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EXHIBIT 4.3
FORM OF SURETY BOND
[DATE]
SURETY BOND NO. SB _____
RE: NATIONSCREDIT GRANTOR TRUST 1997-2 (THE "TRUST")
$________________ ___% MARINE RECEIVABLE-BACKED
CERTIFICATES, (THE "MARINE CERTIFICATES") AND
$________________ ___% RV RECEIVABLE-BACKED
CERTIFICATES, (THE "RV CERTIFICATES") (THE MARINE
CERTIFICATES AND THE RV CERTIFICATES ARE
SOMETIMES COLLECTIVELY REFERRED TO HEREIN AS THE
"CERTIFICATES").
INSURED OBLIGATION OBLIGATION OF THE TRUST TO PAY INTEREST ON AND
PRINCIPAL OF THE CERTIFICATES AND THE MONTHLY
SERVICING FEE IN THE EVENT NATIONSCREDIT
COMMERCIAL CORPORATION OF AMERICA OR AN AFFILIATE
THEREOF IS NOT THE SERVICER.
BENEFICIARY BANKERS TRUST COMPANY, AS TRUSTEE OF THE TRUST,
TOGETHER WITH ANY SUCCESSOR TRUSTEE DULY
QUALIFIED UNDER THE POOLING AND SERVICING
AGREEMENT (AS DEFINED HEREIN) (THE "TRUSTEE"),
FOR THE BENEFIT OF THE HOLDERS OF THE
CERTIFICATES.
CAPITAL MARKETS ASSURANCE CORPORATION ("CapMAC"), for consideration
received and subject to the terms of this surety bond (the "Surety Bond"), does
hereby unconditionally and irrevocably guarantee to the Beneficiary, payment of
the Insured Obligation. CapMAC agrees to pay to the Beneficiary, in respect of
each Distribution Date, an amount equal to the sum of (A) the amount, if and,
by which (i) the Marine Priority Distributions exceeds (ii) the sum of the
Marine Available Funds, the amount on deposit in the Marine Reserve Account on
such Distribution Date, the amount of any distribution to be made from the RV
Certificate Account on such Distribution Date in respect of Marine Priority
Distributions, and the amount on deposit in the RV Reserve Account (after
giving effect to any Marine Reserve Account Cross Collateral Withdrawal
Amount), provided, however, that in no event shall the aggregate amount of
payments made under this clause (A) in respect of principal of the Marine
Certificates exceed the Marine Insured Principal Amount, plus (B) the amount,
if and, by which (i) the RV Priority Distributions exceeds (ii) the sums of RV
Available Funds, the amount on deposit in the RV Reserve Account on such
Distribution Date, the amount of any distribution to be made from the Marine
Certificate Account on such Distribution Date in respect of RV Priority
Distributions, and the amount on deposit in the Marine Reserve Account (after
giving effect to any RV Reserve Account Cross Collateral Withdrawal Amount),
provided, however, that in no event shall the aggregate amount of payments made
under this clause (B) in respect of principal of the RV Certificates exceed the
RV Insured Principal Amount.
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Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to them in the Pooling and Servicing Agreement dated as
of ________, 1997 (the "Pooling and Servicing Agreement") by and among
NationsCredit Securitization Corporation, as "Depositor", NationsCredit
Commercial Corporation of America, as "Servicer", the Trustee and the
Collateral Agent.
"Marine Insured Principal Amount" means $_______________.
"RV Insured Principal Amount" means $_______________.
CapMAC will pay or cause to be paid to the Beneficiary, irrevocably and
unconditionally and without the prior assertion of any defenses to payment,
including fraud in inducement or fact, the amount demanded in a Notice for
Payment in the form of Exhibit A hereto ("Notice for Payment") appropriately
completed and executed by the Beneficiary, not to exceed the sum of the amount
calculated pursuant to the first paragraph of this Surety Bond for the
Distribution Date relating to the Notice for Payment, in immediately available
funds on the later of (a) 11:00 a.m. New York City time on the second Business
Day following Receipt of such Notice for Payment and (b) 11:00 a.m. New York
City time on the Business Day preceding the related Distribution Date.
A Notice for Payment under this Surety Bond must be received by CapMAC by
2:00 p.m. New York City time on any Business Day by (i) delivery of the
original Notice for Payment to CapMAC at its address set forth below, or (ii)
facsimile transmission of the original Notice for Payment to CapMAC at its
facsimile number set forth below. If presentation is made by facsimile
transmission, the Beneficiary shall (i) simultaneously confirm transmission by
telephone to CapMAC at its telephone number set forth below, and (ii) as soon
as reasonably practicable, deliver the original Notice for Payment to CapMAC at
its address set forth below.
The terms "Receipt" and "Received" with respect to the Surety Bond, mean
actual delivery to CapMAC, prior to 2:00 p.m., New York City time, on a
Business Day; delivery either on a day that is not a Business Day or after 2:00
p.m., New York City time, shall be deemed to be Received on the next succeeding
Business Day.
Subject to the foregoing, if any payments guaranteed by the first
paragraph above or any portion thereof are voided (a "Preference Event")
pursuant to a final and non-appealable order under any applicable bankruptcy,
insolvency, receivership or similar law in an Insolvency Proceeding (as defined
herein), and, if as a result of such a Preference Event, the Beneficiary is
required to return such voided payment, or any portion of such voided payment,
made in respect of the Certificates (the "Avoided Payment"), CapMAC will pay on
the guarantee described in the first paragraph hereof, an amount equal to such
Avoided Payment, irrevocably, absolutely and unconditionally and without the
assertion of any defenses to payment, including fraud in the inducement or fact
or any other circumstances that would have the effect of discharging a surety
in law or in equity, upon receipt by CapMAC from the Beneficiary of (x) a
certified copy of a final order of a court exercising jurisdiction in such
Insolvency Proceeding to the effect that the Beneficiary is required to return
any such payment or portion thereof prior to the Surety Bond
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Termination Date (as defined below) because such payment was voided under
applicable law with respect to which order the appeal period has expired
without an appeal having been filed (the "Final Order") (y) an assignment in
form reasonably satisfactory to CapMAC, irrevocably assigning to CapMAC all
rights and claims of such Beneficiary relating to or arising under such Avoided
Payment and (z) a Notice for Payment in form of Exhibit A hereto appropriately
completed and executed by the Trustee. Such payment shall be disbursed to the
receiver, conservator, debtor-in-possession or trustee in bankruptcy named in
the Final Order and not to the Beneficiary directly.
Notwithstanding the foregoing, in no event shall CapMAC be obligated to
make any payment in respect of any Avoided Payment, which payment represents a
payment of principal amount of the Certificates, prior to the time CapMAC would
have been required to make a payment in respect of principal pursuant to the
first paragraph hereof.
CapMAC shall make payments due in respect of Avoided Payments prior to
1:00 p.m., New York City time on the second Business Day following CapMAC's
Receipt of the documents required under clauses (x) through (z) of the second
preceding paragraph.
Under the Surety Bond, "Business Day" means any day other than (i) a
Saturday or Sunday or (ii) a day on which banking institutions in the City of
New York, New York and the State of Georgia are authorized or obligated by law
or executive order to be closed.
"Insolvency Proceeding" means the commencement, after the Closing Date,
of any bankruptcy, insolvency, readjustment of debt, reorganization, marshaling
of assets and liabilities or similar proceedings by or against any Person, or
the commencement, after the Closing Date, of any proceedings by or against any
Person for the winding up or liquidation of its affairs, or the consent after
the date hereof to the appointment of a trustee, conservator, receiver or
liquidator in any bankruptcy, insolvency, readjustment of debt, reorganization,
marshaling of assets and liabilities or similar proceedings of or relating to
any Person.
CapMAC hereby waives and agrees not to assert any and all rights to
require the Beneficiary to make demand on or to proceed against any person,
party or security prior to demanding payment under this Surety Bond.
No defenses, set-offs and counterclaims of any kind available to CapMAC
so as to deny payment of any amount due in respect of this Surety Bond will be
valid and CapMAC hereby waives and agrees not to assert any and all such
defenses, set-offs and counterclaims, including, without limitation, any such
rights acquired by subrogation, assignment or otherwise.
Any rights of subrogation acquired by CapMAC as a result of any payment
made under this Surety Bond shall, in all respects, be subordinate and junior
in right of payment to the prior indefeasible payment in full of all amounts
due the Trustee on account of payments due under the Certificates.
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This Surety Bond is neither transferable nor assignable except, in whole
but not in part, to a successor Trustee duly appointed and qualified under the
Pooling and Servicing Agreement. Such transfer and assignment shall be
effective upon receipt by CapMAC of a copy of the instrument effecting such
transfer and assignment signed by the transferor and the transferee, and a
certificate, properly completed and signed by the transferor and the
transferee, in the form of Exhibit B hereto (which shall be conclusive evidence
of such transfer and assignment) and, in such case, the transferee instead of
the transferor shall, without the necessity of further action, be entitled to
all the benefits of and rights under this Surety Bond in the transferor's
place, provided that, in such case, the Notice for Payment presented hereunder
shall be a certificate of the transferee and shall be signed by one who states
therein that he is a duly authorized officer of the transferee.
All notices, presentations, transmissions, deliveries and communications
made by the Beneficiary to CapMAC with respect to this Surety Bond shall
specifically refer to the number of this Surety Bond and shall be made to
CapMAC at:
Capital Markets Assurance Corporation
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Managing Director,
Credit Enhancement
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or such other address, officer, telephone number or facsimile number as CapMAC
may designate to the Beneficiary in writing from time to time. Each such
notice, presentation, delivery and communication shall be effective only upon
actual receipt by CapMAC.
The obligations of CapMAC under this Surety Bond are irrevocable,
primary, absolute and unconditional (except as expressly provided herein) and
neither the failure of the Trustee, the Depositor, the Servicer or any other
person, to perform any covenant or obligation in favor of CapMAC (or
otherwise), nor the failure or omission to make a demand permitted hereunder,
nor the commencement of any bankruptcy, debtor or other insolvency proceeding
by or against the Trustee, the Depositor, the Servicer or any other person
shall in any way affect or limit CapMAC's obligations under this Surety Bond.
If an action or proceeding to enforce this Surety Bond is brought, the
Beneficiary shall be entitled to recover from CapMAC costs and expenses
reasonably incurred, including without limitation reasonable fees and expenses
of counsel.
There shall be no acceleration payment due under this Surety Bond unless
such acceleration is at the sole option of CapMAC.
The obligations of CapMAC hereunder with respect to the Marine
Certificates shall terminate upon the payment in full of all amounts payable to
the Holders of the Marine Certificates. The obligations of CapMAC hereunder
with respect to the RV Certificates shall terminate upon the payment in full of
all amounts payable to the Holders of the RV Certificates.
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This Surety Bond shall terminate on the earlier to occur of (a) the termination
of the obligations of CapMAC hereunder with respect to the Marine Certificates
and the RV Certificates in accordance with the foregoing two sentences and (b)
the date that CapMAC receives written notice from the Trustee, substantially in
the form of Exhibit C hereto, stating that the termination of the Trust has
occurred (the "Surety Bond Termination Date").
This Surety Bond shall be returned to CapMAC on the Surety Bond
Termination Date.
THIS SURETY BOND IS NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE FUND
SPECIFIED IN ARTICLE SEVENTY-SIX OF THE NEW YORK STATE INSURANCE LAW.
This Surety Bond sets forth in full the undertaking of CapMAC, and shall
not be modified, altered or affected by any other agreement or instrument,
including any modification or amendment to any other agreement or instrument,
or by the merger, consolidation or dissolution of the Trust or any other Person
and may not be canceled or revoked prior to the time it is terminated in
accordance with the express terms hereof.
THE SURETY BOND SHALL BE CONSTRUED, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED, IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES OR
THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.
IN WITNESS WHEREOF, XxxXXX has caused this Surety Bond to be executed on
the date first written above.
CAPITAL MARKETS ASSURANCE CORPORATION
By:
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Name:
Title:
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EXHIBIT A TO SURETY BOND NO.___________
Capital Markets Assurance Corporation
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Managing Director,
Credit Enhancement
NOTICE FOR PAYMENT
UNDER SURETY BOND NO. _________
The undersigned individual, a duly authorized officer of , as Trustee (the
"Trustee"), hereby certifies to Capital Markets Assurance Corporation
("CapMAC"), with reference to the Surety Bond dated ____________, 1997 (the
"Surety Bond"), as follows:
1. The Trustee is the Trustee under the Pooling and Servicing Agreement,
dated as of ________________, 1997, by and among NationsCredit Securitization
Corporation, as depositor, NationsCredit Commercial Corporation of America as
servicer, and the Trustee (the "Pooling and Servicing Agreement") and the
Beneficiary under the Surety Bond.
2. The Trustee is entitled to make a demand under the Surety Bond
pursuant to the provisions of the Pooling and Servicing Agreement.
[For a Notice for Payment in respect of a Distribution Date use the
following paragraphs 3, 4 and 5].
3. This notice relates to the [insert date] Distribution Date.
4. The Beneficiary demands payment of $, which is the amount calculated
pursuant to clauses (A) and (B) of the first paragraph of the Surety Bond for
such Distribution Date. Such amount is the amount the Trustee is entitled to
demand pursuant to the Pooling and Servicing Agreement.
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5. The amount demanded is to be paid in immediately available funds to
____________________ Account No. ___________________.
[For a Notice for Payment in respect of an Avoided Payment use the
following paragraphs 3 and 4].
3. The Trustee hereby represents and warrants, based upon information
available to it, that (i) the amount entitled to be drawn under the Surety Bond
on the date hereof in respect of Avoided Payments is the amount paid or to be
paid simultaneously with such draw on the Surety Bond, by all
Certificateholders on account of a Preference Event [$] (the "Avoided Payment
Amount"), (ii) each Certificateholder with respect to which the drawing is
being made under the Surety Bond has paid or simultaneously with such draw on
the Surety Bond will pay such Avoided Payment, and (iii) the documents required
by the Surety Bond to be delivered in connection with such Avoided Payment and
Avoided Payment Amount have previously been presented to CapMAC or are attached
hereto.
4. The amount demanded is to be paid in immediately available funds to
____________________ Acct. No. ___________________.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement and the Surety
Bond, as the case may be.
IN WITNESS WHEREOF, this notice has been executed this ____________ day of
____________________, ______.
___________________, as Trustee
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Name:
Title:
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EXHIBIT B TO SURETY BOND NO. _____________
Capital Markets Assurance Corporation
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Managing Director,
Credit Enhancement
Dear Sirs:
Reference is made to that certain Surety Bond No. _______ dated
____________, 1997 (the "Surety Bond") which has been issued by Capital Markets
Assurance Corporation in favor of ______________________________, as Trustee.
The undersigned [Name of Transferor] has transferred and assigned (and
hereby confirms to you said transfer and assignment) all of its rights in and
under said Surety Bond to [Name of Transferee] and confirms that [Name of
Transferor] no longer has any rights under or interest in said Surety Bond.
Transferor and Transferee have indicated on the face of said Surety
Bond that it has been transferred and assigned to Transferee.
Transferee hereby certifies that it is a duly authorized transferee
under the terms of said Xxxxxx Bond and is accordingly entitled, upon
presentation of the document(s) called for therein, to receive payment
thereunder.
[Name of Transferor]
By:
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[Name and Title of Authorized Officer of Transferor]
[Name of Transferee]
By:
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[Name and Title of Authorized Officer of Transferee]
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EXHIBIT C TO SURETY BOND NO. _____________
Capital Markets Assurance Corporation
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Managing Director,
Credit Enhancement
Dear Sirs:
Reference is made to that certain Surety Bond No. __________ dated
_________, 1997 which has been issued by Capital Markets Assurance Corporation
in favor of __________________________, as Trustee.
The undersigned hereby certifies and confirms that the Trust has
terminated in accordance with the terms of the Pooling and Servicing Agreement
and the date of such termination has occurred on __________________________.
The original of the Surety Bond is enclosed herewith.
[Name of Trustee or Transferee]
By:
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Name:
Title:
