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EXHIBIT 4.1
INDENTURE
BETWEEN
FUND AMERICA INVESTORS TRUST 1997-NMC1,
AS ISSUER,
AND
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
AS INDENTURE TRUSTEE
Dated as of September 1, 1997
Relating to
FUND AMERICA INVESTORS TRUST 1997-NMC1
COLLATERALIZED MORTGAGE OBLIGATIONS, SERIES 1997-NMC1
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.............................................................................................2
Section 1.01. General Definitions.......................................................................2
ARTICLE II THE BONDS.............................................................................................20
Section 2.01. Forms Generally..........................................................................20
Section 2.02. Forms of Certificate of Authentication...................................................20
Section 2.03. General Provisions With Respect to Principal and Interest Payments.......................20
Section 2.04. Denominations............................................................................21
Section 2.05. Execution, Authentication, Delivery and Dating...........................................21
Section 2.06. Registration, Registration of Transfer and Exchange......................................21
Section 2.07. Mutilated, Destroyed, Lost or Stolen Bonds...............................................22
Section 2.08. Payments of Principal and Interest.......................................................23
Section 2.09. Persons Deemed Owners....................................................................24
Section 2.10. Cancellation.............................................................................24
Section 2.11. Authentication and Delivery of Bonds.....................................................24
Section 2.12. Book-Entry Bonds.........................................................................26
Section 2.13. Termination of Book Entry System.........................................................26
ARTICLE III COVENANTS............................................................................................27
Section 3.01. Payment of Bonds.........................................................................27
Section 3.02. Maintenance of Office or Agency..........................................................27
Section 3.03. Money for Bond Payments to Be Held In Trust..............................................27
Section 3.04. Existence of Issuer......................................................................28
Section 3.05. Protection of Trust Estate...............................................................29
Section 3.06. Opinions as to Trust Estate..............................................................30
Section 3.07. Performance of Obligations; Servicing Agreement..........................................30
Section 3.08. Investment Company Act...................................................................30
Section 3.09. Negative Covenants.......................................................................30
Section 3.10. Annual Statement as to Compliance........................................................31
Section 3.11. Restricted Payments......................................................................31
Section 3.12. Treatment of Bonds as Debt for Tax Purposes..............................................31
Section 3.13. Notice of Events of Default..............................................................32
Section 3.14. Further Instruments and Acts.............................................................32
ARTICLE IV SATISFACTION AND DISCHARGE............................................................................32
Section 4.01. Satisfaction and Discharge of Indenture..................................................32
Section 4.02. Application of Trust Money...............................................................33
ARTICLE V DEFAULTS AND REMEDIES..................................................................................33
Section 5.01. Event of Default.........................................................................33
Section 5.02. Acceleration of Maturity; Rescission and Annulment.......................................34
Section 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee................35
Section 5.04. Remedies.................................................................................35
Section 5.05. Indenture Trustee May File Proofs of Claim...............................................36
Section 5.06. Indenture Trustee May Enforce Claims Without Possession of Bonds.........................36
Section 5.07. Application of Money Collected...........................................................36
Section 5.08. Limitation on Suits......................................................................37
Section 5.09. Unconditional Rights of Bondholders to Receive Principal and Interest....................38
Section 5.10. Restoration of Rights and Remedies.......................................................38
Section 5.11. Rights and Remedies Cumulative...........................................................38
Section 5.12. Delay or Omission Not Waiver.............................................................38
Section 5.13. Control by Bondholders...................................................................38
Section 5.14. Waiver of Past Defaults..................................................................39
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Section 5.15. Undertaking for Costs....................................................................39
Section 5.16. Waiver of Stay or Extension Laws.........................................................39
Section 5.17. Sale of Trust Estate.....................................................................39
Section 5.18. Action on Bonds..........................................................................41
Section 5.19. No Recourse to Other Trust Estates or Other Assets of the Issuer.........................41
Section 5.20. Application of the Trust Indenture Act...................................................41
ARTICLE VI THE INDENTURE TRUSTEE.................................................................................41
Section 6.01. Duties of Indenture Trustee..............................................................41
Section 6.02. Notice of Default........................................................................42
Section 6.03. Rights of Indenture Trustee..............................................................42
Section 6.04. Not Responsible for Recitals or Issuance of Bonds........................................43
Section 6.05. May Hold Bonds...........................................................................43
Section 6.06. Money Held in Trust......................................................................43
Section 6.07. Eligibility; Disqualification............................................................43
Section 6.08. Indenture Trustee's Capital and Surplus..................................................43
Section 6.09. Resignation and Removal; Appointment of Successor........................................44
Section 6.10. Acceptance of Appointment by Successor...................................................45
Section 6.11. Merger, Conversion, Consolidation or Succession to Business of Indenture Trustee.........45
Section 6.12. Preferential Collection of Claims Against Issuer.........................................45
Section 6.13. Co-Indenture Trustees and Separate Indenture Trustees....................................45
Section 6.14. Authenticating Agents....................................................................46
Section 6.15. Review of Mortgage Files.................................................................47
Section 6.16. Indenture Trustee Fees and Expenses......................................................49
ARTICLE VII BONDHOLDERS' LISTS AND REPORTS.......................................................................49
Section 7.01. Issuer to Furnish Indenture Trustee Names and Addresses of Bondholders...................49
Section 7.02. Preservation of Information; Communications to Bondholders...............................49
Section 7.03. Reports by Indenture Trustee.............................................................49
Section 7.04. Reports by Issuer........................................................................50
ARTICLE VIII ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES..........................................50
Section 8.01. Collection of Moneys.....................................................................50
Section 8.02. Bond Account.............................................................................51
Section 8.03. Claims against the MBIA Insurance Policy..................................................52
Section 8.04. General Provisions Regarding the Indenture Accounts and Mortgage Loans...................53
Section 8.05. Releases of Defective Mortgage Loans.....................................................54
Section 8.06. Reports by Indenture Trustee to Bondholders; Access to Certain Information...............54
Section 8.07. Trust Estate Mortgage Files..............................................................55
Section 8.08. Amendment to Servicing Agreement.........................................................55
Section 8.09. Delivery of the Mortgage Files Pursuant to Servicing Agreement...........................55
Section 8.10. Servicer as Agent........................................................................55
Section 8.11. Termination of Servicer..................................................................55
Section 8.12. Opinion of Counsel.......................................................................56
Section 8.13. Appointment of Custodians................................................................56
Section 8.14. Rights of the Bond Insurer to Exercise Rights of Bondholders.............................56
Section 8.15. Trust Estate and Accounts Held for Benefit of the Bond Insurer...........................57
ARTICLE IX SUPPLEMENTAL INDENTURES...............................................................................57
Section 9.01. Supplemental Indentures Without Consent of Bondholders...................................57
Section 9.02. Supplemental Indentures With Consent of Bondholders......................................58
Section 9.03. Execution of Supplemental Indentures.....................................................59
Section 9.04. Effect of Supplemental Indentures........................................................59
Section 9.05. Conformity With Trust Indenture Act......................................................59
Section 9.06. Reference in Bonds to Supplemental Indentures............................................59
Section 9.07. Amendments to Governing Documents........................................................59
ARTICLE X REDEMPTION OF BONDS....................................................................................60
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Section 10.01. Redemption..............................................................................60
Section 10.02. Form of Redemption Notice...............................................................60
Section 10.03. Bonds Payable on Optional Redemption....................................................61
ARTICLE XI MISCELLANEOUS.........................................................................................61
Section 11.01. Compliance Certificates and Opinions....................................................61
Section 11.02. Form of Documents Delivered to Indenture Trustee........................................61
Section 11.03. Acts of Bondholders.....................................................................62
Section 11.04. Notices, etc. to Indenture Trustee, the Bond Insurer and Issuer.........................63
Section 11.05. Notices and Reports to Bondholders; Waiver of Notices...................................64
Section 11.06. Rules by Indenture Trustee..............................................................64
Section 11.07. Conflict With Trust Indenture Act.......................................................64
Section 11.08. Effect of Headings and Table of Contents................................................64
Section 11.09. Successors and Assigns..................................................................64
Section 11.10. Separability............................................................................64
Section 11.11. Benefits of Indenture...................................................................64
Section 11.12. Legal Holidays..........................................................................65
Section 11.13. Governing Law...........................................................................65
Section 11.14. Counterparts............................................................................65
Section 11.15. Recording of Indenture..................................................................65
Section 11.16. Issuer Obligation.......................................................................65
Section 11.17 No Petition.............................................................................65
Section 11.18. Inspection..............................................................................66
Section 11.19. Usury...................................................................................66
Section 11.20. Third Party Beneficiary.................................................................66
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SCHEDULES AND EXHIBITS
Schedule I Mortgage Loan Schedule
Exhibit A Form of Bond
Exhibit B Mortgage Loan Sale Agreement
Exhibit C Mortgage Loan Contribution Agreement
Exhibit D Letter of Representations to The Depository Trust Company
Exhibit E-1 Form of Indenture Trustee's Initial Certification
Exhibit E-2 Form of Indenture Trustee's Final Certification
Exhibit F MBIA Insurance Policy
Exhibit G Form of Notice of Claim
Exhibit H Servicing Agreement
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CROSS-REFERENCE TABLE
Cross-reference sheet showing the location in the Indenture of the
provisions inserted pursuant to Sections 310 through 318(a) inclusive of the
Trust Indenture Act of 1939.*
Trust Indenture Act of 1939 Indenture Section
--------------------------- -----------------
Section 310
(a)(1)................................................................... 6.07
(a)(2)................................................................... 6.07, 6.08
(a)(3)................................................................... 6.13
(a)(4)................................................................... Not Applicable
(a)(5)................................................................... 6.07
(b)...................................................................... 6.07, 6.09
(c)...................................................................... Not Applicable
Section 311
(a)...................................................................... 6.12
(b)...................................................................... 6.12
(c)...................................................................... Not Applicable
Section 312
(a)...................................................................... 7.01(a), 7.02(a)
(b)...................................................................... 7.02(b)
(c)...................................................................... 7.02(c)
Section 313
(a)...................................................................... 7.03(a)
(b)...................................................................... 7.03(a)
(c)...................................................................... 11.05
(d)...................................................................... 7.03(b)
Section 314
(a)(1)................................................................... 7.04
(a)(2)................................................................... 7.04
(a)(3)................................................................... 7.04
(a)(4)................................................................... 7.04
(b)(1)................................................................... 2.11(c), 11.01
(b)(2)................................................................... 3.06
(c)(1)................................................................... 2.11(d), 4.01,
8.02(d), 11.01
(c)(2)................................................................... 2.11(c), 4.01,
8.02(d), 11.01
(c)(3)................................................................... 8.02(d)
(d)(1)................................................................... 11.01(a)
(d)(2)................................................................... 11.01(a)
(d)(3)................................................................... 11.01(a)
(e)...................................................................... 11.01(b)
Section 315
(a)...................................................................... 6.01(b), 6.01(c)(1)
(b)...................................................................... 6.02, 11.05
(c)...................................................................... 6.01(a)
(d)(1)................................................................... 6.01(b), 6.01(c)
(d)(2)................................................................... 6.01(c)(2)
-------------------------
*This Cross-Reference Table is not part of the Indebture.
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(d)(3)................................................................... 6.01(c)(3)
(e)...................................................................... 5.15
Section 316
(a)...................................................................... 5.20
(b)...................................................................... 5.09
(c)...................................................................... 5.20
Section 317
(a)(1)................................................................... 5.03
(a)(2)................................................................... 5.05
(b)...................................................................... 3.03
Section 318
(a)...................................................................... 11.07
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THIS INDENTURE, dated as of September 1, 1997 (as amended or
supplemented from time to time as permitted hereby, this "Indenture"), is
between FUND AMERICA INVESTORS TRUST 1997-NMC1, a Delaware business trust
(together with its permitted successors and assigns, the "Issuer") and NORWEST
BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking association, as trustee
(together with its permitted successors in the trusts hereunder, the "Indenture
Trustee").
PRELIMINARY STATEMENT
The Issuer has duly authorized the execution and delivery of this
Indenture to provide for its Collateralized Mortgage Obligations, Series
1997-NMC1 (the "Bonds"), issuable as provided in this Indenture. All covenants
and agreements made by the Issuer herein are for the benefit and security of the
Holders of the Bonds and the Bond Insurer. The Issuer is entering into this
Indenture, and the Indenture Trustee is accepting the trusts created hereby, for
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged.
All things necessary to make this Indenture a valid agreement of the
Issuer in accordance with its terms have been done.
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee, for the exclusive
benefit of the Holders of the Bonds and the Bond Insurer, all of the Issuer's
right, title and interest in and to (a) the Mortgage Loans listed in Schedule I
to this Indenture (including property that secures a Mortgage Loan that becomes
an REO Property), including the related Mortgage Files delivered or to be
delivered to the Indenture Trustee pursuant to the Mortgage Loan Sale Agreement,
all payments of principal received, collected or otherwise recovered after the
applicable Cut-off Date for each Mortgage Loan, all payments of interest
accruing on each Mortgage Loan after the applicable Cut-off Date therefor
whenever received and all other proceeds received in respect of such Mortgage
Loans, and any Qualified Replacement Mortgage Loan, (b) the MBIA Insurance
Policy, (c) the Servicing Agreement, (d) the Mortgage Loan Sale Agreement, (e)
the Mortgage Loan Contribution Agreement, (f) the Management Agreement, (g) the
Insurance Policies, (h) all cash, instruments or other property held or required
to be deposited in the Collection Account and the Bond Account, including all
investments made with funds in such accounts (but not including any income on
funds deposited in, or investments made with funds deposited in, the Collection
Account, which income shall belong to and be for the account of the Servicer,
and not including any income on funds deposited in, or investments made with
funds deposited in the Bond Account, which income shall belong to and be for the
account of the Indenture Trustee), (i) all proceeds of the conversion, voluntary
or involuntary, of any of the foregoing into cash or other liquid assets,
including, without limitation, all insurance proceeds and condemnation awards.
Such Grants are made, however, in trust, to secure the Bonds equally and ratably
without prejudice, priority or distinction between any Bond and any other Bond
by reason of difference in time of issuance or otherwise, and for the benefit of
the Bond Insurer to secure (x) the payment of all amounts due on the Bonds in
accordance with their terms, (y) the payment of all other sums payable under
this Indenture and (z) compliance with the provisions of this Indenture, all as
provided in this Indenture. All terms used in the foregoing granting clauses
that are defined in Section 1.01 are used with the meanings given in said
Section.
The Indenture Trustee acknowledges such Grant, accepts the trusts
hereunder in accordance with the provisions of this Indenture and agrees to
perform the duties herein required to the end that the interests of the Holders
of the Bonds may be adequately and effectively protected. The Indenture Trustee
agrees that it will hold the MBIA Insurance Policy in trust and that it will
hold any proceeds of any claim upon the MBIA Insurance Policy, solely for the
use and benefit of the Bondholders in accordance with the terms hereof and the
MBIA Insurance Policy.
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ARTICLE I
DEFINITIONS
SECTION 1.01. GENERAL DEFINITIONS.
Except as otherwise specified or as the context may otherwise require,
the following terms have the respective meanings set forth below for all
purposes of this Indenture, and the definitions of such terms are applicable to
the singular as well as to the plural forms of such terms and to the masculine
as well as to the feminine genders of such terms. Whenever reference is made
herein to an Event of Default or a Default known to the Indenture Trustee or of
which the Indenture Trustee has notice or knowledge, such reference shall be
construed to refer only to an Event of Default or Default of which the Indenture
Trustee is deemed to have notice or knowledge pursuant to Section 6.01(d). All
other terms used herein that are defined in the Trust Indenture Act (as
hereinafter defined), either directly or by reference therein, have the meanings
assigned to them therein.
"ACCOUNTANT": A Person engaged in the practice of accounting who
(except when this Indenture provides that an Accountant must be Independent) may
be employed by or affiliated with the Issuer or an Affiliate of the Issuer.
"ACT": With respect to any Bondholder, as defined in Section 11.03.
"ADMINISTRATIVE FEE AMOUNT": For any Payment Date, the sum of the
Monthly Servicing Fee, the Indenture Trustee's Fee and the Bond Insurer Premium,
each relating to such Payment Date.
"AFFILIATE": With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract, relation to individuals or otherwise, and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"AGENT": Any Bond Registrar, Paying Agent, Authenticating Agent or
Custodian.
"AGGREGATE PRINCIPAL BALANCE": With respect to any Payment Date, the
aggregate of the Principal Balances of the Mortgage Loans as of the related
Determination Date (or other specified date).
"ASSIGNMENTS": Collectively (i) the original instrument of assignment
of a Mortgage, including any interim assignments, from the originator or any
other holder of any Mortgage Loan to the Indenture Trustee (that in each case
may, to the extent permitted by the laws of the state in which the related
Mortgaged Property is located, be a blanket instrument of assignment covering
other Mortgages and Mortgage Notes as well and that may also be an instrument of
assignment running directly from the mortgagee of record under the related
Mortgage to the Indenture Trustee).
"AUTHENTICATING AGENT": The Person, if any, appointed as Authenticating
Agent by the Issuer pursuant to Section 6.14, until any successor Authenticating
Agent for the Bonds is named, and thereafter "Authenticating Agent" shall mean
such successor. The initial Authenticating Agent shall be the Indenture Trustee.
Any Authenticating Agent other than the Indenture Trustee shall sign an
instrument under which it agrees to be bound by all of the terms of this
Indenture applicable to the Authenticating Agent.
"AUTHORIZED OFFICER": With respect to the Indenture Trustee, any
Responsible Officer and with respect to any other Person, the Chairman, Chief
Operating Officer, President or any Vice President of such Person.
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"AVAILABLE FUNDS": With respect to the Bonds and any Payment Date, the
sum of the amounts described in clauses (a) through (g) below, less (i) the
Administrative Fee Amount in respect of such Payment Date, (ii)Monthly Advances
and Servicing Advances previously made that are reimbursable to the Servicer
(other than those included in liquidation expenses for any Liquidated Mortgage
Loan and reimbursed from the related Liquidation Proceeds) with respect to the
related Collection Period to the extent permitted by the Servicing Agreement and
(iii) the aggregate amounts (A)deposited into the Collection Account or Bond
Account that may not be withdrawn therefrom pursuant to a final and
nonappealable order of a United States bankruptcy court of competent
jurisdiction imposing a stay pursuant to Section 362 of the Bankruptcy Code and
that would otherwise have been included in Available Funds on such Payment Date
and (B) received by the Indenture Trustee that are recoverable and sought to be
recovered from the Issuer as a voidable preference by a trustee in bankruptcy
pursuant to the Bankruptcy Code in accordance with a final nonappealable order
of a court of competent jurisdiction:
(a) all scheduled payments of interest received with
respect to the Mortgage Loans and due during the related Due Period and
all other interest payments on or in respect of the Mortgage Loans
received by or on behalf of the Servicer during the related Collection
Period (including Payments Ahead that are allocable to interest for the
related Due Period), net of amounts representing interest accrued on
such Mortgage Loans in respect of any period prior to the applicable
Cut-off Dates, plus any Compensating Interest payments made by the
Servicer in respect of the related Mortgage Loans and any net income
from related REO Properties for such Collection Period;
(b) all scheduled payments of principal received with
respect to the Mortgage Loans and due during the related Due Period and
all other principal payments (including Principal Prepayments, but
excluding amounts described elsewhere in this definition) received or
deemed to be received during the related Collection Period (including
Payments Ahead that are allocable as principal for the related Due
Period) in respect of the Mortgage Loans;
(c) the aggregate of any Trust Insurance Proceeds
collected by the Servicer during the related Collection Period;
(d) the aggregate of any Net Liquidation Proceeds
collected by the Servicer during the related Collection Period;
(e) the aggregate of the Purchase Prices received in
respect of any Mortgage Loans that are required or permitted to be
repurchased, released, removed or substituted by the Mortgage Loan
Seller during or in respect of the related Collection Period, to the
extent such amounts are received by the Indenture Trustee on or before
the related Deposit Date;
(f) the amount of any Monthly Advances made by the
Servicer for such Payment Date; and
(g) the aggregate of amounts deposited in the Bond
Account during such Collection Period in connection with redemption of
the Bonds pursuant to Article X.
"AVAILABLE FUNDS CAP": The annualized weighted average of the Mortgage
Interest Rates on the Mortgage Loans as of the first day of the related Due
Period less the sum of (i) 0.50% plus one-twelfth of a per annum rate equal to
the percentage equivalent of the fraction obtained by dividing the
Administrative Fee Amount by the Aggregate Principal Balance of the Mortgage
Loans as of the first day of the related Due Period and (ii) if applicable, the
Relief Act Percentage.
"AVAILABLE FUNDS CAP CARRY FORWARD AMOUNT": For any Payment Date for
which the Bond Interest Rate was equal to the Available Funds Cap, the
difference between the amount of Bond Interest that would have accrued had the
Bond Interest Rate equaled the Bond Formula Rate, minus the amount of Bond
Interest that did accrue for such Payment Date, plus interest accrued on such
difference from such Payment Date at the Bond
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Interest Rate for each successive Interest Period to but excluding the Payment
Date on which such amount, with interest, is paid in full.
"BANKRUPTCY CODE": The Bankruptcy Reform Act of 1978 (Title 11 of the
United States Code), as amended.
"BASIC DOCUMENTS": This Agreement, the Trust Agreement, the Servicing
Agreement, the Mortgage Loan Sale Agreement, the Mortgage Loan Contribution
Agreement, the Management Agreement, the Insurance Agreement and the
Indemnification Agreement.
"BENEFICIAL OWNER": With respect to a Book-Entry Bond, the Person who
is the beneficial owner of such Bond as reflected on the books of the Clearing
Agency for the Bonds or on the books of a Person maintaining an account with
such Clearing Agency (directly or as an indirect participant, in accordance with
the rules of such Clearing Agency).
"BEST EFFORTS": Efforts determined to be in good faith and reasonably
diligent by the Person performing such efforts, specifically the Issuer or the
Servicer, as the case may be, in its reasonable discretion. Such efforts do not
require the Issuer or the Servicer, as the case may be, to enter into any
litigation, arbitration or other legal or quasi-legal proceeding, nor do they
require the Issuer or the Servicer, as the case may be, to advance or expend
fees or sums of money in addition to those specifically set forth in this
Indenture and the Servicing Agreement.
"BOND ACCOUNT": The segregated trust account, which shall be an
Eligible Account, established and maintained pursuant to Section 8.02 and
entitled "Norwest Bank Minnesota, National Association, as Indenture Trustee for
Fund America Investors Trust 1997-NMC1 Collateralized Mortgage Obligations,
Series 1997-NMC1, Bond Account" on behalf of the Bondholders and the Bond
Insurer.
"BOND BALANCE": With respect to all of the Bonds, the aggregate of the
Current Bond Balances of all Bonds Outstanding at the time of determination.
"BONDHOLDER" or "HOLDER": The Person in whose name a Bond is registered
in the Bond Register, except that, solely for the purpose of taking any action
under Section 5.02 or giving of any consent pursuant to this Indenture, any Bond
registered in the name of the Issuer, the Mortgage Loan Seller, the Servicer or
the Transferor or any Persons actually known by a Responsible Officer of the
Indenture Trustee to be an Affiliate of the Issuer, the Mortgage Loan Seller,
the Servicer or the Transferor shall be deemed not to be Outstanding and the
percentage interest evidenced thereby shall not be taken into account in
determining whether Holders of the requisite percentage interests necessary to
take any such action or effect any such consent have acted or consented unless
the Issuer, the Mortgage Loan Seller, the Servicer, the Transferor or any such
Person is an owner of record of all of the Bonds.
"BOND FORMULA RATE": For any Payment Date prior to the Redemption Date,
a per annum rate equal to LIBOR plus 0.21% and, for any Payment Date thereafter,
a per annum rate equal to LIBOR plus 0.42%.
"BOND INSURER": MBIA Insurance Corporation, a New York stock insurance
company, and any successors thereto.
"BOND INSURER COMMITMENT LETTER": The commitment letter dated September
29, 1997, from the Bond Insurer to the Mortgage Loan Seller regarding the
issuance of a financial guaranty insurance policy,
"BOND INSURER DEFAULT": The existence and continuance of any of the
following:
(a) a MBIA Payment Default;
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(b) the entry by a court having jurisdiction in the
premises of (i) a final and nonappealable decree or order for relief in
respect of the Bond Insurer in an involuntary case or proceeding under
any applicable United States federal or state bankruptcy, insolvency,
rehabilitation, reorganization or other similar law of (ii) a final and
nonappealable decree or order adjudging the Bond Insurer bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, rehabilitation, arrangement, adjustment or composition
of or in respect of the Bond Insurer under any applicable United States
federal or state law, or appointing a custodian, receiver, liquidator,
rehabilitator, assignee, trustee, sequestrator or other similar
official of the Bond Insurer or of any substantial part of its
property, or ordering the winding-up or liquidation of its affairs, and
the continuance of any such decree or order for relief or any such
other decree or order unstayed and in effect for a period of 60
consecutive days; or
(c) the commencement by the Bond Insurer of a voluntary
case or proceeding under any applicable United States federal or state
bankruptcy, insolvency, reorganization or other similar law or of any
other case or proceeding to be adjudicated bankrupt or insolvent, or
the consent of the Bond Insurer to the entry of a decree or order for
relief in respect of the Bond Insurer in an involuntary case or
proceeding under any applicable United States federal or state
bankruptcy, insolvency case or proceeding against the Bond Insurer, or
the filing by the Bond Insurer of a petition or answer or consent
seeking reorganization or relief under any applicable United States
federal or state law, or the consent by the Bond Insurer to the filing
of such petition or to the appointment of or the taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or
similar official of the Bond Insurer or of any substantial part of its
property, or the failure by the Bond Insurer to pay debts generally as
they become due, or the admission by the Bond Insurer in writing of its
inability to pay its debts generally as they become due, or the taking
of corporate action by the Bond Insurer in furtherance of any such
action.
Notwithstanding anything to the contrary contained herein, upon the
existence and continuance of a Bond Insurer Default, the consent by the Bond
Insurer shall not be required to any action or inaction hereunder and the Bond
Insurer shall not have any rights with respect thereto.
"BOND INSURER PREMIUM": On the Closing Date, the premium due to the
Bond Insurer in paragraph 1(a)(i) of the Bond Insurer Commitment Letter and
thereafter the premium due to the Bond Insurer on each Payment Date, which
amount shall be equal to the Bond Insurer Premium Rate and the Bond Balance
immediately prior to such Payment Date.
"BOND INSURER PREMIUM RATE": On the Closing Date, the Premium
Percentage specified in paragraph 1(a)(i) of the Bond Insurer Commitment Letter
and beginning on October 27, 1997 and on each Payment Date thereafter, the
Premium Percentage specified in paragraph 1(b) thereof.
"BOND INTEREST": As to any Payment Date, the amount of interest payable
to Holders of the Bonds on such Payment Date, which amount shall be equal to (a)
with respect to the initial Interest Period, interest for the number of days in
the period commencing on the Closing Date and ending on the day prior to such
Payment Date at the Bond Interest Rate on the Original Bond Balance, and (b)
with respect to any subsequent Interest Period, interest for the number of days
in such Interest Period at the Bond Interest Rate on the Bond Balance as of the
preceding Payment Date (after giving effect to the payment, if any, in reduction
of principal made on the Bonds on such preceding Payment Date). All calculations
of interest on the Bonds will be computed on the basis of the actual number of
days elapsed in the related Interest Period and in a year of 360 days.
"BOND INTEREST RATE": With respect to the Interest Period relating to
the October 1997 Payment Date, 5.86625% per annum. With respect to each Interest
Period thereafter, a per annum rate equal to the lesser of (a)the Bond Formula
Rate and (b) the Available Funds Cap.
"BOND REGISTER": As defined in Section 2.06.
"BOND REGISTRAR": As defined in Section 2.06.
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"BONDS": Any bonds authorized by, and authenticated and delivered
under, this Indenture.
"BOOK-ENTRY BONDS": Any Bonds registered in the name of the Clearing
Agency or its nominee, ownership of which is reflected on the books of the
Clearing Agency or on the books of a person maintaining an account with such
Clearing Agency (directly or as an indirect participant in accordance with the
rules of such Clearing Agency).
"BOOK-ENTRY TERMINATION": The time at which the book-entry registration
of the Book-Entry Bonds shall terminate, as specified in Section 2.13.
"BUSINESS DAY": Any day other than (i) a Saturday or Sunday or (ii) a
day that is either a legal holiday or a day on which banking institutions in the
State of Colorado, the State of New York, the State of Minnesota, or the State
of Delaware or the principal office of the Bond Insurer are authorized or
obligated by law, regulation or executive order to be closed.
"CERTIFICATE": As defined in the Trust Agreement.
"CERTIFICATE DISTRIBUTION ACCOUNT": As defined in the Trust Agreement.
"CERTIFICATEHOLDERS": As defined in the Trust Agreement.
"CLEAN-UP CALL DATE": The first Payment Date on which the Aggregate
Principal Balance of the Mortgage Loans is less than 10% of the Aggregate
Principal Balance as of the Cut-Off Date.
"CLEARING AGENCY": An organization registered as a "clearing agency"
pursuant to Section 17A of the Securities and Exchange Act of 1934, as amended,
and the regulations of the Commission thereunder and shall initially be The
Depository Trust Company of New York, the nominee for which is Cede & Co.
"CLEARING AGENCY PARTICIPANTS": The entities for whom the Clearing
Agency will maintain book-entry records of ownership and transfer of Book-Entry
Bonds, which may include securities brokers and dealers, banks and trust
companies and clearing corporations and certain other organizations.
"CLOSING DATE": September 30, 1997, the date of initial issuance of the
Bonds.
"CODE": The Internal Revenue Code of 1986, as amended, and as may be
further amended from time to time, as successor statutes thereto, and applicable
U.S. Department of Treasury regulations issued pursuant thereto in temporary or
final form and proposed regulations thereunder to the extent that, by reason of
their proposed effective date, such proposed regulations would apply.
"COLLECTION ACCOUNT": The segregated trust account established by the
Servicer and maintained pursuant to Section 2.02(b) of the Servicing Agreement.
"COLLECTION PERIOD": As to any Payment Date, the period beginning on
the first day of the calendar month immediately preceding the month in which
such Payment Date occurs (except that, in the case of the first Payment Date,
the related Collection Period will commence on the applicable Cut-off Date for
each Mortgage Loan) and ending on the last day of such calendar month.
"COMMISSION": The Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, or if at
any time such Commission is not existing and performing the duties now assigned
to it under the Trust Indenture Act, then the body performing such duties at
such time under the Trust Indenture Act or similar legislation replacing the
Trust Indenture Act.
"COMPENSATING INTEREST". As defined in the Servicing Agreement.
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"CORPORATE TRUST OFFICE": The principal office of the Indenture Trustee
at which at any particular time its corporate trust business with respect to
this Indenture shall be principally administered, which office at the date of
the execution of this Indenture is located at Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx,
Xxxxxxxxxxx, XX 00000, Attention: Fund America Investors Trust 1997-NMC1, Series
1997-NMC1, with a copy to the Indenture Trustee at 00000 Xxxxxx Xxxx Xxxxxxx,
Xxxxxxxx, Xxxxxxxx 00000, Attention: Fund America Investors Trust 1997-NMC1,
Series 1997-NMC1.
"CURRENT BOND BALANCE": With respect to any Bond as of any date of
determination, the original principal amount of such Bond, reduced by all prior
payments (including Insured Payments), if any, made with respect to principal of
such Bond.
"CUSTODIAN": A Person who is at any time appointed by the Indenture
Trustee pursuant to Section 8.14 as a document custodian for the Mortgage Files,
which Person shall not be the Issuer or an Affiliate of the Issuer.
"CUT-OFF DATE": For any Mortgage Loan, the later of September1, 1997
or the date of funding of such Mortgage Loan by the Mortgage Loan Seller (which
date has occurred prior to the Closing Date).
"DEFAULT": Any occurrence that is, or with notice or the lapse of time
or both would become, an Event of Default.
"DEFECTIVE MORTGAGE LOAN": Any Mortgage Loan that is required to be
repurchased or substituted by the Mortgage Loan Seller pursuant to the Mortgage
Loan Sale Agreement.
"DEFINITIVE BONDS": Bonds other than Book-Entry Bonds.
"DELETED MORTGAGE LOAN": A Mortgage Loan replaced or to be replaced by
a Qualified Replacement Mortgage Loan.
"DELINQUENCY AMOUNT": As of any Payment Date, the product of the
Delinquency Percentage for such Payment Date and the Aggregate Principal Balance
of the Mortgage Loans as of the Determination Date relating to such Payment
Date.
"DELINQUENCY PERCENTAGE": For any Payment Date, the rolling three month
average of the fraction, expressed as a percentage, (i) the numerator of which
is the aggregate of the Principal Balances as of the related Determination Date
of all Mortgage Loans that were 90 or more days contractually delinquent, in
foreclosure, REO Property or for which the related Mortgagor was in a bankruptcy
proceeding or paying a reduced Monthly Payment as a result of a bankruptcy
workout and (ii) the denominator of which is the Aggregate Principal Balance of
all Mortgage Loans as of the related Determination Date.
"DEPOSIT DATE": The date each month on which funds on deposit in the
Collection Account are remitted by the Servicer to the Indenture Trustee for
deposit into the Bond Account, which date shall be with respect to any Payment
Date, the 18th day of the month in which such Payment Date occurs, or the next
succeeding Business Day, if such 18th day is not a Business Day.
"DETERMINATION DATE": As to any Payment Date, the last day of the Due
Period relating to such Payment Date.
"DUE PERIOD": With respect to any Payment Date, the period commencing
on the second day of the calendar month immediately preceding the calendar month
in which such Payment Date occurs (or, with respect to the first Payment Date,
commencing the day following the applicable Cut-off Date for each Mortgage Loan)
and ending on the first day of the calendar month in which such Payment Date
occurs.
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"ELIGIBLE ACCOUNT": Either (A) a segregated account or accounts
maintained with an institution the deposits of which are insured by the Bank
Insurance Fund or the Savings Association Insurance Fund of the FDIC, the
unsecured and uncollateralized debt obligations of which shall be rated "AA" or
better by Standard & Poor's and "Aa2" or better by Moody's and in the highest
short term rating category by Standard & Poor's and Moody's, and that is either
(i) a federal savings and loan association duly organized, validly existing and
in good standing under the federal banking laws, (ii) an institution duly
organized, validly existing and in good standing under the applicable banking
laws of any state, (iii) a national banking association duly organized, validly
existing and in good standing under the federal banking laws, (iv) a principal
subsidiary of a bank holding company, and (v) approved in writing by the Bond
Insurer or (B) a trust account maintained with the trust department of a federal
or state chartered depository institution or trust company, having capital and
surplus of not less than $100,000,000, acting in its fiduciary capacity, the
unsecured and uncollateralized debt obligations of which shall be rated "Baa3"
or better by Moody's. Any Eligible Accounts maintained with the Indenture
Trustee shall conform to the preceding clause (B).
"EVENT OF DEFAULT": As defined in Section 5.01.
"EXCESS CASH": With respect to any Payment Date, the amount, if any, by
which Available Funds for such Payment Date exceed the sum of (i) any amounts
payable to the Bond Insurer for Insured Payments paid on prior Payment Dates and
not yet reimbursed and for any unpaid Bond Insurer Premiums for prior Payment
Dates (in each case with interest thereon at the "Late Payment Rate" (as defined
in the Insurance Agreement)), (ii) the Bond Interest for the related Payment
Date, and (iii) the Monthly Principal for the related Payment Date.
"EXCESS CASH PAYMENT". As defined in clause fourth of Section 8.02(c).
"FDIC": The Federal Deposit Insurance Corporation and its successors in
interest.
"FINAL CERTIFICATION": A certification as to the completeness of each
Mortgage File provided by the Indenture Trustee on or before the first
anniversary of the Closing Date pursuant to Section 6.15(b).
"FINAL MATURITY DATE": The Payment Date in April 2029.
"FULL PREPAYMENT": With respect to any Mortgage Loan, when any one of
the following occurs: (i) payment is made by the Mortgagor to the Servicer of
100% of the outstanding principal balance of such Mortgage Loan, together with
all accrued and unpaid interest thereon at the Mortgage Interest Rate on such
Mortgage Loan, (ii) payment is made to the Indenture Trustee of the Purchase
Price of such Mortgage Loan in connection with the purchase of such Mortgage
Loan by the Mortgage Loan Seller or the Servicer or (iii) payment is made to the
Servicer of all Insurance Proceeds and Liquidation Proceeds, and other payments,
if any, that have been determined by the Servicer in accordance with the
provisions of the Servicing Agreement to be finally recoverable, in the
Servicer's reasonable judgment, in respect of such Mortgage Loan.
"GRANT": To assign, transfer, mortgage, pledge, create and grant a
security interest in, deposit, set-over and confirm. A Grant of a Mortgage Loan
and related Mortgage Files, a Permitted Investment, the Servicing Agreement, the
Mortgage Loan Sale Agreement, the Mortgage Loan Contribution Agreement, an
Insurance Policy or any other instrument shall include all rights, powers and
options (but none of the obligations) of the Granting party thereunder,
including without limitation the immediate and continuing right to claim for,
collect, receive and give receipts for principal and interest payments
thereunder, insurance proceeds, Purchase Prices and all other moneys payable
thereunder and all proceeds thereof, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all rights and
options, to bring Proceedings in the name of the Granting party or otherwise,
and generally to do and receive anything that the Granting party is or may be
entitled to do or receive thereunder or with respect thereto.
"GROSS MARGIN": As defined in the Servicing Agreement.
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"HIGHEST LAWFUL RATE": As defined in Section 11.18.
"INDENTURE": This instrument as originally executed and, if from time
to time supplemented or amended by one or more indentures supplemental hereto
entered into pursuant to the applicable provisions hereof, as so supplemented or
amended. All references in this instrument to designated "Articles", "Sections",
"Subsections" and other subdivisions are to the designated Articles, Sections,
Subsections and other subdivisions of this instrument as originally executed.
The words "herein", "hereof", "hereunder" and other words of similar import
refer to this Indenture as a whole and not to any particular Article, Section,
Subsection or other subdivision.
"INDENTURE TRUSTEE": Norwest Bank Minnesota, National Association, a
national banking association, and any Person resulting from or surviving any
consolidation or merger to which it may be a party until a successor Person
shall have become the Indenture Trustee pursuant to the applicable provisions of
this Indenture, and thereafter "Indenture Trustee" shall mean such successor
Person.
"INDENTURE TRUSTEE'S FEE": The Indenture Trustee's monthly fee, equal
to 1/12th of 0.0125% of the Aggregate Principal Balance of the Mortgage Loans as
of the first day of the related Due Period.
"INDEPENDENT": When used with respect to any specified Person means
such a Person who (i) is in fact independent of the Issuer and any other obligor
upon the Bonds, (ii) does not have any direct financial interest or any material
indirect financial interest in the Issuer or in any such other obligor or in an
Affiliate of the Issuer or such other obligor, and (iii) is not connected with
the Issuer or any such other obligor as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
Whenever it is herein provided that any Independent Person's opinion or
certificate shall be furnished to the Indenture Trustee, such Person shall be
appointed by an Issuer Order and such opinion or certificate shall state that
the signer has read this definition and that the signer is Independent within
the meaning hereof.
"INDIVIDUAL BOND": A Bond of an original principal amount of $1,000
(provided, however, one Bond may be less than that amount); a Bond of an
original principal amount in excess of $1,000 shall be deemed to be a number of
Individual Bonds equal to the quotient obtained by dividing such original
principal amount by $1,000.
"INITIAL CERTIFICATION": A certification as to the completeness of each
Mortgage File provided by the Indenture Trustee on the Closing Date pursuant to
Section 6.15(a).
"INDEMNIFICATION AGREEMENT": As defined in the Insurance Agreement.
"INSURANCE AGREEMENT": The Insurance Agreement, dated as of September
1, 1997, among the Bond Insurer, the Issuer, the Servicer, the Mortgage Loan
Seller, the Transferor, and the Indenture Trustee.
"INSURANCE POLICIES": All insurance policies insuring any Mortgage Loan
or Mortgaged Property, to the extent the Issuer or the Indenture Trustee has any
interest therein.
"INSURED PAYMENTS": As to any Payment Date, the amount required to be
paid by the Bond Insurer under the MBIA Insurance Policy pursuant to a Notice of
Claim presented by the Indenture Trustee (in the manner described in Section
8.03). The Insured Payment is (a) for any Payment Date, the sum of (i) the Bond
Interest for such Payment Date minus the Available Funds for such Payment Date
and (ii) the then existing Overcollateralization Deficit, if any (after
application of Available Funds for such Payment Date to reduce the Bond Balance
on such Payment Date) and (b)any shortfall in the amount required to pay a
Preference Amount from any source other than the MBIA Insurance Policy.
"INSURANCE PROCEEDS": As defined in the Servicing Agreement.
"INTEREST PERIOD": With respect to the first Payment Date, the period
beginning on the Closing Date and ending on the day preceding the Payment Date
in October 1997 and, as to any subsequent Payment Date, the
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period beginning on the immediately preceding Payment Date and ending on the day
prior to the related Payment Date.
"ISSUER": Fund America Investors Trust 1997-NMC1, a Delaware business
trust.
"ISSUER ORDER" and "ISSUER REQUEST": A written order or request of the
Issuer signed on behalf of the Issuer by an Authorized Officer of the Owner
Trustee or, in the case of such order or request required by Section 2.11, by an
Authorized Officer of the holder of the Residual Certificate and delivered to
the Indenture Trustee or the Authenticating Agent, as applicable.
"LETTER AGREEMENT": The Letter of Representations to The Depository
Trust Company from the Indenture Trustee and the Issuer dated September 30,
1997, attached hereto as Exhibit D.
"LIBOR": With respect to any Payment Date (other than the first Payment
Date), the per annum rate determined by the Indenture Trustee on the related
LIBOR Determination Date on the basis of the offered rates of the Reference
Banks for one-month U.S. dollar deposits as such rates appear on the Reuters
Screen LIBO Page as of 11:00 a.m. (London time) on such LIBOR Determination
Date. On each LIBOR Determination Date, LIBOR will be established by the
Indenture Trustee as follows:
(a) if on such LIBOR Determination Date two or more
Reference Banks provide such offered quotations, LIBOR shall be the
arithmetic mean (rounded upwards if necessary to the nearest whole
multiple of 0.0625%) of such offered quotations; or
(b) if on such LIBOR Determination Date, fewer than two
Reference Banks provide such offered quotations, LIBOR shall be the
greater of (x) LIBOR as determined on the previous LIBOR Determination
Date or (y) the Reserve Interest Rate.
"LIBOR DETERMINATION DATE": With respect to any Interest Period after
the first Interest Period, the second London Business Day immediately preceding
the first day of such Interest Period.
"LIQUIDATED MORTGAGE LOAN": As defined in the Servicing Agreement.
"LIQUIDATION DATE": With respect to any Mortgage Loan, the date of the
final receipt of all Liquidation Proceeds, Insurance Proceeds or other payments
with respect to such Mortgage Loan.
"LIQUIDATION PROCEEDS": As defined in the Servicing Agreement.
"LOAN-TO-VALUE RATIO": As defined in the Mortgage Loan Sale Agreement.
"LONDON BUSINESS DAY": A Business Day on which banks are open for
dealing in foreign currency and exchange in London and New York City.
"MATURITY": With respect to any Bond, the date on which the entire
unpaid principal amount of such Bond becomes due and payable as therein or
herein provided, whether at the Final Maturity Date or by declaration of
acceleration, call for redemption or otherwise.
"MANAGEMENT AGREEMENT": That certain agreement, dated as of September
1, 1997, between the Issuer and the Indenture Trustee pursuant to which the
Indenture Trustee, as manager, will perform certain obligations of the Issuer
hereunder.
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"MBIA INSURANCE POLICY": The financial guaranty insurance policy (No.
24873), dated September 30, 1997, issued by the Bond Insurer to the Indenture
Trustee for the benefit of the Bondholders, pursuant to which the Bond Insurer
guarantees payment of Insured Payments. A specimen of the MBIA Insurance Policy
is attached hereto as Exhibit F.
"MBIA PAYMENT DEFAULT": Failure and continued failure by the Bond
Insurer to make an Insured Payment required under the MBIA Insurance Policy in
accordance with its terms.
"MINIMUM RATE": As defined in the Servicing Agreement.
"MONTHLY ADVANCE": As defined the Servicing Agreement.
"MONTHLY PAYMENT": With respect to any Mortgage Note, the amount of
each monthly payment payable under such Mortgage Note by the Mortgagor in
accordance with its terms, including one month's accrued interest on the related
Principal Balance at the then applicable Mortgage Interest Rate, but net of any
portion of such monthly payment that represents late payment charges, prepayment
or extension fees or collections allocable to payments to be made by Mortgagors
for payment of insurance premiums or similar items.
"MONTHLY PRINCIPAL": For any Payment Date, an amount equal to (a) the
aggregate of (i) all scheduled payments of principal received (or advanced or to
be advanced on the related Deposit Date) with respect to the Mortgage Loans and
due during the related Due Period and all other amounts collected, received or
otherwise recovered in respect of principal on the Mortgage Loans (including
Principal Prepayments, but not including Payments Ahead that are not allocable
to principal for the related Due Period) during or in respect of the related
Collection Period, and (ii) the aggregate of the amounts allocable to principal
deposited in the Bond Account on the related Deposit Date by the Issuer, the
Transferor, the Servicer or the Bond Insurer in connection with a repurchase,
release, removal or substitution of any Mortgage Loans pursuant to this
Indenture, reduced by (b) the amount of any Overcollateralization Surplus with
respect to such Payment Date.
"MONTHLY SERVICING FEE": As defined in the Servicing Agreement.
"MOODY'S": Xxxxx'x Investors Service, Inc. and its successors in
interest.
"MORTGAGE": The mortgage, deed of trust or other instrument creating a
first lien on an estate in fee simple in real property securing a Mortgage Loan.
"MORTGAGE FILE": As defined in the Mortgage Loan Sale Agreement.
"MORTGAGE INTEREST RATE": With respect to each Mortgage Loan, the
adjustable rate per annum set forth in the related Mortgage Note from time to
time at which interest accrues on such Mortgage Loan as of the most recent
interest rate adjustment pursuant to the related Mortgage Note, in each case
after giving effect to any modification of a Mortgage Loan for any period in
connection with a bankruptcy or similar proceeding involving the related
Mortgagor or a modification, waiver or amendment of such Mortgage Loan granted
or agreed to by the Servicer in accordance with the Servicing Agreement.
"MORTGAGE LOAN": Each of the mortgage loans Granted to the Indenture
Trustee under this Indenture as security for the Bonds and that from time to
time comprise part of the Trust Estate, including any property that secures a
Mortgage that becomes REO Property. The Mortgage Loans are listed on the
Mortgage Loan Schedule annexed hereto as Schedule I.
"MORTGAGE LOAN CONTRIBUTION AGREEMENT": That certain agreement, dated
as of September 1, 1997, between the Transferor and the Issuer pursuant to which
the Mortgage Loans will be acquired from the Transferor by the Issuer for
inclusion in the Trust Estate, a copy of which agreement is attached hereto as
Exhibit C.
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"MORTGAGE LOAN SALE AGREEMENT": That certain agreement, dated as of
September 1, 1997, between the Mortgage Loan Seller and the Transferor pursuant
to which the Mortgage Loans will be acquired from the Mortgage Loan Seller by
the Transferor, a copy of which agreement is attached hereto as Exhibit B.
"MORTGAGE LOAN SCHEDULE": As of any date, the schedule of mortgage
loans included in the Trust Estate. Schedule I hereto identifies the Mortgage
Loans being Granted to the Indenture Trustee on the Closing Date. The Mortgage
Loan Schedule shall be amended by the Servicer as appropriate from time to time
to reflect the deletion and substitution of Mortgage Loans in accordance with
the terms of the Basic Documents. The Mortgage Loan Schedule shall identify each
Mortgage Loan by the Servicer's loan number and address (including the state) of
the related Mortgaged Property and shall set forth as to each Mortgage Loan the
initial Loan-to-Value Ratio, the Principal Balance as of the Cut-off Date, the
Index, the Gross Margin, the currently Monthly Payment amount and the stated
maturity date of the related Mortgage Note. The Issuer shall cause the initial
Mortgage Loan Schedule to be delivered by the Mortgage Loan Seller to the
Indenture Trustee in both physical and computer-readable form.
"MORTGAGE LOAN SELLER": National Mortgage Corporation, a Colorado
corporation.
"MORTGAGE NOTE": The note or other instrument evidencing the
indebtedness of a Mortgagor under the related Mortgage Loan.
"MORTGAGED PROPERTY": The underlying property securing a Mortgage Note.
"MORTGAGOR": The obligor under a Mortgage Note.
"NET LIQUIDATION PROCEEDS": As defined in the Servicing Agreement.
"NONRECOVERABLE ADVANCE": As defined in the Servicing Agreement.
"NOTICE OF CLAIM": The notice required to be furnished by the Indenture
Trustee to the Bond Insurer in the event an Insured Payment is required to be
paid under the MBIA Insurance Policy with respect to any Payment Date, in the
form set forth as Exhibit G hereto.
"OFFICERS' CERTIFICATE": A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, Chief Operating Officer or
a Vice President of the Mortgage Loan Seller, the Transferor, the Servicer or,
in the case of the Issuer, an authorized signatory of the Owner Trustee, as the
case may be, and delivered to the Indenture Trustee, Bond Insurer or each Rating
Agency, as the case may be.
"OPINION OF COUNSEL": A written opinion of counsel reasonably
acceptable to the Indenture Trustee and, in the case of opinions delivered to
the Bond Insurer, reasonably acceptable to it. Any expense related to obtaining
an Opinion of Counsel for an action requested by a party shall be borne by the
party required to obtain such opinion or seeking to effect the action that
requires the delivery of such Opinion of Counsel, except in such instances where
such opinion is at the request of the Indenture Trustee, in which case such
expense shall be an expense of the Issuer.
"ORIGINAL BOND BALANCE": The principal balance of the Bonds at the
issue date thereof, equal to $121,765,000.
"OUTSTANDING": As of the date of determination, all Bonds theretofore
authenticated and delivered under this Indenture except:
(i) Definitive Bonds theretofore canceled by the Bond
Registrar or delivered to the Bond Registrar for cancellation;
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(ii) Bonds or portions thereof for whose payment or
redemption money in the necessary amount has been theretofore deposited
with the Indenture Trustee or any Paying Agent (other than the Issuer)
in trust for the Holders of such Bonds; provided, however, that if such
Bonds are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor, satisfactory to the
Indenture Trustee, has been made;
(iii) Bonds in exchange for or in lieu of which other Bonds
have been authenticated and delivered pursuant to this Indenture unless
proof satisfactory to the Indenture Trustee is presented that any such
Bonds are held by a bona fide purchaser (as defined by the Uniform
Commercial Code of the applicable jurisdiction); and
(iv) Bonds alleged to have been destroyed, lost or stolen
that have been paid as provided for in Section 2.07;
provided, however, that in determining whether the Holders of the requisite
percentage of the Bond Balance of the Outstanding Bonds have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, Bonds
owned by the Issuer, any other obligor upon the Bonds or any Affiliate of the
Issuer, the Mortgage Loan Seller, the Servicer or the Transferor or such other
obligor shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Indenture Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Bonds that the Indenture Trustee knows to be so owned shall be so disregarded.
Bonds so owned that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Indenture
Trustee the pledgee's right so to act with respect to such Bonds and that the
pledgee is not the Issuer, any other obligor upon the Bonds or any Affiliate of
the Issuer, the Mortgage Loan Seller, the Servicer or the Transferor or such
other obligor; provided, further, however, that Bonds that have been paid with
the proceeds of the MBIA Insurance Policy shall be deemed to be Outstanding for
the purposes of this Indenture, such payment to be evidenced by written notice
from the Bond Insurer to the Indenture Trustee, and the Bond Insurer shall be
deemed to the Holder thereof to the extent of any payments thereon made by the
Bond Insurer.
"OVERCOLLATERALIZATION AMOUNT": As to any Payment Date, the amount, if
any, by which (x) the Aggregate Principal Balance of the Mortgage Loans as of
the end of the related Due Period exceeds (y) the Bond Balance for such Payment
Date, after taking into account the Monthly Principal (disregarding any
permitted reduction thereof in Monthly Principal due to an Overcollateralization
Surplus made on such Payment Date) to be applied in reduction of the Bond
Balance on such Payment Date. If the Aggregate Principal Balance of the Mortgage
Loans is less than the Bond Balance for such Payment Date, determined as
provided above, the Overcollateralization Amount for such Payment Date shall be
zero.
"OVERCOLLATERALIZATION DEFICIT": As to any Payment Date, the amount, if
any, by which the Bond Balance on such Payment Date (after taking into account
any payments to be paid on such Payment Date in reduction of the Bond Balance)
exceeds the Aggregate Principal Balance of the Mortgage Loans as of the end of
the related Due Period. If the Aggregate Principal Balance of the Mortgage Loans
as determined pursuant to the preceding sentence is greater than the Bond
Balance for such Payment Date determined as provided above, the
Overcollateralization Deficit for such Payment Date shall be zero.
"OVERCOLLATERALIZATION SURPLUS": As to any Payment Date, the amount, if
any, by which (x) the Overcollateralization Amount on such Payment Date exceeds
(y) the Required Overcollateralization Amount on such Payment Date.
"OWNER TRUSTEE": Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity, but solely as owner trustee under
the Trust Agreement, and any successor owner trustee thereunder.
"OWNER TRUSTEE FEE": As defined in the Trust Agreement.
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"PAYING AGENT": The Indenture Trustee or any other depository
institution or trust company that is authorized by the Issuer pursuant to
Section 3.03 to pay the principal of, or interest on, any Bonds on behalf of the
Issuer, which agent, if not the Indenture Trustee, shall have signed an
instrument agreeing to be bound by the terms of this Indenture applicable to the
Paying Agent.
"PAYMENT AHEAD": As defined in the Servicing Agreement.
"PAYMENT DATE": The 25th day of each month or, if any such day is not a
Business Day, the Business Day immediately following such 25th day, beginning
October 27, 1997.
"PAYMENT DATE STATEMENT": The statement prepared pursuant to Section
2.08(d) with respect to collection on or in respect of the Mortgage Loans and
other assets of the Trust Estate and payments on or in respect of the Bonds,
based upon the information contained in the Servicer Remittance Report prepared
pursuant to the Servicing Agreement and setting forth the following information
with respect to each Payment Date (to the extent the Servicer has made such
information (other than the information described in clause (ii), (iii), (iv),
(v) and (xiv) below) available to the Indenture Trustee):
(i) the amount of such payment to Bondholders allocable
to (x) Monthly Principal (separately setting forth Principal
Prepayments) and (y) any Excess Cash Payment;
(ii) the amount of such payment to Bondholders allocable
to (x) Bond Interest and (y) Available Funds Cap Carry Forward Amount;
(iii) the Bond Balance, after giving effect to the payment
of Monthly Principal and any Excess Cash Payment applied to reduce the
Bond Balance on such Payment Date;
(iv) the amount of any Insured Payments for such Payment
Date;
(v) the Overcollateralization Amount, the then applicable
Required Overcollateralization Amount, the Overcollateralization
Surplus, if any, and the Overcollateralization Deficit, if any, with
respect to such Payment Date;
(vi) the Aggregate Principal Balance of the Mortgage Loans
as of the end of the related Due Period;
(vii) the amount of Monthly Advances made with respect to
such Payment Date, if any;
(viii) the number and aggregate of the Principal Balances of
Mortgage Loans (including the Principal Balances of all Mortgage Loans
in foreclosure) contractually delinquent (i) one month, (ii) two months
and (iii) three or more months, as of the end of the related Collection
Period;
(ix) the number and aggregate of the Principal Balances of
the Mortgage Loans in foreclosure or subject to other similar
proceedings, and the number and aggregate of the Principal Balance of
Mortgage Loans, the Mortgagor of which is known by the Servicer to be
in bankruptcy as of the end of the related Collection Period and the
book value of any real estate acquired through foreclosure, grant of a
deed in lieu of foreclosure or other similar proceedings during the
related Collection Period;
(x) the aggregate of the Principal Balances of the
Mortgage Loans repurchased by the Mortgage Loan Seller or purchased by
the Servicer, separately setting forth the aggregate of the Principal
Balances of Mortgage Loans delinquent for three consecutive monthly
installments purchased by the Servicer at its option pursuant to the
Servicing Agreement;
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(xi) the aggregate amount of the Monthly Servicing Fee
paid to or retained by the Servicer for the related Collection Period;
(xii) the aggregate Principal Balance of the three largest
outstanding Mortgage Loans subject to this Indenture as of the related
Determination Date;
(xiii) the aggregate amount of Realized Losses incurred
during the related Collection Period and the cumulative amount of
Realized Losses since the respective Cut-off Dates; and
(xiv) the Delinquency Percentage and the Rolling Loss
Percentage (as defined in the Servicing Agreement) relating to such
Payment Date.
In the case of information furnished pursuant to subclauses (i) and
(ii) above, the amounts shall be expressed as a dollar amount per
Individual Bond.
"PERCENTAGE INTEREST": With respect to a Bond, the undivided percentage
interest (carried to eight places rounded down) obtained by dividing the
original principal balance of such Bond by the Original Bond Balance and
multiplying the result by 100.
"PERMITTED INVESTMENTS": One or more of the following obligations,
instruments and securities:
(a) direct general obligations of, or obligations fully
guaranteed by, the United States of America, the Federal Home Loan
Mortgage Corporation, Federal National Mortgage Corporation, the
Federal Home Loan Banks or any agency or instrumentality of the United
States of America rated Aa3 or higher by Xxxxx'x, the obligations of
which are backed by the full faith and credit of the United States of
America;
(b) (i) demand and time deposits in, certificates of
deposit of, banker's acceptances issued by, or federal funds sold by
any depository institution or trust company (including the Indenture
Trustee or its agent acting in their respective commercial capacities)
incorporated under the laws of the United States of America or any
state thereof and subject to supervision and examination by federal
and/or state authorities, so long as, at the time of such investment or
contractual commitment providing for such investment, such depository
institution or trust company or its ultimate parent has a short-term
uninsured debt rating in one of the two highest available rating
categories of Standard & Poor's and of Xxxxx'x and provided that each
such investment has an original maturity of no more than 365 days and
(ii) any other demand or time deposit or deposit which is fully insured
by the FDIC;
(c) repurchase obligations with a term not to exceed 30
days with respect to any security described in clause (a) above and
entered into with a depository institution or trust company (acting as
a principal) rated A or higher by S&P and rated A2 or higher by
Xxxxx'x; provided, however, that collateral transferred pursuant to
such repurchase obligation must be of the type described in clause (a)
above and must (i) be valued daily at current market price plus accrued
interest, (ii) pursuant to such valuation, be equal, at all times, to
105% of the cash transferred by the Indenture Trustee in exchange for
such collateral and (iii) be delivered to the Indenture Trustee or, if
the Indenture Trustee is supplying the collateral, an agent for the
Indenture Trustee, in such a manner as to accomplish perfection of a
security interest in the collateral by possession of certified
securities.
(d) securities bearing interest or sold at a discount
issued by any corporation incorporated under the laws of the United
States of America or any state thereof which has a long-term unsecured
debt rating in the highest available rating category of each of the
Rating Agencies at the time of such investment;
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(e) commercial paper having an original maturity of less
than 365 days and issued by an institution having a short-term
unsecured debt rating in the highest available rating category of each
of the Rating Agencies at the time of such investment;
(f) a guaranteed investment contract approved by each of
the Rating Agencies and the Bond Insurer and issued by an insurance
company or other corporation having a long-term unsecured debt rating
in the highest available rating category of each of the Rating Agencies
at the time of such investment;
(g) money market funds having ratings in the highest
available rating category of Xxxxx'x and one of the two highest
available rating categories of S&P at the time of such investment which
invest only in other Permitted Investments (any such money market funds
which provide for demand withdrawals being conclusively deemed to
satisfy any maturity requirements for Permitted Investments set forth
herein) including money market funds of the Indenture Trustee and any
such funds that are managed by the Indenture Trustee or its affiliates
or which Indenture Trustee or any affiliate acts as advisor as long as
such money market funds satisfy the criteria of this subparagraph (g);
and
(h) any investment approved in writing by the Bond
Insurer and written evidence that any such investment will not result
in a downgrading or withdrawal of the rating by each Rating Agency on
the Bonds.
The Indenture Trustee may purchase from or sell to itself or an
affiliate, as principal or agent, the Permitted Investments listed above. All
Permitted Investments in a trust account under the Indenture shall be made in
the name of the Indenture Trustee for the benefit of the Bondholders and the
Bond Insurer.
"PERSON": Any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust (including
any beneficiary thereof), unincorporated organization or government or any
agency or political subdivision thereof.
"PREDECESSOR BONDS": With respect to any particular Bond, every
previous Bond evidencing all or a portion of the same debt as that evidenced by
such particular Bond; and, for the purpose of this definition, any Bond
authenticated and delivered under Section 2.07 in lieu of a lost, destroyed or
stolen Bond shall be deemed to evidence the same debt as the lost, destroyed or
stolen Bond.
"PREFERENCE AMOUNT": Any amount previously distributed to a Bondholder
that is recoverable and sought to be recovered as a voidable preference by a
trustee in bankruptcy pursuant to the Bankruptcy Code in accordance with a final
nonappealable order of a court having competent jurisdiction.
"PRINCIPAL BALANCE": As to any Mortgage Loan and any Determination
Date, the actual outstanding principal amount thereof as of the close of
business on the Determination Date in the preceding month (or, in the case of
the first Payment Date, as of the applicable Cut-off Date) less (i) all
scheduled payments of principal received or advanced (or to be advanced on the
related Deposit Date) with respect to the Mortgage Loans and due during the
related Due Period and all other amounts collected, received or otherwise
recovered in respect of principal on the Mortgage Loans (including Principal
Prepayments, but not including Payments Ahead that are not allocable to
principal for the related Due Period) during or in respect of the related
Collection Period, Net Liquidation Proceeds and Insurance Proceeds allocable to
principal recovered or collected in respect of such Mortgage Loan during the
related Collection Period, (ii) the portion of the Purchase Price allocable to
principal to be remitted by the Mortgage Loan Seller or the Servicer to the
Indenture Trustee on or prior to the related Deposit Date in connection with a
repurchase of such Mortgage Loan pursuant to the Mortgage Loan Sale Agreement,
the Servicing Agreement or Section 8.05 hereof, to the extent such amount is
actually remitted on or prior to such Deposit Date, and (iii) the amount to be
remitted by the Mortgage Loan Seller to the Indenture Trustee on the related
Deposit Date in connection with a substitution of a Qualified Replacement
Mortgage Loan for such Mortgage Loan pursuant to the Mortgage Loan Sales
Agreement and Section 8.05 hereof, to the extent such
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amount is actually remitted on or prior to such Deposit Date; provided, however
that Mortgage Loans that have become Liquidated Mortgage Loans since the end of
the preceding Determination Date (or, in the case of the first Determination
Date, since the applicable Cut-off Date) will be deemed to have a Principal
Balance of zero on the current Determination Date.
"PRINCIPAL PREPAYMENT": As to any Mortgage Loan and Collection Period,
any payment by a Mortgagor or other recovery in respect of principal on a
Mortgage Loan (including Net Liquidation Proceeds and Trust Insurance Proceeds)
that, in the case of a payment by a Mortgagor, is received in advance of its
scheduled due date and is not a Payment Ahead.
"PROCEEDING": Any suit in equity, action at law or other judicial or
administrative proceeding.
"PURCHASE PRICE": With respect to any Defective Mortgage Loan, an
amount equal to (i) the sum of (A) the Principal Balance of such Defective
Mortgage Loan as of the beginning of the Due Period next preceding the Deposit
Date on which such repurchase or purchase is required to occur, (B) interest
computed at the applicable Mortgage Interest Rate on such Principal Balance from
the date to which interest was last paid by the Mortgagor to the last day of the
Due Period immediately preceding the Deposit Date on which such repurchase
occurs and (C) any previously unreimbursed Servicing Advances made on or in
respect of such Defective Mortgage Loan, less (ii) any payments of principal and
interest in respect of such Defective Mortgage Loan made by or on behalf of the
related Mortgagor during such Due Period. With respect to any Qualified
Replacement Mortgage Loan, the amount remitted by the Mortgage Loan Seller to
the Indenture Trustee on or prior to the Deposit Date relating to a Payment Date
in connection with a substitution of such Qualified Replacement Mortgage Loan
for a Mortgage Loan pursuant to the Mortgage Loan Sales Agreement or Section
8.05 hereof.
"QUALIFIED REPLACEMENT MORTGAGE LOAN": A Mortgage Loan that is
substituted for a Deleted Mortgage Loan pursuant to Section 8.05 that must, at
the end of the Due Period preceding the date of such substitution, (i) have an
outstanding principal balance (when taken together with any other Qualified
Replacement Mortgage Loan being substituted for such Deleted Mortgage Loan), not
in excess of and not substantially less than the unpaid principal balance of the
Deleted Mortgage Loan at the end of the Due Period preceding the date of
substitution, (ii) have the Mortgage Interest Rate computed on substantially the
same basis as the Mortgage Interest Rate on the related Mortgage Loan, utilizing
the same Index and having a Gross Margin or Minimum Rate not less than (and not
more than one percentage point in excess of) the Gross Margin and Minimum Rate
applicable to the Deleted Mortgage Loan, (iii) have a remaining term to maturity
not greater than (and not more than one year less than) that of the Deleted
Mortgage Loan, (iv) have a Loan-to-Value Ratio equal to or lower than the
Loan-to- Value Ratio of the Deleted Mortgage Loan, (v) have a first lien
priority, (vi) comply as of the date of substitution with each representation
and warranty set forth in Section 4(b) and Exhibit B of the Mortgage Loan Sale
Agreement, (vii) have the same or better property type as the Deleted Mortgage
Loan and (viii) have the same or better occupancy status. In the event that one
or more mortgage loans are proposed to be substituted for one or more Deleted
Mortgage Loans, the foregoing tests may be met on a weighted average basis or
other aggregate basis acceptable to the Bond Insurer, except that the
requirements of clauses (v), (vi), (vii) and (viii) hereof must be satisfied as
to each Qualified Replacement Mortgage Loan.
"RATING AGENCIES": Standard & Poor's and Xxxxx'x (each, a "Rating
Agency"). If either such agency or a successor is no longer in existence,
"Rating Agency" shall be such nationally recognized statistical credit rating
agency, or other comparable Person, designated by the Servicer, notice of which
designation shall be given to the Indenture Trustee.
"REALIZED LOSS": As defined in the Servicing Agreement.
"RECORD DATE": With respect to any Payment Date, the date on which the
Persons entitled to receive any payment of principal of or interest on any Bonds
(or notice of a payment in full of principal) due and payable on such Payment
Date are determined; such date shall be the last Business Day preceding such
Payment Date or, with respect to Definitive Bonds, the last Business Day of the
month preceding the month of such Payment Date. With
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respect to a vote of Bondholders required or allowed hereunder, the Record Date
shall be the later of (i) 30 days prior to the first solicitation of consents or
(ii) the date of the most recent list of Bondholders furnished to the Indenture
Trustee pursuant to Section 7.01(a) prior to such solicitation.
"REDEMPTION DATE": The Payment Date, if any, on which the Bonds are
redeemed pursuant to Article X hereof which date may occur on or after the
Payment Date on which the Aggregate Principal Balance of the Mortgage Loans as
of the related Determination Date is less than 10% of the Aggregate Principal
Balances of the Mortgage Loans as of their respective Cut-off Dates.
"REDEMPTION PRICE": With respect to any Bond to be redeemed in whole or
in part, an amount equal to 100% of the Current Bond Balance of the Bond to be
so redeemed, together with accrued and unpaid interest on such amount at the
Bond Interest Rate, plus any unpaid Available Funds Cap Carry Forward Amount,
through the end of the Interest Period immediately preceding the Redemption
Date.
"REFERENCE BANKS": Bankers Trust Company, Xxxxxxx'x Bank PLC and
National Westminster Bank PLC; provided that, if any of the foregoing banks are
deemed by the Servicer (as indicated in writing to the Indenture Trustee) not
suitable to serve as a Reference Bank, then any leading banks selected by the
Indenture Trustee and engaged in transactions in Eurodollar deposits in the
international Eurocurrency market (i) with an established place of business in
London, (ii) whose quotations appear on the Reuters Screen LIBO Page on the
LIBOR Determination Date in question, (iii) that have been designated as such by
the Indenture Trustee and (iv) not controlling, controlled by, or under common
control with the Issuer, the Mortgage Loan Seller, the Transferor, the Servicer
or any originator.
"RELIEF ACT PERCENTAGE": For any Payment Date, the amount, converted to
a percentage of the Aggregate Principal Balance of the Mortgage Loans as of the
end of the related Determination Date, of any interest shortfalls resulting from
the application of the Soldiers' and Sailors' Civil Relief Act of 1940, as
amended (the "Relief Act"). In computing the Relief Act Percentage, only those
shortfalls that would reduce Available Funds to an amount less than the sum of
(i) amounts owed to the Bond Insurer, (ii) Bond Interest (calculated assuming
the Relief Act Percentage is zero) and (iii) Monthly Principal on the related
Payment Date will be taken into account for purposes of such calculation.
"REMITTABLE FUNDS": As defined in the Servicing Agreement.
"REO PROPERTY": As defined in the Servicing Agreement.
"REQUIRED OVERCOLLATERALIZATION AMOUNT" means:
(a) for any Payment Date occurring during the period
commencing on the Closing Date and ending on the later of the thirtieth
Payment Date following the Closing Date and the date upon which
principal of the Bonds in the amount of one-half of the Aggregate
Principal Balance of the Mortgage Loans as of the respective Cut-off
Dates has been received by the Bondholders, the greater of: (i) 3.70%
of the Aggregate Principal Balance of the Mortgage Loans as of the
respective Cut-off Dates, and (ii) 60% of the Delinquency Amount.
(b) for any Payment Date occurring after the end of the
period described in clause (a) above, the greatest of (i) 7.40% of the
Aggregate Principal Balance of the Mortgage Loans as of the
Determination Date relating to such Payment Date, (ii) 60% of the
Delinquency Amount, (iii) 0.75% of the Aggregate Principal Balance of
the Mortgage Loans as of the respective Cut-off Dates, and (iv) the sum
of the Principal Balances of the three largest Mortgage Loans then
outstanding.
(c) Provided, however, for any Payment Date occurring
after the end of the period described in clause (a) above, if 70% of
the Delinquency Amount exceeds the amount calculated in clause (b)(i)
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above, the Required Overcollateralization Amount shall be no less than
the Required Overcollateralization Amount as of the previous Payment
Date.
The Bond Insurer may, in its sole discretion, at the request
of the holders of 50% or more of the ownership interests of the Issuer,
modify clause (a)(ii) or (b)(ii) above for the purpose of reducing or
eliminating, in whole or in part, the application of clause (a)(ii) or
(b)(ii) above, if the Indenture Trustee and each Rating Agency shall
have been notified in writing of such modification prior to the related
Payment Date and each Rating Agency shall have confirmed that such
modification shall not result in a downgrading of the then-current
implied ratings on the Bonds (without regard to the MBIA Insurance
Policy).
"REQUIRED PAYMENT AMOUNT": With respect to any Payment Date, the Bond
Interest for such Payment Date plus the amount of any Overcollateralization
Deficit for such Payment Date.
"RESERVE INTEREST RATE": With respect to any LIBOR Determination Date,
the rate per annum that the Indenture Trustee determines to be either (i) the
arithmetic mean (rounded upwards if necessary to the nearest whole multiple of
0.0625%) of the one-month U.S. dollar lending rates that New York City banks
selected by the Indenture Trustee are quoting on the relevant LIBOR
Determination Date to the principal London offices of leading banks in the
London interbank market or (ii) in the event that the Indenture Trustee can
determine no such arithmetic mean, the lowest one-month U.S. dollar lending rate
that New York City banks selected by the Indenture Trustee are quoting on such
LIBOR Determination Dates to leading European banks.
"RESPONSIBLE OFFICER": With respect to the Indenture Trustee, the
chairman or vice-chairman of the board of directors, the chairman or
vice-chairman of the executive committee of the board of directors, the
president, any vice president, any assistant vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
trust officer or assistant trust officer, the controller, any assistant
controller or any other officer of the Indenture Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of his knowledge of and familiarity with
the particular subject.
"REUTERS SCREEN LIBO PAGE": The display designated as page "LIBO" on
the Reuters Monitor Money Rates Service (or such other page as may replace the
LIBO page on that servicer for the purpose of displaying London interbank
offered rates of major banks).
"SALE": The meaning specified in Section 5.17.
"SERVICER": With respect to any Mortgage Loan, National Mortgage
Corporation, a Colorado corporation, as Servicer under the Servicing Agreement,
and its permitted successors and assigns thereunder, including any successor
servicers appointed pursuant to Section 6.02 of the Servicing Agreement.
"SERVICER REMITTANCE REPORT": As defined in the Servicing Agreement.
"SERVICING ADVANCE": As defined in the Servicing Agreement.
"SERVICING AGREEMENT": The servicing agreement, dated as of September
1, 1997, among the Issuer, the Servicer and the Indenture Trustee, as indenture
trustee and backup servicer, providing, among other things, for the servicing of
the Mortgage Loans, as such agreement may be amended or supplemented from time
to time as permitted hereby and thereby. Such term shall also include any
servicing agreement entered into with a successor servicer. A copy of the
Servicing Agreement as in effect as of the date hereof is attached hereto as
Exhibit H.
"SERVICING FEE RATE": 0.50% per annum.
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"STANDARD & POOR'S": Standard & Poor's Rating Services, a Division of
The XxXxxx-Xxxx Companies, Inc., and its successors in interest.
"TRANSFEROR": Fund America Investors Corporation II.
"TRUST AGREEMENT": That certain Deposit Trust Agreement, dated as of
September 1, 1997, among the Transferor, as Depositor (as such term is defined
therein) and the Owner Trustee.
"TRUST ESTATE": All money, instruments and other property subject or
intended to be subject to the lien of this Indenture for the benefit of the
Bondholders and the Bond Insurer as of any particular time (including, without
limitation, all property and interests Granted to the Indenture Trustee,
including all proceeds thereof).
"TRUST INDENTURE ACT" or "TIA": The Trust Indenture Act of 1939 as it
may be amended from time to time.
"TRUST INSURANCE PROCEEDS": As defined in the Servicing Agreement.
"TRUST PAYING AGENT": The entity appointed to act as paying agent
pursuant to the Trust Agreement with respect to amounts on deposit from time to
time in the Certificate Distribution Account and distributions thereof to
Certificateholders. The initial Trust Paying Agent is Norwest Bank Minnesota,
National Association.
"U.S. BANKRUPTCY CODE" shall mean the United States Bankruptcy Code, 11
U.S.C. Sections 101, et seq., as amended or supplemented from time to time.
"VICE PRESIDENT": Any vice president, whether or not designated by a
number or a word or words added before or after the title "vice president".
ARTICLE II
THE BONDS
SECTION 2.01. FORMS GENERALLY.
The Bonds shall be in substantially the form set forth on Exhibit A
attached hereto. Each Bond may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange on which the Bonds
may be listed, or as may, consistently herewith, be determined by the Authorized
Officers of the Owner Trustee executing such Bonds on behalf of the Issuer, as
evidenced by their execution thereof. Any portion of the text of any Bond may be
set forth on the reverse thereof with an appropriate reference on the face of
the Bond.
The Definitive Bonds may be produced in any manner determined by the
Authorized Officers of the Owner Trustee executing such Bonds, as evidenced by
their execution thereof.
SECTION 2.02. FORMS OF CERTIFICATE OF AUTHENTICATION.
The form of the Authenticating Agent's certificate of authentication is
as follows:
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This is one of the Bonds referred to in the within-mentioned Indenture.
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Authenticating Agent
By:
-------------------------------------------
Authorized Signatory
SECTION 2.03. GENERAL PROVISIONS WITH RESPECT TO PRINCIPAL AND INTEREST
PAYMENTS.
The Bonds shall be designated generally as the "Collateralized Mortgage
Obligations, Series 1997-NMC1" of the Issuer.
The aggregate principal amount of Bonds that may be authenticated and
delivered under the Indenture is limited to $121,765,000, except for the Bonds
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Bonds pursuant to Sections 2.06, 2.07, or 9.06 of this
Indenture. The Bonds shall consist of one and only one class having an Original
Bond Balance, Bond Interest Rate for the initial Interest Period and Final
Maturity Date as follows:
Bond Interest
Original Bond Rate for the initial Final
Designation Balance Interest Period Maturity Date
------------- -------------- -------------------- --------------
Series 1997-1 $121,765,000 5.86625% April 25, 2029
The Bonds shall be issued in the form specified in Section 2.01.
Subject to the provisions of Section 3.01, Section 5.07, Section 5.09
and Section 8.02(d), the principal of the Bonds shall be payable in installments
ending no later than the Final Maturity Date unless the unpaid principal of such
Bonds become due and payable at an earlier date by declaration of acceleration
or call for redemption or otherwise.
All payments made with respect to any Bond shall be applied first to
the interest then due and payable on such Bond and then to the principal
thereof. All computations of interest accrued on any Bond shall be made on the
basis of the actual number of days elapsed in the related Interest Period in a
year of 360 days.
Interest on the Bonds shall accrue at the Bond Interest Rate during
each Interest Period on the Current Bond Balance of each Outstanding Bond at the
end of such Interest Period. Interest accrued during an Interest Period shall be
payable on the next following Payment Date.
All payments of principal of and interest on any Bond shall be made in
the manner specified in Section 2.08.
Notwithstanding any of the foregoing provisions with respect to
payments of principal of and interest on the Bonds, if the Bonds have become or
been declared due and payable following an Event of Default and such
acceleration of maturity and its consequences have not been rescinded and
annulled, then payments of principal of and interest on the Bonds shall be made
in accordance with Section 5.07.
SECTION 2.04. DENOMINATIONS.
The Bonds shall be issuable only as registered Bonds in the minimum
denomination of $1,000 and integral multiples in excess thereof, with the
exception of one Bond which may be issued in a lesser amount.
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SECTION 2.05. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Bonds shall be executed on behalf of the Issuer by an Authorized
Officer of the Owner Trustee. The signature of such Authorized Officer of the
Owner Trustee on the Bonds may be manual or by facsimile.
Bonds bearing the manual or facsimile signature of an individual who
was at any time an Authorized Officer of the Owner Trustee shall bind the
Issuer, notwithstanding that such individual has ceased to be an Authorized
Officer of the Owner Trustee prior to the authentication and delivery of such
Bonds or was not an Authorized Officer of the Owner Trustee at the date of such
Bonds.
At any time and from time to time after the execution and delivery of
this Indenture, the Issuer may deliver Bonds executed on behalf of the Issuer to
the Authenticating Agent for authentication; and the Authenticating Agent shall
authenticate and deliver such Bonds as in this Indenture provided and not
otherwise.
Each Bond authenticated on the Closing Date shall be dated the Closing
Date. All other Bonds that are authenticated after the Closing Date for any
other purpose hereunder shall be dated the date of their authentication.
No Bond shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Bond a
certificate of authentication substantially in the form provided for herein
executed by the Authenticating Agent by the manual signature of one of its
authorized officers or employees, and such certificate upon any Bond shall be
conclusive evidence, and the only evidence, that such Bond has been duly
authenticated and delivered hereunder.
SECTION 2.06. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Issuer shall cause to be kept a register (the "Bond Register") in
which, subject to such reasonable regulations as it may prescribe, the Issuer
shall provide for the registration of Bonds and the registration of transfers of
Bonds. The Indenture Trustee is hereby initially appointed "Bond Registrar" for
the purpose of registering Bonds and transfers of Bonds as herein provided. The
Indenture Trustee shall remain the Bond Registrar throughout the term hereof.
Upon any resignation of the Indenture Trustee, the Issuer shall promptly appoint
a successor, with the approval of the Bond Insurer, or, in the absence of such
appointment, shall assume the duties of Bond Registrar.
Upon surrender for registration of transfer of any Bond at the office
or agency of the Issuer to be maintained as provided in Section 3.02, the Owner
Trustee on behalf of the Issuer, shall execute, and the Authenticating Agent
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Bonds of any authorized denominations and of a like
aggregate principal amount.
At the option of the Holder, Bonds may be exchanged for other Bonds of
any authorized denominations, and of a like aggregate initial principal amount,
upon surrender of the Bonds to be exchanged at such office or agency. Whenever
any Bonds are so surrendered for exchange, the Owner Trustee shall execute, and
the Authenticating Agent shall authenticate and deliver, the Bonds that the
Bondholder making the exchange is entitled to receive.
All Bonds issued upon any registration of transfer or exchange of Bonds
shall be the valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Bonds surrendered
upon such registration of transfer or exchange.
Every Bond presented or surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Bond Registrar duly executed by the Holder
thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Bonds, but the Issuer and the Bond Registrar may require payment of
a sum sufficient to cover any tax or other governmental charge as may
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be imposed in connection with any registration of transfer or exchange of Bonds,
other than exchanges pursuant to Section 2.07 not involving any transfer or any
exchange made by the Bond Insurer.
SECTION 2.07. MUTILATED, DESTROYED, LOST OR STOLEN BONDS.
If (1) any mutilated Bond is surrendered to the Bond Registrar or the
Bond Registrar receives evidence to its satisfaction of the destruction, loss or
theft of any Bond, and (2) there is delivered to the Bond Registrar such
security or indemnity as may be required by the Bond Registrar to save each of
the Issuer, the Bond Insurer and the Bond Registrar harmless, then, in the
absence of notice to the Issuer or the Bond Registrar that such Bond has been
acquired by a bona fide purchaser, the Owner Trustee shall execute and upon its
request the Bond Registrar shall authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Bond, a new Bond or Bonds
of the same tenor and aggregate initial principal amount bearing a number not
contemporaneously outstanding. If, after the delivery of such new Bond, a bona
fide purchaser of the original Bond in lieu of which such new Bond was issued
presents for payment such original Bond, the Issuer and the Bond Registrar shall
be entitled to recover such new Bond from the person to whom it was delivered or
any person taking therefrom, except a bona fide purchaser, and shall be entitled
to recover upon the security or indemnity provided therefor to the extent of any
loss, damage, cost or expenses incurred by the Issuer or the Bond Registrar in
connection therewith. If any such mutilated, destroyed, lost or stolen Bond
shall have become or shall be about to become due and payable, or shall have
become subject to redemption in full, instead of issuing a new Bond, the Issuer
may pay such Bond without surrender thereof, except that any mutilated Bond
shall be surrendered.
Upon the issuance of any new Bond under this Section, the Issuer or the
Bond Registrar may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
reasonable expenses (including the fees and expenses of the Indenture Trustee or
the Bond Registrar) connected therewith.
Every new Bond issued pursuant to this Section in lieu of any
destroyed, lost or stolen Bond shall constitute an original additional
contractual obligation of the Issuer, whether or not the destroyed, lost or
stolen Bond shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Indenture equally and proportionately with any and all
other Bonds duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Bonds.
SECTION 2.08. PAYMENTS OF PRINCIPAL AND INTEREST.
(a) Payments on Bonds issued as Book-Entry Bonds will be
made by or on behalf of the Indenture Trustee to the Clearing Agency or
its nominee. Any installment of interest or principal payable on any
Definitive Bonds that is punctually paid or duly provided for by the
Issuer on the applicable Payment Date shall be paid to the Person in
whose name such Bond (or one or more Predecessor Bonds) is registered
at the close of business on the Record Date for such Payment Date by
either (i) check mailed to such Person's address as it appears in the
Bond Register on such Record Date, or (ii) by wire transfer of
immediately available funds to the account of a Bondholder, if such
Bondholder (A) is the registered holder of Definitive Bonds having an
initial principal amount of at least $1,000,000 and (B) has provided
the Indenture Trustee with wiring instructions in writing by five
Business Days prior to the related Record Date or has provided the
Indenture Trustee with such instructions for any previous Payment Date,
except for the final installment of principal payable with respect to
such Bond (or the Redemption Price for any Bond called for redemption,
if such redemption will result in payment of the then entire unpaid
principal amount of such Bond), which shall be payable as provided in
subsection (b) below of this Section 2.08. A fee may be charged by the
Indenture Trustee to a Bondholder of Definitive Bonds for any payment
made by wire transfer. Any installment of interest or principal not
punctually paid or duly provided for shall be payable as soon as funds
are available to the Indenture Trustee for payment thereof, or if
Section 5.07 applies, pursuant to Section 5.07.
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(b) All reductions in the principal amount of a Bond (or
one or more Predecessor Bonds) effected by payments of installments of
principal made on any Payment Date shall be binding upon all Holders of
such Bond and of any Bond issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof, whether or not such
payment is noted on such Bond. The final installment of principal of
each Bond (including the Redemption Price of any Bond called for
optional redemption, if such optional redemption will result in payment
of the entire unpaid principal amount of such Bond) shall be payable
only upon presentation and surrender thereof on or after the Payment
Date therefor at the Indenture Trustee's presenting office located
within the United States of America pursuant to Section 3.02.
Whenever the Indenture Trustee expects that the entire remaining
unpaid principal amount of any Bond will become due and payable on the next
Payment Date other than pursuant to a redemption pursuant to Article X, it
shall, no later than two days prior to such Payment Date, telecopy or hand
deliver to each Person in whose name a Bond to be so retired is registered at
the close of business on such otherwise applicable Record Date a notice to the
effect that:
(i) the Indenture Trustee expects that funds sufficient
to pay such final installment will be available in the Bond Account on
such Payment Date; and
(ii) if such funds are available, (A) such final
installment will be payable on such Payment Date, but only upon
presentation and surrender of such Bond at the office or agency of the
Bond Registrar maintained for such purpose pursuant to Section 3.02
(the address of which shall be set forth in such notice) and (B) no
interest shall accrue on such Bond after such Payment Date.
A copy of such form of notice shall be sent to the Bond
Insurer by the Indenture Trustee.
Notices in connection with redemptions of Bonds shall be
mailed to Bondholders in accordance with Section 10.02.
(c) Subject to the foregoing provisions of this Section,
each Bond delivered under this Indenture upon registration of transfer
of or in exchange for or in lieu of any other Bond shall carry the
rights to unpaid principal and interest that were carried by such other
Bond. Any checks mailed pursuant to subsection (a) of this Section 2.08
and returned undelivered shall be held in accordance with Section 3.03.
(d) Each Payment Date Statement, prepared by the
Indenture Trustee based on the Servicer Remittance Report delivered to
the Indenture Trustee pursuant to the Servicing Agreement, shall be
delivered by the Indenture Trustee to the Bond Insurer, the Rating
Agencies, the Owner Trustee, the Underwriters (as defined in the
Insurance Agreement) and each Bondholder as the statement required
pursuant to Section 8.06. In addition, on each Payment Date the
Indenture Trustee shall forward to the Underwriters and Bloomberg the
electromagnetic tape or disk containing certain Mortgage Loan
information required to be delivered to the Indenture Trustee by the
Servicer pursuant to Section 3.01 of the Servicing Agreement; provided,
however, that the Indenture Trustee shall not forward any such tape or
disk that separately sets forth the Bond Insurer Premium or the Bond
Insurer Premium Rate. Neither the Indenture Trustee (in its capacity as
Indenture Trustee or as Back-Up Servicer) nor the Paying Agent shall
have any responsibility to recalculate, verify or recompute information
contained in any such tape or disk or any such Servicer Remittance
Report except to the extent necessary to satisfy all obligations under
this Section 2.08(d) and in its capacity as Back-Up Servicer under
Article III of the Servicing Agreement.
Within 90 days after the end of each calendar year, the Indenture
Trustee will be required to furnish to each person who at any time
during the calendar year was a Bondholder, if requested in writing by
such person, a statement containing the information set forth in
subclauses (i) and (ii) in the definition of "Payment Date Statement,"
aggregated for such calendar year or the applicable portion thereof
during which such person was a Bondholder. Such obligation will be
deemed to have been satisfied to the extent
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that substantially comparable information is provided pursuant to any
requirements of the Code as are from time to time in force.
SECTION 2.09. PERSONS DEEMED OWNERS.
Prior to due presentment for registration of transfer of any Bond, the
Issuer, the Indenture Trustee, any Paying Agent and any other agent of the
Issuer, the Bond Insurer or the Indenture Trustee may treat the Person in whose
name any Bond is registered as the owner of such Bond (a) on the applicable
Record Date for the purpose of receiving payments of the principal of and
interest on such Bond and (b) on any other date for all other purposes
whatsoever, and neither the Issuer, the Indenture Trustee, any Paying Agent nor
any other agent of the Issuer, the Bond Insurer or the Indenture Trustee shall
be affected by notice to the contrary.
SECTION 2.10. CANCELLATION.
All Bonds surrendered for payment, registration of transfer, exchange
or redemption shall, if surrendered to any Person other than the Bond Registrar,
be delivered to the Bond Registrar and shall be promptly canceled by it. The
Issuer may at any time deliver to the Bond Registrar for cancellation any Bond
previously authenticated and delivered hereunder which the Issuer may have
acquired in any manner whatsoever, and all Bonds so delivered shall be promptly
canceled by the Bond Registrar. No Bonds shall be authenticated in lieu of or in
exchange for any Bonds canceled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Bonds held by the Bond Registrar shall
be held by the Bond Registrar in accordance with its standard retention policy,
unless the Issuer shall direct by an Issuer Order that they be destroyed or
returned to it.
SECTION 2.11. AUTHENTICATION AND DELIVERY OF BONDS.
The Bonds may be executed by an Authorized Officer of the Owner Trustee
and delivered to the Authenticating Agent for authentication, and thereupon the
same shall be authenticated and delivered by the Authenticating Agent, upon
Issuer Request and upon receipt by the Authenticating Agent of all of the
following:
(a) An Issuer Order authorizing the execution,
authentication and delivery of the Bonds and specifying the Final
Maturity Date, the principal amount and the Bond Interest Rate (or the
manner in which such Bond Interest Rate is to be determined) of such
Bonds to be authenticated and delivered.
(b) An Issuer Order authorizing the execution and
delivery of this Indenture.
(c) One or more Opinions of Counsel addressed to the
Authenticating Agent and the Bond Insurer or upon which the
Authenticating Agent and the Bond Insurer is expressly permitted to
rely, complying with the requirements of Section 11.01, reasonably
satisfactory in form and substance to the Authenticating Agent and the
Bond Insurer.
In rendering the opinions set forth above, such counsel may
rely upon officer's certificates of the Issuer, the Owner Trustee, the
Servicer and the Indenture Trustee, without independent confirmation or
verification with respect to factual matters relevant to such opinions.
In rendering the opinions set forth above, such counsel need express no
opinion as to (A) the existence of, or the priority of the security
interest created by the Indenture against, any liens or other interests
that arise by operation of law and that do not require any filing or
similar action in order to take priority over a perfected security
interest or (B) the priority of the security interest created by this
Indenture with respect to any claim or lien in favor of the United
States or any agency or instrumentality thereof (including federal tax
liens and liens arising under Title IV of the Employee Retirement
Income Security Act of 1974).
The acceptability to the Bond Insurer of the Opinion of
Counsel delivered to the Indenture Trustee and the Bond Insurer at the
Closing Date shall be conclusively evidenced by the delivery on the
Closing Date of the MBIA Insurance Policy.
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(d) An Officers' Certificate of the Issuer complying with
the requirements of Section 11.01 and stating that:
(i) the Issuer is not in Default under this Indenture and
the issuance of the Bonds will not result in any breach of any of the
terms, conditions or provisions of, or constitute a default under, the
Issuer's Certificate of Trust or any indenture, mortgage, deed of trust
or other agreement or instrument to which the Issuer is a party or by
which it is bound, or any order of any court or administrative agency
entered in any proceeding to which the Issuer is a party or by which it
may be bound or to which it may be subject, and that all conditions
precedent provided in this Indenture relating to the authentication and
delivery of the Bonds have been complied with;
(ii) the Issuer is the owner of each Mortgage Loan, free
and clear of any lien, security interest or charge, has not assigned
any interest or participation in any such Mortgage Loan (or, if any
such interest or participation has been assigned, it has been released)
and has the right to Grant each such Mortgage Loan to the Indenture
Trustee;
(iii) the information set forth in the Mortgage Loan
Schedule attached as Schedule I to this Indenture is correct;
(iv) the Issuer has Granted to the Indenture Trustee all
of its right, title and interest in each Mortgage Loan;
(v) as of the Closing Date, no lien in favor of the
United States described in Section 6321 of the Code, or lien in favor
of the Pension Benefit Guaranty Corporation described in Section
4068(a) of the Employee Retirement Income Security Act of 1974, as
amended, has been filed as described in subsections 6323(f) and 6323(g)
of the Code upon any property belonging to the Issuer; and
(vi) attached thereto is a true and correct copy of
letters signed by each Rating Agency confirming that the Bonds have
been rated in the highest rating category of such Rating Agency.
(e) An executed counterpart of the Servicing Agreement.
(f) An executed counterpart of the Mortgage Loan Sale
Agreement.
(g) An executed counterpart of the Mortgage Loan
Contribution Agreement.
SECTION 2.12. BOOK-ENTRY BONDS.
The Bonds will be issued initially as one or more certificates in the
name of the Cede & Co., as nominee for the Clearing Agency maintaining
book-entry records with respect to ownership and transfer of such Bonds, and
registration of the Bonds may not be transferred by the Bond Registrar except
upon Book-Entry Termination. In such case, the Bond Registrar shall deal with
the Clearing Agency as representatives of the Beneficial Owners of such Bonds
for purposes of exercising the rights of Bondholders hereunder. Each payment of
principal of and interest on a Book-Entry Bond shall be paid to the Clearing
Agency, which shall credit the amount of such payments to the accounts of its
Clearing Agency Participants in accordance with its normal procedures. Each
Clearing Agency Participant shall be responsible for disbursing such payments to
the Beneficial Owners of the Book-Entry Bonds that it represents and to each
indirect participating brokerage firm (a "brokerage firm" or "indirect
participating firm") for which it acts as agent. Each brokerage firm shall be
responsible for disbursing funds to the Beneficial Owners of the Book-Entry
Bonds that it represents. All such credits and disbursements are to be made by
the Clearing Agency and the Clearing Agency Participants in accordance with the
provisions of the Bonds. None of the Indenture Trustee, the Bond Registrar, if
any, the Issuer, or any Paying Agent or the Bond Insurer shall have any
responsibility therefor except as otherwise provided by applicable law. Requests
and directions from, and votes of, such representatives shall not be deemed to
be inconsistent if they are made with respect to different Beneficial Owners.
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SECTION 2.13. TERMINATION OF BOOK ENTRY SYSTEM.
(a) The book-entry system through the Clearing Agency
with respect to the Book-Entry Bonds may be terminated upon the
happening of any of the following:
(i) The Clearing Agency advises the Indenture Trustee
that the Clearing Agency is no longer willing or able to discharge
properly its responsibilities as nominee and depositary with respect to
the Bonds and the Indenture Trustee is unable to locate a qualified
successor clearing agency satisfactory to the Issuer;
(ii) The Issuer, in its sole discretion, elects to
terminate the book-entry system by notice to the Clearing Agency and
the Indenture Trustee; or
(iii) After the occurrence of an Event of Default (at which
time the Indenture Trustee shall use all reasonable efforts to promptly
notify each Beneficial Owner through the Clearing Agency of such Event
of Default), the Beneficial Owners of no less than 51% of the Bond
Balance of the Book-Entry Bonds advise the Indenture Trustee in
writing, through the related Clearing Agency Participants and the
Clearing Agency, that the continuation of a book-entry system through
the Clearing Agency to the exclusion of any Definitive Bonds being
issued to any person other than the Clearing Agency or its nominee is
no longer in the best interests of the Beneficial Owners.
(b) Upon the occurrence of any event described in
subsection (a) above, the Indenture Trustee shall use all reasonable
efforts to notify all Beneficial Owners, through the Clearing Agency,
of the occurrence of such event and of the availability of Definitive
Bonds to Beneficial Owners requesting the same, in an aggregate Current
Bond Balance representing the interest of each, making such adjustments
and allowances as it may find necessary or appropriate as to accrued
interest and previous calls for redemption. Definitive Bonds shall be
issued only upon surrender to the Indenture Trustee of the global Bond
by the Clearing Agency, accompanied by registration instructions for
the Definitive Bonds. Neither the Issuer nor the Indenture Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such
instructions. Upon issuance of the Definitive Bonds, all references
herein to obligations imposed upon or to be performed by the Clearing
Agency shall cease to be applicable and the provisions relating to
Definitive Bonds shall be applicable.
ARTICLE III
COVENANTS
SECTION 3.01. PAYMENT OF BONDS.
The Issuer will pay or cause to be duly and punctually paid the
principal of, and interest on, the Bonds in accordance with the terms of the
Bonds and this Indenture. The Bonds shall be non-recourse obligations of the
Issuer and shall be limited in right of payment to amounts available from the
Trust Estate as provided in this Indenture and the Issuer shall not otherwise be
liable for payments on the Bonds. No person shall be personally liable for any
amounts payable under the Bonds. If any other provision of this Indenture
conflicts or is deemed to conflict with the provisions of this Section 3.01, the
provisions of this Section 3.01 shall control.
SECTION 3.02. MAINTENANCE OF OFFICE OR AGENCY.
The Issuer will cause the Bond Registrar to maintain its corporate
trust office at a location where Bonds may be surrendered for registration of
transfer or exchange, and where notices and demands to or upon the Issuer in
respect of the Bonds and this Indenture may be served.
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The Issuer may also from time to time at its own expense designate one
or more other offices or agencies within the United States of America where the
Bonds may be presented or surrendered for any or all such purposes and may from
time to time rescind such designations; provided, however, any designation of an
office or agency for payment of Bonds shall be subject to Section 3.03. The
Issuer will give prompt written notice to the Indenture Trustee and the Bond
Insurer of any such designation or rescission and of any change in the location
of any such other office or agency.
SECTION 3.03. MONEY FOR BOND PAYMENTS TO BE HELD IN TRUST.
All payments of amounts due and payable with respect to any Bonds that
are to be made from amounts withdrawn from the Bond Account pursuant to Section
8.02(c) or Section 5.07 shall be made on behalf of the Issuer by the Paying
Agent, and no amounts so withdrawn from the Bond Account for payments of Bonds
shall be paid over to the Issuer under any circumstances except as provided in
this Section 3.03 or in Section 5.07 or Section 8.02.
With respect to Definitive Bonds, if the Issuer shall have a Paying
Agent that is not also the Bond Registrar, such Bond Registrar shall furnish, no
later than the fifth calendar day after each Record Date, a list, in such form
as such Paying Agent may reasonably require, of the names and addresses of the
Holders of Bonds and of the number of Individual Bonds held by each such Holder.
Whenever the Issuer shall have a Paying Agent other than the Indenture
Trustee, it will, on or before the Business Day next preceding each Payment Date
direct the Indenture Trustee to deposit with such Paying Agent an aggregate sum
sufficient to pay the amounts then becoming due (to the extent funds are then
available for such purpose in the Bond Account), such sum to be held in trust
for the benefit of the Persons entitled thereto. Any moneys deposited with a
Paying Agent in excess of an amount sufficient to pay the amounts then becoming
due on the Bonds with respect to which such deposit was made shall, upon Issuer
Order, be paid over by such Paying Agent to the Indenture Trustee for
application in accordance with Article VIII.
Subject to the prior consent of the Bond Insurer, any Paying Agent
other than the Indenture Trustee shall be appointed by Issuer Order and at the
expense of the Issuer. The Issuer shall not appoint any Paying Agent (other than
the Indenture Trustee) that is not, at the time of such appointment, a
depository institution or trust company whose obligations would be Permitted
Investments pursuant to clause (c) of the definition of the term Permitted
Investments. The Issuer will cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee an instrument in which
such Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of
this Section, that such Paying Agent will:
(1) allocate all sums received for payment to the Holders
of Bonds on each Payment Date among such Holders in the proportion
specified in the applicable Payment Date Statement, in each case to the
extent permitted by applicable law;
(2) hold all sums held by it for the payment of amounts
due with respect to the Bonds in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided;
(3) if such Paying Agent is not the Indenture Trustee,
immediately resign as a Paying Agent and forthwith pay to the Indenture
Trustee all sums held by it in trust for the payment of the Bonds if at
any time the Paying Agent ceases to meet the standards set forth above
required to be met by a Paying Agent at the time of its appointment;
(4) if such Paying Agent is not the Indenture Trustee,
give the Indenture Trustee notice of any Default by the Issuer (or any
other obligor upon the Bonds) in the making of any payment required to
be made with respect to any Bonds for which it is acting as Paying
Agent;
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(5) if such Paying Agent is not the Indenture Trustee, at
any time during the continuance of any such Default, upon the written
request of the Indenture Trustee, forthwith pay to the Indenture
Trustee all sums so held in trust by such Paying Agent; and
(6) comply with all requirements of the Code, and all
regulations thereunder, with respect to withholding from any payments
made by it on any Bonds of any applicable withholding taxes imposed
thereon and with respect to any applicable reporting requirements in
connection therewith; provided, however, that with respect to
withholding and reporting requirements applicable to original issue
discount (if any) on any of the Bonds, the Issuer has provided the
calculations pertaining thereto to the Indenture Trustee and the Paying
Agent.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or any other purpose, by Issuer
Order direct any Paying Agent, if other than the Indenture Trustee, to pay to
the Indenture Trustee all sums held in trust by such Paying Agent, such sums to
be held by the Indenture Trustee upon the same trusts as those upon which such
sums were held by such Paying Agent; and upon such payment by any Paying Agent
to the Indenture Trustee, such Paying Agent shall be released from all further
liability with respect to such money.
Any money held by the Indenture Trustee or any Paying Agent in trust
for the payment of any amount due with respect to any Bond and remaining
unclaimed for two and one-half years after such amount has become due and
payable to the Holder of such Bond (or if earlier, three months before the date
on which such amount would escheat to a governmental entity under applicable
law) shall be discharged from such trust and paid to the Issuer; and the Holder
of such Bond shall thereafter, as an unsecured general creditor, look only to
the Issuer for payment thereof (but only to the extent of the amounts so paid to
the Issuer), and all liability of the Indenture Trustee or such Paying Agent
with respect to such trust money shall thereupon cease. The Indenture Trustee
may adopt and employ, at the expense of the Issuer, any reasonable means of
notification of such repayment (including, but not limited to, mailing notice of
such repayment to Holders whose Bonds have been called but have not been
surrendered for redemption or whose right to or interest in moneys due and
payable but not claimed is determinable from the records of the Indenture
Trustee or any Agent, at the last address of record for each such Holder).
SECTION 3.04. EXISTENCE OF ISSUER.
(a) Subject to Sections 3.04(b) and (c), the Issuer will
keep in full effect its existence, rights and franchises as a business
trust under the laws of the State of Delaware or under the laws of any
other state or the United States of America, and will obtain and
preserve its qualification to do business in each jurisdiction in which
such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Bonds, the Servicing Agreement,
the Insurance Agreement and the Mortgage Loan Contribution Agreement.
(b) Subject to Section 3.09(vii) and the prior written
consent of the Bond Insurer, any entity into which the Issuer may be
merged or with which it may be consolidated, or any entity resulting
from any merger or consolidation to which the Issuer shall be a party,
shall be the successor Issuer under this Indenture without the
execution or filing of any paper, instrument or further act to be done
on the part of the parties hereto, anything in any agreement relating
to such merger or consolidation, by which any such Issuer may seek to
retain certain powers, rights and privileges therefore obtaining for
any period of time following such merger or consolidation to the
contrary notwithstanding (other than Section 3.09(vii)).
(c) Upon any consolidation or merger of or other
succession to the Issuer in accordance with this Section 3.04, the
Person formed by or surviving such consolidation or merger (if other
than the Issuer) may exercise every right and power of, and shall have
all of the obligations of, the Issuer under this Indenture with the
same effect as if such Person had been named as the Issuer herein.
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SECTION 3.05. PROTECTION OF TRUST ESTATE.
(a) The Issuer will from time to time execute and deliver
all such supplements and amendments hereto and all such financing
statements, continuation statements, instruments of further assurance
and other instruments, and will take such other action as may be
necessary or advisable to:
(i) Grant more effectively all or any portion of the
Trust Estate;
(ii) maintain or preserve the lien of this Indenture or
carry out more effectively the purposes hereof;
(iii) perfect, publish notice of or protect the validity of
any Grant made or to be made by this Indenture;
(iv) enforce any of the Mortgage Loans, the Servicing
Agreement, the Mortgage Loan Sale Agreement or the Mortgage Loan
Contribution Agreement; or
(v) preserve and defend title to the Trust Estate and the
rights of the Indenture Trustee, and of the Bondholders, in the
Mortgage Loans and the other property held as part of the Trust Estate
against the claims of all Persons and parties.
(b) The Indenture Trustee shall not remove any portion of
the Trust Estate that consists of money or is evidenced by an
instrument, certificate or other writing from the jurisdiction in which
it was held at the date of the most recent Opinion of Counsel delivered
pursuant to Section 3.06 (or from the jurisdiction in which it was
held, or to which it is intended to be removed, as described in the
Opinion of Counsel delivered at the Closing Date pursuant to Section
2.11(c), if no Opinion of Counsel has yet been delivered pursuant to
Section 3.06) or cause or permit ownership or the pledge of any portion
of the Trust Estate that consists of book-entry securities to be
recorded on the books of a Person located in a different jurisdiction
from the jurisdiction in which such ownership or pledge was recorded at
such time unless the Indenture Trustee shall have first received an
Opinion of Counsel to the effect that the lien and security interest
created by this Indenture with respect to such property will continue
to be maintained after giving effect to such action or actions.
SECTION 3.06. OPINIONS AS TO TRUST ESTATE.
On or before April 30th in each calendar year, beginning with the first
calendar year commencing after the Closing Date, the Issuer shall furnish to the
Indenture Trustee and the Bond Insurer an Opinion of Counsel reasonably
satisfactory in form and substance to the Indenture Trustee and the Bond Insurer
either stating that, in the opinion of such counsel, such action has been taken
as is necessary to maintain the lien and security interest created by this
Indenture and reciting the details of such action or stating that in the opinion
of such counsel no such action is necessary to maintain such lien and security
interest. Such Opinion of Counsel shall also describe all such action, if any,
that will, in the opinion of such counsel, be required to be taken to maintain
the lien and security interest of this Indenture with respect to the Trust
Estate until May 1st in the following calendar year.
SECTION 3.07. PERFORMANCE OF OBLIGATIONS; SERVICING AGREEMENT.
(a) The Issuer shall punctually perform and observe all
of its obligations under this Indenture and the Servicing Agreement.
(b) The Issuer shall not take any action and will use its
Best Efforts not to permit any action to be taken by others that would
release any Person from any of such Person's covenants or obligations
under any of the Mortgage Files or under any instrument included in the
Trust Estate, or that would result in the amendment, hypothecation,
subordination, termination or discharge of, or impair the validity or
effectiveness of, any of the documents or instruments contained in the
Mortgage Files, except as expressly
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permitted in this Indenture, the Servicing Agreement or such document
included in the Mortgage File or other instrument or unless such action
will not adversely affect the interests of the Holders of the Bonds.
(c) If the Issuer shall have knowledge of the occurrence
of a default under the Servicing Agreement, the Issuer shall promptly
notify the Indenture Trustee, the Bond Insurer and the Rating Agencies
thereof, and shall specify in such notice the action, if any, the
Issuer is taking with respect to such default.
(d) Upon any termination of the Servicer's rights and
powers pursuant to the Servicing Agreement, the Indenture Trustee shall
promptly notify the Rating Agencies. As soon as any successor Servicer
is appointed, the Indenture Trustee shall notify the Rating Agencies,
specifying in such notice the name and address of such successor
Servicer.
SECTION 3.08. INVESTMENT COMPANY ACT.
The Issuer shall at all times conduct its operations so as not to be
subject to, or shall comply with, the requirements of the Investment Company Act
of 1940, as amended (or any successor statute), and the rules and regulations
thereunder.
SECTION 3.09. NEGATIVE COVENANTS.
The Issuer shall not:
(i) sell, transfer, exchange or otherwise dispose of any
portion of the Trust Estate except as expressly permitted by this
Indenture or the Servicing Agreement;
(ii) claim any credit on, or make any deduction from, the
principal of, or interest on, any of the Bonds by reason of the payment
of any taxes levied or assessed upon any portion of the Trust Estate;
(iii) engage in any business or activity other than as
permitted by the Trust Agreement or other than in connection with, or
relating to, the issuance of the Bonds pursuant to this Indenture or
amend the Trust Agreement, as in effect on the Closing Date, other than
in accordance with Section 11.01;
(iv) incur, issue, assume or otherwise become liable for
any indebtedness other than the Bonds;
(v) incur, assume, guaranty or agree to indemnify any
Person with respect to any indebtedness of any Person, except for such
indebtedness as may be incurred by the Issuer in connection with the
issuance of the Bonds pursuant to this Indenture;
(vi dissolve or liquidate in whole or in part (until the
Bonds are paid in full);
(vii)(1) permit the validity or effectiveness of this
Indenture or any Grant to be impaired, or permit the lien of this
Indenture to be impaired, amended, hypothecated, subordinated,
terminated or discharged, or permit any Person to be released from any
covenants or obligations under this Indenture, except as may be
expressly permitted hereby, (2) permit any lien, charge, security
interest, mortgage or other encumbrance (other than the lien of this
Indenture or any Permitted Encumbrance) to be created on or extend to
or otherwise arise upon or burden the Trust Estate or any part thereof
or any interest therein or the proceeds thereof, or (3) permit the lien
of this Indenture not to constitute a valid perfected first priority
security interest in the Trust Estate; or
(viii) take any other action that should reasonably be
expected to, or fail to take any action if such failure should
reasonably be expected to, cause the Issuer to be taxable as (a) an
association pursuant to Section 7701 of the Code or (b) a taxable
mortgage pool pursuant to Section 7701(i) of the Code.
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SECTION 3.10. ANNUAL STATEMENT AS TO COMPLIANCE.
On or before March 31, 1998, and each March 31st thereafter, the Issuer
shall deliver to the Indenture Trustee, the Bond Insurer and the Underwriters a
written statement, signed by an Authorized Officer of the Owner Trustee, stating
that:
(1) a review of the fulfillment by the Issuer during such
year of its obligations under this Indenture has been made under such
Authorized Officer's supervision; and
(2) to the best of such Authorized Officer's knowledge,
based on such review, the Issuer has complied with all conditions and
covenants under this Indenture throughout such year, or, if there has
been a Default in the fulfillment of any such covenant or condition,
specifying each such Default known to such Authorized Officer and the
nature and status thereof.
SECTION 3.11. RESTRICTED PAYMENTS.
The Issuer shall not, directly or indirectly, (i) pay any dividend or
make any distribution (by reduction of capital or otherwise), whether in cash,
property, securities or a combination thereof, to the Owner Trustee or any owner
of a beneficial interest in the Issuer or otherwise with respect to any
ownership or equity interest or security in or of the Issuer or to the Servicer,
(ii) redeem, purchase, retire or otherwise acquire for value any such ownership
or equity interest or security or (iii) set aside or otherwise segregate any
amounts for any such purpose; provided, however, that the Issuer may make, or
cause to be made, distributions to the Servicer, the Indenture Trustee, the
Owner Trustee, the Bond Insurer and the Certificateholders as contemplated by,
and to the extent funds are available for such purpose under, the Servicing
Agreement or the Trust Agreement and the Issuer will not, directly or
indirectly, make or cause to be made payments to or distributions from the Bond
Account except in accordance with this Indenture.
SECTION 3.12. TREATMENT OF BONDS AS DEBT FOR TAX PURPOSES.
The Issuer shall treat the Bonds as indebtedness for all federal and
state tax purposes.
SECTION 3.13. NOTICE OF EVENTS OF DEFAULT.
The Issuer shall give the Indenture Trustee, the Bond Insurer, the
Rating Agencies and the Underwriters prompt written notice of each Event of
Default hereunder, each default on the part of the Servicer of its obligations
under the Servicing Agreement and each default on the part of the Mortgage Loan
Seller of its obligations under the Mortgage Loan Sale Agreement.
SECTION 3.14. FURTHER INSTRUMENTS AND ACTS.
Upon request of the Indenture Trustee or the Bond Insurer, the Issuer
will execute and deliver such further instruments and do such further acts as
may be reasonably necessary or proper to carry out more effectively the purpose
of this Indenture.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01. SATISFACTION AND DISCHARGE OF INDENTURE.
Whenever the following conditions shall have been satisfied:
(1) either
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(A) all Bonds theretofore authenticated and
delivered (other than (i) Bonds that have been destroyed, lost
or stolen and that have been replaced or paid as provided in
Section 2.07, and (ii) Bonds for whose payment money has
theretofore been deposited in trust and thereafter repaid to
the Issuer, as provided in Section 3.03) have been delivered
to the Bond Registrar for cancellation; or
(B) all Bonds not theretofore delivered to the
Bond Registrar for cancellation
(i) have become due and payable, or
(ii) will become due and payable at the
Final Maturity Date within one year, or
(iii) are to be called for redemption
within one year under irrevocable arrangements
satisfactory to the Indenture Trustee for the giving
of notice of redemption by the Indenture Trustee in
the name, and at the expense, of the Issuer or the
Servicer,
and the Issuer or the Servicer, in the case of clauses (B)(i),
(B)(ii) or (B)(iii) above, has irrevocably deposited or caused
to be deposited with the Indenture Trustee, in trust for such
purpose, an amount sufficient to pay and discharge the entire
indebtedness on such Bonds not theretofore delivered to the
Indenture Trustee for cancellation, for principal and interest
to the Final Maturity Date or to the applicable Redemption
Date, as the case may be, and in the case of Bonds that were
not paid at the Final Maturity Date of their entire unpaid
principal amount, for all overdue principal and all interest
payable on such Bonds to the next succeeding Payment Date
therefor;
(2) the Issuer has paid or caused to be paid all other
sums payable hereunder by the Issuer (including, without limitation,
any amounts due the Bond Insurer hereunder); and
(3) the Issuer has delivered to the Indenture Trustee and
the Bond Insurer an Officers' Certificate and an Opinion of Counsel
satisfactory in form and substance to the Indenture Trustee and the
Bond Insurer each stating that all conditions precedent herein
providing for the satisfaction and discharge of this Indenture have
been complied with;
then, upon Issuer Request, this Indenture and the lien, rights and interests
created hereby and thereby shall cease to be of further effect, and the
Indenture Trustee and each co-trustee and separate trustee, if any, then acting
as such hereunder shall, at the expense of the Issuer (or of the Servicer in the
case of a redemption by the Servicer), execute and deliver all such instruments
as may be necessary to acknowledge the satisfaction and discharge of this
Indenture and shall pay, or assign or transfer and deliver, to the Issuer or
upon Issuer Order all cash, securities and other property held by it as part of
the Trust Estate remaining after satisfaction of the conditions set forth in
clauses (1) and (2) above.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Indenture Trustee and the Paying Agent to the Issuer and the
Holders of Bonds under Section 3.03, the obligations of the Indenture Trustee to
the Holders of Bonds under Section 4.02 and the provisions of Section 2.07 with
respect to lost, stolen, destroyed or mutilated Bonds, registration of transfers
of Bonds and rights to receive payments of principal of and interest on the
Bonds shall survive.
SECTION 4.02. APPLICATION OF TRUST MONEY.
All money deposited with the Indenture Trustee pursuant to Sections
3.03 and 4.01 shall be held in trust and applied by it, in accordance with the
provisions of the Bonds and this Indenture, to the payment, either directly or
through any Paying Agent, as the Indenture Trustee may determine, to the Persons
entitled thereto, of the principal and interest for whose payment such money has
been deposited with the Indenture Trustee.
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ARTICLE V
DEFAULTS AND REMEDIES
SECTION 5.01. EVENT OF DEFAULT.
"Event of Default", wherever used herein, means, with respect to Bonds
issued hereunder, any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) if the Issuer, after payment of any Insured Payment
in respect of such Payment Date, shall default in the payment on any
Payment Date of any Required Payment Amount or fail to pay the Bonds in
full on or before the Final Maturity Date (and in the case of any such
default, such default or failure shall continue for a period of 5 days
unremedied);
(2) if the Issuer shall breach or default in the due
observance of any one or more of the covenants set forth in clauses (i)
through (viii) of Section 3.09;
(3) if the Issuer shall breach, or default in the due
observance or performance of, any other of its covenants in this
Indenture, and such Default shall continue for a period of 30 days
after there shall have been given, by registered or certified mail, to
the Issuer and the Bond Insurer by the Indenture Trustee at the
direction of the Bond Insurer, or to the Issuer and the Indenture
Trustee by the Holders of Bonds representing at least 25% of the Bond
Balance of the Outstanding Bonds, with the prior written consent of the
Bond Insurer, a written notice specifying such Default and requiring it
to be remedied and stating that such notice is a "Notice of Default"
hereunder;
(4) if any representation or warranty of the Issuer made
in this Indenture or any certificate or other writing delivered by the
Issuer pursuant hereto or in connection herewith shall prove to be
incorrect in any material respect as of the time when the same shall
have been made and, within 30 days after there shall have been given,
by registered or certified mail, written notice thereof to the Issuer
and the Bond Insurer by the Indenture Trustee at the direction of the
Bond Insurer, or to the Issuer and the Indenture Trustee by the Holders
of Bonds representing at least 25% of the Bond Balance of the
Outstanding Bonds, with the prior written consent of the Bond Insurer,
the circumstance or condition in respect of which such representation
or warranty was incorrect shall not have been eliminated or otherwise
cured; provided, however, that in the event that there exists a remedy
with respect to any such breach that consists of a purchase obligation,
repurchase obligation or right to substitute under the Basic Documents,
then such purchase obligation, repurchase obligation or right to
substitute shall be the sole remedy with respect to such breach and
shall not constitute an Event of Default hereunder;
(5) the entry of a decree or order for relief by a court
having jurisdiction in respect of the Issuer in an involuntary case
under the federal bankruptcy laws, as now or hereafter in effect, or
any other present or future federal or state bankruptcy, insolvency or
similar law, or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Issuer or of
any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Issuer and the continuance of any
such decree or order unstayed and in effect for a period of 60
consecutive days; or
(6) the commencement by the Issuer of a voluntary case
under the federal bankruptcy laws, as now or hereafter in effect, or
any other present or future federal or state bankruptcy, insolvency or
similar law, or the consent by the Issuer to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Issuer or of
any substantial part of its property or the making by the Issuer of an
assignment for the benefit of creditors or
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the failure by the Issuer generally to pay its debts as such debts
become due or the taking of corporate action by the Issuer in
furtherance of any of the foregoing.
The payment by the Bond Insurer of any Insured Payment in an amount
sufficient to cover the related Required Payment Amount pursuant to the MBIA
Insurance Policy in respect of any Payment Date shall not constitute an Event of
Default with respect to the Bonds.
SECTION 5.02. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default occurs and is continuing, then and in every such
case, but with the consent of the Bond Insurer in the absence of a Bond Insurer
Default, the Indenture Trustee may, and on request of the Holders of Bonds
representing not less than 50% of the Bond Balance of the Outstanding Bonds,
shall, declare all the Bonds to be immediately due and payable by a notice in
writing to the Issuer (and to the Indenture Trustee if given by Bondholders),
and upon any such declaration such Bonds, in an amount equal to the Bond Balance
of such Bonds, together with accrued and unpaid interest thereon to the date of
such acceleration, shall become immediately due and payable, all subject to the
prior written consent of the Bond Insurer in the absence of a Bond Insurer
Default.
At any time after such a declaration of acceleration of maturity of the
Bonds has been made and before a judgment or decree for payment of the money due
has been obtained by the Indenture Trustee as hereinafter in this Article
provided the Bond Insurer or the Holders of Bonds representing more than 50% of
the Bond Balance of the Outstanding Bonds, with the prior written consent of the
Bond Insurer, by written notice to the Issuer and the Indenture Trustee, may
rescind and annul such declaration and its consequences if:
(1) the Issuer has paid or deposited with the Indenture
Trustee a sum sufficient to pay:
(A) all payments of principal of, and interest
on, all Bonds and all other amounts that would then be due
hereunder or upon such Bonds if the Event of Default giving
rise to such acceleration had not occurred; and
(B) all sums paid or advanced by the Indenture
Trustee hereunder and the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee, its
agents and counsel; and
(2) all Events of Default, other than the nonpayment of
the principal of Bonds that have become due solely by such
acceleration, have been cured or waived as provided in Section 5.14.
No such rescission shall affect any subsequent Default or impair any
right consequent thereon.
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SECTION 5.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
INDENTURE TRUSTEE.
Subject to the provisions of Section 3.01 and the following sentence,
if an Event of Default occurs and is continuing, the Indenture Trustee may, with
the prior written consent of the Bond Insurer, proceed to protect and enforce
its rights and the rights of the Bondholders and the Bond Insurer by any
Proceedings the Indenture Trustee deems appropriate to protect and enforce any
such rights, whether for the specific enforcement of any covenant or agreement
in this Indenture or in aid of the exercise of any power granted herein, or
enforce any other proper remedy. Any proceedings brought by the Indenture
Trustee on behalf of the Bondholders and the Bond Insurer or any Bondholder
against the Issuer shall be limited to the preservation, enforcement and
foreclosure of the liens, assignments, rights and security interests under the
Indenture and no attachment, execution or other unit or process shall be sought,
issued or levied upon any assets, properties or funds of the Issuer, other than
the Trust Estate relative to the Bonds in respect of which such Event of Default
has occurred. If there is a foreclosure of any such liens, assignments, rights
and security interests under this Indenture, by private power of sale or
otherwise, no judgment for any deficiency upon the indebtedness represented by
the Bonds may be sought or obtained by the Indenture Trustee or any Bondholder
against the Issuer. The Indenture Trustee shall be entitled to recover the costs
and expenses expended by it pursuant to this Article V including reasonable
compensation, expenses, disbursements and advances of the Indenture Trustee, its
agents and counsel.
SECTION 5.04. REMEDIES.
If an Event of Default shall have occurred and be continuing and the
Bonds have been declared due and payable and such declaration and its
consequences have not been rescinded and annulled, the Indenture Trustee, at the
direction of the Bond Insurer (subject to Section 5.17, to the extent
applicable) may, for the benefit of the Bondholders and the Bond Insurer, do one
or more of the following:
(a) institute Proceedings for the collection of all
amounts then payable on the Bonds, or under this Indenture, whether by
declaration or otherwise, enforce any judgment obtained, and collect
from the Issuer moneys adjudged due, subject in all cases to the
provisions of Sections 3.01 and 5.03;
(b) in accordance with Section 5.17, sell the Trust
Estate or any portion thereof or rights or interest therein, at one or
more public or private Sales called and conducted in any manner
permitted by law;
(c) institute Proceedings from time to time for the
complete or partial foreclosure of this Indenture with respect to the
Trust Estate;
(d) exercise any remedies of a secured party under the
Uniform Commercial Code and take any other appropriate action to
protect and enforce the rights and remedies of the Indenture Trustee or
the Holders of the Bonds and the Bond Insurer hereunder; and
(e) refrain from selling the Trust Estate and apply all
Remittable Funds pursuant to Section 5.07.
SECTION 5.05. INDENTURE TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, composition or other judicial
Proceeding relative to the Issuer or any other obligor upon any of the Bonds or
the property of the Issuer or of such other obligor or their creditors, the
Indenture Trustee (irrespective of whether the Bonds shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Indenture Trustee shall have made any demand on the Issuer for the
payment of any overdue principal or interest) shall, with the prior written
consent of the Bond Insurer, be entitled and empowered, by intervention in such
Proceeding or otherwise to:
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(i) file and prove a claim for the whole amount of
principal and interest owing and unpaid in respect of the Bonds and
file such other papers or documents as may be necessary or advisable in
order to have the claims of the Indenture Trustee (including any claim
for the reasonable compensation, expenses, disbursements and advances
of the Indenture Trustee, its agents and counsel) and of the
Bondholders and the Bond Insurer allowed in such Proceeding, and
(ii) collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, liquidator, or sequestrator (or
other similar official) in any such Proceeding is hereby authorized by
each Bondholder and the Bond Insurer to make such payments to the
Indenture Trustee and, in the event that the Indenture Trustee shall
consent to the making of such payments directly to the Bondholders and
the Bond Insurer, to pay to the Indenture Trustee any amount due to it
for the reasonable compensation, expenses, disbursements and advances
of the Indenture Trustee, its agents and counsel.
Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or accept or adopt on behalf of any
Bondholder or the Bond Insurer any plan of reorganization, arrangement,
adjustment or composition affecting any of the Bonds or the rights of any Holder
thereof, or the Bond Insurer, or to authorize the Indenture Trustee to vote in
respect of the claim of any Bondholder or the Bond Insurer in any such
Proceeding.
SECTION 5.06. INDENTURE TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION
OF BONDS.
All rights of action and claims under this Indenture or any of the
Bonds may be prosecuted and enforced by the Indenture Trustee without the
possession of any of the Bonds or the production thereof in any Proceeding
relating thereto, and any such Proceeding instituted by the Indenture Trustee,
at the direction of the Bond Insurer, shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall be for the
ratable benefit of the Holders of the Bonds and the Bond Insurer in respect of
which such judgment has been recovered after payment of amounts required to be
paid pursuant to clause (i) of Section 5.07.
SECTION 5.07. APPLICATION OF MONEY COLLECTED.
If the Bonds have been declared due and payable following an Event of
Default and such declaration and its consequences have not been rescinded and
annulled, any money collected by the Indenture Trustee with respect to such
Bonds pursuant to this Article or otherwise and any other monies that may then
be held or thereafter received by the Indenture Trustee as security for such
Bonds shall be applied in the following order, at the date or dates fixed by the
Indenture Trustee and, in case of the payment of the entire amount due on
account of principal of, and interest on, such Bonds, upon presentation and
surrender thereof:
(i) first, to the Indenture Trustee, any unpaid Indenture
Trustee's Fees then due and any other amounts payable and due to the
Indenture Trustee under this Indenture, including any costs or expenses
incurred by it in connection with the enforcement of the remedies
provided for in this Article V;
(ii) second, to the Servicer, any amounts required to pay
the Servicer for any unpaid Servicing Fees then due and to reimburse
the Servicer for Monthly Advances previously made by, and not
previously reimbursed or retained by, the Services and, upon the final
liquidation of the related Mortgage Loan or the final liquidation of
the Trust Estate, Servicing Advances previously made by, and not
previously reimbursed or retained by, the Servicer;
(iii) third, to the payment of Bond Interest then due and
unpaid upon the Outstanding Bonds through the day preceding the date on
which such payment is made;
(iv) fourth, to the payment of the Bond Balance of the
Outstanding Bonds, up to the amount of their respective Current Bond
Balances, ratably, without preference or priority of any kind;
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(v) fifth, to the payment to the Bond Insurer, as
subrogee to the rights of the Bondholders, (A) the aggregate amount
necessary to reimburse the Bond Insurer for any unreimbursed Insured
Payments paid by the Bond Insurer on prior Payment Dates, together with
interest thereon at the "Late Payment Rate" specified in the Insurance
Agreement from the date such Insured Payments were paid by the Bond
Insurer to such Payment Date, (B) the amount of any unpaid Bond Insurer
Premium then due, together with interest thereon at the "Late Payment
Rate" specified in the Insurance Agreement from the date such amounts
were due and (C) any other amounts due and owing to the Bond Insurer
under the Insurance Agreement;
(vi) sixth, to the payment of the entire outstanding
Available Funds Cap Carry Forward Amount then due and unpaid upon the
Outstanding Bonds through the day preceding the date on which such
payment is made; and
(vii) seventh, to the payment of the remainder, if any, to
the Issuer or any other Person legally entitled thereto.
SECTION 5.08. LIMITATION ON SUITS.
No Holder of a Bond shall have any right to institute any Proceedings,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to
the Indenture Trustee and the Bond Insurer of a continuing Event of
Default;
(2) the Holders of Bonds representing not less than 25%
of the Bond Balance of the Outstanding Bonds shall have made written
request to the Indenture Trustee to institute Proceedings in respect of
such Event of Default in its own name as Indenture Trustee hereunder;
(3) such Holder or Holders have offered to the Indenture
Trustee indemnity in full against the costs, expenses and liabilities
to be incurred in compliance with such request;
(4) the Indenture Trustee for 60 days after its receipt
of such notice, request and offer of indemnity has failed to institute
any such Proceeding;
(5) no direction inconsistent with such written request
has been given to the Indenture Trustee during such 60-day period by
the Holders of Bonds representing more than 50% of the Bond Balance of
the Outstanding Bonds; and
(6) the consent of the Bond Insurer shall have been
obtained; it being understood and intended that no one or more Holders
of Bonds shall have any right in any manner whatever by virtue of, or
by availing of, any provision of this Indenture to affect, disturb or
prejudice the rights of any other Holders of Bonds or to obtain or to
seek to obtain priority or preference over any other Holders or to
enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders of
Bonds.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of Bonds,
each representing less than 50% of the Bond Balances of the Outstanding Bonds,
the Indenture Trustee in its sole discretion may determine what action, if any,
shall be taken notwithstanding any other provision herein to the contrary.
SECTION 5.09. UNCONDITIONAL RIGHTS OF BONDHOLDERS TO RECEIVE PRINCIPAL
AND INTEREST.
Subject to the provisions in this Indenture (including Sections 3.01
and 5.03) limiting the right to recover amounts due on a Bond to recovery from
amounts in the Trust Estate, the Holder of any Bond shall have the right,
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to the extent permitted by applicable law, which right is absolute and
unconditional, to receive payment of each installment of interest on such Bond
on the respective Payment Date for such installments of interest, to receive
payment of each installment of principal of such Bond when due (or, in the case
of any Bond called for redemption, on the date fixed for such redemption) and to
institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of such Holder.
SECTION 5.10. RESTORATION OF RIGHTS AND REMEDIES.
If the Indenture Trustee, the Bond Insurer or any Bondholder has
instituted any Proceeding to enforce any right or remedy under this Indenture
and such Proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to the Indenture Trustee, the Bond Insurer or to such
Bondholder, then and in every such case the Issuer, the Indenture Trustee, the
Bond Insurer and the Bondholders shall, subject to any determination in such
Proceeding, be restored severally and respectively to their former positions
hereunder, and thereafter all rights and remedies of the Indenture Trustee, the
Bond Insurer and the Bondholders shall continue as though no such Proceeding had
been instituted.
SECTION 5.11. RIGHTS AND REMEDIES CUMULATIVE.
No right or remedy herein conferred upon or reserved to the Indenture
Trustee, the Bond Insurer or to the Bondholders is intended to be exclusive of
any other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 5.12. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Indenture Trustee, the Bond Insurer or of
any Holder of any Bond to exercise any right or remedy accruing upon any Event
of Default shall impair any such right or remedy or constitute a waiver of any
such Event of Default or an acquiescence therein. Every right and remedy given
by this Article or by law to the Indenture Trustee, the Bond Insurer or to the
Bondholders may be exercised from time to time, and as often as may be deemed
expedient, by the Indenture Trustee, the Bond Insurer or by the Bondholders with
the prior consent of the Bond Insurer, as the case may be.
SECTION 5.13. CONTROL BY BONDHOLDERS.
The Holders of Bonds representing more than 50% of the Bond Balance of
the Outstanding Bonds on the applicable Record Date shall, with the consent of
the Bond Insurer, have the right to direct the time, method and place of
conducting any Proceeding for any remedy available to the Indenture Trustee or
exercising any trust or power conferred on the Indenture Trustee; provided that:
(1) such direction shall not be in conflict with any rule
of law or with this Indenture;
(2) any direction to the Indenture Trustee to undertake a
Sale of the Trust Estate shall be by the Holders of Bonds representing
the percentage of the Bond Balance of the Outstanding Bonds specified
in Section 5.17(b) (1), unless Section 5.17(b) (2) is applicable; and
(3) the Indenture Trustee may take any other action
deemed proper by the Indenture Trustee that is not inconsistent with
such direction; provided, however, that, subject to Section 6.01, the
Indenture Trustee need not take any action that it determines might
involve it in liability or be unjustly prejudicial to the Bondholders
not consenting.
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SECTION 5.14. WAIVER OF PAST DEFAULTS.
The Holders of Bonds representing more than 50% of the Bond Balance of
the Outstanding Bonds on the applicable Record Date may on behalf of the Holders
of all the Bonds, and with the consent of the Bond Insurer, waive any past
Default hereunder and its consequences, except a Default:
(1) in the payment of principal or any installment of
interest on any Bond; or
(2) in respect of a covenant or provision hereof that
under Section 9.02 cannot be modified or amended without the consent of
the Holder of each Outstanding Bond affected.
Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
SECTION 5.15. UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Bond by his
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Indenture Trustee for any action
taken, suffered or omitted by it as Indenture Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to any suit instituted by the
Indenture Trustee, to any suit instituted by any Bondholder, or group of
Bondholders, holding in the aggregate Bonds representing more than 10% of the
Bond Balance of the Outstanding Bonds, or to any suit instituted by any
Bondholder for the enforcement of the payment of any Required Payment Amount on
any Bond on or after the related Payment Date or for the enforcement of the
payment of principal of any Bond on or after the Final Maturity Date (or, in the
case of any Bond called for redemption, on or after the applicable Redemption
Date).
SECTION 5.16. WAIVER OF STAY OR EXTENSION LAWS.
The Issuer covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension of law wherever enacted,
now or at any time hereafter in force, that may affect the covenants in, or the
performance of, this Indenture; and the Issuer (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Indenture Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
SECTION 5.17. SALE OF TRUST ESTATE.
(a) The power to effect any sale (a "Sale") of any
portion of the Trust Estate pursuant to Section 5.04 shall not be
exhausted by any one or more Sales as to any portion of the Trust
Estate remaining unsold, but shall continue unimpaired until the entire
Trust Estate shall have been sold or all amounts payable on the Bonds
and under this Indenture with respect thereto shall have been paid. The
Indenture Trustee may from time to time postpone any public Sale by
public announcement made at the time and place of such Sale.
(b) To the extent permitted by law, the Indenture Trustee
shall not in any private Sale sell or otherwise dispose of the Trust
Estate, or any portion thereof, unless:
(1) the Holders of Bonds representing not less
than 50% of the Bond Balance of the Bonds then Outstanding
consent to or direct the Indenture Trustee to make such Sale;
or
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(2) the proceeds of such Sale would be not less
than the entire amount that would be payable to the Holders of
the Bonds, in full payment thereof in accordance with Section
5.07, on the Payment Date next succeeding the date of such
Sale.
The purchase by the Indenture Trustee of all or any portion of
the Trust Estate at a private Sale shall not be deemed a Sale or
disposition thereof for purposes of this Section 5.17(b). In the
absence of a Bond Insurer Default, no sale hereunder shall be effective
without the consent of the Bond Insurer.
(c) Unless the Holders of all Outstanding Bonds have
otherwise consented or directed the Indenture Trustee, at any public
Sale of all or any portion of the Trust Estate at which a minimum bid
equal to or greater than the amount described in paragraph (2) of
subsection (b) of this Section 5.17 has not been established by the
Indenture Trustee and no Person bids an amount equal to or greater than
such amount, the Indenture Trustee, acting in its capacity as Indenture
Trustee on behalf of the Bondholders, shall prevent such sale and bid
an amount (which shall include the Indenture Trustee's right, in its
capacity as Indenture Trustee, to credit bid) at least $1.00 more than
the highest other bid in order to preserve the Trust Estate on behalf
of the Bondholders.
(d) In connection with a Sale of all or any portion of
the Trust Estate:
(1) any Holder or Holders of Bonds may bid for
and purchase the property offered for Sale, and upon
compliance with the terms of sale may hold, retain and possess
and dispose of such property, without further accountability,
and may, in paying the purchase money therefor, deliver any
Outstanding Bonds or claims for interest thereon in lieu of
cash up to the amount that shall, upon distribution of the net
proceeds of such Sale, be payable thereon, and such Bonds, in
case the amounts so payable thereon shall be less than the
amount due thereon, shall be returned to the Holders thereof
after being appropriately stamped to show such partial
payment;
(2) the Indenture Trustee may bid for and
acquire the property offered for Sale in connection with any
public Sale thereof, and, in lieu of paying cash therefor, may
make settlement for the purchase price by crediting the gross
Sale price against the sum of (A) the amount that would be
payable to the Holders of the Bonds as a result of such Sale
in accordance with Section 5.07 on the Payment Date next
succeeding the date of such Sale and (B) the expenses of the
Sale and of any Proceedings in connection therewith which are
reimbursable to it, without being required to produce the
Bonds in order to complete any such Sale or in order for the
net Sale price to be credited against such Bonds, and any
property so acquired by the Indenture Trustee shall be held
and dealt with by it in accordance with the provisions of this
Indenture;
(3) the Indenture Trustee shall execute and
deliver an appropriate instrument of conveyance transferring
its interest in any portion of the Trust Estate in connection
with a Sale thereof;
(4) the Indenture Trustee is hereby irrevocably
appointed the agent and attorney-in-fact of the Issuer to
transfer and convey its interest in any portion of the Trust
Estate in connection with a Sale thereof, and to take all
action necessary to effect such Sale; and
(5) no purchaser or transferee at such a Sale
shall be bound to ascertain the Indenture Trustee's authority,
inquire into the satisfaction of any conditions precedent or
see to the application of any moneys.
SECTION 5.18. ACTION ON BONDS.
The Indenture Trustee's right to seek and recover judgment under this
Indenture shall not be affected by the seeking, obtaining or application of any
other relief under or with respect to this Indenture. Neither the lien of
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this Indenture nor any rights or remedies of the Indenture Trustee, the Bond
Insurer or the Holders of Bonds shall be impaired by the recovery of any
judgment by the Indenture Trustee against the Issuer or by the levy of any
execution under such judgment upon any portion of the Trust Estate.
SECTION 5.19. NO RECOURSE TO OTHER TRUST ESTATES OR OTHER ASSETS OF
THE ISSUER.
The Trust Estate Granted to the Indenture Trustee as security for the
Bonds serves as security only for the Bonds. Holders of the Bonds shall have no
recourse against the trust estate granted as security for any other series of
bonds issued by the Issuer, and no judgment against the Issuer for any amount
due with respect to the Bonds may be enforced against either the trust estate
securing any other series or any other assets of the Issuer, nor may any
prejudgment lien or other attachment be sought against any such other trust
estate or any other assets of the Issuer.
SECTION 5.20. APPLICATION OF THE TRUST INDENTURE ACT.
Pursuant to Section 316(a) of the TIA, all provisions automatically
provided for in Section 316(a) are hereby expressly excluded.
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.01. DUTIES OF INDENTURE TRUSTEE.
(a) If an Event of Default has occurred and is
continuing, the Indenture Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and use the same degree of care
and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Indenture Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others and no implied covenants or obligations shall be read into this
Indenture against the Indenture Trustee; and
(2) In the absence of bad faith on its part, the
Indenture Trustee may request and conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein,
upon certificates or opinions furnished to the Indenture Trustee and
conforming to the requirements of this Indenture. The Indenture Trustee
shall, however, examine such certificates and opinions to determine
whether they conform on their face to the requirements of this
Indenture.
(c) The Indenture Trustee may not be relieved from
liability for its own negligent action, its own negligent failure to
act or its own willful misconduct, except that:
(1) This paragraph does not limit the effect of
subsection (b) of this Section 6.01;
(2) The Indenture Trustee shall not be liable
for any error of judgment made in good faith by a Responsible Officer,
unless it is proved that the Indenture Trustee was negligent in
ascertaining the pertinent facts; and
(3) The Indenture Trustee shall not be liable
with respect to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section 5.13 or
5.17 or exercising any trust or power conferred upon the Indenture
Trustee under this Indenture.
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(d) Except with respect to duties of the Indenture
Trustee prescribed by the TIA, as to which this Section 6.01(d) shall
not apply, for all purposes under this Indenture, the Indenture Trustee
shall not be deemed to have notice or knowledge of any Event of Default
described in Section 5.01(2), 5.01(5) or 5.01(6) or any Default
described in Section 5.01(3) or 5.01(4) or of any event described in
Section 3.05 unless a Responsible Officer assigned to and working in
the Indenture Trustee's corporate trust department has actual knowledge
thereof or unless written notice of any event that is in fact such an
Event of Default or Default is received by the Indenture Trustee at the
Corporate Trust Office, and such notice references the Bonds generally,
the Issuer, the Trust Estate or this Indenture.
(e) No provision of this Indenture shall require the
Indenture Trustee to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not
reasonably assured to it under the Servicing Agreement or otherwise.
(f) Every provision of this Indenture that in any way
relates to the Indenture Trustee is subject to the provisions of this
Section.
(g) Notwithstanding any extinguishment of all right,
title and interest of the Issuer in and to the Trust Estate following
an Event of Default and a consequent declaration of acceleration of the
Maturity of the Bonds, whether such extinguishment occurs through a
Sale of the Trust Estate to another Person, the acquisition of the
Trust Estate by the Indenture Trustee or otherwise, the rights, powers
and duties of the Indenture Trustee with respect to the Trust Estate
(or the proceeds thereof) and the Bondholders and the Bond Insurer and
the rights of Bondholders and the Bond Insurer shall continue to be
governed by the terms of this Indenture.
(h) The Indenture Trustee or any Custodian appointed
pursuant to Section 8.13 shall at all times retain possession of the
Mortgage Files in the State of Minnesota, except for those Mortgage
Files or portions thereof released to the Servicer pursuant to this
Indenture or the Servicing Agreement.
SECTION 6.02. NOTICE OF DEFAULT.
Immediately after the occurrence of any Default known to the Indenture
Trustee, the Indenture Trustee shall transmit by mail to the Bond Insurer and
the Underwriters notice of each such Default and, within 90 days after the
occurrence of any Default known to the Indenture Trustee, the Indenture Trustee
shall transmit by mail to all Holders of Bonds notice of each such Default,
unless such Default shall have been cured or waived; provided, however, that in
no event shall the Indenture Trustee provide notice, or fail to provide notice
of a Default known to the Indenture Trustee in a manner contrary to the
requirements of the Trust Indenture Act. Concurrently with the mailing of any
such notice to the Holders of the Bonds, the Indenture Trustee shall transmit by
mail a copy of such notice to the Rating Agencies.
SECTION 6.03. RIGHTS OF INDENTURE TRUSTEE.
(a) Except as otherwise provided in Section 6.01, the
Indenture Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper Person. The
Indenture Trustee need not investigate any fact or matter stated in any
such document.
(b) Before the Indenture Trustee acts or refrains from
acting, it may require an Officers' Certificate or an Opinion of
Counsel reasonably satisfactory in form and substance to the Indenture
Trustee. The Indenture Trustee shall not be liable for any action it
takes or omits to take in good faith in reliance on any such Officer's
Certificate or Opinion of Counsel.
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(c) With the consent of the Bond Insurer, which consent
shall not be unreasonably withheld, the Indenture Trustee may act
through agents and shall not be responsible for the misconduct or
negligence of any agent appointed with due care.
(d) The Indenture Trustee shall not be liable for any
action it takes or omits to take in good faith that it believes to be
authorized or within its rights or powers.
SECTION 6.04. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF BONDS.
The recitals contained herein and in the Bonds, except the certificates
of authentication on the Bonds, shall be taken as the statements of the Issuer,
and the Indenture Trustee and the Authenticating Agent assume no responsibility
for their correctness. The Indenture Trustee makes no representations with
respect to the Trust Estate or as to the validity or sufficiency of this
Indenture or of the Bonds. The Indenture Trustee shall not be accountable for
the use or application by the Issuer of the Bonds or the proceeds thereof or any
money paid to the Issuer or upon Issuer Order pursuant to the provisions hereof.
SECTION 6.05. MAY HOLD BONDS.
The Indenture Trustee, any Agent, or any other agent of the Issuer, in
its individual or any other capacity, may become the owner or pledgee of Bonds
and, subject to Sections 6.07 and 6.13, may otherwise deal with the Issuer or
any Affiliate of the Issuer with the same rights it would have if it were not
Indenture Trustee, Agent or such other agent.
SECTION 6.06. MONEY HELD IN TRUST.
Money held by the Indenture Trustee in trust hereunder need not be
segregated from other funds except to the extent required by this Indenture or
by law. The Indenture Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Issuer and
except to the extent of income or other gain on investments that are obligations
of the Indenture Trustee, in its commercial capacity, and income or other gain
actually received by the Indenture Trustee on investments, which are obligations
of others.
SECTION 6.07. ELIGIBILITY; DISQUALIFICATION.
Irrespective of whether this Indenture is qualified under the TIA, this
Indenture shall always have a Indenture Trustee who satisfies the requirements
of TIA Sections 310(a)(1) and 310(a)(5). The Indenture Trustee shall always have
a combined capital and surplus as stated in Section 6.08. The Indenture Trustee
shall be subject to TIA Section 310(b).
SECTION 6.08. INDENTURE TRUSTEE'S CAPITAL AND SURPLUS.
The Indenture Trustee shall at all times have a combined capital and
surplus of at least $100,000,000 or shall be a member of a bank holding company
system, the aggregate combined capital and surplus of which is at least
$100,000,000 and shall at all times be rated "BBB" or better by Standard &
Poor's and "Baa2" by Moody's; provided, however, that the Indenture Trustee's
separate capital and surplus shall at all times be at least the amount required
by TIA Section 310(a)(2). If the Indenture Trustee publishes annual reports of
condition of the type described in TIA Section 310(a)(1), its combined capital
and surplus for purposes of this Section 6.08 shall be as set forth in the
latest such report. If at any time the Indenture Trustee shall cease to be
eligible in accordance with the provisions of this Section 6.08 and TIA Section
310(a)(2), it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
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SECTION 6.09. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Indenture Trustee
and no appointment of a successor Indenture Trustee pursuant to this
Article shall become effective until the acceptance of appointment by
the successor Indenture Trustee under Section 6.10.
(b) The Indenture Trustee may resign at any time by
giving written notice thereof to the Issuer, the Bond Insurer and each
Rating Agency. If an instrument of acceptance by a successor Indenture
Trustee shall not have been delivered to the Indenture Trustee within
30 days after the giving of such notice of resignation, the resigning
Indenture Trustee may petition any court of competent jurisdiction for
the appointment of a successor Indenture Trustee.
(c) The Indenture Trustee may be removed at any time by
the Bond Insurer or, with the consent of the Bond Insurer, by Act of
the Holders representing more than 50% of the Bond Balance of the
Outstanding Bonds, delivered to the Indenture Trustee and to the
Issuer.
(d) If at any time:
(1) the Indenture Trustee shall have a
conflicting interest prohibited by Section 6.07 and shall fail
to resign or eliminate such conflicting interest in accordance
with Section 6.07 after written request therefor by the Issuer
or by any Bondholder; or
(2) the Indenture Trustee shall cease to be
eligible under Section 6.08 or shall become incapable of
acting or shall be adjudged a bankrupt or insolvent, or a
receiver of the Indenture Trustee or of its property shall be
appointed, or any public officer shall take charge or control
of the Indenture Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation;
then, in any such case, (i) the Issuer by an Issuer Order, with the
consent of the Bond Insurer, may remove the Indenture Trustee, and the
Issuer shall join with the Indenture Trustee in the execution, delivery
and performance of all instruments and agreements necessary or proper
to appoint a successor Indenture Trustee acceptable to the Bond Insurer
and to vest in such successor Indenture Trustee any property, title,
right or power deemed necessary or desirable, subject to the other
provisions of this Indenture; provided, however, if the Issuer and the
Bond Insurer do not join in such appointment within fifteen (15) days
after the receipt by it of a request to do so, or in case an Event of
Default has occurred and is continuing, the Indenture Trustee may
petition a court of competent jurisdiction to make such appointment, or
(ii) subject to Section 5.15, and, in the case of a conflicting
interest as described in clause (1) above, unless the Indenture
Trustee's duty to resign has been stayed as provided in TIA Section
310(b), the Bond Insurer or any Bondholder who has been a bona fide
Holder of a Bond for at least six months may, on behalf of himself and
all others similarly situated, with the consent of the Bond Insurer,
petition any court of competent jurisdiction for the removal of the
Indenture Trustee and the appointment of a successor Indenture Trustee.
(e) If the Indenture Trustee shall resign, be removed or
become incapable of acting, or if a vacancy shall occur in the office
of the Indenture Trustee for any cause, the Issuer, by an Issuer Order
shall promptly appoint a successor Indenture Trustee acceptable to the
Bond Insurer. If within one year after such resignation, removal or
incapability or the occurrence of such vacancy a successor Indenture
Trustee shall be appointed by the Bond Insurer or, with the consent of
the Bond Insurer, by Act of the Holders of Bonds representing more than
50% of the Bond Balance of the Outstanding Bonds delivered to the
Issuer and the retiring Indenture Trustee, the successor Indenture
Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Indenture Trustee and supersede the
successor Indenture Trustee appointed by the Issuer. If no successor
Indenture Trustee shall have been so appointed by the Issuer, the Bond
Insurer or Bondholders and shall have accepted appointment in the
manner hereinafter provided, any Bondholder who has been a bonafide
Holder of a Bond for at least six months
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may, on behalf of himself and all others similarly situated, with the
consent of the Bond Insurer, petition any court of competent
jurisdiction for the appointment of a successor Indenture Trustee.
(f) The Issuer shall give notice of each resignation and
each removal of the Indenture Trustee and each appointment of a
successor Indenture Trustee to the Holders of Bonds and the Bond
Insurer. Each notice shall include the name of the successor Indenture
Trustee and the address of its Corporate Trust Office.
SECTION 6.10. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
Every successor Indenture Trustee appointed hereunder shall execute,
acknowledge and deliver to the Issuer, the Bond Insurer and the retiring
Indenture Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Indenture Trustee shall become effective
and such successor Indenture Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Indenture Trustee. Notwithstanding the foregoing, on request of
the Issuer or the successor Indenture Trustee, such retiring Indenture Trustee
shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Indenture Trustee all the rights, powers and
trusts of the retiring Indenture Trustee, and shall duly assign, transfer and
deliver to such successor Indenture Trustee all property and money held by such
retiring Indenture Trustee hereunder. Upon request of any such successor
Indenture Trustee, the Issuer shall execute and deliver any and all instruments
for more fully and certainly vesting in and confirming to such successor
Indenture Trustee all such rights, powers and trusts.
No successor Indenture Trustee shall accept its appointment unless at
the time of such acceptance such successor Indenture Trustee shall be qualified
and eligible under this Article.
SECTION 6.11. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS OF INDENTURE TRUSTEE.
Any corporation into which the Indenture Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Indenture Trustee
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of the Indenture Trustee, shall be the successor of
the Indenture Trustee hereunder, provided such corporation shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto. In case
any Bonds have been authenticated, but not delivered, by the Indenture Trustee
then in office, any successor by merger, conversion or consolidation to such
authenticating Indenture Trustee may adopt such authentication and deliver the
Bonds so authenticated with the same effect as if such successor Indenture
Trustee had authenticated such Bonds.
SECTION 6.12. PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER.
The Indenture Trustee (and any co-trustee or separate trustee) shall be
subject to TIA Section 311(a), excluding any creditor relationship listed in TIA
Section 311(b), and an Indenture Trustee (and any co-trustee or separate
trustee) who has resigned or been removed shall be subject to TIA Section 311(a)
to the extent indicated.
SECTION 6.13. CO-INDENTURE TRUSTEES AND SEPARATE INDENTURE TRUSTEES.
At any time or times, for the purpose of meeting the legal requirements
of the TIA or of any jurisdiction in which any of the Trust Estate may at the
time be located, the Indenture Trustee shall have power to appoint, and, upon
the written request of the Indenture Trustee, of the Bond Insurer or of the
Holders of Bonds representing more than 50% of the Bond Balance of the
Outstanding Bonds with respect to which a co-trustee or separate trustee is
being appointed with the consent of the Bond Insurer, the Issuer shall for such
purpose jointly with the Indenture Trustee in the execution, delivery and
performance of all instruments and agreements necessary or proper to appoint,
one or more Persons approved by the Indenture Trustee either to act as
co-trustee, jointly with the Indenture Trustee, of all or any part of the Trust
Estate, or to act as separate trustee of any such property, in either case with
such powers as may be provided in the instrument of appointment, and to vest in
such Person or
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Persons in the capacity aforesaid, any property, title, right or power deemed
necessary or desirable, subject to the other provisions of this Section. If the
Issuer does not join in such appointment within 15 days after the receipt by it
of a request to do so, or in case an Event of Default has occurred and is
continuing, the Indenture Trustee alone shall have power to make such
appointment. All fees and expenses of any co-trustee or separate trustee shall
be payable by the Issuer.
Should any written instrument from the Issuer be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right or power, any and all
such instruments shall, on request, be executed, acknowledged and delivered by
the Issuer.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms:
(1) The Bonds shall be authenticated and delivered and
all rights, powers, duties and obligations hereunder in respect of the
custody of securities, cash and other personal property held by, or
required to be deposited or pledged with, the Indenture Trustee
hereunder, shall be exercised, solely by the Indenture Trustee.
(2) The rights, powers, duties and obligations hereby
conferred or imposed upon the Indenture Trustee in respect of any
property covered by such appointment shall be conferred or imposed upon
and exercised or performed by the Indenture Trustee or by the Indenture
Trustee and such co-trustee or separate trustee jointly, as shall be
provided in the instrument appointing such co-trustee or separate
trustee, except to the extent that under any law of any jurisdiction in
which any particular act is to be performed, the Indenture Trustee
shall be incompetent or unqualified to perform such act, in which event
such rights, powers, duties and obligations shall be exercised and
performed by such co-trustee or separate trustee.
(3) The Indenture Trustee at any time, by an instrument
in writing executed by it, with the concurrence of the Issuer evidenced
by an Issuer Order, may accept the resignation of or remove any
co-trustee or separate trustee appointed under this Section, and, in
case an Event of Default has occurred and is continuing, the Indenture
Trustee shall have power to accept the resignation of, or remove, any
such co-trustee or separate trustee without the concurrence of the
Issuer upon the written request of the Indenture Trustee, the Issuer
shall join with the Indenture Trustee in the execution, delivery and
performance of all instruments and agreements necessary or proper to
effectuate such resignation or removal. A successor to any co-trustee
or separate trustee so resigned or removed may be appointed in the
manner provided in this Section.
(4) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Indenture
Trustee, or any other such trustee hereunder.
(5) Any Act of Bondholders delivered to the Indenture
Trustee shall be deemed to have been delivered to each such co-trustee
and separate trustee.
SECTION 6.14. AUTHENTICATING AGENTS.
The Issuer shall appoint an Authenticating Agent with power to act on
its behalf and subject to its direction in the authentication and delivery of
the Bonds designated for such authentication by the Issuer and containing
provisions therein for such authentication (or with respect to which the Issuer
has made other arrangements, satisfactory to the Indenture Trustee and such
Authenticating Agent, for notation on the Bonds of the authority of an
Authenticating Agent appointed after the initial authentication and delivery of
such Bonds) in connection with transfers and exchanges under Section 2.06, as
fully to all intents and purposes as though the Authenticating Agent had been
expressly authorized by that Section to authenticate and deliver Bonds. For all
purposes of this Indenture (other than in connection with the authentication and
delivery of Bonds pursuant to Sections 2.05 and 2.11 in connection with their
initial issuance), the authentication and delivery of Bonds by the
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Authenticating Agent pursuant to this Section shall be deemed to be the
authentication and delivery of Bonds "by the Indenture Trustee." Such
Authenticating Agent shall at all times be a Person that both meets the
requirements of Section 6.07 for the Indenture Trustee hereunder and has an
office for presentation of Bonds in the United States of America. The Indenture
Trustee shall initially be the Authenticating Agent and shall be the Bond
Registrar as provided in Section 2.06. The office from which the Indenture
Trustee shall perform its duties as Bond Registrar and Authenticating Agent
shall be the Corporate Trust Office. Any Authenticating Agent appointed pursuant
to the terms of this Section 6.14 or pursuant to the terms of any supplemental
indenture shall deliver to the Indenture Trustee as a condition precedent to the
effectiveness of such appointment an instrument accepting the trusts, duties and
responsibilities of Authenticating Agent and of Bond Registrar or co-Bond
Registrar and indemnifying the Indenture Trustee for and holding the Indenture
Trustee harmless against, any loss, liability or expense (including reasonable
attorneys' fees) incurred without negligence or bad faith on its part, arising
out of or in connection with the acceptance, administration of the trust or
exercise of authority by such Authenticating Agent, Bond Registrar or co-Bond
Registrar.
Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate trust business
of any Authenticating Agent, shall be the successor of the Authenticating Agent
hereunder, if such successor corporation is otherwise eligible under this
Section, without the execution or filing of any further act on the part of the
parties hereto or the Authenticating Agent or such successor corporation.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Issuer. The Issuer may at any time terminate the
agency of any Authenticating Agent by giving written notice of termination to
such Authenticating Agent and the Issuer. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time any
Authenticating Agent shall cease to be eligible under this Section, the Issuer
shall promptly appoint a successor Authenticating Agent, shall give written
notice of such appointment to the Indenture Trustee, and shall mail notice of
such appointment to all Holders of Bonds.
The Indenture Trustee agrees, subject to Section 6.01(e), to pay to any
Authenticating Agent from time to time reasonable compensation for its services
and the Indenture Trustee shall be entitled to be reimbursed for such payments
pursuant to Section 6.05 of the Servicing Agreement. The provisions of Sections
2.09, 6.04 and 6.05 shall be applicable to any Authenticating Agent.
SECTION 6.15. REVIEW OF MORTGAGE FILES.
(a) Initial Certification. The Indenture Trustee shall,
for the benefit of the Bondholders and the Bond Insurer, review each
Mortgage File prior to the Closing Date to ascertain that all documents
required to be included in the Mortgage File are included therein, and
shall deliver to the Mortgage Loan Seller, the Bond Insurer and the
Servicer on the Closing Date an Initial Certification in the form
attached hereto as Exhibit E-1 with respect to each Mortgage Loan to
the effect that, except as specifically noted on a schedule of
exceptions thereto, (A) all documents required to be contained in the
Mortgage File are in its possession, (B)such documents have been
reviewed by it and appear regular on their face and relate to such
Mortgage Loan, and (C)based on its examination and only as to the
foregoing documents, the information set forth on the related Mortgage
Loan Schedule accurately reflects information set forth in the Mortgage
File.
It is understood that before making the Initial Certification,
the Indenture Trustee shall examine the related Mortgage Loan Documents
to confirm that:
(1) each Mortgage Note and Mortgage bears an
original signature or signatures purporting to be that of the
Person or Persons named as the maker and mortgagor/trustor or,
if photocopies are permitted, that such copies bear a
reproduction of such signature or signatures;
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(2) except for the endorsement to the Indenture
Trustee, neither the Mortgage nor any Assignment, on the face
or the reverse side(s) thereof, contains evidence of any
unsatisfied claims, liens, security interests, encumbrances or
restrictions on transfer;
(3) the principal amount of the indebtedness
secured by the related Mortgage is identical to the original
principal amount of the related Mortgage Note;
(4) the Assignment of the related Mortgage from
the Mortgage Loan Seller to the Indenture Trustee is in the
form required pursuant to clause (e) of the definition of
"Mortgage Loan Documents" in the Mortgage Loan Sale Agreement,
and bears an original signature of the Mortgage Loan Seller
and any other necessary party (or signatures purporting to be
that of the Mortgage Loan Seller and any such other party) or,
if photocopies are permitted, that such copies bear a
reproduction of such signature or signatures;
(5) if intervening Assignments are included in
the Mortgage File, each such intervening Assignment bears an
original signature of the related mortgagee and/or the
assignee (and any other necessary party) (or signatures
purporting to be that of each such party) or, if photocopies
are permitted, that such copies bear a reproduction of such
signature or signatures;
(6) if either a title insurance policy, a
preliminary title report or a written commitment to issue a
title insurance policy is delivered, the address of the real
property set forth in such policy, report or written
commitment is identical to the real property address contained
in the related Mortgage; and
(7) if any of a title insurance policy,
certificate of title insurance or a written commitment to
issue a title insurance policy is delivered, such policy,
certificate or written commitment is for an amount not less
than the original principal amount of the related Mortgage
Note and such title insurance policy insures that the related
Mortgage creates a first lien, senior in priority to all other
deeds of trust, mortgages, deeds to secure debt, financing
statements and security agreements and to any mechanics'
liens, judgment liens or writs of attachment (or if the title
insurance policy or certificate of title insurance has not
been issued, the written commitment for such insurance
obligates the insurer to issue such policy for an amount not
less than the original principal amount of the related
Mortgage Note).
(b) Final Certification. On or before one year following
the Closing Date, the Indenture Trustee shall deliver to the Mortgage
Loan Seller, the Bond Insurer and the Servicer a Final Certification in
the form attached hereto as Exhibit E-2 evidencing the completeness of
the Mortgage File for each Mortgage Loan, except as specifically noted
on a schedule of exceptions thereto.
(c) Certification Generally. In giving each of the
Initial Certification and the Final Certification, the Indenture
Trustee shall be under no duty or obligation (1) to inspect, review or
examine any such documents, instruments, securities or other papers to
determine that they or the signatures thereto are genuine, enforceable,
or appropriate for the represented purpose or that they have actually
been recorded or that they are other than what they purport to be on
their face or (2) to determine whether any Mortgage File should include
a flood insurance policy, any rider, addenda, surety or guaranty
agreement, power of attorney, buy down agreement, assumption agreement,
modification agreement, written assurance or substitution agreement.
(d) Recordation Report. No later than the fifth Business
Day of each third month, commencing in January 1998, the Indenture
Trustee shall deliver to the Servicer and the Bond Insurer a
recordation report dated as of the first day of such month, identifying
those Mortgage Loans for which it has not yet received (1)an original
recorded Mortgage or a copy thereof certified to be true and correct by
the public recording office in possession of such Mortgage or (2) an
original recorded Assignment of the
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Mortgage to the Indenture Trustee and any required intervening
Assignments or a copy thereof certified to be a true and correct copy
by the public recording office in possession of such Assignment.
SECTION 6.16. INDENTURE TRUSTEE FEES AND EXPENSES.
The Indenture Trustee shall be entitled to receive the Indenture
Trustee Fee on each Payment Date as provided herein. The Indenture Trustee also
shall be entitled, pursuant to the provisions of Section 6.05 of the Servicing
Agreement, to (i) payment of or reimbursement for expenses, disbursements and
advances incurred or made by the Indenture Trustee in accordance with any of the
provisions of this Agreement (including but not limited to the reasonable
compensation and the expenses and disbursements of its counsel and of all
persons not regularly in its employ) as provided in the Servicing Agreement, and
(ii) indemnification against losses, liability and expenses, including
reasonable attorney's fees, incurred, arising out of or in connection with this
Agreement and the Bonds as provided in the Servicing Agreement.
ARTICLE VII
BONDHOLDERS' LISTS AND REPORTS
SECTION 7.01. ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND ADDRESSES
OF BONDHOLDERS.
(a) The Issuer shall furnish or cause to be furnished to
the Indenture Trustee (i) semi-annually, not less than 45 days nor more
than 60 days after the Payment Date occurring closest to six months
after the Closing Date and each Payment Date occurring at six-month
intervals thereafter, all information in the possession or control of
the Issuer, in such form as the Indenture Trustee may reasonably
require, as to names and addresses of the Holders of Bonds, and (ii) at
such other times, as the Indenture Trustee may request in writing,
within 30 days after receipt by the Issuer of any such request, a list
of similar form and content as of a date not more than 10 days prior to
the time such list is furnished; provided, however, that so long as the
Indenture Trustee is the Bond Registrar, no such list shall be required
to be furnished.
(b) In addition to furnishing to the Indenture Trustee
the Bondholder lists, if any, required under subsection (a), the Issuer
shall also furnish all Bondholder lists, if any, required under Section
3.03 at the times required by Section 3.03.
SECTION 7.02. PRESERVATION OF INFORMATION; COMMUNICATIONS TO
BONDHOLDERS.
(a) The Indenture Trustee shall preserve, in as current a
form as is reasonably practicable, the names and addresses of the
Holders of Bonds contained in the most recent list, if any, furnished
to the Indenture Trustee as provided in Section 7.01 and the names and
addresses of the Holders of Bonds received by the Indenture Trustee in
its capacity as Bond Registrar. The Indenture Trustee may destroy any
list furnished to it as provided in Section 7.01 upon receipt of a new
list so furnished.
(b) Bondholders may communicate pursuant to TIA Section
312(b) with other Bondholders with respect to their rights under this
Indenture or under the Bonds.
(c) The Issuer, the Indenture Trustee and the Bond
Registrar shall have the protection of TIA Section 312(c).
SECTION 7.03. REPORTS BY INDENTURE TRUSTEE.
(a) Within 60 days after December 31 of each year (the
"reporting date"), commencing with the year after the issuance of the
Bonds, (i) the Indenture Trustee shall, if required by TIA Section
313(a), mail to all Holders a brief report dated as of such reporting
date that complies with TIA Section 313(a);
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(ii) the Indenture Trustee shall, to the extent not set forth in the
Payment Date Statement pursuant to Section 2.08(d), also mail to
Holders of Bonds and the Bond Insurer with respect to which it has made
advances, any reports with respect to such advances that are required
by TIA Section 313(b)(2); and, the Indenture Trustee shall also mail to
Holders of Bonds and the Bond Insurer any reports required by TIA
Section 313(b)(1). For purposes of the information required to be
included in any such reports pursuant to TIA Sections 313(a)(2),
313(b)(1) (if applicable), or 313(b)(2), the principal amount of
indenture securities outstanding on the date as of which such
information is provided shall be the Bond Balance of the then
Outstanding Bonds covered by the report.
(b) A copy of each report required under this Section
7.03 shall, at the time of such transmission to Holders of Bonds and
the Bond Insurer be filed by the Indenture Trustee with the Commission
and with each securities exchange upon which the Bonds are listed. The
Issuer will notify the Indenture Trustee when the Bonds are listed on
any securities exchange.
SECTION 7.04. REPORTS BY ISSUER.
The Issuer (a) shall deliver to the Indenture Trustee within 15 days
after the Issuer is required to file the same with the Commission copies of the
annual reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission may by rules and
regulations prescribe) that the Issuer is required to file with the Commission
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, and (b) shall also comply with the other provisions of TIA Section
314(a).
ARTICLE VIII
ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES
SECTION 8.01. COLLECTION OF MONEYS.
Except as otherwise expressly provided herein, the Indenture Trustee
may demand payment or delivery of, and shall receive and collect, directly and
without intervention or assistance of any fiscal agent or other intermediary,
all money and other property payable to or receivable by the Indenture Trustee
pursuant to this Indenture. The Indenture Trustee shall hold all such money and
property received by it as part of the Trust Estate and shall apply it as
provided in this Indenture.
If the Indenture Trustee shall not have received the Remittable Funds
by close of business on any related Deposit Date, the Indenture Trustee shall,
unless the Issuer or the Servicer shall have made provisions satisfactory to the
Indenture Trustee for delivery to the Indenture Trustee of an amount equal to
such Remittable Funds, deliver a notice, with a copy to the Bond Insurer, to the
Issuer and the Servicer of their failure to remit such Remittable Funds and that
such failure, if not remedied by the close of business on the Business Day after
the date upon which such notice is delivered to the Servicer, shall constitute
an event of default under the Servicing Agreement. If the Indenture Trustee
shall subsequently receive any such Remittable Funds by 2:00 p.m. Eastern Time
on such Business Day, such Event of Default shall not be deemed to have
occurred. Notwithstanding any other provision hereof, the Indenture Trustee
shall deliver to the Issuer or the Servicer, or their respective designee or
assignee, any Remittable Funds received with respect to a Mortgage Loan after
the related Deposit Date to the extent that the Issuer or the Servicer,
respectively, previously made payment or provision for payment with respect to
such Remittable Funds in accordance with this Section 8.01, and any such
Remittable Funds shall not be deemed part of the Trust Estate.
Except as otherwise expressly provided in this Indenture and the
Servicing Agreement, if, following delivery by the Indenture Trustee of the
notice described above, the Servicer shall fail to remit the Remittable Funds on
any Deposit Date, the Indenture Trustee shall deliver a second notice to the
Servicer, the Issuer and the Bond Insurer by 2:00 p.m. Eastern Time on the third
Business Day prior to the related Payment Date indicating that an event of
default occurred and is continuing under the Servicing Agreement. Thereupon, the
Indenture
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Trustee shall take such actions as are required of the Indenture Trustee under
Article VI of the Servicing Agreement. In addition, if a default occurs in any
other performance required under the Servicing Agreement, the Indenture Trustee
may, and upon the request of the Bond Insurer or, with the consent of the Bond
Insurer, the Holders of Bonds representing more than 50% of the Bond Balance of
the Outstanding Bonds shall, take such action as may be appropriate to enforce
such payment or performance including the institution and prosecution of
appropriate Proceedings. Any such action shall be without prejudice to any right
to claim a Default or Event of Default under this Indenture and to proceed
thereafter as provided in Article V.
SECTION 8.02. BOND ACCOUNT.
(a) The Issuer hereby directs the Indenture Trustee to
establish, at the Corporate Trust Office one or more accounts that
shall collectively be the "Bond Account" on or before the Closing Date.
The Indenture Trustee shall promptly deposit in the Bond Account (i)
all Remittable Funds received by it from the Servicer pursuant to the
Servicing Agreement, (ii) any other funds from any deposits to be made
by the Servicer pursuant to the Servicing Agreement, (iii) any amount
required to be deposited in the Bond Account pursuant to Section 8.01,
(iv) all amounts received pursuant to Section 8.03, and (v) all other
amounts received for deposit in the Bond Account, including the payment
of any Purchase Price received by the Indenture Trustee. All amounts
that are deposited from time to time in the Bond Account are subject to
withdrawal by the Indenture Trustee for the purposes set forth in
subsections (c) and (d) of this Section 8.02. All funds withdrawn from
the Bond Account pursuant to subsection (c) of this Section 8.02 for
the purpose of making payments to the Holders of Bonds shall be applied
in accordance with Section 3.03.
(b) So long as no Default or Event of Default shall have
occurred and be continuing, amounts held in the Bond Account shall be
invested in Permitted Investments, which Permitted Investments shall
mature no later than the Business Day preceding the immediately
following Payment Date or, if such Permitted Investments are an
obligation of the Indenture Trustee or are money market funds for which
the Indenture Trustee or any affiliate is the manager or the advisor,
such Permitted Investments shall mature no later than the following
Payment Date..
All income or other gains, if any, from investment of moneys
deposited in the Bond Account shall be for the benefit of the Indenture
Trustee and on each Payment Date, any such amounts may be released from
the Bond Account and paid to the Indenture Trustee as part of its
compensation for acting as Indenture Trustee. Any loss resulting from
such investment of moneys deposited in the Bond Account shall be
reimbursed immediately as incurred to the Bond Account by the Indenture
Trustee. Subject to Section 6.01 and the preceding sentence, the
Indenture Trustee shall not in any way be held liable by reason of any
insufficiency in the Bond Account.
(c) On each Payment Date, the Indenture Trustee shall
withdraw amounts on deposit in the Bond Account and pay on a pari passu
basis the Bond Insurer Premium, the Indenture Trustee Fee, and,
provided notice is given to the Indenture Trustee no later than the 4th
Business Day prior to the Payment Date, amounts required to pay the
Servicer any unpaid Servicing Fees then due and to reimburse the
Servicer for Monthly Advances and Servicing Advances previously made
by, and not previously reimbursed to or retained by, the Servicer,
which are so reimbursable to the Servicer pursuant to the Servicing
Agreement (as reported in writing by the Servicer to the Indenture
Trustee). After payment of such amounts, unless the Bonds have been
declared due and payable pursuant to Section 5.02 and moneys collected
by the Indenture Trustee are being applied in accordance with Section
5.07, Available Funds on deposit in the Bond Account on any Payment
Date or Redemption Date shall be withdrawn from the Bond Account, in
the amounts required, for application on such Payment Date as follows:
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(i) first, to the payment to the Bond Insurer, as
subrogee to the rights of the Bondholders, the aggregate amount
necessary to reimburse the Bond Insurer for any unreimbursed Insured
Payments paid by the Bond Insurer on prior Payment Dates, together with
interest thereon at the "Late Payment Rate" specified in the Insurance
Agreement from the date such Insured Payments were paid by the Bond
Insurer to such Payment Date and the amount of any unpaid Bond Insurer
Premium for any prior Payment Date together with interest thereon at
the "Late Payment Rate" specified in the Insurance Agreement from the
date such amounts were due; provided, however, that the Bond Insurer
shall be paid such amounts only after the Bondholders have received the
Required Payment Amount with respect to such Payment Date;
(ii) second, to the Bondholders, the Bond Interest for
such Payment Date;
(iii) third, to the Bondholders, the Monthly Principal for
such Payment Date in reduction of the Bond Balance until such Bond
Balance is reduced to zero;
(iv) fourth, to the Bondholders, in reduction of the Bond
Balance, the amount, if any, equal to the lesser of (A)Excess Cash with
respect to such Payment Date, and (B) the lesser of (1) the amount
necessary for the Overcollateralization Amount to equal the Required
Overcollateralization Amount on such Payment Date (after giving effect
to application of Monthly Principal for such Payment Date) and (2) the
amount necessary to reduce the Bond Balance to zero (the "Excess Cash
Payment");
(v) fifth, to the Bond Insurer, any amounts due and owing
under the Insurance Agreement that are not described in clause "first";
and
(vi) sixth, to the Bondholders, the amount of all
Available Funds Cap Carry Forward Amount outstanding on such Payment
Date.
(d) On or after each Payment Date, so long as the
Indenture Trustee shall have prepared a Payment Date Statement in
respect of such Payment Date and (1) shall have made, or, in accordance
with Section 3.03, set aside from amounts in the Bond Account an amount
sufficient to make, the payments required to be made as set forth in
Section 8.02(c) as indicated in such Payment Date Statement, and (2)
shall have set aside any amounts that have been deposited in the Bond
Account prior to such time that represent amounts that are to be used
to make payments on the Bonds on the next succeeding Payment Date, the
cash balance, if any, then remaining in the Bond Account shall be
withdrawn from the Bond Account by the Indenture Trustee and, so long
as no Default or Event of Default shall have occurred and be
continuing, shall be released from the lien of this Indenture and paid
by the Indenture Trustee to the Issuer.
(e) Any payments made by the Indenture Trustee to the
Issuer pursuant to this Section 8.02 shall be remitted to the
Certificate Distribution Account established and maintained pursuant to
the Trust Agreement.
(f) In the event the Indenture Trustee is required to
establish a Collection Account pursuant to the Servicing Agreement, the
Indenture Trustee shall establish and maintain such account in the
manner required under the Servicing Agreement. The Indenture Trustee
shall reinvest amounts in the Collection Account at the direction of
the Servicer in Permitted Investments. All income or other gains, if
any, from investment of moneys deposited in the Collection Account
shall be for the benefit of the Servicer and the Indenture Trustees
shall release any such amounts from the Collection Account to the
Servicer on each Deposit Date.
SECTION 8.03. CLAIMS AGAINST THE MBIA INSURANCE POLICY.
(a) (i) The Indenture Trustee shall (A) receive as
attorney-in-fact of each Bondholder any Insured Payment from the Bond
Insurer or on behalf of the Bond Insurer and (B) disburse such Insured
Payment to such Bondholders in accordance with Section 8.02(c) hereof
for the benefit of the
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related Bondholders. Any Insured Payment received by the Indenture
Trustee shall be held by the Indenture Trustee uninvested. Insured
Payments disbursed by the Indenture Trustee from proceeds of the MBIA
Insurance Policy shall not be considered payment by the Issuer with
respect to the Bonds, nor shall such payments discharge the obligation
of the Issuer with respect to such Bonds, and the Bond Insurer shall
become the owner of such unpaid amounts due from the Issuer in respect
of such Insured Payments as the deemed assignee and subrogee of such
Bondholders and shall be entitled to receive the reimbursement in
respect thereof. The Indenture Trustee hereby agrees on behalf of each
Bondholder for the benefit of the Bond Insurer that it recognizes that
to the extent the Bond Insurer makes Insured Payments for the benefit
of the Bondholders, the Bond Insurer will be entitled to receive the
related reimbursement in accordance with the priority of distributions
referenced in Section 8.02(c) hereof.
(ii) The Indenture Trustee shall promptly notify
the Bond Insurer of any proceeding or the institution of any action, of
which a Responsible Officer of the Indenture Trustee has actual
knowledge, constituting a Preference Amount in respect of any payment
made on the Bonds. Each Bondholder that pays any amount pursuant to a
Preference Amount theretofore received by such Bondholder on account of
a Bond will be entitled to receive reimbursement for such amounts from
the Bond Insurer in accordance with the terms of the MBIA Insurance
Policy. Each Bondholder, by its purchase of Bonds, and the Indenture
Trustee hereby agree that, the Bond Insurer (so long as no MBIA Payment
Default exists) may at any time during the continuation of any
proceeding relating to a Preference Amount direct all matters relating
to such Preference Amount, including, without limitation, (i) the
direction of any appeal of any order relating to such Preference Amount
and (ii) the posting of any surety, supersedeas or performance bond
pending any such appeal. In addition and without limitation of the
foregoing, the Bond Insurer shall be subrogated to the rights of the
Indenture Trustee and each Bondholder in the conduct of any such
Preference Amount, including, without limitation, all rights of any
party to any adversary proceeding action with respect to any court
order issued in connection with any such Preference Amount.
(iii) Each Bondholder, by its purchase of Bonds,
and the Indenture Trustee hereby agree that, unless an MBIA Payment
Default exists and is continuing, the Bond Insurer shall have the right
to direct all matters relating to the Bonds in any proceeding in a
bankruptcy of the Issuer, including without limitation any proceeding
relating to a Preference Amount and the posting of any surety or bond
pending any such appeal.
(iv) With respect to a Preference Amount, the
Indenture Trustee shall be responsible for procuring and delivering the
items set forth in the MBIA Insurance Policy to the Bond Insurer.
(b) Unless a Bond Insurer Default exists and is
continuing, the Indenture Trustee shall cooperate in all respects with
any reasonable request by the Bond Insurer for action to preserve or
enforce the Bond Insurer's rights or interests hereunder without
limiting the rights or affecting the interests of the Bondholders as
otherwise set forth herein.
(c) The Indenture Trustee shall surrender the MBIA
Insurance Policy to the Bond Insurer for cancellation upon the
expiration of the term of the MBIA Insurance Policy as provided in the
MBIA Insurance Policy.
(d) With respect to any Payment Date on which an Insured
Payment is required to be made, the Indenture Trustee shall deliver to
the Bond Insurer a Notice of Claim by no later than noon on the third
Business Day prior to such Payment Date in the manner set forth in the
MBIA Insurance Policy.
SECTION 8.04. GENERAL PROVISIONS REGARDING THE BOND ACCOUNT AND
MORTGAGE LOANS.
(a) The Bond Account shall relate solely to the Bonds and
to the Mortgage Loans, Permitted Investments and other property
securing the Bonds. Funds and other property in the Bond Account shall
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not be commingled with any other moneys or property of the Issuer or
any Affiliate thereof. Notwithstanding the foregoing, the Indenture
Trustee may hold any funds or other property received or held by it as
part of the Bond Account in collective accounts maintained by it in the
normal course of its business and containing funds or property held by
it for other Persons (which may include the Issuer or an Affiliate),
provided that such accounts are under the sole control of the Indenture
Trustee and the Indenture Trustee maintains adequate records indicating
the ownership of all such funds or property and the portions thereof
held for credit to the Bond Account.
(b) If any amounts are needed for payment from the Bond
Account and sufficient uninvested funds are not available therein to
make such payment, the Indenture Trustee shall cause to be sold or
otherwise converted to cash a sufficient amount of the investments in
the Bond Account.
(c) The Indenture Trustee shall, at all times while any
Bonds are Outstanding, maintain in its possession, or in the possession
of an agent whose actions with respect to such items are under the sole
control of the Indenture Trustee, all certificates or other
instruments, if any, evidencing any investment of funds in the Bond
Account. The Indenture Trustee shall relinquish possession of such
items, or direct its agent to do so, only for purposes of collecting
the final payment receivable on such investment or certificate or, in
connection with the sale of any investment held in the Bond Account,
against delivery of the amount receivable in connection with any sale.
(d) The Indenture Trustee shall not invest any part of
the Trust Estate in Permitted Investments that constitute
uncertificated securities (as defined in Section 8-102 of the Uniform
Commercial Code, as enacted in the relevant jurisdiction) or in any
other book-entry securities unless it has received an Opinion of
Counsel reasonably satisfactory in form and substance to the Indenture
Trustee setting forth, with respect to each type of security for which
authority to invest is being sought, the procedures that must be
followed to maintain the lien and security interest created by this
Indenture with respect to the Trust Estate.
SECTION 8.05. RELEASES OF DEFECTIVE MORTGAGE LOANS.
Upon notice or discovery that any of the representations or warranties
of the Mortgage Loan Seller set forth in Section 4(b) and Exhibit B of the
Mortgage Loan Sale Agreement was materially incorrect or otherwise misleading
with respect to any Mortgage Loan as of the time made, the Indenture Trustee
shall direct the Mortgage Loan Seller to either (i) within 60 days after the
Mortgage Loan Seller receives actual knowledge of such incorrectness, eliminate
or otherwise cure the circumstance or condition in respect of which such
representation or warranty was incorrect as of the time made, (ii) withdraw such
Defective Mortgage Loan from the lien of this Indenture following the expiration
of such 60-day period by depositing to the Bond Account an amount equal to the
Purchase Price for such Mortgage Loan or (iii) substitute a Qualified
Replacement Mortgage Loan for such Defective Mortgage Loan and deposit any
Purchase Price required to be paid in connection with such substitution pursuant
to Section 7 of the Mortgage Loan Sale Agreement, all as provided in Section 7
of the Mortgage Loan Sale Agreement. Upon any purchase of or substitution for a
Defective Mortgage Loan by the Mortgage Loan Seller in accordance with Section 7
of the Mortgage Sale Agreement, the Indenture Trustee shall deliver the Mortgage
File relating to such Defective Mortgage Loan to the Mortgage Loan Seller, and
the Issuer and the Indenture Trustee shall execute such instruments of transfer
as are necessary to convey title to such Defective Mortgage Loan to the Mortgage
Loan Seller from the lien of this Indenture.
SECTION 8.06. REPORTS BY INDENTURE TRUSTEE TO BONDHOLDERS; ACCESS TO
CERTAIN INFORMATION.
On each Payment Date, the Indenture Trustee shall deliver the written
report required by Section 2.08(d) to Bondholders of record as of the related
Record Date (including the Clearing Agency, if any).
The Indenture Trustee shall make available at its Corporate Trust
Office, during normal business hours, for review by any Bondholder or any person
identified to the Indenture Trustee as a prospective Bondholder, originals or
copies of the following items: (a) the Indenture and any amendments thereto, (b)
all Payment Date
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Statements delivered to the Issuer since the Closing Date, (c) any Officers'
Certificates delivered to the Indenture Trustee since the Closing Date as
described in the Indenture and (d) any Accountants' reports delivered to the
Indenture Trustee since the Closing Date as required under the Servicing
Agreement. Copies of any and all of the foregoing items will be available from
the Indenture Trustee upon request; however, the Indenture Trustee will be
permitted to require payment of a sum sufficient to cover the reasonable costs
and expenses of providing such copies and shall not be required to provide such
copies without reasonable assurances that such sum will be paid.
SECTION 8.07. TRUST ESTATE MORTGAGE FILES.
(a) The Indenture Trustee shall release Mortgage Files or
portions thereof to the Servicer on the terms specified in the
Servicing Agreement.
(b) The Indenture Trustee shall, at such time as there
are no Bonds outstanding, release all of the Trust Estate to the Issuer
(other than any cash held for the payment of the Bonds pursuant to
Section 3.03 or 4.02).
SECTION 8.08. AMENDMENT TO SERVICING AGREEMENT.
The Indenture Trustee may, without the consent of any Holder, enter
into or consent to any amendment or supplement to the Servicing Agreement for
the purpose of increasing the obligations or duties of any party other than the
Indenture Trustee or the Holders of the Bonds. The Indenture Trustee may, in its
discretion, decline to enter into or consent to any such supplement or
amendment: (i) unless the Indenture Trustee receives an Opinion of Counsel that
the position of the Holders would not be materially adversely affected or
written confirmation from the Rating Agencies that the then-current implied
ratings on the Bonds (without taking into account the MBIA Insurance Policy)
would not be adversely affected by such supplement or amendment or (ii) if its
own rights, duties or immunities would be adversely affected.
SECTION 8.09. DELIVERY OF THE MORTGAGE FILES PURSUANT TO SERVICING
AGREEMENT.
As is appropriate for the servicing or foreclosure of any Mortgage
Loan, the Indenture Trustee shall deliver to the Servicer of such Mortgage the
Mortgage Files for such Mortgage Loan upon receipt by the Indenture Trustee on
or prior to the date such release is to be made of:
(a) such Officers' Certificates, if any, as are required
by the Servicing Agreement; and
(b) a "Request for Release" in the form prescribed by the
Servicing Agreement, executed by the Servicer, providing that the
Servicer will hold or retain the Mortgage Files in trust for the
benefit of the Indenture Trustee, the Bond Insurer and the Holders of
Bonds.
SECTION 8.10. SERVICER AS AGENT.
In order to facilitate the servicing of the Mortgage Loans by the
Servicer of such Mortgage Loans, the Servicer of the Mortgage Loans has been
appointed by the Issuer to retain, in accordance with the provisions of the
Servicing Agreement and this Indenture, all Remittable Funds on such Mortgage
Loans prior to their deposit into the Bond Account on or prior to the related
Deposit Date.
SECTION 8.11. TERMINATION OF SERVICER.
In the event of an event of default specified in Section 6.01 of the
Servicing Agreement, the Indenture Trustee may, with the consent of the Bond
Insurer, and shall, upon the direction of the Bond Insurer, (or as otherwise
provided in the Servicing Agreement) terminate the Servicer as provided in
Section 6.01 and Section 6.02 of the Servicing Agreement. If the Indenture
Trustee terminates the Servicer, the Indenture Trustee shall pursuant to Section
6.02 of the Servicing Agreement assume the duties of the Servicer or appoint a
successor
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servicer acceptable to the Issuer, the Bond Insurer and the Rating Agencies and
meeting the requirements set forth in the Servicing Agreement.
SECTION 8.12. OPINION OF COUNSEL.
The Indenture Trustee shall be entitled to receive at least five
Business Days' notice of any action to be taken pursuant to Section 8.07(a)
(other than in connection with releases of Mortgage Loans that were the subject
of a Full Prepayment of the type described in clause (i) of the definition of
the term "Full Prepayment") and 8.08, accompanied by copies of any instruments
involved, and the Indenture Trustee shall be entitled to receive an Opinion of
Counsel, in form and substance reasonably satisfactory to the Indenture Trustee,
stating the legal effect of any such action, outlining the steps required to
complete the same, and concluding that all conditions precedent to the taking of
such action have been complied with. Counsel rendering any such opinion may
rely, without independent investigation, on the accuracy and validity of any
certificate or other instrument delivered to the Indenture Trustee in connection
with any such action.
SECTION 8.13. APPOINTMENT OF CUSTODIANS.
The Indenture Trustee may, at no additional cost to the Issuer, with
the consent of the Issuer and the Bond Insurer, appoint one or more Custodians
to hold all or a portion of the Mortgage Files as agent for the Indenture
Trustee. Each Custodian shall (i) be a financial institution supervised and
regulated by the Comptroller of the Currency, the Board of Governors of the
Federal Reserve System, the Office of Thrift Supervision, or the Federal Deposit
Insurance Corporation; (ii) have combined capital and surplus of at least
$10,000,000; (iii) be equipped with secure, fireproof storage facilities, and
have adequate controls on access to assure the safety and security of the
Mortgage Files; (iv) utilize in its custodial function employees who are
knowledgeable in the handling of mortgage documents and of the functions of a
mortgage document custodian; and (v) satisfy any other reasonable requirements
that the Issuer may from time to time deem necessary to protect the interests of
Bondholders and the Bond Insurer in the Mortgage Files. Each Custodian shall be
subject to the same obligations and standard of care as would be imposed on the
Indenture Trustee hereunder assuming the Indenture Trustee retained the Mortgage
Files directly. The appointment of one or more Custodians shall not relieve the
Indenture Trustee from any of its obligations hereunder, and the Indenture
Trustee shall remain responsible for all acts and omissions of any Custodian. If
the Servicer is appointed as a Custodian in accordance with this Section 8.14,
it shall fulfill its servicing and custodial duties and obligations through
separate departments and, if it maintains a trust department, shall fulfill its
custodial duties and obligations through such trust department.
SECTION 8.14. RIGHTS OF THE BOND INSURER TO EXERCISE RIGHTS OF
BONDHOLDERS.
By accepting its Bonds, each Bondholder agrees that unless a Bond
Insurer Default exists, the Bond Insurer shall have the right to exercise all
rights of the Bondholders under this Agreement without any further consent of
the Bondholders, including, without limitation:
(i) the right to require the Servicer to effect
foreclosures upon Mortgage Loans upon failure of the Servicer to do so;
(ii) the right to require the Mortgage Loan Seller to
repurchase or substitute for Defective Mortgage Loans pursuant to
Section 8.05;
(iii) the right to direct the actions of the Indenture
Trustee during the continuance of an Event of Default; and
(iv) the right to vote on proposed amendments to this
Indenture.
In addition, each Bondholder agrees that, unless a Bond Insurer Default
exists, the rights specifically set forth above may be exercised by the
Bondholders only with the prior written consent of the Bond Insurer.
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Except as otherwise provided in Section 8.03 and notwithstanding any
provision in this Indenture to the contrary, so long as a Bond Insurer Default
has occurred and is continuing, the Bond Insurer shall have no rights to
exercise any voting rights of the Bondholders hereunder, nor shall the Indenture
Trustee be required to obtain the consent of, or act at the direction of, the
Bond Insurer.
SECTION 8.15. TRUST ESTATE AND ACCOUNTS HELD FOR BENEFIT OF THE BOND
INSURER.
The Indenture Trustee shall hold the Trust Estate and the Mortgage
Files for the benefit of the Bondholders and the Bond Insurer and all references
in this Agreement and in the Bonds to the benefit of Holders of the Bonds shall
be deemed to include the Bond Insurer (provided there does not exist a Bond
Insurer Default).
All notices, statements, reports, certificates or opinions required by
this Agreement to be sent to any other party hereto or to the Bondholders shall
also be sent to the Bond Insurer.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF BONDHOLDERS.
With the consent of the Bond Insurer and without the consent of the
Holders of any Bonds, the Issuer and the Indenture Trustee, at any time and from
time to time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(1) to correct or amplify the description of any property
at any time subject to the lien of this Indenture, or better to assure,
convey and confirm unto the Indenture Trustee any property subject or
required to be subjected to the lien of this Indenture, or to subject
to the lien of this Indenture additional property;
(2) to add to the conditions, limitations and
restrictions on the authorized amount, terms and purposes of the
issuance, authentication and delivery of any Bonds, as herein set
forth, additional conditions, limitations and restrictions thereafter
to be observed;
(3) to evidence the succession of another Person to the
Issuer to the extent permitted herein, and the assumption by any such
successor of the covenants of the Issuer herein and in the Bonds
contained;
(4) to add to the covenants of the Issuer, for the
benefit of the Holders of all Bonds and the Bond Insurer or to
surrender any right or power herein conferred upon the Issuer;
(5) to cure any ambiguity, to correct or supplement any
provision herein that may be defective or inconsistent with any other
provision herein, or to amend any other provisions with respect to
matters or questions arising under this Indenture, which shall not be
inconsistent with the provisions of this Indenture, provided that such
action shall not adversely affect in any material respect the interests
of the Holders of the Bonds; and provided, further, that the amendment
shall not be deemed to adversely affect in any material respect the
interests of the Holders of the Bonds and the Bond Insurer if the
Person requesting the amendment obtains letters from the Rating
Agencies that the amendment would not result in the downgrading or
withdrawal of the implied ratings then assigned to the Bonds (without
taking into account the MBIA Insurance Policy); or
(6) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
federal statute
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hereafter enacted, and to add to this Indenture such other provisions
as may be expressly required by the TIA.
SECTION 9.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF BONDHOLDERS.
With the consent of the Bond Insurer and with the consent of Holders of
Bonds representing not less than a majority of the Bond Balance of all
Outstanding Bonds by Act of said Holders delivered to the Issuer and the
Indenture Trustee, the Issuer and the Indenture Trustee may enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Holders of
the Bonds under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Bond
affected thereby:
(1) change the any Payment Date or the Final Maturity
Date of the Bonds or reduce the principal amount thereof, the Bond
Interest Rate thereon or the Redemption Price with respect thereto,
change the earliest date on which any Bond may be redeemed at the
option of the Issuer, change any place of payment where, or the coin or
currency in which, any Bond or any interest thereon is payable, or
impair the right to institute suit for the enforcement of the payment
of any installment of interest due on any Bond on or after the Final
Maturity Date thereof or for the enforcement of the payment of the
entire remaining unpaid principal amount of any Bond on or after the
Final Maturity Date (or, in the case of redemption, on or after the
applicable Redemption Date);
(2) reduce the percentage of the Bond Balance of the
Outstanding Bonds, the consent of the Holders of which is required for
any such supplemental indenture, or the consent of the Holders of which
is required for any waiver of compliance with provisions of this
Indenture or Defaults hereunder and their consequences provided for in
this Indenture;
(3) modify any of the provisions of this Section, Section
5.13 or Section 5.17(b), except to increase any percentage specified
therein or to provide that certain other provisions of this Indenture
cannot be modified or waived without the consent of the Holder of each
Outstanding Bond affected thereby;
(4) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(5) permit the creation of any lien other than the lien
of this Indenture with respect to any part of the Trust Estate (except
for Permitted Encumbrances) or terminate the lien of this Indenture on
any property at any time subject hereto or deprive the Holder of any
Bond of the security afforded by the lien of this Indenture;
(6) modify any of the provisions of this Indenture in
such manner as to affect the calculation of the Required Payment Amount
for any Payment Date (including the calculation of any of the
individual components of such Required Payment Amount) or to affect
rights of the Holders of the Bonds to the benefits of any provisions
for the mandatory redemption of Bonds contained herein; or
(7) incur any indebtedness, other than the Bonds, that
would cause the Issuer or the Trust Estate to be treated as a "taxable
mortgage pool" within the meaning of Code Section 7701(i).
The Indenture Trustee may in its discretion determine whether or not
any Bonds would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Bonds, whether
theretofore or thereafter authenticated and delivered hereunder. The Indenture
Trustee shall not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Bondholders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
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Promptly after the execution by the Issuer and the Indenture Trustee of
any supplemental indenture pursuant to this Section, the Indenture Trustee shall
mail to the Holders of the Bonds to which such supplemental indenture relates a
notice setting forth in general terms the substance of such supplemental
indenture. Any failure of the Indenture Trustee to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture.
SECTION 9.03. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Indenture Trustee shall be entitled to
receive, and (subject to Section 6.01) shall be fully protected in relying upon,
an Opinion of Counsel stating that the execution of such supplemental indenture
is authorized or permitted by this Indenture. The Indenture Trustee may, but
shall not be obligated to, enter into any such supplemental indenture that
affects the Indenture Trustee's own rights, duties or immunities under this
Indenture or otherwise. The Issuer shall cause executed copies of any
Supplemental Indentures to be delivered to the Rating Agencies.
SECTION 9.04. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Bonds to which such supplemental indenture relates that have theretofore been
or thereafter are authenticated and delivered hereunder shall be bound thereby.
SECTION 9.05. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the TIA as then in effect so long as this
Indenture shall then be qualified under the TIA.
SECTION 9.06. REFERENCE IN BONDS TO SUPPLEMENTAL INDENTURES.
Bonds authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and if required by the
Indenture Trustee shall, bear a notation in form approved by the Indenture
Trustee as to any matter provided for in such supplemental indenture. If the
Issuer shall so determine, new Bonds so modified as to conform, in the opinion
of Indenture Trustee and the Issuer, to any such supplemental indenture may be
prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Bonds.
SECTION 9.07. AMENDMENTS TO GOVERNING DOCUMENTS.
The Indenture Trustee shall, upon Issuer Request, consent to any
proposed amendment to the Issuer's governing documents, or an amendment to or
waiver of any provision of any other document relating to the Issuer's governing
documents, such consent to be given without the necessity of obtaining the
consent of the Holders of any Bonds upon receipt by the Indenture Trustee of:
(i) an Officers' Certificate, to which such proposed
amendment or waiver shall be attached, stating that such attached copy
is a true copy of the proposed amendment or waiver and that all
conditions precedent to such consent specified in this Section 9.07
have been satisfied; and
(ii) written confirmation from the Rating Agencies that
the implementation of the proposed amendment or waiver will not
adversely affect their implied ratings of the Bonds (without taking
into account the MBIA Insurance Policy).
Notwithstanding the foregoing, the Indenture Trustee may decline to
consent to a proposed waiver or amendment that adversely affects its own rights,
duties or immunities under this Indenture or otherwise.
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Nothing in this Section 9.07 shall be construed to require that any
Person obtain the consent of the Indenture Trustee to any amendment or waiver or
any provision of any document where the making of such amendment or the giving
of such waiver without obtaining the consent of the Indenture Trustee is not
prohibited by this Indenture or by the terms of the document that is the subject
of the proposed amendment or waiver.
ARTICLE X
REDEMPTION OF BONDS
SECTION 10.01. REDEMPTION.
(a) All the Bonds may be redeemed in whole, but not in
part, on the Redemption Date at the Redemption Price at the option of
the holders of a majority of the ownership interest of the Issuer (the
"Residual Majority"), or at the option of the Servicer if the Residual
Majority shall not have exercised its option to redeem the Bonds on
such Redemption Date, provided, however, that funds in an amount equal
to the Redemption Price, plus any amounts owed to the Bond Insurer
under the Insurance Agreement any unreimbursed Nonrecoverable Advances
and any unreimbursed amounts due and owing to the Indenture Trustee
hereunder, must have been deposited with the Indenture Trustee prior to
the Indenture Trustee's giving notice of such redemption pursuant to
Section 10.02 or the Issuer shall have complied with the requirements
for satisfaction and discharge of the Bonds specified in Section 4.01.
Notice of the election to redeem the Bonds shall be furnished to the
Indenture Trustee not later than thirty (30) days prior to the Payment
Date selected for such redemption, whereupon all such Bonds shall be
due and payable on such Payment Date upon the furnishing of a notice
pursuant to Section 10.02 to each Holder of such Bonds and the Bond
Insurer. Any expenses associated with the compliance of the provisions
hereof in connection with a redemption of the Bonds shall be paid by
the Residual Majority or the Servicer, depending upon which party is
electing to redeem the Bonds.
(b) Upon receipt of the notice from Issuer of its
election to redeem the Bonds pursuant to Section 10.01(a), the
Indenture Trustee shall prepare and deliver to the Issuer, no later
than the related Redemption Date, a Payment Date Statement stating
therein that it has determined that the conditions to redemption at the
option of the Issuer have been satisfied and setting forth the amount,
if any, to be withdrawn from the Bond Account and paid to the Servicer
as reimbursement for Nonrecoverable Advances and such other information
as may be required to accomplish such redemption.
SECTION 10.02. FORM OF REDEMPTION NOTICE.
Notice of redemption shall be given by the Indenture Trustee in the
name of and at the expense of the Issuer by first class mail, postage prepaid,
mailed not less than ten days prior to the Redemption Date to each Holder of
Bonds to be redeemed, such Holders being determined as of the Record Date for
such Payment Date, and to the Bond Insurer.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price at which the Bonds of such
Series will be redeemed,
(3) the fact of payment in full on such Bonds, the place
where such Bonds are to be surrendered for payment of the Redemption
Price (which shall be the office or agency of the Issuer to be
maintained as provided in Section 3.02), and that no interest shall
accrue on such Bond for any period after the date fixed for redemption.
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Failure to give notice of redemption, or any defect therein, to any
Holder of any Bond selected for redemption shall not impair or affect the
validity of the redemption of any other Bond.
SECTION 10.03. BONDS PAYABLE ON OPTIONAL REDEMPTION.
Notice of redemption having been given as provided in Section 10.02,
the Bonds to be redeemed shall, on the applicable Redemption Date, become due
and payable at the Redemption Price and (unless the Issuer shall default in the
payment of the Redemption Price) no interest shall accrue on such Redemption
Price for any period after such Redemption Date; provided, however, that if such
Redemption Price is not paid on the Redemption Date, the Bond Balance shall,
until paid, bear interest from the Redemption Date at the Bond Interest Rate.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. COMPLIANCE CERTIFICATES AND OPINIONS.
(a) Upon any application or request by the Issuer to the
Indenture Trustee to take any action under any provision of this
Indenture, the Issuer shall furnish to the Indenture Trustee an
Officers' Certificate stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have
been complied with and an Opinion of Counsel, if requested by the
Indenture Trustee, stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in
the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this
Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished.
(b) Every certificate, opinion or letter with respect to
compliance with a condition or covenant provided for in this Indenture,
including one furnished pursuant to specific requirements of this
Indenture relating to a particular application or request (other than
certificates provided pursuant to TIA Section 314(a)(4)) shall include
and shall be deemed to include (regardless of whether specifically
stated therein) the following:
(1) a statement that each individual signing
such certificate, opinion or letter has read such covenant or
condition and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope
of the examination or investigation upon which the statements
or opinions contained in such certificate, opinion or letter
are based;
(3) a statement that, in the opinion of each
such individual, he has made such examination or investigation
as is necessary to enable him to express an informed opinion
as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether, in the opinion of
each such individual, such condition or covenant has been
complied with.
SECTION 11.02. FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
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Any certificate or opinion of the Issuer may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such officer knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
the matters upon which his certificate or opinion is based are erroneous. Any
Opinion of Counsel may be based on the written opinion of other counsel, in
which event such Opinion of Counsel shall be accompanied by a copy of such other
counsel's opinion and shall include a statement to the effect that such counsel
believes that such counsel and the Indenture Trustee may reasonably rely upon
the opinion of such other counsel.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Wherever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Section 6.01(b)(2).
Whenever in this Indenture it is provided that the absence of the
occurrence and continuation of a Default or Event of Default is a condition
precedent to the taking of any action by the Indenture Trustee at the request or
direction of the Issuer, then, notwithstanding that the satisfaction of such
condition is a condition precedent to the Issuer's right to make such request or
direction, the Indenture Trustee shall be protected in acting in accordance with
such request or direction if it does not have knowledge of the occurrence and
continuation of such Default or Event of Default as provided in Section 6.01(d).
SECTION 11.03. ACTS OF BONDHOLDERS.
(a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Indenture to
be given or taken by Bondholders may be embodied in and evidenced by
one or more instruments of substantially similar tenor signed by such
Bondholders in person or by an agent duly appointed in writing; and,
except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the
Indenture Trustee, and, where it is hereby expressly required, to the
Issuer. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of
the Bondholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Indenture and
(subject to Section 6.01) conclusive in favor of the Indenture Trustee
and the Issuer, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of
any such instrument or writing may be proved by the affidavit of a
witness of such execution or by the certificate of any notary public or
other officer authorized by law to take acknowledgments of deeds,
certifying that the individual signing such instrument or writing
acknowledged to him the execution thereof. Whenever such execution is
by an officer of a corporation or a member of a partnership on behalf
of such corporation or partnership, such certificate or affidavit shall
also constitute sufficient proof of his authority.
(c) The ownership of Bonds shall be proved by the Bond
Register.
(d) Any request, demand, authorization, direction,
notice, consent, waiver or other action by the Holder of any Bonds
shall bind the Holder of every Bond issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof, in respect
of anything done, omitted or suffered to be
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done by the Indenture Trustee or the Issuer in reliance thereon,
whether or not notation of such action is made upon such Bonds.
SECTION 11.04. NOTICES, ETC. TO INDENTURE TRUSTEE, THE BOND INSURER AND
ISSUER.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Bondholders or other documents provided or permitted by this Indenture
to be made upon, given or furnished to, or filed with:
(1) the Indenture Trustee by any Bondholder or by the
Issuer shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with and received by the Indenture
Trustee at its Corporate Trust Office; or
(2) the Issuer by the Indenture Trustee or by any
Bondholder shall be sufficient for every purpose hereunder (except as
provided in Section 5.01(3) and (4)) if in writing and mailed,
first-class postage prepaid, to the Issuer addressed to it at Fund
America Investors Trust 1997-NMC1, in care of Wilmington Trust Company,
Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx
00000-0000, Attention: Corporate Trust Administration, or at any other
address previously furnished in writing to the Indenture Trustee by the
Issuer.
(3) the Bond Insurer by the Indenture Trustee or by any
Bondholder shall be sufficient for every purpose hereunder if in
writing and mailed, first-class, postage prepaid, to MBIA Insurance
Corporation addressed to it at 000 Xxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000,
Attention: Insured Portfolio Management-SF (IPM-SF) (Fund America
Investors Trust 1997-NMC1), or at any other address previously
furnished in writing to the Indenture Trustee by the Bond Insurer; or
(4) the Transferor by the Indenture Trustee or by any
Bondholder shall be sufficient for every purpose hereunder if in
writing and mailed, first-class, postage paid, to Fund America
Investors Corporation II, Plaza Tower One, Suite 1200, 0000 Xxxxx
Xxxxxxx'x Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X.
Xxxxxxxxx or at any other address previously furnished in writing to
the Indenture Trustee by the Transferor; or
(5) the Mortgage Loan Seller or the Servicer by the
Indenture Trustee or by any Bondholder shall be sufficient for every
purpose hereunder if in writing and mailed, first-class, postage paid,
to National Mortgage Corporation, 0000 Xxxx Xxxxxxx Xxxx, Xxxxx 000X,
Xxxxxxxxx, Xxxxxxxx 00000, Attention: President or at any other address
previously furnished in writing to the Indenture Trustee by the
Mortgage Loan Seller or the Servicer; or
(6) the Underwriters by any party or by any Bondholder
shall be sufficient for every purpose hereunder if in writing and
mailed, first-class, postage prepaid, to (a) Greenwich Capital Markets,
Inc., 000 Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000, Attention:
General Counsel, fax: (000) 000-0000, and (b) ContiFinancial Services
Corporation, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
General Counsel.
Notices required to be given to the Rating Agencies by the
Issuer or the Indenture Trustee shall be in writing, personally
delivered or mailed first-class postage pre-paid, to (i) in the case of
Moody's, at the following address: Xxxxx'x Investors Service, Inc.,
Residential Mortgage Monitoring Department, 00 Xxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000 and (ii) in the case of Standard & Poor's, at the
following address: Standard & Poor's Ratings Group, 00 Xxxxxxxx (00xx
Xxxxx), Xxx Xxxx, Xxx Xxxx, 00000, Attention: Asset Bankers
Surveillance Department; or as to each of the foregoing, at such other
address as shall be designed by written notice to the other parties.
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SECTION 11.05. NOTICES AND REPORTS TO BONDHOLDERS; WAIVER OF NOTICES.
Where this Indenture provides for notice to Bondholders of any event or
the mailing of any report to Bondholders, such notice or report shall be
sufficiently given (unless otherwise herein expressly provided) if mailed,
first-class postage prepaid, to each Bondholder affected by such event or to
whom such report is required to be mailed, at the address of such Bondholder as
it appears on the Bond Register, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice or the mailing
of such report. In any case where a notice or report to Bondholders is mailed in
the manner provided above, neither the failure to mail such notice or report,
nor any defect in any notice or report so mailed, to any particular Bondholder
shall affect the sufficiency of such notice or report with respect to other
Bondholders, and any notice or report that is mailed in the manner herein
provided shall be conclusively presumed to have been duly given or provided.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Bondholders shall be filed with the Indenture
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Bondholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.
SECTION 11.06. RULES BY INDENTURE TRUSTEE.
The Indenture Trustee may make reasonable rules for any meeting of
Bondholders.
SECTION 11.07. CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with another
provision hereof that is required to be included in this Indenture by any of the
provisions of the TIA, such required provision shall control.
SECTION 11.08. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 11.09. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Issuer shall bind
its successors and assigns, whether so expressed or not.
SECTION 11.10. SEPARABILITY.
In case any provision in this Indenture or in the Bonds shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 11.11. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Bonds, expressed or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, any separate trustee or Co-trustee appointed under Section 6.14 and
the Bondholders, any benefit or any legal or equitable right, remedy or claim
under this Indenture.
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SECTION 11.12. LEGAL HOLIDAYS.
In any case where the date of any Payment Date, Redemption Date or any
other date on which principal of or interest on any Bond is proposed to be paid
shall not be a Business Day, then (notwithstanding any other provision of the
Bonds or this Indenture) payment need not be made on such date, but may be made
on the next succeeding Business Day with the same force and effect as if made on
the nominal date of any such Payment Date, Redemption Date or other date for the
payment of principal of or interest on any Bond and no interest shall accrue for
the period from and after any such nominal date, provided such payment is made
in full on such next succeeding Business Day.
SECTION 11.13. GOVERNING LAW.
IN VIEW OF THE FACT THAT BONDHOLDERS ARE EXPECTED TO RESIDE IN MANY
STATES AND OUTSIDE THE UNITED STATES AND THE DESIRE TO ESTABLISH WITH CERTAINTY
THAT THIS INDENTURE WILL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAW OF A STATE HAVING A WELL-DEVELOPED BODY OF COMMERCIAL
AND FINANCIAL LAW RELEVANT TO TRANSACTIONS OF THE TYPE CONTEMPLATED HEREIN, THIS
INDENTURE AND EACH BOND SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED THEREIN.
SECTION 11.14. COUNTERPARTS.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
SECTION 11.15. RECORDING OF INDENTURE.
This Indenture is subject to recording in any appropriate public
recording offices, such recording to be effected by the Issuer and at its
expense in compliance with any Opinion of Counsel delivered pursuant to Section
2.11(c) or 3.06.
SECTION 11.16. ISSUER OBLIGATION.
No recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Bonds or under this Indenture or any certificate or other writing delivered in
connection herewith or therewith, against (i) the Indenture Trustee or the Owner
Trustee in its individual capacity, (ii) any owner of a beneficial interest in
the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director,
employee or agent of the Indenture Trustee or the Owner Trustee in its
individual capacity, any holder of a beneficial interest in the Issuer, the
Owner Trustee or the Indenture Trustee or of any successor or assign of the
Indenture Trustee or the Owner Trustee in its individual capacity, except as any
such Person may have expressly agreed (it being understood that the Indenture
Trustee and the Owner Trustee have no such obligations in their individual
capacity) and except that any such partner, owner or beneficiary shall be fully
liable, to the extent provided by applicable law, for any unpaid consideration
for stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity. For all purposes of this Indenture, in the performance of
any duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of the
Trust Agreement.
SECTION 11.17 NO PETITION.
The Indenture Trustee, by entering into this Indenture, and each
Bondholder and Beneficial Owner, by accepting a Bond, hereby covenant and agree
that they will not at any time institute against the Transferor or the Issuer,
or join in any institution against the Transferor or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any United States federal or state
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bankruptcy or similar law in connection with any obligations relating to the
Bonds, this Indenture or any of the Basic Documents. In addition, the Indenture
Trustee will on behalf of the holders of the Bonds, (a) file a written objection
to any motion or other proceeding seeking the substantive consolidation of the
Mortgage Loan Seller with National Mortgage Finance Corporation, the Transferor
or the Issuer, (b) file an appropriate memorandum of points and authorities or
other brief in support of such objection, or (c) endeavor to establish at the
hearing on such objection that the substantive consolidation of such entity
would be materially prejudicial to the Bondholders.
This Section 11.17 will survive for one year AND ONE DAY following the
termination of this Indenture.
SECTION 11.18. INSPECTION.
The Issuer agrees that, on reasonable prior notice, it will permit any
representative of the Indenture Trustee and the Bond Insurer, during the
Issuer's normal business hours, to examine all of books of account, records,
reports and other papers of the Issuer, to make copies and extracts therefrom,
to cause such books to be audited by Independent Accountants selected by the
Indenture Trustee or the Bond Insurer, as the case may be, and to discuss its
affairs, finances and accounts with its officers, employees and Independent
Accountants (and by this provision the Issuer hereby authorizes its Accountants
to discuss with such representatives such affairs, finances and accounts), all
at such reasonable times and as often as may be reasonably requested. Any
expense incident to the exercise by the Indenture Trustee of any right under
this Section 11.17 shall be borne by the Issuer.
SECTION 11.19. USURY.
The amount of interest payable or paid on any Bond under the terms of
this Indenture shall be limited to an amount that shall not exceed the maximum
nonusurious rate of interest allowed by the applicable laws of the United States
or the State of New York (whichever shall permit the higher rate), that could
lawfully be contracted for, charged or received (the "Highest Lawful Rate"). In
the event any payment of interest on any Bond exceeds the Highest Lawful Rate,
the Issuer stipulates that such excess amount will be deemed to have been paid
as a result of an error on the part of both the Indenture Trustee, acting on
behalf of the Holder of such Bond, and the Issuer, and the Holder receiving such
excess payment shall promptly, upon discovery of such error or upon notice
thereof from the Issuer or the Indenture Trustee, refund the amount of such
excess or, at the option of the Indenture Trustee, apply the excess to the
payment of principal of such Bond, if any, remaining unpaid. In addition, all
sums paid or agreed to be paid to the Indenture Trustee for the benefit of
Holders of Bonds for the use, forbearance or detention of money shall, to the
extent permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full term of such Bonds.
SECTION 11.20. THIRD PARTY BENEFICIARY.
The Bond Insurer is intended as a third party beneficiary of this
Indenture shall be binding upon and inure to the benefit of the Bond Insurer;
provided that, notwithstanding the foregoing, for so long as a Bond Insurer
Default is continuing with respect to its obligations under the MBIA Insurance
Policy, the Bondholders shall succeed to the Bond Insurer's rights hereunder.
Without limiting the generality of the foregoing, all covenants and agreements
in this Indenture that expressly confer rights upon the Bond Insurer shall be
for the benefit of and run directly to the Bond Insurer, and the Bond Insurer
shall be entitled to rely on and enforce such covenants to the same extent as if
it were a party to this Indenture.
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IN WITNESS WHEREOF, the Issuer and the Indenture Trustee and the have
caused this Indenture to be duly executed by their respective officers thereunto
duly authorized, all as of the day and year first above written.
FUND AMERICA INVESTORS TRUST 1997-NMC1
By: Wilmington Trust Company,
as Owner Trustee
By:
-------------------------------
Authorized Signatory
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Indenture Trustee
By:
-------------------------------------
Name:
Title:
-00-
00
Xxxxx xx Xxx Xxxx )
) ss.:
County of New York )
On the _________ day of September, 1997 before me, a notary public in
and for said State, personally appeared ______________________________, known to
me to be ______________________ of Wilmington Trust Company, a corporation that
executed the within instrument acting as trustee of Fund America Investors Trust
1997-NMC1, and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
-----------------------------------------
Notary Public
[Notarial Seal]
State of New York )
) ss.:
County of New York )
On the _________ day of September, 1997 before me, a notary public in
and for said State, personally appeared ______________________________, known to
me to be ______________________ of Norwest Bank Minnesota, National Association,
a national banking association that executed the within instrument, and also
known to me to be the person who executed it on behalf of said association, and
acknowledged to me that such association executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
-----------------------------------------
Notary Public
[Notarial Seal]
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