date": The date on which the Certificates of a Series are
first executed, authenticated and delivered, as specified in the applicable
Supplement.
"Depositor": The Person described in the introductory paragraph hereof
and all successors and permitted assigns of such Person under this Agreement.
"Depositor Event of Default": The meaning specified in Section 6.01.
"Depositor Order" and "Depositor Request": A written order or request,
as applicable, signed in the name of the Depositor by its President or a Vice
President and delivered to the Trustee.
"Determination Date": The twelfth day of each calendar month (or if
such day is not a Business Day, the next succeeding Business Day).
"Directing Holder": The meaning specified in the Servicing Agreement.
"Distribution Account": The trust account or accounts designated as
such and created and maintained pursuant to Section 5.02.
"Dollar(s)": Lawful money of the United States of America.
"Due Date": With respect to each Loan, each date on which payment is
due thereunder.
"Due Period": As to any Determination Date or Payment Date, the period
beginning on and including the tenth day of the prior month and ending on and
including the ninth day of the calendar month in which such Determination Date
or Payment Date occurs.
"Eligibility Criteria": The criteria set forth in Section 3.01(a) of
the Loan Acquisition Agreement.
"Eligible Investments": Any and all of the following:
(a) direct obligations of, and obligations fully guaranteed by,
the United States of America, or any agency or instrumentality
of the United States of America the obligations of which are
backed by the full faith and credit of the United States of
America;
(b) (i) demand and time deposits in, certificates of deposit of,
banker's acceptances issued by or federal funds sold by any
depository institution or trust company (including the Trustee
or its agent acting in their respective commercial capacities)
incorporated under the laws of the United States of America or
any State thereof and subject to supervision and examination
by federal and/or state authorities, so long as at the time of
such investment or contractual commitment providing for such
investment, such depository institution or trust company has a
short term unsecured debt rating in the highest available
ratings categories and provided that each such investment has
an original maturity of no more than 365 days; and provided
that any such certificates of deposit must be secured at all
times by collateral described in clause (a) above, such
collateral must be held by a third party and the Trustee must
have a perfected first priority security interest in such
collateral, and (ii) any other demand or time deposit or
deposit which is fully insured by the Federal Deposit
Insurance Corporation;
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(c) repurchase obligations with a term not to exceed thirty (30)
days with respect to any security described in clause (a)
above and entered into with a depository institution or trust
company (acting as a principal) rated in the highest available
rating category of the Rating Agency or, if not rated by the
Rating Agency, in the highest available rating category of at
least two other nationally recognized rating agencies;
provided that collateral transferred pursuant to such
repurchase obligation must be of the type described in clause
(a) above and must (i) be valued weekly at current market
price plus accrued interest, (ii) pursuant to such valuation,
equal, at all times, 104% of the cash transferred by the
Trustee in exchange for such collateral and (iii) be delivered
to the Trustee or, if the Trustee is supplying the collateral,
an agent for the Trustee, in such a manner as to accomplish
perfection of a security interest in the collateral by
possession of certificated securities;
(d) commercial paper having an original maturity of less than
three hundred sixty-five (365) days and issued by an
institution having a short term unsecured debt rating of the
Rating Agency in the highest available rating category at the
time of such investment or, if not rated by the Rating Agency,
in the highest available rating category of at least two other
nationally recognized rating agencies at the time of such
investment;
(e) a guaranteed investment contract approved in writing by the
Rating Agency and issued by an insurance company or other
corporation having a long term unsecured debt rating in the
highest available rating category of the Rating Agency or, if
not rated by the Rating Agency, in the highest available
rating category of at least two other nationally recognized
rating agencies;
(f) money market funds registered under the Investment Company Act
of 1940, as amended, whose shares are registered under the
Securities Act of 1933, and who have ratings in the highest
available rating categories of the Rating Agency, or, if not
rated by the Rating Agency, in the highest available rating
category of at least two other nationally recognized rating
agencies, and who, at the time of such investment invest only
in other Eligible Investments; any such money market funds
which provide for demand withdrawals shall conclusively be
deemed to satisfy any maturity requirement for Eligible
Investments set forth in this Agreement; and
(g) any other investment approved in writing by the Rating Agency
and the Certificateholder Agent.
The Trustee may purchase from or sell to itself or an Affiliate, as principal or
agent, the Eligible Investments listed above. All Eligible Investments shall be
made in the name of the Trustee for the benefit of the Certificateholders.
"Eligible Loan": The meaning specified in the Loan Acquisition
Agreement.
"ERISA": The Employee Retirement Income Security Act of 1974,
as amended or any successor statute thereto.
"Escrow Instructions": With respect to any Loan, the related escrow
instructions, if any, that are substantially in the form of Exhibit A, with such
changes as the Certificateholder Agent shall approve or shall reasonably
require, so long as such escrow instructions are not subsequently changed
without the prior written consent of the Certificateholder Agent.
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"Existing Indebtedness": The meaning specified in the Loan Acquisition
Agreement.
"Final Due Date": With respect to each Loan, the final Due Date
thereunder.
"Final Payment Date": With respect to any Certificate of a Series, the
date on which the final principal payment on such Certificate is made as therein
or herein provided, whether at the Series Termination Date or otherwise.
"First Period Interest": With respect to any Funding that occurs on a
day other than the first day of an Accrual Period, the amounts, if any, of
interest that will accrue on the related Funding Amount for each Class, at the
applicable Certificate Interest Rate, commencing on and including such Funding
Date and ending on and including the last day of the Accrual Period in which
such Funding occurs.
"Funded Loan": A Loan acquired by the Depositor on a Funding Date.
"Funding": Any extension of credit by any Class or Series of
Certificateholders in accordance with Article Four.
"Funding Amount": As of any Funding Date, an amount equal to the
aggregate Loan Balance of the related Funding Group.
"Funding Date": A day designated by the Depositor in accordance with
the terms of this Agreement on which it will obtain a Funding, which date is
either the fifteenth or last day of a month; provided that if such date is not a
Business Day, then the Funding Date shall be the next succeeding Business Day.
"Funding Group": A pool of Loans to be funded on a Delivery Date or
subsequent Funding Date.
"Funding Period": For each Series, the period of time commencing on the
Delivery Date for such Series and ending on the applicable Funding Termination
Date.
"Funding Report": A report substantially in the form of Exhibit D here
to.
"Funding Termination Date": With respect to each Series and each Class
within such Series, the earlier of (a) the Scheduled Funding Termination Date,
and (b) the day of the occurrence of a Funding Termination Event for such Class
or Series.
"Funding Termination Event": For each Series of Certificates, the
events specified in the related Supplement.
"Guaranty Amounts": Any and all amounts paid by any guarantor or
pledgor with respect to a Loan.
"Holder" or "Certificateholder": The person in whose name a Certificate
is registered in the Certificate Register.
"Independent": When used with respect to any specified Person and
except as otherwise defined in the Servicing Agreement with respect to a Loan,
means such a Person, who (a) is in fact independent of the Depositor, the
Servicer, the Special Servicer, the Servicing Advisor and their Affiliates, (b)
does not have any direct financial interest or any material indirect financial
interest in the Depositor, the Servicer, the Special Servicer, the Servicing
Advisor and their Affiliates and (c) is not connected with the Depositor, the
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Servicer, the Special Servicer, the Servicing Advisor and their Affiliates as an
officer, employee, promoter, advisor, consultant, 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 a Depositor Order delivered to the
Trustee and the Certificateholder Agent, and such opinion or certificate shall
state that the signer has read this definition and that the signer is
Independent within the meaning hereof.
"Independent Accountants": Any firm of Independent certified public
accountants of recognized national standing.
"Initial Class D Percentage": The ratio of the Outstanding Principal
Amount of the Class D Certificates of a Term Series as of the Delivery Date for
such Series to the Maximum Series Amount for all Classes of Certificates in such
Series.
"Initial Delivery Date": The date on which the first Series of
Certificates are executed, authenticated and delivered.
"Initial Funding Amount": With respect to each Series of Certificates,
as defined in the related Supplement.
"Initial Payment Date": With respect to each Series, as defined in the
related Supplement.
"Insurance Policy": With respect to any Loan Collateral and the related
Loan, any insurance policy maintained by or on behalf of the Obligor pursuant to
the related Loan that covers physical damage to the Loan Collateral or general
liability (including policies procured by the Company or the Servicer on behalf
of the Obligor).
"Insurance Proceeds": With respect to an item of Loan Collateral and
the related Loan, any amount received during the related Due Period pursuant to
an Insurance Policy issued with respect to such Loan Collateral and the related
Loan and not required to be held in trust or released to the related Obligor or
guarantor or otherwise applied under the terms of the related Loan, net of any
costs of collecting such amounts not otherwise reimbursed.
"Insurer": Any insurance company or other insurer providing any
Insurance Policy.
"Interest Collections": As of any Determination Date, all Collections
attributable to interest on the Loans accrued before the end of the related Due
Period.
"Investment and Assumption Letter": The letter required to be delivered
by each transferee of a Certificate, as provided in Section 2.06, substantially
in the form of Exhibit B hereto.
"LIBOR Rate": For each Series, the meaning, if any, specified in the
applicable Supplement.
"Lien": The meaning specified in the Loan Acquisition Agreement.
"Liquidated Loan": The meaning specified in the Servicing Agreement.
"Loan": Any loan that is (a) originated or purchased by the Company and
(b) is identified on the Loan Schedule and, in accordance with the terms of this
Agreement, has become part of the Trust Estate;
8
provided that, from and after the date on which a Loan is repurchased, removed
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or substituted by the Company or the Depositor in accordance with Section 3.04,
such repurchased, removed or replaced Loan shall no longer constitute a "Loan"
for purposes of the Transaction Documents.
"Loan Acquisition Agreement": The Loan Acquisition Agreement, dated as
of August 1, 1998, entered into between the Depositor and the Company.
"Loan Assets": The meaning specified in the Loan Acquisition Agreement
"Loan Balance": As of any date of determination, the principal amount
of such Loan as of its Cut-Off Date, minus the sum of (a) the portion of
Scheduled Payments and any prepayments allocable to principal paid by or on
behalf of the related Obligor, (b) the amount of Recoveries, Insurance Proceeds
or other Collections allocable to principal, and (c) the portion of the
Repurchase Price allocable to principal and deposited in the Collection Account,
each as received from such Loan's Cut-Off Date to the close of business on the
last day of the Due Period (or, prior to the end of the first Due Period,
calculated as of the close of business on the day immediately prior to the
Cut-Off Date); provided that the Loan Balance of a Liquidated Loan shall be
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zero.
"Loan Collateral": The meaning specified in the Loan Acquisition
Agreement.
"Loan File": The meaning specified in the Loan Acquisition Agreement.
"Loan Pool": The Loans in the aggregate.
"Loan Prepayment Fee": For any Loan, the fee, if any, that is due from
the Obligor upon prepayment of the Loan.
"Loan Schedule": As the context requires: (a) the list of Loans
attached to an AFI Certificate delivered to the Trustee on an Acquisition Date,
each of which shall include with respect to the Loans thereon as of the
Acquisition Date thereof: (i) a number identifying the Loan, (ii) the initial
and remaining Loan Balance, (iii) the Obligor's name, (iv) the Obligor's billing
address, (v) origination date, maturity date, and initial payment date, (vi) the
original and remaining months to maturity of the Loan, (vii) the amount and
frequency of the Scheduled Payments, (viii) the amount of the final Scheduled
Payment (if different), (ix) the Cut-Off Date, (x) the coupon rate and if
applicable the reset index, frequency and margin, (xi) the prepayment terms,
(xii) the debt service or fixed charge coverage ratio, (xiii) the loan-to-value
ratio, and (xiv) the name and address of each collateral business, the type of
business and whether the related loan is secured by a fee interest or leasehold
interest in realty; and (b) the aggregate of all Loan Schedules.
"Lockbox Account": The meaning specified in the Servicing Agreement.
"London Banking Day": Any day on which dealings in deposits in Dollars
are transacted in the London interbank market.
"Maximum Series Amount": For each Series and Class of Certificates
within such Series, as defined in the related Supplement.
"Minimum Funding Amount": For each Series and Class of Certificates
within such Series, the meaning specified in the related Supplement.
9
"Obligor": The borrower under each Loan, including any guarantor of
such borrower, and their respective successors and assigns.
"Officer's Certificate": A certificate signed by the Chairman of the
Board, the President, a Vice President, the Treasurer, the Controller, an
Assistant Controller or the Secretary of the company on whose behalf the
certificate is delivered, and delivered to the Trustee, which certificate shall
comply with the applicable requirements of Section 11.13. Unless otherwise
specified, any reference in this Agreement to an Officer's Certificate shall be
to an Officer's Certificate of the Depositor.
"Opinion of Counsel": A written opinion of outside counsel who shall be
reasonably satisfactory to the Trustee and which opinion shall comply with the
applicable requirements of Section 11.13 and shall be acceptable as to form and
substance to the Trustee.
"Outstanding": With respect to Certificates, as of any date of
determination, all Certificates theretofore authenticated and delivered under
this Agreement except:
(a) Certificates previously canceled by the Certificate Registrar
or delivered to the Certificate Registrar for cancellation;
and
(b) Certificates in exchange for or in lieu of which other
Certificates have been authenticated and delivered pursuant to
this Agreement, unless proof satisfactory to the Trustee is
presented that any such Certificates are held by a bona fide
purchaser;
provided that, in determining whether the Holders of the requisite Outstanding
--------
Principal Amount of Certificates have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Certificates owned by the
Depositor or any other obligor upon the Certificates or any Affiliate of the
Depositor or the Servicer 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 Certificates which the Trustee knows to be so
owned shall be so disregarded.
"Outstanding Principal Amount": With respect to any Outstanding
Certificate or Class of Certificates as of any date of determination, the unpaid
principal amount of such Certificate or Class of Certificates.
"Overall Substitution/Repurchase Limitation": 10% of the Pool Balance
as of its highest level.
"Overdue Payment": With respect to a Due Period and a Loan that is a
Delinquent Loan, all payments due in a prior Due Period that the Servicer
receives from or on behalf of a Obligor during the related Due Period on such
Delinquent Loan, including any Servicing Charges.
"Paying Agent": The Trustee or any other Person approved by the
Certificateholder Agent.
"Payment Date": For each Series, the 15th day of each calendar month
(or if such day is not a Business Day, the next succeeding Business Day)
commencing on the Initial Payment Date for such Series.
"Pending Credit Schedule":The meaning specified in the Loan Acquisition
Agreement.
10
"Person": Any individual, corporation, partnership, association,
joint-stock company, limited liability company, trust (including any beneficiary
thereof), unincorporated organization or government or any agency or political
subdivision thereof.
"Pool Balance": As of any date of determination, the sum of all Loan
Balances.
"Pool Criteria": The meaning specified in the Loan Acquisition
Agreement.
"Pool Performance Condition": Shall be deemed satisfied if, as of the
applicable Determination Date, each of the following tests is met: (a) the Loan
Balance of any Liquidated Loan has been either paid to Certificateholders or
allocated to reduce the Outstanding Principal Amount of Certificates other than
Rated Certificates; (b) no Loan is classified as a Delinquent Loan or a
Defaulted Loan unless an amount equal to all Valuation Reductions with respect
to each such Loan has been deposited into the Reserve Account or distributed to
Certificateholders; (c) not more than the lesser of three (3) loans and 8.0% of
the Pool Balance is attributable to Loans which are not Defaulted Loans or
Delinquent Loans but whose Coverage Ratio is below the minimum required under
their terms; (d) not more than the lesser of five (5) loans and 16.0% of the
Pool Balance is attributable to Loans classified as Underperforming Loans; (e)
with respect to Term Series Outstanding, if any, the sum of the Class D
Percentages for all Series is not less than the sum of the Initial Class D
Percentages for all Series, or the Rating Agency has confirmed all of the
initial ratings on all Rated Certificates; (f) with respect to all Revolving
Series Outstanding, the Class D-R Outstanding Principal Amount has not been
reduced by losses and is not less than the amount required by the Rating Agency
from time to time, pursuant to the applicable Supplement; and (g) the Reserve
Account balance is at least equal to the Reserve Account Required Balance.
"Prepaid Principal Amount": For each Due Period, all amounts allocable
to principal that are received in respect of any Loan for which either (i) a
Loan Prepayment Fee is due or (ii) the Repurchase Price is received and such
Repurchase Price includes an amount attributable to clause (c) of the definition
of Repurchase Price.
"Prepayment Fee Collections": For each Due Period, an amount equal to
the sum of (a) all Collections attributable to Loan Prepayment Fees plus (b) all
amounts received in respect of clause (c) of the definition of Repurchase Price.
"Principal Collections": As of any Determination Date, all Collections
attributable to principal on the Loans due prior to the end of the related Due
Period.
"Principal Distribution Amount": For any Payment Date, the sum, for all
Loans, of (a) the principal component of all Scheduled Payments, (b) to the
extent not included in the preceding clause, the portion of the Repurchase Price
allocable to principal for any Loan which was purchased or repurchased from the
Trust Estate during the related Due Period, (c) to the extent not included in
the preceding clauses, the amount of any Valuation Reduction determined or
Realized Losses incurred during the preceding Due Period, (d) to the extent not
included in the preceding clauses, the amount of any prepayments received during
the preceding Due Period and (e) to the extent not included in the preceding
clauses (a) through (d), any such amounts with respect to a prior Due Period
that have not previously been distributed.
"Proceeding": Any suit in equity, action at law or other judicial or
administrative proceeding.
"Qualified Institutional Buyer": Any "qualified institutional buyer"
as defined in 17 CFR 230.144A.
11
"Rated Certificates": Any Class of Certificates bearing a credit rating
at issuance from the Rating Agency.
"Rating Agency": Duff & Xxxxxx Credit Rating Co., and any legal
successor thereto.
"Realized Loss": As of any Determination Date, with respect to a Loan
designated as a Liquidated Loan during the preceding Due Period, an amount (not
less than zero) equal to (a) the Loan Balance of such Loan on the day
immediately prior to it becoming a Liquidated Loan, plus (b) accrued and unpaid
interest thereon to such Determination Dat, minus (c) all Recoveries in respect
of such Liquidated Loan that the Servicer has (in accordance with the definition
of "Liquidated Loan" contained in the Servicing Agreement) identified and
reasonably expects to receive within thirty (30) days from the date such Loan
became a Liquidated Loan.
"Record Date": The close of business on the last day of the month
preceding the applicable Payment Date, whether or not a Business Day, except
with respect to an Initial Payment Date, the Record Date shall be the related
Delivery Date.
"Recoveries": For any Due Period occurring after the date on which any
Loan becomes a Defaulted Loan and with respect to such Defaulted Loan, all
payments that the Servicer or Special Servicer received from or on behalf of a
Obligor during such Due Period in respect of such Defaulted Loan, from the sale
of such Defaulted Loan, or from liquidation or leasing of the related Loan
Collateral, including Scheduled Payments, Overdue Payments, Guaranty Amounts,
and Insurance Proceeds.
"Recovery Expenses": The meaning specified in the Servicing Agreement.
"Reference Banks": Unless otherwise specified in the applicable
Supplement, four leading banks selected by the Servicer that are engaged in
transactions in eurodollar deposits in the international eurocurrency market,
each of which shall have an established place of business in London.
"Registered Holder": The Person whose name appears on the Certificate
Register on the applicable Record Date.
"Reinvestment Income": Any interest or other earnings earned on all or
part of the Trust Estate.
"Report": The meaning specified in the Servicing Agreement.
"Repossessed Collateral": The meaning specified in the Servicing
Agreement.
"Repurchase Price": With respect to any Loan repurchased by the Company
pursuant to Sections 2.06 or 3.03 of the Loan Acquisition Agreement or removed
by the Depositor pursuant to Section 3.04(d) or Section 10.02, the sum of the
following: (a) the excess of the Loan Balance (computed without giving effect to
clause (c) and the provisos to the definition of "Loan Balance" contained
therein) of the related Loan on the Determination Date on or immediately
preceding the date when the Loan is removed or repurchased over the Loan Balance
of the Substitute Loan(s), if any, substituted therefore; (b) any accrued but
unpaid interest thereon at the interest rate specified in the Loan through the
date of repurchase and (without duplication) any unreimbursed advances; and (c)
other than in connection with a determination of the Repurchase Price under
Section 10.02, if the Loan Balance of the Loan (or portion thereof) being
repurchased or removed, together with the Loan Balance of all Loans previously
repurchased or removed, exceeds 5.0% of the initial Loan Balances of all loans
transferred by the Company to the Depositor under
12
the Loan Acquisition Agreement, then an amount equal to the Loan Prepayment Fee
which would be due if the Loan were being prepaid rather than repurchased.
"Request for Release of Documents": The meaning specified in the
Servicing Agreement.
"Required Prepayment Fee Deposit": As of any Determination Date for
which Prepayment Fee Collections were received during the related Due Period, an
amount equal to the lesser of (a) before giving effect to any deposits to, and
withdrawals from, the Reserve Account on such Determination Date, an amount
sufficient to bring the Reserve Account balance up to the Reserve Account
Required Balance, and (b) the Residual Prepayment Fee Amount.
"Reserve Account": The trust account or accounts created and maintained
pursuant to Section 5.03.
"Reserve Account Floor Amount": $250,000.00.
"Reserve Account Required Balance": As of any date of determination, an
amount equal to the sum of: (a) the greater of (i) the product of 1.0% and the
Pool Balance and (ii) the Reserve Account Floor Amount; plus (b) the sum of (i)
the product of 5.0% and the sum of the Loan Balances of each Loan other than a
Delinquent Loan or Defaulted Loan whose Coverage Ratio is less than the Coverage
Ratio required under its terms, and (ii) the product of 5.0% and the excess of
(A) the sum of the Loan Balances of each Underperforming Loan over (B) the
product of 5.0% and the Pool Balance.
"Reserve Withdrawals": Amounts withdrawn from the Reserve Account
pursuant to Section 5.03(d)(i).
"Reset Date": For each Series, except otherwise specified in the
related Supplement, (a) with respect to First Period Interest, the second
Business Day preceding a Funding Date, (b) with respect to the LIBOR Rate (other
than the calculation of the LIBOR Rate with respect to First Period Interest),
the second Business Day immediately preceding the commencement of each Accrual
Period for interest paid on any Payment Date; provided that if such date is not
--------
both a Business Day and a London Banking Day, the Reset Date shall be the first
preceding day that is both a Business Day and a London Banking Day.
"Residual Prepayment Fee Amount": As of any Determination Date, the sum
for each Loan prepaid in the related Due Period of the following amounts (a) 50%
of the Loan Prepayment Fee collected with respect to such Loan until such amount
equals 1.5% of the Prepaid Principal Amount for such Loan, plus (b) 20% of the
amount of the Loan Prepayment Fee collected with respect to such Loan, if any,
in excess of 3% of the Prepaid Principal Amount for such Loan.
"Responsible Officer": When used with respect to the Trustee, any
officer assigned to the Corporate Trust Office (or any successor thereto),
including any Vice President, senior trust officer, trust officer, assistant
trust officer, any assistant secretary, any trust officer or any other Officer
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers and having direct responsibility for the
administration of this Agreement, and also, with respect to a particular matter,
any other officer, to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
"Revolving Certificates": Any Certificates of a Series that is
designated as a Revolving Series in the Supplement for such Series.
13
"Revolving Series": Any Series denominated as such in the Supplement
for such Series.
"Scheduled Distributions": With respect to all Series and any Payment
Date, the sum of (a) interest accrued and payable on all outstanding Rated
Certificates on such date, including interest accrued in prior Due Periods but
unpaid, (b) the aggregate Principal Distribution Amount payable on such date on
all outstanding Rated Certificates, and (c) the sum of all prior Principal
Distribution Amounts, if any, from prior Payment Dates not yet paid.
"Scheduled Expenses": On any Determination Date, the Trustee Fee, the
Servicer Fee, the Special Servicer Fee and the Servicing Advisor Fee due on the
related Payment Date.
"Scheduled Funding Termination Date": For each Series of Certificates,
the date specified in the related Supplement.
"Scheduled Maturity": With respect to any Series, the meaning set forth
in the applicable Supplement.
"Scheduled Payment": With respect to a Payment Date and any Loan, the
periodic payment (inclusive of any amounts in respect of stated interest but
exclusive of any Servicing Charges or impound amounts) due with respect to such
Loan in the related Due Period.
"Series": Each series of Revolving or Term Certificates issued pursuant
to this Agreement and a common Supplement, bearing the same Series designation
and which may be comprised of multiple Classes of Certificates.
"Series Collections": With respect to any Series and any Payment Date,
an amount equal to the Available Collections allocated to such Series pursuant
to Section 5.01(e), as otherwise adjusted pursuant to Section 5.01(f)(vi).
"Series Percentage": With respect to any Series and any Determination
Date, a fraction the numerator of which is the Series Principal Amount and the
denominator of which is the aggregate Series Principal Amounts for all Series
then Outstanding.
"Series Principal Amount": With respect to any Series and any
Determination Date, the aggregate Outstanding Principal Amount of all
Certificates of such Series immediately following the preceding Payment Date or
Funding Date, whichever is later.
"Series Termination Date": With respect to any Series of Certificates,
the date specified in the applicable Supplement.
"Servicer": The meaning specified in the Servicing Agreement.
"Servicer Event of Default": The meaning specified in Section 6.01(a)
of the Servicing Agreement.
"Servicer Fee": With respect to each Loan and for any Payment Date, an
amount per Due Period equal to (a) the product of (i) one-twelfth of 0.20% and
(ii) (A) if the Loan became a Funded Loan prior to the Determination Date
occurring in the month preceding such Payment Date, the Loan Balance of such
loan as of the Determination Date occurring in the month preceding such Payment
Date, otherwise (B) (1) the Loan Balance of such Loan as of the date it became a
Funded Loan times (2) a fraction, the numerator of
14
which is the number of days from the date the Loan became a Funded Loan through
the last day of the Due Period in which such Loan became a Funded Loan, and the
denominator of which is thirty (30), minus (b) the Trustee Fee.
"Servicer Report": The meaning specified in the Servicing Agreement.
"Servicer Termination Notice": The meaning specified in Section 6.01(b)
of the Servicing Agreement.
"Servicing Advisor": The meaning specified in the Servicing Agreement.
"Servicing Advisor Fee": The meaning specified in the Servicing
Agreement.
"Servicing Agreement": The Servicing Agreement, dated as of August 1,
1998, entered into among the Servicer, the Depositor, the Special Servicer, the
Servicing Advisor and the Trustee.
"Servicing Charges": The sum of (a) all late payment charges paid by
Obligors on Loans that are Delinquent Loans after payment in full of any
Scheduled Payments due in a prior Due Period and Scheduled Payments for the
related Due Period and (b) any other incidental charges or fees received from a
Obligor, including assumption fees, other late fees, collection fees and bounced
check charges.
"Servicing Officers": The meaning specified in the Servicing Agreement
"Special Servicer": The meaning specified in the Servicing Agreement.
"Special Servicer Fee": With respect to each Loan and for any Payment
Date, an amount per Due Period equal to (a) the product of (i) one-twelfth of
0.20% and (ii) (A) if the Loan became a Funded Loan prior to the Determination
Date occurring in the month preceding such Payment Date, the Loan Balance of
such Loan as of the Determination Date occurring in the month preceding such
Payment Date, otherwise (B) (1) the Loan Balance of such Loan as of the date it
became a Funded Loan times (2) a fraction, the numerator of which is the number
of days from the date the Loan became a Funded Loan through the last day of the
Due Period in which such Loan became a Funded Loan, and the denominator of which
is thirty (30), minus (b) the Servicing Advisor Fee.
"Special Servicer Report": The meaning specified in the Servicing
Agreement.
***
"State": Any state of the United States of America and, in addition,
the District of Columbia.
"Substitute Loan": The meaning specified in the Loan Acquisition
Agreement.
"Supplement": With respect to each Series of Certificates, a supplement
to this Agreement setting forth the terms of the various Classes of Certificates
comprising such Series, as provided in Section 2.02.
"Swap Agreement": With respect to any Series of Certificates, the
meaning set forth in the applicable Supplement.
***Confidential information omitted purusant to a request for confidential
treatment filed separately with the Securities and Exchange Commission.
15
"Swap Payments": With respect to each Due Period, the payments that are
required to be made to or from the Trust under any Swap Agreement then in
effect.
"Term Certificates": Any Certificates of a Series that is designated
as a Term Series in the Supplement for such Series.
"Term Series": Any Series designated as such in the Supplement for
such Series.
"Transaction Documents": This Agreement, the Servicing Agreement, the
Loan Acquisition Agreement, the Certificates and the Certificate Purchase
Agreements.
"Transaction Documents Date": With respect to each Series of
Certificates, the meaning specified in the applicable Supplement.
"Transition Costs": Any documented expenses reasonably incurred by a
Successor Servicer or the Trustee in connection with a transfer of servicing
from the Servicer, Special Servicer or Servicing Advisor, pursuant to the
Servicing Agreement, but not to exceed $25,000 in the aggregate for any
particular transfer.
"Trust": Allegiance Capital Trust I, being the trust created hereunder
"Trust Estate": The meaning specified in the Conveyance Clause of this
Agreement.
"Trustee": Manufacturers and Traders Trust Company, a New York banking
corporation, until a successor Person shall have become the Trustee pursuant to
the applicable provisions of this Agreement, and thereafter "Trustee" shall mean
such successor Person.
"Trustee Fee": The fee payable to the Trustee in consideration for the
Trustee's performance of its duties as trustee pursuant to this Agreement, which
fee shall be nonrefundable as to the current year and shall be payable in
advance as follows: (a) $7,500, payable by the Depositor to the Trustee on the
initial Funding Date; and (b) $615, deposited on each Payment Date thereafter.
"UCC": The Uniform Commercial Code in effect in the applicable
jurisdiction.
"Underperforming Loan": As of any Determination Date, a Loan that is
not a Defaulted Loan or a Delinquent Loan and that has a Coverage Ratio of less
than ***.
"Valuation Reduction": With respect to any Defaulted Loan that is not a
Liquidated Loan and with respect to which an updated Valuation has been prepared
in accordance with Section 3.12(f) of the Servicing Agreement, an amount equal
to the excess of (a) the sum, as of the beginning of the Due Period in which an
updated Valuation is received with respect to such Loan in accordance with
Section 3.12(f) of the Servicing Agreement, (i) the Loan Balance of such Loan as
of the beginning of the related Due Period, plus, (ii) to the extent not
previously advanced by the Servicer or the Special Servicer, all unpaid interest
on such Loan at a per annum rate equal to the applicable interest rate, (iii)
any unreimbursed advances and (iv) all currently due but unpaid real estate
taxes and assessments, insurance premiums and, if applicable, ground rents in
respect of the related Loan Collateral or Repossessed Collateral over (b) 80% of
the Valuation of the Loan Collateral or Repossessed Collateral securing such
Loan as per such updated Valuation.
"Vice President": With respect to the Depositor or 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."
***Confidential information omitted purusant to a request for confidential
treatment filed separately with the Securities and Exchange Commission.
16
"Workout Fee": The meaning specified in the Servicing Agreement.
Section 1.02 Certain Rules of Construction.
------------ -----------------------------
Unless the context of this Agreement or any Supplement clearly requires
otherwise: (a) references to the plural include the singular and to the singular
include the plural; (b) references to any gender include any other gender; (c)
the words "include" and "including" are not limiting; (d) the word "or" has the
inclusive meaning represented by the phrase "and/or"; (e) the words "hereof,"
"herein," "hereby," and "hereunder," and any other similar words, refer to this
Agreement or such Supplement (as applicable) as a whole and not to any
particular provision hereof; and (f) article, section, subsection, clause,
exhibit, and schedule references are to this Agreement or such Supplement (as
applicable). Article, section, and subsection headings are for convenience of
reference only, shall not constitute a part of this Agreement for any other
purpose, and shall not affect the construction of this Agreement or any
Supplement. All exhibits and schedules attached hereto are incorporated herein
by this reference. Any reference herein to this Agreement or in any Supplement
or any other agreement, document, or instrument includes all permitted
alterations, amendments, changes, extensions, modifications, renewals, or
supplements thereto or thereof, as applicable.
Section 1.03 Certain Calculations.
------------ ---------------------
For purposes of this Agreement and unless the context of this Agreement
clearly requires otherwise:
(a) All calculations of interest on the Certificates and of Scheduled
Expenses shall be made on the basis of a year of three hundred sixty (360) days
consisting of twelve (12), thirty (30) day months. All calculations of interest
with respect to any Loan shall be made in accordance with the terms of the
related Note and Mortgage or, if such documents do not specify the basis upon
which interest accrues thereon, on the basis of a year of three hundred sixty
(360) days consisting of twelve (12), thirty (30) day months.
(b) Subject to Section 1.03(c), all Recoveries in respect of a Loan
shall be applied as follows: (i) first, to the reimbursement of any Recovery
Expenses with respect to such Loan; (ii) second, to past due Scheduled Payments;
(iii) third, to the Scheduled Payment due in the Due Period in which such
Recoveries are received; (iv) fourth, as a principal prepayment on the related
Loan; (v) fifth, to the applicable Loan Prepayment Fee, if any, and (vi) sixth,
to the Obligor, as required by law or the terms of the related Loan.
(c) Notwithstanding acceleration or foreclosure of any Loan and the
repossession of the related Loan Collateral and the cancellation of the related
Loan, such Loan shall (for purposes of all calculations hereunder) be considered
to be a Loan held in the Trust Estate until such time as such Loan or the
related Repossessed Collateral is sold by the Trust Estate. Consistent with the
foregoing, for purposes of all calculations hereunder, so long as such Loan is
considered to be a Loan held in the Trust Estate, it shall be assumed that,
notwithstanding that the indebtedness evidenced by the related Note shall have
been discharged, such Note shall remain outstanding and, for purposes of
determining the Loan Balance thereof and in connection with the calculation of
any servicing compensation, the interest rate and related amortization schedule
in effect at the time of any such acquisition of title shall remain in effect
(except that such schedule shall be adjusted to reflect the application of
Recoveries in the manner set forth in Section 1.03(b) or 1.03(c), as
applicable).
17
ARTICLE TWO
-----------
THE CERTIFICATES
----------------
Section 2.01 Form Generally.
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Each Class of Certificates and the certificates of authentication shall
be in substantially the form set forth in the applicable Supplement, in each
case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Agreement, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon, as may, consistently herewith, be determined by the
officers executing such Certificates, as evidenced by their execution of the
Certificates.
The definitive Certificates shall be typewritten, printed,
lithographed, or engraved or produced by any combination of these methods on
steel engraved borders or may be produced in any manner acceptable to the
Trustee and the initial purchasers of the Certificates, all as determined by the
officers executing such Certificates, as evidenced by their execution of such
Certificates.
Section 2.02 Series; Denomination.
------------ ---------------------
(a) This Agreement provides for the issuance from time to time of one
or more Series of Certificates, designated as either a Revolving Series or a
Term Series, each subject to and in accordance with the terms of this Agreement
and the applicable Supplement. Each Series of Certificates shall have multiple
Classes and, to the extent provided in the applicable Supplement, sub-Classes.
Certificates in a Revolving Series may be designated in the applicable
Supplement as Class A-R, Class B-R, Class C-R or Class D-R, and Certificates in
a Term Series may be designated as Class A, Class B, Class C, Class D or Class
R. Each Certificate in a Series shall bear upon the face thereof the designation
selected for the Series and Class (and sub-Class, if applicable) to which it
belongs.
(b) Each Class of Certificates issued under this Agreement shall in all
respects represent a fractional undivided interest in the Trust Estate, and
shall be entitled to the benefits hereof without preference, priority or
distinction on account of the actual time or times of authentication and
delivery, except as otherwise provided in this Agreement or the applicable
Supplement. As and to the extent set forth in the priority of payments in
Section 5.02(b) and the Supplements, the rights of the Holders of certain
Classes of Certificates to receive payments of interest and principal shall be
subordinated to the rights of the Holders of certain other Classes of
Certificates to receive such payments.
(c) The Supplement with regard to a Series of Certificates shall
establish, without limitation, the following terms and provisions of each Class
of Certificates of such Series, each of which the Depositor shall determine in
authorizing the issuance of any Series:
(i) designation of the Series and the Classes of
Certificates within such Series;
(ii) the applicable Delivery Date, Initial Funding
Amount, Initial Payment Date, Minimum Funding Amount, and Transaction
Documents Date;
(iii) the maximum aggregate principal amount of Certificates of
each Class of such Series that may be issued, including the Maximum
Series Amount;
18
(iv) the Certificate Interest Rate for each Class of
Certificates in such Series;
(v) the Series Termination Date for each Class of
Certificates in such Series; and
(vi) the priority of payments for the Distribution Account for
such Series.
(d) The aggregate principal amount of Certificates of each Class of
each Series which may be authenticated and delivered under this Agreement shall
be the Maximum Series Amount, except for Certificates authenticated and
delivered upon registration of transfer or in exchange for or in lieu of other
Certificates pursuant to Sections 2.04, 2.05, 2.07 or 9.05. Except as specified
in the related Supplement, the Certificates shall be issuable only as registered
Certificates without coupons in denominations of at least $250,000 and any
amount in excess thereof; provided that the foregoing shall not restrict or
prevent the transfer in accordance with Sections 2.05 and 2.06 of any
Certificate with a remaining Outstanding Principal Amount of less than $250,000.
Section 2.03 Formation, Execution, Authentication, Delivery and
------------ ---------------------------------------------------
Dating
------
(a) By its conveyance of the Trust Estate to the Trustee as set forth
in the Conveyance Clause hereof, the Depositor hereby establishes the Trust in
exchange for the Depositor's rights to receive payments hereunder. On the
Initial Delivery Date and from time to time thereafter, Certificates shall be
issued in accordance with the terms hereof by the Trust and authenticated by the
Trustee upon the written order of the Depositor.
(b) The Certificates shall be executed on behalf of the Depositor by
its President or one of its Vice Presidents under its corporate seal imprinted
or otherwise reproduced thereon. The signature of these officers on the
Certificates must be manual.
(c) Certificates bearing the manual signatures of individuals who were
at any time the proper officers of the Depositor shall bind the Depositor,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication or delivery of such Certificates or did not
hold offices at the date of authentication or delivery of such Certificates.
(d) Each Certificate shall bear on its face the applicable Delivery
Date and be dated as of the date of its authentication.
(e) No Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose, unless there appears on
such Certificate a certificate of authentication substantially in the form
provided for herein executed by the Trustee by the manual signature of one of
its authorized officers, and such certificate upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder.
Section 2.04 Temporary Certificates.
------------ -----------------------
Pending the preparation of definitive Certificates, the Depositor may
execute, and upon Depositor Order, the Trustee shall authenticate and deliver,
temporary Certificates which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any denomination, containing the same
terms and representing the same rights as the definitive Certificates in lieu of
which they are issued.
19
If temporary Certificates are issued, the Depositor will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the office or agency of the Depositor to be maintained as
provided in Section 8.02(l), without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Certificates, the Depositor shall
execute and the Trustee shall authenticate and deliver in exchange therefor one
or more definitive Certificates of any authorized denominations and of a like
initial aggregate principal amount and Series Termination Date. Until so
exchanged, the temporary Certificates shall in all respects be entitled to the
same benefits under this Agreement as definitive Certificates.
Section 2.05 Registration, Registration of Transfer and Exchange.
------------ ----------------------------------------------------
(a) The Depositor shall cause to be kept at an office or agency to be
maintained by the Depositor in accordance with Section 8.02(l) a register (the
"Certificate Register"), in which, subject to such reasonable regulations as it
may prescribe, the Depositor shall provide for the registration of Certificates
and the registration of transfers of Certificates. The Trustee is hereby
appointed "Certificate Registrar" for the purpose of registering Certificates
and transfers of Certificates as herein provided. The Trustee shall have the
right to examine the Certificate Register at all reasonable times and to rely
conclusively upon a Certificate of the Certificate Registrar as to the names and
addresses of the Holders of the Certificates and the principal amounts and
numbers of such Certificates as held.
(b) Upon surrender for registration of transfer of any Certificate at
the office or agency of the Depositor to be maintained as provided in Section
8.02(l) and subject to the conditions set forth in Section 2.06, the Depositor
shall execute, and the Trustee or its agent shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new
Certificates of any authorized denominations and of a like aggregate principal
amount, Class, Series and Series Termination Date.
(c) At the option of the Holder, Certificates of a Series may be
exchanged for other Certificates of such Series of any authorized denominations
and of a like aggregate principal amount, Class and Series Termination Date upon
surrender of the Certificates to be exchanged at such office or agency. Whenever
any Certificates are so surrendered for exchange, the Depositor shall execute,
and the Trustee or its agent shall authenticate and deliver, the Certificates
which the Certificateholder making the exchange is entitled to receive.
(d) All Certificates issued upon any registration of transfer or
exchange of Certificates shall be entitled to the same benefits under this
Agreement, as the Certificates surrendered upon such registration of such
transfer or exchange.
(e) Every Certificate presented or surrendered for registration of
transfer or exchange shall (if so required by the Depositor or the Certificate
Registrar) be duly endorsed or be accompanied by a written instrument of
transfer in form reasonably satisfactory to the Depositor and the Certificate
Registrar duly executed by the Holder thereof or his attorney duly authorized in
writing.
(f) No service charge shall be made to a Holder for any registration of
transfer or exchange of Certificates, but the Depositor may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Certificates,
other than exchanges pursuant to Section 2.04 or Section 9.05 not involving any
registration of transfer.
20
Section 2.06 Limitation on Transfer and Exchange.
------------ ------------------------------------
(a) The Certificates have not been registered or qualified under the
Securities Act of 1933, as amended (the "1933 Act") or the securities laws of
any state. No transfer of any Certificate shall be made unless that transfer is
made in a transaction which does not require registration or qualification under
the 1933 Act or under applicable state securities or "Blue Sky" laws. In the
event that a transfer is to be made without registration or qualification, such
Certificateholder's prospective transferee shall (i) deliver to the Trustee an
Investment and Assumption Letter and (ii) if the Trustee deems necessary (in
other than a transfer under Rule 144A), deliver to the Trustee an opinion of
counsel that the transfer is exempt from such registration or qualification
(which opinion shall not be at the expense of the Depositor, the Trustee, the
Servicer or the Trust Estate). Neither the Depositor nor the Trustee is
obligated to register or qualify the Certificates under the 1933 Act or any
other securities law. Any such Holder desiring to effect such transfer shall,
and does hereby agree to, indemnify the Trustee and the Depositor against any
liability, cost or expense (including attorneys' fees) that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws. The Trustee shall promptly, after receipt of such information as is
set forth in the next succeeding sentence, furnish to any Holder, or any
prospective owner designated by a Holder, the information required to be
delivered to Holders and prospective owners of Certificates in connection with
resales of the Certificates to permit compliance with Rule 144A of the 1933 Act
in connection with such resales. Such information shall be provided to the
Trustee by the Servicer.
(b) No acquisition or transfer of a Certificate or any interest therein
may be made to any Benefit Plan Investor or to any Person who is directly or
indirectly purchasing such Certificates or an interest therein on behalf of, as
named fiduciary of, as trustee of, or with assets of, such a Benefit Plan
Investor unless the Trustee is provided with evidence that establishes to the
satisfaction of the Trustee that either no "prohibited transaction" under ERISA
or the Code will occur in connection with such prospective acquiror's or
transferee's acquisition and holding of the Certificates or that the acquisition
and holding of the Certificates by such prospective acquiror or transferee is
subject to a statutory or administrative exemption.
(c) Except as otherwise provided in the applicable Certificate Purchase
Agreement, no acquisition or transfer of a Certificate or any interest therein
may be made during such Certificate's Funding Period without the prior written
consent of the Depositor.
(d) In addition, no transfer of a Certificate shall be permitted, and
no such transfer shall be registered by the Trustee or the Certificate Registrar
on the Certificate Register, or shall be effective hereunder, if such transfer
or the registration of such transfer would cause the Trust to have, directly or
indirectly, more than 98 Certificateholders at any time. The Servicer hereby
agrees to determine at least annually the number of Certificateholders and
promptly notify the Trustee of the restriction in this subsection (c) if the
number of beneficial owners exceeds seventy-five. The Trustee further agrees
that it shall not participate in the establishment of an "established securities
market" (within the meaning of section 1.7704-1(b) of the Treasury Regulations)
or a "secondary market or the substantial equivalent thereof" (within the
meaning of section 1.7704-1(c) of the Treasury Regulations), or the inclusion of
any of the Certificates in such a market, nor shall it permit the registration
or listing of any Certificate on any such market.
(e) The Trustee shall have no liability to the Trust Estate or any
Certificateholder arising from a transfer of any such Certificate in reliance
upon a certification described in this Section 2.06.
21
Section 2.07 Mutilated, Destroyed, Lost or Stolen Certificat.
------------ ------------------------------------------------
If (a) any mutilated Certificate is surrendered to the Certificate
Registrar, or the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate (which evidence shall be, in the
case of a Qualified Institutional Buyer, notice from such Qualified
Institutional Buyer of such ownership and such loss, theft, destruction or
mutilation), and (b) in the case of any such destruction, loss or theft, there
is delivered to the Trustee such security or indemnity as may be required by the
Trustee to save the Depositor, the Trustee or any agent of any of them harmless
(provided that, if the Holder of the Certificate is, or is a nominee for, a
--------
Qualified Institutional Buyer, then such Qualified Institutional Buyer's own
unsecured agreement of indemnity shall be deemed to be satisfactory for such
purpose), then, in the absence of notice to the Depositor or the Certificate
Registrar that such Certificate has been acquired by a bona fide purchaser, the
Depositor shall execute and, upon its request, the Trustee shall authenticate
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of the same tenor, Series, Class,
initial principal amount and Series Termination Date, bearing a number not
contemporaneously outstanding. If after the delivery of such new Certificate, a
bona fide purchaser of the original Certificate in lieu of which such new
Certificate was issued presents for payment such original Certificate, the
Depositor and the Trustee shall be entitled to recover such new Certificate from
the person to whom it was delivered or any person taking therefrom, except a
bona fide purchaser, and shall be entitled to recover upon the security or
indemnity provided therefor to the extent of any loss, damage, cost or expenses
incurred by the Depositor or the Trustee or any agent of any of them in
connection therewith. If any such mutilated, destroyed, lost or stolen
Certificate 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
Certificate, the Depositor may pay such Certificate without surrender thereof,
except that any mutilated Certificate shall be surrendered.
No service charge shall be made to a Holder for any registration of
transfer, exchange or issuance of Certificates, but the Depositor may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Certificates, other than exchanges pursuant to Section 2.04 or Section 9.05 not
involving any registration of transfer.
Every new Certificate issued pursuant to this Section 2.07, in lieu of
any destroyed, lost or stolen Certificate, shall constitute an original
additional contractual obligation of the Depositor, whether or not the
destroyed, lost or stolen Certificate shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Agreement equally and
proportionately with any and all other Certificates duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
maximum extent permitted by law) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Certificates.
Section 2.08 Payment of Principal and Interest.
------------ ----------------------------------
(a) Each Certificate shall bear interest during each Accrual Period at
the Certificate Interest Rate applicable to such Class and Series on the
Outstanding Principal Amount of such Certificate (as of the first day of the
Accrual Period) until and including the last day preceding the Payment Date on
which its Outstanding Principal Amount has been reduced to zero, and, if and to
the extent specifically provided for in the related Supplement and to the extent
that the payment of such interest shall be legally enforceable, on any overdue
installment of interest from the date such interest became due until fully paid.
Unless otherwise specified in the related Supplement, such interest shall be
calculated on the basis of a three hundred sixty
22
(360) day year consisting of twelve (12) months of thirty (30) days each.
Interest shall be payable in arrears on each Payment Date. On any Reset Date
preceding any Accrual Period or Delivery Date, the Servicer shall determine the
changes, if any, applicable to the Certificate Interest Rates and will promptly
provide notice by 11:00 a.m. local time (of the Servicer) of such determination
to the Holders of Certificates and the Trustee.
In addition to the foregoing, with respect to any Funding occurring in
any Accrual Period since the preceding Payment Date, the related Funding Amounts
shall accrue interest from the related Funding Date through the end of the
Accrual Period in which such Funding occurs in the amount of the applicable
First Period Interest, which interest shall be paid on the next Payment Date to
the Series and Class of Certificates having made such Funding. The Servicer
shall determine the First Period Interest due on a Funding Amount based on the
rate established on the applicable Reset Date.
Accrued but unpaid interest on a Certificate shall be paid on a Payment
Date to the extent of funds available to be distributed as interest on such
Class in accordance with the priorities set forth in Article Five and the
related Supplement.
In making any interest payments hereunder, if the interest calculation
with respect to a Certificate shall result in a portion of such payment being
less than $0.01, then such payment shall be decreased to the nearest whole cent
and no subsequent adjustment shall be made in respect thereof.
(b) The principal of each Certificate shall be payable in installments
beginning on the Initial Payment Date for such Series and ending no later than
the applicable Series Termination Date for such Series unless such Certificate
becomes due and payable at an earlier date by call for redemption or otherwise
under the terms of the applicable Supplement. All reductions in the principal
amount of a Certificate effected by payments of installments of principal made
on any Payment Date shall be binding upon all future Holders of such Certificate
and of any Certificate issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof, whether or not such payment is noted on
such Certificate. Each installment of principal payable on a Certificate shall
be in an amount equal to that Certificate's pro rata share of the Principal
Distribution Amount for such Class and Series that is available to be paid in
accordance with the priorities of Article Five and the related Supplement. All
payments of principal with respect to the Certificates of a particular Class and
Series shall be made on a pro rata basis based upon the ratio that the
Outstanding Principal Amount of a Certificate bears to the Outstanding Principal
Amount of all Certificates of such Class and Series; provided that if, as a
--------
result of such proration, a portion of such principal would be less than $0.01,
then such payment shall be reduced to the nearest whole cent and no subsequent
adjustment shall be made in respect thereof..
In addition to the foregoing, on each Payment Date the Certificate
Prepayment Fee Amount shall be distributed to the Holders of any Series and
Class of Certificates then receiving a distribution of Prepaid Principal Amount,
in the same proportion as such Prepaid Principal Amount is then being
distributed. For purposes of this computation, the first dollars of the
Principal Distribution Amount for a Payment Date shall be deemed attributable to
the Prepaid Principal Amount for such Due Period and such computation shall be
made after the reallocations provided for in Section 5.02(c) hereof. All
payments of Certificate Prepayment Fee Amounts with respect to the Certificates
of a particular Class and Series shall be made on a pro rata basis based upon
the ratio that the Outstanding Principal Amount of a Certificate bears to the
Outstanding Principal Amount of all Certificates of such Class and Series;
provided that if, as a result of such proration, a portion of such principal
--------
would be less than $0.01, then such payment shall be reduced to the nearest
whole cent and no subsequent adjustment shall be made in respect thereof..
23
(c) Notwithstanding the foregoing, the Class R Certificates of any Term
Series shall be entitled solely to the payment of the amounts specified in the
related Supplement or otherwise released from the Reserve Account as provided in
Section 5.03(d).
(d) The principal, interest and any other amounts paid on the
Certificates are payable either (i) by check mailed by first-class mail to the
Person whose name appears as the Registered Holder of such Certificate on the
Certificate Register at the address of such Person as it appears on the
Certificate Register or (ii) by wire transfer in immediately available funds to
the account specified in writing to the Trustee by such Registered Holder at
least five Business Days prior to the Record Date for the Payment Date on which
wire transfers will commence, in such coin or currency of the United States of
America as at the time of payment is legal tender for the payment of public and
private debts. All payments on the Certificates shall be paid without any
requirement of presentment. The Depositor shall notify the Person in whose name
a Certificate is registered at the close of business on the Record Date next
preceding the Payment Date on which the Depositor expects that the final
installment of principal of such Certificate will be paid that the Depositor
expects that such final installment will be paid on such Payment Date. Such
notice shall be mailed no later than the tenth day prior to such Payment Date
and shall specify the place where such Certificate may be surrendered. Funds
representing any such checks returned undeliverable shall be held in accordance
with Section 7.16. Each Certificateholder shall surrender its Certificate to the
Trustee within thirty (30) days after the Final Payment Date therefor; provided
that if the Holder of any Certificate is, or is a nominee for, a Qualified
Institutional Buyer, then such Qualified Institutional Buyer need not surrender
its Certificate but shall indemnify the Trustee and the Depositor for any losses
attributable to the failure to surrender such Certificate.
(e) The Certificates are payable only out of the Trust Estate and do
not represent recourse obligations of the Depositor, the Servicer or any
Affiliate thereof or any successor thereto.
Section 2.09 Persons Deemed Owner.
------------ ---------------------
Prior to due presentment for registration of transfer of any
Certificate, the Depositor, the Trustee and any agent of the Depositor or the
Trustee shall treat the Person in whose name any Certificate is registered as
the owner of such Certificate for the purpose of receiving payments of principal
of and interest on such Certificate and for all other purposes whatsoever,
whether or not such Certificate be overdue, and neither the Depositor, the
Trustee nor any agent of the Depositor or the Trustee shall be affected by
notice to the contrary.
Section 2.10 Cancellation.
------------ -------------
All Certificates surrendered to the Trustee for payment, registration
of transfer or exchange (including Certificates surrendered to any Person other
than the Trustee which shall be delivered to the Trustee) shall be promptly
canceled by the Trustee. No Certificates shall be authenticated in lieu of or in
exchange for any Certificates canceled as provided in this Section 2.10, except
as expressly permitted by this Agreement. All canceled Certificates held by the
Trustee shall be disposed of by the Trustee as is customary with its standard
practice.
24
Section 2.11 Tax Treatment.
------------ --------------
The Depositor has structured this Agreement and the Certificates with
the intention that the Trust formed hereby be treated as a partnership, with the
assets of the partnership including all of the assets comprising the Trust
Estate and the partners of the partnership being all Certificateholders and the
Depositor. The Depositor, the Trustee, the Servicer and each Certificateholder,
by acceptance of such Person's Certificate (and any Person that is a beneficial
owner of any interest in a Certificate, by virtue of such Person's acquisition
of a beneficial interest therein) agree to report the transactions contemplated
hereby in accordance with such stated intentions unless and until determined to
the contrary by an applicable taxing authority. In connection therewith, the
Depositor shall be designated as the "tax matters partner" of the Trust and
shall be authorized to maintain capital accounts and make partnership
allocations in accordance with Section 704 of the Code, which allocations shall
track as nearly as possible the cash distributions made to the various parties
hereunder.
In no event shall the Trust, or any party with the authority to act on
behalf of the Trust, make the election described in Treasury Regulation
301.7701-3(a) to treat the Trust as an association taxable as a corporation for
United States federal income tax purposes, or in any comparable state tax law.
Section 2.12 No Petition By Certificateholders.
------------ ----------------------------------
Each Holder of a Certificate, by acceptance of such Person's
Certificate, agrees that during the term of this Agreement and for one year and
one day after the termination hereof, such Holder or any Affiliate thereof will
not (without the consent of Holders holding at least 51% of all Rated
Certificates, by Outstanding Principal Amount) file any involuntary petition or
otherwise institute or cooperate in the institution of any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding or other
proceeding under any federal or state bankruptcy or similar law against the
Depositor or the Trust.
25
ARTICLE THREE
--------------
ISSUANCE OF CERTIFICATES; SUBSTITUTIONS OF COLLATERAL
------------------------------------------------------
Section 3.01 Conditions to Initial Issuance of Certificats.
------------ ----------------------------------------------
Each Certificate to be issued on the Initial Delivery Date shall be
executed by the Depositor and delivered to the Trustee for authentication, and
thereupon, the same shall be authenticated and delivered by the Trustee upon
Depositor Order and upon receipt by the Trustee of the following:
(a) a Company Certificate and an AFI Certificate with the related
Loan Schedule attached thereto;
(b) the original manually executed counterpart of each Loan to be
acquired on such date and all other items included in the related Loan Files,
subject to such exceptions as shall be noted in an exception report delivered in
accordance with Section 4.06, by the Trustee to the Depositor, the Servicer, the
Certificateholders of the Series being issued on such date and the Rating
Agency;
(c) a Board Resolution of each of the Depositor, the Servicer, the
Special Servicer, the Servicing Advisor and the Company authorizing, as
applicable, the execution, delivery and performance of the Transaction Documents
and the transactions contemplated hereby and by the other Transaction Documents,
certified by the Secretary or an Assistant Secretary of the Depositor, the
Servicer, the Special Servicer, the Servicing Advisor or the Company, as
applicable;
(d) a copy of an officially certified document, dated not more than 30
days prior to the Initial Delivery Date, evidencing the due organization and
good standing of each of the Depositor, the Servicer, the Special Servicer, the
Servicing Advisor and the Company in their respective states of formation;
(e) copies of the organizational documents of each of the Depositor,
the Servicer, the Special Servicer, the Servicing Advisor and the Company,
certified by the Secretary or Managing Member, as applicable, of the Depositor,
the Servicer, the Special Servicer, the Servicing Advisor and the Company;
(f) (i) evidence of filing with the Secretary of State of the State
(and with the relevant county, if required by the applicable state law) of the
Company's chief executive office of UCC-1 financing statements executed by the
Company, as debtor, and naming the Depositor as secured party, the Trustee for
the benefit of the Certificateholders, as assignee, and the Loan Assets as
collateral; (ii) evidence of filing with the Secretary of State of the State
(and with the relevant county, if required by the applicable state law) of the
Depositor's chief executive office of UCC-1 financing statements executed by the
Depositor, as debtor, and naming the Trustee for the benefit of the
Certificateholders, as secured party, and the Trust Estate as collateral; and
(iii) evidence of all other filings, recordations or other actions required to
be made, filed, recorded or taken under Section 2.06 of the Loan Acquisition
Agreement;
(g) certificates listing the Servicing Officers of the Servicer, the
Special Servicer, and the Servicing Advisor as of the Initial Delivery Date;
(h) executed copies of each of the Supplement for the Series of
Certificates being issued on the Initial Delivery Date, the Servicing Agreement,
the Loan Acquisition Agreement and the Swap Agreement;
26
(i) evidence of the deposit by the Depositor into the Collection
Account of any amounts due and paid on the Loans since the applicable Cut-Off
Date;
(j) confirmation from the Rating Agency that each Class of Certificates
in the Series being issued on such date has been assigned the credit rating
required under the Certificate Purchase Agreements for such Series; and
(k) such other documents as the Trustee or the prospective
Certificateholders of such Series may reasonably require, including such
documents and opinions as are described in the applicable Certificate Purchase
Agreement.
Section 3.02 Issuances of Additional Series of Certificates.
------------ -----------------------------------------------
(a) Additional Series of Revolving or Term Certificates may be issued
in accordance with the terms of this Agreement, provided that no new Series of
--------
Certificates shall be issued without the consent of the Certificateholder Agent.
(b) On or before the Delivery Date relating to any new Series of
Certificates, the parties hereto shall execute and deliver a Supplement
specifying the terms applicable to such new Series of Certificates. The terms
set forth in such Supplement may modify or amend, subject to Article Nine, the
terms of this Agreement solely as applied to such new Series of Certificates.
(c) Each new Series of Certificates shall be executed by the Depositor
and delivered to the Trustee for authentication, and thereupon, the same shall
be authenticated and delivered by the Trustee upon Depositor Order and upon
receipt by the Trustee of the following:
(i) a Supplement for such Series of Certificates executed
by each party hereto other than the Trustee;
(ii) if the Depositor is acquiring Loans from the Company on
the applicable Delivery Date, compliance with the requirements for a
Funding set forth in Article IV;
(iii) on or before the tenth Business Day immediately preceding
the Delivery Date for the Series to be issued (unless the parties to be
notified agree to a shorter time period), the Depositor shall have
given the Trustee, the Servicer and the Rating Agency notice of such
issuance and the applicable Delivery Date;
(iv) the Depositor shall have delivered to the Trustee an
Officer's Certificate of the Depositor to the effect that such issuance
will not result in a Default and all conditions precedent provided in
this Agreement relating to the authentication and delivery of the
additional Series of Certificates proposed to be issued have been
complied with;
(v) to the extent not previously filed, (A) evidence of
filing with the Secretary of State of the State (and with the relevant
county, if required by the applicable state law) of the Company's chief
executive office of UCC-1 financing statements executed by the Company,
as debtor, and naming the Depositor as secured party, the Trustee for
the benefit of the Certificateholders as assignee, and the applicable
Loan Assets as collateral; (B) evidence of filing with the Secretary of
State of the State (and with the relevant county, if required by the
applicable state law) of the Depositor's chief executive office of
UCC-1 financing statements executed by the Depositor, as
27
debtor, and naming the Trustee for the benefit of the
Certificateholders, as secured party, and the Trust Estate as
collateral; and (C) evidence of all other filings, recordations or
other actions required to be made, filed, recorded or taken under
Section 2.06 of the Loan Acquisition Agreement;
(vi) confirmation from the Rating Agency of the initial rating
on each Class of Certificates in any Series then Outstanding along with
evidence that each Class of Certificates in the Series being issued has
been assigned the credit rating required under the Certificate Purchase
Agreements for such Series;
(vii) an opinion of counsel to the effect that the Trust will
not be taxable as an association or as a publicly traded partnership as
a result of the issuance of such Series of Certificate;
(viii) evidence of the deposit by the Depositor into the
Collection Account of any amounts due and paid under the Loans of such
Series since the related Cut-Off Date; and
(ix) such other documents, certificates, instruments,
opinions, or other items as may be required by the terms of the
Supplement creating such Series of Certificates or the Certificate
Purchase Agreements executed in connection therewith.
Upon satisfaction of the above conditions, the Trustee shall execute
the Supplement and issue and deliver to or upon the order of the Depositor the
applicable Certificates.
Section 3.03 Perfection of Transfer.
------------ -----------------------
(a) The Depositor and the Company shall file such Uniform Commercial
Code financing statements and assignments as are described in Sections 3.01and
3.02 in accordance with such Sections and take such other actions as are
required (i) to perfect the sale by the Company to the Depositor of the Loans
and the related Loan Assets, (ii) to assign to the Trustee all Uniform
Commercial Code financing statements perfecting the security interest of the
Depositor (as assignee of the Company) in the related Loan Collateral, (iii) to
perfect the first priority security interest of the Trustee in the Loans and the
related Loan Assets and (iv) to cause any related Loan Collateral (including any
Mortgages) to name the Trustee as lienholder. From time to time thereafter, the
Servicer shall take or cause to be taken such actions and execute such documents
as are necessary to perfect and protect the Trustee's interest in the Loans and
the Loan Collateral against all other Persons, including the filing of financing
statements, amendments thereto and continuation statements, the execution of
transfer instruments and the making of notations on or taking possession of all
records.
(b) File-stamped copies of such Uniform Commercial Code financing
statements and assignments with respect to the Loans shall be given to the
Trustee within ten (10) days of the Initial Delivery Date.
(c) If any change in either the Company's or the Depositor's name,
identity, structure or the location of its principal place of business or chief
executive office occurs, then the Depositor shall, or the Depositor shall cause
the Company to, deliver thirty (30) days prior written notice of such change or
relocation to the Servicer, the Certificateholder Agent and the Trustee and no
later than the effective date of such change or relocation, the Servicer shall
file such amendments or statements as may be required to preserve and protect
the Trustee's interest in the Trust Estate.
(d) During the term of this Agreement, the Depositor shall maintain its
chief executive office and principal place of business in one of the States of
the United States.
28
(e) The Servicer agrees to pay all reasonable costs and disbursements
in connection with the perfection and the maintenance of perfection, as against
all third parties, of the Trustee's right, title and interest in and to the
Trust Estate.
(f) The Trustee shall hold the original manually executed counterparts
of each Loan at its office in the State of New York, or at any such new address
in the State of New York, as the Trustee shall inform the Servicer, the
Depositor, and the Certificateholders in writing from time to time. The Trustee
shall hold each Loan for the benefit of Certificateholders, and shall maintain
accurate records pertaining to each Loan including a current inventory thereof.
The Trustee may, pursuant to a Request for Release of Documents, temporarily
release such Loan to the Special Servicer, provided that such request shall be
--------
in writing with an explanation of the intended use specified and the
Certificateholder Agent shall receive a copy of such Request for Release of
Documents. Any Loan temporarily released from the custody of the Trustee to the
Special Servicer or its agents shall have stamped on it prior to delivery a
legend to the effect that the Loan is the property of Manufacturers and Traders
Trust Company, as Trustee. The Special Servicer shall hold any such Loan in
trust for the benefit of the Trustee and shall promptly return the Loan to the
Trustee when the need therefor no longer exists.
Section 3.04 Substitution and Repurchase of Loan Assets.
------------ -------------------------------------------
(a) If any party hereto obtains knowledge (within the meaning of
Section 7.01(e)), or discovers or is notified by the Servicer that any of the
representations and warranties of the Company in the Loan Acquisition Agreement
were incorrect at the time as of which such representations and warranties were
made, then the Person discovering such defect, omission, or circumstance shall
promptly notify the other parties to this Agreement.
(b) Within the time period and in the manner set forth in Section 3.03
of the Loan Acquisition Agreement, the Depositor shall require the Company to
substitute for, or repurchase, Loan Assets as required by Section 3.03 of the
Loan Acquisition Agreement. The proceeds of a repurchase shall be remitted by or
on behalf of the Depositor to the Collection Account in accordance with Sections
3.03 and 3.04 of the Loan Acquisition Agreement.
(c) If the Depositor fails to enforce the purchase or substitution
obligation of the Company under the Loan Acquisition Agreement, the Trustee
shall, at the direction of the Controlling Holders (provided, in each case, that
--------
the requirements of Section 7.03(e) have been satisfied), enforce such
repurchase or substitution obligation for the benefit of the Certificateholders,
and the Trustee is hereby appointed attorney-in-fact to act on behalf of and in
the name of the Depositor to require such repurchase or substitution.
(d) With respect to any Loan that becomes a Defaulted Loan or a
Delinquent Loan, the Depositor (and if not the Depositor, the Directing Holder)
may, upon five (5) Business Days notice to the Trustee, purchase such Loan at
the Repurchase Price or remove such Loan from the Trust Estate and deposit the
Repurchase Price and/or deliver a Substitute Loan meeting the same requirements
as those specified in Section 3.04 of the Loan Acquisition Agreement for
substitutions and purchases by the Company upon breaches of a representation or
warranty by the Company thereunder; provided that the aggregate Loan Balance
--------
(computed without regard to clause (c) and the proviso to such definition) of
such Defaulted Loans and Delinquent Loans that are substituted or removed by the
Depositor shall be subject to the Overall Substitution/Repurchase Limitation;
provided further that no substitution or repurchase shall be made if (i) such
-----------------
substitution or repurchase is made with any intent to hinder, delay, or defraud
any entity to which the Company is or will become indebted; (ii) there shall be
any reason to believe that the Company is
29
insolvent or that such substitution or repurchase will render the Company
insolvent on the date thereof or as a result of such substitution or repurchase;
(iii) at the time of such substitution or repurchase, the Company is engaged in
business, or about to engage in business, for which the assets remaining with it
after the substitution or repurchase will be an unreasonably small amount of
capital; or (iv) the Company intends or believes that it will incur debts beyond
its ability to pay as such debts mature.
(e) Any Substitute Loans conveyed to the Trustee shall be accompanied
by the following items:
(i) on or before the applicable Acquisition Date, a Company
Certificate and an AFI Certificate, each such certificate having
attached thereto a Loan Schedule and subjecting such Substitute Loan to
the provisions thereof and hereof , along with a Pending Credit
Schedule for such Substitute Loan; and
(ii) by the time required in Section 4.06, the original
executed counterpart of the Substitute Loan and all other items
included in the related Loan File.
Section 3.05 Releases.
------------ --------
(a) The Depositor shall be entitled to obtain a release from the lien
of this Agreement for any Loan and the related Loan Collateral at any time (i)
after a payment by the Company or the Depositor of the Repurchase Price of the
Loan or (ii) after a Substitute Loan is substituted for such Loan, if the
Depositor delivers to the Trustee an Officer's Certificate (A) identifying the
Loan and the related Loan Collateral to be released and requesting the release
thereof, (B) setting forth the amount deposited in the Collection Account with
respect thereto or identifying the Substitute Loan, as the case may be, and (C)
certifying that either the amount deposited in the Collection Account or the
Loan Balance of the Substitute Loan, as the case may be, equals the Repurchase
Price of the Loan.
(b) Upon satisfaction of the conditions specified in subsection (a),
the Trustee shall release from the lien of this Agreement and deliver to or upon
the order of the Depositor (or to or upon the order of the Company if it has
satisfied its obligations under Section 3.04 of the Loan Acquisition Agreement
with respect to a Loan) the Loan and any related Loan Collateral described in
the Depositor's request for release.
Section 3.06 Trust Estate.
------------ ------------
The Trustee may, and when required by the provisions of this Agreement
shall, execute instruments to release property from the lien of this Agreement,
or convey the Trustee's interest in the same, in a manner and under
circumstances which are not inconsistent with the provisions of this Agreement.
No party relying upon an instrument executed by the Trustee as provided in this
Article Three shall be bound to ascertain the Trustee's authority, inquire into
the satisfaction of any conditions precedent or see to the application of any
monies.
Section 3.07 Notice of Release.
------------ -----------------
The Trustee shall be entitled to receive at least ten (10) days notice
of any action to be taken pursuant to Section 3.05(a), accompanied by copies of
any instruments involved.
30
Section 3.08 Nature of Transfer.
------------ ------------------
To the extent that the transfer of the Trust Estate from the Depositor
to the Trustee is deemed to be a secured financing, the Depositor shall be
deemed hereunder to have granted to the Trustee, and the Depositor does hereby
grant to the Trustee, a security interest in all of the Depositor's right, title
and interest in, to and under the Trust Estate, whether now owned or hereafter
acquired. For purposes of such grant, this Agreement shall constitute a security
agreement under applicable law.
31
ARTICLE FOUR
------------
FUNDINGS
--------
Section 4.01 General.
------------ --------
Subject to satisfaction of the conditions precedent set forth in
Section 4.03 or 4.04, as applicable, the Depositor shall be eligible to obtain
Fundings under the Certificates on the Delivery Date for such Series of
Certificates and thereafter on any applicable Funding Date.
Section 4.02 Funding Amounts.
------------ ----------------
The Funding Amount for a Funding Group acquired on a Funding Date shall
be determined by the Depositor and confirmed by the Trustee (based solely on the
information contained in the Funding Report) and shall be reflected in a Funding
Report with respect to such Funding Group. Each Funding Group shall be conveyed
to the Trust pursuant to an AFI Certificate and the Loans in such Funding Group
shall be identified on a Loan Schedule attached to the AFI Certificate and the
Company Certificate for such Funding. The related Loan Files shall be held by
the Trustee for the benefit of the Certificateholders as provided herein.
Section 4.03 Procedures for Obtaining Fundings Under a Revolving
------------ ---------------------------------------------------
Series.
-------
(a) Conditions Precedent. Each Funding under a Revolving Series is
----------------------
subject to the satisfaction of the following conditions precedent on the
relevant date specified below:
(i) fifteen (15) days prior to the Funding Date (or such
shorter period of time as may be agreed to by the Certificateholder
Agent in its sole discretion), the Depositor shall deliver, for each
Loan to be funded, (A) the related Pending Credit Schedule to the
Rating Agency and the Certificateholder Agent, and (B) the related
credit application, preliminary credit memorandum, preliminary
Valuation, draft Loan Funding Checklist and draft credit agreement
(blacklined against the Standard Form thereof) to the Certificateholder
Agent;
(ii) the Depositor shall deliver to the Certificateholder
Agent, as soon as possible, with respect to each Loan to be funded,
written notice of any exceptions intended to be included on the Funding
Report relating to such Loan, which notice shall specify with
reasonable detail the nature of such exceptions;
(iii) five (5) Business Days prior to the Funding Date (or
such shorter period of time as may be agreed to by the
Certificateholder Agent in its sole discretion), the Depositor shall
deliver, for each Loan to be funded, (A) an updated Pending Credit
Schedule to the Trustee, the Rating Agency and the Certificateholder
Agent, (B) a *** to the Rating Agency and the Certificateholder Agent,
and (C) the Valuation, a draft Funding Report, indicating the amount of
the Funding, the related credit memorandum, and drafts of all of the
items on the Loan Funding Checklist for such Loan (blacklined against
the Standard Forms thereof, to the extent applicable) to the
Certificateholder Agent;
(iv) two (2) Business Days prior to the requested Funding
Date, the Depositor shall deliver, (A) with respect to each Loan to be
funded, the final Funding Report to the Rating Agency and the
Certificateholder Agent and (B) to the Trustee and the
Certificateholder Agent, with respect
***Confidential information omitted purusant to a request for confidential
treatment filed separately with the Securities and Exchange Commission.
32
to all Loans to be funded, an AFI Certificate and Company Certificate,
each accompanied by a copy of the applicable Loan Schedule, executed by
the Depositor, or the Company, respectively;
(v) on the Funding Date, the Depositor shall deliver to the
Trustee either (A) the original manually executed counterpart of the
Loans relating to such Funding and the other items comprising the
related Loan Files or (B) the Escrow Instructions or evidence
acceptable to the Certificateholder Agent that such items have been
obtained from the Obligor and are being held in escrow with delivery of
the Loan Files to be made in accordance with Section 4.06;
(vi) (A) the Loans in the proposed Funding Group shall be
Eligible Loans and shall not cause the Loan Pool to violate the Pool
Criteria, (B) after giving effect to such Funding, the applicable
Maximum Series Amount shall not be exceeded, and (C) if any Funded Loan
is subject to Existing Indebtedness the Depositor shall use the
proceeds of such Funding to repay such Existing Indebtedness and shall
obtain a release and extinguishment of rights from the obligee of such
Existing Indebtedness, which shall include an acknowledgment that upon
such repayment all obligations owing to such obligee and relating to
such Funded Loan have been satisfied;
(vii) such Funding shall occur on a date prior to the
applicable Funding Termination Date and shall be at least equal to the
Minimum Funding Amount for Series or Class, as applicable;
(viii) no Default (other than a Servicing Advisor Default),
Depositor Event of Default, Servicer Event of Default, Special Servicer
Event of Default or Servicing Advisor Event of Default shall exist or
shall result from the Funding;
(ix) both before and after giving effect to such Funding, the
Pool Performance Condition shall be met; and
(x) such other conditions as may be specified in the
applicable Supplement or related Certificate Purchase Agreement(s).
(b) Preparation of Funding Report. In connection with each Funding, the
-----------------------------
Depositor shall prepare the Funding Report and the Loan Schedule and shall
calculate the First Period Interest with respect to each Funding Amount. Each
Funding Report shall be countersigned by the Certificateholder Agent to evidence
its approval of the contents thereof.
Section 4.04 Procedures for Obtaining Fundings Under Term
------------ --------------------------------------------
Certificates.
------------
Each Funding under a Term Series shall also be based upon a Funding
Report and shall be subject to the satisfaction of the conditions precedent that
are specified in the applicable Supplement or related Certificate Purchase
Agreement(s) for such Series.
Section 4.05 Obligation of Certificateholders to Make Fundings.
------------ --------------------------------------------------
(a) Unless otherwise specified in the related Supplement, upon the
issuance of each Series of Certificates and execution of a Certificate Purchase
Agreement on the related Delivery Date, the initial Certificateholders shall
have agreed, and by their acquisition of any Certificates and execution of an
Investment and Assumption Letter after the applicable Delivery Date, any
subsequent Certificateholders shall have agreed, on the terms and conditions set
forth herein, in the applicable Supplement and the related
33
Certificate Purchase Agreement(s) to make Fundings to the Depositor on the
Delivery Date and from time to time thereafter during the Funding Period.
(b) On the Delivery Date for a Series, a Funding shall take place under
such Series in an aggregate amount equal to the Initial Funding Amount specified
for each Class in such Series. All subsequent Fundings under that Series shall
be made by each Class in the proportions and priorities set forth in the
Supplement for such Series.
(c) Each Class of each Series of Certificates shall be issued in an
aggregate principal amount equal to the Maximum Series Amount for such Class,
although at any one time the Outstanding Principal Amount may be less than the
Maximum Series Amount for such Class of such Series. The Certificateholders
shall endorse on a schedule, which shall be attached to each Certificate, the
date and amount of each Funding made by such Certificateholder with respect to
the related Series and the amount of each payment of principal made by the
Depositor with respect thereto; provided that the Certificateholders may, at
--------
their option, record the amount of their respective Fundings in other internal
records rather than on such a schedule. The Certificateholders are authorized
and directed by the Depositor to make such endorsements or records but each
Certificateholder's records shall be effective only if such records are in
agreement with the applicable Certificate Register maintained by the Trustee,
absent manifest error in such Certificate Register. Failure by any
Certificateholders to make, or an error by any Certificateholder in making, such
endorsement or record with respect to any Funding shall not limit or otherwise
affect the obligations of the Depositor hereunder or under any Certificate.
(d) Subject to the terms hereof, each Certificateholder will wire
directly to the account specified in the applicable Funding Report on the
applicable Funding Date in immediately available funds such Certificateholder's
allocable share of the Funding Amount for its Class that is specified in the
Funding Report for such Class and Series. Each such Certificateholder's
allocable share of a Funding shall be based on a fraction, the numerator of
which shall be equal to the maximum principal amount of such Holder's
Certificate (as indicated on the face of such Certificate), and the denominator
of which shall be equal to the Maximum Series Amount for such Class.
(e) The failure of any Certificateholder to remit its allocable share
of any Funding Amount for its Series and Class on the Delivery Date or any
subsequent Funding Date shall not relieve any other Certificateholder in such
Series of any obligation hereunder to make its allocable share of a Funding
Amount for its Class and Series on such date. Any nondefaulting
Certificateholder may, but is not required to, fund the portion of the Funding
Amount of its respective Class and Series, not funded by the defaulting
Certificateholder. If a nondefaulting Certificateholder does not fund the
portion of the Funding Amount due from the defaulting Certificateholder, the
Funding Amount and the Minimum Funding Amount with respect thereto shall be
reduced by the defaulting Certificateholder's allocable portion of the Funding
Amount and the Depositor shall have all remedies available to it under
applicable law in respect of the defaulting Certificateholder.
(f) Immediately following each Funding or payment of principal on any
Series of Certificates, the Trustee shall make an appropriate notation in the
applicable Certificate Register indicating the amount and date of the Funding or
payment and the unused Maximum Series Amount after giving effect to any Funding.
34
Section 4.06 Delivery of Loan Files.
------------ -----------------------
(a) The Depositor shall or shall cause the Company to comply with the
requirements relating to Funded Loans and Substitute Loans as set forth in the
Loan Acquisition Agreement (including compliance with the Eligibility Criteria
and the Pool Criteria) within the time periods set forth therein. On or prior to
any Acquisition Date, the Depositor shall deliver to the Trustee either (i) the
final, executed Loan File or (ii) evidence acceptable to the Certificateholder
Agent that such documents are being held in escrow pursuant to the related
Escrow Instructions, in which case the Loan File shall be delivered to the
Trustee in accordance with the provisions of the Loan Acquisition Agreement.
Upon receipt of a Loan File, the Trustee will review such files and shall
confirm, by execution and delivery of a certificate of the Trustee to the
Depositor and the Certificateholder Agent, that: (A) the Trustee has received a
Loan File for each Loan that it is listed on the Loan Schedule; (B) such Loan
File contains all of the items listed on the Loan Funding Checklist for such
Loan, including original executed copies of those items required to be originals
pursuant to the Loan Funding Checklist for such Loan.
(b) If, upon examination of the Loan Files in accordance with this
Section, the Trustee determines that any such Loan File is incomplete, the
Trustee shall, within two (2) Business Days, deliver an exception report to the
Depositor, the Servicer and the Certificateholder Agent by telephone or
telecopy.
(c) Within thirty (30) days after each Acquisition Date, the Trustee
shall review any exception report delivered pursuant to Section 7.14 in
connection with the related Loan Files and shall verify that it has possession
of any missing items noted thereon. The Trustee shall send such verification
report and notice of any defects to the Depositor, the Company and Servicer
within thirty (30) days thereafter and shall take any appropriate action under
the Loan Acquisition Agreement.
(d) Notwithstanding anything to the contrary contained in this Section
4.06, any review by the Trustee of the documents contained in a Loan File shall
be limited to ascertaining that such documents appear on their face to be
executed original counterparts of the documents listed on the applicable Loan
Funding Checklist. The Trustee shall have no obligation to verify the
authenticity, completeness or legal sufficiency of any such documents or the
genuineness of any signatures thereon.
35
ARTICLE FIVE
------------
ACCOUNTS, ALLOCATIONS AND DISTRIBUTIONS
---------------------------------------
Section 5.01 Collections; Collection Account.
------------ --------------------------------
(a) Except as otherwise expressly provided herein or in the Servicing
Agreement, the Trustee may demand payment or delivery of, and shall receive and
collect, all money and other property payable to or receivable by the Trustee in
respect of the Trust Estate. The Trustee shall, upon the request of the
Servicer, provide the Servicer with the information requested by the Servicer
regarding the amount of Collections received by the Trustee in the accounts held
in the name of the Trustee (including the Lockbox Account) so as to permit the
Servicer to perform its duties under the Servicing Agreement. The Trustee shall
hold all such money and property so received by it as part of the Trust Estate
and shall apply it as provided in this Agreement. Absent manifest error, the
Trustee shall be entitled to rely, without any independent verification, on all
information contained in any Report. If any Loan becomes a Defaulted Loan, the
Trustee, upon Depositor or Servicer request may, and upon the request of the
Controlling Holders shall take such action as may be appropriate to enforce such
payment or performance, including the institution and prosecution of appropriate
Proceedings. If the Depositor receives any amounts payable to or receivable by
the Trustee pursuant to this Agreement, then the Depositor shall immediately,
but not later than two (2) Business Days after receipt, remit such amounts in
the form received to the Trustee for deposit in the Collection Account.
(b) On or before the Initial Delivery Date, the Trustee shall open and
maintain a trust account at its Corporate Trust Office (the "Collection
Account") in the name of the Trustee for the benefit of the Certificateholders,
wherein it shall deposit or where there shall be received, among other amounts,
Collections and all of the following: (i) payments remitted to the Trustee by
the Servicer or Special Servicer pursuant to Article Three of the Servicing
Agreement, (ii) any amounts received by the Trustee from the Lockbox Account or
otherwise pursuant to Section 5.01(a), (iii) amounts transferred from the
Reserve Account in accordance with Section 5.03(d)(i), (ii) and (iii), (iv)
amounts received by the Trustee as Swap Payments, and (v) any Reinvestment
Income. Funds in the Collection Account shall not be commingled with any other
monies. All monies deposited from time to time in the Collection Account
pursuant to this Agreement shall be held by the Trustee as part of the Trust
Estate (other than monies attributable to that portion of a Scheduled Payment
that relates to interest accrued on a Loan prior to its Cut-off Date which shall
be held in Trust for the benefit of the Company). The Business Day prior to each
Payment Date, the Trustee shall (i) remove any amounts improperly deposited into
the Collection Account and remit them to the correct party; (ii) remove funds
from the Collection Account and pay the Swap Payments, if any, required to be
paid by the Trust; and (iii) pay to the Company any amounts collected
representing interest accrued on any Loan prior to its Cut-off Date.
(c) Upon Depositor Order, the Trustee shall invest the funds in the
Collection Account in Eligible Investments. The Depositor Order shall specify
the Eligible Investments in which the Trustee shall invest, shall state that the
same are Eligible Investments and shall further specify the percentage of funds
to be invested in each Eligible Investment. No such Eligible Investment shall
mature later than one (1) Business Day preceding the next following
Determination Date and shall not be sold or disposed of prior to its maturity;
provided that Eligible Investments of the type described in clause (a) of the
--------
definition of "Eligible Investments" contained herein may mature on such
Determination Date. In the absence of a Depositor Order, the Trustee shall
invest funds in the Collection Account in Eligible Investments described in
clause (f) of the definition thereof. Eligible Investments shall be made in the
name of the Trustee for the benefit of the Certificateholders. The Trustee shall
provide to the Depositor and the Servicer monthly written
36
confirmation of such investments, describing the Eligible Investments in which
such amounts have been invested.
(d) Any income or other gain from investments in Eligible Investments
as outlined in Section 5.01(c) shall be credited to the Collection Account and
any loss resulting from such investments shall be charged to such account.
Except as otherwise specifically set forth herein, the Trustee shall not be
liable for any loss incurred on any funds invested in Eligible Investments
pursuant to the provisions of this Section 5.01 (other than in its capacity as
obligor under any Eligible Investment).
(e) On each Determination Date, after computing all transfers and
deposits to the Collection Account referred to in Section 5.01(b), the Servicer
shall (i) determine the amount of any Certificate Prepayment Fee Amounts, (ii)
determine the Available Collections and then shall allocate them among the
outstanding Series pro rata according to the Series Percentage for each such
Series, and (iii) determine the amount of any Reserve Withdrawals.
(f) Thereafter, on each Payment Date, the Trustee shall withdraw all
amounts in the Collection Account (including the Reinvestment Income therein but
excluding any Scheduled Payments due after the Determination Date for such
Payment Date) and shall disburse them in the following priority in accordance
with the provisions of and instructions in the monthly Servicer Report; provided
--------
that, to the extent that the Available Collections are insufficient to pay
Scheduled Distributions on Rated Certificates, any Servicing Fee, Special
Servicing Fee and Servicing Advisor Fee otherwise payable to the initial
Servicer or the initial Special Servicer or the initial Servicing Advisor (or,
with respect to any such Person prior to the delivery of a Termination Notice to
such Person, such Person's successors or Affiliates) under clauses (ii), (iii)
and (iv) respectively shall not be paid to them and shall instead be made
available for disbursement under clause (vi) below and the applicable
Supplement:
(i) to pay to the Trustee: (A) a deposit of $615 to be
applied to the payment of the Trustee Fee becoming due on the next
anniversary of the initial Funding Date; (B) to reimburse it for any
expenses incurred by it and reimbursable from the Trust Estate under
the terms of any of the Transaction Documents; and (C) after delivery
of a Termination Notice, to pay any Transition Costs to the applicable
party;
(ii) to pay to the Servicer: (A) the Servicer Fee then due;
(B) all Servicing Charges received and due to the Servicer; (C) in
respect of each Liquidated Loan, from Recoveries on such Loan or any
related Repossessed Collateral, any Recovery Expenses not previously
reimbursed and all other reimbursement amounts due to it, as provided
in Section 3.09(a) of the Servicing Agreement; and (D) any amounts
received from Obligors to pay the taxes or other impound amount
required under the related Loan, to the extent deposited in the
Collection Account;
(iii) to pay to the Special Servicer: (A) the Special Servicer
Fee then due; (B) all Servicing Charges received and due to the Special
Servicer; and (C) in respect of each Liquidated Loan, from Recoveries
on such Loan or any related Repossessed Collateral, any Recovery
Expenses not previously reimbursed and all other reimbursement amounts
due to it, as provided in Section 3.09(b) of the Servicing Agreement;
(iv) to pay to the Servicing Advisor: (A) the Servicing
Advisor Fee then due; and (B) in respect of each Liquidated Loan, from
Recoveries on such Loan or any related Repossessed Collateral, any
Recovery Expenses not previously reimbursed and all other reimbursement
amounts due to it, as provided in Section 3.09(c) of the Servicing
Agreement;
37
(v) to the extent of Prepayment Fee Collections, (A) to pay
the Certificate Prepayment Fee Amount to the Certificateholders as
provided in Section 2.08(b), (B) to make any Required Prepayment Fee
Deposit into the Reserve Account, and (C) to pay the remainder to the
Class R Certificateholders, or if there are none, to the Depositor;
(vi) to deposit into the Distribution Account for each Series,
the Available Collections allocable to such Series pursuant to Section
5.01(e) plus the applicable Series Percentage of any Servicer Fee,
----
Special Servicer Fee and Servicing Advisor Fee deferred pursuant to the
introductory paragraph of this Section 5.01(f) and any Reserve
Withdrawal made with respect to such Series; and
(vii) to deposit into (or remove from) the Distribution
Account for each Series any amounts reallocated to (or from) such
Series in accordance with Section 5.02(c)
Section 5.02 Distributions; Distribution Account.
------------ ------------------------------------
(a) On or before the Delivery Date for a Series of Certificates, the
Trustee shall open and maintain a trust account at its Corporate Trust Office
(each such account, a "Distribution Account") in the name of the Trustee for the
benefit of the Certificateholders of that Series, for the receipt of amounts
allocated to such Series in accordance with Section 5.01(e). Funds in each
Distribution Account shall not be commingled with any other monies and shall not
be invested. All monies deposited from time to time in each Distribution Account
pursuant to this Agreement shall be held by the Trustee as part of the Trust
Estate as herein provided. All payments to be made from time to time to the
Certificateholders out of funds in the Distribution Account pursuant to the
Agreement shall be made by the Trustee or the Paying Agent.
(b) On each Payment Date, the Trustee shall withdraw amounts on deposit
in each Distribution Account and shall distribute them to the Certificateholders
of the related Series in accordance with the priorities set forth in the
applicable Supplement (as directed in the Servicer Report).
(c) Each Supplement shall provide for reallocations as described in
this subsection. On each Payment Date, Series Collections otherwise
distributable to Certificates other than Rated Certificates of such Series shall
be made available for Scheduled Distributions on any other Series and payment of
any Outstanding Principal Amount on the Rated Certificates of a Revolving Series
at their Scheduled Maturity, to the extent that any shortfalls with respect
thereto exist. Such reallocation shall be divided between each Series having a
shortfall pro rata by the amount of its shortfall and shall be distributed
within each Series according to the Supplement for such Series. In addition, if
after such reallocation of amounts otherwise distributable to unrated
Certificates, Series Collections are insufficient to pay accrued interest,
whether current or past due, on all Rated Certificates for all Series, then such
shortfall shall be allocated among all Series with Rated Certificates
outstanding with a like initial rating, pro rata, in reverse order of rating
seniority, in a manner such that, after giving effect to the distribution of
such Available Collections, all Rated Certificates with a like initial rating
shall have received identical percentages of interest distributable to such
Rated Certificates on the Payment Date.
Section 5.03 Reserve Account.
------------ ----------------
(a) Prior to the initial Delivery Date, the Depositor shall cause the
Trustee to open and maintain a trust account (the "Reserve Account") at the
Corporate Trust Office in the name of the Trustee for the benefit of the
Certificateholders, for the receipt of deposits pursuant to Section 5.01(f) and
the Supplements. Monies received in the Reserve Account will be invested at the
written direction of a majority of the Holders of the Class R Certificates or,
if there are no Class R Certificates then Outstanding, the Depositor, in
Eligible
38
Investments during the term of this Agreement, and any income or other gain
realized from such investment, shall be held by the Trustee in the Reserve
Account as part of the Trust Estate subject to disbursement and withdrawal as
herein provided. Eligible Investments shall be made in the name of the Trustee
for the benefit of the Certificateholders. No such Eligible Investment shall
mature later than one (1) Business Day preceding the next following
Determination Date and shall not be sold or disposed of prior to its maturity;
provided that Eligible Investments of the type described in clause (a) of the
--------
definition of "Eligible Investments" may mature on such Determination Date. In
the absence of direction, the Trustee shall invest funds in the Reserve Account
in Eligible Investments described in clause (f) of the definition thereof.
Monies in the Reserve Account shall be subject to withdrawal in accordance with
Section 5.03(d).
(b) The Trustee shall provide to the Servicer monthly written
confirmation of investments of funds held in the Reserve Account, describing the
Eligible Investments in which such amounts have been invested. Any funds not so
invested must be insured by the Federal Deposit Insurance Corporation.
(c) The Trustee shall not be liable for any investment loss resulting
from investment of money in the Reserve Account in any Eligible Investment in
accordance with the terms hereof (other than in its capacity as obligor under
any Eligible Investment).
(d) Disbursements from the Reserve Account shall be made, to the extent
funds therefor are available, only as follows (in accordance with the provisions
of and instructions in the monthly Servicer Report):
(i) if the Available Collections allocable to a Series
(computed after giving effect to any deferral of Servicing Fees,
Special Servicing Fees and Servicing Advisors Fees pursuant to Section
5.01(f) on the Determination Date immediately preceding such Payment
Date) are less than the amounts required to be distributed as interest
on all Classes of Rated Certificates in such Series plus, at the Series
Termination Date for such Series, the Outstanding Principal Amount
thereof, the Trustee shall withdraw funds from the Reserve Account on
such Determination Date to the extent necessary to make such payments
on such Payment Date and deposit such funds into the Collection
Account;
(ii) at the close of any Payment Date on which (A) the balance
in the Reserve Account exceeds the Reserve Account Required Balance,(B)
the Pool Performance Condition is met, and (C) no Default, Depositor
Event of Default, Servicer Event of Default, Special Servicer Event of
Default or Servicing Advisor Event of Default exists, the Trustee shall
withdraw such excess funds from the Reserve Account and pay them as
follows:
(1) first to the Depositor, to the extent of any
unreimbursed deposits made by it pursuant to
any Series Supplement, and
(2) second, to the Holders of the Class R
Certificates of any Term Series then
Outstanding and if no such Certificates are
then Outstanding, to the Depositor; and
(iii) upon termination of the Trust and payment in full of all
Rated Certificates, any funds remaining in the Reserve Account shall be
paid in the same manner as provided in Section 5.03(d) (ii) above.
39
Section 5.04 Reports by Trustee to Certificateholders.
------------ ------------------------------------------
(a) On each Payment Date, the Trustee shall account to each Holder of
Certificates on which payments are then being made the amount that represents
principal, the amount that represents interest and the amount that represents
any Certificate Prepayment Fee Amount and shall contemporaneously advise the
Depositor of all such payments. The Trustee may satisfy its obligations under
this Section 5.04 by delivering the monthly Servicer Report to each such Holder
of the Certificates, the Depositor and the Rating Agency. On or before the 15th
day prior to any Final Payment Date (or the 5th day prior to the Final Payment
Date occurring as a result of the Depositor taking action under Section 10.02),
the Trustee shall provide notice to the Rating Agency and the Holders of the
applicable Series of Certificates of the Final Payment Date for such
Certificates. Such notice shall include (i) a statement that interest shall
cease to accrue as of the last day preceding the date on which the Final Payment
Date occurs, and (ii) shall specify the place or places at which presentation
and surrender of Certificates may be made; provided that, if the Holder of any
--------
Certificate is, or is a nominee for, a Qualified Institutional Buyer, then such
Person need not surrender such Certificate, provided further that, in such
event, such Qualified Institutional Buyer shall automatically be deemed to have
provided its own unsecured agreement of indemnity saving the Depositor and the
Trustee, or either of them, harmless in respect of such failure to surrender.
(b) At least annually, or as otherwise required by law, the Trustee
shall distribute to the Certificateholders any information returns or other tax
information or statements as are required by applicable tax law to be
distributed to the Certificateholders. The Servicer shall prepare or cause to be
prepared all such information for distribution by the Trustee to the
Certificateholders.
Section 5.05 Trustee Permitted to Rely on Reports.
------------ -------------------------------------
Absent manifest error, the Trustee shall be permitted to rely on the
Servicer Report and, to the extent relevant, any other Reports, in making the
allocations, distributions and funds transfers required pursuant to this Article
Five and the Supplements.
40
ARTICLE SIX
-----------
DEFAULTS AND REMEDIES
----------------------
Section 6.01 Depositor Events of Default.
------------ ---------------------------
"Depositor Event of Default" wherever used herein means any one of the
following events:
(a) (i) the breach in any material respect of any representation or
warranty of the Depositor in any Transaction Document or (ii) default in the
performance of any covenant of the Depositor in any Transaction Document, and,
except in the case of a default in the performance of Section 8.2(a),
continuance of such default or breach for a period of thirty (30) days after the
earlier of the Depositor has received notice thereof or has actual knowledge
thereof;
(b) the entry of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Depositor under the United States
Bankruptcy Code or any other applicable federal or state bankruptcy, insolvency,
reorganization, liquidation or other similar law now or hereafter in effect or
any arrangement with creditors or appointing a receiver, liquidator, assignee,
trustee, or sequestrator (or other similar official) for the Depositor or for
any substantial part of its property, or ordering the winding up or liquidation
of the Depositor's affairs, and the continuance of any such decree or order
unstayed and in effect for a period of sixty (60) consecutive days;
(c) the institution by the Depositor of bankruptcy or insolvency
proceedings against itself, or the consent by the Depositor to the institution
of bankruptcy or insolvency proceedings against the Depositor, or the filing by
the Depositor of a petition or answer or consent seeking reorganization or
relief under the United States Bankruptcy Code or any other applicable federal
or state bankruptcy insolvency, reorganization, liquidation or other similar law
now or hereafter in effect, or the consent by the Depositor to the filing of any
such petition or to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee or sequestrator (or other similar
official) of the Depositor or of any substantial part of the Depositor's
property, or the making by the Depositor of any assignment for the benefit of
creditors, or the admission by it in writing of its inability, or the failure by
it generally, to pay its debts as they become due, or the taking of corporate
action by the Depositor in furtherance of any such action;
(d) the cumulative amount (without double counting) of all Realized
Losses and all Valuation Reduction Amounts, to the extent that amounts in
respect thereof have not previously been distributed to Certificateholders,
exceeds 62.5% of the initial Outstanding Principal Amount of all Class D
Certificates and the Maximum Series Amount of any Class D-R Certificates then
Outstanding, unless the initial rating on all Rated Certificates is confirmed in
writing by the Rating Agency upon (i) the initial triggering of such condition
and (ii) at any time thereafter that a Loan is delinquent thirty (30) days or
more;
(e) any portion of the interest accrued on any Rated Certificate
(computed without regard to any Maximum Interest Rate provided for in the
applicable Supplement) remains unpaid 5 days after the Payment Date such
interest was first scheduled to be paid;
(f) the failure of any Rated Certificates of any Revolving Series to be
paid in full by their Scheduled Maturity, or the failure of any Rated
Certificates of any Term Series to be paid in full by the Series Termination
Date, in either case for any reason other than a breach by the Holders of such
Certificates of their obligations under the applica.ble Certificate Purchase
Agreement, and continuance of such failure for a period of sixty (60) days
thereafter;
41
(g) at any time the amount equal to the Loan Balances of all Defaulted
Loans minus all Adjustment Amounts with respect to all Defaulted Loans exceeds
the amount equal to 7.50% of the sum of the initial Loan Balances of all Loans
transferred by the Company to the Depositor under the Loan Acquisition Agreement
and not repurchased or replaced by substitution;
(h) the cumulative amount of Realized Losses exceeds (i) prior to the
first anniversary of the initial Funding Date, 2.0% of the sum of the initial
Loan Balances of all loans transferred by the Company to the Depositor under the
Loan Acquisition Agreement prior to such date and not replaced by substitution,
or (ii) at any time following the first anniversary of the initial Funding Date,
3.0% of the sum of the initial Loan Balances of all loans transferred by the
Company to the Depositor under the Loan Acquisition Agreement prior to such date
and not replaced by substitution;
(i) the Coverage Ratio applicable to Loans comprising 10% or more of
the Pool Balance is less than 1.10:1.00 and such Loans are not current with
respect to their Scheduled Payments; or
(j) following the delivery of a Servicing Advisor Termination Notice
with respect to the initial Servicing Advisor or the resignation of the initial
Servicing Advisor, (i) the Depositor shall have failed to appoint a successor
Servicing Advisor within the time period provided, and otherwise in accordance
with the provisions of, the Servicing Agreement or (ii) the Special Servicer
shall have not provided to the Certificateholder Agent in writing two (2)
qualified successor Servicing Advisor candidates.
Section 6.02 Remedies.
------------ ---------
(a) If a Depositor Event of Default shall have occurred and be
continuing, the Trustee may, at the direction of the Controlling Holders, do one
or more of the following:
(i) to the extent that such Depositor Event of Default has
interfered with the collection of any payments or the making of distributions
hereunder, institute Proceedings for the collection of all amounts then due and
payable on the Certificates or under this Agreement and enforce any judgment
obtained;
(ii) exercise any remedies available at law, in equity, or by
statute, including under the UCC, and take any other appropriate action to
protect and enforce the rights and remedies of the Trustee and the Holders of
the Certificates under the Transaction Documents; and
(iii) direct the Trustee, the Servicer or the Special Servicer
to sell or otherwise liquidate the Trust Estate, in whole or in any number of
parts, in one or more transactions from time to time, in any commercially
reasonable manner approved by the Controlling Holders; provided that, in
connection with any such sale or other liquidation, the Person conducting such
sale or other liquidation shall provide the Directing Holders and the Rating
Agencies with ten (10) days prior written notice thereof.
(b) Upon the occurrence and during the continuation of any Depositor
Event of Default, the Controlling Holders may deliver a Termination Notice to
any or all of the Servicer, the Special Servicer or the Servicing Advisor.
(c) Any amounts realized by the Trustee, the Servicer or the Special
Servicer in accordance with this Section 6.02 shall be deposited into the
Collection Account within two (2) Business Days following the receipt thereof
and treated as Collections for distribution on the next Payment Date.
42
ARTICLE SEVEN
-------------
THE TRUSTEE
-----------
Section 7.01 Certain Duties and Responsibilities.
------------ -----------------------------------
(a) Except during the continuance of a Default known to the Trustee as
provided in subsection (e) below:
(i) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in any of the Transaction
Documents to which it is a party and no implied covenants or
obligations shall be read into this Agreement against the Trustee; and
(ii) in the absence of bad faith or negligence 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 Agreement; but in the case of any such certificates or opinions,
which by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the same
and to determine whether or not they conform to the requirements of
this Agreement.
(b) If a Default known to the Trustee as provided in subsection (e)
below has occurred and is continuing, the Trustee shall exercise such of the
rights and powers vested in it by this Agreement, and shall use the same degree
of care and skill in its exercise, as a reasonable person would exercise or use
under the circumstances in the conduct of his or her own affairs.
(c) No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct or bad faith, except that:
(i) this subsection (c) shall not be construed to limit the
effect of subsection (a) of this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Trustee, unless it
shall be proved that the Trustee was negligent in ascertaining the
pertinent facts;
(iii) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Controlling Holders (or other such percentage
as may be required by the terms hereof) in accordance with Section 6.02
relating to the time, method and place of conducting any Proceeding for
any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Agreement, the Loan Acquisition
Agreement or the Servicing Agreement; and
(iv) no provision of this Agreement 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 that nothing contained in this Agreement shall excuse the
--------
Trustee for failure to perform its duties as Trustee under this
Agreement.
43
(d) Whether or not therein expressly so provided, every provision of
this Agreement relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section 7.01.
(e) For all purposes under this Agreement, the Trustee shall not be
deemed to have notice of any Default, Servicer Event of Default, Depositor Event
of Default or of the failure of any Pool Performance Condition 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 a Default or failure of a Pool Performance Condition is
received by the Trustee at the Corporate Trust Office, and such notice
references any of the Certificates generally, the Depositor, the Trust Estate or
this Agreement.
(f) The Trustee shall be under no obligation to institute any suit, or
to take any remedial proceeding under this Agreement, or to enter any appearance
or in any way defend in any suit in which it may be made defendant, or to take
any steps in the execution of the trusts hereby created or in the enforcement of
any rights and powers hereunder until it shall be indemnified to its
satisfaction against any and all costs and expenses, outlays and counsel fees
and other reasonable disbursements and against all liability, except liability
that is adjudicated, in connection with any action so taken.
(g) Notwithstanding anything to the contrary contained herein, the
provisions of subsections (e) and(f) of this Section 7.01 shall be subject to
the provisions of subsections (a) through (c), inclusive, of this Section 7.01.
(h) The Trustee shall provide the reports and accountings as required
pursuant to Section 5.04.
Section 7.02 Notice of Default and Other Events.
------------ -----------------------------------
Within one (1) Business Day after the Trustee has notice (within the
meaning of Section 7.01(e)) of any Default or Funding Termination Event, the
Trustee shall transmit by telephonic or telegraphic communication confirmed by
mail to all Holders, as their names and addresses appear on the Certificate
Register, notice of such Default or Funding Termination Event, unless such event
shall have been promptly cured or waived in accordance with this Agreement.
Section 7.03 Certain Rights of Trustee.
------------ --------------------------
Except as otherwise provided in Section 7.01:
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, note or other
obligation, paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) any request or direction of the Depositor mentioned herein shall be
sufficiently evidenced by a Depositor Request or Depositor Order and any
resolution of the Board of Directors may be sufficiently evidenced by a Board
Resolution;
(c) whenever in the administration of this Agreement the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officer's Certificate;
44
(d) the Trustee may consult with counsel and the written advice of such
counsel selected by the Trustee with due care or any Opinion of Counsel shall be
full and complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement at the request or direction of
any of the Certificateholders pursuant to this Agreement, unless such
Certificateholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be incurred by
it in compliance with such request or direction;
(f) unless so directed by the Controlling Holders and if the
requirements of clause (e) above have been satisfied, the Trustee shall not be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, note or other paper or document, but
the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Depositor, upon reasonable notice
and at reasonable times personally or by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys.
Section 7.04 Not Responsible for Recitals or Issuance of
------------ -------------------------------------------
Certificates.
-------------
(a) The recitals contained in this Agreement and in the Certificates,
except the certificates of authentication on the Certificates, shall be taken as
the statements of the Depositor, and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations as to the validity or
condition of the Trust Estate or any part thereof, or as to the title of the
Depositor thereto, or as to the security afforded thereby or hereby, or as to
the validity or genuineness of any securities at any time pledged and deposited
with the Trustee hereunder or as to the validity or sufficiency of this
Agreement as against any other party or any of the Certificates. The Trustee
shall not be accountable for the use or application by the Depositor of any of
the Certificates or the proceeds thereof or of any money paid to the Depositor
or upon Depositor Order under any provisions hereof.
(b) Except as otherwise expressly provided herein and in Section 7.15
and without limiting the generality of the foregoing, the Trustee shall have no
responsibility or liability for or with respect to the validity of any Loan
Collateral or Loan, the perfection of any security interest (whether as of the
date hereof or at any future time), the maintenance of or the taking of any
action to maintain such perfection, the validity of the assignment of any
portion of the Trust Estate to the Trustee or of any intervening assignment, the
review of any Loan (it being understood that the Trustee has not reviewed and
does not intend to review the substance or form of any such Loan), the
performance or enforcement of any Loan, the compliance by the Depositor or the
Servicer with any covenant or the breach by the Depositor or the Servicer of any
warranty or representation made hereunder or in any related document or the
accuracy of any such warranty or representation, any investment of monies in the
Collection Account or any loss resulting therefrom, the acts or omissions of the
Depositor, the Servicer, or any Obligor, any action of the Servicer taken in the
name of the Trustee, or the validity as against any other party of the Servicing
Agreement or the Loan Acquisition Agreement.
(c) Except as otherwise expressly provided herein, the Trustee shall
not have any obligation or liability under any Loan by reason of or arising out
of this Agreement or the assignment of such Loan hereunder or the receipt by the
Trustee of any payment relating to any Loan pursuant hereto, nor shall the
45
Trustee be required or obligated in any manner to perform or fulfill any of the
obligations of the Depositor under or pursuant to any Loan, or to make any
payment, or to make any inquiry as to the nature or the sufficiency of any
payment received by it, or the sufficiency of any performance by any party,
under any Loan.
Section 7.05 May Hold Certificates.
------------ ----------------------
The Trustee, the Servicer, any Paying Agent, the Certificate Registrar
or any other agent of the Depositor, in its individual or any other capacity,
may become the owner or pledgee of Certificates, and if operative, may otherwise
deal with the Depositor with the same rights it would have if it were not
Trustee, Servicer, Paying Agent, Certificate Registrar or such other agent.
Section 7.06 Money Held in Trust.
------------ --------------------
Money and investments held in trust by the Trustee or any Paying Agent
hereunder shall be held in one or more trust accounts hereunder but need not be
segregated from other funds except to the extent required in this Agreement or
required by law. The Trustee or any Paying Agent shall be under no liability for
interest on any money received by it hereunder except as otherwise agreed with
the Depositor or otherwise specifically provided in this Agreement.
Section 7.07 Compensation and Reimbursement.
------------ -------------------------------
The Trustee shall be paid, from the Trust Estate, a fee for all
services rendered by it hereunder as Trustee, in the amount of the Trustee Fee
(which compensation shall not otherwise be limited by any provision of law in
regard to the compensation of a trustee of an express trust) payable in
accordance with Section 5.01(f) and the definition of "Trustee Fee" contained
herein; provided that upon the termination of the Trust or the resignation or
--------
removal of the Trustee, the Trustee shall return to the Servicer a sum equal to
$615 times the number of months that have elapsed since the last anniversary of
the initial Funding Date. In addition, the Trustee shall be reimbursed, from the
Trust Estate, for all expenses (including attorneys fees) reasonably incurred by
it in connection with its administration of the Trust. The Trustee shall not be
entitled to any other or additional compensation or reimbursement, except as
expressly provided in Section 8.02(q) hereof.
Section 7.08 Corporate Trustee Required; Eligibility.
------------ ----------------------------------------
There shall at all times be a trustee hereunder which shall be a
corporation or association organized and doing business under the laws of the
United States of America or of any state, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$100,000,000 (or a lesser amount with the approval of the Rating Agency and the
Controlling Holders), subject to supervision or examination by Federal or state
authority and having an office within the United States of America, and which
shall have a commercial paper or other short-term rating of the highest short
term rating categories by the Rating Agency, or otherwise acceptable to the
Rating Agency and the Controlling Holders. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
46
Section 7.09 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 7.10.
(b) The Trustee may resign at any time by giving thirty (30) days
written notice thereof to the Depositor and each Certificateholder. If an
instrument of acceptance by a successor Trustee shall not have been delivered to
the Trustee within thirty (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. Such court may
thereupon, after such notice, if any, as it may deem proper and may prescribe,
appoint a successor Trustee.
(c) The Trustee may be removed by (i) the Depositor with (A) with the
consent of the Controlling Holders, or (ii) upon written notice from the Rating
Agency that failure to remove the Trustee will result in a downgrade of any
Rated Certificates or by the Controlling Holders so long as removal of the
Trustee will not result in a downgrade of any Rated Certificates, at any time if
one of the following events have occurred:
(i) the Trustee shall cease to be eligible under Section 7.08
and shall fail to resign after written request therefor by the
Depositor or by any Certificateholder, or
(ii) the Trustee shall become incapable of acting or shall be
the subject of a bankruptcy or insolvency proceeding 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,
or
(iii) the Trustee has failed to perform its duties in this
Agreement or has breached any representation of warranty made in this
Agreement, in either case, in any material respect.
(d) 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
with respect to any of the Certificates, the Depositor by a Board Resolution,
shall promptly appoint a successor Trustee satisfactory to the Controlling
Holders and subject to confirmation by the Rating Agency of no downgrade of the
Rated Certificates. If no successor Trustee shall have been so appointed by the
Depositor within thirty (30) days, then the Controlling Holders may petition any
court of competent jurisdiction for the appointment of a successor Trustee with
respect to the Certificates.
(e) The Depositor shall give notice in the manner provided in Section
11.03 and 11.04 of each resignation and each removal of the Trustee and each
appointment of a successor Trustee with respect to the Certificates to the
Certificateholders, the Certificateholder Agent and the Rating Agency. Each
notice shall include the name of the successor Trustee and the address of its
Corporate Trust Office.
Section 7.10 Acceptance of Appointment by Successor.
------------ ----------------------------------------
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Depositor, the Certificateholders 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
47
and duties of the retiring Trustee but, on request of the Depositor or the
successor Trustee, such retiring Trustee shall, upon payment of its reasonable
out-of-pocket costs and expenses, 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. Upon request of
any such successor Trustee, the Depositor shall execute 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 eligible under this Article.
Section 7.11 Merger, Conversion, Consolidation or Succession to
------------ ---------------------------------------------------
Business of Trustee.
-------------------
Any Person into which the Trustee may be merged or converted or with
which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such Person 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, and notice thereof shall be provided by the
Trustee to the Certificateholders and the Rating Agency. In case any
Certificates 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 such authentication and deliver the
Certificates so authenticated with the same effect as if such successor Trustee
had itself authenticated such Certificates.
Section 7.12 Co-Trustees and Separate Trustees.
------------ ----------------------------------
At any time or times, for the purpose of meeting the legal requirements
of any jurisdiction in which any of the Trust Estate may at the time be located,
the Depositor and the Trustee shall have power to appoint, and, upon the written
request of the Trustee and the Holders representing at least 25% in Outstanding
Principal Amount of all Certificates, the Depositor 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 Trustee and meeting the requirements of Section 7.08, either to act as
co-Trustee, jointly with the Trustee of all or any part of such 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
Depositor does not join in such appointment within fifteen (15) days after the
receipt by it of a request so to do, or in case a Depositor Event of Default has
occurred and is continuing, the Trustee alone shall have power to make such
appointment.
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:
(a) the Certificates shall be authenticated and delivered by, and all
rights, powers, duties and obligations under this Agreement in respect of the
custody of securities, cash and other personal property held by, or required to
be deposited or pledged with, the Trustee under this Agreement, shall be
exercised solely by the Trustee;
(b) the rights, powers, duties and obligations conferred or imposed
upon the Trustee by this Agreement in respect of any property covered by such
appointment shall be conferred or imposed upon and
48
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 rights,
powers, duties and obligations shall be exercised and performed by such
co-Trustee or separate Trustee;
(c) the Trustee at any time, by an instrument in writing executed by
it, with the concurrence of the Depositor evidenced by a Board Resolution, may
accept the resignation of or remove any co-Trustee or separate Trustee,
appointed under this Section, and, in case a Depositor 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 Depositor. Upon the written request of the Trustee, the
Depositor 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 that
has so resigned or been removed may be appointed in the manner provided in this
Section;
(d) 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 nor shall the Trustee be liable by reason of any act or omission of
any co-Trustee or separate Trustee selected by the Trustee with due care or
appointed in accordance with directions to the Trustee pursuant to Section 6.02;
and
(e) any Act of Certificateholders delivered to the Trustee shall be
deemed to have been delivered to each such co-Trustee and separate Trustee.
Section 7.13 Rights with Respect to the Servicer.
------------ ------------------------------------
The Trustee's rights and obligations with respect to the Servicer and
the Special Servicer shall be governed by the Servicing Agreement.
Section 7.14 Trustee to Hold Loans.
------------ ---------------------
The Trustee hereby acknowledges receipt of the Loans and related Loan
Files (subject to any exceptions as may be noted by the Trustee to the
Depositor, the Servicer and the Certificateholder Agent within two (2) Business
Days of receipt thereof) and shall hold each Loan together with any documents
relating thereto that may from time to time be delivered to the Trustee, until
such time as such Loan is released from the Trust Estate pursuant to the terms
of this Agreement.
Except as provided in Section 4.06, the Trustee shall be under no duty
or obligation to inspect, review or examine the Loans, related Loan Files, and
other documents to determine that the same are genuine, enforceable or
appropriate for the represented purpose or that they have actually been recorded
or that they are other than what they purport to be on their face.
Section 7.15 Unclaimed Monies Held for Certificate Payments.
------------ -----------------------------------------------
If there is any Paying Agent other than the Trustee, the Depositor will
cause each Paying Agent other than the Trustee to execute and deliver to the
Trustee and the Certificateholder Agent an instrument in which such Paying Agent
shall agree with the Trustee and the Certificateholder Agent that, subject to
the provisions of this Section, such Paying Agent will:
49
(a) hold all sums held by it for the payment of principal or interest
on Certificates in trust for the benefit of the Certificateholders entitled
thereto until such sums shall be paid to such Persons or otherwise disposed of
as herein provided;
(b) give the Trustee, the Certificateholder Agent and the
Certificateholders notice of any Default by the Depositor (or any other obligor
upon the Certificates) in the making of any payment of principal or interest;
and
(c) at any time during the continuance of any such Default, upon the
written request of the Trustee and the Certificateholder Agent forthwith pay to
the Trustee all sums so held in trust by such Paying Agent.
The Depositor may at any time, for the purpose of obtaining the
satisfaction and discharge of this Agreement or for any other purpose, pay, or
by Depositor Order direct any Paying Agent 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.
Section 7.16 Swap Agreements.
------------ ----------------
The Trustee is hereby directed to executed, on behalf of the Trust, the
Swap Agreement entered into connection with the Initial Delivery Date. Such Swap
Agreement shall not be amended or modified without the consent of the Depositor
and the Controlling Holders, with notice to the Rating Agency. The Trustee shall
be authorized to enter into any subsequent Swap Agreement upon receipt of a
Depositor Order to such effect, which Depositor Order has been approved by the
Controlling Holders, as evidenced by the countersignature of the
Certificateholder Agent.
50
ARTICLE EIGHT
-------------
REPRESENTATIONS, WARRANTIES AND COVENANTS
------------------------------------------
Section 8.01 Representations and Warranties of the Depositor.
------------ ------------------------------------------------
The Depositor hereby makes the following representations and warranties
for the benefit of the Trustee and the Certificateholders on which the Trustee
relies in accepting the Trust Estate in trust and in authenticating the
Certificates and on which the Certificateholders rely in acquiring their
Certificates. Such representations and warranties are made as of the Initial
Delivery Date and, except as specifically provided herein, each additional
Delivery Date, and shall survive the transfer, conveyance and assignment of the
Trust Estate to the Trustee.
(a) The Depositor is a corporation duly organized, validly existing and
in good standing under the law of the State of Delaware and each other State
where the nature of its business requires it to qualify, except to the extent
that the failure to so qualify would not in the aggregate materially adversely
affect the ability of the Depositor to perform its obligations under the
Transaction Documents or otherwise materially adversely affect the interests of
the Certificateholders, as Certificateholders, under the Transaction Documents.
(b) The Depositor has the power, authority and legal right to execute,
deliver and perform under the terms of the Transaction Documents and the
execution, delivery and performance of the Transaction Documents have been duly
authorized by the Depositor by all necessary corporate action.
(c) Each of (i) this Agreement, assuming due authorization, execution
and delivery by the Trustee and the Servicer, (ii) the Servicing Agreement,
assuming due authorization, execution and delivery by the Servicer, the Special
Servicer, the Servicing Advisor and the Trustee, (iii) the applicable
Certificate Purchase Agreement, assuming due authorization, execution and
delivery by the purchaser(s) named therein, (iv) the Loan Acquisition Agreement,
assuming due authorization, execution and delivery by the Company, constitutes a
legal, valid and binding obligation of the Depositor, enforceable against the
Depositor in accordance with its terms except that (A) such enforcement may be
subject to bankruptcy, insolvency, reorganization, moratorium or other similar
laws (whether statutory, regulatory or decisional) now or hereafter in effect
relating to creditors' rights generally and (B) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
certain equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought, whether a proceeding at law or in equity.
(d) The consummation of the transactions contemplated by the
fulfillment of the terms of the Transaction Documents to which the Depositor is
a party will not conflict with, result in any breach of any of the terms and
provisions of or constitute (with or without notice, lapse of time or both) a
default under the organizational documents or bylaws of the Depositor, or any
indenture, agreement, mortgage, deed of trust or other instrument to which the
Depositor is a party or by which it is bound, or in the creation or imposition
of any Lien upon any of its properties pursuant to the terms of such indenture,
agreement, mortgage, deed of trust or other such instrument, other than any Lien
created or imposed pursuant to the terms of such Transaction Documents, or
violate any law, or any order, rule or regulation applicable to the Depositor of
any court or of any federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the Depositor or any
of its properties.
51
(e) There are no Proceedings or investigations to which the Depositor,
or any of the Depositor's Affiliates, is a party pending, or, to the knowledge
of Depositor, threatened, before any court, regulatory body, administrative
agency or other tribunal or governmental instrumentality (A) asserting the
invalidity of the Transaction Documents, (B) seeking to prevent the issuance of
any of the Certificates or the consummation of any of the transactions
contemplated by the Transaction Documents or (C) seeking any determination or
ruling that would materially and adversely affect the performance by the
Depositor of its obligations under, or the validity or enforceability of, the
Transaction Documents or materially adversely affect the interests of the
Certificateholders, as Certificateholders, under the Transaction Documents.
(f) All approvals, authorizations, consents, orders or other actions of
any Person, or of any court, governmental agency or body or official, required
in connection with the execution and delivery of the Transaction Documents and
with the valid and proper authorization, issuance and sale of the Certificates
pursuant to this Agreement (except approvals of state securities officials under
the Blue Sky Laws), have been or will be taken or obtained on or prior to the
applicable Delivery Date.
(g) As of the Initial Delivery Date, the Depositor's principal place of
business and chief executive office is located at 0000 Xxxxxxxxxx Xxxxxx, Xxxxx
000X, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 and the Depositor has done business only
under the name Allegiance Funding Corp. I.
(h) The Depositor hereby restates and makes each of the representations
and warranties with respect to the Loans and the related Loan Collateral that
are made by the Company in Section 3.01(a) and (b) of the Loan Acquisition
Agreement as of the date on which such representations and warranties were made
with references to the Company therein deemed to refer to the Depositor, as the
context requires.
(i) The Depositor is not an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
(j) There has been no material adverse change in the financial
condition of the Depositor since April 28, 1998 and all information concerning
the Depositor furnished by the Depositor to the Certificateholder Agent, any
Certificateholder, the Trustee or the Rating Agency in connection with the
Transaction Documents or any transaction contemplated thereby is true and
accurate in all material respects or based on reasonable estimates (but, if
based on estimates, shall be identified as so based) on the date as of which
such information is stated or certified, as applicable, and no such information
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained herein or therein, in
light of the circumstances under which such statements were made and taken as a
whole, not misleading; provided that, to the extent that the representations and
--------
warranties of the Depositor contained in this subsection (j) relate to any such
information that was not prepared by the Depositor or any of its Affiliates,
then such representations and warranties are made by the Depositor solely to the
best of its knowledge. As used in this clause, "information" does not include
casual oral conversations or informal oral statements of opinions on which it
would be unreasonable to rely.
Section 8.02 Covenants of the Depositor.
------------ ---------------------------
The Depositor hereby makes the following covenants for the benefit of
the Trustee and the Certificateholders, on which the Trustee relies in accepting
the Trust Estate in trust and in authenticating the Certificates and the
Certificateholders rely in acquiring their Certificates. Such covenants shall
survive the transfer, conveyance and assignment of the Trust Estate to the
Trustee.
52
(a) Except for the conveyances and assignment hereunder, the Depositor
will not sell, pledge, assign or transfer to any other Person, or grant, create,
incur, assume or suffer to exist any Lien on the Trust Estate now existing or
hereafter created, or any interest therein prior to the termination of this
Agreement pursuant to Section 10.01; the Depositor will notify the Trustee of
the existence of any Lien on the Trust Estate immediately upon discovery
thereof; and the Depositor shall defend the right, title and interest of the
Trustee in, to and under the Trust Estate now existing or hereafter created,
against all claims of third parties claiming through or under the Depositor;
provided that nothing in this Section 8.02(a) shall prevent or be deemed to
--------
prohibit the Depositor from suffering to exist upon any of the Loan Collateral
any Liens permitted under the terms of the related Loan.
(b) The Depositor agrees to hold in trust and promptly pay to the
Servicer any amounts received by the Depositor in respect of the Trust Estate
(other than amounts distributed to or for the benefit of the Depositor pursuant
to Article Five).
(c) The Depositor will duly fulfill all obligations on its part to be
fulfilled under or in connection with each Loan and will do nothing to impair
the rights of the Trustee (for the benefit of the Certificateholders) in the
Loans and the related Loan Collateral.
(d) The Depositor will comply, in all material respects, with all acts,
rules, regulations, orders, decrees and directions of any governmental authority
applicable to the Loans or the Loan Collateral or the Depositor.
(e) The Depositor shall execute and file such continuation statements
and any other documents and take such other actions that may be required by law
to fully preserve and protect the interest of the Trustee (for the benefit of
the Certificateholders) in the Trust Estate.
(f) The Depositor will not, without providing thirty (30) days notice
to the Trustee and the Certificateholder Agent and without filing such
amendments to any previously filed financing statements as the Trustee may
require or as may be required in order to maintain the Trustee's perfected
security interest in the Trust Estate, (a) change the location of its principal
executive office, or (b) change its name, identity or corporate structure in any
manner which would make any financing statement or continuation statement filed
by the Depositor in accordance with the Servicing Agreement or this Agreement
seriously misleading within the meaning of Article 9-402(7) of any applicable
enactment of the UCC.
(g) The Depositor will make, execute or endorse, acknowledge, and file
or deliver to the Trustee from time to time such schedules, confirmatory
assignments, conveyances, transfer endorsements, powers of attorney,
certificates, reports and other assurances or instruments and take such further
steps relating to the Trust Estate, as the Trustee may request and reasonably
require.
(h) The Depositor shall notify the Trustee promptly after becoming
aware of any Lien on any Trust Estate, except for any Liens on Loan Collateral
for municipal or other local taxes if such taxes shall not at the time be due or
payable without penalty or if the Depositor or the related Obligor shall
currently be contesting the validity thereof in good faith by appropriate
proceedings and the Depositor shall have set aside on its books adequate
reserves with respect thereto.
(i) The Depositor (a) shall engage in only (1) the acquisition,
ownership, leasing, selling and pledging of the property acquired by the
Depositor pursuant to the Loan Acquisition Agreement, and causing the issuance
of, receiving and selling the Certificates issued pursuant to this Agreement and
(2) the exercise of any powers permitted to corporations under the corporate law
of the State of Delaware which are
53
incidental to the foregoing or necessary to accomplish the foregoing and the
Depositor shall incur no debt other than trade payables and expense accruals in
connection with its operations in the normal course of business, and other than
as contemplated by the Transaction Documents; (b) will (1) maintain its books,
records and cash management accounts separate from the books and records of any
other entity and in accordance with generally accepted accounting principles,
(2) maintain separate bank accounts and shall not commingle its funds with those
of any other entity, (3) keep in full effect its existence, rights and
franchises as a corporation under the laws of its State of incorporation, and
will obtain and preserve its qualification to do business as a foreign
corporation in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement, (4)
observe all corporate procedures required by its Certificate of Incorporation,
its bylaws and the laws of the State of Delaware, (5) maintain its good standing
under the laws of the State of Delaware, (6) keep correct and complete books and
records of account and minutes of meeting and other proceedings of its Board of
Directors and shareholder meetings, (7) obtain proper authorization from its
directors or shareholders, as appropriate, and act solely in its corporate name
and through its duly authorized officers and agents in the conduct of its
business, (8) disclose in its financial statements that the Loan Assets have
been sold and assigned to the Depositor and from the Depositor to the Trust and
that the assets of the Depositor are not available to pay the creditors of the
Company, (9) maintain a separate telephone number and stationery reflecting a
separate address and identity from that of the Company; and (c) will not (1)
dissolve or liquidate in whole or in part, (2) own any subsidiary or lend or
advance any moneys to, or make an investment in, any Person, (3) make any
capital expenditures, (4)(A) commence any case, proceeding or other action under
any existing or future bankruptcy, insolvency or similar law seeking to have an
order for relief entered with respect to it, or seeking reorganization,
arrangement, adjustment, wind-up, liquidation, dissolution, composition or other
relief with respect to it or its debts, (B) seek appointment of a receiver,
trustee, custodian or other similar official for it or any part of its assets,
(C) make a general assignment for the benefit of creditors, or (D) take any
action in furtherance of, or consenting or acquiescing in, any of the foregoing,
(5) guarantee (directly or indirectly), endorse or otherwise become contingently
liable (directly or indirectly) for the obligations of, or own or purchase any
stock, obligations or securities of or any other interest in, or make any
capital contribution to, any other Person, (6) merge or consolidate with any
other Person, (7) engage in any other action that bears on whether the separate
legal identity of the Depositor will be respected, including (A) holding itself
out as being liable for the debts of any other party or (B) acting other than in
its corporate name and through its duly authorized officers or agents, or (8)
create, incur, assume, or in any manner become liable in respect of any
indebtedness other than as contemplated by the Transaction Documents and other
than trade payables and expense accruals incurred in the ordinary course of
business and which are incidental to its business purpose; provided that the
--------
Depositor may take any action prohibited by this clause (8) if (y) the Depositor
shall cause, prior to the taking of such action, an Opinion of Counsel
experienced in federal bankruptcy matters, in substance satisfactory to the
Trustee, the Certificateholders and the Rating Agency confirming the
non-consolidation of the Depositor and the Company, to be delivered to the
Trustee, the Certificateholders and the Rating Agency, (z) the Rating Agency
shall indicate in writing that the taking of such action will not affect the
then current rating of any Series of Certificates. The Depositor shall not amend
any article in its Certificate of Incorporation that deals with any matter
discussed above without the prior written consent of the Controlling Holders. On
or before April 15 of each year, so long as any of the Certificates are
Outstanding, the Depositor shall furnish to each Certificateholder and the
Trustee, an Officer's Certificate confirming that the Depositor has complied
with its obligations under this Section 8.02(i).
(j) The Depositor agrees that at all times, at least one (1) of the
directors and one (1) of the executive officers of the Depositor (or two (2)
persons, one of whom is serving as both a director and an executive officer)
will not be a director, officer or employee of any direct or ultimate parent, or
Affiliate of the parent or of the Depositor; provided that such independent
--------
directors and officers may serve in similar
54
capacities for other "special purpose corporations" formed by the Company and
its Affiliates. The Depositor's Certificate of Incorporation shall at all times
provide that such independent directors shall have a fiduciary duty to the
Holders of the Certificates and will always require unanimous consent of the
Board of Directors to file any bankruptcy petition.
(k) The Depositor shall comply with Section 2.11 of this Agreement at
all times and its financial and tax records shall reflect such tax treatment.
(l) The Depositor will maintain an office or agency within the United
States of America where notices and demand to or upon the Depositor in respect
of the Certificates and this Agreement may be served. The Depositor hereby
initially appoints the Trustee as the Paying Agent and its Corporate Trust
Office as the office for each of said purposes. The Depositor will give thirty
(30) days prior written notice to the Trustee and the Certificateholders of any
change in the identity of the Paying Agent or the location of any such office or
agency. If at any time the Depositor shall fail to maintain any such office or
agency or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served to the
Trustee, and the Depositor hereby appoints the Trustee its agent to receive all
such presentations, surrenders, notices and demands.
(m) The Depositor will take all actions, and diligently pursue all
remedies available to it, in any case, to the extent necessary or reasonably
prudent and to the extent commercially reasonable, to enforce the obligations of
the Servicer under the Servicing Agreement and the Company under the Loan
Acquisition Agreement and to secure the Depositor's rights under such
agreements.
(n) The proceeds from the sale of the Certificates will be used by the
Depositor (i) to pay the Existing Indebtedness, if any, and to otherwise make
the payments required under the terms of the Loan Acquisition Agreement; (ii) to
pay the expenses associated with this transaction and (iii) for general
corporate purposes, including the cost of funding additional Loans. None of the
transactions contemplated in the Transaction Documents (including the use of the
proceeds from the sale of the Certificates) will result in a violation of
Section 7 of the Securities and Exchange Act of 1934, as amended, or any
regulations issued pursuant thereto, including Regulations T, U and X of the
Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter II. The
Depositor does not own or intend to carry or purchase any "margin security"
within the meaning of said Regulation G, including margin securities originally
issued by it or any "margin stock" within the meaning of said Regulation U.
(o) The Depositor shall not consolidate with or merge into any other
Person or convey or transfer its properties and assets substantially as an
entirety to any Person, without the consent of the Controlling Holders.
(p) Upon any consolidation or merger, or any conveyance or transfer of
the properties and assets of the Depositor in accordance with Section 8.02(o)
hereof, the Person formed by or surviving such consolidation or merger (if other
than the Depositor) or the Person to which such conveyance or transfer is made
shall succeed to, and be substituted for, and may exercise every right and power
of, the Depositor under this Agreement with the same effect as if such Person
had been named as the Depositor herein upon the execution of an assignment and
assumption agreement by such Person. In the event of any such conveyance or
transfer, the Person named as the "Depositor" in the first paragraph of this
Agreement or any successor which shall theretofore have become such in the
manner prescribed in this Article shall be released from its liabilities and its
obligations under this Agreement and may be dissolved, wound-up and liquidated
at any time thereafter.
55
(q) The Depositor shall indemnify and hold harmless the Trustee, the
Certificateholders and the Certificateholder Agent from and against any loss,
liability, expense, damage or injury (other than any loss attributable to a
Certificateholder's investment in any of the Certificates) sustained or suffered
by them by reason of any acts, omissions or alleged acts or omissions (i) by the
Depositor in the performance of its obligations under the Transaction Documents
(including any violation of any applicable laws by the Depositor as a result of
the transactions contemplated by this Agreement), (ii) arising out of the
activities of the Trust, or (iii) arising out of the activities of any of them
with respect to the Trust, including enforcement of rights and remedies against
the Depositor under the Transaction Documents and any judgment, award,
settlement, reasonable attorneys' fees and other expenses reasonably incurred in
connection with the defense of any actual or threatened action, proceeding or
claim; provided that the Depositor shall not indemnify the Trustee, the
--------
Certificateholders or the Certificateholder Agent if such loss, liability,
expense, damage or injury is due to the such Person's gross negligence, willful
misconduct, willful misfeasance or bad faith in the performance of its rights or
duties hereunder. Any indemnification pursuant to this Section shall only be
payable from the assets of the Depositor and shall not be payable from the
assets of the Trust Estate except as otherwise provided in the Transaction
Documents. The provisions of this indemnity shall survive the termination of
this Agreement.
Section 8.03 Other Matters as to the Depositor.
------------ ----------------------------------
(a) Except as provided in subsection (b) of this Section and elsewhere
in this Agreement, the directors, officers, or employees of the Depositor shall
not be under any personal liability to the Trust, the Trustee, the
Certificateholders, the Servicer, or any other Person hereunder or pursuant to
any documents delivered hereunder, it being expressly understood that all such
liability is expressly waived and released as a condition of, and as
consideration for, the execution of this Agreement and the issuance of the
Certificates, except with respect to liability resulting from such person's
fraudulent or willful misconduct. The Depositor and any director or officer or
employee or agent of the Depositor may rely in good faith on the advice of
counsel or on any documents of any kind, prima facie properly executed and
submitted by any Person respecting any matters arising hereunder.
(b) During the term of this Agreement and for one (1) year and one (1)
day after the termination hereof, none of the parties hereto or any Affiliate
thereof will file any involuntary petition or otherwise institute or cooperate
in the institution of any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding or other proceeding under any federal or state bankruptcy
or similar law against the Depositor or the Trust.
Section 8.04 Representations and Warranties of the Trustee.
------------ ----------------------------------------------
The Trustee hereby makes the following representations and warranties
for the benefit of the Depositor and the Certificateholders on which the
Certificateholders rely in acquiring their Certificates. Such representations
and warranties are made as of the Initial Delivery Date and, except as
specifically provided herein, each additional Delivery Date, and shall survive
the transfer, conveyance and assignment of the Trust Estate to the Trustee.
(a) The Trustee is a banking corporation duly organized, validly
existing and in good standing under the law of the State of New York and each
other State where the nature of its business requires it to qualify, except to
the extent that the failure to so qualify would not in the aggregate materially
adversely affect the ability of the Trustee to perform its obligations under the
Transaction Documents or otherwise
56
materially adversely affect the interests of the Certificateholders, as
Certificateholders, under the Transaction Documents.
(b) The Trustee has the power, authority and legal right to execute,
deliver and perform under the terms of the Transaction Documents and the
execution, delivery and performance of the Transaction Documents have been duly
authorized by the Trustee by all necessary corporate action.
(c) Each of (i) this Agreement, assuming due authorization, execution
and delivery by the Servicer and (ii) the Servicing Agreement, assuming due
authorization, execution and delivery by the Depositor, the Servicer, the
Special Servicer and the Servicing Advisor, constitutes a legal, valid and
binding obligation of the Trustee, enforceable against the Trustee in accordance
with its terms except that (A) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws (whether statutory,
regulatory or decisional) now or hereafter in effect relating to creditors'
rights generally and (B) the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to certain equitable defenses and
to the discretion of the court before which any proceeding therefor may be
brought, whether a proceeding at law or in equity.
(d) The consummation of the transactions contemplated by the
fulfillment of the terms of the Transaction Documents to which the Trustee is a
party will not conflict with, result in any breach of any of the terms and
provisions of or constitute (with or without notice, lapse of time or both) a
default under the organizational documents or bylaws of the Trustee, or any
indenture, agreement, mortgage, deed of trust or other instrument to which the
Trustee is a party or by which it is bound, or in the creation or imposition of
any Lien upon any of its properties pursuant to the terms of such indenture,
agreement, mortgage, deed of trust or other such instrument, other than any Lien
created or imposed pursuant to the terms of such Transaction Documents, or
violate any law, or any order, rule or regulation applicable to the Trustee of
any court or of any federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the Trustee or any
of its properties.
(e) There are no Proceedings or investigations to which the Trustee, or
any of the Trustee's Affiliates, is a party pending, or, to the knowledge of
Trustee, threatened, before any court, regulatory body, administrative agency or
other tribunal or governmental instrumentality (A) asserting the invalidity of
the Transaction Documents, (B) seeking to prevent the issuance of any of the
Certificates or the consummation of any of the transactions contemplated by the
Transaction Documents or (C) seeking any determination or ruling that would
materially and adversely affect the performance by the Trustee of its
obligations under, or the validity or enforceability of, the Transaction
Documents or otherwise adversely affect the interests of the Certificateholders,
as Certificateholders, under the Transaction Documents.
(f) All approvals, authorizations, consents, orders or other actions of
any Person, or of any court, governmental agency or body or official, required
as a condition to the execution and delivery by the Trustee of the Transaction
Documents have been or will be taken or obtained on or prior to the applicable
Delivery Date.
57
ARTICLE NINE
------------
AMENDMENTS
----------
Section 9.01 Amendments without Consent of Certificateholders.
------------ -------------------------------------------------
The Depositor, the Servicer and the Trustee, without the consent of the
Holders of any Certificates, at any time and from time to time, may enter into
one or more amendments hereto, in form satisfactory to the Trustee, for any of
the following purposes, provided that any such amendment, as evidenced by an
--------
Opinion of Counsel, will not have a material adverse affect on the
Certificateholders:
(a) to correct or amplify the description of any property at any time
included in the Trust Estate (other than any such correction or amplification
that would have the effect of curing a Default or a breach of any
representation, warranty or covenant that would otherwise require the Company or
the Depositor to repurchase or substitute for any Loan), or to better assure,
convey and confirm unto the Trustee any property included or required to be
included in the Trust Estate, or to include in the Trust Estate any additional
property;
(b) to evidence the succession of another Person to the Depositor, and
the assumption by such successor of the covenants of the Depositor herein and in
the Certificates, in accordance with Section 8.02(o);
(c) to add to the covenants of any party hereto, for the benefit of the
Holders of all Certificates or to surrender any right or power herein conferred
upon the Depositor;
(d) to convey, transfer, assign, mortgage or pledge any property to or
with the Trustee;
(e) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provisions with
respect to matters or questions arising under this Agreement, which shall not be
inconsistent with the provisions of this Agreement; or
(f) to evidence the succession of the Trustee pursuant to Article
Seven; provided that any such amendment does not modify this Agreement in a
--------
manner described in paragraphs (i) through (vii) of Section 9.02(a).
The Trustee is hereby authorized to join in the execution of any such
amendment and to make any further appropriate agreements and stipulations that
may be therein contained, but the Trustee shall not be obligated to enter into
any such amendment that affects the Trustee's own rights, duties, liabilities or
immunities under this Agreement or otherwise.
Promptly after the execution by the Depositor, the Servicer and the
Trustee of any amendment pursuant to this Section, the Depositor shall mail to
the Rating Agency, the Certificateholder Agent and each Certificateholder a copy
of such amendment.
Section 9.02 Amendments and Modifications to Agreement with Consent
------------- ------------------------------------------------------
of Certificateholders.
---------------------
(a) With the prior written consent of not less than 51% of the
Outstanding Principal Amount of the Holders of each affected Class (or, with
respect to any affected Class during the Funding Period applicable to such
Class, of not less than 51% of the Maximum Series Amount of such Class) of Rated
58
Certificates, by Act of such Holders delivered to the Depositor and the Trustee,
the Depositor, the Servicer and the Trustee may enter into an amendment or
modification of this Agreement for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
modifying in any manner the rights of the Holders of the Certificates under this
Agreement (other than as described in Section 9.01); provided that no such
--------
amendment shall, without the consent of the Holders of each Outstanding
Certificate affected thereby:
(i) change the Series Termination Date of any Certificate or
the Due Date of any installment of principal of, or any installment of
interest on, any Certificate, or change the principal amount thereof or
the Certificate Interest Rate or change any place of payment where, or
the coin or currency in which, any Certificate or the interest thereon
is payable, or impair the right to institute suit for the enforcement
of any such payment;
(ii) reduce the percentage in Outstanding Principal Amount of
Certificates, the consent of the Holders of which is required for any
such amendment, or the consent of the Holders of which is required for
any waiver of compliance with certain provisions of this Agreement or
Events of Default or their consequences;
(iii) impair or adversely affect the Trust Estate;
(iv) modify or alter the definition of the term "Outstanding"
or "Outstanding Principal Amount" or "Controlling Holders";
(v) modify or alter the provisions of Sections 5.01 or 5.02;
(vi) modify any of the provisions of this Section 9.02,except
to increase the percentage of Holders required for any modification or
waiver or to provide that certain other provisions of this Agreement
cannot be modified or waived without the consent of each Holder of each
Outstanding Certificate affected thereby; or
(vii) permit the creation of any lien ranking prior to, on a
parity with, or subordinate to the lien of this Agreement with respect
to any part of the Trust Estate or terminate or release the lien of
this Agreement or any lien created under the Loan Acquisition Agreement
on any property at any time subject hereto or deprive the Holder of any
Certificate of the security afforded by the lien of this Agreement or
any lien created under the Loan Acquisition Agreement.
(b) With the prior written consent of the Holders of not less than
66-2/3% in Outstanding Principal Amount of each Class of each Series of
Certificates then in its Funding Period, by Act of said Holders delivered to the
Depositor and the Trustee, the Depositor, the Servicer and the Trustee may enter
into amendments hereto for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of Article Three or the
definitions used therein, provided that any such amendment does not modify the
--------
Agreement in a manner described in clauses (i) through (vii) of paragraph (a) of
this Section 9.02.
(c) The Trustee is hereby authorized to join in the execution of any
amendments to this Agreement pursuant to clause (a) or (b) above and to make any
further appropriate agreements and stipulations that may be therein contained,
but the Trustee shall not be obligated to enter into any such amendment that
affects the Trustee's own rights, duties, liabilities or immunities under this
Agreement. It shall not be necessary for any Act of Certificateholders under
this Section to approve the particular form of
59
any proposed supplemental agreement, but it shall be sufficient if such Act
shall approve the substance thereof. Promptly after the execution by the
Depositor, the Servicer and the Trustee of any amendment pursuant to this
Section, the Depositor shall mail to the Holders of the Certificates and the
Rating Agency a copy of such amendment, together with any consents obtained in
connection therewith.
Section 9.03 Execution of Amendments.
------------ ------------------------
In executing any amendment permitted by this Article or the
modifications thereby of the trusts created by this Agreement, the Trustee shall
be entitled to receive upon request, and (subject to Section 7.01) shall be
fully protected in relying in good faith upon, an Opinion of Counsel reasonably
acceptable to the Trustee stating that the execution of such amendment is
authorized or permitted by this Agreement. The Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Trustee's own
duties or immunities under this Agreement or otherwise.
Section 9.04 Effect of Amendments.
------------ ---------------------
Upon the execution of any amendment under this Article, this Agreement
shall be modified in accordance therewith, and such amendment shall form a part
of this Agreement for all purposes; and every Holder of Certificates theretofore
or thereafter authenticated and delivered hereunder shall be bound thereby.
Section 9.05 Reference in Certificates to Amendments.
------------ ----------------------------------------
Certificates authenticated and delivered after the execution of any
amendment 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 amendment. If the Depositor shall so determine, new Certificates so
modified as to conform, in the opinion of the Trustee and the Depositor, to any
such amendment may be prepared and executed by the Depositor and authenticated
and delivered by the Trustee in exchange for Outstanding Certificates.
60
ARTICLE TEN
------------
TERMINATION AND DISCHARGE
-------------------------
Section 10.01 Termination of Trust; Satisfaction and Discharge of
------------- ---------------------------------------------------
Agreement.
----------
(a) The Trust shall terminate upon the earlier of (i) December 31, 2020
and (ii) the day following the date when the Pool Balance has been reduced to
zero and all proceeds of the Trust Estate have been applied in accordance with
Article Five and each applicable Supplement. Upon termination of the Trust, all
rights, obligations and Liens created by this Agreement shall be discharged.
(b) If, nine (9) months prior to the date specified in Section
10.01(a)(i), there remains an Outstanding Principal Amount on any Certificate,
the Special Servicer shall use its best efforts to sell, dispose or otherwise
liquidate the Loans and related Loan Collateral in a commercially reasonable
manner in the succeeding one hundred eighty (180) days and shall deposit the
proceeds thereof in the Collection Account for application in accordance with
Article Five.
(c) Thirty (30) days advance written notice of termination of the Trust
shall be given by the Trustee to the Certificateholders, the Certificateholder
Agent and the Rating Agency, specifying the Final Payment Date and the amount of
any such final payment on the Certificates.
(d) Upon termination of the Trust and application of all proceeds of
the Trust Estate in accordance with Article Five and each applicable Supplement,
the Depositor may submit to the Trustee an Officer's Certificate requesting the
release of the funds on deposit in the Reserve Account, if any, and any other
assets then comprising the Trust Estate. Upon receipt of such request, the
Trustee shall release from the lien of this Agreement and deliver to or upon the
order of the Depositor all property remaining in the Trust Estate and shall
execute and file, at the expense of the Depositor, UCC financing statements
evidencing such discharge and release.
Section 10.02 Optional Termination.
------------- ---------------------
(a) At any time when the Pool Balance is equal to or less than 15% of
the Pool Balance at its highest level, the Depositor shall have the right to
purchase the Loan Assets at a price equal to the Repurchase Price for such
Loans. The Depositor shall deposit such amount in the Collection Account for
application in accordance with Article Five.
(b) The Depositor shall give written notice to the Trustee, the Rating
Agency and the Certificateholders of its intention to exercise such option five
(5) Business Days in advance thereof. Such notice shall include (i) a statement
that interest shall cease to accrue as of the last day preceding the date on
which such repurchase is to occur (such date being the Final Payment Date for
all of such Certificates) and (ii) shall specify the place or places at which
presentation and surrender of Certificates may be made; provided that, if the
---------
Holder of any Certificate is, or is a nominee for, a Qualified Institutional
Buyer, then such Person need not surrender such Certificate, provided further
----------------
that, in such event, such Qualified Institutional Buyer shall automatically be
deemed to have provided its own unsecured agreement of indemnity saving the
Depositor and the Trustee, or either of them, harmless in respect of such
failure to surrender.
(c) Upon exercise of such option and deposit of the amounts required
under Section 10.01 into the Collection Account, the Depositor shall be entitled
to obtain an assignment of the Loan Assets and the Trustee shall promptly
execute all instruments provided to it as may be necessary to effectuate such
assignment and the release of any lien created hereunder.
61
ARTICLE ELEVEN
--------------
PROVISIONS OF GENERAL APPLICATION
---------------------------------
Section 11.01 General Provisions.
------------- -------------------
All of the provisions of this Article shall apply to this Agreement, as
supplemented by each Supplement.
Section 11.02 Acts of Certificateholders.
------------- ---------------------------
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by
an agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee, and, where it is hereby expressly required, to the
Depositor. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Certificateholders 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 Agreement and (subject to Section 7.01)
conclusive in favor of the Trustee and the Depositor, if made in the manner
provided in this Section 11.02.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Trustee deems
sufficient.
(c) The ownership of Certificates shall be proved by the Certificate
Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Certificate shall bind the Holder of
every Certificate 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 Depositor in reliance thereon, whether
or not notation of such action is made upon such Certificate.
Section 11.03 Notices,etc.,to Trustee, Depositor, Servicer and Rating
------------- -------------------------------------------------------
Agency.
-------
(a) All notices, requests, demands, authorizations, directions,
consents, waivers or Acts of Certificateholders and other communications to any
party under this Agreement shall be in writing (including telefacsimile
communication) and mailed, sent by telefacsimile or delivered to such party at
its address or telefacsimile number set forth in Section 11.03(b) or such other
address or telefacsimile number as such party may hereafter specify for such
purpose by notice given in accordance with this Section 11.03. Each such notice,
request or other communication shall be deemed to have been received: (i) if
mailed as provided above by any method other than overnight delivery service,
when actually received; (ii) if mailed by overnight delivery service, when
delivered by the overnight delivery service; (iii) if sent by telefacsimile when
transmitted by telefacsimile (with electronic confirmation of receipt by the
sending party), so long as such notice is promptly confirmed in writing by any
of the other means specified in clauses (i), (ii) or (iv) of this Section
11.03(a); or (iv) if delivered by hand, upon delivery.
62
(b) For purposes hereof, the address and telefacsimile number of:
(i) the Trustee shall be Xxx X & X Xxxxx, 0xx Xxxxx, Xxxxxxx,
Xxx Xxxx 00000-0000, Fax 000-000-0000, or otherwise as furnished in
writing to the Depositor, the Certificateholder Agent, the
Certificateholders, the Servicer and the Special Servicer by the
Trustee;
(ii) the Depositor shall be 0000 Xxxxxxxxxx Xxxxxx, Xxxxx
000-X, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, Fax 000-000-0000, or otherwise
as furnished in writing to the Trustee, the Certificateholder Agent,
the Certificateholders, the Servicer and the Special Servicer by the
Depositor;
(iii) the Servicer shall be 0000 Xxxxxxxxxx Xxxxxx, Xxxxx 000,
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, Fax 000-000-0000, or otherwise as
furnished in writing to the Trustee, the Depositor, the
Certificateholder Agent, the Certificateholders and the Special
Servicer by the Servicer;
(iv) the Special Servicer shall be 0000 Xxxxxxxxxx Xxxxxx,
Xxxxx 000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, Fax 000-000-0000, or
otherwise furnished in writing to the Trustee, the Depositor, the
Certificateholder Agent, the Certificateholders and the Servicer by the
Special Servicer; and
(v) the Certificateholder Agent shall be ***, Attn. Asset
Manager, Fax *** or otherwise furnished in writing to the Trustee, the
Depositor, the Certificateholders, the Servicer and the Special
Servicer by the Certificateholder Agent;
(vi) the Rating Agency shall be 00 Xxxxx Xxxxxx, 00xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000 Fax 000-000-0000, or otherwise furnished in
writing to the Trustee, the Depositor, the Certificateholder Agent, the
Certificateholders, the Servicer and the Special Servicer by the Rating
Agency.
Section 11.04 Notices to Certificateholders; Waiver.
------------- --------------------------------------
Where this Agreement provides for notice to Certificateholders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and made in accordance with Section 11.03 to
each Certificateholder affected by such event, at such Person's address as it
appears on the Certificate Register, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such notice. In any
case in which notice to Certificateholders is given by mail, neither the failure
to mail such notice, nor any defect in any notice so mailed, to any particular
Certificateholder shall affect the sufficiency of such notice with respect to
other Certificateholders, and any notice which is mailed in the manner herein
provided shall conclusively be presumed to have been duly given.
Where this Agreement 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 Certificateholders 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 Certificateholders when such notice is required
to be given pursuant to any provision of this Agreement, 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.
***Confidential information omitted purusant to a request for confidential
treatment filed separately with the Securities and Exchange Commission.
63
Section 11.05 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 11.06 Successors and Assigns.
------------- -----------------------
All covenants and agreements in this Agreement by the Depositor shall
bind its successors and assigns, whether so expressed or not. Notwithstanding
the foregoing, no party shall assign any of its rights under this Agreement, or
delegate any of its duties, except in accordance with the provisions of Sections
2.06, 7.10 and 8.02(o).
Section 11.07 Separability.
------------- -------------
In case any provision in this Agreement or in the Certificates 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 11.08 Benefits of Agreement.
------------- ----------------------
Nothing in this Agreement or in the Certificates, express or implied,
shall give to any Person, other than the parties hereto, the Certificateholders,
and any Paying Agent which may be appointed pursuant to the provisions hereof,
and any of their successors hereunder, any benefit or any legal or equitable
right, remedy or claim under this Agreement or under the Certificates.
Section 11.09 Legal Holidays.
------------- ---------------
In any case in which the date of any Payment Date or the Series
Termination Date of any Certificate shall not be a Business Day, then
(notwithstanding any other provision of a Certificate or this Agreement) payment
of principal or interest 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 Series Termination Date or Payment Date and, assuming
such payment is actually made on such subsequent Business Day, no additional
interest shall accrue on the amount so paid for the period from and after any
such nominal date.
Section 11.10 Governing Law.
------------- --------------
THIS AGREEMENT AND EACH CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE
-----------------------------------------------------------------------
WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO
--------------------------------------------------------------------------------
AGREEMENTS MADE AND TO BE PERFORMED THEREIN, WITHOUT REGARD TO THE CONFLICT OF
--------------------------------------------------------------------------------
LAWS PROVISIONS OF ANY STATE.
-----------------------------
Section 11.11 Counterparts.
------------- -------------
This Agreement 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 11.12 Corporate Obligation.
------------- ---------------------
No recourse may be taken, directly or indirectly, against any
incorporator, subscriber to the capital stock, stockholder, employee, officer or
director of the Depositor or of any predecessor or successor of the
64
Depositor with respect to the Trust or under this Agreement or any certificate
or other writing delivered in connection herewith.
Section 11.13 Compliance Certificates and Opinions.
------------- -------------------------------------
Upon any application, order or request by the Depositor or the Servicer
to the Trustee to take any action under any provision of this Agreement for
which a specific request is required under this Agreement, the Depositor or the
Servicer, as applicable, shall furnish to the Trustee an Officer's Certificate
of the Depositor or the Servicer, as applicable, stating that all conditions
precedent, if any, provided for in this Agreement relating to the proposed
action have been complied with, except that in the case of any such application
or request as to which the furnishing of a different certificate is specifically
required by any provision of this Agreement relating to such particular
application or request, no additional certificate need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement shall include:
(a) a statement that each individual signing such certificate or
opinion has read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
(b) 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;
(c) a statement that, in the opinion of each such individual, such
individual has made such examination or investigation as is necessary to enable
such individual to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
65
IN WITNESS WHEREOF, the Depositor, the Trustee and the Servicer have
caused this Agreement to be executed by their respective duly authorized
officers as of the date and year first written above.
ALLEGIANCE FUNDING CORP. I, as Depositor
By: /s/ Xxxx X. Xxxxxx
--------------------------------
Name: Xxxx X. Xxxxxx
Title: President
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Trustee
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Assistant Vice President
POINT WEST CAPITAL CORPORATION, as Servicer
By: /s/ Xxxx X. Xxxxxx
--------------------------------
Name: Xxxx X. Xxxxxx
Title: President
EXHIBIT A
---------
to Trust Agreement
------------------
FORM OF
-------
STANDARD ESCROW INSTRUCTIONS
----------------------------
--------------- --, 199_
[Title Company]
Re: Loan (the "Loan") from Allegiance Capital, LLC (the
"Lender") to [] (the "Borrower")
Ladies and Gentlemen:
This letter is being forwarded to you by the Borrower[, [other
Credit Parties]] and the Lender in connection with the Loan. Pursuant to the
written authorization from the Borrower to the Lender (the "Disbursement
Letter"), the Lender is sending to you, or will cause to be sent to you, by wire
transfer of immediately available federal funds (in accordance with wire
transfer instructions previously supplied by you) an amount equal to ($ )
-------
(the "Wired Funds"). A copy of the Disbursement Letter is attached hereto as
Exhibit A. The Wired Funds are being delivered to you to be held in trust for
payment as provided in the Disbursement Letter.
You are not authorized to disburse any or all of the Wired
Funds unless and until all of the following conditions (the "Threshold
Conditions") have been satisfied:
(a) You hold in your possession each of the documents set
forth on Exhibit B attached hereto (collectively, the "Credit Documents"), duly
executed by each of the respective parties thereto.
(b) You hold in your possession originals of all documents
required by Section [] of each Title Commitment (except to the extent otherwise
permitted by the Lender);
(c) You have received written authorization from the Lender
that you may disburse the Wired Funds.
If all of the foregoing conditions are satisfied on or before
the close of business on 199 (the "Threshold Date"), then, on the
----- -- --
earliest date on which (A) all such conditions have been fulfilled and (B) you
are able to satisfy the Title Company Conditions (as hereinafter defined), you
are hereby authorized and directed to disburse the Wired Funds according to the
Disbursement Letter. Notwithstanding anything to the contrary contained herein,
you may not disburse any or all of the Wired Funds, unless, contemporaneously
with your disbursement of the Wired Funds, you do both of the following (the
"Title Company Conditions"): (1) record, or cause to be recorded, each Mortgage
(as that term is defined on Exhibit B attached hereto, a "Mortgage") in the
appropriate recording office identified on Exhibit B attached hereto, with
respect to the related real property identified in such Mortgage(s) that is the
subject
(Title Company)
199
------------ --, -
Page 2
of your Title Commitment(s), dated , 199 (the "Title Commitment(s)");
-- -
and (2) issue, in favor of the Lender, the following title insurance policies
(collectively, the "Title Insurance Policies"):
(i) [identify title insurance policy for each
separate piece of real property that is the subject of a Mortgage],
such policy to reflect the lien of the Lender as the only lien or
encumbrance of any kind on such real property, other than those set
forth in Items [] of the [related] Title Commitment; and
(ii) [identify title insurance policy for each
separate piece of real property that is the subject of a Mortgage],
such policy to reflect the lien of the Lender as the only lien or
encumbrance of any kind on such real property, other than those set
forth in Items [] of the [related] Title Commitment.
Should all of the Threshold Conditions not be satisfied on or
before the close of business on the Threshold Date and/or should you not be able
to comply with the Title Company Conditions on or before the close of business
on the Threshold Date, you are to return (i) the Wired Funds to the Trustee
according to wire transfer instructions provided to you by the Lender or its
counsel, and (ii) the Credit Documents to the Lender.
Following the distribution of the Wired Funds, you are to
deliver the Credit Documents to Manufacturers and Traders Trust Company (the
"Trustee"), Xxx X & X Xxxxx, 0xx Xxxxx, Xxxxxxx, XX 00000-0000, Attention:
. Within five (5) business days of receipt of a recorded Mortgage,
-----------
you are to forward such recorded Mortgage to the Trustee at the above address.
In addition, within three (3) business days of the disbursement of Wired Funds,
you are to send originals of each of the Title Policies to the Trustee at the
above address.
The instructions contained herein may not be altered, changed,
or modified in any way except by a writing signed by the Lender. The Lender
reserves the right to amend or cancel these instructions and authorizations at
any time prior to the recording of the Mortgages, the issuance of the Title
Policies, the delivery to the Trustee of the Credit Documents or the
disbursement of the Wired Funds.
Please indicate your acceptance of the foregoing provisions by
signing this letter in the space provided below and returning a copy by fax to
the undersigned at 000-000-0000. Please note that, by signing this letter below,
you are indicating that you will hold and disburse the Wired Funds solely as
provided herein. In addition, please note that, notwithstanding the failure of
the Lender to receive a copy of this letter signed by you, your act of recording
any or all of the Mortgages or disbursing any or all of the Wired Funds shall
constitute evidence of your agreement to comply with the foregoing instructions.
(Title Company)
199
------------ --, -
Page 3
Should you have any questions regarding the above or receive
any contrary instructions from any other person, please do not hesitate to
contact the undersigned at 000-000-0000.
Very truly yours,
ALLEGIANCE CAPITAL, LLC
By:
Name:
Title:
Acknowledged and Agreed:
[TITLE COMPANY]
By:
Name:
Title:
[BORROWER]
By:
Name:
Title:
[ADDITIONAL CREDIT PARTIES]
EXHIBIT B
---------
to Trust Agreement
------------------
FORM OF INVESTMENT AND ASSUMPTION LETTER
----------------------------------------
ALLEGIANCE FUNDING CORP. I
REVOLVING CERTIFICATES, SERIES -1
------
Allegiance Funding Corp. I (the "Company")
0000 Xxxxxxxxxx Xxxxxx, Xxxxx 000X
Xxx Xxxxxxxxx, XX 00000
Manufacturers and Traders Trust Company
Xxx X & X Xxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000-0000
Ladies and Gentlemen:
Terms used herein and not otherwise defined shall have the meanings
given to them in the Trust Agreement, dated as of August 1, 1998, by and among
the Depositor, Point West Capital Corporation, as servicer, and Manufacturers
and Traders Trust Company, as trustee. The undersigned hereby certifies on
behalf of the Purchaser named below (the "Purchaser") as follows:
1. I, , am the chief financial officer, a person
--------------
fulfilling an equivalent function or other executive officer of the Purchaser.
[2. I am familiar with the provisions of Rule 144A ("Rule 144A")
under the Securities Act of 1933 (the "1933 Act").
(a) The Purchaser is a "qualified institutional buyer,"
as defined in Rule 144A.
(b) The Purchaser is aware that the Depositor may rely on the
exemption from the registration requirements of the 1933 Act provided
by Rule 144A.
(c) The Purchaser acknowledges that the Purchaser has (i)
received such information regarding the Allegiance Capital Trust I
Revolving Certificates, Series -1 Class Certificates,
---- ----------
Class Certificates, Class Certificates and Class
---------- ----------
Certificates (the "Certificates") as the Purchaser may
----------
require pursuant to Rule 144A or (ii) the Purchaser has determined not
to request such information.]
(2. I am familiar with the provisions of Regulation D under the
Securities Act of 1933 (the "1933 Act").
(a) The Purchaser is an "accredited investor" within the
meaning of Rule 501(a)(1), (2), (3), or (7) of Regulation D under the
1933 Act.
(b) In the normal course of the Purchaser's business the
Purchaser invests in or purchases securities similar to the
Certificates, has such knowledge and experience in financial and
business matters that the Purchaser is capable of evaluating the merits
and risks of its investment in the Certificates.
(c) The Purchaser is capable of bearing the economic
risks of an investment in the Certificates.)
3. The Purchaser is acquiring the Certificates for its own account or
the account of its affiliated entities for the purpose of investment or resale
under Rule 144A or any other exemption from registration available under the
1933 Act and not with a view to the distribution thereof.
4. The Purchaser understands that it is the expressed intent of the
Depositor that the Certificates are being issued only in transactions not
involving any public offering within the meaning of the 1933 Act and that the
Certificates will bear a legend substantially as set forth in the applicable
form of the Certificate attached to the Supplement to Trust Agreement.
5. The Purchaser has no present intention of selling, negotiating or
otherwise disposing of the Certificates (except pursuant to Rule 144A);
provided, that it is understood that the disposition of the Purchaser's property
shall at all times be and remain within its control and without prejudice,
subject however, to its right at all times to sell or otherwise dispose of all
or any part of the Certificates in accordance with the Trust Agreement under a
registration statement under the 1933 Act, or under the exemption from such
registration available under the 1933 Act.
6. The Purchaser represents to the Depositor that it is either (a) not
a "Benefit Plan Investor" (as defined in 29 C.F.R. '2510.3-101) or any person
who is directly or indirectly purchasing such Certificates or an interest
therein on behalf of, as named fiduciary of, as trustee of, or with assets of,
such a Benefit Plan Investor or (b) the Trustee has been provided with evidence
that should establish to the satisfaction of the Trustee that either no
"prohibited transaction" under ERISA or the Code will occur in connection with
the Purchaser's acquisition and holding of the Certificates or that the
acquisition and holding of the Certificates by the Purchaser is subject to a
statutory or administrative exemption.
7. The Purchaser represents to the Depositor that it is and will be the
beneficial owner of the Certificates for federal income tax purposes and (a)
that it is not classified as a partnership, grantor trust or S Corporation for
federal income tax purposes or (b) the value of the Certificates represents no
more than 50 percent (50%) of the value of its assets.1 The Purchaser further
covenants that it will not cause the Certificates to be marketed on or through
an established securities market within the meaning of Section 7704(b)(1) of the
Code and acknowledges that transfers of a Certificate (including the granting of
any participation therein) can only be effected in accordance with the Trust
Agreement, that any attempted
--------------------------
1 (Or describe other facts that, in conjunction with existing facts re:
current Holders, Maintains publicly traded partnership exemption.)
transfers in violation of such provisions shall be void and any such purported
transferee not recognized as by the Trust as a Holder for any purpose.
8. [The Purchaser acknowledges that no transfer can be made during the
Funding Period without the consent of the Depositor and hereby confirms it's
obligation to make Fundings in accordance with Article Four of the Trust
Agreement, and of the Certificate Purchase Agreement, dated ,
-------- ----------
among the Depositor and the initial purchaser named therein, as if such
Purchaser were an original party to such agreement.)2
The representations and warranties contained herein shall be binding
upon the heirs, executors, administrators and other successors of the
undersigned. If there is more than one signatory hereto, the obligations,
representations, warranties and agreements of the undersigned are made jointly
and severally.
---------------------
2 Required for transfers during the related Funding Period.
Executed at , this
----------------------- ------------------- -----
day of , 199
------------ -
-------------------------------- ------------------------------
Purchaser's Name and Title (Print) Signature of Purchaser
---------------------------------
Address of Purchaser
---------------------------------
Purchaser's Taxpayer Identification or
Social Security number
(Acknowledged and consented to:
--------------------------
Depositor]3
--------------------------
3 Required for transfers during the related Funding Period.
EXHIBIT C
---------
to Trust Agreement
------------------
FORM OF AFI CERTIFICATE
, 19
--------------- --
Pursuant to the Trust Agreement, dated as of August 1, 1998 (as amended
or modified from time to time, the "Trust Agreement"), among Allegiance Funding
Corp. I, Manufacturers and Traders Trust Company and Point West Capital
Corporation, attached hereto as Schedule I is a Loan Schedule, which includes
information regarding the Loan Assets that are hereby assigned, set over,
transferred, delivered and otherwise conveyed by the Depositor to the Trustee in
accordance with the Trust Agreement. Each capitalized term used herein and not
otherwise defined has the meaning assigned thereto in the Trust Agreement.
Further, Allegiance Funding Corp. I hereby certifies:
1. no Default (other than a Servicing Advisor Default), Depositor
Event of Default, Servicer Event of Default, Special Servicer
Event of Default, Servicing Advisor Event of Default or
Funding Termination Event exists or shall result from the
Funding;
2. the Loans to be funded are Eligible Loans and do not cause the
Loan Pool to violate the Pool Criteria;
3. after giving effect to such Funding, the applicable Maximum
Series Amount shall not be exceeded;
4. if any Funded Loan is subject to Existing Indebtedness, the
Depositor will use the proceeds of the Funding to repay the
Existing Indebtedness and will obtain a release and
extinguishment of rights from the obligee of such Existing
Indebtedness;
5. the Funding is at least equal to the Minimum Funding Amount
for Series or Class, as applicable;
6. both before and after giving effect to such Funding, the Pool
Performance Condition is met; and
7. it is not aware of any proposed or threatened downgrade in the
credit rating of any Rated Certificate.
C-1
ALLEGIANCE FUNDING CORP. I
By:
----------------------------
Name:
----------------------------
Title:
----------------------------
MANUFACTURERS AND TRADERS
TRUST COMPANY, as Trustee
By:
----------------------------
Name:
----------------------------
Title:
----------------------------
C-2
SCHEDULE I
LOAN SCHEDULE
C-3
EXHIBIT D
---------
to Trust Agreement
------------------
FORM OF FUNDING REPORT
SERIES 19 -
-- -
Depositor: Allegiance Funding Corp. I
Funding Date:
----------------
Determination Date:
----------------
Class ___ Maximum Series Amount:
----------------
[Class ___ Maximum Series Amount: ]
----------------
Class ___ Minimum Funding Amount:
----------------
[Class ___ Minimum Funding Amount: ]
----------------
Class ___ Funding Amount:
----------------
[Class ___ Funding Amount: ]
----------------
Please see Schedule I attached hereto.
[With final Funding Report:
A. Please see AFI Certificate attached hereto as Schedule II.
B. Please see Company Certificate attached hereto as Schedule III.]
ALLEGIANCE FUNDING CORP.
Name:
------------------------
Title:
------------------------
Date:
------------------------
Acknowledged and Approved:
[CERTIFICATEHOLDER AGENT]
Name:
------------------------
Title:
------------------------
Date:
------------------------
D-1
SCHEDULE I to EXHIBIT D to
TRUST AGREEMENT
Exceptions to and deviations from the Standard Forms:
Loan No. :
---
Loan No. :
---
Loan No. :
---
Exceptions to and deviations from the Program Guidelines:
Loan No. :
---
Loan No. :
---
Loan No. :
---
Updated Pool concentrations reflecting compliance with (or exceptions to) the
Pool Criteria:
D-2
